Author: telegraph

Nobody’s Lending. Nobody’s Borrowing. Here’s What To Do

Another lockdown will destroy the economy unless we change direction. It’s really that simple, and it is because the banking system no longer works as a distributor of capital in the country.

Our Government and ECB have approached the crisis in the same way: cutting interest rates to zero to coax businesses to borrow and to encourage banks to lend. As a result, banks are the critical intermediary between the Central Bank, the State and the economy.

However, because banks have a fear of bad debts, they are not lending, and because businesses have a fear of incurring too much debt, they are not borrowing. This is a classic “liquidity trap” as outlined by John Maynard Keynes during the Great Depression of the 1930s.

One of the best leading indicators for how people feel about the economy is consumer credit and loans for short maturities, such as a 12-month loan to do up a kitchen, buy a durable good or a short-term car loan.

Durable goods make up about 10 per cent of any Western economy. We are not talking about an insignificant sum here. Such loans are an accurate barometer of sentiment. They have completely collapsed in Ireland.

The reason is quite straightforward: the banks don’t know when the economy will recover, because we are experiencing a “pandession” not a recession. Exit from the pandession is determined by the pandemic, not by the typical economic cycle.

As a result, the banks can’t plug a recovery into their spreadsheets when assessing the credibility of any loan, collateral or borrower. So they don’t lend.

In addition, a new paper by the Bank of England released this week suggests there is a one-for-one relationship between unemployment and loan default. This means that banks are terrified about bad loans. In the UK, a one per cent rise in unemployment leads to a one per cent rise in loan defaults. Irish figures are bound to be similar.

The banks here expect unemployment to remain high and incomes to remain weak, and so they are not lending no matter how low the rate of interest.

In addition, small businesspeople have no idea what is coming down the tracks, so they are not going to take on any more debt now, again despite the fact that interest payments have never been lower on borrowed money. So we are stuck.

Pass-through

Unfortunately, the State and the ECB are behaving as if the pass-through from interest rates to the economy, via the banking system, still works. It doesn’t.

To make matters worse, the only people who will avail of very low interest rates are the already wealthy, who will take this opportunity of zero-cost money, leverage up, buy cheap assets and thereby amplify already alarming levels of wealth inequality.

Because rich people have the financial security to see beyond the pandemic, they can imagine the world in five years. Most people don’t have this luxury even if the banks would support them, which they won’t.

The way out of a liquidity trap is for the State to bypass the banking system and borrow directly from the ECB (via the secondary market) and actually put money into businesses’ accounts.

There is nothing radical about this idea at all. In fact, what is radical and dangerous is relying on banks to do governments’ handiwork. They’ve never done this and are not about to start now.

This is not a “bash the banks”“ article. It is not their job to feed money into the system, to maintain the balance sheet of small businesses and to effectively get money into people’s pockets. (Although it could be argued that as AIB is a nationalised bank and the State is the largest shareholder, it could be made an official ward of State to fight the pandession.)

Consider small companies that have managed to survive the past few months by juggling bills, deferring payments and doing deals with all sorts of creditors. They will not be able to conjure up the same trick twice, at least not with the present policies.

Let’s be clear: in a new lockdown, businesses will be ordered to cease trading. Capitalism as we understand it – buying and selling, opening your doors, selling your wares, paying your staff, paying your utilities and rent – has been suspended. If you suspend capitalism, you need to replace it with something that protects businesses until capitalism is recalled.

Business depends on income. If a business is told it cannot, by law, earn an income, then it is shuttered by decree. It is up to the State – if it feels its health service can’t cope – to explain to small businesspeople, who employ over 50 per cent of Irish workers, why they must bear the cost.

Entertainment

The recent guidelines on public gatherings mean the conditions of lockdown 2 have already been visited on the live entertainment sector, with catastrophic results.

Taken together, this sector sold 4.8 million tickets last year, generating income of €305 million, paid about €35 million in VAT and, based on an internal multiplier for the economy, drove about €1.8 billion extra spending.

(The multiplier captures the extra spending that goes along with the original ticket price and how it ripples through the economy. When you go to a concert/festival/gig you spend a lot more that night than just the ticket price.)

This huge part of the domestic economy is closed. If we go into lockdown 2, this calamity will be mirrored all over the economy.

So what can be done about it?

In a liquidity trap, the banks are out of the game. There is no point in the ECB saying that it is open for business, because the private sector will not borrow.

It’s time – as I have argued consistently – for helicopter money. It is time for the State to give money to small business to tide them over, as a gift. When the problem is no money, the solution is money.

This is not a long-term fix; it is an emergency treatment in the same way as the treatment applied in an ICU is very different from the treatment applied at your local GP clinic. Emergency economics is applied to avoid calamity.

In terms of macro-economic policy, helicopter money is exactly the same as a debt-financed budget deficit or a debt-financed tax cut – things we do all the time. The people who receive a tax cut are effectively given money they didn’t have yesterday by the State. Helicopter money is precisely the same, but it gets to people and businesses immediately without having to go through the palaver of tax credits, PAYE and the like.

The end result is more money, fewer defaults, less unemployment, less bankruptcies, less anxiety, and ultimately a smaller budget deficit than if the economy stalls, because spending and income will be maintained. The same will apply to debt-GDP ratios, because what caused the debt ratio to deteriorate in a world of low interest rates is the slow growth rate.

As we face lockdown 2 this winter, helicopter money might be our main bulwark against outbreaks of social disruption and political instability.

There Is A Vaccine To Immunise The Economy. It’s The Bond Market

During the first great agricultural revolution (10,000 BC to 5,000 BC), when humans moved from being hunter-gatherers to farmers, settling in small villages and ultimately towns, the world human population is estimated to have increased from four million to five million.

In the next 5,000 years, from 5,000 BC to the birth of Christ, the human population is thought to have increased from five million to 100 million. In this second 5,000-year period, the human population increased approximately 25 times whereas in the first 5,000-year period, the increase was marginal. The reason for this disparity is that the earlier five millennia of domestication were the most lethal years in human history.

When we started to domesticate animals – cows, chickens, sheep, goats and pigs – and began to cultivate plants – particularly wheat, barley and rice – disease killed us in huge numbers.

By domesticating animals, their diseases became our diseases. Most scientists today agree that Covid-19 crossed into humans from an animal, most likely a bat, and during the early first agricultural revolution, other diseases jumped from animals to humans at a time when humans had no immunity.

As our immune system had no memory of these new invaders and therefore no antibodies to call upon, epidemics from these domesticated animals killed us in huge numbers.

It took many centuries of epidemics for us to figure out how to fight them. The ancients knew all about these epidemics and contagion. In fact the Akkadian word for epidemics translates literally as “certain death”.

Akkadian was the language of the peoples of Mesopotamia, the first urbanised civilisation in the world, the people who gave us the first written documents, the first mathematics, accountancy and bureaucracy. These were the first city states, with their own codes, city walls and tax collectors.

They reacted to epidemics such as measles, influenza and smallpox, in the way we do today. They understood contagion and appreciated that the disease jumped from the sick to the healthy, so the sick needed to be confined. They knew that these were “crowd diseases”. Quarantines were common and travellers (usually soldiers or salesmen) were isolated.

Over thousands of years, we developed immunity to many diseases as survivors passed on the genetic information to the next generation. As a result, the human population started to increase as we adapted to our new diseased urban world.

Just like the Mesopotamians

It is extraordinary that the 21st-century reaction to pandemics mirrors that of ancient Mesopotamians, despite our technology, testing capacity, far superior health services and comprehension.

They locked down; we lock down. They quarantined; we quarantine. They suspected travellers; we suspect travellers. They had no vaccines; as yet, we have no vaccines. They lost tax revenue; we lose tax revenue. They stopped building temples, worrying about state revenue; we worry about government expenditure.

The major difference was that epidemics back then killed huge proportions of populations, emptying entire cities, destroying armies, ravaging entire communities.

Covid-19 kills only a small percentage of those infected. Nearly all people who contract it survive, meaning our immune system does its job in the vast majority of cases. It identifies the invader, marshals its antibodies and goes to work.

That was not the case for the ancients. Our immune system is an evolved version of their immune system, experienced and bolstered by many conflicts with these types of invaders over thousands of years, passing on genetic information. Yet the reactions of ancient Mesopotamia and modern Ireland are not dissimilar.

This disparity between the overwhelming survival rates and the bluntness of lockdowns, virtually ensuring mass economic carnage and bankruptcies, is fuelling scepticism about the latest lockdown moves.

Are we to do this for the next two years? Three years? Businesspeople, particularly those in retail, hospitality, transport, entertainment – what I like to call “the Craic Economy” – are entitled to ask this question.

The Craic Economy could be as big as 20 per cent of GDP, maybe more. It is highly labour-intensive and wonderfully creative, encompassing the visual arts, theatre and cinema, not to mention music, festivals and the entire production infrastructure that goes with performance art.

When does the entrepreneur behind a small retail business choose to throw in the towel and declare that she’s had enough? Or when does the restaurateur who is being asked, yet again, to close down, simply walk away? Once this happens, the rolling defaults on loans, rents, tax liabilities will become an avalanche.

Common sense, rather than economic modelling, tells you this is already happening. If a business has no income, that business is going out of business. When a business runs out of cash, it is no longer a business; it is a shell.

Therefore, if the State wants to deploy the lockdown approach to living with Covid-19, it must devise an economic strategy to protect the economy during this period. Alternatively, it can look to the Swedish alternative of testing, contact tracing and personal responsibility.

As of now, Ireland’s medical advice is to continue with the lockdown approach, so what should we do on the economic front?

The good news is that, while we may not be acting very differently from the ancients in terms of quarantine, isolation and social distancing, our economy is more sophisticated and the economic tools at our disposal are more effective, if we choose to use them.

The Future is Free

The key difference is money and our understanding of it. We now have something called the bond market which means we can borrow from the bright future to prop up the traumatised present. Please take that description in.

We also know that the future is free. The rate of interest, which is the price of money in the future, is officially zero. What this means is there is no cost to dipping into the future to bailout the present.

The State has an obligation to business in the same way as business has an obligation to the State. Businesses’ obligation to the State is best measured in tax. The State’s obligation to business is best measured in imagination.

Going into the winter, the real jeopardy for business is lack of cash, so there will be defaults, and a domino cascade of bankruptcies. If the problem is no cash, give them cash. It costs nothing. This is helicopter money for business. The State issues an IOU, goes to the European Central Bank, gets real cash at zero per cent, gives it to business (yes gives it for free) and the businesses reassure their creditors that they have money.

Their creditors’ fears are assuaged, and they chill out and stop demanding payment. Deals will be done in an atmosphere of calm, not angst. This column suggested we do this in March. It’s not too late. It’s just a matter of imagination.

Odd as it may seem, while we have made enormous leaps in medicine since Mesopotamia, we are still bedevilled by disease. Thankfully, we have made greater leaps in monetary economics – so much so that the bond market can provide the winter vaccine for business.

It just a pity the people at the top don’t seem to understand that.

 

 

Meet Ben Jealous – The Reformer Who’s Back To Lead A Second Premier Voting Rights Group

Few advocacy leaders can say they have led two of the more storied progressive organizations fighting for civil rights and voting rights. Ben Jealous now counts himself a member of that select cohort. The youngest person named to head the NAACP, in 2008 when he was just 35, he led that organization through the Trayvon Martin case, the fight over New York’s stop-and-frisk policies and other civil rights battles. He also formed the Democracy Initiative, a progressive coalition pushing campaign finance and voting rights reform. He left the NAACP in 2013 and was the Democratic nominee for governor of Maryland two years ago, losing to GOP incumbent Larry Hogan by 12 points. In June he was named president of People for the American Way, the progressive group founded by TV visionary Norman Lear. 

Note: His answers have been edited for clarity and length.


What’s democracy’s biggest challenge, in 10 words or less?
Money in politics.

Describe your very first civic engagement.
Hanging door knockers for a neighbor who was running for county council on California’s Monterey Peninsula when I was 5 years old.

What was your biggest professional triumph?
Playing leading roles, all in the same year of 2012, in abolishing the death penalty in Maryland, passing marriage equality for the state and and enacting its version of the Dream Act, which helps undocumented immigrants attend state colleges. This made us the first state south of the Mason-Dixon Line to do any of them — and the first state in the nation to do all of them.

And your most disappointing setback?
Getting the third highest vote total of any gubernatorial candidate in the history of Maryland — yet losing my race for want of $10 million, which would have allowed me to reach the 25 percent of voters who had no idea who I was.

How does some aspect of your identity influence the way you go about your work?
I come from a long line of freedom fighters, both Black and white. My parents raised me to understand that the American experiment is both ongoing and fragile. Every generation must work to make our nation more just, and every generation must be vigilant in protecting our democracy. I’ve dedicated my life to doing both.

What’s the best advice you’ve ever been given?
You can do everything you want, but not all at once. Create a new flavor for Ben & Jerry’s. Fully Baked. It would be the current Half-Baked flavor with CBD.

What’s your favorite political movie or TV show?
“Eyes on the Prize,” the 14-hour series documenting the history of the civil rights movement.

What’s the last thing you do on your phone at night?
Text with my daughter, whether she’s in my house or her mom’s.

What is your deepest, darkest secret?
I eat too much Ben and Jerry’s!

Jeffrey Sachs Says Geopolitical Cold War With China Would Be A Dreadful Mistake

Economist and bestselling author Jeffrey Sachs told CNBC a Cold War with China would be a “dreadful mistake.” Sachs said attacking China has become a bipartisan strategy for political gain. He urged global leaders to come together on issues like climate change as the economy undergoes a “remarkably choppy period of disruption and transition.”

 

 


American politicians risk making a “dreadful mistake” by escalating tensions with China, economist and bestselling author Jeffrey Sachs told CNBC.

Sachs, a Columbia University professor and director of the U.N. Sustainable Development Solutions Network, warned that a “geopolitical Cold War” with China would threaten global security in an already tumultuous period marked by the coronavirus pandemic.

“The last Cold War was dangerous enough,” he said. “This one would be even more dangerous. It’s completely misconceived and misguided, but a lot of Americans want to put it to China and think that we run the show, which is a very dangerous view of thinking.”

Tensions between the world’s two biggest economies have intensified during the pandemic, which originated in Wuhan, China. In July, the U.S. ordered China to close its consulate in Houston, citing risks to American intellectual property. China retaliated by revoking the license for the U.S. consulate generate in the Chinese city of Chengdu.

The U.S.-China relationship has been under strain for several years amid a trade war sparked by President Donald Trump and a race to develop key technologies such as 5G wireless networks.

Sachs said attacking China has become a bipartisan strategy for political gain.

“While politics is a game, and a pretty tough one in the U.S., it’s an incredibly dangerous sport also, and to play with the facts and the lies that we’re saying about China right now has consequences,” he said.

Some companies have said they will reevaluate their dependence on Chinese supply chains in the wake of the pandemic. Sachs, author of the new book “The Ages of Globalization: Geography, Technology and Institutions,” said a movement toward “manufacturing nationalism” was already underway as countries compete in new sectors of the economy such as electric vehicles and renewable energy.

He urged global leaders to come together on issues like climate change as the economy undergoes a “remarkably choppy period of disruption and transition.”

“If we face [these crises] together, cooperatively, with a sense of decency, we’ll have some pride that the waters were very high and very choppy but we made it through,” he said. “If we face it as each one is on your own, then we’re going to look back with a lot of regret.”

Conflicting Emotions About Lebanon

When I saw the scenes of French President Emmanuel Macron visiting the devastated areas of Beirut, I was filled with a number of conflicting emotions.

I was pleased that he went directly to the site of the explosions as a sign of deep respect for the suffering of the people and the city. I was furious that no one in the Lebanese government joined him. And I was amazed by the throngs of Lebanese who turned out thankful for his recognition of their pain and eager to demonstrate their contempt for their own failed leaders.

I was once again conflicted when Macron announced that France would be convening a donor conference to provide aid to Lebanon that would be conditioned on the implementation of real reforms. What he said was “I will propose a new political pact in Lebanon and I will be back September 1, and if they can’t do it, I’ll take my political responsibility.”

It made me both sad and angry that in the face of the massive corruption that has bilked billions of dollars from the country and the political dysfunction that has brought Lebanon to its knees, that it took this enormous tragedy and the French president to press hard on the reform issue. Hundreds of thousands of protesters in sustained demonstrations were not enough. COVID-19 was not able to do it. Neither was the economic crisis that has left many Lebanese impoverished and in despair.

Through all these crippling challenges, the government dithered, the elites remained unmoved, and the armed groups, Hizbollah included, stood defiant against reform, “self-policing” their individual communities with the threat of force against protesters. Lebanon continued its slow march to death.

It is, therefore, upsetting that it is the arrogance of the French, who created and saddled Lebanon with its sectarian feudal regime, that is now demanding to “fix” the country. At the same time, I will admit a bit of relief that at last someone put down their foot and said “you must reform, or else”. But it was embarrassed relief, coupled with annoyance, that the ultimatum was left to the French to deliver, especially since that had been the very demand of the massive prolonged protest movement of the fall of 2019.

Last year, in the midst of the country-wide protests against corruption, I was honoured by a Lebanese humanitarian organisation. I began my remarks paraphrasing Kahlil Gibran’s poem “You have your Lebanon, I have my Lebanon.” Like Gibran, I love the Lebanese people, their poetry, art, song and love of life. I love their generous and welcoming spirit. I also love what Lebanon has given to the world, especially its gifted people. And I love the sheer beauty of the country, its majestic snow-capped mountains and its pristine seascapes.

And, like Gibran, I do not love Lebanon’s petty bickering politicians who lead because of an accident of birth. Nor can I embrace the country’s system of sectarian privilege and the corruption that is endemic to the political-economic regime that has squeezed Lebanon dry to the benefit of their chosen ones. And I reject the armed militias, whether they be Christian, Muslim or secular that in the past and in the present continue to torment those who challenge their dominance.

I told the audience that the Lebanon I loved was in the streets making their voices heard demanding fundamental reform, an end to sectarianism, corrupt feudal elites, and rule by force of arms.

In the wake of the protests, the government fell, but was replaced by more of the same. The economy, already in shambles, went into free-fall. And still the leadership could not make needed reforms. “How could they,” one might ask, “when they were the problem.”

Over the past few decades, I have polled in Lebanon and the results are instructive. Lebanese, of all sects, want “one man one vote.” They reject sectarian governance and the tyranny of militias. And they are wary of US and Iranian meddling in their internal affairs. In other words, they want reform.

From everything I’ve heard since the explosions in the port, many Lebanese have crossed the line from frustration with their government to despair that change is possible. A collapsing economy, a loss of control over their domestic and foreign policies, a dysfunctional government that remains insensitive to their needs and aspirations, coupled with a pandemic and continuing refugee crisis that has strained limited resources, have left them still angry but despondent. I believe that was why they responded so hungrily to Macron’s presence at the scene of their newest hurt.

While France is an unlikely patron of change, Macron, therefore, was “singing to the choir”. But it should not be the French alone who should join the Lebanese people in demanding fundamental reform and restructuring of the system of governance. The planned donor conference should provide immediate assistance to aid those in need of support and combine it with a long-term package to rebuild — conditional on needed reforms. This will empower the popular movement in Lebanon and restore their hope that they have allies who will be by their side in the long road ahead to save, rebuild, and restore the country.

Make no mistake, the path forward won’t be easy. The sectarian elites will not just step aside, nor will Hizbollah simply agree to end their threat to use arms against those who demand change. But we’ve come to a crossroads. If the Lebanon we love is to be saved, then the Lebanon we do not love must be defeated. Either that or Lebanon may die.

Some Good, Some Bad In The Democrats’ Platform On Israel / Palestine

I have been engaged in Democratic Party platform debates for over three decades and am amazed at how the party consistently gets the section on Israel/Palestine wrong.

Wrong because the positions expressed are out of touch with political realities on the ground. And wrong because the language they adopt has been out of sync with the opinions of Democratic voters. Unfortunately, the same is true this year. Despite some marginal progress in the 2020 platform language, it’s still 20 years behind the times and out of touch with the views of Democratic voters.

Before I critique this year’s proposed platform plank on Israel/Palestine, let’s review a bit of history.

Back in 1988, representing Jesse Jackson, I introduced an amendment to the platform calling for “mutual recognition, territorial compromise, and self-determination for both Israelis and Palestinians”. The platform drafters not only rejected this mild formula, they also accused us of trying to destroy the Democratic Party. They were wrong.

At that time, Palestinians were in the midst of the first Intifada and US opinion was shifting in response to the disproportionate force being used by the Israelis to crush the revolt. A poll conducted by the Atlanta Constitution showed that 70 per cent of Democrats supported our position. But the party leadership was adamantly opposed to any changes.

Since the platform did call for implementation of the Camp David Accords, we offered compromise language simply spelling out the terms of Camp David. We suggested adding phrases like “land for peace” and “the legitimate rights of the Palestinian people”. I was told that if the “‘P’ word” were even mentioned in the platform “all hell would break loose”.

Because they wouldn’t give, I proceeded to introduce our plank from the convention podium and “all hell did break loose,” not because we raised it, but because they so disrespectfully tried to shut it down.

In 1996 in the early years of the Oslo Process, the party platform draft included a plank calling for “an undivided Jerusalem” as Israel’s capital. I found this troubling since at that very moment the Clinton Administration was cautioning both Israelis and Palestinians against taking “unilateral actions that might predetermine final status issues” (and Jerusalem was one of these). I called Sandy Berger, Clinton’s national security adviser, and expressed my concern that this would undercut the Administration’s position. He agreed and while he couldn’t intervene in the platform process, he dispatched the State Department spokesperson to read a statement to the platform committee clearly distancing the White House from the party’s position. It was an avoidable embarrassment.

In 2012, the party’s platform did not initially mention this language regarding Jerusalem and we were pleased. But on the day after the platform had already been approved by the convention, the chairman of the Platform Committee came to the podium to announce a last-minute amendment declaring “a united Jerusalem the undivided capital of Israel”. Three times, he called for a voice vote to approve the change. And all three times the “No” votes clearly won. Clearly unsettled, the chair decided to announce that the “Yes” votes had won in response, the convention erupted with booing.

That day and the next, I was interviewed by countless media outlets about how Democrats had, in fact, rejected the plank, despite the heavy-handedness of the chair. The party had committed another unforced error.

In 2016, I was involved in the platform drafting effort and found, once again, the party leadership to be out of touch with reality. When I asked to include opposition to settlements in the platform, I was told that the party didn’t want to decide final status issues. When I countered with then we shouldn’t mention Jerusalem, my objection was met with embarrassed silence. It was against this background that I approached the 2020 platform. It’s a mixed bag.

There is language that for the first time creates some degree of recognition for Palestinian rights and attempts to reflect a balanced concern for both Palestinians and Israelis. And the document (for the first time!) recognises the Palestinians right to a state and promises to undo the damage done by the Trump Administration. It calls for restoring US assistance programmes sorely needed by Palestinians, reopening the US Consulate in East Jerusalem that long served Palestinians in the occupied lands, and working to reopen the Palestinian Mission in Washington, DC. But calling for a state two decades too late or promising to return to the status quo ante just is not good enough.

There is one area where significant progress was made relating to the Boycott, Divestment, and Sanctions (BDS) movement for Palestinian rights. While this year’s platform keeps problematic language from 2016 stating opposition to “any effort to delegitimize Israel, including at the UN or through the BDS movement”, it also notably adds a commitment to “protect the constitutional right of our citizens to free speech”. Pro-Israel groups are trying to spin this as a victory, but it’s akin to a GOP platform reading, “We are opposed to abortion, but we support the right of citizens to make their own choice on this matter.”

Even with this advance, there are still significant areas where the platform falls far short of where it should be.

I am baffled why the platform committee once again drew a red line on including any mention of the word “occupation” in the document even though every Democratic leader (including president Obama, Hillary Clinton, and Joe Biden) has spoken about the need to end Israel’s military occupation over Palestinians.

And while it opposes “settlement expansion” (another belated first in our party’s platform), it fails to acknowledge that while successive Democratic administrations have opposed such expansion, the settler population has continued to grow. By refusing to accept our amendment to place conditions on US aid to Israel should Israel continue to build settlements or annex Palestinian lands, the platform only serves to foster Israel’s sense of impunity.

For decades prior to Trump, successive US administrations have called for an end to occupation and expressed opposition to settlements, but have taken little or no action to back up their words. Now, the overwhelming majority of Democratic members of Congress say they oppose annexation. But precisely because these same lawmakers have been reticent to say that there will be consequences if Israel annexes or continues to expand settlements, Israel has continued to ignore what the US says. When there are no consequences to bad behavior, bad behaviour continues.

There are, however, reasons to be hopeful about where this debate is headed. It’s reflected in the courage demonstrated by Bernie Sanders and newer members of Congress, like Alexandria Ocasio Cortez, who are speaking out for Palestinian rights, and in polls showing that a majority of Democrats support conditioning aid to Israel based on its human rights performance.

And so this fight isn’t over. Not by a long shot. We will continue to push Democrats to recognise reality and oppose Israel’s occupation. Instead of just expressions of opposition “settlement expansion” we will continue to press for conditioning US aid to Israel, making it absolutely clear that there will be consequences if Israel does annex Palestinian land or continues its settlement enterprise.

Polls show that these positions have the support of most Democrats and they reflect political imperatives on the ground. It is high time for our party’s platform to catch up with reality.

America’s Unholy Crusade Against China

Last month, Secretary of State Mike Pompeo delivered an anti-China speech that was extremist, simplistic, and dangerous. If biblical literalists like Pompeo remain in power past November, they could well bring the world to the brink of a war that they expect and perhaps even seek.

Many white Christian evangelicals in the United States have long believed that America has a God-given mission to save the world. Under the influence of this crusading mentality, US foreign policy has often swerved from diplomacy to war. It is in danger of doing so again.

Last month, Secretary of State Mike Pompeo launched yet another evangelical crusade, this time against China. His speech was extremist, simplistic, and dangerous – and may well put the US on a path to conflict with China.

According to Pompeo, Chinese President Xi Jinping and the Communist Party of China (CPC) harbor a “decades-long desire for global hegemony.” This is ironic. Only one country – the US – has a defense strategy calling for it to be the “preeminent military power in the world,” with “favorable regional balances of power in the Indo-Pacific, Europe, the Middle East, and the Western Hemisphere.” China’s defense white paper, by contrast, states that “China will never follow the beaten track of big powers in seeking hegemony,” and that, “As economic globalization, the information society, and cultural diversification develop in an increasingly multi-polar world, peace, development, and win-win cooperation remain the irreversible trends of the times.”

One is reminded of Jesus’s own admonition: “Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye” (Matthew 7:5). US military spending totaled $732 billion in 2019, nearly three times the $261 billion China spent.

The US, moreover, has around 800 overseas military bases, while China has just one (a small naval base in Djibouti). The US has many military bases close to China, which has none anywhere near the US. The US has 5,800 nuclear warheads; China has roughly 320. The US has 11 aircraft carriers; China has one. The US has launched many overseas wars in the past 40 years; China has launched none (though it has been criticized for border skirmishes, most recently with India, that stop short of war).

The US has repeatedly rejected or withdrawn from United Nations treaties and UN organizations in recent years, including UNESCO, the Paris climate agreement, and, most recently, the World Health Organization, while China supports UN processes and agencies. US President Donald Trump recently threatened the staff of the International Criminal Court with sanctions. Pompeo rails against China’s clampdown on its mainly Muslim Uighur population, but Trump’s former national security adviser, John Bolton, claims that Trump privately gave China’s actions a pass, or even encouraged them.

The world took relatively little notice of Pompeo’s speech, which offered no evidence to back up his claims of China’s hegemonic ambition. China’s rejection of US hegemony does not mean that China itself seeks hegemony. Indeed, outside of the US, there is little belief that China aims for global dominance. China’s explicitly stated national goals are to be a “moderately prosperous society” by 2021 (the centenary of the CPC), and a “fully developed country” by 2049 (the centennial of the People’s Republic).

Moreover, at an estimated $10,098 in 2019, China’s GDP per capita was less than one-sixth that of the US ($65,112) – hardly the basis for global supremacy. China still has a lot of catching up to do to achieve even its basic economic development goals.

Assuming that Trump loses in November’s presidential election, Pompeo’s speech will likely receive no further notice. The Democrats will surely criticize China, but without Pompeo’s brazen exaggerations. Yet, if Trump wins, Pompeo’s speech could be a harbinger of chaos. Pompeo’s evangelism is real, and white evangelicals are the political base of today’s Republican Party.

Pompeo’s zealous excesses have deep roots in American history. As I recounted in my recent book A New Foreign Policy, English protestant settlers believed that they were founding a New Israel in the new promised land, with God’s providential blessings. In 1845, John O’Sullivan coined the phrase “Manifest Destiny” to justify and celebrate America’s violent annexation of North America. “All this will be our future history,” he wrote in 1839, “to establish on earth the moral dignity and salvation of man – the immutable truth and beneficence of God. For this blessed mission to the nations of the world, which are shut out from the life-giving light of truth, has America been chosen…”

On the basis of such exalted views of its own beneficence, the US engaged in mass enslavement until the Civil War and mass apartheid thereafter; slaughtered Native Americans throughout the nineteenth century and subjugated them thereafter; and, with the closure of the Western frontier, extended Manifest Destiny overseas. Later, with the onset of the Cold War, anti-communist fervor led the US to fight disastrous wars in Southeast Asia (Vietnam, Laos, and Cambodia) in the 1960s and 1970s, and brutal wars in Central America in the 1980s.

After the September 11, 2001, terrorist attacks, the evangelical ardor was directed against “radical Islam” or “Islamic fascism,” with four US wars of choice – in Afghanistan, Iraq, Syria, and Libya – all of which remain debacles to this day. Suddenly, the supposed existential threat of radical Islam has been forgotten, and the new crusade targets the CPC.

Pompeo himself is a biblical literalist who believes that the end time, the apocalyptic battle between good and evil, is imminent. Pompeo described his beliefs in a 2015 speech while a Congressman from Kansas: America is a Judeo-Christian nation, the greatest in history, whose task is to fight God’s battles until the Rapture, when Christ’s born-again followers, like Pompeo, will be swept to heaven at the Last Judgment.

White evangelicals represent only around 17% of the US adult population, but comprise around 26% of voters. They vote overwhelmingly Republican (an estimated 81% in 2016), making them the party’s single most important voting bloc. That gives them powerful influence on Republican policy, and in particular on foreign policy when Republicans control the White House and Senate (with its treaty-ratifying powers). Fully 99% of Republican congressmen are Christian, of whom around 70% are Protestant, including a significant though unknown proportion of evangelicals.

Of course, the Democrats also harbor some politicians who proclaim American exceptionalism and launch crusading wars (for example, President Barack Obama’s interventions in Syria and Libya). On the whole, however, the Democratic Party is less wedded to claims of US hegemony than is the Republican Party’s evangelical base.

Pompeo’s inflammatory anti-China rhetoric could become even more apocalyptic in the coming weeks, if only to fire up the Republican base ahead of the election. If Trump is defeated, as seems likely, the risk of a US confrontation with China will recede. But if he remains in power, whether by a true electoral victory, vote fraud, or even a coup (anything is possible), Pompeo’s crusade would probably proceed, and could well bring the world to the brink of a war that he expects and perhaps even seeks.

The Democratic Party Is Setting The Stage For A Letdown

During the week of August 17, thousands of Democrats elected to serve as delegates to their party’s national convention will log on to their computers to view the proceedings. They will cast electronic votes on the party platform and for their party’s nominee to challenge Donald Trump for the presidency.

About one-quarter of this year’s delegates are Bernie Sanders supporters. Most of them are progressive political activists—and many are first-time participants in a national convention. This virtual event will not be the experience they expected. And while all of those with whom I’ve spoken are supportive of the precautions being taken in this era of pandemic, most remain in the dark about the convention plans and whether their participation is valued.

Months ago, when the 2020 Summer Olympics and a host of professional sporting events were canceled, it should have been clear that we were going to have problems bringing tens of thousands of delegates, supporters, and press to Milwaukee. I fully recognize the political calculations that had to be made, the problems of disappointing the host city, the need to have an event that would serve as a launching pad for the presidential election season. And I have no doubt that the convention planning team and DNC staffers were working round the clock weighing all these problems and exploring options.

Nevertheless, what was missing was a recognition that the convention wasn’t just the concern of the planning staff or the Biden campaign. It was personal for the delegates—especially first-timers, many of whom worked hard to earn their posts, felt empowered when they won, and were looking forward to playing their part in this quadrennial drama.

Given this, it was troubling how little communication there was with prospective delegates and how little engagement there was with DNC members while deliberations were ongoing. I should be clear that I am not faulting the convention or DNC staff that delegates were left in the dark. This was a political call that should have come from the leadership of the party.

With this in mind, the Bernie Delegates Network (BDN) conducted a national survey of Sanders delegates. We wanted to get their assessment of the planning process, whether they felt respected as delegates, and ideas they might have shared had they been consulted.

Their responses should be seen as troubling both for the party and the Biden campaign. More than 80 percent of those who responded said they felt disrespected or ignored. And their comments made clear why.

Common refrains were that as delegates they “felt left out” and that the process was “lacking in transparency and input.” Some went further, cautioning that this year’s “organizing, like the 2016 DNC convention, seems to minimize participation by Sanders delegates.”

Two others summed up the views of many:

“It should have been anticipated much earlier that the convention would be online and things planned with that in mind ahead of time. [There were] a lot of missed opportunities…” And there was “too little communication with stakeholders, that is, delegates and DNC members. It has been a closed affair— not seeking input…”

Frequently, The Sanders delegates also complained that they had no idea how this convention will allow their voices to be heard. They expressed the desire to participate but said they “don’t know how.” And a number of first-time delegates were unsure whether their participation was even valued by the party.

Some may dismiss these complaints as coming from the disgruntled losing side, but there is a risk in doing so. Young and old progressives are an important constituency. They make up a respectable share of Democratic voters, and many are activists who represent communities Democrats will need to win. As Jesse Jackson famously noted at the 1988 Democratic convention, “It takes two wings to fly.”In party-building, there can be no victor/vanquished. The role of a successful convention is to heal internal divisions and create unity of purpose among the various component groups of the party. In 2016, too little attention was paid to this critical undertaking. Bernie Sanders, personally, tried to soothe the disappointment felt by his delegation. But the message they received from the establishment was “We won, and you lost.” They felt shut out of the proceedings and left the convention demoralized.

This year could have been different. So far, it has not been. There isn’t the same degree of rancor as there was four years ago; the Biden/Sanders task forces formed to create a unified approach to writing the platform, while producing a document not wholly satisfying to progressives, was still a good-faith effort to bridge differences.

But leaving grassroots delegates in the dark as to how the convention will work—and reducing their role to passive online viewers—runs the risk of producing a massive letdown that could leave hundreds of delegates alienated. What this may mean is that at the conclusion of the party confab, many first-time Sanders delegates (and some old-timers, as well), instead of being energized and engaged, may turn off their computers feeling deflated and dejected. The unity so necessary for victory will not have been achieved.

This can still be addressed. If there is a will, creative solutions can still be found to give us the “two wings” we need to fly. But time is running out.

3 Actionable Insights From Simon Sinek

Simon Sinek is a wise human being. He taught us that organizations can only truly inspire if they “start with why”. He taught us that leaders eat last. And now, he is teaching us how leaders should behave in the age of Covid. Here are the three top actions he recommends:


1. Double down on ‘good leadership’.

“Human instincts kicked in when it was a global pandemic. So whether somebody was considered a good leader or an ineffective leader previously, as soon as Covid happened they picked up the phone and called their people one-by-one and said, ‘are you OK?’ And when Black Lives Matters happened, a lot of people, whether they were a good leader or an ineffective leader, picked up the phone. They called their African American colleagues and said, ‘are you OK?‘ Or ‘do you need to talk?‘ Or ‘I need your advice’.

“The funny thing is, that‘s just good leadership. My question is: why weren‘t you doing that before? If somebody was struggling, why did you yell at them instead of just calling them up and saying, ‘are you OK?’ Or why weren‘t you just calling your people at random and saying, ‘just checking in’. That‘s just good leadership.

“So there‘s a lot of human instinct that kicked in when the stakes felt higher. Go do that. Double down on good leadership – which means consider the wellbeing of human beings before you consider their performance and their results.”

2. Put the customer at the front of the equation, not yourself.

“The companies that are struggling to pivot right now have put themselves at the center of the equation. They say, ‘how can we make more money?‘ Or, ‘how can we save ourselves?’ The companies that are really doing a good job at everything right now have put their customer at the center of the equation. They are saying, ‘we have really important, valuable things’.

“I‘ll give you one of my favorite examples. There‘s a pizza place in Chicago called Dimo’s Pizza. Dimo’s made 70% of its revenues from selling slices. Covid hits and Dimo‘s says: ‘Shit, we‘re not equipped for home delivery. We‘re a slice place. What are we going to do?’ Any other pizza place would say: ‘We have a pizza oven. All we can do is make pizzas. We’re done for.’ But that’s not what it did. Instead, it says: ‘We have resources. What can we do with a pizza oven?’ It turns out pizza ovens burn much hotter than regular ovens, so it can bend industrial grade plastic. What it did was start taking sheets of industrial grade plastic and making face shields for healthcare workers, and then it delivered them in pizza boxes.

“Real innovation isn’t asking, ’what can a pizza oven make?’ It’s asking, ’what can an oven make?’ This goes for people too. It should be, ‘I’ve got a lot of smart people, what can they do?’ It’s not, ‘what can my accountant do because accountants can only do accounting’. Or ’what can my engineer do because engineers can only do engineering’. It is ’what can smart people do when we give them a customer-focused problem?’

“‘How can I sell more pizza?’ is putting the company at the center of the equation. And that’s what a lot of companies are doing. ‘How can we sell more? We’ve got to survive.’ But what Dimo’s did is: ‘Shit, people need something. How can we fulfill a need? We have resources. Can we fulfill that need with our resources? Turns out we can completely reinvent and buy nothing.’ I love that. And that only happens when you have an external focus, when you have a giving mentality.”

3. It doesn’t matter how mature your company or your industry is, you are a startup.

“The companies that are struggling to pivot are trying to do what they’ve always done in this environment. The companies that are doing a good job of pivoting are saying: ‘OK, throw the old playbook out and let’s pretend we’re a startup. How would we start up our business today?’ This is why Tesla is so much further ahead with electric cars than all the car companies.

“You would think car companies would be ahead because they know how to build a car, but that was the problem. They took what they used to know and tried to make an electric car. Tesla started from scratch and said: ‘We don’t know anything about how to make a car. What would we do if we’re starting now?’ And it turns out it’s like five years ahead of everybody.

“So that mentality, that startup mentality, is very scary because all the people who were at the top of the organizations, all the decision makers, they got there by sticking to the plan they’ve been doing for 20 years. Now we’re telling them, ‘yeah, I know, but stop doing that”.

It’s Time For The Democratic Party To Mention The Occupation

The Democratic Party often has meaningful debates when putting together its platform on a range of issues—including one often seen as the third rail of American politics: US policy on the Israeli-Palestinian conflict.

As longtime activists in the American Jewish and Arab American communities, respectively, we believe this year’s platform has the opportunity to be groundbreaking and fruitful instead of divisive. Democratic leaders should unite behind a vision that shows a clear commitment to the rights and security of both Palestinians and Israelis. They should promote diplomacy to help achieve peace, while strongly opposing settlements, annexation, incitement, violence, and the injustice of occupation.

The first draft of the platform’s Israel/Palestine plank revealed last week contains several of these elements—including, for the first time, affirmation of “the right of Palestinians to live in freedom and security in a viable state of their own.” Yet, frustratingly, once again the platform draft is missing an indispensable component: acknowledgement that millions of Palestinians continue to live under Israeli military occupation, without the basic civil rights and freedoms enjoyed by Israeli citizens living both inside the State of Israel and in illegal West Bank settlements.

Including or omitting reference to occupation is not a mere word choice. It’s an indication of whether the Democratic party is truly willing to confront and oppose the systemic injustice that has been at the heart of the Israeli-Palestinian conflict for over 53 years.

Without admitting the existence of occupation, one cannot understand how Palestinians are daily deprived of their fundamental rights—or why they demand freedom and independent statehood. Without admitting occupation, one cannot understand why so many veteran Israeli political and security leaders warn that the country’s unending rule over another people is eroding its democratic institutions and leading it down (in the words of former prime minister Ehud Barak) “a slippery slope toward apartheid.”

It’s encouraging that the current draft includes opposition to Israeli settlement expansion and potential unilateral annexation. This is a major improvement over previous platforms that said nothing on the subject of settlements. Yet if the next Democratic administration is serious about promoting real peace, the party needs to go beyond this.

It’s not only annexation or further expansion of settlements that poses a major obstacle to peace—it is the entire settlement enterprise, which for decades has entrenched occupation, compromising the creation of a viable Palestinian state alongside Israel.

Until we confront the settlers’ agenda head-on, our diplomatic efforts will continue to be stymied—and both Palestinians and Israelis will continue to lose faith that a negotiated solution could ever be possible. Until we make clear that American taxpayer dollars cannot be used as a blank check to help implement illegal annexation and other actions and policies that run counter to US interests and values, the Israeli right will continue to reject all compromise and to believe that it can act with impunity.

Outside of the settlement movement and its apologists, the term “occupation” is not and should not be controversial in this country, in Israel/Palestine or anywhere in the world. Until the Trump administration, it has been the policy of both Republican and Democratic presidents to recognize (and oppose) the occupation since it began in 1967.

In 2008, President George W. Bush called for “an end to the occupation that began in 1967.” In a 2009 speech, President Barack Obama stated that “the Palestinian people…endure the daily humiliations—large and small—that come with occupation.” For decades, even Israeli hard-liners such as former prime minister Ariel Sharon have regularly used the term.

There is no reason for the Democratic Party not to officially recognize occupation in 2020, at a time when so many Americans are finally grappling with deep systemic issues, like racial injustice and police brutality, that continue to shape our reality.

As the party seeks to affirm its commitment to the fundamental rights of all people in this country and around the world, it must include a clear commitment to the rights and security of both Israelis and Palestinians. It must decisively bring an end to years of obfuscation and denial. It must confidently call out the occupation as an unacceptable injustice that—in order to achieve a better future for both peoples—can and should be brought to an end.

With the platform still subject to amendment and revision, it’s not too late for party leaders to take this vital step. If they do, they can help avoid further divisiveness and frustration among their own base voters. Democrats across the country would rally behind a platform that promoted this vision.