Trump is Winning the Psychological War on Democracy

Someday years from now, Kamala Harris declared in her Democratic convention address, children and grandchildren will look back on Donald Trump’s presidency with a bracing question for the people who lived through it: “Where were you when the stakes were so high?”

There surely will be some good stories to tell:

“By day, I was an ordinary shopkeeper. By night, my comrades and I donned camouflage and planted bombs under railroad trestles to disrupt the supply of makeup and hairspray heading to the White House and Fox News studios.”

Or maybe:

“I had an affair with a senior Trump White House official. I pretended to love her even as I inwardly recoiled at her icy touch. Each night I delivered the secrets I learned by carrier pigeon to leaders of The Resistance.”

Among most Democrats and a notable number of Republicans, it is now a prevailing notion that the general election ahead represents an existential moment for American democracy. Not just Harris, but Joe Biden and, especially, former President Barack Obama painted the choice in precisely these terms.

But if the character of Trump resistance is different than historic resistance movements that is because the Trump threat is likewise of a different character. It arrives at a time when nearly every dimension of daily life reflects how we live in an Age of Small. We fight a virus that is invisible to the naked eye. We communicate with one another most often in bursts of sentence fragments by text and Twitter.

Even those who answer Obama’s urgent summons—“Don’t let them take away your democracy”—will join a movement that for the most part exists in an agitated digital space that hardly has a tactile dimension. It will be hard to evoke any retrospective romance of the sort associated with the French Resistance in World War II or the anti-fascists of the Spanish Civil War, as memorialized in the literature or Hemingway and Orwell.

Until this summer, when several cities erupted in anger over George Floyd, the Trump Resistance has lacked the brutal physicality of the civil rights movement, when protesters regularly faced the batons of police officers and sometimes the guns and nooses of Klansman.

Even now, for the vast majority of people who oppose Trump, the honest answer those children and grandchildren who ask “where were you” when constitutional democracy was on the line will be something like:

“I was on my couch compulsively watching cable and checking social media, by turns indignant and depressed.”

“I was on the driveway storming out of a holiday gathering after I just couldn’t listen to my uncle spout his Trump B.S. any longer.

“At the dinner table we would play those videos by that funny woman, what’s her name, Sarah something? ... Yes, that’s it, Cooper.”

The point is not to trivialize Obama’s dire warnings, or to argue that the threat he describes to historic norms of governance is illusory. But the gap between drastic language about the peril represented by Trump and the banal housebound way that all but the most energized activists are experiencing the moment illuminates a point about both the Trump and anti-Trump movements.

Both movements are in part ideological but more profoundly psychological. They are driven by people who find the era fundamentally disorienting, who not only hold the other side’s political leaders in contempt but are aghast that fellow citizens somehow are in the grip of an alternate reality.

The reason Obama can credibly warn the anti-Trump movement that democracy is on the line does not have to do with midnight knocks on the door, imprisonment or murder of journalists or opposition party leaders, unchecked surveillance as an instrument of political control. These things are happening—at an accelerating pace—all over the world, but not here. On concrete questions of law, George W. Bush’s terror policies arguably represented a more fundamental challenge than Trump tenure has to once-settled questions of civil liberties and the relationship of the individual to state power.

The reason Trump is to many people the more profound threat is that he has eviscerated everyone’s sense of normal, of the shared conviction that “that’s just not how things are done in America.” High-level intervention in criminal investigations in which Trump has a political interest, pardons for cronies, firings of inspectors general, profiting off government business at Trump properties—these are the most prominent examples.

But, so, too, is just about any day picked at random. Just this week, Trump in an interview claimed he has knowledge of an airplane headed to Washington “almost completely loaded with thugs, wearing these dark uniforms, black uniforms, with gear and this and that” hoping to disrupt his virtual convention week; Asserted that Biden is taking a drug—“some kind of enhancement”—to help with allegedly failing mental acuity; and one of his campaign spokesmen in a television appearance said Kyle Rittenhouse, charged with first-degree murder of protesters in Kenosha, Wis., was practicing understandable vigilante justice: “If you don’t allow police to do their job, then the American people have to defend themselves some way.”

Yes, all these comments—and dozens of others—raced across social media and cable as uproars. But under the previous 44 presidencies, any one of these moments naturally would have been so breathtaking that it would have dominated news coverage for months, and effectively brought the presidency to a standstill.

If democracy requires some shared sense of normal—of what is in bounds and what is not—there is no question that Trump is so far winning the psychological war on democracy.

The most striking result of a USA Today/Suffolk University poll this week was the finding that 28 percent of Biden supporters say they aren't prepared to accept a Trump victory as fairly won. Nineteen percent of Trump backers say “they aren't prepared to accept a Biden victory as legitimate,” the USA Today story said.

This result isn’t because of government jackboots. It is because of a degraded political culture in which people do not believe—have no reason to disbelieve—that basic institutions and rituals of democracy are on the level.

I’m typically a bit skeptical of journalists or political activists who portray themselves—in a U.S. domestic political context—as fighting heroically on the barricades of freedom. It seems frivolous for people who move freely between home and television studio, often while promoting books or other lucrative projects, to compare themselves with people who genuinely are at risk of jail or torture or summary execution in other countries.

Increasingly, though, it seems clear that physical peril isn’t the only kind of threat to democracy. The psychological kind matters, too.

Is hurling obscenities at the television screen or trading mocking videos of Trump an expression of a robust democratic culture at work? That seems likely to me. Or is it what people do when they worry that culture is potentially eroding beyond repair?

The latter is the scenario Obama warned about. Let’s hope, years from now, his words sound a bit overexcited. We will be in trouble if they sound prescient.

from Politics, Policy, Political News Top Stories https://ift.tt/3bnOdWx
via 400 Since 1619

Donald Trump Is a Terrible Retail Politician. Will It Matter in November?

There might be no better summary of Donald Trump’s campaign style than the way he handled Kenosha this week. Arguing that a visit to the Wisconsin city would “increase love and respect for our country” —and over the objections of Wisconsin Governor Tony Evers— he made a trip there to survey the damage, praise police in riot gear and tell reporters, “we’re going to get it fixed up.” But there’s something significant that Trump didn’t do in Kenosha: Meet with the family of Jacob Blake.

Just a week ago, the Republican National Convention went to great lengths to convey Trump as a warm and personable figure, the kind of president who could calm troubled nerves or lend a healing voice at a time of unrest. U.S. Representative Jim Jordan told a story about Trump consoling his grieving relatives. Deputy Chief of Staff Dan Scavino recalled how Trump saw “a spark” in him when he was a young caddy at a golf club. “I wish you could be with me by his side to see his endless kindness to everyone he meets,” Scavino said.

The naturalization ceremony that aired during the convention seemed aimed at promoting this same image of Trump as a leader with a human touch. There was just one problem: No one looked more uncomfortable in the moment than Trump himself. Standing behind a podium in a White House hallway, reading the biographies of newly-minted citizens, he struggled with their names, made eye contact fleetingly, and deviated from his prepared remarks only a few times—to call Wyoming a “great place, great state,” for instance, and assure one man that his small construction company would grow to “have hundreds of employees, I think, right? Could happen.”

A one-on-one connection is an art of the trade that most practiced politicians hone over years of courting voters in living rooms and VFW halls, shaking hands at state fairs and Veterans Day parades. The best of them can manage, in a human interaction, to convey a certain magic: the impression that a moment of campaigning is all about them. Bill Clinton could famously make a stranger at a political event feel like the only other person in the room. Lindsey Graham has talked about the joys of a retail presidential campaign (“It’s almost like running for sheriff!”) and gleefully taken donors to a skeet-shooting range. Joe Biden’s urge to make connections is, by all accounts, a driving force of his personality—his compulsive need to hug people he’s just met has gotten him into trouble in the #MeToo era.

But Trump has very little of this skill, and he has gotten very little practice at it over the course of the past four years. In part, that’s because, as a noted germaphobe, he has seldom seemed to want to engage in close-contact politics. And in part, it’s because his fans never expected that of him in the first place—his image was fully-formed from the start as a brawler, not a touchy-feely friend.

Trump swooped into the 2016 race as a celebrity, which meant that in the retail-politics-heavy early primary states—where appearances at small gatherings can make up for lack of money or name recognition—he was mostly able to skip the kinds of intimate events where candidates and voters engage in lengthy back-and-forths. Christopher Galdieri, a political science professor at St. Anselm College and author of the book Donald Trump and New Hampshire Politics, kept track of the candidates’ New Hampshire events leading up to 2016. By his count, Trump made 42 appearances in the state before the primary, only 13 of which were retail-style events: six town halls, three house parties, two meet-and-greets, two roundtables. By comparison, Lindsey Graham did 95 retail events, Marco Rubio did 54, Jeb Bush did 81, Chris Christie did 113. Instead, Trump moved straight to big rallies and his always-handy Twitter account, both venues where he was the only one talking, tossing out insults and braggadocio as the audience egged him on.

Now, 2020 appears to be a repeat of the same playbook. In 2016, Trump’s lack of talent for retail politics clearly didn’t matter much; he’s still here to run for re-election, after all. But Joe Biden, whose campaign said will make his own trip to Kenosha on Thursday “to bring together Americans to heal and address the challenges we face,” is a different opponent than Hillary Clinton was. If retail politics still has any purchase in 2020, this match-up might be the one that proves it.

If it doesn’t, that might be because 2020 is even more suited than 2016 was to Trump’s secret weapon: At a moment of maximum crisis and disorder, he hopes to convince voters that he’s a figure who stands apart from the crowd, positioned to swoop in and take command. “I alone can fix it,” he declared at the Republican National Convention in 2016. It doesn’t appear to be working yet: In a Quinnipiac poll released Wednesday, 50 percent of likely voters said Trump as president makes them feel less safe, compared to 40 percent who said that having Biden as president would make them feel less safe. But as 2020 spirals further and further out of control, Trump is betting that—despite his campaign’s attempts to accentuate his soft touch—the image of the distant warrior will be the one that works.

At the Democratic National Convention, Biden’s empathy and fellowship were front and center. There were personal testimonials about how he helped a young stutterer and befriended an elevator operator. The message was that hardships in his own life had prepared Biden to understand the hardships of others, and his emotional connections with everyday Americans would bleed into his policies and his actions.

This kind of understanding has never been part of Trump’s story; he traffics in boasts and cheap insults, not expressions of vulnerability. Trump “never tried to suggest that he feels people’s personal pain, so to speak,” says Elliott Fullmer, a political science professor at Randolph-Macon College. Instead, his implicit argument has been that if the country has problems, “somebody with his success can fix it.” And when Trump evokes an emotional response from a crowd, Fullmer says, “It’s not based on feeling the pain of their personal circumstances, but rather expressing and validating their anger.”

The intimacy of retail politics, Fullmer notes, draws out a different political skill set. During the past two election cycles, Fullmer has taken students on an extended trip to witness the New Hampshire primary campaign, dropping in on candidate visits at libraries and schools, churches and bars. The most effective retail politicians, he notes, employ a range of tactics to forge an emotional connection. They make eye contact. They remember the particulars in a voter’s question: a relative’s name, a medical condition. (“Sometimes a questioner is really telling a story on the way to their question,” Fullmer says, and a candidate who repeats back the details offers validation.) Sometimes, they engage in a charming bit of theater: At a Tulsi Gabbard event in a bar last January, one of his students had an exchange with the candidate that culminated in a pushup contest—which Gabbard won.

Trump didn’t mingle with the people much during the 2016 campaign—expected behavior, perhaps, for someone who has called handshaking “one of the curses of American society.” Galdieri was struck by photos from Trump’s 2015 appearance at the go-to breakfast series Politics and Eggs: Well before social distancing was a public health imperative, Trump was mostly offering a thumbs-up, not a hug, to voters who came up to greet him. At political events, “he’s not doing the handshake or the arm around the shoulder,” Galdieri says. It was “Stand close to me, I’ll put my thumbs up, but we don’t actually have to touch.”

And fear of germs can’t be the only explanation. In a 2016 article in The Atlantic, Dan McAdams, a psychology professor at Northwestern University, judged Trump against five standard personality traits: extroversion, neuroticism, conscientiousness, openness and agreeableness, that last one defined as “warmth, care for others altruism, compassion, modesty.”

McAdams has continued to study Trump’s behavior, writing the 2020 book The Strange Case of Donald J. Trump: A Psychological Reckoning. Among the things that sets Trump apart, McAdams told me by phone, is his seeming inability to conform to different situations. In life, most of us play multiple roles—spouse, parent, child, colleague, friend—and change our actions according to expectations. But Trump, McAdams contends, is incapable of playing anyone but Donald Trump, a pugilistic dealmaker of his own imagination, engaged in constant combat that he has to win. That’s why, as president, he never adapted his persona to match the dignity of the office, McAdams posits—and why he comes across so awkwardly in situations when he’s forced to appear empathetic.

“You get these ceremonies at the White House every once in awhile. Maybe he needs to meet with a group to console them … He reads from a script, quite literally,” McAdams said. “In general, that’s when he’s not playing Donald Trump, and so he’s just no good at that. He doesn’t have any skill playing any other role.” When he met with survivors and victims’ families after the Parkland school shooting massacre in 2018, Trump held a talking-points card, apparently handwritten by trusted staffer Hope Hicks, that included a basic script for empathy: “I hear you.”

At the GOP convention, speaker after speaker took pains to insist that the behavior McAdams talks about does happen, just behind closed doors. “I have seen firsthand many times the President comforting and encouraging a child who has lost a parent, a parent who has lost a child, a worker who lost his job, an adolescent who lost her way to drugs,” presidential adviser Kellyanne Conway said. Press Secretary Kayleigh McEnany recalled a personal phone call from Trump as she recovered from a mastectomy.

And Ivanka Trump acknowledged, with gilded euphemisms, the chasm between her father’s persona and some voters’ expectations of kindness. “I recognize that my dad’s communication style is not to everyone’s taste and I know that his tweets can feel a bit unfiltered,” she said, before proceeding to outline “the moments that I wish every American could see:” the fact that he keeps her son’s LEGO White House in the Oval Office and “shows it to world leaders, just so they know he has the greatest grandchildren on earth;” the “pain in his eyes” when he receives updates about deaths from COVID-19; the “emotion on his face” after he commuted non-violent drug offender’s prison sentence, and watched her reunite with her family.
But she ended with an argument that felt much closer to Trump’s actual relationship with his loyal base: “Dad, people attack you for being unconventional, but I love you for being real, and I respect you for being effective.”

Trump looks a lot happier when he’s able to lean into that version of the “real” him, brandishing words as bullets, not valentines. The night after the convention, he delivered a marathon speech to a crowd of 1,400 in New Hampshire, standing before a hangar at an aircraft maintenance company, with Air Force One looming in the background. As he draped himself over the podium, listing a stream of insults and accomplishments that wouldn’t be fact-checked in real time, Trump looked like he was having a ball. He was back to familiar form, mocking Kamala Harris for her failed presidential bid, referring to Democrats as “a bunch of nut jobs,” displaying what might be the dark genius of his public persona: If there’s no expectation that he’s supposed to be nice, that gives him a lot of latitude to be mean.

His supporters lapped it up, and Trump offered his appreciation back. “I want to thank New Hampshire for all you’ve done for me,” he said at the end. But he also reminded the crowd that, on some level, he did take the relationship personally. If Biden wins, he declared, with a twinkle in his eye, “I’ll be so angry at New Hampshire I’ll never speak to you again.”

from Politics, Policy, Political News Top Stories https://ift.tt/2Do476H
via 400 Since 1619

Opinion | The Middle East Just Doesn’t Matter as Much Any Longer

Joe Biden has made clear that he wants America “back at the head of the table” to “rally the free world to meet the challenges facing the world today. ... No other nation has that capacity.”

While it is essential for the United States to restore U.S. leadership and credibility on issues that are vital to national security and prosperity—most notably, global health cooperation, combating global warming and pushing back on China’s predatory trade practices—there is one region that simply isn’t as important as it used to be: the Middle East.

No matter who wins the White House in November, it is important to recognize that in recent years, the turbulent Middle East—where more often than not American ideas go to die—has become decidedly less important to American foreign policy and to our interests. The change reflects not only new regional dynamics and U.S. domestic priorities but the changing nature of American interests there.

American leadership and exceptionalism cannot fix a broken Middle East or play a major role in leading it to a better future. The U.S. still has interests there to protect but America needs to be realistic, prudent and disciplined in how it secures them. If we can learn to act with restraint, we’ll avoid the overreach, arrogance and self-inflicted wounds that have caused us and many others so much unnecessary misery and trouble.

If the past two administrations were wary about overcommitments in the Middle East pre-pandemic, Washington should be downright allergic to any unnecessary involvement in the time of Covid. Domestic priorities will and should take precedence over any Middle East adventures likely to absorb large resources or the president’s time. The next administration will confront the greatest challenge of national recovery since the 1940s—and it won’t have a world war that energized the U.S. economy and left America as the dominant power abroad. Add to that crisis domestic unrest driven by severe polarization along class, racial and political lines and a loss of confidence and trust in our governing institutions. Pressures from growing debt and deficits will impose severe fiscal constraints on pursuing anything but vital American interests abroad.

A glance at the daily headlines underscores just how much U.S. strategic priorities have shifted away from the Middle East over the past few years: The coronavirus pandemic wreaking havoc on American lives and livelihoods and our credibility around the world; extreme weather events—raging forest fires in California, Hurricane Laura ripping into the Gulf Coast, a summer of unusually repressive heat—linked to climate change; an adversarial China flexing its muscles throughout the Asia-Pacific region and an intensifying U.S.-China rivalry for military, economic and technological supremacy; Russia’s continued rogue behavior (see: the recent poisoning of Putin’s chief domestic opponent Alexei Navalny) and the Kremlin’s continued interference in the U.S. presidential election; and the rise of homegrown white-nationalist terrorism.

All these challenges have assumed far greater significance than the declining terrorist threat to the U.S. homeland emanating from the Middle East. The last thing this country needs is to throw good money after bad in a futile search for opportunities to reform, let alone transform, the dysfunctional Middle East.

During the Cold War, America’s quest to dominate the Middle East was driven largely by the need to ensure the uninterrupted flow of its energy resources to America and its allies. Throughout most of this period, the Persian Gulf constituted a disproportionate share of global oil reserves and U.S. oil imports. Ancient history. With the growth of nonfossil energy sources, the discovery of large oil and natural gas deposits outside the Persian Gulf and increased domestic U.S. oil and natural gas production, the Middle East’s vast energy resources are of declining strategic significance to the United States. The price of oil has dropped significantly in recent years despite continued turmoil in major oil producing countries like Iraq, Iran and Libya, which together have removed billions of barrels of oil from international markets. Moreover, roughly 85 percent of Persian Gulf oil exports are bound for China, India, Japan and South Korea.

Still, oil production in the Gulf still accounts for about 20 percent of world oil output, and roughly one-third of total seaborne oil passes through the Strait of Hormuz. Thus, maintaining stable global oil prices still depends in part on preventing significant interruptions in oil exports from the Gulf that would create a sudden and dramatic spike in the price of oil that markets would have difficulty adjusting to in the short term. This threat can be mitigated by maintaining the U.S.’s modest naval presence in Bahrain and timely release of oil from national stockpile reserves. Simply put, the United States now has the capacity to respond rapidly to price swings through market mechanisms; Middle Eastern crises don’t have the impact on oil prices that is generally assumed; and all the oil producing states, including a disruptive Iran, have an interest in getting their product to market.

Afghanistan and Iraq—the two longest wars in American history—are trillion-dollar social science projects that serve as poster children for the limitations of American power. The standard for victory in these conflicts was never: Could we win?—if winning meant building stable, peaceful pro-American polities—but rather: When could we leave? No amount of rationalization can justify the sacrifices made by Americans, Afghans and Iraqis given the paucity of the returns.

It is magical thinking to believe that a less militarized foreign policy—one that relied more heavily on diplomacy, aid and democracy-building programs rather than the use of military force—could have secured better endings. Sectarian, ethnic, regional and tribal rivalries; the dearth of leadership, rule of law, and basic freedoms; poor governance and weak institutions; the lack of transparency and respect for human rights and gender equality; and rampant corruption have created a broken and dysfunctional region beyond the capacity of America to ameliorate, let alone repair. These are challenges that need to be owned and resolved primarily by those who live in the neighborhood.

The U.S. faces a conundrum in the Middle East: It’s trapped in a region it can neither transform nor leave because it has interests, allies and adversaries there. The key to survival and success is not only understanding the limits on American influence but also distinguishing between vital and peripheral interests. We believe vital interests are those that directly impact our security, prosperity and way of life, and on whose behalf a president is prepared to deploy force, risk war, expend serious resources and invest America’s prestige and credibility.

None of this means that Washington should ignore the myriad challenges that beset the region, especially the humanitarian crises in Syria and Yemen. But we cannot and should not invest heavily, especially given the other crises America confronts, in hopeless causes, in issues that don’t relate directly to America’s vital interests or problems where local actors aren’t ready to do most of the heavy lifting themselves. The seemingly endless pursuit of Israeli-Palestinian peace is a classic example.

It’s our view that the U.S. has three truly vital interests in the region: limiting terrorism, protecting the flow of oil and preventing Iran from acquiring a nuclear weapon. Before the Trump administration withdrew from the Iranian nuclear deal, the U.S. was doing pretty well in safeguarding them.

Since 9/11, there has been only a single successful attack seemingly directed by a jihadi terror organization at the continental United States. Indeed, the cruel irony is that, according to one authoritative estimate, the United States has spent over $6 trillion since 9/11 on countering that threat only to ignore the threat of a pandemic that’s killed more than 180,000 Americans and wrecked an economy. More to the point, we don’t need thousands of American combat forces permanently stationed in foreign lands. We can minimize the threat to the homeland by using offshore assets and small numbers of special forces in country to kill terrorists that want to do harm to the United States.

We may be weaning ourselves off Arab hydrocarbons. But the rest of the world isn’t—yet. A serious and sustained disruption of the flow of Persian Gulf oil could have devastating impact on the world’s economy and obviously ours as well. Iran may be able to close the Strait of Hormuz for a short period of time, but it lacks the military capability and likely the interest to keep it closed indefinitely. The U.S. can protect its energy interests in the Middle East without a significant increase in military or economic investments.

Iran, a minority Shia and Persian regime in a dominant Sunni Arab world, isn’t 10 feet tall. Iran is currently constrained by crippling sanctions, Russia, Israel, a healthy respect for American military might, and its own self-inflicted wounds of gross economic mismanagement and corruption. Clearly a better alternative to keep Iran further away from acquiring nuclear weapons would be a return to some sort of agreement on the nuclear issue. And an incoming administration ought to test the waters with Tehran to see what’s possible, keeping in mind that some grand bargain with Iran to significantly erode its influence in the region or its ballistic missile program is pie in the proverbial sky.

The Middle East will remain a mess for years to come. It is, of course, an unpredictable region that could offer up crises when America least expects it. But we don’t need to set ourselves up for failure by chasing unrealistic ambitions, acting imprudently, and looking at the region the way we want it to be rather than the way it really is. Memo to the Biden administration: It’s no one’s region. And no single power inside or outside the region can dominate it. Indeed, the U.S. is no longer the top dog in the Middle East neighborhood. And it doesn’t need to be.

from Politics, Policy, Political News Top Stories https://ift.tt/2QS0Y2m
via 400 Since 1619

The global coronavirus economy: How bad will it get?

Don’t count on a vaccine to save the world economy.

In the early months of the coronavirus crisis, policymakers hoped for a V-shaped recovery — that the pandemic could be knocked down or suppressed, allowing economic activity to bounce back quickly.

Today, as countries around the world face a new surge in infections and contemplate the possibility of new, probably localized lockdowns, many economists expect things to get worse before they get better.

“It will certainly feel like a depression,” said Albert Edwards, the notoriously bearish strategist at the investment bank division of Société Générale who became famous for foreseeing the 2008 global financial crisis.

The global economy may have kinked up, for now, as countries have come blinking out of lockdown. But with no swift solution to the pandemic — the widespread deployment of a successful vaccine is months, if not years, away — the coronavirus will continue to be a drag on economies, as businesses shut their doors, workers lose their jobs and banks face rising levels of bad loans.

“The recovery will peter out, even if we don’t tip into another outright recession because of unemployment,” said Edwards.

Global gross domestic product is estimated to have fallen by 15.6 percent in the first six months of the year, a drop four times greater than in 2008, according to the U.S. investment bank JPMorgan Chase. Some of that decline has already been recovered, but the International Monetary Fund predicts that the world economy will contract by 4.9 percent during the whole of 2020, even as governments begin to draw down support programs. GDP in the eurozone and the United Kingdom is predicted to drop by 10.2 percent this year, while the U.S. economy shrinks by 8 percent.

If the first stage of the coronavirus crisis was precipitated by state-mandated lockdowns, the coming months are likely to be characterized by consumer fear and government restrictions on industries like travel, tourism, entertainment, hospitality and retail.

Most experts, including those at the Bank of England and the European Central Bank, don’t expect global output to recover to its pre-crisis levels until the end of 2021 — unless there is a major second wave of the virus this winter, and then all bets are off.

On Wednesday, EU market regulators warned that investors may be underestimating the risk of economic disappointment. Prices seem to have come untethered from economic reality, the European Securities and Markets Authority said.

The agency noted that European stocks have soared more than 40 percent since their coronavirus dive in March, even as some forecasts indicate that the Continent’s economy may not fully recover until 2023.

The coming flood

Take the example of an airport deli as an illustration of how a drop in demand in one area can make itself felt more broadly.

As wary travelers cancel their holidays, airport traffic slows. That causes business at the deli to plummet to the point where it can’t cover its costs. After a few months, with no end to the problem in sight, the deli’s owners conclude they can’t afford to wait for passengers to return.

The business declares bankruptcy, its employees are sacked and its suppliers find themselves with one less client. The airport struggles to rent the commercial space, and down the value chain, the distributors, vegetable growers, bakers, cheesemakers and butchers also see their revenues fall and need to make cuts.

Stories like this are playing out all over the world in countries where tourism is a key source of revenue. European ticketing data shows that airline companies sold less than one-fifth as many plane trips in August as they had a year before. Arrivals in Japan fell by 99.9 percent.

With each afflicted business — think hotels, restaurants, gyms, yoga studios, concert halls, cinemas, cruises, movie studios, taxi companies, convention centers, sports venues, theme parks — this pattern is being replicated, putting additional pressure on the economy, changing the faces of entire neighborhoods and forcing industries to adapt or die.

The next few months are likely to take an especially heavy toll on small businesses, as government support schemes are scaled back or come to an end. Bankruptcy rates could triple to 12 percent in 2020 from an average of 4 percent of small and medium enterprises before the pandemic, according to an analysis by the International Monetary Fund.

‘Waves of unemployment’

Economists are concerned that large companies are already announcing layoffs, even while furlough schemes and other forms of government support are still in place.

The redundancies include highly trained white-collar workers as well as less-skilled employees. The moves suggest that multinationals are reevaluating their long-term staffing needs beyond the pandemic, making a prolonged period of uncertainty and gloom more likely.

“Some companies think their business model has been permanently damaged by this,” said John Wraith, an economist with Swiss bank UBS. “Many casualties won’t bounce back even if there is a medical breakthrough” such as a vaccine.

The eurozone saw 4.5 million people falling out of employment in the three months to June, at the height of the pandemic, according to official figures. In the Philippines, joblessness reached a record peak of 45.5 percent in July.

The United States saw unemployment peak at 14.7 percent in April, with the July rate standing at 10.2 percent. In the United Kingdom, large companies have announced more than 120,000 job cuts since the beginning of the crisis, according to data compiled by Sky News. The hardest-hit sectors were retail and aviation.

There’s likely more to come. The world can expect to be hit by “different waves of unemployment,” as closures, strategic changes and layoffs in one part of the economy force other companies to scale back or freeze hiring, said Gerard Lyons, an economist with Netwealth and former adviser to Boris Johnson when he was mayor of London.

Jobs in London’s city center are taking a hit, for example, after corporate giants like Schroders, HSBC and PwC announced plans to allow a large part, if not all, of their staff to continue to work from home indefinitely.

Office vacancy rates are expected to spike to highs not seen since 2008, leading to a 12 percent drop in rental income for owners of London office spaces and a steep decline in business for firms catering to the city center’s daytime workers.

Lyons predicts the world economy will continue to recover slowly, making up its losses from the pandemic by the end of 2021, but he acknowledged the possibility of a second dip into recession next year is “a valid concern.”

Eyes on the banks

Downturns in the real economy tend to make themselves felt in the financial system, and the coronavirus crisis is unlikely to be an exception.

Laid-off workers struggle to find similar work as the slump affects entire sectors. Retraining takes time, and unemployment benefits are not enough to cover a mortgage or rent. As “debt holidays” expire, payments are missed and the banks reclassify loans as “nonperforming,” which could oblige them to be more conservative with future lending, creating a credit crunch.

During the early months of the pandemic, banks played an essential role in keeping the economy from crashing by providing state-guaranteed loans and allowing borrowers to defer repayments. But with much of this emergency action now wearing off, some insiders are saying that banks themselves will soon require state support.

Regulators around the world are confident that there will be no repeat of 2008, when the largest banks were at risk of collapse because they had much smaller financial cushions. But this doesn’t mean some smaller lenders won’t need to be bailed out, or that they won’t reduce the supply of credit in order to meet the capital requirements put in place in the aftermath of the financial crisis.

“I fear that indeed there will be a deceleration of credit supply, which by itself will contribute to a very sluggish recovery,” said Vítor Constâncio, a Portuguese economist who served as the European Central Bank’s vice president from 2010 to 2018.

“It can even become worse,” he said, warning that the EU might have to suspend its rules against bank bailouts with taxpayers’ money. A credit crunch would only materialize in the second half of next year and is still avoidable, he said.

Limits to action

Just what course the economy takes will depend on the pace of medical science in tackling the pandemic — and what measures governments take to blunt its effects.

Developing a vaccine will help, but it won’t be the economic panacea policymakers are hoping for. “From the perspective of the global economy, the issue is not as simple as whether there is or isn’t a vaccine,” said Neil Shearing, chief economist at Capital Economics in London.

Although there are six vaccines in the late stages of development, as well as the one being rolled out by Russia, Shearing said that none of them is likely to have a dramatic impact in 2021. Issues such as efficacy, speed of distribution, duration of effect and potential mutations in the virus are likely to make life with a jab not much different than without it, at least in the near term.

Meanwhile, there’s a limit to what governments can do.

Countries across the world have announced $11 trillion in aid measures to fight the pandemic, mostly financed with borrowing, according to the IMF — the equivalent of eight times Spain’s gross domestic product in 2019. Central banks have provided billions in corporate financing on their own account, separately from their bond-buying programs.

But assistance programs can’t be maintained forever — and as long as demand for goods and services stays low, there’s only so much programs like furloughs, loan guarantees or the U.K.’s “eat out to help out” restaurant subsidies can accomplish.

“Speaking as an older person, I’m not all that inclined to go out to the restaurants, and many other people aren’t going to drop their inhibitions either,” said Charles Dumas, chief economist at TS Lombard in London.

The other means governments have of creating demand and spurring growth is via big-ticket infrastructure projects, many of which are expected to be announced in the U.K., Europe and the U.S. starting at the end of this year. But these have the disadvantage of taking years to filter through to the whole of the economy, said Dumas.

The U.K. in particular is showing signs of coming to terms with the fact that permanent damage is inevitable and a readjustment will be required. Chancellor Rishi Sunak has often repeated that he “can’t save every job.”

“Some economic activities are even at risk of simply closing down,” said Luca Visentini, secretary-general of the European Trade Union Confederation (ETUC), estimating that 45 million Europeans are currently on furlough. “That’s why we are insisting in all the countries about the need to prolong at least until the end of the year.”

While Italy and Germany have proposals in place to extend the furlough scheme, the U.K. plans to end its program in October.

‘Ogre’ on the prowl

Beyond the immediate losses in 2020, the worst aspects of the crisis could take years to make themselves felt. The Great Depression was sparked by the October 1929 market crash, but the economy didn’t bottom out until March 1933, with a collapse of the U.S. banking system.

Spooked businesses will shy away from risks long after the outbreak, according to a paper presented at an international conference of central bankers last month. “Belief scarring will depress output and investment substantially ... for decades to come,” the co-author Laura Veldkamp, finance professor Columbia University, said in a presentation.

The most obvious threat this time around, according to Société Générale’s Edwards, is deflation — a phenomenon that ECB chief Christine Lagarde once described as an “ogre.”

Deflation, when the price of goods and services decreases, is no mythical monster. An early estimate from the EU statistical office found a 0.2 percent decline in prices for August. And while low prices may be great for consumers with money in their pockets, for the wider economy, it’s a highly destructive force because it encourages people and companies to defer purchases in anticipation of lower prices.

That pushes the economy into a downward trajectory. It also makes paying back loans more expensive, as firms and governments have a harder time raising the revenues to pay off their debt burdens.

For countries like Italy, Greece, the U.S. or Japan — which are piling new coronavirus-related debts on a balance sheet already deep in the red — the results could be catastrophic. “We have never had deflation on so much debt, it can strangle economic activity,” said Edwards.

The Société Générale strategist predicted a period of deflation in the coming two years, especially in Europe and the U.S., to be followed by a spike in inflation to levels around 5 to 6 percent. “There’s no painless way out of this,” he said.

from Politics, Policy, Political News Top Stories https://ift.tt/34ZQNkz
via 400 Since 1619

Monica talks working with Kim Kardashian to get C-Murder released

The singer is speaking out about her decision to turn to the reality TV star and her legal team in the fight for justice.

Monica caught major heat last month for joining forces with Kim Kardashian to help free her ex-boyfriend C-Murder from a Louisiana prison. Now she is speaking out about her decision to turn to the reality TV star and her legal team in the fight for justice.

Monica recently addressed the matter with Kenny Burns for V103 Atlanta. The R&B singer explained that before she reached out to Kardashian, she researched why the wife of Kanye West is on a mission to help reform the criminal justice system and free wrongly convicted inmates. 

“Before reaching out, I researched. I researched her father. I researched why this is a desire of hers,” Monica said during the virtual interview.

Read More: Brandy, Monica take over 30 out of 40 spots on Apple Music chart after Verzuz battle

As theGRIO previously reported, the rapper, whose real name is Corey Miller, is best known for being the brother of music mogul Percy “Master P” Miller. However, tragedy altered his life. In 2009, a jury of his peers found him guilty of second-degree murder in the 2002 fatal shooting case of a 16-year-old teen named Steve Thomas, NOLA.com reported.

Miller, 49, is currently serving a life sentence in the Louisiana State Penitentiary but his supporters say he is the victim of a corrupt criminal justice system that allowed false witness accounts and police interference to undermine his defense.

Monica said the amount of evidence that proves he was wrongfully convicted motivated her to work with Kardashian and use her platform to raise awareness about Miller’s case. 

Elsewhere in the conversation with Burns, she denied being romantically involved with Miller at the time of his arrest. And while she has continued to support him throughout his incarceration (including visiting him and allegedly putting money on his books), the songstress slammed speculation that she was carrying on an “emotional affair” with Miller while she was married. 

“The idea of the ‘relationship’ of it — of course, that’s how we knew each other but we weren’t together when he was arrested. And we weren’t together during incarcerated but that never changed out friendship,” Monica said. “It was kind of unfair when other people got brought up. For instance, my ex-husband, I never did anything disrespectful in that light. And every time I went to New Orleans, he would too.”

Watch the full interview via the YouTube clip above.

Read More: Singer Monica enlists Kim Kardashian to help free C-Murder from prison

Meanwhile, Miller is appreciative of the efforts of Monica and Kardashian. He wrote in an Instagram post that he was able to sleep for the first time in years because of renewed hope.

View this post on Instagram

#PressPlay: #Monica recently sat down to talk to @kennyburns about her efforts to help free #CMurder from prison. She opened up about working with #KimKardashian to help possibly bring him home to his family. (📹: @v103atlanta)

A post shared by The Shade Room (@theshaderoom) on Sep 2, 2020 at 9:18am PDT

“7 months ago I called @monicadenise & she conferenced in @kimkardashian ! I did not know Moses had been working to reach Kim. After our call for the first time in 19 years, I slept!! You can rest behind these walls but never do you actually sleep!,” he wrote.

“My case had been stagnant for years! So I published multiple books to help feed my kids & pay lawyers bare minimum! I am a man so it was no one’s responsibility to save me & no one attempted to! But when you trust God he will send his angels!,” Miller added.

Have you subscribed to theGrio’s podcast “Dear Culture”? Download our newest episodes now!

The post Monica talks working with Kim Kardashian to get C-Murder released appeared first on TheGrio.

from TheGrio https://ift.tt/2EKBrpr