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Week in Review

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07/20/2019

For the week 7/15-7/19

[Posted 6:00 AM ET, Saturday, from Cincinnati…I’m at a family wedding…and have been out of pocket much of today…so there are gaps in the following that I’ll fill in as necessary next time.]

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Edition 1,058

I was distressed by the words of our president this week.  “Go back to where you came from” and “Send her back” are disturbing to this 61-year-old.  I’m upset that more don’t feel that way.  If you read nothing else from this column this week, focus in on the comments of Robert Kagan and George Will.

I’m a guy who was born in Plainfield, New Jersey.  We moved to nearby Summit, before I was to start second grade, in no small part because of a new busing policy that would have had my older brother bussed to a school miles away when he had one that was just walking distance.   I eventually would have faced the same situation.  Thankfully, my father is rather smart.  Bottom line, we left Plainfield in the nick of time.  Two years later there were fatal riots that set the community back 20 years.

In Summit, I went to an integrated elementary school (and all schools thereafter), walking distance from our house, crossing a field every day (Charlie Brown type stuff), and I made friends with the black kids in my class.  One, it would be dishonest to say I was a friend with, but who sat next me to one year, ended up being Ice-T!  [It took him a while to admit, professionally, that his childhood took a detour from Newark to South Central…it was Summit…which didn’t fit his narrative at the time.]

I remember when a kid from Romania suddenly showed up (we’re talking like 1968), he had a heavy accent and clearly was uncomfortable, and we became friends.  Another one of my friends, Eric D., ended up becoming his best friend as Nuri became a beloved figure at Summit High School (God rest his soul….he died suddenly years ago).

I remember when this Chinese girl showed up in elementary school, Louise.  It wasn’t easy for her, but I know I treated her with respect.

Well, as some of you know, later in life I kind of adopted a family in Newark.  A budding hoops star, Mubby, and his mother, Mary.  We became big-time friends.  Your white editor was one time feted in Newark by 50 of their family members at a picnic, where Mubby’s brother, who had just gotten out of prison for armed robbery, sat next to me the whole time and seemed to hang on my every word.  [No, there was never, ever, an issue with him.]

Mary was a member of a terrific gospel group, and I supported them, and one time myself and another white guy (who had also helped out, and did their legal work) were honored at a concert in front of hundreds in Jersey City.  [I never told Mary my plaque had a misspelling.  I might admit to it when I see her in a few weeks.]

Mubby has been dead for years, the victim of a godawful healthcare system in Newark.  I couldn’t begin to tell you all the awful stories I used to hear from Mary about relatives I had just met who died in a Newark hospital, that was no doubt dirty, infections spread, devices weren’t cleaned properly, and a simple kidney issue, as was the case with Mubby, turned deadly.  Don’t tell me in this respect how great America is. 

I’ve told you how my best friend in my building is the ‘super,’ Luis, from Ecuador.  Man, I’ve been there ten years and we have gotten to know each other well.   Luis and his wife, Maria, raised a terrific boy, who is now attending college in South Carolina.   They are U.S. citizens.

Yet Luis told me years ago about how he had an issue with something on our property and a Summit policeman told him to “go back to where you came from.”

I am who I am because of my parents, particularly my father.  Dad and I never once had a deep conversation when I was a kid about building character and treating people with respect.   I learned by example.  I was a walking sponge, observing his everyday interactions with people all over.  To me, he’s the best person in the world…and my brother would say the same.

And boy, do the three of us agree on one thing.   We are scared for the future of our country.

I do not in the least like Rep. Ilhan Omar.  I am not a fan of AOC.  But they can say anything they freakin’ want.  And I can then tell them how I feel about it.

We have the right to say what we want because, it’s America!

I am always amazed at how ignorant some are; those who don’t understand what it’s like to live in China, or Russia, let alone North Korea.  I would be imprisoned in hours if I wrote this in any of those countries.  Years ago, I would have been shot on the spot in Russia if I started saying these things in front of, say, Lenin’s Tomb.  Hell, I’ve told you how back in 1973, as we were descending said tomb, Mom let out one of her legendary sneezes (the echo of which can still be heard today), and I thought we were goners as the guards grabbed their sub-machine guns.

America isn’t perfect, by a long shot.  But it’s great because we can do what we please, and say what we want, though in turn we have to allow others who may not agree with us the same right.  It’s not real hard.  I’m thoroughly depressed it has become so.

Trump World

President Trump, in tweets widely deemed to be racist, went after Representatives Alexandria Ocasio-Cortez, Ilhan Omar, Ayanna Pressley and Rashida Tlaib, not initially by name but everyone knew who he was referring to.

“So interesting to see ‘Progressive’ Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly....

“....and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government it to be run.  Why don’t they go back and help fix the totally broken and crime infested places from which they came. Then come back and show us how....

“....it is done.  These places need your help badly, you can’t leave fast enough.  I’m sure that Nancy Pelosi would be very happy to quickly work out free travel arrangements!”

Only one of the four freshmen lawmakers was born outside the United States, Ilhan Omar, and all four are U.S. citizens.

Then Monday, at a Made in America Showcase, as Trump calls it, after some brief remarks about American manufacturing, the president launched into a doubling down of his Sunday tweets.

“If you’re not happy here, then you can leave. That’s what I said in a tweet that I guess some people think is controversial. A lot of people love it, by the way.  A lot of people love it.”

Asked at the event if he was concerned about the criticism over his comments, Trump said:

“It doesn’t concern me because many people agree with me.  And all I’m saying – they want to leave, they can leave.”

At a Monday news conference, the four congresswomen, aka “The Squad,” urged Americans “not to take the bait,” after Trump had suggested the four “can leave,” which he then later double- and triple-downed on.

Rep. Omar said Trump’s “blatantly racist attack” was “the agenda of white nationalists,” adding the president would like “nothing more than to divide our country.”

Democratic presidential candidate Pete Buttigieg, asked on a Sunday talk show about Trump’s “go back to your country” tweet, said: “It’s wrong, it’s racist and it fundamentally misunderstands America.”

“One of the reasons we set up this country, one of the things we celebrate in freedom and democracy of the United States is you can criticize your president.  You can criticize the ways in which the country falls short of its values,” Buttigieg added.  “And that makes you more, not less, loyal to this country whether we’re talking about naturalized citizens or many of the people he was talking about who were born right here in the U.S. When you become a citizen, you are an American and questioning somebody’s Americanness because they disagree with you – is about one of the most un-American things I can think of.”

Republican criticism was muted.  Long Island Rep. Peter King called the tweets “very inappropriate and wrong,” though added, “I don’t think he’s racist, but I think the comments can be interpreted in a very negative way. They could inflame racist tendencies that people may have,” he told the New York Daily News.  “You have to be careful with what you say.”

Another Republican from Long Island, Rep. Lee Zeldin, placed the blame on the Squad, tweeting that “anyone in the U.S. with a blame America 1st mentality for everything needs to do some serious self-reflection, especially if they are a Member of Congress.”

Republican Rep. Mike Turner of Ohio, though, said, “Trump’s tweets from this weekend were racist and he should apologize.  We must work as a country to rise above hate, not enable it.”

Tuesday, the House rebuked the president, 240-187, voting to “strongly condemn” Trump’s suggestion that the four freshman Democratic women of color “go home” – a Twitter broadside described in a Democratic resolution as “racist comments that have legitimized and increased fear and hatred of new Americans and people of color.”

Only four Republicans – Representatives Will Hurd of Texas, Brian Fitzpatrick of Pennsylvania, Fred Upton of Michigan, Susan W. Brooks of Indiana – broke with their party to vote against Mr. Trump.  They were joined by Rep. Justin Amash of Michigan, a Trump critic who recently abandoned the Republican Party to become an independent.

Gerald F. Seib / Wall Street Journal

“At Mass on Sunday, Catholics around the world heard the gospel parable of the Good Samaritan: It is the story Jesus told of a Samaritan encountering on the road a Jewish man – a foreigner to him – who had been beaten and left for dead.  While others walked by and let the man suffer, the Samaritan stopped, dressed his wounds and took him to safety despite their deep cultural differences.

“At about the time that gospel was being proclaimed, President Trump tweeted out his already-famous, incendiary declaration that young Democratic congresswomen criticizing America should ‘go back’ to the ‘totally broken and crime infested places from which they came.’

“The contrast in those Sunday messages was striking.  So too was the evolution in Republican rhetoric from the days of Ronald Reagan, an earlier GOP president who, in his farewell address, talked of America as a ‘shining city’ that was ‘teeming with people of all kinds living in harmony and peace’ and whose ‘doors were open to anyone with the will and the heart to get here.’....

“The president’s attack on the congresswomen had significant racial overtones, because all four are women of color.  But the policy debate running beneath the charged rhetoric is over immigration.

“The nuts and bolts of the immigration problem now riveting the country are relatively simple. Rampant social violence and economic dislocation are compelling working men and women in Central America to seek a way out.  Current immigration law and court rulings have created a muddle over when and how such people might seek asylum in the U.S., and what should be done with them when they do so....

“Nearly lost in the process is a recognition of the considerable contribution immigrants make to American society.  The New American Economy is an organization, funded by business leaders, that has set out to document the contribution immigrants make to U.S. economic growth.  On its website, it estimates the impact of immigrants by state, and even by city.

“Example: The Kansas City metropolitan area has 140,442 immigrant residents, who pay $1 billion in taxes, have $3.1 billion in spending power, and include 9,625 immigrant entrepreneurs.

“Mr. Trump’s supporters often point out that his administration supports legal immigration, and is fighting illegal immigration, which is true.  Presidential son-in-law Jared Kushner has overseen the drafting of an immigration proposal that would boost border security while also setting up a merit-based immigration system that would keep the number of legal immigrants at current levels while shifting the mix more to those with needed job and technical skills.

“But the congresswomen Mr. Trump targeted also are here legally, a sign of how fast rhetoric can slide downhill.”

Robert Kagan / Washington Post

“President Trump has forced us all to take a position on what kind of America this is going to be – in essence, to define again what American ‘nationalism’ means.  Is it a white Christian nationalism (or if you’re Jewish and think you can wriggle yourself inside the Trumpian nationalist tent, you can call it Judeo-Christian), in which immigrants of color or other religions are not really Americans and can be told by the president to ‘go back’ to their ancestral lands?  Or is it the universalist nationalism of the Declaration of Independence, based on the liberal Enlightenment principles of equality before the law, the inviolable rights of the individual against the state and the conviction that all citizens – regardless of religion, ethnicity or ancestral roots and the timing of their arrival – are equally American?

“This is hardly the first time that Americans have been presented with this question, needless to say, and they have often answered equivocally.  The popular willingness to denounce and even persecute the ‘hyphenated’ Americans of German and Irish descent during and after World War I, a frenzy spurred by leaders of both political parties; the imprisonment of U.S. citizens of Japanese descent during World War II, upheld by the Supreme Court; and of course the unending horrific treatment of African Americans – these are more than sad episodes in our history. They are as much a part of who we are as the civil rights movement and other triumphs of individual liberties.  White nationalism was never just a fringe phenomenon, and it isn’t today.  The South was a bastion of the white-nationalist idea for almost two centuries and with support in the last half of the 20th century from conservative thinkers such as Russell Kirk and William F. Buckley Jr.  Today, the American conservative movement proudly nurtures a new nationalism, whose intellectual authors openly call on Americans to reject the universal liberal principles of the Declaration of Independence in favor of a nationhood grounded in religion and culture.  It is a growth industry.

“This nationalism is antithetical to the American experiment. The Founding Fathers, though white, Christian men, explicitly rejected establishing the new republic on a religious and ethnic foundation.  They did not share a Burkean belief that the rights they enshrined in the Declaration derived from their Anglo-Saxon Protestant heritage, accreted over the centuries.  As Alexander Hamilton put it, the ‘sacred rights of mankind’ were not to be found among ‘parchments or musty records’ but were ‘written, as with a sunbeam...by the hand of the divinity itself.’  In the Declaration of Independence, which Abraham Lincoln recognized as the quintessential statement of American nationalism, there is not a word about culture, color or Christianity.  Yet the fight to define our nationalism has continued ever since. And that is what’s at stake in the current confrontation between the president and ‘the Squad.’

“As always in such fights, the battle is not being fought on the clear and solid ground we’d all prefer.  Trump himself deliberately picked this murky ground.  He knows that a great number of Americans in both parties have little sympathy for the Squad, and for all kinds of reasons, ranging from simple racism, Islamophobia and misogyny, to genuine policy disagreements, to unhappiness with the bigotry and insensitivity that members of the Squad have themselves sometimes displayed.  Almost everyone has a reason to temper their support.  Professional Republicans are silent because they fear their voters; professional Democrats are still angry at the Squad for challenging House Speaker Nancy Pelosi (D-Calif.).  Many are inclined to declare a pox on both their houses – they deserve each other.

“Unfortunately, we don’t have the luxury of equivocation.  Trump has given us a binary choice: Either stand with American principles, which in this case means standing in defense of the Squad, or equivocate, which means standing with Trump and white nationalism.  It doesn’t matter how you feel about Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Ilhan Omar (D-Minn.). The truth is, they have done nothing and said nothing about the United States or about an ally (in this case, Israel) that has not been done or said thousands of times. When politicians were denouncing ‘hyphenated’ Americans during World War I, German and Irish Americans were not only denouncing their government. Some were actively working for the German government, engaging in sabotage and espionage, often supported by funds paid through the German Embassy in Washington.  Yet even that did not justify a national assault on ‘hyphenated’ Americans.

“Our nation won’t be undermined by anything the Squad has said or done.  It will be undermined if we don’t fight back against this assault on our universal principles.  Disagree with the Squad, refute them, argue with them, vote against them. But also defend them, as the founders intended.  The essence of our nation is at stake.”

Editorial / Wall Street Journal

“We’re optimists about American democracy in the long run, but nowadays the long run looks longer all the time.  The bonfire of inanities in the last two days between Donald Trump and Democrats over who’s the bigger racist, or real anti-Semite, or greater disgrace to the nation is a new low even by recent standards.

“Mr. Trump started the bonfire, as he so often does, with a Sunday Twitter barrage telling ‘‘progressive’ Democrat Congresswomen’ who are critical of the U.S. to ‘go back’ to the countries from whence they came.  He seemed to be targeting the four hard-left Members of Congress, all minority women, who’ve been brawling with House Speaker Nancy Pelosi over the direction of the Democratic Party.

“Conservative journalist Brit Hume offered a succinct summary in calling Mr. Trump’s comments ‘nativist, xenophobic, counterfactual and politically stupid.’ Three of the four women were born in the U.S., and ‘go back’ is a taunt immigrants have heard in America for more than two centuries.  It was used against Catholics, against the Irish, Germans and Italians, against Chinese and Japanese, and in our day most often against Mexican-Americans.  A President of the United States shouldn’t sink to such a crude nativist trope, but then we repeat ourselves.

“As for politically stupid, Mr. Trump rescued Democrats from an intra-party feud that had been escalating for days.  A smart opponent would have kept quiet and let it continue.    But Mr. Trump intruded into the spotlight and let Democrats unite in denouncing him....

“The best political advice for Mr. Trump came from Lindsey Graham, the South Carolina Senator, who said Monday that the President should ‘aim higher’ and focus on the extreme policies of Democrats, not insinuations about their race or national heritage.

“Mr. Trump doesn’t seem to understand that Democrats want the 2020 election to be about his words and behavior, rather than the results of his economic policies.  They’ll lose a debate over results, but they’ll win if the election is a referendum on character.

“Democrats want Mr. Trump to sound as if he’s the one who believes half the country is a ‘basket of deplorables,’ to quote the line that so damaged Hillary Clinton in 2016.   They want an atmosphere of chaos and national division so voters who are up for grabs will be so tired after four years that they’ll gamble on a Democrat even if they worry about the candidate’s policies.

“It may be hard to believe in this climate of partisan discord and contempt, but most Americans still prefer a politics that is less divisive and aspires to our better angels.”

In an interview with the New York Times Book Review podcast, longtime conservative commentator George Will offered a stark assessment of what Donald Trump’s presidency will mean for our politics and our culture.

In part:

“I believe that what this president has done to our culture, to our civic discourse...you cannot unring these bells and you cannot unsay what he has said, and you cannot change that he has now in a very short time made it seem normal for schoolboy taunts and obvious lies to be spun out in a constant stream.  I think this will do more lasting damage than Richard Nixon’s surreptitious burglaries did....

“What Donald Trump’s revolutionary effect has been [is] to make things acceptable that were unthinkable until recently,” Will asking the podcast host, Pamela Paul, if she could even conceive of past presidents like John Kennedy or Dwight Eisenhower uttering any of the many things Trump has said in office.

Will’s main point, “You cannot unring these bells,” is about the impacts and reverberations of what he has done to the presidency will not just disappear when he leaves office, whenever that may be.  [Chris Cillizza]

Editorial / New York Post

“ ‘Never interfere with your enemy when he is making a mistake,’ Napoleon said.  It’s a lesson neither President Trump nor ‘The Squad’ seems to have learned.

“Going into the weekend, the press was chock-full of stories about the Democratic civil war.  Nancy Pelosi sniped at Alexandria Ocasio-Cortez, progressives disparaged ‘moderates.’  Republicans were popping popcorn, watching the Dems destroy each other.

“Rather than stay silent, Trump tweeted himself into the conversation, saying that the four far-left Democrats should ‘go back’ to the countries they came from.

“Besides being factually off...the language was incendiary and offensive.

“Whatever point he was trying to make about their criticisms of the United States and their rhetoric on Israel was lost to his indecency.  The media narrative became all about Trump and which Republicans would criticize him.

“Then it was ‘the Squad’s’ turn to step on their own moment.  Reps. AOC, Ilhan Omar, Ayanna Pressley and Rashida Tlaib held a press conference at which they erased any sympathy they might have garnered.

“It wasn’t enough to object to Trump’s tweet: They had to accuse him of murdering children, complain that he won’t provide universal health care, that he is ‘weak.’  Pressley wouldn’t even call him president, referring to ‘the occupant of the White House.’  It’s time for impeachment, they all agreed.

“Mr. President, there’s a reason 51% of Americans approve of the way you’re handling the economy, yet your favorability rating is only 43%, per the RealClearPolitics poll averages.  It’s because of tweets like the one you sent out this weekend.

“ ‘The Squad’ demonstrated Monday just how radical they are all on their own.  Don’t get in their way.  Sit back with some popcorn and enjoy the self-destructive show.”

Editorial / USA TODAY

“In the not so distant past, politicians would reach racist voters through what are sometimes called ‘dog whistle’ comments. These are cautious, subtle statements that most people hear only as policy mumbo jumbo – criticizing affirmative action, say, or activist judges – but which others hear as reaffirmation of their bigoted worldviews.

“How utterly different things are now, with the president of the United States deploying the oldest racist trope in the book by calling on four congresswomen of color to go back to where they came from....

“In so doing, Donald J. Trump is replacing the dog whistle with a bullhorn.  He is all but declaring: I am a racist. I will advocate racist policies.  I will redefine the Republican Party of Abraham Lincoln, Teddy Roosevelt and Ronald Reagan as the party of white grievance against a changing America.

“To anyone who has been paying attention, Trump’s offensive comments, tweeted before a Sunday golf outing, were shocking but not surprising.  Trump has trafficked in bigotry throughout his career in business and politics....

“Responding to Trump’s stink bombs can be exhausting, and it’s tempting to just ignore them, especially when he’s trying to change the subject from topics such as migrant children locked up in detention centers, sex-trafficking charges against former friend Jeffrey Epstein and deportation raids that didn’t live up to their advance billing.

“In this case, Trump undoubtedly also saw an opportunity to exploit divisions in the Democratic Party between old guard leaders such as Nancy Pelosi and the ‘squad’....

“Yet some comments are too offensive to be ignored, and Trump is making it impossible to overlook his racism in all its grim venality.  As if his original schoolyard tweet calling on the four congresswomen to go away wasn’t enough, the president – who campaigned for office painting a dark picture of ‘American carnage’ – dug himself in deeper Monday by saying that they hated their country.  ‘If you’re not happy here, you can leave,’ he added for good measure....

“For Republicans, Trump presents a Hobson’s choice of jumping into the moral cesspool with him, or facing the wrath of Republican primary voters who’ve convinced themselves that Trump is worthy of support.”

---

--The administration moved to dramatically limit Central American migrants’ ability to seek asylum at the U.S. border with Mexico, an escalation of President Trump’s push to stem the flood of border crossers.

Under the rule, with few exceptions, migrants who pass through another country first must seek asylum there rather than at the U.S. border, where they will be ineligible to do so.

--The immigration deportation raids that President Trump telegraphed ended up being small in stature.  The operation had been expected to target hundreds of recently arrived families in about 10 cities who had been ordered deported by an immigration judge.

The move, like the above rule limiting migrants’ ability to seek asylum, is intended to deter a surge in families fleeing poverty and gang violence in their home countries.

Editorial / Washington Post

“Agents from Immigration and Customs Enforcement are launching major raids in a dozen cities this weekend aimed at deporting some 2,000 undocumented immigrants.  And in case you credited President Trump when he said it’s foolish to telegraph a major operation by announcing it in advance, never mind.  Mr. Trump himself did the telegraphing.”

--Trump tweets:

“So great to see how unified the Republican Party was on today’s vote concerning statements I made about four Democrat Congresswomen.  If you really want to see statements, look at the horrible things they said about our Country, Israel, and much more. They are now the top, most...

“...visible members of the House Democrats, who are now wedded to this bitterness and hate.  The Republican vote was 187-4. Wow!  Also, this was the first time since 1984 that the Speaker of the House was ruled Out of Order and broke the Rules of the House.  Quite a day!”

“Our Country is Free, Beautiful and Very Successful.  If you hate our Country, or if you are not happy here, you can leave!”

“Those Tweets were NOT Racist.  I don’t have a Racist bone in my body!  The so-called vote to be taken is a Democrat con game.  Republicans should not show ‘weakness’ and fall into their trap. This should be a vote on the filthy language, statements and lies told by the Democrat...

“...Congresswomen, who I truly believe, based on their actions, hate our Country.  Get a list of the HORRIBLE things they have said.  Omar is polling at 8%, Cortez at 21%.  Nancy Pelosi tried to push them away, but now they are forever wedded to the Democrat Party. See you in 2020!”

“We will never be a Socialist or Communist Country.  IF YOU ARE NOT HAPPY HERE, YOU CAN LEAVE!  It is your choice, and your choice alone.  This is about love for America. Certain people HATE our Country...

“...They are anti-Israel, pro Al-Qaeda, and comment on the 9/11 attack, ‘some people did something.’  Radical Left Democrats want Open Borders, which means drugs, crime, human trafficking, and much more....

“....Detention facilities are not Concentration Camps!  America has never been stronger than it is now – rebuilt Military, highest Stock Market EVER, lowest unemployment and more people working than ever before.  Keep America Great!”

“The Dems were trying to distance themselves from the four ‘progressives,’ but now they are forced to embrace them.  That means they are endorsing Socialism, hate of Israel and the USA! Not good for the Democrats!”

“When will the Radical Left Congresswomen apologize to our Country, the people of Israel and even to the Office of the President, for the foul language they have used, and the terrible things they have said.  So many people are angry at them & their horrible & disgusting actions!”

“The United States House of Representatives has just overwhelmingly voted to kill the Resolution on Impeachment, 332-95-1.  This is perhaps the most ridiculous and time consuming project I have ever had to work.  Impeachment of your President, who has led the...

“...Greatest Economic BOOM in the history of our Country, the best job numbers, biggest tax reduction, rebuilt military and much more, is now OVER.  This should never be allowed to happen to another President of the United States again!”

[The vote revealed the split in the Democratic Party between progressives who want to challenge Trump more aggressively and moderates desperate to quash talk of impeachment and stick to a poll-tested agenda that includes improving health coverage and raising wages for working people.]

--In his first campaign rally since his racist tweets, President Trump, addressing the faithful in Greenville, North Carolina, found a new hook to keep his fans engaged... “send her back” as he went through a list of grievances against Rep. Omar.  He clearly approved of the chant.

Trump mocked AOC for using two names, Ocasio-Cortez, a common practice among Latinas, insisting he would only refer to her as “Cortez.”

“They said, ‘That’s not her name, Sir,’ Trump told the crowd.  “I said, ‘No, no I don’t have time to go with three different names.’  We’ll call her ‘Cortez.’”

David Brooks / New York Times

“So apparently Donald Trump wants to make this an election  about what it means to be American.  He’s got his vision of what it means to be American, and he’s challenging the rest of us to come up with a better one.

“In Trump’s version, ‘American’ is defined by three propositions.  First, to be American is to be xenophobic.  The basic narrative he tells is that the good people of the heartland are under assault from aliens, elitists and outsiders.  Second, to be American is to be nostalgic.  America’s values were better during some  golden past.  Third, a true American is white.  White Protestants created this country; everybody else is here on their sufferance.

“When you look at Trump’s American idea you realize that it contradicts the traditional American idea in every particular.  In fact, Trump’s national story is much closer to the Russian national story than it is toward our own.  It’s an alien ideology he’s trying to plant on our soil.

“Trump’s vision is radically anti-American.

“The real American idea is not xenophobic, nostalgic or racist; it is pluralistic, future-oriented and universal.  America is exceptional precisely because it is the only nation on earth that defines itself by its future, not its past.  America is exceptional because from the first its citizens saw themselves in a project that would have implications for all humankind.  America is exceptional because it was launched with a dream to take the diverse many and make them one – e pluribus unum….

“Trump’s campaign is an attack on that dream.  The right response is to double down on that ideal….

“Americans have always been divided on where they came from, but united in their vision of  their common future.  They’ve been bonded by the vision of creating a pluralistic home in which everybody can belong and be seen.  Or as Langston Hughes wrote: ‘America never was America to me / And yet I swear this oath / America will be!’”

Editorial  / Wall Street Journal

“Donald Trump rarely admits a mistake, much less an overstatement, so we’ll take the regret he expressed Thursday at the chant of ‘send her back’ during his Wednesday rally as the moral equivalent of an apology.  Let’s hope his supporters get the message.

--Former Trump communications director and adviser, Anthony Scaramucci: “Would @realDonaldTrump ever tell a white immigrant – whether 1st, 2nd, 3rd or 4th+ generation – to ‘go back to your country’?  No.   That’s why the comments were racist and unacceptable.

“America is a nation of immigrants founded on the ideals of free thought and free speech.”

Wall Street and the Trade War

The economic data on the week was solid, if unspectacular, with June retail sales  better than expected at 0.4%, while industrial production came in unchanged, though the manufacturing component was 0.4%, beating estimates.  A figure on housing starts for June was essentially in line.

With the consumer representing a larger share of the economy than manufacturing, the retail sales number, now up four consecutive months, is significant.

But as Fed Chairman Jerome Powell told the House Financial Services Committee a week ago, “The bottom line for me is the uncertainties around global growth and trade continue to weigh on the outlook.”

We get our first look at second-quarter GDP next Friday, and as of today, the Atlanta Fed’s GDPNow indicator is still at just 1.6%, though other folks place it at 2% or a little better.

On the twin critical issues of the coming up with a new federal budget and raising the debt ceiling, deadlines for both fast approaching, Congress and the administration have apparently agreed to overall spending levels and raising the U.S. government’s borrowing limit for two years, but negotiators still have to work out how to offset the cost of any spending agreement.

The thing is lawmakers are looking to go on August recess in two weeks.

Without a new spending deal, automatic spending cuts known as sequestration would be triggered early next year, reducing discretionary spending by 10% as compared with fiscal year 2019 levels.

Boosting military spending is a priority for Republicans, but any increases require similar nonmilitary spending to satisfy Democrats.  But how will they offset  it all remains the big question.

And first you need an agreement on the debt ceiling.

Turning to Trade...U.S. and Chinese officials spoke by telephone on Thursday as the world’s two largest economies seek to end a year-long trade war, with Treasury Secretary Steven Mnuchin suggesting in-person talks could follow.

But there are no dates set for face-to-face talks.  “Right now we’re having principal-level calls and to the extent that it makes sense for us to set up in-person meetings, I would anticipate that we would be doing that,” Mnuchin told Reuters.

The thing is, neither side is willing to budge on the critical issues at this point.  And the U.S. has to remember, China wants respect, and they need a face-saving way to come back to the table.  And for them, Huawei is the key as Beijing is demanding the U.S. ease restrictions on it.

At a Cabinet meeting on Tuesday, President Trump said, “We have a long way to go as far as tariffs, where China is concerned, if we want.  We have another $325 billion that we can put a tariff on if we want.”

At the time of the G20 meeting and Trump’s talk with Chinese President Xi Jinping, Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations.

Trump admitted Tuesday that China hasn’t been meeting its word either on a key issue.

“What they did was not appropriate.  They are supposed to be buying farm products.  Let’s see whether or not they do.”

I told you China wasn’t buying soy beans to any great extent, yet President Trump continued to trumpet this falsehood at his rallies and in public statements.

Sen. Chuck Grassley (R-Iowa), who heads the Senate Finance Committee and whose constituents include corn and soybean farmers who have lost big sales to China, was asked by reporters if he was optimistic about a deal this year.  Grassley replied: “Just exactly the opposite.”

Last Monday, in an interview published with People’s Daily, the Communist Party’s mouthpiece, Zhong Shan, China’s commerce minister who has recently been part of the trade negotiations, outlined a “Six Plus One” game plan for his ministry, in keeping with President Xi’s nationwide campaign to emphasize political loyalty.

Zhong said: “The ‘One’ is that we need to do a good job in handling the trade conflicts between China and the U.S.  The U.S. has started this economic and trade dispute  with us in violation of the principles of the World Trade Organization – a classic example of unilateralism and protectionism.

“We must make the best of the spirit of struggle, and stand firm in defending the interests of our county and the people, as well as the multilateral trading system,” he said.

The “six” included other prioritized initiatives, Zhong said.  Among those being the belt and road program, growing domestic consumption, and running a successful International Import Expo in November.

To many China experts, Zhong’s remarks show China is in no hurry to reach a deal and is ready for protracted talks.

And so the uncertainty will  continue.

Europe and Asia

Brexit: In just a few days we will learn who is Britain’s new prime minister, Boris Johnson, the likely winner of the Conservative Party membership vote, or Foreign Minister Jeremy Hunt.

Both have been talking up their willingness to execute a hard Brexit come October 31.

Meanwhile, the European Union’s chief Brexit negotiator, Michel Barnier, told the BBC that the U.K. will have to “face the consequences” if it opts to leave the bloc without a deal.  Barnier emphasized the thrice-rejected agreement negotiated by Theresa May was the “only way to leave the EU in an orderly manner.”

Johnson and Hunt seem convinced that the threat of a no-deal will bring the EU back to the table.  I wouldn’t put my money on that.

Separately, according to the Sunday Times, citing unnamed government sources, a suspect has been identified behind the leak of confidential memos from Britain’s Washington ambassador, which sparked a major diplomatic  rift with the United States and President Trump.

Britain’s Mail on Sunday newspaper published the memos from Kim Darroch in which he described the Trump administration as “inept” and “dysfunctional,” prompting a few Twitter tirades from The Donald.

Those who are saying a suspect has been identified add that suggestions that it could be the result of a computer hack by a foreign state had been ruled out.

European Commission: Germany’s Ursula von der Leyen secured European parliamentary approval on Tuesday to become the first female European Commission president on a platform of a greener, fairer and rule-based Europe.

The German conservative got the approval of socialist and liberal lawmakers which, together with the endorsement by her fellow conservatives, gives her a stronger mandate to tackle issues such as climate change, trade and maintaining democracy in the European Union.

As head of the EU executive, von der Leyen will be in charge of trade negotiations, economic and climate policy  for 500 million Europeans and antitrust rulings involving powerful tech giants.  She takes up her new role on November 1, replacing Jean-Claude Juncker.

A second woman, International Monetary Fund chief Christine Lagarde, submitted her resignation as her nomination to lead the European Central Bank gained clarity with the electioin of von der Leyen.  The nonbinding vote on Lagarde’s appointment will come at a regular EU summit on Oct. 17-18, Lagarde’s resignation from the IMF effective Sept. 12.

Since its creation at the end of World War II, the IMF has been led by a European, while its sister institution, the World Bank, has been led by an American.

Turning to Asia....China reported second-quarter GDP came in at 6.2%, the lowest in 27 years and down from the first quarter’s 6.4% pace, though the lower figure is in line with the government’s own forecast, which is rather convenient.  Funny how that works in China.

But you look for trends in other data points for a clue as to the truth,  and June retail sales were better than expected, up 9.8% over a year ago.  Industrial production (industrial output) was 6.3%, but this was an increase off May’s 17-year low.  Fixed-asset investment rose 5.8% for the first half.

Autos, though, rose 17.2% in the month over a year ago.

New home prices rose 0.6% in June, month-on-month, and up 10.3% vs. a year ago, all the above courtesy of the National Bureau of Statistics.

The Chinese government has been laying on the stimulus, including tax cuts, but the domestic economy has been slow to respond.

In Japan, exports in June fell 6.7% from a year ago, the seventh month in a row of contraction, and now it’s not just about the impact of the U.S.-China trade war on overall global trade, but the growing trade friction between Japan and South Korea, as I spelled out last week.  There has been no improvement here.

President Trump tweeted: “China’s 2nd Quarter growth is the slowest it has been in more than 27 years.  The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries.  Thousands of companies are leaving.  This is why China wants to make a deal...

“...with the U.S., and wishes it had not broken the original deal in the first place.  In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come.  These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!”

Street Bytes

--The market took a breather from record highs, set again on Monday, and then finished down on the week, with the Dow Jones down -0.7% to 27154, the S&P and Nasdaq off 1.2% each.  The big tech earnings coming up in the next two weeks will be important to the market’s health.

--U.S. Treasury Yields

6-mo. 2.03%  2-yr. 1.82%  10-yr. 2.06%  30-yr. 2.58%

Trump tweet this week, “We are doing great Economically as a Country, Number One, despite the Fed’s antiquated policy on rates and tightening.  Much room to grow!”

--JPMorgan Chase reported a better-than-expected quarterly profit on Tuesday as higher interest income and buoyant consumer lending offset lower activity at its trading desks. The earnings beat was driven by the consumer bank, Chase, which reported credit card loans were up 2%, with overall income up 22%.

Income from consumer and community banking, JPM’s largest business, rose 22%, offsetting declines in other areas.

Total net interest income, the difference between what banks pay on deposits and earn on loans, rose 7% to $14.40 billion.

But if the Fed cuts interest rates in July, it could pressure margins at the banks, which have been benefiting from higher rates.

Net income climbed 16% to $9.65 billion, with net revenue rising 4% to $29.57 billion, above expectations.

CEO Jamie Dimon remained bullish about the U.S. economy.

“We continue to see positive momentum with the U.S. consumer – healthy confidence levels, solid job creation and rising wages – which are reflected in our Consumer & Community Banking results,” he said in a statement.

--Citigroup Inc. reported second-quarter net income that was up 7% from a year ago to $4.8 billion, with per-share earnings beating estimates at $1.95.

Revenue was up 2% to $18.76 billion, also beating expectations.  Without a one-time gain, Citi’s core trading revenue declined 5%.   Despite the soaring equity market, when it comes to trading in the industry, clients have remained cautious.

Investment banking revenue fell 10%, with a 36% drop in fee revenue from advising companies on mergers and acquisitions.

But the consumer unit had revenues of $8.51bn, up 3%.

CEO Michael Corbat told analysts: “We’re clearly pivoting from an environment where we had predicted...rising rates to this point.  From our perspective we don’t believe that the market has made that full adjustment.”

--Goldman Sachs reported a better-than-expected quarterly profit, as the investment bank continues to shift its business model away from a focus on trading to a more stable, consumer-focused revenue stream.

Institutional client revenue, which includes trading, slipped 3%, while investment banking revenue was down 9%.  But revenue from the bank’s investing and lending business rose 16%.

Total net revenue came in at $9.46 billion, down 2% but above expectations.  Earnings were $2.20 billion, down 6%.

“Given the strength of our client franchise, we are well positioned to benefit from a growing global economy,” CEO David Solomon said in a statement.

--Wells Fargo & Co. posted a 22% increase year-over-year in second-quarter net income to $5.85 billion, essentially unchanged from the first quarter.  This was the first quarter of operations since CEO Tim Sloan abruptly stepped down, with interim CEO Allen Parker not offering any clues in a call with analysts as to the status of the search for a new leader.    

Expenses dropped 4% in the quarter, ditto loan revenue, with fee income up 5%.

Wells has plans to close up to 900 branches over the next four years to reduce the total to between 5,000 and 5,100, and the overall work force by 5% to 10%, or by roughly 13,000 to 26,500 jobs, within three years,  as part of an effort to reduce expenses by $4 billion.

--Bank of America, the second-largest by assets, reported their consumers helped boost profit in the latest quarter but warned that it could take a hit from Fed rate cuts.

--Morgan Stanley announced quarterly profit fell 10% in the second quarter, reporting  a profit of $2.2 billion, on $10.2 billion in revenue, both down from a year ago.

“People don’t have much conviction, at these levels, in this rally,” said Morgan Stanley’s finance chief, Jonathan Pruzan.

Morgan Stanley has a giant retail brokerage but lacks the mortgage and credit-card operations that are booming at its rivals.

The wealth division, which manages about $2.5 trillion for U.S. clients, reported a 2% rise in quarterly revenue to $4.4 billion.  But trading revenue fell 12% from a year ago.  Revenue was down 18% in fixed-income trading.

But revenue grew 21% in its asset-management business.

--Shares of Netflix plunged 10% on Wednesday after the streaming giant reported a rare slowdown in subscriber growth.

The company added 2.7 million subscribers in the quarter ended in June – down 2.3 million from its forecast of 5 million new viewers.  The company behind “Orange is the New Black” and “House of Cards” gained 5.5 million subscribers during the same time last year.

Netflix blamed the disappointing growth on a lackluster show lineup – though Wall Street is pointing to the company’s decision to hike prices at a time when competition by rival streaming services is heating up.

The price hikes, which started in the spring, pushed the cost of a standard subscription to $12.99 a month, from $10.99, and to $8.99 a month, from $7.99, for a basic plan.

Aside from facing competition from rivals like Hulu and Amazon Prime, now Netflix faces a flood of new products, including from deep-pocketed rivals, including Disney, which is planning to release a service that will include its vast archive of movies for the low price of $6.99 a month in the coming months.  Apple is also readying its own service later this year...no price point announced as yet.

Netflix Chairman and CEO Reed Hastings, however, said the competition was nothing to worry about.

“We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during the second quarter,” he told analysts and investors.  “Rather, we think the second quarter’s content slate drove less growth in paid net adds than we anticipated.”

The company said it would add more than seven million subscribers in the current quarter, when the new season of “Stranger Things” was made available.  But Netflix had previously announced it would lose the North American rights to “Friends,” the second-most-watched show on the service, according to Nielsen, which is why the company was willing to pay as much as $100 million to stream the show worldwide in 2019.  Starting next year, American and Canadian customers will be able to find it only on HBO Max, after AT&T exercised an option worth over $80 million a year for a five-year period.

And beginning in 2020, Netflix’s North American subscribers will have to go elsewhere for “The Office,” with NBCUniversal, the show’s owner and another entrant into the streaming competition, grabbing the rights to stream it in North America.

Netflix ended the quarter with 151.6 million global subscriptions.

Adjusted earnings came in at 60 cents a share for the second quarter on revenue of $4.92 billion.

--After all I wrote last week on the ongoing issues of the 737 MAX, Ryanair said it is taking a knife to its operations in Europe as it prepares for two years of disruption caused by the unavailability of the MAX aircraft.

Europe’s biggest low-cost airline said Tuesday that it was planning to cut back operations at some airports and abandon others entirely because regulators may not return the grounded 737 MAX to service until December.  Remember when Boeing was talking July?

Well now the company doesn’t plan to submit its software fix to regulators until September, so if they meet that date, realistically we’re talking November at the very earliest.  But many are now saying next year.

But Ryanair is already slashing revenue growth forecasts for next summer, though CEO Michael O’Leary said the airline would not change how it markets 737 MAX flights to passengers once the plane is certified by regulators.

“We don’t believe once the aircraft are back flying there will be any customer issues,” he said.

--United Airlines tweaked its profit outlook for the full year despite the financial impact of its 737 MAX exposure, after announcing second-quarter results that beat the Street.

United has just 14 MAX jets, with American at 24 and Southwest at 34 (Delta zero). As I noted last week, United has cancelled 2,100 flights as a result of its MAX exposure.

--Southwest Airlines said Thursday it will keep Boeing 737 MAX aircraft from its flight schedules through Nov. 2, a month longer than its previous  estimate, saying it would cancel about 180 flights daily out of its overall daily total of 4,000.

--So with all the above in mind, Boeing Co. said on Thursday it would take an after-tax charge of $4.9 billion in the second quarter on estimated disruptions from the prolonged grounding of its lucrative 737MAX passenger jets.

The charge is from “potential concessions and other considerations to customers,” and the impact of continued lower production, the world’s largest planemaker said in  a statement.

The company’s official results for its last quarter come out July 24.

--Johnson & Johnson raised its forecast for 2019 sales as it reported quarterly results, but costly product litigation continues to weigh on the health-care giant. Second-quarter profit rose 42% to $5.61 billion, or $2.08 a share vs. last year.  Ex-items, earnings were $2.58, above estimates.

Sales fell 1.3% to $20.56 billion, but better than expectations.  The pharmaceuticals division, the largest, had sales of $10.53 billion, up 1.7% from a year earlier.  Medical-device sales declined 6.9% to $6.49 billion, while consumer products (Band-Aid, Tylenol) increased 1.2% to $3.54 billion.

But J&J is having to deal with issues such as the safety of its Baby Powder, and the company’s marketing of opioids.  The company faces more than 14,000 legal claims that use of its talc products caused cancer, and some juries have been ordering the pharm giant to pay large monetary damages to plaintiffs.

--IBM said revenue fell for a fourth straight quarter as the struggle to retool the business continues, though Big Blue’s profit grew more than Wall Street had projected, 3.9% to $2.5 billion, while revenue fell 4.2% from a year earlier to $19.16 billion.

IBM has been losing out to Microsoft and Amazon.com as customers race to do more of their computing in the cloud.  IBM’s cloud revenue grew just 5% in the second quarter – far behind the 41% annual cloud revenue growth Microsoft saw in its latest quarter.

IBM’s other businesses are in gradual decline, with IT services seeing its revenue fall by 6.7% year-over-year in Q2, while the division that houses IBM’s mainframe business also fell almost 20%.

--Shares in Microsoft Corp. hit record highs after it beat analysts’ estimates for fiscal fourth-quarter revenue and profit, driven by continued sales increases from its cloud business.

Since CEO Satya Nadella took over in 2014, Microsoft has been shifting away from its Windows operating system software and toward cloud services, in which customers move their computing work to data centers managed by Microsoft.  Revenue growth in Azure was 64% in the quarter ended June 30, compared with 89% a year earlier and 73% in the prior quarter, staggering growth.  Microsoft also guided higher for its “intelligent cloud unit” in the current quarter.  On Thursday, Microsoft said its Azure-based business segment for the first time reported slightly more quarterly revenue than its Windows-based segment.

In the cloud computing business, Azure’s chief rival is Amazon Web Services, which dominates the industry with a 32.8% market share, according to research firm Canalys.  Microsoft has a 14.6% share, while Google is at 9.9%.

Total revenue for Microsoft in the quarter was up 12% to $33.72 billion.

--The Trump administration raised national security concerns about Facebook’s plans to launch a cryptocurrency, Libra, as a growing chorus of U.S. and international officials are voicing resistance.

Treasury Secretary Steven Mnuchin said, “Many players have attempted to use cryptocurrencies to fund their malign behavior.  This is indeed a national security issue.”

Some European officials have expressed concerns Libra could undermine sovereign currencies and the power of the European Central Bank.

--Trump tweet: “ ‘Billionaire Tech Investor Peter Thiel believes Google should be investigated for treason.  He accuses Google of working with the Chinese Government.’ @foxandfriends.  A great and brilliant guy who knows this subject better than anyone!  The Trump Administration will take a look!”

--Interesting factoid in the Journal from Laura Kusisto: “While the Hispanic homeownership rate is on the rise, the black homeownership rate has fallen 8.6 percentage points since its peak in 2004, hitting its lowest level on record in the first quarter of this year, according to census data.

It marks the first time in more than two decades that Hispanics and blacks are no longer following the same path when it comes to owning homes.

--McDonald’s said it will partner with privately-held DoorDash to expand the availability of McDelivery, which was previously exclusively by Uber’s UberEats delivery service.

McDonald’s said it will launch delivery through DoorDash in Houston and expand to more than 200 restaurants beginning July 29.

--Speaking of food delivery services, Domino’s Pizza reported U.S. same-store sales growth that fell short of analysts’ estimates at 3%.  CEO Richard Allison said a “significant amount of pressure” from third-party food aggregators, in addition to the company’s push to expand its brick-and-mortar presence, weighed on comp sales in the quarter

Delivery services add to what was already a highly competitive pizza market.  Diners using third-party online food ordering sites like UberEats can order pizza from local restaurants that, frankly, have better pizza.

Domino’s does continue to have success in its international markets with global retail sales rising 5.1%, 8.4% when excluding changes in foreign exchange rates.

--Last Saturday night’s power failure in Midtown Manhattan was costly for the theater district, with 26 of the 30 shows currently on Broadway forced to cancel evening performances.

The Broadway League, the industry trade group, reported that grosses for the week ending Sunday were $30.6 million – or nearly $7 million lower versus the same week last season.

Restaurants reported big losses.  Junior’s, the New York institution famed for its cheesecake, said it lost about $35,000 in revenue at its West 45th Street location because of the outage.

Foreign Affairs

Iran: Thursday, a U.S. Navy ship downed an Iranian drone in the Strait of Hormuz after its operators ignored warnings to change course, President Trump announced.

The ship, the USS Boxer, was on a routine patrol when the drone approached within 1,000 yards, he said.

Trump said: “This was the latest of many hostile and provocation actions by Iran against vessels operating in international waters.”  The U.S., he continued, “calls on all nations to condemn Iran’s attempts to disrupt freedom of navigation and global commerce.”

Also Thursday, the U.S. demanded Iran release a vessel it seized in the Gulf, and a military commander in the region said that America would work “aggressively” to ensure free passage of vessels through the vital waterway.

The Iranian Revolutionary Guards announced they had seized a foreign ship smuggling fuel, and the State Department insisted Iran had to free the ship and its crew and stop harassing vessels in and around the Strait.  Iran said the ship was smuggling oil.

Meanwhile, also on Thursday, Iran signaled a willingness to engage in diplomacy to defuse tensions with the United States with a modest offer on its nuclear program that immediately met with skepticism in Washington.  Iran’s foreign minister told reporters in New York that Iran could immediately ratify a document prescribing more intrusive inspections of its nuclear program if the United States abandoned its economic sanctions.

The document, known as the Additional Protocol, gives UN inspectors from the International Atomic Energy Agency (IAEA) more tools to verify that Iran, in this case, is compliant in its nuclear program...that it is for peaceful purposes.

The U.S. calls this a non-starter, but, if taken up, it does provide a possible opening for a dialogue.

Foreign Minister Mohammad Javad Zarif told the Guardian newspaper: “If Trump wants more for more, we can ratify the Additional Protocol and he can lift the sanctions he set.”

U.S. officials responded skeptically, suggesting it was a disingenuous effort to get sanctions relief. “Their whole game is to try to get any sanctions relief they can while maintaining the ability to get a nuclear weapon in the future,” an official told Reuters on condition of anonymity.  The official said that under the offer, Iran would keep enriching uranium.

As for its ballistic missile program, Iran denied it was willing to use it in any negotiations.  A spokesman for Iran’s mission to the United Nations posted on Twitter: “Iran’s missiles…are absolutely and under no condition negotiable with anyone or any country, period.”

Supreme Leader Khamenei also accused Britain, Germany and France of failing to uphold obligations under the deal to restore Iranian access to global trade, especially for Tehran’s oil exports blocked by U.S. sanctions.

“According to our foreign minister, Europe made 11 commitments, none of which they abided by.  We abided by our commitments and even beyond them.  Now that we’ve begun to reduce our commitments, they oppose it.  How insolent!  You didn’t abide by your commitments!” Khamenei said, according to his website.

“Western governments’ major vice is their arrogance,” Khamenei said.  “If the country  opposing them is a weak one, their arrogance works.  But if it’s a country that knows and stands up against them, they will be defeated.”

And this one...Sen. Rand Paul received the go-ahead to try to repair Iranian-American relations from Donald Trump, raising concerns among some administration officials about the impact of such a mission on the president’s “maximum pressure” campaign against Tehran, as Politico reported.

“Paul proposed sitting down with Iranian Foreign Minister Javad Zarif to extend a fresh olive branch on the president’s behalf, according to four U.S. officials,” Politico reported.  Trump signed off on the idea.

Zarif was in New York this week for meetings at the UN.

Paul has long urged Trump to stay true to his election promise of not starting new wars in the Middle East.

But Paul’s strategy is opposed by hardliners Secretary of State Mike Pompeo and National Security Adviser John Bolton, as well as Vice President Mike Pence.

Meanwhile, European foreign ministers said the 2015 nuclear deal with Iran can still be saved.  U.K. Foreign Secretary Jeremy Hunt said, “We are looking to find a way to preserve the nuclear deal, which we think is the best way of keeping the Middle East, as a whole, nuclear-weapon free.”

“Iran is still a good year away from developing a nuclear weapon.  We think there is still some closing but small window to keep the deal alive,” Mr. Hunt added.

Spanish Foreign Minister Josep Borrell, who has been nominated to be the EU’s next foreign-policy chief, said, “Europe is doing everything it can to avoid” the deal collapsing.  He also lashed out at the U.S. and its attempts to impose an “economic blockade” on Iran and said Spain would participate in a European trade mechanism intended to keep commerce going between Europe and Iran amid the sanctions targeting U.S. and foreign firms dealing with Iran.

And then tonight, Iran has seized at least one more oil tanker, but there are conflicting stories as to the number and other facts.

Syria: Russia denied allegations by Syrian rebels that Russian special forces or ground troops were fighting in the campaign for the rebel-held region of Idlib.

Senior rebel commanders said Wednesday that Russia has sent special forces in recent days to fight alongside Syrian army troops struggling to make gains in a more than two month assault in northwestern Syria to seize the last opposition bastion.

Meanwhile, regime airstrikes continue to kill civilians in Idlib, the toll now more than 600 since the assault began, according to the Syrian Observatory for Human Rights.

Turkey: The United States on Wednesday announced it was removing Turkey from the F-35 fighter jet program, a move that had long been threatened, as I brought up last week, after Ankara began accepting delivery of the Russian S-400 air defense system.

The White House said in a statement: “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”

Related to the above, the Pentagon said it will cost the Defense Department between $500 million and $600 million to remove Turkey from the F-35 Joint Strike Fighter program.

That’s the cost of finding and setting up U.S. suppliers to make the 900-plus components currently made by ten Turkish manufacturers.

Ellen Lord, defense undersecretary of acquisition and sustainment, told reporters: “We have worked on alternate sources for the over 900 parts – we have been working since 2018 on this,” Lord said.

Asked if Turkey would be reimbursed for planes they have purchased, Lord said, “We are discussing the specifics about the aircraft they have purchased so far as we speak.”

Turkey has ordered 30 F-35s, four of which are at an Air Force Base in Arizona, where they are being used for pilot training.

President Trump said, “Turkey is very good with us, very good.  And we are now telling Turkey, because you have really been forced to buy another missile system, we’re not going to sell you the F-35 fighter jets.”

For his part, Turkish President Erdogan had bet heavily on a personal relationship with President Trump as a way of resolving the issue.  Erdogan has also said Turkey turned to Russia for air-defense equipment after the U.S. declined to sell it the Patriot antimissile system.

But Turkey’s relations with both Presidents Obama and Trump were strained over Washington’s decision to arm and train Syrian Kurdish fighters in the battle against ISIS, the Kurds deemed to be an enemy of Turkey.

North Korea: Pyongyang said the United States looks set to break a promise not to hold military exercises with South Korea, putting talks aimed at getting North Korea to abandon its nuclear weapons at risk, the North Korean Foreign Ministry said on Tuesday.

The Foreign Ministry said Washington’s pattern of “unilaterally reneging on its commitments” was leading Pyongyang to reconsider its own commitments to discontinue tests of nuclear weapons and intercontinental ballistic missiles.

China: The government and Chinese companies will cut business ties with U.S. firms selling arms to Taiwan, China’s Foreign Ministry said on Monday, declining to give details  of the sanctions.

Chinese Foreign Ministry spokesman Geng Shuang said the arms sales were a violation of international law and harmed China’s sovereignty and national security.

“China’s government and Chinese companies will not cooperate or have commercial contacts with these U.S. companies,” he told a daily briefing.”

Meanwhile, in the world’s most beautiful city (that I’ve been to, at least), protests continued in Hong Kong over China's proposed legislation on extradition that the local government says has been withdrawn, only the protesters don't believe them.

Pakistan: Days before Prime Minister Imran Khan was due to visit Washington, Pakistan attempted to smooth things over with President Trump on Wednesday by announcing the arrest of a notorious militant leader who has been living openly for years despite a $10 million U.S. bounty.

Hafiz Muhammad Saeed, founder of the Lashkar-e-Taiba militant group that carried out the 2008 attacks in Mumbai, India, was taken into custody in Punjab province when he went to seek bail in a terrorism financing case, Pakistani authorities said.

Pakistan has had Saeed under control, having detained and released him several times, most recently in 2017, when he served 10 months under house arrest.  India and the U.S. have long accused Pakistan of protecting the terrorist, who has a large following in his home city of Lahore.

The capture of Saeed presented President Trump with an opportunity to claim credit for his arrest, tweeting that it was the result of a “ten year search” and that “great pressure has been exerted over the last two years to find him.”

But Saeed has lived openly in Lahore for years and regularly gives sermons to large audiences.

So it was a deliberate move by Pakistan to curry favor with Trump before Khan meets with the president on Monday; their first encounter since Khan was elected last summer.

Democratic Republic of Congo:  The World Health Organization has labeled the year-old Ebola epidemic here a global health emergency.  Some experts say this isn’t the case...that it is still a “regional emergency.”

But the WHO was persuaded by a number of factors, such as the disease having reached Goma, a city of nearly two million people; the outbreak has raged for a year; the virus has flared again in spots where it had once been contained; and the epidemic hot zone has geographically expanded in northeastern Congo near Rwanda and into Uganda.

And then there is the violence against health workers, with two killed in their homes in Congo last week.  So senseless.

As yet I have no reports of more than a few cases in Goma, but imagine the threat.

Random Musings

--Presidential tracking polls....

Gallup: 44% approval of President Trump’s job performance, 51% disapproval, 90% Republicans, 38% independents (July 1-12, posted July 17).
Rasmussen: 50% approval, 48% disapproval (July 19).

--In a new USA TODAY/Ipsos survey, 68% of Americans found President Trump's tweets concerning the Squad offensive.  But 57% of Republicans agree with them.

--In a Saint Anselm College Survey Center poll of New Hampshire voters expressing an intention to vote in the upcoming Democratic Presidential Primary, Joe Biden leads at 21%, followed by Kamala Harris at 18%, Elizabeth Warren 17%, Pete Buttigieg 12% and Bernie Sanders 10%.

But Biden has been falling since an April survey, ditto Sanders, while Harris and Warren have seen big bumps in support.

--California is going Democrat in 2020, that’s certain, but it’s interesting what is happening in the Democratic field there, according to a new Quinnipiac University poll of Democrats and voters leaning Democrat.

Kamala Harris now leads with 23% to Biden’s 21%; Bernie Sanders 18%, Warren 16% and Buttigieg 3%.

Back in April, two weeks before Biden announced, it was the former vice president at 26%, Sanders 18%, Harris 17% and Warren 7%.

--The next Democratic presidential debates are slated for July 30-31 on CNN, which announced the two pairings of ten.  Bernie Sanders and Elizabeth Warren will face off on the first  night, while Joe Biden and Kamala Harris will share the stage the second night.

--Comedian and advocate Jon Stewart blasted Sen. Ran Paul (R-Ky.) hours after Paul delayed a vote, the Senate attempting to reauthorize a fund that compensates victims of 9/11.

“It’s absolutely outrageous, and you’ll pardon me if I’m  not impressed in any way by Rand Paul’s fiscal responsibility virtue signaling,” Stewart said, having repeatedly advocated for the 9/11 Victims Compensation Fund.

“Rand Paul presented tissue paper avoidance of the $1.5 trillion tax cut that added hundreds of billions of dollars to our deficit and now he stands up at the last minute, after 15 years of blood, sweat, and tears from the 9/11 community, to say that it’s all over now and we’re going to balance the budget on the backs of the 9/11 first responder community.”

Paul objected to the projected cost of the bill that would reauthorize the compensation fund, which helps pay for medical and economic losses as a result of the terrorist attacks, with the estimated cost to pay outstanding and future claims at $10.2 billion over the next decade, according to the Congressional Budget Office.  He said, “I will be offering an amendment if the bill should come to the floor but until then I will object.”  Paul wants any new spending to be offset with spending cuts elsewhere in the budget, but as Stewart says, it’s all bulls---.

The House passed its version of the bill with a 402-12 vote.

--Midtown Manhattan experienced a major power outage last Saturday night, and as I noted above, the economic impact was significant for some.

But it was even more significant for the supposed leader of Gotham.

Editorial / New York Post

“The lights went out on Broadway Saturday night, and Bill de Blasio was a thousand miles away in Iowa.  It was the moment that perfectly captured his distracted, ego-driven failure of a mayoralty.

“Bill de Blasio does not care about New York City. He does not care about its people. He does not care about how it’s run.  He does not care about you or your taxes, creating jobs or improving lives.  All Bill de Blasio cares about is Bill de Blasio.

“And so, for the good of the city, Gov. Andrew Cuomo needs to remove the mayor from office.

“Let’s face it: It’s only by accident de Blasio is mayor in the first place.  Without Anthony Weiner’s onanistic implosion, the Campaign Finance Board’s sidelining of rival lefty John Liu, or the support of one peculiar, but well-funded, constituency – people who hate carriage horses – de Blasio would probably be calling for a socialist uprising on Community Board 6.

“But there he was, the designated survivor of 2013, suddenly in charge of your money.  And boy, did he spent it.  He paid off the unions with generous contracts, expanded the taxpayer-funded workforce and poured cash into pet projects.  Thanks to the success of Wall Street and real estate, he never lacked for funds, never had to make any tough budget choices.

“Yet from this start, his lack of interest was apparent.

“After his one initiative, pre-K, passed in Albany, de Blasio had no other ideas.  The self-described champion of the poor didn’t even notice when a nursing home was sold for luxury condos under his nose.

“He couldn’t show up on time.  For anything.

“Every day, he drags himself out of bed at the crack of 10, has himself driven to the other side of town so he can do a halfhearted couple of minutes on the elliptical, and then maybe goes to City Hall.  Of late, even that is optional.  He goes back to Gracie Mansion to hold meetings about running for president....

“He runs the largest, greatest city in America, but Bill de Blasio is bored.  He doesn’t relish New York.  Doesn’t ride the subways, see its shows, eat in its restaurants (except for one café near his gym).  Once he realized he didn’t need the voters anymore, he skipped the Puerto Rican Day Parade this year.  He threw a parade for the Women’s World Cup soccer team just so he could give a tone-deaf campaign speech....

“And we sit here, in the dark, wondering about the infrastructure not being worked on, the disorder not being addressed, the city he’s too indifferent to run.

“How much more money will he waste?  How many more bad decisions must we endure?  We cannot live with an absentee mayor – and we cannot live with him here, either.

“Per the City Charter and  the state Constitution, the governor can suspend the mayor immediately for 30 days, then prepare charges, present de Blasio with them, give him a chance to answer them – and finally officially remove him.  Or the mayor could do the right thing and resign.

“Either way, Bill de Blasio must go.  Now.”

--Robert D. Kaplan / Wall Street Journal

“We live in a world without inhibition.  The distance between President Eisenhower and his life experience and President Trump and his is vast.  And it isn’t only American leadership that has deteriorated as we have traveled from the nuclear to the cyber age.  So too have global institutions and leadership elsewhere among major Western countries.

“Britain and Italy are two examples of utterly irresponsible and immature politics.  The new generation of German leaders – on which Europe’s fate pivots – won’t be like the generations from Konrad Adenauer to Angela Merkel, with deep memories of World War II and the Cold War.  They too are the children of the digital mind-set: brimming with ambition and virtue-signaling on climate change, while possibly lacking the requisite discipline to stand up to future challenges from the likes of Russia and China.  As digital technology accelerates, politics and memory degenerate.  News cycles are more intense, even as they are more quickly forgotten.  Consequently, the new generation of Western politicians is fundamentally without character.

“The answer lies behind us.  Nuclear apocalypse didn’t happen mainly because of the hard wisdom of our Cold War presidents, both Republican and Democrat.  Throughout history, instilling virtue and character in leaders has been the only effective means of arresting decline, writes James Hankins in a new book, ‘Virtue Politics: Soulcraft and Statecraft in Renaissance Italy.’  Mr. Hankins, a Harvard historian, painstakingly demonstrates that the greatest virtue in civic life – and the ultimate factor determining political stability – has always been principled moderation, whatever the epoch.

“It’s that simple, that mundane and that difficult.  In a digital age favoring extremists – the purveyors of rage and passion – the rarest and bravest of leaders will have to be moderates.  Only they can tame the forces of technology.  Only in their hands will humanity and markets be safe.”

--We note the passing of John Paul Stevens, the second oldest and third longest-serving Supreme Court justice in history and a Republican president’s nominee who went on to lead the Court’s liberal wing.  He was 99.

In lengthy interviews with the New Yorker and the New York Times near the end of his career, Stevens insisted that he had not changed his stripes but had simply withstood the court’s transformation from liberal to conservative.  During that time, he came to align more with the court’s liberals than its new brand of conservatives, eventually becoming the senior justice on that side with the power to assign opinions and dissents.

He was better known for his dissenting opinions to some.  Such as a 90-page dissent to the court’s decision in Citizens United vs. Federal Election Commission, which gave corporations the right to spend money freely on elections.

“While American democracy is imperfect, few outside the majority of this court would have thought its flaws included a dearth of corporate money in politics,” he wrote.

In his dissent of the high court’s ruling in Bush v. Gore, which ended the Florida recount and handed the election to George W. Bush:

“Although we may never know with complete certainty the identity of the winner of this year’s presidential election, the identity of the loser is perfectly clear,” he wrote.  “It is the nation’s confidence in the judge as an impartial guardian of the rule of law.”

--Finally, Sept. 12, 1962...President John F. Kennedy at Rice University, drumming up support for the space program.

“We choose to go to the Moon!  We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win.”

NASA saw its budget swell from $401 million in 1960 to $5.9 billion at its peak in 1966.  In the end, 400,000 were involved in the Moon landing, working for 20,000 different private companies and 200 universities.

---

Pray for the men and women of our armed forces...and all the fallen.

God bless America.

---

Gold $1426
Oil $55.63

Returns for the week 7/15-7/19

Dow Jones  -0.7%  [27154]
S&P 500  -1.2%  [2976]
S&P MidCap  -1.2%
Russell 2000  -1.4%
Nasdaq  -1.2%  [8146]

Returns for the period 1/1/19-7/19/19

Dow Jones  +16.4%
S&P 500  +18.7%
S&P MidCap  +16.5%
Russell 2000  +14.8%
Nasdaq  +22.8%

Bulls 58.0
Bears 16.8 [definitely worrisome levels for both]

Have a great week.

Brian Trumbore

 



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Week in Review

07/20/2019

For the week 7/15-7/19

[Posted 6:00 AM ET, Saturday, from Cincinnati…I’m at a family wedding…and have been out of pocket much of today…so there are gaps in the following that I’ll fill in as necessary next time.]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link, or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,058

I was distressed by the words of our president this week.  “Go back to where you came from” and “Send her back” are disturbing to this 61-year-old.  I’m upset that more don’t feel that way.  If you read nothing else from this column this week, focus in on the comments of Robert Kagan and George Will.

I’m a guy who was born in Plainfield, New Jersey.  We moved to nearby Summit, before I was to start second grade, in no small part because of a new busing policy that would have had my older brother bussed to a school miles away when he had one that was just walking distance.   I eventually would have faced the same situation.  Thankfully, my father is rather smart.  Bottom line, we left Plainfield in the nick of time.  Two years later there were fatal riots that set the community back 20 years.

In Summit, I went to an integrated elementary school (and all schools thereafter), walking distance from our house, crossing a field every day (Charlie Brown type stuff), and I made friends with the black kids in my class.  One, it would be dishonest to say I was a friend with, but who sat next me to one year, ended up being Ice-T!  [It took him a while to admit, professionally, that his childhood took a detour from Newark to South Central…it was Summit…which didn’t fit his narrative at the time.]

I remember when a kid from Romania suddenly showed up (we’re talking like 1968), he had a heavy accent and clearly was uncomfortable, and we became friends.  Another one of my friends, Eric D., ended up becoming his best friend as Nuri became a beloved figure at Summit High School (God rest his soul….he died suddenly years ago).

I remember when this Chinese girl showed up in elementary school, Louise.  It wasn’t easy for her, but I know I treated her with respect.

Well, as some of you know, later in life I kind of adopted a family in Newark.  A budding hoops star, Mubby, and his mother, Mary.  We became big-time friends.  Your white editor was one time feted in Newark by 50 of their family members at a picnic, where Mubby’s brother, who had just gotten out of prison for armed robbery, sat next to me the whole time and seemed to hang on my every word.  [No, there was never, ever, an issue with him.]

Mary was a member of a terrific gospel group, and I supported them, and one time myself and another white guy (who had also helped out, and did their legal work) were honored at a concert in front of hundreds in Jersey City.  [I never told Mary my plaque had a misspelling.  I might admit to it when I see her in a few weeks.]

Mubby has been dead for years, the victim of a godawful healthcare system in Newark.  I couldn’t begin to tell you all the awful stories I used to hear from Mary about relatives I had just met who died in a Newark hospital, that was no doubt dirty, infections spread, devices weren’t cleaned properly, and a simple kidney issue, as was the case with Mubby, turned deadly.  Don’t tell me in this respect how great America is. 

I’ve told you how my best friend in my building is the ‘super,’ Luis, from Ecuador.  Man, I’ve been there ten years and we have gotten to know each other well.   Luis and his wife, Maria, raised a terrific boy, who is now attending college in South Carolina.   They are U.S. citizens.

Yet Luis told me years ago about how he had an issue with something on our property and a Summit policeman told him to “go back to where you came from.”

I am who I am because of my parents, particularly my father.  Dad and I never once had a deep conversation when I was a kid about building character and treating people with respect.   I learned by example.  I was a walking sponge, observing his everyday interactions with people all over.  To me, he’s the best person in the world…and my brother would say the same.

And boy, do the three of us agree on one thing.   We are scared for the future of our country.

I do not in the least like Rep. Ilhan Omar.  I am not a fan of AOC.  But they can say anything they freakin’ want.  And I can then tell them how I feel about it.

We have the right to say what we want because, it’s America!

I am always amazed at how ignorant some are; those who don’t understand what it’s like to live in China, or Russia, let alone North Korea.  I would be imprisoned in hours if I wrote this in any of those countries.  Years ago, I would have been shot on the spot in Russia if I started saying these things in front of, say, Lenin’s Tomb.  Hell, I’ve told you how back in 1973, as we were descending said tomb, Mom let out one of her legendary sneezes (the echo of which can still be heard today), and I thought we were goners as the guards grabbed their sub-machine guns.

America isn’t perfect, by a long shot.  But it’s great because we can do what we please, and say what we want, though in turn we have to allow others who may not agree with us the same right.  It’s not real hard.  I’m thoroughly depressed it has become so.

Trump World

President Trump, in tweets widely deemed to be racist, went after Representatives Alexandria Ocasio-Cortez, Ilhan Omar, Ayanna Pressley and Rashida Tlaib, not initially by name but everyone knew who he was referring to.

“So interesting to see ‘Progressive’ Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly....

“....and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government it to be run.  Why don’t they go back and help fix the totally broken and crime infested places from which they came. Then come back and show us how....

“....it is done.  These places need your help badly, you can’t leave fast enough.  I’m sure that Nancy Pelosi would be very happy to quickly work out free travel arrangements!”

Only one of the four freshmen lawmakers was born outside the United States, Ilhan Omar, and all four are U.S. citizens.

Then Monday, at a Made in America Showcase, as Trump calls it, after some brief remarks about American manufacturing, the president launched into a doubling down of his Sunday tweets.

“If you’re not happy here, then you can leave. That’s what I said in a tweet that I guess some people think is controversial. A lot of people love it, by the way.  A lot of people love it.”

Asked at the event if he was concerned about the criticism over his comments, Trump said:

“It doesn’t concern me because many people agree with me.  And all I’m saying – they want to leave, they can leave.”

At a Monday news conference, the four congresswomen, aka “The Squad,” urged Americans “not to take the bait,” after Trump had suggested the four “can leave,” which he then later double- and triple-downed on.

Rep. Omar said Trump’s “blatantly racist attack” was “the agenda of white nationalists,” adding the president would like “nothing more than to divide our country.”

Democratic presidential candidate Pete Buttigieg, asked on a Sunday talk show about Trump’s “go back to your country” tweet, said: “It’s wrong, it’s racist and it fundamentally misunderstands America.”

“One of the reasons we set up this country, one of the things we celebrate in freedom and democracy of the United States is you can criticize your president.  You can criticize the ways in which the country falls short of its values,” Buttigieg added.  “And that makes you more, not less, loyal to this country whether we’re talking about naturalized citizens or many of the people he was talking about who were born right here in the U.S. When you become a citizen, you are an American and questioning somebody’s Americanness because they disagree with you – is about one of the most un-American things I can think of.”

Republican criticism was muted.  Long Island Rep. Peter King called the tweets “very inappropriate and wrong,” though added, “I don’t think he’s racist, but I think the comments can be interpreted in a very negative way. They could inflame racist tendencies that people may have,” he told the New York Daily News.  “You have to be careful with what you say.”

Another Republican from Long Island, Rep. Lee Zeldin, placed the blame on the Squad, tweeting that “anyone in the U.S. with a blame America 1st mentality for everything needs to do some serious self-reflection, especially if they are a Member of Congress.”

Republican Rep. Mike Turner of Ohio, though, said, “Trump’s tweets from this weekend were racist and he should apologize.  We must work as a country to rise above hate, not enable it.”

Tuesday, the House rebuked the president, 240-187, voting to “strongly condemn” Trump’s suggestion that the four freshman Democratic women of color “go home” – a Twitter broadside described in a Democratic resolution as “racist comments that have legitimized and increased fear and hatred of new Americans and people of color.”

Only four Republicans – Representatives Will Hurd of Texas, Brian Fitzpatrick of Pennsylvania, Fred Upton of Michigan, Susan W. Brooks of Indiana – broke with their party to vote against Mr. Trump.  They were joined by Rep. Justin Amash of Michigan, a Trump critic who recently abandoned the Republican Party to become an independent.

Gerald F. Seib / Wall Street Journal

“At Mass on Sunday, Catholics around the world heard the gospel parable of the Good Samaritan: It is the story Jesus told of a Samaritan encountering on the road a Jewish man – a foreigner to him – who had been beaten and left for dead.  While others walked by and let the man suffer, the Samaritan stopped, dressed his wounds and took him to safety despite their deep cultural differences.

“At about the time that gospel was being proclaimed, President Trump tweeted out his already-famous, incendiary declaration that young Democratic congresswomen criticizing America should ‘go back’ to the ‘totally broken and crime infested places from which they came.’

“The contrast in those Sunday messages was striking.  So too was the evolution in Republican rhetoric from the days of Ronald Reagan, an earlier GOP president who, in his farewell address, talked of America as a ‘shining city’ that was ‘teeming with people of all kinds living in harmony and peace’ and whose ‘doors were open to anyone with the will and the heart to get here.’....

“The president’s attack on the congresswomen had significant racial overtones, because all four are women of color.  But the policy debate running beneath the charged rhetoric is over immigration.

“The nuts and bolts of the immigration problem now riveting the country are relatively simple. Rampant social violence and economic dislocation are compelling working men and women in Central America to seek a way out.  Current immigration law and court rulings have created a muddle over when and how such people might seek asylum in the U.S., and what should be done with them when they do so....

“Nearly lost in the process is a recognition of the considerable contribution immigrants make to American society.  The New American Economy is an organization, funded by business leaders, that has set out to document the contribution immigrants make to U.S. economic growth.  On its website, it estimates the impact of immigrants by state, and even by city.

“Example: The Kansas City metropolitan area has 140,442 immigrant residents, who pay $1 billion in taxes, have $3.1 billion in spending power, and include 9,625 immigrant entrepreneurs.

“Mr. Trump’s supporters often point out that his administration supports legal immigration, and is fighting illegal immigration, which is true.  Presidential son-in-law Jared Kushner has overseen the drafting of an immigration proposal that would boost border security while also setting up a merit-based immigration system that would keep the number of legal immigrants at current levels while shifting the mix more to those with needed job and technical skills.

“But the congresswomen Mr. Trump targeted also are here legally, a sign of how fast rhetoric can slide downhill.”

Robert Kagan / Washington Post

“President Trump has forced us all to take a position on what kind of America this is going to be – in essence, to define again what American ‘nationalism’ means.  Is it a white Christian nationalism (or if you’re Jewish and think you can wriggle yourself inside the Trumpian nationalist tent, you can call it Judeo-Christian), in which immigrants of color or other religions are not really Americans and can be told by the president to ‘go back’ to their ancestral lands?  Or is it the universalist nationalism of the Declaration of Independence, based on the liberal Enlightenment principles of equality before the law, the inviolable rights of the individual against the state and the conviction that all citizens – regardless of religion, ethnicity or ancestral roots and the timing of their arrival – are equally American?

“This is hardly the first time that Americans have been presented with this question, needless to say, and they have often answered equivocally.  The popular willingness to denounce and even persecute the ‘hyphenated’ Americans of German and Irish descent during and after World War I, a frenzy spurred by leaders of both political parties; the imprisonment of U.S. citizens of Japanese descent during World War II, upheld by the Supreme Court; and of course the unending horrific treatment of African Americans – these are more than sad episodes in our history. They are as much a part of who we are as the civil rights movement and other triumphs of individual liberties.  White nationalism was never just a fringe phenomenon, and it isn’t today.  The South was a bastion of the white-nationalist idea for almost two centuries and with support in the last half of the 20th century from conservative thinkers such as Russell Kirk and William F. Buckley Jr.  Today, the American conservative movement proudly nurtures a new nationalism, whose intellectual authors openly call on Americans to reject the universal liberal principles of the Declaration of Independence in favor of a nationhood grounded in religion and culture.  It is a growth industry.

“This nationalism is antithetical to the American experiment. The Founding Fathers, though white, Christian men, explicitly rejected establishing the new republic on a religious and ethnic foundation.  They did not share a Burkean belief that the rights they enshrined in the Declaration derived from their Anglo-Saxon Protestant heritage, accreted over the centuries.  As Alexander Hamilton put it, the ‘sacred rights of mankind’ were not to be found among ‘parchments or musty records’ but were ‘written, as with a sunbeam...by the hand of the divinity itself.’  In the Declaration of Independence, which Abraham Lincoln recognized as the quintessential statement of American nationalism, there is not a word about culture, color or Christianity.  Yet the fight to define our nationalism has continued ever since. And that is what’s at stake in the current confrontation between the president and ‘the Squad.’

“As always in such fights, the battle is not being fought on the clear and solid ground we’d all prefer.  Trump himself deliberately picked this murky ground.  He knows that a great number of Americans in both parties have little sympathy for the Squad, and for all kinds of reasons, ranging from simple racism, Islamophobia and misogyny, to genuine policy disagreements, to unhappiness with the bigotry and insensitivity that members of the Squad have themselves sometimes displayed.  Almost everyone has a reason to temper their support.  Professional Republicans are silent because they fear their voters; professional Democrats are still angry at the Squad for challenging House Speaker Nancy Pelosi (D-Calif.).  Many are inclined to declare a pox on both their houses – they deserve each other.

“Unfortunately, we don’t have the luxury of equivocation.  Trump has given us a binary choice: Either stand with American principles, which in this case means standing in defense of the Squad, or equivocate, which means standing with Trump and white nationalism.  It doesn’t matter how you feel about Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Ilhan Omar (D-Minn.). The truth is, they have done nothing and said nothing about the United States or about an ally (in this case, Israel) that has not been done or said thousands of times. When politicians were denouncing ‘hyphenated’ Americans during World War I, German and Irish Americans were not only denouncing their government. Some were actively working for the German government, engaging in sabotage and espionage, often supported by funds paid through the German Embassy in Washington.  Yet even that did not justify a national assault on ‘hyphenated’ Americans.

“Our nation won’t be undermined by anything the Squad has said or done.  It will be undermined if we don’t fight back against this assault on our universal principles.  Disagree with the Squad, refute them, argue with them, vote against them. But also defend them, as the founders intended.  The essence of our nation is at stake.”

Editorial / Wall Street Journal

“We’re optimists about American democracy in the long run, but nowadays the long run looks longer all the time.  The bonfire of inanities in the last two days between Donald Trump and Democrats over who’s the bigger racist, or real anti-Semite, or greater disgrace to the nation is a new low even by recent standards.

“Mr. Trump started the bonfire, as he so often does, with a Sunday Twitter barrage telling ‘‘progressive’ Democrat Congresswomen’ who are critical of the U.S. to ‘go back’ to the countries from whence they came.  He seemed to be targeting the four hard-left Members of Congress, all minority women, who’ve been brawling with House Speaker Nancy Pelosi over the direction of the Democratic Party.

“Conservative journalist Brit Hume offered a succinct summary in calling Mr. Trump’s comments ‘nativist, xenophobic, counterfactual and politically stupid.’ Three of the four women were born in the U.S., and ‘go back’ is a taunt immigrants have heard in America for more than two centuries.  It was used against Catholics, against the Irish, Germans and Italians, against Chinese and Japanese, and in our day most often against Mexican-Americans.  A President of the United States shouldn’t sink to such a crude nativist trope, but then we repeat ourselves.

“As for politically stupid, Mr. Trump rescued Democrats from an intra-party feud that had been escalating for days.  A smart opponent would have kept quiet and let it continue.    But Mr. Trump intruded into the spotlight and let Democrats unite in denouncing him....

“The best political advice for Mr. Trump came from Lindsey Graham, the South Carolina Senator, who said Monday that the President should ‘aim higher’ and focus on the extreme policies of Democrats, not insinuations about their race or national heritage.

“Mr. Trump doesn’t seem to understand that Democrats want the 2020 election to be about his words and behavior, rather than the results of his economic policies.  They’ll lose a debate over results, but they’ll win if the election is a referendum on character.

“Democrats want Mr. Trump to sound as if he’s the one who believes half the country is a ‘basket of deplorables,’ to quote the line that so damaged Hillary Clinton in 2016.   They want an atmosphere of chaos and national division so voters who are up for grabs will be so tired after four years that they’ll gamble on a Democrat even if they worry about the candidate’s policies.

“It may be hard to believe in this climate of partisan discord and contempt, but most Americans still prefer a politics that is less divisive and aspires to our better angels.”

In an interview with the New York Times Book Review podcast, longtime conservative commentator George Will offered a stark assessment of what Donald Trump’s presidency will mean for our politics and our culture.

In part:

“I believe that what this president has done to our culture, to our civic discourse...you cannot unring these bells and you cannot unsay what he has said, and you cannot change that he has now in a very short time made it seem normal for schoolboy taunts and obvious lies to be spun out in a constant stream.  I think this will do more lasting damage than Richard Nixon’s surreptitious burglaries did....

“What Donald Trump’s revolutionary effect has been [is] to make things acceptable that were unthinkable until recently,” Will asking the podcast host, Pamela Paul, if she could even conceive of past presidents like John Kennedy or Dwight Eisenhower uttering any of the many things Trump has said in office.

Will’s main point, “You cannot unring these bells,” is about the impacts and reverberations of what he has done to the presidency will not just disappear when he leaves office, whenever that may be.  [Chris Cillizza]

Editorial / New York Post

“ ‘Never interfere with your enemy when he is making a mistake,’ Napoleon said.  It’s a lesson neither President Trump nor ‘The Squad’ seems to have learned.

“Going into the weekend, the press was chock-full of stories about the Democratic civil war.  Nancy Pelosi sniped at Alexandria Ocasio-Cortez, progressives disparaged ‘moderates.’  Republicans were popping popcorn, watching the Dems destroy each other.

“Rather than stay silent, Trump tweeted himself into the conversation, saying that the four far-left Democrats should ‘go back’ to the countries they came from.

“Besides being factually off...the language was incendiary and offensive.

“Whatever point he was trying to make about their criticisms of the United States and their rhetoric on Israel was lost to his indecency.  The media narrative became all about Trump and which Republicans would criticize him.

“Then it was ‘the Squad’s’ turn to step on their own moment.  Reps. AOC, Ilhan Omar, Ayanna Pressley and Rashida Tlaib held a press conference at which they erased any sympathy they might have garnered.

“It wasn’t enough to object to Trump’s tweet: They had to accuse him of murdering children, complain that he won’t provide universal health care, that he is ‘weak.’  Pressley wouldn’t even call him president, referring to ‘the occupant of the White House.’  It’s time for impeachment, they all agreed.

“Mr. President, there’s a reason 51% of Americans approve of the way you’re handling the economy, yet your favorability rating is only 43%, per the RealClearPolitics poll averages.  It’s because of tweets like the one you sent out this weekend.

“ ‘The Squad’ demonstrated Monday just how radical they are all on their own.  Don’t get in their way.  Sit back with some popcorn and enjoy the self-destructive show.”

Editorial / USA TODAY

“In the not so distant past, politicians would reach racist voters through what are sometimes called ‘dog whistle’ comments. These are cautious, subtle statements that most people hear only as policy mumbo jumbo – criticizing affirmative action, say, or activist judges – but which others hear as reaffirmation of their bigoted worldviews.

“How utterly different things are now, with the president of the United States deploying the oldest racist trope in the book by calling on four congresswomen of color to go back to where they came from....

“In so doing, Donald J. Trump is replacing the dog whistle with a bullhorn.  He is all but declaring: I am a racist. I will advocate racist policies.  I will redefine the Republican Party of Abraham Lincoln, Teddy Roosevelt and Ronald Reagan as the party of white grievance against a changing America.

“To anyone who has been paying attention, Trump’s offensive comments, tweeted before a Sunday golf outing, were shocking but not surprising.  Trump has trafficked in bigotry throughout his career in business and politics....

“Responding to Trump’s stink bombs can be exhausting, and it’s tempting to just ignore them, especially when he’s trying to change the subject from topics such as migrant children locked up in detention centers, sex-trafficking charges against former friend Jeffrey Epstein and deportation raids that didn’t live up to their advance billing.

“In this case, Trump undoubtedly also saw an opportunity to exploit divisions in the Democratic Party between old guard leaders such as Nancy Pelosi and the ‘squad’....

“Yet some comments are too offensive to be ignored, and Trump is making it impossible to overlook his racism in all its grim venality.  As if his original schoolyard tweet calling on the four congresswomen to go away wasn’t enough, the president – who campaigned for office painting a dark picture of ‘American carnage’ – dug himself in deeper Monday by saying that they hated their country.  ‘If you’re not happy here, you can leave,’ he added for good measure....

“For Republicans, Trump presents a Hobson’s choice of jumping into the moral cesspool with him, or facing the wrath of Republican primary voters who’ve convinced themselves that Trump is worthy of support.”

---

--The administration moved to dramatically limit Central American migrants’ ability to seek asylum at the U.S. border with Mexico, an escalation of President Trump’s push to stem the flood of border crossers.

Under the rule, with few exceptions, migrants who pass through another country first must seek asylum there rather than at the U.S. border, where they will be ineligible to do so.

--The immigration deportation raids that President Trump telegraphed ended up being small in stature.  The operation had been expected to target hundreds of recently arrived families in about 10 cities who had been ordered deported by an immigration judge.

The move, like the above rule limiting migrants’ ability to seek asylum, is intended to deter a surge in families fleeing poverty and gang violence in their home countries.

Editorial / Washington Post

“Agents from Immigration and Customs Enforcement are launching major raids in a dozen cities this weekend aimed at deporting some 2,000 undocumented immigrants.  And in case you credited President Trump when he said it’s foolish to telegraph a major operation by announcing it in advance, never mind.  Mr. Trump himself did the telegraphing.”

--Trump tweets:

“So great to see how unified the Republican Party was on today’s vote concerning statements I made about four Democrat Congresswomen.  If you really want to see statements, look at the horrible things they said about our Country, Israel, and much more. They are now the top, most...

“...visible members of the House Democrats, who are now wedded to this bitterness and hate.  The Republican vote was 187-4. Wow!  Also, this was the first time since 1984 that the Speaker of the House was ruled Out of Order and broke the Rules of the House.  Quite a day!”

“Our Country is Free, Beautiful and Very Successful.  If you hate our Country, or if you are not happy here, you can leave!”

“Those Tweets were NOT Racist.  I don’t have a Racist bone in my body!  The so-called vote to be taken is a Democrat con game.  Republicans should not show ‘weakness’ and fall into their trap. This should be a vote on the filthy language, statements and lies told by the Democrat...

“...Congresswomen, who I truly believe, based on their actions, hate our Country.  Get a list of the HORRIBLE things they have said.  Omar is polling at 8%, Cortez at 21%.  Nancy Pelosi tried to push them away, but now they are forever wedded to the Democrat Party. See you in 2020!”

“We will never be a Socialist or Communist Country.  IF YOU ARE NOT HAPPY HERE, YOU CAN LEAVE!  It is your choice, and your choice alone.  This is about love for America. Certain people HATE our Country...

“...They are anti-Israel, pro Al-Qaeda, and comment on the 9/11 attack, ‘some people did something.’  Radical Left Democrats want Open Borders, which means drugs, crime, human trafficking, and much more....

“....Detention facilities are not Concentration Camps!  America has never been stronger than it is now – rebuilt Military, highest Stock Market EVER, lowest unemployment and more people working than ever before.  Keep America Great!”

“The Dems were trying to distance themselves from the four ‘progressives,’ but now they are forced to embrace them.  That means they are endorsing Socialism, hate of Israel and the USA! Not good for the Democrats!”

“When will the Radical Left Congresswomen apologize to our Country, the people of Israel and even to the Office of the President, for the foul language they have used, and the terrible things they have said.  So many people are angry at them & their horrible & disgusting actions!”

“The United States House of Representatives has just overwhelmingly voted to kill the Resolution on Impeachment, 332-95-1.  This is perhaps the most ridiculous and time consuming project I have ever had to work.  Impeachment of your President, who has led the...

“...Greatest Economic BOOM in the history of our Country, the best job numbers, biggest tax reduction, rebuilt military and much more, is now OVER.  This should never be allowed to happen to another President of the United States again!”

[The vote revealed the split in the Democratic Party between progressives who want to challenge Trump more aggressively and moderates desperate to quash talk of impeachment and stick to a poll-tested agenda that includes improving health coverage and raising wages for working people.]

--In his first campaign rally since his racist tweets, President Trump, addressing the faithful in Greenville, North Carolina, found a new hook to keep his fans engaged... “send her back” as he went through a list of grievances against Rep. Omar.  He clearly approved of the chant.

Trump mocked AOC for using two names, Ocasio-Cortez, a common practice among Latinas, insisting he would only refer to her as “Cortez.”

“They said, ‘That’s not her name, Sir,’ Trump told the crowd.  “I said, ‘No, no I don’t have time to go with three different names.’  We’ll call her ‘Cortez.’”

David Brooks / New York Times

“So apparently Donald Trump wants to make this an election  about what it means to be American.  He’s got his vision of what it means to be American, and he’s challenging the rest of us to come up with a better one.

“In Trump’s version, ‘American’ is defined by three propositions.  First, to be American is to be xenophobic.  The basic narrative he tells is that the good people of the heartland are under assault from aliens, elitists and outsiders.  Second, to be American is to be nostalgic.  America’s values were better during some  golden past.  Third, a true American is white.  White Protestants created this country; everybody else is here on their sufferance.

“When you look at Trump’s American idea you realize that it contradicts the traditional American idea in every particular.  In fact, Trump’s national story is much closer to the Russian national story than it is toward our own.  It’s an alien ideology he’s trying to plant on our soil.

“Trump’s vision is radically anti-American.

“The real American idea is not xenophobic, nostalgic or racist; it is pluralistic, future-oriented and universal.  America is exceptional precisely because it is the only nation on earth that defines itself by its future, not its past.  America is exceptional because from the first its citizens saw themselves in a project that would have implications for all humankind.  America is exceptional because it was launched with a dream to take the diverse many and make them one – e pluribus unum….

“Trump’s campaign is an attack on that dream.  The right response is to double down on that ideal….

“Americans have always been divided on where they came from, but united in their vision of  their common future.  They’ve been bonded by the vision of creating a pluralistic home in which everybody can belong and be seen.  Or as Langston Hughes wrote: ‘America never was America to me / And yet I swear this oath / America will be!’”

Editorial  / Wall Street Journal

“Donald Trump rarely admits a mistake, much less an overstatement, so we’ll take the regret he expressed Thursday at the chant of ‘send her back’ during his Wednesday rally as the moral equivalent of an apology.  Let’s hope his supporters get the message.

--Former Trump communications director and adviser, Anthony Scaramucci: “Would @realDonaldTrump ever tell a white immigrant – whether 1st, 2nd, 3rd or 4th+ generation – to ‘go back to your country’?  No.   That’s why the comments were racist and unacceptable.

“America is a nation of immigrants founded on the ideals of free thought and free speech.”

Wall Street and the Trade War

The economic data on the week was solid, if unspectacular, with June retail sales  better than expected at 0.4%, while industrial production came in unchanged, though the manufacturing component was 0.4%, beating estimates.  A figure on housing starts for June was essentially in line.

With the consumer representing a larger share of the economy than manufacturing, the retail sales number, now up four consecutive months, is significant.

But as Fed Chairman Jerome Powell told the House Financial Services Committee a week ago, “The bottom line for me is the uncertainties around global growth and trade continue to weigh on the outlook.”

We get our first look at second-quarter GDP next Friday, and as of today, the Atlanta Fed’s GDPNow indicator is still at just 1.6%, though other folks place it at 2% or a little better.

On the twin critical issues of the coming up with a new federal budget and raising the debt ceiling, deadlines for both fast approaching, Congress and the administration have apparently agreed to overall spending levels and raising the U.S. government’s borrowing limit for two years, but negotiators still have to work out how to offset the cost of any spending agreement.

The thing is lawmakers are looking to go on August recess in two weeks.

Without a new spending deal, automatic spending cuts known as sequestration would be triggered early next year, reducing discretionary spending by 10% as compared with fiscal year 2019 levels.

Boosting military spending is a priority for Republicans, but any increases require similar nonmilitary spending to satisfy Democrats.  But how will they offset  it all remains the big question.

And first you need an agreement on the debt ceiling.

Turning to Trade...U.S. and Chinese officials spoke by telephone on Thursday as the world’s two largest economies seek to end a year-long trade war, with Treasury Secretary Steven Mnuchin suggesting in-person talks could follow.

But there are no dates set for face-to-face talks.  “Right now we’re having principal-level calls and to the extent that it makes sense for us to set up in-person meetings, I would anticipate that we would be doing that,” Mnuchin told Reuters.

The thing is, neither side is willing to budge on the critical issues at this point.  And the U.S. has to remember, China wants respect, and they need a face-saving way to come back to the table.  And for them, Huawei is the key as Beijing is demanding the U.S. ease restrictions on it.

At a Cabinet meeting on Tuesday, President Trump said, “We have a long way to go as far as tariffs, where China is concerned, if we want.  We have another $325 billion that we can put a tariff on if we want.”

At the time of the G20 meeting and Trump’s talk with Chinese President Xi Jinping, Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations.

Trump admitted Tuesday that China hasn’t been meeting its word either on a key issue.

“What they did was not appropriate.  They are supposed to be buying farm products.  Let’s see whether or not they do.”

I told you China wasn’t buying soy beans to any great extent, yet President Trump continued to trumpet this falsehood at his rallies and in public statements.

Sen. Chuck Grassley (R-Iowa), who heads the Senate Finance Committee and whose constituents include corn and soybean farmers who have lost big sales to China, was asked by reporters if he was optimistic about a deal this year.  Grassley replied: “Just exactly the opposite.”

Last Monday, in an interview published with People’s Daily, the Communist Party’s mouthpiece, Zhong Shan, China’s commerce minister who has recently been part of the trade negotiations, outlined a “Six Plus One” game plan for his ministry, in keeping with President Xi’s nationwide campaign to emphasize political loyalty.

Zhong said: “The ‘One’ is that we need to do a good job in handling the trade conflicts between China and the U.S.  The U.S. has started this economic and trade dispute  with us in violation of the principles of the World Trade Organization – a classic example of unilateralism and protectionism.

“We must make the best of the spirit of struggle, and stand firm in defending the interests of our county and the people, as well as the multilateral trading system,” he said.

The “six” included other prioritized initiatives, Zhong said.  Among those being the belt and road program, growing domestic consumption, and running a successful International Import Expo in November.

To many China experts, Zhong’s remarks show China is in no hurry to reach a deal and is ready for protracted talks.

And so the uncertainty will  continue.

Europe and Asia

Brexit: In just a few days we will learn who is Britain’s new prime minister, Boris Johnson, the likely winner of the Conservative Party membership vote, or Foreign Minister Jeremy Hunt.

Both have been talking up their willingness to execute a hard Brexit come October 31.

Meanwhile, the European Union’s chief Brexit negotiator, Michel Barnier, told the BBC that the U.K. will have to “face the consequences” if it opts to leave the bloc without a deal.  Barnier emphasized the thrice-rejected agreement negotiated by Theresa May was the “only way to leave the EU in an orderly manner.”

Johnson and Hunt seem convinced that the threat of a no-deal will bring the EU back to the table.  I wouldn’t put my money on that.

Separately, according to the Sunday Times, citing unnamed government sources, a suspect has been identified behind the leak of confidential memos from Britain’s Washington ambassador, which sparked a major diplomatic  rift with the United States and President Trump.

Britain’s Mail on Sunday newspaper published the memos from Kim Darroch in which he described the Trump administration as “inept” and “dysfunctional,” prompting a few Twitter tirades from The Donald.

Those who are saying a suspect has been identified add that suggestions that it could be the result of a computer hack by a foreign state had been ruled out.

European Commission: Germany’s Ursula von der Leyen secured European parliamentary approval on Tuesday to become the first female European Commission president on a platform of a greener, fairer and rule-based Europe.

The German conservative got the approval of socialist and liberal lawmakers which, together with the endorsement by her fellow conservatives, gives her a stronger mandate to tackle issues such as climate change, trade and maintaining democracy in the European Union.

As head of the EU executive, von der Leyen will be in charge of trade negotiations, economic and climate policy  for 500 million Europeans and antitrust rulings involving powerful tech giants.  She takes up her new role on November 1, replacing Jean-Claude Juncker.

A second woman, International Monetary Fund chief Christine Lagarde, submitted her resignation as her nomination to lead the European Central Bank gained clarity with the electioin of von der Leyen.  The nonbinding vote on Lagarde’s appointment will come at a regular EU summit on Oct. 17-18, Lagarde’s resignation from the IMF effective Sept. 12.

Since its creation at the end of World War II, the IMF has been led by a European, while its sister institution, the World Bank, has been led by an American.

Turning to Asia....China reported second-quarter GDP came in at 6.2%, the lowest in 27 years and down from the first quarter’s 6.4% pace, though the lower figure is in line with the government’s own forecast, which is rather convenient.  Funny how that works in China.

But you look for trends in other data points for a clue as to the truth,  and June retail sales were better than expected, up 9.8% over a year ago.  Industrial production (industrial output) was 6.3%, but this was an increase off May’s 17-year low.  Fixed-asset investment rose 5.8% for the first half.

Autos, though, rose 17.2% in the month over a year ago.

New home prices rose 0.6% in June, month-on-month, and up 10.3% vs. a year ago, all the above courtesy of the National Bureau of Statistics.

The Chinese government has been laying on the stimulus, including tax cuts, but the domestic economy has been slow to respond.

In Japan, exports in June fell 6.7% from a year ago, the seventh month in a row of contraction, and now it’s not just about the impact of the U.S.-China trade war on overall global trade, but the growing trade friction between Japan and South Korea, as I spelled out last week.  There has been no improvement here.

President Trump tweeted: “China’s 2nd Quarter growth is the slowest it has been in more than 27 years.  The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries.  Thousands of companies are leaving.  This is why China wants to make a deal...

“...with the U.S., and wishes it had not broken the original deal in the first place.  In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come.  These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!”

Street Bytes

--The market took a breather from record highs, set again on Monday, and then finished down on the week, with the Dow Jones down -0.7% to 27154, the S&P and Nasdaq off 1.2% each.  The big tech earnings coming up in the next two weeks will be important to the market’s health.

--U.S. Treasury Yields

6-mo. 2.03%  2-yr. 1.82%  10-yr. 2.06%  30-yr. 2.58%

Trump tweet this week, “We are doing great Economically as a Country, Number One, despite the Fed’s antiquated policy on rates and tightening.  Much room to grow!”

--JPMorgan Chase reported a better-than-expected quarterly profit on Tuesday as higher interest income and buoyant consumer lending offset lower activity at its trading desks. The earnings beat was driven by the consumer bank, Chase, which reported credit card loans were up 2%, with overall income up 22%.

Income from consumer and community banking, JPM’s largest business, rose 22%, offsetting declines in other areas.

Total net interest income, the difference between what banks pay on deposits and earn on loans, rose 7% to $14.40 billion.

But if the Fed cuts interest rates in July, it could pressure margins at the banks, which have been benefiting from higher rates.

Net income climbed 16% to $9.65 billion, with net revenue rising 4% to $29.57 billion, above expectations.

CEO Jamie Dimon remained bullish about the U.S. economy.

“We continue to see positive momentum with the U.S. consumer – healthy confidence levels, solid job creation and rising wages – which are reflected in our Consumer & Community Banking results,” he said in a statement.

--Citigroup Inc. reported second-quarter net income that was up 7% from a year ago to $4.8 billion, with per-share earnings beating estimates at $1.95.

Revenue was up 2% to $18.76 billion, also beating expectations.  Without a one-time gain, Citi’s core trading revenue declined 5%.   Despite the soaring equity market, when it comes to trading in the industry, clients have remained cautious.

Investment banking revenue fell 10%, with a 36% drop in fee revenue from advising companies on mergers and acquisitions.

But the consumer unit had revenues of $8.51bn, up 3%.

CEO Michael Corbat told analysts: “We’re clearly pivoting from an environment where we had predicted...rising rates to this point.  From our perspective we don’t believe that the market has made that full adjustment.”

--Goldman Sachs reported a better-than-expected quarterly profit, as the investment bank continues to shift its business model away from a focus on trading to a more stable, consumer-focused revenue stream.

Institutional client revenue, which includes trading, slipped 3%, while investment banking revenue was down 9%.  But revenue from the bank’s investing and lending business rose 16%.

Total net revenue came in at $9.46 billion, down 2% but above expectations.  Earnings were $2.20 billion, down 6%.

“Given the strength of our client franchise, we are well positioned to benefit from a growing global economy,” CEO David Solomon said in a statement.

--Wells Fargo & Co. posted a 22% increase year-over-year in second-quarter net income to $5.85 billion, essentially unchanged from the first quarter.  This was the first quarter of operations since CEO Tim Sloan abruptly stepped down, with interim CEO Allen Parker not offering any clues in a call with analysts as to the status of the search for a new leader.    

Expenses dropped 4% in the quarter, ditto loan revenue, with fee income up 5%.

Wells has plans to close up to 900 branches over the next four years to reduce the total to between 5,000 and 5,100, and the overall work force by 5% to 10%, or by roughly 13,000 to 26,500 jobs, within three years,  as part of an effort to reduce expenses by $4 billion.

--Bank of America, the second-largest by assets, reported their consumers helped boost profit in the latest quarter but warned that it could take a hit from Fed rate cuts.

--Morgan Stanley announced quarterly profit fell 10% in the second quarter, reporting  a profit of $2.2 billion, on $10.2 billion in revenue, both down from a year ago.

“People don’t have much conviction, at these levels, in this rally,” said Morgan Stanley’s finance chief, Jonathan Pruzan.

Morgan Stanley has a giant retail brokerage but lacks the mortgage and credit-card operations that are booming at its rivals.

The wealth division, which manages about $2.5 trillion for U.S. clients, reported a 2% rise in quarterly revenue to $4.4 billion.  But trading revenue fell 12% from a year ago.  Revenue was down 18% in fixed-income trading.

But revenue grew 21% in its asset-management business.

--Shares of Netflix plunged 10% on Wednesday after the streaming giant reported a rare slowdown in subscriber growth.

The company added 2.7 million subscribers in the quarter ended in June – down 2.3 million from its forecast of 5 million new viewers.  The company behind “Orange is the New Black” and “House of Cards” gained 5.5 million subscribers during the same time last year.

Netflix blamed the disappointing growth on a lackluster show lineup – though Wall Street is pointing to the company’s decision to hike prices at a time when competition by rival streaming services is heating up.

The price hikes, which started in the spring, pushed the cost of a standard subscription to $12.99 a month, from $10.99, and to $8.99 a month, from $7.99, for a basic plan.

Aside from facing competition from rivals like Hulu and Amazon Prime, now Netflix faces a flood of new products, including from deep-pocketed rivals, including Disney, which is planning to release a service that will include its vast archive of movies for the low price of $6.99 a month in the coming months.  Apple is also readying its own service later this year...no price point announced as yet.

Netflix Chairman and CEO Reed Hastings, however, said the competition was nothing to worry about.

“We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during the second quarter,” he told analysts and investors.  “Rather, we think the second quarter’s content slate drove less growth in paid net adds than we anticipated.”

The company said it would add more than seven million subscribers in the current quarter, when the new season of “Stranger Things” was made available.  But Netflix had previously announced it would lose the North American rights to “Friends,” the second-most-watched show on the service, according to Nielsen, which is why the company was willing to pay as much as $100 million to stream the show worldwide in 2019.  Starting next year, American and Canadian customers will be able to find it only on HBO Max, after AT&T exercised an option worth over $80 million a year for a five-year period.

And beginning in 2020, Netflix’s North American subscribers will have to go elsewhere for “The Office,” with NBCUniversal, the show’s owner and another entrant into the streaming competition, grabbing the rights to stream it in North America.

Netflix ended the quarter with 151.6 million global subscriptions.

Adjusted earnings came in at 60 cents a share for the second quarter on revenue of $4.92 billion.

--After all I wrote last week on the ongoing issues of the 737 MAX, Ryanair said it is taking a knife to its operations in Europe as it prepares for two years of disruption caused by the unavailability of the MAX aircraft.

Europe’s biggest low-cost airline said Tuesday that it was planning to cut back operations at some airports and abandon others entirely because regulators may not return the grounded 737 MAX to service until December.  Remember when Boeing was talking July?

Well now the company doesn’t plan to submit its software fix to regulators until September, so if they meet that date, realistically we’re talking November at the very earliest.  But many are now saying next year.

But Ryanair is already slashing revenue growth forecasts for next summer, though CEO Michael O’Leary said the airline would not change how it markets 737 MAX flights to passengers once the plane is certified by regulators.

“We don’t believe once the aircraft are back flying there will be any customer issues,” he said.

--United Airlines tweaked its profit outlook for the full year despite the financial impact of its 737 MAX exposure, after announcing second-quarter results that beat the Street.

United has just 14 MAX jets, with American at 24 and Southwest at 34 (Delta zero). As I noted last week, United has cancelled 2,100 flights as a result of its MAX exposure.

--Southwest Airlines said Thursday it will keep Boeing 737 MAX aircraft from its flight schedules through Nov. 2, a month longer than its previous  estimate, saying it would cancel about 180 flights daily out of its overall daily total of 4,000.

--So with all the above in mind, Boeing Co. said on Thursday it would take an after-tax charge of $4.9 billion in the second quarter on estimated disruptions from the prolonged grounding of its lucrative 737MAX passenger jets.

The charge is from “potential concessions and other considerations to customers,” and the impact of continued lower production, the world’s largest planemaker said in  a statement.

The company’s official results for its last quarter come out July 24.

--Johnson & Johnson raised its forecast for 2019 sales as it reported quarterly results, but costly product litigation continues to weigh on the health-care giant. Second-quarter profit rose 42% to $5.61 billion, or $2.08 a share vs. last year.  Ex-items, earnings were $2.58, above estimates.

Sales fell 1.3% to $20.56 billion, but better than expectations.  The pharmaceuticals division, the largest, had sales of $10.53 billion, up 1.7% from a year earlier.  Medical-device sales declined 6.9% to $6.49 billion, while consumer products (Band-Aid, Tylenol) increased 1.2% to $3.54 billion.

But J&J is having to deal with issues such as the safety of its Baby Powder, and the company’s marketing of opioids.  The company faces more than 14,000 legal claims that use of its talc products caused cancer, and some juries have been ordering the pharm giant to pay large monetary damages to plaintiffs.

--IBM said revenue fell for a fourth straight quarter as the struggle to retool the business continues, though Big Blue’s profit grew more than Wall Street had projected, 3.9% to $2.5 billion, while revenue fell 4.2% from a year earlier to $19.16 billion.

IBM has been losing out to Microsoft and Amazon.com as customers race to do more of their computing in the cloud.  IBM’s cloud revenue grew just 5% in the second quarter – far behind the 41% annual cloud revenue growth Microsoft saw in its latest quarter.

IBM’s other businesses are in gradual decline, with IT services seeing its revenue fall by 6.7% year-over-year in Q2, while the division that houses IBM’s mainframe business also fell almost 20%.

--Shares in Microsoft Corp. hit record highs after it beat analysts’ estimates for fiscal fourth-quarter revenue and profit, driven by continued sales increases from its cloud business.

Since CEO Satya Nadella took over in 2014, Microsoft has been shifting away from its Windows operating system software and toward cloud services, in which customers move their computing work to data centers managed by Microsoft.  Revenue growth in Azure was 64% in the quarter ended June 30, compared with 89% a year earlier and 73% in the prior quarter, staggering growth.  Microsoft also guided higher for its “intelligent cloud unit” in the current quarter.  On Thursday, Microsoft said its Azure-based business segment for the first time reported slightly more quarterly revenue than its Windows-based segment.

In the cloud computing business, Azure’s chief rival is Amazon Web Services, which dominates the industry with a 32.8% market share, according to research firm Canalys.  Microsoft has a 14.6% share, while Google is at 9.9%.

Total revenue for Microsoft in the quarter was up 12% to $33.72 billion.

--The Trump administration raised national security concerns about Facebook’s plans to launch a cryptocurrency, Libra, as a growing chorus of U.S. and international officials are voicing resistance.

Treasury Secretary Steven Mnuchin said, “Many players have attempted to use cryptocurrencies to fund their malign behavior.  This is indeed a national security issue.”

Some European officials have expressed concerns Libra could undermine sovereign currencies and the power of the European Central Bank.

--Trump tweet: “ ‘Billionaire Tech Investor Peter Thiel believes Google should be investigated for treason.  He accuses Google of working with the Chinese Government.’ @foxandfriends.  A great and brilliant guy who knows this subject better than anyone!  The Trump Administration will take a look!”

--Interesting factoid in the Journal from Laura Kusisto: “While the Hispanic homeownership rate is on the rise, the black homeownership rate has fallen 8.6 percentage points since its peak in 2004, hitting its lowest level on record in the first quarter of this year, according to census data.

It marks the first time in more than two decades that Hispanics and blacks are no longer following the same path when it comes to owning homes.

--McDonald’s said it will partner with privately-held DoorDash to expand the availability of McDelivery, which was previously exclusively by Uber’s UberEats delivery service.

McDonald’s said it will launch delivery through DoorDash in Houston and expand to more than 200 restaurants beginning July 29.

--Speaking of food delivery services, Domino’s Pizza reported U.S. same-store sales growth that fell short of analysts’ estimates at 3%.  CEO Richard Allison said a “significant amount of pressure” from third-party food aggregators, in addition to the company’s push to expand its brick-and-mortar presence, weighed on comp sales in the quarter

Delivery services add to what was already a highly competitive pizza market.  Diners using third-party online food ordering sites like UberEats can order pizza from local restaurants that, frankly, have better pizza.

Domino’s does continue to have success in its international markets with global retail sales rising 5.1%, 8.4% when excluding changes in foreign exchange rates.

--Last Saturday night’s power failure in Midtown Manhattan was costly for the theater district, with 26 of the 30 shows currently on Broadway forced to cancel evening performances.

The Broadway League, the industry trade group, reported that grosses for the week ending Sunday were $30.6 million – or nearly $7 million lower versus the same week last season.

Restaurants reported big losses.  Junior’s, the New York institution famed for its cheesecake, said it lost about $35,000 in revenue at its West 45th Street location because of the outage.

Foreign Affairs

Iran: Thursday, a U.S. Navy ship downed an Iranian drone in the Strait of Hormuz after its operators ignored warnings to change course, President Trump announced.

The ship, the USS Boxer, was on a routine patrol when the drone approached within 1,000 yards, he said.

Trump said: “This was the latest of many hostile and provocation actions by Iran against vessels operating in international waters.”  The U.S., he continued, “calls on all nations to condemn Iran’s attempts to disrupt freedom of navigation and global commerce.”

Also Thursday, the U.S. demanded Iran release a vessel it seized in the Gulf, and a military commander in the region said that America would work “aggressively” to ensure free passage of vessels through the vital waterway.

The Iranian Revolutionary Guards announced they had seized a foreign ship smuggling fuel, and the State Department insisted Iran had to free the ship and its crew and stop harassing vessels in and around the Strait.  Iran said the ship was smuggling oil.

Meanwhile, also on Thursday, Iran signaled a willingness to engage in diplomacy to defuse tensions with the United States with a modest offer on its nuclear program that immediately met with skepticism in Washington.  Iran’s foreign minister told reporters in New York that Iran could immediately ratify a document prescribing more intrusive inspections of its nuclear program if the United States abandoned its economic sanctions.

The document, known as the Additional Protocol, gives UN inspectors from the International Atomic Energy Agency (IAEA) more tools to verify that Iran, in this case, is compliant in its nuclear program...that it is for peaceful purposes.

The U.S. calls this a non-starter, but, if taken up, it does provide a possible opening for a dialogue.

Foreign Minister Mohammad Javad Zarif told the Guardian newspaper: “If Trump wants more for more, we can ratify the Additional Protocol and he can lift the sanctions he set.”

U.S. officials responded skeptically, suggesting it was a disingenuous effort to get sanctions relief. “Their whole game is to try to get any sanctions relief they can while maintaining the ability to get a nuclear weapon in the future,” an official told Reuters on condition of anonymity.  The official said that under the offer, Iran would keep enriching uranium.

As for its ballistic missile program, Iran denied it was willing to use it in any negotiations.  A spokesman for Iran’s mission to the United Nations posted on Twitter: “Iran’s missiles…are absolutely and under no condition negotiable with anyone or any country, period.”

Supreme Leader Khamenei also accused Britain, Germany and France of failing to uphold obligations under the deal to restore Iranian access to global trade, especially for Tehran’s oil exports blocked by U.S. sanctions.

“According to our foreign minister, Europe made 11 commitments, none of which they abided by.  We abided by our commitments and even beyond them.  Now that we’ve begun to reduce our commitments, they oppose it.  How insolent!  You didn’t abide by your commitments!” Khamenei said, according to his website.

“Western governments’ major vice is their arrogance,” Khamenei said.  “If the country  opposing them is a weak one, their arrogance works.  But if it’s a country that knows and stands up against them, they will be defeated.”

And this one...Sen. Rand Paul received the go-ahead to try to repair Iranian-American relations from Donald Trump, raising concerns among some administration officials about the impact of such a mission on the president’s “maximum pressure” campaign against Tehran, as Politico reported.

“Paul proposed sitting down with Iranian Foreign Minister Javad Zarif to extend a fresh olive branch on the president’s behalf, according to four U.S. officials,” Politico reported.  Trump signed off on the idea.

Zarif was in New York this week for meetings at the UN.

Paul has long urged Trump to stay true to his election promise of not starting new wars in the Middle East.

But Paul’s strategy is opposed by hardliners Secretary of State Mike Pompeo and National Security Adviser John Bolton, as well as Vice President Mike Pence.

Meanwhile, European foreign ministers said the 2015 nuclear deal with Iran can still be saved.  U.K. Foreign Secretary Jeremy Hunt said, “We are looking to find a way to preserve the nuclear deal, which we think is the best way of keeping the Middle East, as a whole, nuclear-weapon free.”

“Iran is still a good year away from developing a nuclear weapon.  We think there is still some closing but small window to keep the deal alive,” Mr. Hunt added.

Spanish Foreign Minister Josep Borrell, who has been nominated to be the EU’s next foreign-policy chief, said, “Europe is doing everything it can to avoid” the deal collapsing.  He also lashed out at the U.S. and its attempts to impose an “economic blockade” on Iran and said Spain would participate in a European trade mechanism intended to keep commerce going between Europe and Iran amid the sanctions targeting U.S. and foreign firms dealing with Iran.

And then tonight, Iran has seized at least one more oil tanker, but there are conflicting stories as to the number and other facts.

Syria: Russia denied allegations by Syrian rebels that Russian special forces or ground troops were fighting in the campaign for the rebel-held region of Idlib.

Senior rebel commanders said Wednesday that Russia has sent special forces in recent days to fight alongside Syrian army troops struggling to make gains in a more than two month assault in northwestern Syria to seize the last opposition bastion.

Meanwhile, regime airstrikes continue to kill civilians in Idlib, the toll now more than 600 since the assault began, according to the Syrian Observatory for Human Rights.

Turkey: The United States on Wednesday announced it was removing Turkey from the F-35 fighter jet program, a move that had long been threatened, as I brought up last week, after Ankara began accepting delivery of the Russian S-400 air defense system.

The White House said in a statement: “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”

Related to the above, the Pentagon said it will cost the Defense Department between $500 million and $600 million to remove Turkey from the F-35 Joint Strike Fighter program.

That’s the cost of finding and setting up U.S. suppliers to make the 900-plus components currently made by ten Turkish manufacturers.

Ellen Lord, defense undersecretary of acquisition and sustainment, told reporters: “We have worked on alternate sources for the over 900 parts – we have been working since 2018 on this,” Lord said.

Asked if Turkey would be reimbursed for planes they have purchased, Lord said, “We are discussing the specifics about the aircraft they have purchased so far as we speak.”

Turkey has ordered 30 F-35s, four of which are at an Air Force Base in Arizona, where they are being used for pilot training.

President Trump said, “Turkey is very good with us, very good.  And we are now telling Turkey, because you have really been forced to buy another missile system, we’re not going to sell you the F-35 fighter jets.”

For his part, Turkish President Erdogan had bet heavily on a personal relationship with President Trump as a way of resolving the issue.  Erdogan has also said Turkey turned to Russia for air-defense equipment after the U.S. declined to sell it the Patriot antimissile system.

But Turkey’s relations with both Presidents Obama and Trump were strained over Washington’s decision to arm and train Syrian Kurdish fighters in the battle against ISIS, the Kurds deemed to be an enemy of Turkey.

North Korea: Pyongyang said the United States looks set to break a promise not to hold military exercises with South Korea, putting talks aimed at getting North Korea to abandon its nuclear weapons at risk, the North Korean Foreign Ministry said on Tuesday.

The Foreign Ministry said Washington’s pattern of “unilaterally reneging on its commitments” was leading Pyongyang to reconsider its own commitments to discontinue tests of nuclear weapons and intercontinental ballistic missiles.

China: The government and Chinese companies will cut business ties with U.S. firms selling arms to Taiwan, China’s Foreign Ministry said on Monday, declining to give details  of the sanctions.

Chinese Foreign Ministry spokesman Geng Shuang said the arms sales were a violation of international law and harmed China’s sovereignty and national security.

“China’s government and Chinese companies will not cooperate or have commercial contacts with these U.S. companies,” he told a daily briefing.”

Meanwhile, in the world’s most beautiful city (that I’ve been to, at least), protests continued in Hong Kong over China's proposed legislation on extradition that the local government says has been withdrawn, only the protesters don't believe them.

Pakistan: Days before Prime Minister Imran Khan was due to visit Washington, Pakistan attempted to smooth things over with President Trump on Wednesday by announcing the arrest of a notorious militant leader who has been living openly for years despite a $10 million U.S. bounty.

Hafiz Muhammad Saeed, founder of the Lashkar-e-Taiba militant group that carried out the 2008 attacks in Mumbai, India, was taken into custody in Punjab province when he went to seek bail in a terrorism financing case, Pakistani authorities said.

Pakistan has had Saeed under control, having detained and released him several times, most recently in 2017, when he served 10 months under house arrest.  India and the U.S. have long accused Pakistan of protecting the terrorist, who has a large following in his home city of Lahore.

The capture of Saeed presented President Trump with an opportunity to claim credit for his arrest, tweeting that it was the result of a “ten year search” and that “great pressure has been exerted over the last two years to find him.”

But Saeed has lived openly in Lahore for years and regularly gives sermons to large audiences.

So it was a deliberate move by Pakistan to curry favor with Trump before Khan meets with the president on Monday; their first encounter since Khan was elected last summer.

Democratic Republic of Congo:  The World Health Organization has labeled the year-old Ebola epidemic here a global health emergency.  Some experts say this isn’t the case...that it is still a “regional emergency.”

But the WHO was persuaded by a number of factors, such as the disease having reached Goma, a city of nearly two million people; the outbreak has raged for a year; the virus has flared again in spots where it had once been contained; and the epidemic hot zone has geographically expanded in northeastern Congo near Rwanda and into Uganda.

And then there is the violence against health workers, with two killed in their homes in Congo last week.  So senseless.

As yet I have no reports of more than a few cases in Goma, but imagine the threat.

Random Musings

--Presidential tracking polls....

Gallup: 44% approval of President Trump’s job performance, 51% disapproval, 90% Republicans, 38% independents (July 1-12, posted July 17).
Rasmussen: 50% approval, 48% disapproval (July 19).

--In a new USA TODAY/Ipsos survey, 68% of Americans found President Trump's tweets concerning the Squad offensive.  But 57% of Republicans agree with them.

--In a Saint Anselm College Survey Center poll of New Hampshire voters expressing an intention to vote in the upcoming Democratic Presidential Primary, Joe Biden leads at 21%, followed by Kamala Harris at 18%, Elizabeth Warren 17%, Pete Buttigieg 12% and Bernie Sanders 10%.

But Biden has been falling since an April survey, ditto Sanders, while Harris and Warren have seen big bumps in support.

--California is going Democrat in 2020, that’s certain, but it’s interesting what is happening in the Democratic field there, according to a new Quinnipiac University poll of Democrats and voters leaning Democrat.

Kamala Harris now leads with 23% to Biden’s 21%; Bernie Sanders 18%, Warren 16% and Buttigieg 3%.

Back in April, two weeks before Biden announced, it was the former vice president at 26%, Sanders 18%, Harris 17% and Warren 7%.

--The next Democratic presidential debates are slated for July 30-31 on CNN, which announced the two pairings of ten.  Bernie Sanders and Elizabeth Warren will face off on the first  night, while Joe Biden and Kamala Harris will share the stage the second night.

--Comedian and advocate Jon Stewart blasted Sen. Ran Paul (R-Ky.) hours after Paul delayed a vote, the Senate attempting to reauthorize a fund that compensates victims of 9/11.

“It’s absolutely outrageous, and you’ll pardon me if I’m  not impressed in any way by Rand Paul’s fiscal responsibility virtue signaling,” Stewart said, having repeatedly advocated for the 9/11 Victims Compensation Fund.

“Rand Paul presented tissue paper avoidance of the $1.5 trillion tax cut that added hundreds of billions of dollars to our deficit and now he stands up at the last minute, after 15 years of blood, sweat, and tears from the 9/11 community, to say that it’s all over now and we’re going to balance the budget on the backs of the 9/11 first responder community.”

Paul objected to the projected cost of the bill that would reauthorize the compensation fund, which helps pay for medical and economic losses as a result of the terrorist attacks, with the estimated cost to pay outstanding and future claims at $10.2 billion over the next decade, according to the Congressional Budget Office.  He said, “I will be offering an amendment if the bill should come to the floor but until then I will object.”  Paul wants any new spending to be offset with spending cuts elsewhere in the budget, but as Stewart says, it’s all bulls---.

The House passed its version of the bill with a 402-12 vote.

--Midtown Manhattan experienced a major power outage last Saturday night, and as I noted above, the economic impact was significant for some.

But it was even more significant for the supposed leader of Gotham.

Editorial / New York Post

“The lights went out on Broadway Saturday night, and Bill de Blasio was a thousand miles away in Iowa.  It was the moment that perfectly captured his distracted, ego-driven failure of a mayoralty.

“Bill de Blasio does not care about New York City. He does not care about its people. He does not care about how it’s run.  He does not care about you or your taxes, creating jobs or improving lives.  All Bill de Blasio cares about is Bill de Blasio.

“And so, for the good of the city, Gov. Andrew Cuomo needs to remove the mayor from office.

“Let’s face it: It’s only by accident de Blasio is mayor in the first place.  Without Anthony Weiner’s onanistic implosion, the Campaign Finance Board’s sidelining of rival lefty John Liu, or the support of one peculiar, but well-funded, constituency – people who hate carriage horses – de Blasio would probably be calling for a socialist uprising on Community Board 6.

“But there he was, the designated survivor of 2013, suddenly in charge of your money.  And boy, did he spent it.  He paid off the unions with generous contracts, expanded the taxpayer-funded workforce and poured cash into pet projects.  Thanks to the success of Wall Street and real estate, he never lacked for funds, never had to make any tough budget choices.

“Yet from this start, his lack of interest was apparent.

“After his one initiative, pre-K, passed in Albany, de Blasio had no other ideas.  The self-described champion of the poor didn’t even notice when a nursing home was sold for luxury condos under his nose.

“He couldn’t show up on time.  For anything.

“Every day, he drags himself out of bed at the crack of 10, has himself driven to the other side of town so he can do a halfhearted couple of minutes on the elliptical, and then maybe goes to City Hall.  Of late, even that is optional.  He goes back to Gracie Mansion to hold meetings about running for president....

“He runs the largest, greatest city in America, but Bill de Blasio is bored.  He doesn’t relish New York.  Doesn’t ride the subways, see its shows, eat in its restaurants (except for one café near his gym).  Once he realized he didn’t need the voters anymore, he skipped the Puerto Rican Day Parade this year.  He threw a parade for the Women’s World Cup soccer team just so he could give a tone-deaf campaign speech....

“And we sit here, in the dark, wondering about the infrastructure not being worked on, the disorder not being addressed, the city he’s too indifferent to run.

“How much more money will he waste?  How many more bad decisions must we endure?  We cannot live with an absentee mayor – and we cannot live with him here, either.

“Per the City Charter and  the state Constitution, the governor can suspend the mayor immediately for 30 days, then prepare charges, present de Blasio with them, give him a chance to answer them – and finally officially remove him.  Or the mayor could do the right thing and resign.

“Either way, Bill de Blasio must go.  Now.”

--Robert D. Kaplan / Wall Street Journal

“We live in a world without inhibition.  The distance between President Eisenhower and his life experience and President Trump and his is vast.  And it isn’t only American leadership that has deteriorated as we have traveled from the nuclear to the cyber age.  So too have global institutions and leadership elsewhere among major Western countries.

“Britain and Italy are two examples of utterly irresponsible and immature politics.  The new generation of German leaders – on which Europe’s fate pivots – won’t be like the generations from Konrad Adenauer to Angela Merkel, with deep memories of World War II and the Cold War.  They too are the children of the digital mind-set: brimming with ambition and virtue-signaling on climate change, while possibly lacking the requisite discipline to stand up to future challenges from the likes of Russia and China.  As digital technology accelerates, politics and memory degenerate.  News cycles are more intense, even as they are more quickly forgotten.  Consequently, the new generation of Western politicians is fundamentally without character.

“The answer lies behind us.  Nuclear apocalypse didn’t happen mainly because of the hard wisdom of our Cold War presidents, both Republican and Democrat.  Throughout history, instilling virtue and character in leaders has been the only effective means of arresting decline, writes James Hankins in a new book, ‘Virtue Politics: Soulcraft and Statecraft in Renaissance Italy.’  Mr. Hankins, a Harvard historian, painstakingly demonstrates that the greatest virtue in civic life – and the ultimate factor determining political stability – has always been principled moderation, whatever the epoch.

“It’s that simple, that mundane and that difficult.  In a digital age favoring extremists – the purveyors of rage and passion – the rarest and bravest of leaders will have to be moderates.  Only they can tame the forces of technology.  Only in their hands will humanity and markets be safe.”

--We note the passing of John Paul Stevens, the second oldest and third longest-serving Supreme Court justice in history and a Republican president’s nominee who went on to lead the Court’s liberal wing.  He was 99.

In lengthy interviews with the New Yorker and the New York Times near the end of his career, Stevens insisted that he had not changed his stripes but had simply withstood the court’s transformation from liberal to conservative.  During that time, he came to align more with the court’s liberals than its new brand of conservatives, eventually becoming the senior justice on that side with the power to assign opinions and dissents.

He was better known for his dissenting opinions to some.  Such as a 90-page dissent to the court’s decision in Citizens United vs. Federal Election Commission, which gave corporations the right to spend money freely on elections.

“While American democracy is imperfect, few outside the majority of this court would have thought its flaws included a dearth of corporate money in politics,” he wrote.

In his dissent of the high court’s ruling in Bush v. Gore, which ended the Florida recount and handed the election to George W. Bush:

“Although we may never know with complete certainty the identity of the winner of this year’s presidential election, the identity of the loser is perfectly clear,” he wrote.  “It is the nation’s confidence in the judge as an impartial guardian of the rule of law.”

--Finally, Sept. 12, 1962...President John F. Kennedy at Rice University, drumming up support for the space program.

“We choose to go to the Moon!  We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win.”

NASA saw its budget swell from $401 million in 1960 to $5.9 billion at its peak in 1966.  In the end, 400,000 were involved in the Moon landing, working for 20,000 different private companies and 200 universities.

---

Pray for the men and women of our armed forces...and all the fallen.

God bless America.

---

Gold $1426
Oil $55.63

Returns for the week 7/15-7/19

Dow Jones  -0.7%  [27154]
S&P 500  -1.2%  [2976]
S&P MidCap  -1.2%
Russell 2000  -1.4%
Nasdaq  -1.2%  [8146]

Returns for the period 1/1/19-7/19/19

Dow Jones  +16.4%
S&P 500  +18.7%
S&P MidCap  +16.5%
Russell 2000  +14.8%
Nasdaq  +22.8%

Bulls 58.0
Bears 16.8 [definitely worrisome levels for both]

Have a great week.

Brian Trumbore