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Science, Culture, & Humanities / Replacing Ruth
« on: Today at 09:18:54 AM »


Something I wrote:

In 1980 Ruth Bader Ginsburg was my Constitutional Law prof at Columbia.

Respect for the way she had genuine friendships with those of different points of view-- most famously Justice Scalia.
Respect for her various expressions of concern over how so many now fail to do that (including the Kavanaugh hearings!) and the dangers this poses for our country and respect for her appreciation that she got the job in 1993 with the votes (over 90 IIRC) of so many who disagreed with her.

Respect for her quiet courage in the face of a terrible disease.

Respect that I could disagree with her in class-- which I did both over National League of Cities and over the Equal Rights Amendment.

Respect that she later came to feel that Roe v.  Wade forced an issue that should have been left to the political process.
That said, she was a prime example of judicial activism.  If the reports of her dying words calling for her replacement to be made by Biden are true, they are both genuinely inappropriate and disappointing-- and consistent with other times she took off the mask.  All too often she was a Prog using judicial power to impose political ends beyond the proper purview of the judiciary.

I followed the Bush v. Gore litigation quite closely (reading the statute, listening to the oral arguments of both the FL Supreme Court and the SCOTUS and read all the decisions).  I had to laugh at her expressions of judicial deference to state courts (particularly in electoral matters in the South!) so that the political Florida Supremes could order inconsistent vote counting standards in order to give the victory to Gore-- not the Ruth I knew back in 1980 who gleefully advocated federal power over the States whenever possible-- hence my disagreement with her over National League of Cities v. Usery (working from memory, whether the Feds could make a State government pay its employees the federal minimum wage).

Politics & Religion / Re: 2020 Presidential election
« on: September 18, 2020, 11:41:17 PM »
If she is not replaced before the election, there is real chance of election cases coming before the SCOTUS yielding 4-4 votes.

Sen. Cruz points out that if she is not replaced before the election, the SCOTUS will have an even number of Justices ruling on the plethora of election cases likely to come before it.  Therefore it is the duty of the President and the Senate to replace RBG before the election.

Politics & Religion / GPF: TikTok's Time is Up
« on: September 18, 2020, 11:25:11 AM »
September 18, 2020   Open as PDF

    Daily Memo: TikTok's Time Is Up
By: Geopolitical Futures

Clock ticking for TikTok. The Trump administration announced Friday that it will ban U.S. business transactions with China-owned social apps WeChat and TikTok effective on Sunday. This effectively means people who have already downloaded the wildly popular apps will probably still be able to use them indefinitely. But an accompanying ban on hosting or transferring internet traffic for WeChat could render it unusable immediately, and TikTok will face a similar fate by Nov. 12. At a minimum, though, they will disappear from app stores and not be able to be updated in the U.S. – unless, that is, the White House approves either a sale of TikTok’s U.S. operations to a U.S. firm (which Beijing is blocking) or a “partnership” agreement reached last week between Oracle and ByteDance, TikTok's parent firm.

The issue is important for how it touches on numerous aspects of the burgeoning U.S.-China “tech cold war,” including how concerns about the oceans of personal data people willingly hand over to tech firms could generate national security risks more broadly. Such concerns are theoretically valid (though, if so, singling out specific Chinese apps would be insufficient). But determining exactly how much risk the U.S. faces is extraordinarily difficult, as is evaluating the risks of ultimately doing more harm than good with sweeping moves. Regardless, the U.S. is taking a better-safe-than-sorry approach, choosing to strike first and deal with any potential unintended consequences later. And given the blurring lines between commercial and military or intelligence technologies, it’s not hard to come up with reasons that just about any emerging Chinese technology could threaten U.S. interests.

Science, Culture, & Humanities / Re: Energy issues, energy technology
« on: September 18, 2020, 06:58:13 AM »
If I had held I would now be even!!!

Science, Culture, & Humanities / Re: Economics
« on: September 18, 2020, 06:49:50 AM »
What a great find!

Politics & Religion / Stratfor: China's Recovery
« on: September 18, 2020, 06:46:36 AM »
China's Economic Recovery Continues
Sep 16, 2020 | 18:40 GMT

China is likely the only major economy that will have positive growth for 2020 as a whole....

China is likely the only major economy that will have positive growth for 2020 as a whole, with gross domestic product now above its end-2019 pre-COVID-19 level, leading to a somewhat less deep global recession than anticipated. The economic recovery continued in August, with a small increase in retail sales from a year earlier and a slowing in the decline of private investment leading to a pickup in domestic demand, which until now lagged supply-side improvements. Still, that will not bring the global economy back to positive growth.

China's GDP grew by 11.5 percent (quarter-on-quarter) in 2020-Q2 after a decline of 8.3 percent in Q1, with further positive growth expected when Q3 data is released in October.

Previously, supply-side improvements led the recovery, with industrial production up 5.6 percent (year-on-year) in August after a 4.8 percent increase in July.

Industrial production was boosted by stronger than expected exports, which were up by 9.5 percent in August owing to increases in medical supplies, but also to higher consumer electronics exports.

Export demand is still at risk of a sudden potential increase in U.S. trade tensions ahead of the November election, which if realized would subtract from China's growth.

A 0.5 percent year-over-year increase in August retail sales indicates the beginning of a recovery in private domestic demand. This was mainly the result of further easing of COVID-19 lockdowns and less social distancing, as the virus is largely under control with an average of only about 20 new cases a day, according to Johns Hopkins University's daily tracker. Looser restrictions on service providers such as movie theaters boosted consumption and revenue, with box office receipts in late August at about 90 percent of where they were a year ago. Retail sales overall were still down by 8.6 percent in the January-August period, as high household indebtedness likely dampened spending.

What recovery there was previously in domestic demand until now was due mainly to government-supported infrastructure investment.

Fixed asset investment was off by only -0.3 percent from January to August compared to the same period last year, after declining by 1.6 percent through July.

The fiscal impulse from on-budget spending is substantial this year, with the general government consolidated deficit expected to reach about 11 percent of GDP, nearly double that of 2019.

Private sector investment remains depressed, declining 2.8 percent in January-August — although that's a narrowing of the 5.7 percent decline through July, which suggests that component of domestic demand is improving, too.

China's growth, while recovering, is still far below potential and the recovery remains uneven, especially with world demand sluggish. The latest data, however, relieves pressure on the People's Bank of China for monetary policy easing and will continue to support the yuan's appreciation against the dollar. Unlike advanced economy counterparts, the Chinese central bank has avoided flooding markets with liquidity and large cuts in interest rates, and seems to have acquiesced in the recent strengthening of the yuan in foreign currency markets

Politics & Religion / GPF: Russia's Emerging Arctic Maritime Frontier
« on: September 18, 2020, 06:42:25 AM »
Russia's Emerging Arctic Maritime Frontier
Rodger Baker
Rodger Baker
Senior VP of Strategic Analysis, Stratfor
Sep 15, 2020 | 10:00 GMT
The Magadan icebreaker in the Bay Nagayeva, Sea of Okhotsk, in March 2019.
The Magadan icebreaker in the Bay Nagayeva, Sea of Okhotsk, in March 2019.

(Anton Afanasev/SHUTTERSTOCK)
The thawing Russian Arctic is both a strategic opportunity and challenge, one that may fundamentally reshape Russia's foreign relations....

"Because of the inadequacy of the Arctic Coast as an outlet to the ocean, the great heartland can find access to the sea only by routes that cross the encircling mountain barrier and the border zone beyond."
Nicholas J. Spykman, America's Strategy in World Politics (1942)
Russia's surge of Arctic activity reflects the economic significance of the region and the impact of shifting climate patterns that now offer the prospect of an extended Russia maritime frontier. Russia has rebuilt and expanded its Cold War-era security architecture along its Arctic frontier, significantly increased natural gas production from its operations on the Yamal Peninsula, and laid out a 15-year plan to improve land-, air- and sea-based infrastructure connecting the Northern Sea Route to northern Russia and farther south. The thawing Russian coastline is both a strategic opportunity and challenge, one that may fundamentally reshape Russia's relations with its European and Asian neighbors, and with the United States.

Enclosed Geography

One of the core tenets of geopolitics is the significance of geography in setting the stage for foreign and domestic policy. As American geopolitician Nicholas Spykman noted in his 1942 America's Strategy in World Politics, "Geography is the most fundamental factor in the foreign policy of states because it is the most permanent." Geography's importance is often altered by technology, from canals and railroads to new critical minerals or changing energy sources. But rarely does geography itself change enough to alter the constraints and compulsions on states, at least not in a short time frame or outside localized events or disasters. The warming of the Arctic, however, is changing the core realities of Russia's geography, and it is happening at a pace that allows and compels a Russian response.

A key characteristic of geography that has shaped Russia over the centuries has been its lack of riverine connectivity. Unlike Europe or the United States, Russia's rivers rarely served to link agricultural zones and population centers, or connect the interior to the coasts. Rather, the major river drainage systems empty into the landlocked Caspian; into the constrained Black and Baltic seas; and most of all, into the iced-over Arctic Ocean. This constraint also offered a measure of security: Russia historically has proven incredibly resilient to invasion, particularly by sea. This river drainage system was one of the primary characteristics of Russia that led British geographer Sir Halford Mackinder initially to identify the Russian region as the geographical pivot of history, and later to identify it as the Eurasian heartland.

A map showing Russia's rivers and population density.
Russia's rivers and population density.

Russia long sought to break out of its continental heartland, pushing for sea access on the Pacific, seeking to expand its frontiers in the Baltic, and pressing south toward India and the Middle East (the latter being the subject of the so-called Great Game between Britain and Russia.) The Russo-Japanese War of 1904-5 made the weakness of Russia's limited maritime access manifest. Japan defeated the Russian Pacific fleet based in northern China, and it took Russia's Baltic Fleet — unable to reach East Asia via the Arctic Sea — some seven months to sail around the world only to meet defeat in the Tsushima Strait.

Arctic Opportunities

That inaccessibility is changing rapidly. Coastal navigation along the Northern Sea Route now starts earlier in the year, lasts longer and is even reaching the point that several passages have little need for icebreakers. Moscow's response has been to increase investment in both resource extraction and infrastructure development and to rebuild its Cold-War era military positions along the Arctic coast, updating with new equipment and technology. This year, Moscow established a special security council commission on the Arctic, and Russia produced a 15-year plan for Arctic development.

A map showing Russia's Northern Sea Route Ports

Russia has some 24,000 kilometers of Arctic coastline, compared to less than 20,000 kilometers of total U.S. oceanic coastline. The Russian Arctic accounts for more than 10 percent of national GDP, some 90 percent of Russian natural gas production and is a major contributor of strategic minerals, including nickel and palladium. An early sign of the potential future value of Russian Arctic ports came in the early years of World War II, when the allies supplied Russia through Murmansk and Arkhangelsk. The rest of the Northern Sea Route, however, remained unusable, and played little role in Russia's support of anti-Japanese fighters in the Far East, nor in the final days of the war when Russia declared war on Japan.

Today's changing climate is allowing not only greater access to the Russian Arctic frontier, but more reliable transportation of key commodities out of the Arctic. Already, Russian LNG from the Arctic has shipped to as far away as India, and this year saw the first tanker shipment of Russian Arctic oil to China. Russia has plans to develop large ports at each end of the Northern Sea Route for both containers and commodities, allowing ice-class vessels to move more frequently within Arctic waters and shifting cargos to traditional vessels for the rest of the journey to Europe or Asia.

China has shown strong interest in using the Russian Arctic seaways, and has been a major funder and consumer of Russian Arctic natural gas production. Japan and South Korea have also shown interest in the Northern Sea Route and Russian resources, and Russian and Finnish companies are cooperating on a possible undersea fiber cable through the Russian Arctic connecting Northern Europe to Japan. An opening Arctic provides opportunities for resource extraction, transportation and communications connectivity, and provides Russia with a shorter maritime route between its east and west coasts, the Northern Sea Route serving in that sense as a greatly extended Panama Canal.

Arctic Challenges

This international interest may also prove a challenge to Russia. China is funding Russian Arctic resource extraction, but it is also carrying out its own energy exploration in Arctic waters, and is exploring ways to bypass the Northern Sea Route, or at least the requirements Russia puts on its use. China's reach into the Arctic matches a push through Central Asia and one through the Indian Ocean, all parts of the Belt and Road Initiative, and together wrapping around Russia and its traditional areas of influence, forcing an eventual Russian response. The opening Arctic seas have spurred Russia to restrengthen its Arctic defenses, but this has reawakened the United States and Europe to the strategic challenges of the same region, and seen renewed defense activity and repositioning of forces to match.

The Russian government has established a new review of foreign investment and economic activity in the Arctic to ensure Russian national interests.

What once served as a largely impenetrable wall of ice protecting Russia's back is now an opening avenue exposing a long Russian coastline with little infrastructure and few population centers. Russia's Arctic coastline is largely empty. The government is offering incentives to increase migration to the region, to start businesses and develop infrastructure, but even with the melting sea ice, the area remains inhospitable and difficult territory. Changing permafrost patterns and poor quality construction and maintenance of Soviet-era infrastructure are adding to the cost of future development.

Most Russian Arctic development is in the west along the Kola Peninsula and at the Yamal and Gydan peninsulas, where the Ob River empties into the Kara Sea. There are also mineral developments in the Arctic areas of Krasnoyarsk Krai and The Republic of Sakha (Yakutia), as well as plans for expanded port infrastructure on the Chukchi Peninsula at the eastern end of the Northern Sea Route. The nearly 2 million people in Russian Arctic territories may be the largest Arctic national population, but this is far shy of what it would take to develop a truly connected and robust region capable of sustaining a broad economic base or supplying the manpower and presence necessary to ensure security along the long opening coastline.

What to Watch

For Russia, then, the opening Arctic provides both opportunity and risk. For much of Russia's history, the country has been oriented south, looking to spread its influence and at times its borders to warmer seas. The Arctic was a shield, even during the Cold War when the polar route was the shortest for strategic aircraft and nuclear missiles. An open Arctic coastline increases foreign activity along Russia's north, and draws increasing interest from Asian nations seeking resources and routes. Russia's FSB has already raised concerns that foreign actors are trying to use Arctic native populations in Russia to undermine Russian strategic security, and the government has established a new review of foreign investment and economic activity in the Arctic to ensure Russian national interests.

New Russian naval development will need to take regular Arctic operations into consideration, not merely through the construction of more than a dozen new icebreakers, but from the design of ships themselves. The longer coastline and increased maritime traffic require a robust observation and communications infrastructure, linked into territorial defense and search and rescue. Russian aviation is expanding Arctic operations, from plans to add heavy drones to maintain surveillance to additional fighter aircraft, and even experiments once again as the Soviets did during the Cold War era with establishing temporary airfields on ice to ensure expanded operational capabilities. Russia is also modifying existing weapons systems and designing new ones for Arctic conditions.

Arctic infrastructure, resource extraction, transit safety and national security all require expenditure, and while the Arctic is a critical component of Russia's GDP, it does not provide the needed resources to fund the rising infrastructure and development needs. Yet for Moscow, Arctic development isn't an option, it is increasingly a necessity. The Russians may have a head start in rebuilding Arctic defense structures and in deploying and building icebreakers, but they are also dealing with a 24,000-kilometer coastline that now needs securing. In the global naval race, Russia remains far behind the United States and China.

Russia's Arctic development is a new priority for Moscow, adding to its existing long land borders, its troubled relations along its former Soviet European frontier, its expanded activity in the Middle East and North Africa, and in the face of a rising China. As we look over the next decade, the shift in Russian geography will play a significant role in how Russia reassesses its international relations and its national priorities.

Politics & Religion / GPF: China's Trial by Fire
« on: September 18, 2020, 06:04:35 AM »
    China’s Trial by Fire
By: Phillip Orchard

From the COVID-19 outbreak to the subsequent economic crisis, with catastrophic flooding of the Yangtze River thrown in for good measure, 2020 has subjected the Communist Party of China to one existential crisis after another. Yet, Chinese President Xi Jinping seems to have a preternatural ability to swoop in and save the day. Not only does his administration appear to have come out from these calamities unscathed, but in some ways it seems to have grown stronger, more confident and more determined to dictate terms to foes foreign and domestic than ever – with Xi himself seizing every chance to turn crisis into opportunity to cement his power. It was Xi, for example, who Chinese propagandists say commanded the decisive battles in the “People’s War” against the invisible enemy, the coronavirus. It was Xi, according to his own comments during an August inspection tour of flood damage along the Yangtze, who’s continuing a centurieslong tradition of Chinese leaders demonstrating their mandate to lead by taming floodwaters. It was Xi who successfully waged a war on financial risk and who prepared China for the day when the U.S. would try to blunt China’s rise as a way to distract from its own problems, or so the narrative goes. It’s Xi who state media has increasingly been referring to as “the People’s Leader,” elevating the president to almost Mao-like status.

All this should pour cold water on persistent rumors of discontent with Xi in the upper ranks of the Communist Party of China. Of course, as Chinese elites wrangle for power and influence ahead of the Party Congress in 2022 – when Xi is expected to shatter CPC norms by sticking around for a third term as party chairman – palace intrigue will only intensify. And in a country like China, the next crisis is always just around the corner. Beijing is invariably choosing between bad options for dealing with immense problems, with many of its short-term fixes deepening its long-term structural issues, alienating powerful constituencies at home and antagonizing foreign powers.

But the reality remains: A year like 2020 is exactly why Beijing scrapped its Deng-era consensus leadership model and broadly supported Xi’s consolidation of power. His successes this year have been inflated, sure, but they have been real enough to validate his claim that a strongman must be at the helm during trying times. The most important question then is not whether Xi is strong or China is on the brink of collapse. He and China are simultaneously, perpetually both. What matters most for China and just about everyone else is how this combination of extreme power and extreme vulnerability shapes its behavior at home and abroad. It’s not about to change course.

Crisis Averted?

Two weeks ago, in a triumphant speech, Xi said, “The CCP’s strong leadership is the most reliable backbone when a storm hits. The pandemic once again proves the superiority of the socialist system with Chinese characteristics.” But if there were ever a moment when the Chinese public lost faith in the ruling party’s ability to govern competently, the pandemic could’ve been it.
The government’s mishandling of the virus could be attributed directly to its rigidly enforced top-down decision-making structure and institutional cultures shaped by censorship and paranoia. Indeed, when a popular doctor in Wuhan succumbed to the virus in early February, Chinese censors lost control of a flood of outrage over Beijing’s cover-up of the outbreak, and it briefly looked as if things had reached an inflection point. But the censors regained control of the narrative, and China’s lockdown made it impossible for anger online to become anger on the streets. More important, it largely succeeded in containing the virus, capping deaths at just a fraction of the numbers seen in major powers across the globe. By March, the president, who had been conspicuously absent from state media for much of the first two months of the year, reemerged to “take command” of the response just as the infection curve was being driven downward. A month later, he was declaring victory. Since then, bungled responses in the U.S., Europe, India and elsewhere have bolstered his argument that the CPC is uniquely well-suited to crisis response. (Democracies like Taiwan, South Korea and New Zealand have something to say about this.)

The systemic shock from the pandemic could well have exposed China’s economy as a house of cards. China shut down the bulk of its domestic economy almost overnight. Millions were abruptly out of work. Countless small businesses – which were already weighed down by tariffs and a credit crunch before the pandemic – faltered, searching for rescue from an immature banking system that had already proved ill-suited for meeting the needs of China’s burgeoning private sector. China’s convoluted financial system, already awash in shadow lending and toxic loans, appeared on the brink. Once Beijing was able to reopen most of the economy, it faced a secondary crisis in the form of collapsing demand for Chinese exports as the rest of the world sunk into crisis.

And yet, Beijing has somehow been able to keep its myriad interlocking systemic risks from triggering a cascading crisis. It never even needed to unleash a firehose of stimulus as it did after 2008 – measures that contributed directly to its staggering financial risks today. This week, the Organization of Economic Cooperation and Development predicted that China would be the only one of the world’s 20 leading economies to post positive growth this year. Here, Xi can rightfully take credit for pushing through a series of painful measures to curb financial risk beginning in his first term; these worked better than many expected. Meanwhile, his emphasis on strengthening state-owned enterprises – which in normal times have sapped the economy of its dynamism and are at the core of Western trade grievances – has been validated since SOEs have sopped up surplus labor and kept industrial production humming. Perhaps most important, Beijing’s worst nightmare – a massive spike in unemployment – came true, but without the attendant social unrest. There’s a case to be made that the experience will ultimately make Beijing confident enough to adopt a more sustainable economic model that doesn’t prioritize stable employment at the expense of profitability and dynamism.

Much of Xi’s success could have been undone by the collapse of the Three Gorges Dam, a structure that best embodies the vast potential and pitfalls of China’s ruthlessly ambitious approach to development. It's huge – so large that its construction in 1994 apparently slowed the earth’s rotation – illustrating China’s capacity to dream big and build bigger. It's critical; the 22,500 megawatts per day it can produce are vital for meeting the country’s insatiable energy appetite, breakneck urbanization drive, and soaring public expectations for prosperity.

But it also illustrates the fragility of the contract the CPC has made with the Chinese people. The dam was dogged by warnings about its structural integrity even before it was built, and its construction displaced tens of millions of people, many of whom saw their farms and ancestral lands submerged for good. These people were promised prosperity. If the dam collapsed – or even, as it did in this case, proved inadequate for controlling flooding around economic engines like Chongqing and Wuhan, killing hundreds of people and displacing millions more – they might quite reasonably wonder if the CPC was capable of honoring its end of the bargain. But it didn’t fail. In mid-August, Xi showed up in flood-ravaged Anhui province to hail his government’s success in taming the floods and implicitly compared himself to a legendary Chinese emperor who built a network of canals more than 4,000 years ago.

The Tip of the Iceberg

This run of purported successes can be interpreted in seemingly contradictory ways. On the one hand, you could see it as evidence of the Xi administration’s singular ability to marshal resources and take on colossal challenges – or at least validation of its insistence on centralizing power and micromanaging the country’s affairs. On the other hand, you could simply see it as a series of narrow escapes that expose just how many intertwined, potentially catastrophic crises are keeping Chinese leaders awake at night. You could see Xi’s propaganda blitzes as demonstrations of true triumph and confidence – or desperate bids for credit that betray a thinly veiled anxiety about the CPC’s tenuous hold on power.

Presumably, all these interpretations are valid. Xi’s administration will need all the luck it can get and all the savvy at its disposal because China has no shortage of crises on the horizon. The current pandemic may be under control, but the culture of censorship and institutional rigidity fostered by Xi may keep Beijing unprepared for the next one. The scale of the structural damage on the Chinese economy left behind by the pandemic won’t be fully apparent for years to come. The “grey rhinos” and black swans Xi is always warning about in the financial sector are still out there – and many of Beijing’s critical reform plans aimed at thwarting them have been put on hold. The pandemic, along with the CPC’s increasing dependence on state control, has accelerated the slide toward open hostility between China and the West. The Three Gorges Dam cannot realistically be upgraded. Floods will return. The problems exposed this year are really just the tip of the iceberg.

But to Beijing, the lesson of this year is evidently: trust only the party’s power. Its solution to a dysfunctional public health sector, for example, is to tighten central control over it. The only way to stave off a financial collapse is through painful measures aimed at curbing financial risk, and these can only be implemented with the brute force required to remove opposition and contain the fallout. If the Three Gorges Dam is flawed or insufficient, in the CPC's mind, then state power is needed to build more and build better – and to forcefully move the population out of harm’s way. If people are inclined to get upset about such things, then the state must be capable of preventing a revolt. If the West is going to turn against it, then Beijing must have the power to make clear that it won’t be bullied and reshape the region around its needs. And so forth.
Mao may have thrived on a doctrine of perpetual revolution, but Xi appears to be inescapably driven by permanent crises. This mindset is perhaps the inevitable result for a government haunted by China’s history – by the weight of rising public expectation, by the impossible task of meeting the needs of 1.4 billion people, and by the inherent difficulty of trying to make the massive machinery of the state run efficiently through sheer force of central will and ideology. But the downside risk of this mindset for Beijing is obvious – and for China’s neighbors, it’s particularly alarming. Either way, it's the one Beijing is sticking with, whatever storms may come.   

Politics & Religion / Re: G M's guide to online privacy
« on: September 17, 2020, 10:58:05 PM »
I will be checking this out!

Politics & Religion / Re: Stratfor: Russia's Great Power Strategy
« on: September 14, 2020, 04:56:10 AM »
September 14, 2020   View On Website
Open as PDF

    The Kremlin's Unusual Silence
The problems for Russia's central government keep growing, but the leadership seems reluctant to act.
By: Ekaterina Zolotova

Russian President Vladimir Putin will not fly to New York this week for the 75th session of the U.N. General Assembly, reportedly due to the COVID-19 pandemic. Putin’s annual television program and Q&A show, which usually happens in June but was postponed this year, also will not occur in 2020 – because of the pandemic. In general, the Russian president has limited himself lately to vague decrees and brief comments, usually in online interviews. It’s easiest for the Kremlin to blame the pandemic for Putin’s relative absence from the spotlight, but Moscow is under pressure from many directions, and the virus is just the best distraction. There’s the instability in neighboring Belarus, Russia’s most important buffer and its last remaining ally to the west. There’s the poisoning of Russian opposition leader Alexei Navalny, which threatens to bring down new sanctions against the Kremlin and endangers the future of the Nord Stream 2 gas pipeline, which is important for the Russian economy. There are unending protests in Khabarovsk and, of course, the economic impact of COVID-19 and the fall in oil prices and consumer demand.

The pandemic has strained governments the world over, but what’s interesting about the Russian case is the government’s silence and apparent inaction in the face of not just COVID-19 but also many other challenges. All this creates the impression that the Kremlin is struggling to maintain its strength and the country’s economic stability.

Silencing, or Ignoring, Criticism

Arguably the clearest sign that something strange is happening in Russia is the apparent poisoning of Navalny last month. The 44-year-old anti-corruption activist was aboard a plane from Tomsk to Moscow on Aug. 20 when he fell violently ill, forcing the plane to make an emergency landing so that Navalny could be rushed to a hospital in Omsk. On Aug. 22, he was moved to Berlin’s Charite hospital, where specialists reported signs that Navalny had been exposed to Novichok, a deadly nerve agent that was used in the assassination attempt against Russian defector Sergei Skripal in the U.K. in 2018. For obvious reasons, accusations focused on Moscow, and Western governments began discussing new sanctions against the Kremlin.

It’s uncertain who is to blame, but there are at least two main possibilities. The first is that Moscow fears its power in the regions is weakening and authorities wanted to warn the opposition. Perhaps not coincidentally, Navalny’s poisoning and a government raid of the headquarters of the opposition United Democrats both occurred just before a general election on Sept. 13. The second possibility is that a government rival of Putin wanted to destabilize his position, since the poisoning will hurt the government’s support. In either scenario, Moscow is dealing with uncertainty that affects its ability to govern throughout Russia’s immense territory.

This is also demonstrated by the ongoing protests in the Far East city of Khabarovsk. On July 9, the former governor of the Khabarovsk region, Sergei Furgal, was arrested and sent to Moscow, where he was accused of involvement in the murders of several businessmen in the 2000s. On July 11, thousands of people turned out in Khabarovsk to protest the arrest, saying that it was politically motivated. A member of the Liberal Democratic Party of Russia, Furgal was never a serious opponent of the Putin regime, but skepticism of Moscow’s intentions in Khabarovsk remains high. The emergence of protests is itself notable: This is the first time in modern Russian history that a governor accused of a criminal offense has received massive public support. Protests popped up in other cities, and they have occurred daily in Khabarovsk since they began, with help from the Russian opposition via social networks. Also notable is their durability, even though the protests are smaller than they used to be.
(click to enlarge)

Moscow’s response – or lack thereof – is also unusual. Located nearly 4,000 miles (6,000 kilometers) from Moscow, Khabarovsk is near the border with China. In theory, the stability of a border region in such a distant area should be a priority for the Kremlin. But since the arrest, the central government has been largely absent. Putin does not comment on events in the region, security forces have not suppressed the protests, and the Russian media is focused on unrest in Belarus. It’s possible that the Kremlin worries that attempting to disperse the rallies would cause greater instability and fuel greater discontent, with the potential to spread to other regions. Meanwhile, some political force – the ex-governor’s supporters or other opponents of the Kremlin – has an interest in keeping the protests going, organized and productive. Moscow’s hesitance to engage suggests that it is uncertain about its position and afraid of sparking a larger, more widespread rebellion, especially in other remote cities and regions.

The Price of Stability

Another challenge for Russia – one not of its own making – is energy prices. The Russian economy and budget are heavily dependent on oil and gas exports, but the coronavirus-induced recession has sent energy prices plummeting. The global economic recovery overall has proceeded slowly, and demand for energy hasn’t recovered. Russia’s revenues from oil exports from January to July amounted to $43.9 billion, a decline of 37.7 percent compared to the same period in 2019. Export revenues from gas fell by 51 percent. This translates into greatly reduced budget revenues for the state.
(click to enlarge)

Less revenue means less money to distribute among the population and regions, and this is an especially sensitive time, as COVID-19 has affected standards of living throughout the country. During the lockdown, more than 1.2 million Russians were left without work. At the end of the second quarter, the purchasing power of Russians for basic food products dropped to its lowest level in the past 10 years. Regions continue to develop unevenly, poverty remains an issue, and government subsidies are needed to create demand. And although the economy is not yet an inspiration for protests, a prolonged decline in living standards may exacerbate negative trends in society. The Kremlin fears that at a time when the population and economy need a boost, it will lack the funds to distribute because oil prices are expected to remain low for a while.
(click to enlarge)

In times like these when money is tight, the Kremlin typically looks to the oligarchs and heads of the largest companies to replenish the budget, and this time is no different. The heads of the largest Russian oil companies (Rosneft, Lukoil, Gazprom Neft, Tatneft and Zarubezhneft) complained to Putin about the Ministry of Finance’s plans to raise taxes on hydrocarbon production, but their concerns apparently fell on deaf ears. Russian billionaires have lost some $16.7 billion since the beginning of the year because of the pandemic, and it will get worse: The personal income tax rate of 13 percent, which has been the same for everyone for 20 years, is set to increase to 15 percent next year for those earning more than 5 million rubles (approximately $67,000).

Russia still has $177.6 billion, about 11.7 percent of gross domestic product, in its national wealth fund, but the Kremlin is determined to save what it can for tough times ahead. Without a significant increase in energy prices, Moscow’s only choice to replenish the budget is to raise taxes on the rich to redistribute to the rest of the population. This would help Putin’s popularity with the majority, but it could lead to dissatisfaction and a loss of support among the wealthy and may cause additional capital flight, which would hurt the economy.

Finally, there’s Belarus, the last Russian ally in the west and the only thing standing between U.S. troops in Poland and Russia’s borders. Protests and strikes in Belarus have continued unabated since that country’s disputed presidential election on Aug. 9 and the announcement of incumbent President Alexander Lukashenko’s victory. Labor collectives from the largest Belarusian companies have joined the action. Moscow supports Lukashenko but it is in no hurry to intervene. Russian military assistance in suppressing mass protests would mean an invasion, which, of course, would only worsen Russia’s position in international trade and would mean more severe economic sanctions, which Russia’s slowing economy may not withstand.

Russia’s territorial size is both its greatest strength and its greatest weakness. The different regions of Russia are unequal, are at different stages of economic development and are only loosely connected. A stable government, a strong security apparatus and calm borders are important for preserving the unity of this vast territory. Moscow also needs substantial buffers, as the flattened borderlands act almost as a highway to the capital for foreign armies. Buffers also create a kind of economic zone, sometimes with a large amount of resources (including labor), through which Russia can supply resources to the world market and bypass sanctions. Russia’s security and territorial integrity are a constant challenge, especially when Moscow has fewer financial resources to support the country’s poorer regions, the buffer zones are unstable and the ruling party lacks the confidence to act.

Why Russia has been relatively quiet is unclear. Putin has avoided making loud statements, leaving that to his team: Foreign Minister Sergey Lavrov, who is in talks with Cyprus and Syria; Defense Minister Sergei Shoigu, who last week brought together the defense ministers of the Commonwealth of Independent States and the Shanghai Cooperation Organization; and press secretary Dmitry Peskov, who is preparing for a visit by Lukashenko. None of this means the Kremlin isn’t under pressure. More likely, it means the leadership is aware of its weaknesses and trying to hide it from Russia’s competitors.   

Politics & Religion / Re: Rules of the Road/Fire Hydrant/Self Intro
« on: September 14, 2020, 04:51:32 AM »
Going dark for a few days , , ,

Science, Culture, & Humanities / WSJ: Bad Teaching is Tearing America apart
« on: September 14, 2020, 04:46:38 AM »
Bad Teaching Is Tearing America Apart
Education’s dumbing down frays the bonds of citizenship and is hardest on the poor, says E.D. Hirsch, the man who wrote the book on cultural literacy.
By Naomi Schaefer Riley
Sept. 11, 2020 4:49 pm ET

If you have school-age children, the pandemic-induced move to online classes may give you an unusual window into their education. E.D. Hirsch expects you’ll be surprised by “how little whole-class instruction is going on,” how little knowledge is communicated, and how there is “no coherence” from day to day, let alone from year to year.

The current fashion is for teachers to be a “guide on the side, instead of a sage on the stage,” he says, quoting the latest pedagogical slogan, which means that teachers aren’t supposed to lecture students but to “facilitate” learning by nudging students to follow their own curiosity. Everything Mr. Hirsch knows about how children learn tells him that’s the wrong approach. “If you want equity in education, as well as excellence, you have to have whole-class instruction,” in which a teacher directly communicates information using a prescribed sequential curriculum.

Mr. Hirsch, 92, is best known for his 1987 book, “Cultural Literacy: What Every American Needs to Know.” It is an argument for teaching “specifics,” followed by a lengthy list of them—thousands of historical figures, events, concepts and literary works with which, in Mr. Hirsch’s view, educated Americans should be familiar. Heavily weighted toward Western history and civilization, the list provoked charges of elitism. Yet Mr. Hirsch is singularly focused on helping disadvantaged kids. They “are not exposed to this information at home,” he says, so they’ll starve intellectually unless the schools provide it.

He continues the argument in his new book, “How to Educate a Citizen,” in which he describes himself as a heretofore “rather polite scholar” who has become more “forthright and impatient because things are getting worse. Intellectual error has become a threat to the well-being of the nation. A truly massive tragedy is building.” Schools “are diminishing our national unity and our basic competence.”

Mr. Hirsch is nonetheless cheerful in a Zoom interview from a vacation home in Maine, his armchair perched next to a window with a water view. An emeritus professor at the University of Virginia, he normally resides in Charlottesville, where he continues his research and acts as the chairman of the Core Knowledge Foundation.

He cites both history and neuroscience in explaining how education went wrong. It began in the 1940s, when “schools unbolted the desks and kids were no longer facing the teacher.” Instead children were divided into small groups and instructed to complete worksheets independently with occasional input from teachers. “That was also when our verbal test scores went down and the relative ranking of our elementary schools declined on a national level.” On the International Adult Literacy Survey, Americans went from being No. 1 for children who were educated in the 1950s to fifth for those in the ’70s and 14th in the ’90s. And things have only gotten worse. Between 2002 and 2015, American schoolchildren went from a ranking of 15th to 24th in reading on the Program for International Student Assessment.

The problem runs deeper than the style of instruction, Mr. Hirsch says. It’s the concept at its root—“child-centered classrooms,” the notion that “education is partly a matter of drawing out a child’s inborn nature.” Mr. Hirsch says emphatically that a child’s mind is “a blank slate.” On this point he agrees with John Locke and disagrees with Jean-Jacques Rousseau, who thought children’s need to develop according to their nature. Both philosophers make the “Cultural Literacy” list, but “Locke has to make a comeback” among educators, Mr. Hirsch says. “The culture is up for grabs, and elementary schools are the culture makers.”

Mr. Hirsch is a man of the left—he has said he is “practically a socialist.” But he bristles at the idea that kids should read only books by people who look like them or live like them. He recalls how reading outside his own experience enabled him “to gain perspective.” Growing up in Memphis, Tenn., in the 1930s, he says, “there was no one I knew who wasn’t a racist.” In his teens, he picked up Gunnar Myrdal’s “An American Dilemma: The Negro Problem and Modern Democracy” (1944), which “allowed me to escape.” The Swedish sociologist’s survey of American race relations “made a huge impact” on Mr. Hirsch. “I take it as an illustration of how important knowledge is and how important it is to not necessarily become a member of your culture.”

That’s no less true in 21st-century America. “The idea that identity and ethnicity are inborn and indelible from birth is a false view that leads to group hostility,” Mr. Hirsch says. “The idea that there can be an American culture that everyone joins seems to be anathema to some academic thinkers,” Mr. Hirsch says. “But I can’t believe it’s anathema to any normal person in the country who isn’t some social theorist.” It’s fine for children to embrace their particular heritage, he says, but also vital to create an “American ethnicity.” The purpose of elementary schools “is to make children into good citizens.”

That requires knowledge that is “shared nationally, if you’re going to read and write and communicate with one another.” He’s dismayed that people keep getting hung up on the particulars. “I’m fine with arguing about whether it shall be Toni Morrison or Herman Melville. Who cares?” He calls elementary school “a nonpartisan institution,” a view that may seem quaint in an era when schools are adopting ideological curricula like the “1619 Project” and teachers are displaying “Black Lives Matter” banners as their Zoom backgrounds.

Mr. Hirsch wants to correct some of these excesses. He dedicates “How to Educate a Citizen” to the late political scientist Richard Rorty, who died in 2007. Rorty “made a distinction between the political left and the cultural left,” says Mr. Hirsch, who considers himself a man of the former but not the latter. He commends to me a 1994 New York Times article, “The Unpatriotic Academy,” in which Rorty wrote: “In the name of ‘the politics of difference,’ [the left] refuses to rejoice in the country it inhabits. It repudiates the idea of a national identity, and the emotion of national pride.” Mr. Hirsch agrees and longs for the “willingness to sacrifice for the good of society that was very strong” during his early years. “Patriotism is important because we want to make our society work.”

Mr. Hirsch also takes issue with grade schools’ focus on “skills.” Whether it is imparting “critical thinking skills,” “communication skills” or “problem-solving skills,” he says such instruction is a waste of time in the absence of specific knowledge. He describes the findings of the National Academy of Sciences on the subject of the “domain specificity of human skills.” What this means, he explains in the new book, “is that being good at tennis does not make you good at golf or soccer. You may be a talented person with great hand-eye coordination—and indeed there are native general abilities that can be nurtured in different ways—but being a first-class swimmer will not make a person good at hockey.”

He cites the “baseball study,” conducted by researchers at Marquette University in the 1980s, which found that kids who knew more about how baseball was played performed better when answering questions about a text on baseball than those who didn’t understand the game—regardless of their reading level. The conventional response in education circles is that standardized tests are unfair because some kids are exposed to more specific knowledge than others. In Mr. Hirsch’s view that’s precisely why children should be exposed to more content: Educators “simply haven’t faced up to their duty to provide a coherent sequence of knowledge to children.”

There are now about 5,000 schools in the U.S. that use some form of the Core Knowledge curriculum, developed by Mr. Hirsch’s foundation. And research suggests Mr. Hirsch is right. A recent large-scale randomized study of public-school pupils in kindergarten through second grade found that use of the Core Knowledge Language Arts curriculum had statistically significant benefits for vocabulary, science knowledge, and social-studies knowledge.

Even in poor neighborhoods, kids at Core Knowledge schools perform well and are admitted to competitive high schools. From the South Bronx Classical Charter School to the public schools in Sullivan County, Tenn., Mr. Hirsch is clearly proud that his ideas have helped the least privileged kids in America.

He questions the idea that children who are exposed to more “experiences” are at an automatic advantage. “That’s what fiction is for,” he quips. And not only fiction. “The residue of experience is knowledge,” he says. “If you get your knowledge from the classroom, it’s just as good as if you got it from going to the opera. Poor kids can catch up.”

Asked about the effect of the pandemic and lockdown on children’s emotional well-being, Mr. Hirsch shrugs, then offers an anecdote from a principal at a Core Knowledge school. Before classes began one morning, a second-grade girl approached him and said: “I’m so excited for today.” When the principal asked why, she said, “Because today we are going to learn about the War of 1812.”

“Gee, I wonder what that’s about,” the principal said.

“I don’t know,” the girl replied. “But today I’m going to find out!”

For Mr. Hirsch, the lesson is clear. No matter the circumstances, “kids delight in learning things.”

Ms. Riley is a resident fellow at the American Enterprise Institute and a senior fellow at the Independent Women’s Forum.

Politics & Religion / WSJ Impending PA Fustercluck could be cured if only
« on: September 12, 2020, 10:25:38 AM »
Pennsylvania has already suffered one interminable mail-vote delay in 2020, and a repeat in November could draw the entire country into a legal brawl, while putting the result of the presidential election into serious doubt. How about heading off this too-predictable debacle before it happens?

A week after the June 2 primary, about half the counties in the Keystone State were still tallying ballots. On June 11, Philadelphia alone had 42,255 votes uncounted. President Trump won Pennsylvania in 2016 by 44,292.

If Mr. Trump and Joe Biden run neck and neck in November, how long might Pennsylvania keep the Electoral College hanging? In the campaign’s closing weeks, arriving mail votes will pile up in local offices, but state law says they can’t be processed until 7 a.m. on Election Day. This wasn’t enough preparation to give timely results when 1.5 million residents voted absentee in June, and it won’t be in November.

Tight deadlines are another problem. Pennsylvanians can request a mail ballot as late as 5 p.m. on Oct. 27. For votes to count, they must arrive at local election offices by 8 p.m. on Nov. 3. That leaves seven days, including a Sunday, for applications to be handled, blank ballots delivered, and votes dropped off or return mailed. The U.S. Postal Service says such a turnaround is unrealistic and creates a high risk of tardiness. America’s first postmaster general, Ben Franklin, would be unhappy to see his Pennsylvania setting up the USPS for failure.

In some states, straggling ballots are valid if they’re postmarked by Election Day. Pennsylvania law has no similar provision, but Democrats are asking the state Supreme Court to conjure one. Gov. Tom Wolf, a Democrat, wants to count votes arriving by Nov. 6. Pennsylvania also lacks a way for voters to fix ballots that are rejected for suspect signatures. This is a recipe for extended legal mischief and for judges to determine which votes are counted. With the state Supreme Court controlled by Democrats, that could be what Mr. Wolf has in mind.

The state Legislature, run by Republicans, is moving a bill with fixes. Under the House proposal, which passed 112-90 last week, the deadline to request mail ballots would jump to a comfortable 15 days before the election, as the USPS suggests. Absentee votes could be pre-processed beginning the Saturday before Nov. 3. Voters with suspect signatures would be given a chance to prove their identities.

Mr. Wolf plans to veto the bill “for a multitude of reasons,” his spokeswoman says. One objection is that it “seeks to eliminate the use of drop boxes.” True enough, although it would also authorize Pennsylvanians to drop off voted mail ballots at their polling places. Mr. Wolf wants a longer period of pre-processing for mail votes: three weeks, not three days.

The tragedy would be for Republicans to pass a bill, Mr. Wolf to veto it, and Pennsylvania to barrel toward a foreseeable crash. Maybe three days of pre-processing is too little, given the busyness of Nov. 1 and 2. Maybe three weeks is too much. Mr. Wolf’s office didn’t reply Thursday to a query on the potential for compromise. “We continue to be open to negotiations,” says a spokeswoman for Senate Majority Leader Jake Corman, “and hope that the Governor would meet with Republican legislative leaders.”

The same should be happening beyond Harrisburg. About a dozen states, including Wisconsin and Michigan, don’t process ballots until Election Day. Minnesotans can request a mail ballot on Nov. 2. Smells like more lawsuits.

Some analysts in Washington are so alarmed about delayed presidential results that they’re calling to delay the date of the Electoral College vote, which can be changed with an act of Congress. Inauguration Day is fixed in the Constitution as Jan. 20.

Florida Senator Marco Rubio has a bill to bump the meeting of electors from Dec. 14 to Jan. 2. So Americans can spend Christmas wondering who their next President will be? There’s still time to avoid that outcome.

States shouldn’t be let off the hook. If Mr. Wolf and Pennsylvania’s legislators get together now to fix their shortsighted and potentially destructive election laws, and if other states follow, then with any luck Mr. Rubio’s bill will never be needed.

But on present trend, in a close presidential race, we are headed toward a vote-counting mess in which both sides claim victory. Don’t rule out furious supporters of the candidates battling in the street. If you think this isn’t possible in America, you haven’t been paying attention to this year’s “summer of love.”

Politics & Religion / Now, why would the Dems do that?
« on: September 11, 2020, 07:43:35 PM »

A Trump-Biden Niagara Fall
How the pandemic and protests are floating the U.S. into a political crisis.

By Daniel Henninger
Sept. 9, 2020 7:10 pm ET
WSJ Opinion: A Trump-Biden Niagara Fall

Wonder Land: How the pandemic and protests are floating the U.S. into a political crisis. Images: AFP/Getty Images Composite: Mark Kelly

Niagara Falls is a wonder of the world in part because when staring at its vast, churning expanse, what comes to mind is: I wouldn’t want to be swept over those falls. Welcome to the 2020 presidential election. Some 120 million voters are in the same boat, heading for a political crackup on Nov. 3. But hey, we don’t arrive at the top of the falls for two months. Why worry?

On Tuesday, this newspaper’s opinion columns carried a bracing editorial—“Will Courts Pick the Next President?”—on the impending mail-in voting fiasco. Read it and weep. The gist of the situation is that some states, oblivious to the laws of postal-delivery gravity, are allowing ballots to be put in the mail just days before Nov. 3. They may or may not show up by Election Day, but so what?

Postal service experts have warned of the risks of mailing ballots within seven days of Nov. 3. But hardly anyone is listening to them. Amid the maelstrom of state voting procedures, lawsuits are being filed to challenge existing deadlines. A federal judge told Georgia that if a ballot is postmarked before Election Day, it has to be counted whenever it shows up.

In Pennsylvania, some officials want ballots counted even if a postmark is missing. State election officials are going to eyeball signatures on mailed ballots to see if they match what’s on file. Close doesn’t count only in horseshoes and hand grenades.

Ohio’s League of (Democratic) Women Voters is already challenging the verification process. A long two months remain to throw other legal monkey wrenches into what’s left of the election system.

But here’s the really dynamite mail-in metric: Polling done by The Wall Street Journal suggests 66% of Trump voters plan to vote in person, but nearly 75% of Biden voters say they’ll mail it in. Arguably, we are going to have parallel elections for the same office. Not even close to arguable is that both Donald Trump and Joe Biden will claim each won his election. Dueling inaugurations, anyone? Portland’s permanent political street-fighting could be coming to a neighborhood near you.

The excuse for rolling the election helplessly onto the rocks is, of course . . . the pandemic.

It’s worth noting how much of essential America is being subsumed beneath the pandemic’s unchanging conventional wisdom.

Schools, universities, urban economies, industries and now a national election must stumble forward as if nothing we know about the virus’s virulence or transmission has changed since March. At institution after institution, leadership has ceded decision-making responsibility to an amorphous power called “science.” That statement requires an apology to the scientists who world-wide have been conducting debate and discussion about the virus’s threat today versus the need to resume normal human life.

Are we really going to allow a national political crisis caused by a demonstrably flawed voting system to just, you know, sort of happen? A half year on, the pandemic has short-circuited independent or helpful input from much of the nation’s leadership on protecting the election.

Several reasons may explain the national outbreak of nonfeasance.

One is “Trump.” After marinating for three years in antipathy for “Trump,” many elites—in business, academia and the media—are willing to let the system rip to get rid of him. In turn, he’s happy to oblige the rancor. In the Cold War, this was called mutual assured destruction.

More intriguing is how racial issues that emerged after May 25 have suppressed normal political instincts and comment. The idea of Black Lives Matter has become a kind of alternative reality in which racialism informs everything, starting with that long list of torn-down monuments to such notorious racists as Ulysses S. Grant.

This presidential election was going to be difficult enough without the new element of racially motivated mob rage and one major party locked up over its historic ties to the civil-rights movement and the current movement’s street protests and violence. The BLM goal is to conform opinion. The result is that people who normally would speak up no longer do—about anything.

Last month, Seattle’s Police Chief Carmen Best, a black woman, was forced to resign. This week, Rochester, N.Y., Police Chief La’Ron Singletary, also black, resigned with a bitter statement: “As a man of integrity, I will not sit idly by while outside entities attempt to destroy my character.”

Their careers, a testament to racial advancement, are collateral damage, tossed away in a day without defense from anyone. The complexities of their jobs aren’t discussable. Instead, liberals and many others—in and out of politics—hide behind the virtue of the moment, intimidated by social media and the social-justice sentiments of millennials.

Between the pandemic and protests, we have fallen into a culture of silence this year. Now it looks as if we will nonchalantly let the mail-in vote mess float a presidential election over the falls into a political crisis. Stock up on water wings.


The Federal Program That Keeps Insulin Prices High
Middlemen pocket discounts while forcing patients, employers and Medicare to pay more.
By Adam J. Fein
Sept. 10, 2020 7:10 pm ET

Perhaps the biggest flashpoint in the political debate about prescription drug prices is the cost of insulin. This summer an executive order from President Trump required low prices for some patients, and Eli Lilly last week announced new measures to make insulin more affordable for diabetics. Yet many aren’t aware that a federal program is goosing the price of insulin and other treatments, and keeping the prices high for patients who need these drugs.

Over the past few months the little-known 340B Drug Pricing Program has become the source of intense jockeying over who should benefit from the deep drug discounts—sometimes as much as 100%—that manufacturers provide to hospitals and their pharmacy partners. Drug manufacturers Sanofi, Merck and Novartis are demanding transparency to ensure that their discounts aren’t diverted.

Congress created the 340B Drug Pricing Program in 1992 with the vague goal of helping providers “stretch scarce federal resources” by requiring manufacturers to offer steep drug discounts to certain “safety net” hospitals. But the program includes no clear mandate on how the rebates should be spent. Good intentions have been swamped by middlemen that pocket discounts while forcing patients, employers and the Medicare program to pay more for prescription drugs.

For 18 years, 340B remained a minor, generally uncontroversial part of the U.S. health-care system. But shortly after the Affordable Care Act passed in 2010, the Obama administration announced an expansion: Hospitals could purchase and dispense discounted drugs through an unlimited number of external (or contract) commercial pharmacies.

For years I’ve been studying the economics of the complex and opaque intersection of the 340B program and the pharmacy industry. My analysis has found that since 2010 the 340B program has grown by almost 500% and is approaching the size of the nation’s Medicaid outpatient drug market. The number of external pharmacies in the 340B program has also skyrocketed, from fewer than 1,300 in 2010 to 28,000 in 2020. That means almost half the U.S. pharmacy industry now profits from the 340B program, which was designed as a narrow support to certain hospitals.

Profit margins of up to 100% allow hospitals to pay inflated fees to their pharmacy partners, which can earn margins well above what the patient’s insurance company usually pays. Public companies such as Walgreens, CVS, Walmart, Cigna, UnitedHealth Group, and Kroger have rushed into the 340B business. A booming industry of consultants and technology companies helps hospitals and commercial pharmacies profit from this aspect of the 340B program.

Patients don’t benefit from these discounts. Instead, they are expected to pay their health plans’ full out-of-pocket costs. A patient with a high-deductible health plan must pay the full list price for his medicine. The same sad math applies to seniors in the Medicare Part D program. Seniors taking many expensive specialty therapies must pay 5% of their prescription’s price without discounts—even when the manufacturer has practically given the product away.

Unlike Medicaid, the pharmacy component of 340B doesn’t have—and has never had—a regulatory infrastructure. That’s because the Obama administration’s 2010 notice bypassed the usual rule-making and comment procedures. Consequently, there’s no requirement that hospitals appropriately use the billions in 340B pharmacy discounts, no fair-market-value standards for pharmacies’ fees, and zero transparency around the profits earned by the billion-dollar public companies that dominate 340B pharmacy networks.

Even worse, multiple government watchdogs have found that hospitals often don’t provide discounted drug prices to uninsured low-income patients who filled prescriptions at a hospital’s 340B contract pharmacy. The Government Accountability Office discovered that in a sample of 28 hospitals, 16 (57%) didn’t provide discounted drug prices to needy patients at 340B pharmacies.

Manufacturers can find themselves paying a Medicaid rebate and a 340B discounts for the same prescription. Such double dipping occurs because there is a lack of transparency into claims data that would allow states and manufacturers to apply payment policies correctly. Health and Human Service’s Inspector General in a report last month identified this lack of transparency as one of its top unimplemented recommendations to the agency.

Manufacturers understandably oppose paying 200% in discounts while others in the system make money. Hospitals and pharmacies have fought requests for data that manufacturers need to verify or track 340B discounts.

Congress needs to clean up this mess. The health-care system has changed a lot in the 28 years since the discount program was introduced. The 340B program needs to be modernized so that it benefits seniors and other patients—while supporting the genuine safety-net services of health-care providers. In the absence of sensible regulations, manufacturers will struggle to make sure that patients benefit from discounts on prescription drugs.

Mr. Fein is CEO of Drug Channels Institute.

Politics & Religion / WSJ notices the Eastern Mediterranean
« on: September 11, 2020, 09:10:06 AM »
Showdown in the Mediterranean
Two NATO allies could go to war over a maritime dispute.
By The Editorial Board
Sept. 10, 2020 7:27 pm ET

Aegean Sea surface temperatures naturally can reach the 80s, but the region has come to a boil this summer. Turkish President Recep Tayyip Erdogan’s confrontation with Greece over maritime claims could be resolved through diplomacy. The question is whether Mr. Erdogan wants to negotiate or simply assert Turkish power.

Territorial disputes around the Turkish coast and several nearby Greek islands existed long before Mr. Erdogan took office, but the Turkish leader’s growing belligerence has caused the latest round of tension. He unilaterally claims vast chunks of territory for Turkey and has escalated by sending exploration vessels into disputed territory with support from the navy. Each side has legitimate claims but Ankara justifies bad behavior with nationalist rhetoric.

“They’re either going to understand the language of politics and diplomacy, or in the field with painful experiences,” Mr. Erdogan declared Saturday. While leaders usually reserve such language for adversaries, Mr. Erdogan was threatening a NATO ally. The alliance hoped relations between Greece and Turkey would improve when they joined in 1952, but the two have come close to war three times since the 1970s. Tensions worsened as gas was discovered around the Eastern Mediterranean in recent years.

Turkey also has issues with Cyprus, which belongs to the European Union but not NATO. Ankara invaded the island in 1974 and is the only country in the world to recognize Turkish-speaking Northern Cyprus as a state. The south wants to cut deals with foreign energy firms but Ankara demands the north gets a share. Separately, Turkey wants economic rights in waters Cyprus sees as its own.

Military conflict between Greece and Turkey remains an unlikely but real possibility. NATO has tried to arrange talks but Greece says it won’t participate until Turkey withdraws its naval ships from disputed areas. These difficulties prompted the weekend tantrum from Mr. Erdogan, who sees the fight as about more than uncertain energy reserves.

Mr. Erdogan’s popularity has fallen amid Turkey’s economic and financial troubles. But a tough stance in the Eastern Mediterranean generates support across the Turkish political spectrum. Ankara has invested heavily in its naval ambitions, with a light aircraft carrier set to sail next year and more frigates on the way. Greece has announced more defense spending, but it will take years to have an effect.

In the past the U.S. and Europe have worked together to manage tensions in the region. This time Washington has called for dialogue but deferred to the European Union. Brussels remains divided—with France symbolically escalating against Turkey and Germany trying to play fair broker—and its efforts won’t mean much without America’s economic and military heft.

Under Mr. Erdogan, Turkey has benefited from its ties to the West while moving closer to Russia. Turkey is a strategically important NATO member, particularly in the Black Sea, and the relationship is worth trying to save. But intimidating another ally like this deserves an answer. If Mr. Erdogan uses force or threatens to cut refugees loose on Europe, Washington and Brussels will need a united response.

President Trump’s tweets and transactional approach to foreign affairs get all the media attention. But NATO as the world knows it could unravel in the Eastern Mediterranean.

Politics & Religion / Re: California
« on: September 11, 2020, 12:02:27 AM »

Posted that on my FB page three days ago!

Another Border Clash Heightens China-India Tensions
Sep 9, 2020 | 19:16 GMT


Renewed altercations between Chinese and Indian forces in the disputed region of Ladakh reflect a growing risk of military escalation as China's growing presence along the two countries' border prompts India to more assertively defend its claimed territory. China and India have accused each other of firing shots during a Sept. 7 incident south of Pangong Lake, marking the first official claims of small arms fire on the border since 1975. While the situation in Ladakh had calmed down after the deadly June 15 melee in Galwan Valley, a resurgence of tensions is now occurring in a separate area of the disputed territory. Since Aug. 29, Chinese forces have allegedly been trying to cross into Indian controlled territory in the mountainous area between Pangong and Spanggur Lakes. India reportedly deployed troops to block these Chinese incursion attempts in several separate incidents. ...

Renewed altercations between Chinese and Indian forces in the disputed region of Ladakh reflect a growing risk of military escalation as China's growing presence along the two countries' border prompts India to more assertively defend its claimed territory. China and India have accused each other of firing shots during a Sept. 7 incident south of Pangong Lake, marking the first official claims of small arms fire on the border since 1975. While the situation in Ladakh had calmed down after the deadly June 15 melee in Galwan Valley, a resurgence of tensions is now occurring in a separate area of the disputed territory. Since Aug. 29, Chinese forces have allegedly been trying to cross into Indian controlled territory in the mountainous area between Pangong and Spanggur Lakes. India reportedly deployed troops to block these Chinese incursion attempts in several separate incidents.

India's recent move to grant commanders on the border with greater freedom to respond to Chinese threats has significantly raised the risk for localized violence that could escalate beyond New Delhi's strategic intent. India's rules of engagement previously restricted the use of firearms or explosives in this disputed area, which had limited the potential for escalation into broader violence during past incidents. After the bloody border clash with Chinese forces in June, however, the Indian army provided frontline commanders with complete freedom of action to respond to Chinese incursions as they saw fit. The impact of the rule change was not immediately apparent, as both Indian and Chinese moved to de-escalate their tensions in the weeks following the Galwan Valley incident. But the new reports of the use of firearms by Indian forces and deployments of Indian tanks near the Line of Actual Control, as well as even unconfirmed claims of anti-personnel mines being used. These developments demonstrate how India's new delegation of command authority has changed the dynamics for escalation along the Chinese border.

China, meanwhile, has shown little appetite for diplomatic engagement with India and has instead broadcasted its intent to remain on the path of escalation by continuing to expand its military infrastructure along the border. Efforts to hold high-level political negotiations over the Ladakh crisis have so far failed, including Russia's attempt to bring Chinese and Indian government officials together during BRICS and Shanghai Cooperation Organization summits Russia hosted just last week. Without a committed push for a peaceful resolution, China's ongoing efforts to build up its air bases, air defenses and other military facilities along its border with India can only be read as an attempt to continue to aggressively pursue Beijing's disputed territorial claims with New Delhi over the longer term. India has struggled to provide an answer to this mounting challenge, but it is now taking more decisive action within the border region itself through a more assertive military posture. But as evidenced by the recent claims of exchanged gunfire, such moves come with an added risk of spurring an actual military confrontation with China.

Politics & Religion / GPF: Huawei
« on: September 10, 2020, 12:00:16 PM »
Huawei goes it alone. Chinese telecom giant Huawei announced Thursday that its smartphones will run on its own operating system, HarmonyOS, beginning next year. This is in response to U.S. sanctions blocking sales of U.S. intellectual property to the company, forcing it to release smartphones without a licensed version of Google’s Android operating system.

But while developing a native OS so quickly is a noteworthy achievement for Huawei – and potentially a cautionary tale about how sanctions can inadvertently lead to the creation of foreign workarounds – replacing Google with what will almost certainly be an inferior product (for example, customers won’t have access to apps on the Google Play store) is bound to hamper Huawei smartphone sales in Europe and elsewhere in Asia. This will deprive the company of much-needed revenues at a time when its network infrastructure gear is being either partially or fully banned in a number of Western countries.

Even more problematic for Huawei is the fact that new U.S. sanctions attempting to deprive the company of critical supplies, particularly semiconductors, are set to come into effect next week – and Huawei’s most important suppliers are expected to comply. The world’s largest manufacturer of advanced microchips, Taiwan’s TSMC, has already said it would stop sales to Huawei and other sanctioned Chinese firms this month. Meanwhile, South Korean chipmakers and display manufacturers, namely Samsung, LG and Sk Hynix, filed pro forma requests with the U.S. Commerce Department to continue doing business with the Chinese giant, but are reportedly planning to halt sales. And while Chinese homegrown chipmakers like SMIC and others are racing – with ample state support – to make up the looming microchip shortfall, they’re widely reported to be falling short. By most accounts, Huawei is expected to start exhausting its supply of certain key microchips within the next year.

Rumors that the U.S. will add SMIC and other Chinese chipmakers to its blacklist won’t help their cause. Of course, as we’ve noted, success in the U.S. campaign against Huawei won’t be cost-free either for the U.S. or its allies. The loss of sales to Huawei is expected to cost suppliers in Japan, Taiwan and South Korea more than $26 billion annually.

Politics & Religion / GPF: Eastern Mediterranean
« on: September 10, 2020, 11:58:13 AM »
The summit includes seven Mediterranean nations and focuses on the EU approach to Turkey.
By: Geopolitical Futures

Mediterranean talks. France is hosting the EuroMed 7 summit (which some have dubbed “Club Med”) beginning on Thursday, which this year will focus on rising tensions in the Mediterranean. Italy, Malta, Portugal, Spain, Greece and Cyprus are attending the summit, held on the island of Corsica, but Turkey, of course, did not get an invitation. The goal of the meeting is to build a consensus around the European Union’s relationship with Turkey ahead of an EU summit set for Sept. 24-25.

France has made it clear that it would consider imposing punitive measures, including sanctions, on Turkey if it doesn't change its behavior in the Eastern Mediterranean. Greece has pressured the EU to apply “severe” economic sanctions against Ankara that would be lifted only on the condition that Turkey moves its drilling and military vessels out of Cypriot waters. Meanwhile, French President Emmanuel Macron expressed his support for Greece after a series of fires gutted refugee camps on the island of Lesbos.

Politics & Religion / Producer Price Index up
« on: September 10, 2020, 11:56:21 AM »

The Producer Price Index Rose 0.3% in August To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 9/10/2020

The Producer Price Index (PPI) rose 0.3% in August versus a consensus expected 0.2%. Producer prices are down 0.2% versus a year ago.

Food prices declined 0.4% in August, while energy prices fell 0.1%. Producer prices excluding food and energy rose 0.4% in August and are up 0.6% in the past year.

In the past year, prices for goods are down 1.6%, while prices for services have risen 0.4%. Private capital equipment prices rose 0.3% in August and are up 0.5% in the past year.

Prices for intermediate processed goods rose 0.6% in August, but are down 2.6% versus a year ago. Prices for intermediate unprocessed goods jumped 7.0% in August but remain down 9.0% versus a year ago.

Implications: Producer prices continued to rise in August, coming off a substantial jump in July, and would be up faster but for declining costs of food and energy products. Prices for services led the way in August, as margins received by wholesalers and retailers rose 1.2%. In particular, the margins for machinery, equipment, parts, and supplies accounted for roughly 20% of the service price increase. On the goods side, the typically volatile food and energy categories continue to live up to their reputations, with energy prices falling 0.1% (after three consecutive months of 5%+ increases) while food prices declined 0.4% on lower costs for eggs. Strip out these volatile categories, and "core" producer prices rose 0.4% in August, just a tenth of a percent off the largest monthly increase in the series' (short) history dating back to early 2010. Core producer prices are up a modest 0.6% over the past twelve months, but expect that to move higher in the months ahead. Supply constraints, limitations on activity, and the general economic disruptions related to COVID-19 will continue to muddy the data for the foreseeable future, but what is clear is the massive increase in the M2 money supply, up 23.3% in the past year. Once the dust finally settles – and it eventually will – we expect inflation to trend back toward 2% and then higher. The Federal Reserve is loose and, as it has made abundantly clear, plans to stay that way for the foreseeable future. Meanwhile, businesses operating at limited capacity will remain a headwind to economic activity. The result will eventually be too much money chasing too few goods (and services), meaning higher – but not hyper – inflation. Further down the pipeline, prices for intermediate demand processed goods rose 0.6% in August, while intermediate demand unprocessed goods rose 7.0%. Both intermediate demand categories continue to show prices broadly lower compared to year-ago levels. The data is starting to shift higher, though, tracking the emergence of the economy from what was a severe – but short – recession. We still have a long way to go to get back to where we were at the start of 2020, but the initial steps of recovery are under way, and we expect growth will march onward through the close of this year and beyond. In other news this morning, initial jobless claims were unchanged last week at 884,000. Meanwhile, continuing claims for regular benefits rose 93,000 to 13.385 million. Changes to the seasonal adjustment methodology of these series make comparison to month-ago levels a fool's errand, but this jobs data will remain under intense focus in the weeks ahead for signs of progress or a stall on the path of the workforce recovery.

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