OPINION - Brooks and Capehart 9/24/2021

"Brooks and Capehart on Democratic infighting, raising debt ceiling, border crisis" PBS NewsHour 9/24/2021

SUMMARY:  New York Times columnist David Brooks and Washington Post columnist Jonathan Capehart join Judy Woodruff to discuss the week in politics, including the divide among Democrats over the $3.5 trillion spending bill, the looming debt ceiling deadline, and the Biden administration’s response to the Haitian migrant issue on the southern border.

Judy Woodruff (NewsHour):  As President Biden's legislative agenda stalls in Congress, he has run into yet another issue, or, we should say, continues to run into the issue of turmoil on the Southern border.

For a look at this busy week and what it all means, we're joined by Brooks and Capehart.  That is New York Times columnist David Brooks and Jonathan Capehart, columnist for The Washington Post.

Hello to both of you.

Jonathan Capehart, Washington Post:  You too, Judy.

Judy Woodruff:  Very good to see you…

Jonathan Capehart:  You too.

Judy Woodruff:  … on this Friday.

And there is so much to talk about.

So, David, it does look like there's real trouble for President Biden's domestic agenda.  And it's not the Republicans this time, at least on the part that he's run into, headwinds this week.  It's his own Democratic colleagues.  What is behind this?

David Brooks, New York Times:  Yes, it's just an intellectual difference.

The — and what strikes me is how so many people are drawing red lines.  The progressives are saying, we want $3.5 trillion.  We're not going under.  Manchin and others say $1.5 trillion, we're not going over.

And so that's a gigantic gap.  They can't even agree on when to vote on what.  And so I think what they need to do is look at, what is the key insight of each side?  The progressives are right that we need something big.  We're a nation in decline.  We're a nation — because of disunity.  Lots of people have been left behind by this economy.  And they're right to do something big to try to jolt us back to unity.

The moderates, in my view, are right that we're not going to have a European-style welfare state.  We're just not that kind of country.  We're an individualistic country.  We like to tie benefits to work and have a work obligation.  We're never going to give away as much money in taxes as the Europeans do.  The Norwegians give away about 46 percent of their GDP to taxes.  If this passed, it would get us up to 19.

We're just not that kind of country.  So, if you take the scope of the progressives and the values of the moderates, I think you can get a deal, but they're pretty far away from it right now.

Judy Woodruff:  Well, they both may have a point, Jonathan, but the President's — the future of his of his term in office could be in the balance here.

Jonathan Capehart:  Well, sure, it could be in the balance, but we don't know.

And I look at this as being the storm before the calm.  David's right.  A lot of red lines are being drawn.  And they seem to be being drawn since Wednesday, since they all went to the White House and had their respective meetings with the President.  And then they come out and then they state their positions again.

But I have been paying close attention to the language that they're using.  They're being very firm about what they're for and what they're not for.  But they're not attacking each other, the way they were during the summer.

And so I wonder if this is the usual Washington [DC] theatrics of just doing all of this performance, and then, at some point, when we're — when we least expect it, breaking news announcement, here's the deal.

Now, this is a different Washington.  Who knows if that moment is going to come?  I pray that it does, one, because what they're arguing over is very important for the American people.  Two, if they don't come to some sort of deal, the President's agenda goes from being stalled to dead.  And then, three, it means finally that Washington is completely broken if they can't come to some agreement here.

Judy Woodruff:  Well, it's a different — and then, meantime, there's another massive headache the President has.  And I don't know whether it's another Washington performance, but it's over the debt limit, David.

And this one is between the Democrats and the Republicans.  The Republicans are saying no way.

David Brooks:  Yes.

And when the shoe was on the other foot, they wanted the Republicans, when they were controlling things, to take it.  It's — what's changed is that, 10 years ago, people really used to care about debts and deficits.  It was ranked as a major issue by a lot of Americans.  Now, for whatever reason, some maybe dubious reasons, nobody cares, maybe just low interest rates.

So now there's much greater tolerance among both Republicans and Democrats to run up the debt.  And so voting to raise the limit is not as politically costly as it used to be.  I wish they would just get away with — do away with the whole thing.

We have committed to spend.

Judy Woodruff:  The debt limit, yes.  Yes.

David Brooks:  Yes.

We have committed to spend the money.  The debt limit just says, yes, we're going to borrow the money to spend the money we already committed to.  So they should raise it to a gazillion dollars.  And then we never approach the limit, hopefully.

(LAUGHTER)

David Brooks:  And then they should move forward.  It's a bit of ballet that we don't need.

Judy Woodruff:  Gazillion?  What do you think?

(LAUGHTER)

Jonathan Capehart:  Sure.  Gazillion is a great numerator.

But this is sort of a wonky thing, but it's super important for the American people to understand that raising the debt ceiling is not giving Washington a blank check.  It is allowing Washington to pay for the things that they have already bought.

If the government does not raise the debt ceiling, the Bipartisan Policy Center this morning put out their charts, and they have turned me into a huge debt ceiling nerd.  Started back in 2011, when Jay Powell, who was with Bipartisan Policy Center then, put this together.  He is now the Fed Chairman.

I just want the American people to understand this.  If the debt ceiling is not raised and the government can't borrow any money, it has to use the cash it has on hand.  And I have this chart here.  I don't know if the camera can get it, but I will just talk it through, that, on October 15, which they think might be the first day that we reach that X-date, the government will bring in $27 billion in revenues, but will have $43 billion in expenses.

And that's just on that first day.  All that debt that — all those things that aren't paid carries over to the next day.  I can't — we don't — I don't even have enough time to tell you the avalanche of harm that would come to the American people, to the federal government and to the global economy if that debt ceiling isn't raised.

Judy Woodruff:  And not to mention that, government shutdown and all the all the consequences of that, David.

David Brooks:  Yes.

And both the topics we have talked about so far that, the consequences of failure are cataclysmic.  And so I presume, in a normal, functioning democracy, that we don't walk over those cliffs, but who knows?

Judy Woodruff:  I'm just taking a deep breath here.

(LAUGHTER)

Judy Woodruff:  Another, of course, major issue the President had to deal with this week, again, Jonathan, was the Southern border.

In addition to what's already been happening there, and the Haitian migrants were starting to gather, in the past week, these images of Border Patrol using reins or other — whatever, belts to go after the migrants.

President Biden has come in from enormous criticism from fellow Democrats over this.  And here's how he commented this morning on what happened.

President Joe Biden:  Of course I take responsibility.  I'm President.  But it was horrible what — to see, as you saw — to see people treated like they did, horses nearly running them over and people being strapped.  It's outrageous.

I promise you, those people will pay.  They will be — an investigation under way now, and there will be consequences.

Judy Woodruff:  And, today, we reported there are no Haitian migrants at that particular place.  We don't know whether more will be coming.

But, Jonathan, how is the President handling this?  And how much of a of a political hit is it for him?

Jonathan Capehart:  I will take the political hit first.  It's a huge hit.

And it's a huge hit.  One, with immigration, the President was already on squishy ground with the American people.  But those images that came out of the men on horseback and Black people running, it was just — is a little too close to home for a lot of us.

And for a President who campaigned on a more humane immigration policy, for a President who, on election night, said to African Americans, you brought me here and I will not forget it, that's why you had a lot of Democrats, particularly African American Democrats, saying to the President, what is going on here?  You must — you must do something about this.

And then, on top of it, what made it even more inhumane is that the President or the administration deported Haitians who had not lived in Haiti for more than 10 years to a country that is still dealing with an earthquake that happened and a Presidential assassination.

Judy Woodruff:  How can — immigration, every President counting back as far as we can count, this has been a tough issue.  Where do you see this going?

David Brooks:  Yes.

Well, we had our last successful Immigration Bill, comprehensive one, under Ronald Reagan.  That was a long time ago.  And, so, he's inherited a gigantic mess that nobody has had the solution for.  I think Biden did make it worse.

And part of the problem was, they promised, on day one, they would reverse all the Trump rules.  Reversing the Trump rules was a good idea.  But doing it all at once, on day one, people in the transition, in the White House were warning about that.  They were saying, we will be overwhelmed.  It'll be a big open door signal.  And we don't have the facilities to handle what's about to hit us.

And that turned out to be true.  And I think what bothers me, aside from what Jonathan was just expressing, was, it seems to be arbitrary, like who gets sent where.  It seems like it's just like, who knows who's being decided?  There's no methodology.  There's no procedure for a lot of people.

And so we're just overwhelmed right now.  And it's disturbing that we're overwhelmed after basically 40 years of this mess.

Judy Woodruff:  It's hard to see how this is an issue that gets resolved any time in the near term.

So, the last thing we want to bring up is, it was September 21, 2001, just a week-and-a-half after the 9/11 attacks, and here was the beginning of the "NewsHour" that night with Jim Lehrer.

Jim Lehrer, Co-Founder and Former Anchor, "PBS NewsHour":  And that brings us to Shields and Brooks, syndicated columnist Mark Shields, joined tonight by his new regular partner, David Brooks of The Weekly Standard.

Welcome, David.

David Brooks, Weekly Standard:  Thank you.

Jim Lehrer:  Formally, welcome.  You have been here many, many times before.

Judy Woodruff:  And that man has not changed one iota since September…

(LAUGHTER)

David Brooks:  Yes, I wanted to point out I was 12 at that time.

(LAUGHTER)

David Brooks:  So, I'm — I don't know how old I am now.

Judy Woodruff:  So, David, you joined — I mean, you had been on the "NewsHour," but you joined this program at a very sobering, difficult moment for this country.

It was, what, 10 days after 9/11.  And you have been through a lot of ups and downs with the country ever since.

But just talk a little bit about what it's meant to you to be here at this table every Friday night.

David Brooks:  Yes, I will tell you what it's been like.

Like, it's the end of the week.  And, often, I'm tired.  Sometimes, I'm under the weather.  Sometimes, I'm stressed.  I come in here a little low.  I walk out of here an hour later super charged up and super happy, because I get to work with the people I have worked with, and not only the people on set, but Leah (ph) in the makeup room.  Charlie's back there, our lighting guy.

(LAUGHTER)

David Brooks:  And so it's just — you feel uplifted when you walk out.

And then, when you think about 20 years, I think about the time and about '04, '05.  Mark and I were on with Jim.  And we showed a Marine funeral just before our segment.  And Jim started crying.  And Mark and I gave like 10 minute answers, so Jim could compose itself.

And so that — that was just like — that's something we're going through together.

I think about sitting with Mark and Jim when Barack Obama gave his 2004 speech, that first big speech, which was watching a star appear, but it was also about a version of America that he was describing.

I think about the day Gwen died.  And I go through all the e-mails that she sent me over the years, and some were just about our friendship.  But a lot were tough.  Like, Gwen demanded excellence.

(LAUGHTER)

David Brooks:  And if you didn't show up, Gwen was like, show up.

(LAUGHTER)

David Brooks:  And then with you, I mean, you're the hardest-working woman in show business.  Like, I — you have not had a day where you don't completely show up for this thing.

And so you get a sense of people who respect their job and mostly respect the audience.  And out of that derives a kind of patriotism.

And other networks talk a lot about patriotism, but I think we — we try to serve a certain kind of America.  And we try to exemplify that service in a way we do things, in the culture around here.

And it's just been an honor to be part of that for 20 years.  And my next 60 years will be just as good.

(LAUGHTER)

Judy Woodruff:  Next 60.

I mean, the "NewsHour" has been just incredibly fortunate and honored to have you with us and, of course, Mark for all those years.  And then Jonathan joined us almost a year ago.

And, Jonathan, you get to sit next to David on Friday nights.  It's not exactly like every other television show.

Jonathan Capehart:  No, it's not like every other television show.

And I knew that this was an important job to get, succeeding Mark Shields, the e-mails that came in from people saying:  Oh, my God, Mark Shields is gone.  I'm so upset.  I'm so sad.  We miss him.  But I'm glad you're there.

It was then that I realized how important this job is, how important it is, what we do.

But what makes this so much fun and why it's so wonderful to celebrate David is, we have been doing this in other venues for a few years now.  And I always look forward to being with David, because you're to the right of me.  I'm to the left of you, completely different backgrounds.

And yet, when I sit with David and talk with David, I feel like I have learned something.  I'm smarter.

The way David speaks about all the issues, it's inviting.  And that's what makes Brooks and Capehart, Shields and Brooks and all the other iterations of this so wonderful.  We come to the table to bring news, educate the audience on the inside, but then to do it in a way that invites the audience in.

Judy Woodruff:  There's clearly some magic that happens here.

David Brooks:  Thank you, Jonathan.  Thank you.

Judy Woodruff:  And we are grateful to both of you, to Jonathan Capehart and to David Brooks.

Congratulations on 20 years.

Twenty years more, 40 years more coming up.

David Brooks:  Shoot me.

(LAUGHTER)

GLOBAL PANDEMIC - Governments Key to Recovery

"Why governments will be key to global recovery from the pandemic" PBS NewsHour 1/31/2021

Excerpt

SUMMARY:  As nations grapple with economic recovery, which is closely linked with getting people vaccinated and arresting the coronavirus spread, it has become clear that the pandemic exacerbated the impact of the global economic fractures that predate the COVID-19 outbreak.  Dambisa Moyo, global economist and author of “Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth And How to Fix it” joins to discuss the risks and potential for resilience.

CHINA RISING - Power and Prosperity

"As U.S. tensions grow, NewsHour documentary pulls back the curtain on China’s rise" PBS NewsHour 7/8/2020

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SUMMARY:  A new PBS NewsHour documentary, “China: Power and Prosperity,” examines today's China, its powerful leader in Xi Jinping and relationship with the U.S.  Now, amid a global pandemic, the two governments are decreasing collaboration and accelerating confrontation, says Nick Schifrin, who joins Judy Woodruff to discuss this in-depth portrait.

STARTUPS - WeWork’s Rise and Fall

"WeWork’s spectacular rise and fall provide cautionary tale for startups" PBS NewsHour 11/26/2019

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SUMMARY:  The startup WeWork set out to revolutionize the workplace -- leasing, renovating and subletting offices as shared coworking spaces.  At the beginning of 2019, it was the single biggest private office tenant in London, New York, and Washington.  But the company’s valuation has plunged $40 billion, and it’s now laying off 2400 employees.  John Yang talks to The New York Times' Peter Eavis.

RETHINKING POVERTY - Solving Global Poverty

"How these 2 economists are using randomized trials to solve global poverty" PBS NewsHour 11/21/2019

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SUMMARY:  More than 700 million people across the globe live on extremely low wages.  This year, a trio of economists won the Nobel Prize for their work on addressing global poverty, using randomized control trials to test and improve social policy.  Economics correspondent Paul Solman talks to two of those winners, husband-and-wife duo Abhijit Banerjee and Esther Duflo, about their work.

CHINA - Power and Prosperity

"Taking stock of China’s growing power and prosperity" PBS NewsHour 9/25/2019

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SUMMARY:  When it comes to military, global economy, and global influence, the two most important countries in the world are China and the U.S.  And in recent years, both sides of that rivalry have become more combative.  For our new series, “China: Power and Prosperity,” we travel around the globe to take stock of China’s position on the world stage.  Nick Schifrin joins Judy Woodruff to offer a preview.

"How President Xi Jinping is transforming China at home and abroad" PBS NewsHour 9/26/2019

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SUMMARY:  Chinese President Xi Jinping’s philosophy has been written into the country’s constitution.  He has sought to raise the standard of living at home, while boosting China’s power and influence across the globe.  But critics accuse him of consolidating power and creating a campaign of oppression against the Chinese people -- especially those who disagree with him.  Nick Schifrin reports from Beijing.

"Impact of U.S.-China trade war felt in both countries" PBS NewsHour 9/28/2019

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SUMMARY:  For decades, the world's two largest economies — the U.S. and China — have been integrated.  But the Trump administration is now trying to undo that, as an escalating trade war impacts consumers and businesses in both countries.  NewsHour's Nick Schifrin and special correspondent Katrina Yu report on the third in a 10-part series, "China: Power and Prosperity," with support from the Pulitzer Center.

"China is producing billionaires faster than any other nation" PBS NewsHour 9/29/2019

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SUMMARY:  Communist China's planned economy once prevented its citizens from becoming wealthy.  But China now produces billionaires faster than any country in the world, even as President Xi Jinping has cracked down on ostentatious displays of wealth.  Special correspondent Katrina Yu reports on the fourth in a 10-part series, "China: Power and Prosperity," with support from the Pulitzer Center.

BRITAIN - Brexit, You Bought It and You Own It

"With May’s plan defeated, could a no-deal Brexit be ‘ruinous’ for the UK?" PBS NewsHour 3/12/2019

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SUMMARY:  Britain's Parliament soundly rejected Prime Minister Theresa May’s revised Brexit plan.  May had secured some concessions from the European Union over the most contentious parts of the agreement, but they weren’t enough for opponents.  With less than three weeks until the scheduled date for Brexit, the UK’s trajectory remains unclear.  Judy Woodruff talks to special correspondent Ryan Chilcote.

"‘Political meltdown’ grips UK after Theresa May’s Brexit defeat" PBS NewsHour 3/12/2019

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SUMMARY:  The United Kingdom continues to face political turmoil over Brexit, as Prime Minister Theresa May failed to find enough support in Parliament for her amended agreement with the European Union.  Judy Woodruff talks to Sir Peter Westmacott, former British Ambassador to the U.S., about the most likely courses of action now, May’s “extremely fragile” majority and why Brexit matters across the globe.

"Parliament wants to delay Brexit, as May vows 3rd vote on proposed deal" PBS NewsHour 3/14/2019

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SUMMARY:  The United Kingdom's political crisis over how to exit the European Union continues.  This week, Parliament rejected the option to leave without an agreement, and on Thursday, it voted to delay Brexit for three months.  If the EU grants the extension, will it offer Prime Minister Theresa May a "lifeline?"  Foreign affairs correspondent Nick Schifrin talks to Peter Spiegel of the Financial Times.

WORLD ECONOMY - Global Market Volatility

"Why a ‘veil of uncertainty’ is causing global market volatility" PBS NewsHour 1/3/2019

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SUMMARY:  Global markets dropped after Apple CEO Tim Cook announced unforeseen sales declines for iPhones in China.  Why is the Chinese economy so important to American business, and what's at the root of global market volatility?  Diane Swonk chief economist with Grant Thornton talks to Judy Woodruff about trade tensions, data delayed due to the government shutdown, and investors' "veil of uncertainty."

TRUMP TRADE - 'New' U.S.-Mexico-Canada Deal

"Trump touts ‘fairness and reciprocity’ of new U.S.-Mexico-Canada trade deal" PBS NewsHour 10/1/2018

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SUMMARY:  President Trump declared victory on Monday on a deal more than a year in the making.  The United States-Mexico-Canada Agreement, or USMCA, largely keeps the structure of the 1994 North American Trade Agreement, but gives U.S. dairy farmers greater access to the Canadian market, add stipulations for the auto industry and increases certain protections.  Amna Nawaz reports.

"The new U.S.-Mexico-Canada deal offers modest changes.  Will it help the economy?" PBS NewsHour 10/1/2018

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SUMMARY:  President Trump made renegotiating NAFTA a priority of his administration.  What's really in the new United States-Mexico-Canada Agreement and what does it mean for the U.S. economy?  Amna Nawaz learns more from Edward Alden of the Council on Foreign Relations.

2008 CRASH - Changed the World

"How the 2008 financial crisis crashed the economy and changed the world" PBS NewsHour 9/13/2018

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SUMMARY:  Ten years ago this week, the collapse of Lehman Brothers became the signal event of the 2008 financial crisis.  Its effects and the recession that followed, on income, wealth, disparity, and politics are still with us.  Economics correspondent Paul Solman walks through those events and consequences with historian Adam Tooze, author of "Crashed: How a Decade of Financial Crises Changed the World."

MAKING SEN$E - The New Wealth of Nations

"Why the new global wealth of educated women spurs backlash" PBS NewsHour 5/31/2018

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SUMMARY:  The spread of education across developing nations is transforming global inequalities and playing a key role in closing the gender gap.  Economics correspondent Paul Solman sits down with economist Surjit Bhalla, and sociologist Ravinder Kaur, to discuss Bhalla’s book, “The New Wealth of Nations,” as well as the backlash to increasing equality.

Paul Solman (NewsHour):  And the cost?  What’s the cost?

Surjit Bhalla, author:  The cost is that people in the West are going to lose out relative to the people in the East, the East meaning the rest of the world, the West meaning the advanced countries.

What happens, when the world is filled with everybody graduating from high school, then the Western people will lose their advantage over the rest of the world.

ECONOMICS - Chinese Trade Deficit

"The argument for a U.S. trade deficit with China" PBS NewsHour 4/19/2018

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SUMMARY:  America's growing trade deficit is one of President Trump's main arguments for imposing tariffs on China.  And yet most economists would agree instead with the doctrine of trade deficits and its benefits for consumers.  Economics correspondent Paul Solman reports.

WORLD ECONOMY - Trump's Trade War

"China targets U.S. farm belt with latest tariffs" PBS NewsHour 4/4/2018

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SUMMARY:  China counterpunched with new tariffs against U.S. products in the latest round of an escalating trade fight between the world's two largest economies.  The Chinese announced plans for 25 percent tariffs on a list of American goods, including soybeans, cars, and chemicals, mirroring a Trump administration action hours earlier.  Lisa Desjardins reports.

"Here’s who pays the price for brewing U.S.-China trade war" PBS NewsHour 4/4/2018

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SUMMARY:  As a trade showdown between the U.S. and China escalates, there's fears of how a trade war could hurt both countries.  Special correspondent Katrina Yu reports from Beijing on how recently announced tariffs will affect farmers, importers, retailers, and consumers on both sides of the Pacific.

AFTER BREXIT - Global Financial System

"Brexit or no, former central banker says global financial system needs fixes" PBS NewsHour 7/7/2016

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SUMMARY:  The pound and European markets took big hits when the United Kingdom voted to leave the EU.  Economics correspondent Paul Solman talks to Mervyn King, the former head of the Bank of England and the author of “The End of Alchemy,” who offers a longer view -- and a less alarmed one -- about what Brexit means for global banking and financial stability.

PAUL SOLMAN (NewsHour):  Mervyn King, former head of the Bank of England.

In his new book, “The End of Alchemy,” King still worries that the world banking system hasn't reformed itself, eight years after its excesses led to collapse.

MERVYN KING, Former Governor, Bank of England:  Thames, the old man river of Britain, been here forever, rather like money and banking.  We have always had them.

PAUL SOLMAN:  As it happens, he was giving me a tour of London to make his case on the day of the Brexit vote.  The oddsmakers, the markets, and I at least thought Britain would remain in the E.U.  As we passed a group of upbeat remainers, I thought, no problem.

WOMAN:  Counting is under way of tens of millions of votes.

PAUL SOLMAN:  Then came the result.

MAN:  And the answer is, we're out.

(CHEERING AND APPLAUSE)

PAUL SOLMAN:  So, before asking you to take the tour, we checked back with King to see if the vote had altered his analysis.

MERVYN KING:  We didn't talk much about the Brexit vote, because actually the Brexit vote isn't germane to the fundamental challenges dealing with our banking system and putting it on a sound footing.  We were talking as we walked around London about the really important long-run issues affecting our economies.

EUROPEAN UNION - Brexit

"Brexit, Cameron resignation signal momentous change for UK" PBS NewsHour 6/24/2016

Excerpt

SUMMARY:  Great Britain voted 52 to 48 percent Thursday to become the first nation to leave the European Union.  The vote prompted Prime Minister David Cameron -- a leading voice in the “Remain” camp -- to announce his resignation, though he will stay on until October to ensure a smooth transition.  Special correspondent Malcolm Brabant takes a look at how Britain is readying itself for a post-EU paradigm.

JUDY WOODRUFF (NewsHour):  The British people have spoken, and, in voting to leave the European Union, have sent shockwaves around the world.

Special correspondent Malcolm Brabant begins our coverage in London.

WOMAN:  The U.K. has voted to leave the European Union.

MALCOLM BRABANT (NewsHour):  The official word came just after 7:00 in the morning, U.K. time.

Rapturous cheers went up at leave parties.  The final tally, 52 percent, more than 17 million people, opted to leave the 28-member European Union.

AILEEN QUINTAN, “Leave” Supporter:  We have actually shown that opposition to the E.U. isn’t a small fringe — fringe minority.

MALCOLM BRABANT:  For the 48 percent who voted to stay, the result was devastating.

MAN:  I think it’s going to lead to great political, economic, business uncertainty.

MALCOLM BRABANT:  The political fallout was instant.  Prime Minister David Cameron, who led the campaign to remain, announced that he will step down by October.

DAVID CAMERON, Prime Minister, Britain:  I will do everything I can as prime minister to steady the ship over the coming weeks and months, but I do not think it would be right for me to try to be the captain that steers our country to its next destination.

MALCOLM BRABANT:  Cameron promised the referendum in 2013, in part to appease E.U. skeptics in his own conservative party.

"What motivations led British voters to choose Brexit?" PBS NewsHour 6/24/2016

Excerpt

SUMMARY:  Thursday’s Brexit vote was largely a victory for right-wing British politics.  But both “Leave” and “Remain” supporters had a plethora of political and emotional motivations.  For a closer look at what drove the British majority to decide to exit the European Union, Judy Woodruff talks to former EU official Sir Michael Leigh and Tim Montgomerie of The Times of London.

"Will other countries follow Brexit example and shun globalization?" PBS NewsHour 6/24/2016

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SUMMARY:  Thursday’s successful Brexit vote holds great consequences for economies worldwide, with some analysts warning that departure from the EU could plunge Britain back into a recession that might in turn spread to other countries.  For more on the financial implications of Brexit, Hari Sreenivasan talks to David Wessel of the Brookings Institution and Diane Swonk of DS Economics.

"What impact will Brexit have on U.S. trade policy?" PBS NewsHour 6/25/2016

Excerpt

SUMMARY:  Britain is the U.S.’s closest diplomatic and military ally and top economic partner in Europe.  One-fifth of U.S. exports to Europe go to the UK and so do half a billion dollars in direct investments.  Senior editor of Foreign Policy magazine Cameron Abadi joins Alison Stewart to discuss the effects Brexit might have on business relations in the UK and Europe.

BRITAIN - Common Sense Looses on EU Vote

IMHO:  The vote by British citizens is a big mistake.  It is a win for paranoia, misplaced nationalism, and prejudice.  Britain was much stronger as a member of the EU.  Having said that, the British citizens have the right to their vote.

"Britain votes to leave the European Union, Prime Minister David Cameron resigns" by News Desk, PBS NewsHour 6/24/2016

The United Kingdom has voted to exit the European Union, becoming the first nation to leave the economic, political and cultural bloc.  The news sent shockwaves through the global economy and led to the resignation of British prime minister David Cameron, who supported the Remain campaign.

“Over 33 million people from England, Scotland, Wales, Northern Ireland and Gibraltar have all had their say,” Cameron said in his resignation speech.  We should be proud of the fact that, in these islands, we trust the people with these big decisions.”

Cameron continued by congratulating the Leave campaign for “the spirited and passionate case that they made.”  The prime minister did not release a precise timetable for his departure, but guaranteed that he would remain in his post for at least three months with an aim to depart by October.

Exit polls show that England and Wales drove the decision to leave, while Northern Ireland and Scotland citizens leaned toward staying.  Scotland prime minister Nicola Sturgeon believes a second independence referendum for her nation is “highly likely” following the Brexit.  Scotland voted 62 versus 38 percent to stay in the EU, according to the BBC.

“It's a statement of the obvious that the option of a second independence referendum must be on the table and it is on the table,” Sturgeon said.

Global markets immediately plummeted in reaction to the referendum results.  The British pound nosedived to its lowest valuation in 30 years, as the nation's stock market — FTSE — reported 8 percent losses within the first few seconds of trading Friday morning.

Economic analysts are predicting the biggest single-day decline since the 2008 financial crisis.  Bank of England governor Mark Carney promised 250 billion pounds ($347 billion) to stabilize the economy.  Other European markets took heavy hits, and the European Central bank pledged to provide liquidity for domestic and foreign currencies to prevent panic, as did the U.S. Federal Reserve for the dollar.

"Brexit: Four reasons it comes as a shock" by Paul Solman, PBS NewsHour 6/24/2016

Excerpt

Shocker, a word you'll hear rarely from someone who, like myself, sizes up the world probabilistically.  But shocker is the verdict on the Brexit vote, for at least four reasons.

First, of course, are the political implications.  As economist Justin Wolfers put it late last night on Twitter, though overstating slightly: “Economists favor more integration, not for the economic gains, but because it fosters peace, which is more valuable.”

"Time for real talk.  Economists favor more integration, not for the economic gains, but because it fosters peace, which is more valuable." - Twitter @JustinWolfers

Second, these are millions upon millions of people who were voting against their pocketbooks.  And they knew it.  That's because, economically, the results were unusually predictable.  Every time the odds of a Brexit “Leave” vote had gone up, the value of the British pound had gone down.  This might not be so bad if the UK were an export-based economy.  A cheaper pound would mean cheaper prices on British goods and services.  What the country loses in buying power it might more than make up for in jobs.  But as Matt Yglesias tweeted late last night:

"Cheap pound would be great for UK exports were the UK not withdrawing from the world's biggest integrated market." - Twitter @mattyglesias

And Wolfers again:

"Upside: Britain is on sale.  Everything, 10-15% off.  Steak and kidney pies for everyone." - Twitter @JustinWolfers

Everyone outside Britain, he means — like me and my wife, leaving Oxford on Monday after 10 weeks here.  I got an email from a vendor this morning telling me where to send a “cheque” for the 65 pound-price we agreed upon yesterday.  In the ensuing 24 hours, I've saved $5.  Maybe I'll stall till tomorrow.  Oh wait, the pound could shoot back up! When should I pay? It's a question every importer from Britain will now be asking — more pressingly than in years, if not decades.  And those $5 my vendor loses will be $5 less to spend on what will now be increasingly expensive goods and services from abroad.  In the time we've been here, numerous Brits have told us they'd like to go to America because it's so much cheaper.  Did they vote for Brexit too?

The third shock is more personal; my apparent over-reliance on the prediction markets, and on economists like Justin Wolfers who do as well.  The two of us conducted a video chat more than five years ago in which we extolled the virtues of markets, mainly with respect to sports betting, but also in politics.  And I have reported on political markets for the NewsHour many times, as recently as February.  Last night, Justin reproduced this tweet:

“To Justin:  I think you need an explanation on gambling odds.  These markets are not full markets where people can bet a lot of money.  They are not as informative as you believe they are.”

Justin's reply:   “I love me a good mansplainer.  Because honestly, I just didn't realize.”

In the defense of the market-dependent, yesterday's Brexit vote drew plenty of money: an estimated £50 million pounds or more on one British prediction market alone.  But what we failed to realize — or more honestly, failed to remember — is that odds are probabilities, not facts.  At 11 pm last night here in England, I tweeted:

"Brexit polls now closed here in UK.  Betting mkts put the odds of Remain win at 85% likelihood.  They were down to 60% before Jo Cox killing." - Twitter @paulsolman

Three hours later:

"Most dramatic swings I've ever seen on the prediction mkts:  Brexit from 12% to 54% when this tweet began now back down to 40% as I finish it" - Twitter @paulsolman

The point is, even at 11pm, with the odds at 85 percent for “Remain,” there was still roughly one chance in six that the UK would vote to leave.  And by definition, such an event will occur, on average, one-sixth of the time.  On the prediction markets, those odds should lead to the right call five times out of six, on average.  And that can lull those who monitor the markets into a false sense of complacency, as it did me with Brexit.  I didn't forget about that sixth time.  But I dismissed it.  I'm shocked that I did.

The fourth shock should perhaps not come as one, as assiduously as we here at Making Sen$e having been covering economic inequality over the years.  It's the gulf (or abyss) between elites and workers in countries like the US and the UK.  That would help explain the confidence of the prediction markets.  Who bets money on elections if not, disproportionately, those who already have enough?  With which side was the Remain side identified, if not the Establishment?  But after the assassination of the aggressively humane Labour MP Jo Cox, would aggressively civil England actually vote for the forces of aggression?  The answer is that it did so, aggressively.

HIDING MONEY - Exposé!

"SHELL COMPANIES EXPOSED" by Kevin G. Hall and Marisa Taylor, San Diego Union-Tribune 4/4/2016

NOTE:  The contents comes from the online version of the newspaper, so there are no links to article.

Huge document leak reveals how the wealthy, powerful hide money

A massive leak of documents has blown open a window on the vast, murky world of shell companies, providing an extraordinary look at how the wealthy and powerful conceal their money.

Twelve current and former world leaders maintain offshore shell companies.  Close friends of Russian leader Vladimir Putin have funneled as much as $2 billion through banks and offshore companies.

Those exposed in the leak include the prime ministers of Iceland and Pakistan, an alleged bagman for Syrian President Bashar Assad, a close friend of Mexican President Enrique Pea Nieto, and companies linked to the family of Chinese President Xi Jinping.

Add to those the monarchs of Saudi Arabia and Morocco; Middle Eastern royalty; leaders of FIFA, the international body that controls international soccer; and 29 billionaires included in Forbes Magazine’s list of the world’s 500 richest people.

Also mentioned are 61 relatives and associates of current country leaders, and 128 current or former politicians and public officials.

The leak exposes a trail of dark money flowing through the global financial system, stripping national treasuries of tax revenue.

The data breach occurred at a little-known but powerful Panamanian law firm, Mossack Fonseca & Co., which has an office in Las Vegas, a representative in Miami and presence in more than 35 other places around the world.

The firm is one of the world’s top five creators of shell companies, which can have legitimate business uses but can also be used to dodge taxes and launder money.

More than 11.5 million emails, financial spreadsheets, client records, passports and corporate registries were obtained in the leak, which was delivered to the Suddeutsche Zeitung newspaper in Munich, Germany.  In turn, the newspaper shared the data with the Washington-based International Consortium of Investigative Journalists.

Several McClatchy journalists joined more than 370 journalists from 78 countries in the largest media collaboration ever undertaken after a leak.

The document archive contains 2.6 terabytes of data — more than would fit on 600 DVDs.  Sueddeutsche Zeitung said the amount of data it obtained is several times larger than a previous cache of offshore data published by WikiLeaks in 2013 that exposed the financial dealings of prominent individuals.

ICIJ said it would release the full list of companies and people linked to them early next month.

As a registered agent, the Mossack Fonseca law firm incorporates companies in tax havens worldwide for a fee.  It has avoided close scrutiny from U.S. law enforcement officials.

Mossack Fonseca denied all accusations of illegal activity.

“We have not once in nearly 40 years of operation been charged with criminal wrongdoing,” spokesman Carlos Sousa said.  “We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.”

The law firm’s co-founder, Ramon Fonseca, in an interview last month on Panamanian television, said blaming Mossack Fonseca for what people do with their companies would be like blaming an automaker “for an accident or if the car was used in a robbery.”

Yet plenty of criminals are named in the documents, including drug traffickers and convicted fraudsters.  “The offshore world is the parallel universe of the ultrarich and ultrapowerful,” said Jack Blum, a white-collar crime attorney and an architect of the Foreign Corrupt Practices Act.

The archive, which dates to the late 1970s and extends through December 2015, reveals that 14,000 intermediaries and middlemen bring business to Mossack Fonseca.

No part of the world is untouched, including the United States.

States such as Delaware, Nevada, and Wyoming register thousands of corporations annually, often without identifying the true owners.  Some of the billions of dollars moving through the domestic economy come from anonymous foreigners who inflate real estate prices in places like Miami, buying properties outright in cash.

“We know (of) upwards to $6 (billion) to $10 billion a year laundered through the U.S.,” said Patrick Fallon Jr., head of the FBI’s financial crimes section.

The most extraordinary allegations in the archive revolve around Putin’s closest associates, including Sergey Roldugin, a close friend since the late 1970s when Putin was a young KGB agent.

Roldugin is a cellist for the St. Petersburg orchestra, yet his name appears as the owner of offshore companies that have rights to loans worth hundreds of millions of dollars.  A Russian news service report in 2010 disclosed that he owned at least 3 percent of Bank Rossiya, Russia’s most important bank.

When Mossack Fonseca helped open a bank account in Switzerland on behalf of Roldugin, the application form asked if he had “any relation to PEPs (politically exposed persons) or VIPs.”

The one-word answer was, “No.”  Yet, Roldugin is godfather to Putin’s daughter Mariya.

“Roldugin is, by his proximity to a serving head of state, clearly an exposed person,” Mark Pieth, a former head of the Swiss justice ministry’s organized crime division, told the ICIJ team.

The documents show how in 2008 a company controlled by Roldugin had influence over Russia’s largest truck maker, Kamaz, joining with several other offshore companies to help another Putin insider acquire majority control of the company.  They wanted foreign investment, and German car maker Daimler later that year bought a 10 percent stake in Kamaz for $250 million.

The offshore company that connects many Putin loyalists is Sandalwood Continental Limited in the British Virgin Islands.  Roldugin was a shareholder until 2012, as was Oleg Gordin, a little known businessman whom incorporation documents describe as linked to “law enforcement agencies.”

The files also mention a company co-owned by Putin friend Yury Kovalchuk, the largest shareholder of Bank Rossiya.  Kovalchuk was among those targeted by U.S. sanctions in 2014 in retribution for Russia’s invasion of Crimea.  Another friend, Arkady Rotenberg, Putin’s judo partner and a billionaire construction mogul, openly obtained companies through Mossack Fonseca.  The Treasury Department, when sanctioning him in 2014, suggested that the oligarch acted on behalf of “a senior official.”

That was widely believed to mean Putin, whose fingerprints were not on any offshore company.

“When you are the president of Russia, you don’t need a written contract.  You are the law,” said Karen Dawisha, an academic, former State Department official and author of the acclaimed 2014 book “Putin’s Kleptocracy: Who Owns Russia?”

A Kremlin spokesman, Dmitry Peskov, said last week that ICIJ was publishing a “series of fibs” that amounted to a media “attack” on Putin.  Peskov suggested that unknown “organizations and services” were behind the media reports.

According to the media group’s website, global banks including HSBC, UBS, Credit Suisse, Deutsche Bank and others have worked with Mossack Fonseca to create offshore accounts.  “The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years,” HSBC spokesman Rob Sherman said in an emailed response to an AP request for comment.

“We work closely with the authorities to fight financial crime and implement sanctions,” he said.  UBS, Credit Suisse and Deutsche Bank did not immediately respond to a request for comment.

Hall and Taylor write for the McClatchy Washington Bureau.  The Associated Press contributed to this report.

NEWSHOUR BOOKSHELF - "The Courage to Act"

"What it was like to head the Fed during the 2008 meltdown" PBS NewsHour 10/8/2015

Excerpt

SUMMARY:  "In “The Courage to Act,” former Federal Reserve chairman Ben Bernanke writes that the global economic collapse of 2008 could have resulted in a crisis akin to 1929 had he, his colleagues and policymakers around the world acted differently.  He joins Judy Woodruff to discuss his memoir of that turbulent time and its aftermath.

JUDY WOODRUFF (NewsHour):  He took on perhaps the most important job in the financial world a year before a global economic collapse.

Former Federal Reserve Chairman Ben Bernanke reflects on that turbulent time in a new book, “The Courage to Act: A Memoir of a Crisis and Its Aftermath.”

Ben Bernanke, welcome to the program.

BEN BERNANKE, Former Chairman, Federal Reserve:  Thank you for inviting me.

JUDY WOODRUFF:  So, you write in this remarkable book that takes us inside not only your life, inside the Fed, a place we don’t hear about very often, that if you and your colleagues had not acted as you did in 2008, that we could have seen something like 1929 again.

Do you really believe that might have happened?

BEN BERNANKE:  Well, nobody can know for sure, but, as an academic, I studied the Great Depression.  I studied how financial panics affect the economy.  And I was very concerned about that, you know, even before Lehman Brothers, even before the financial panic hit its peak.

But after Lehman Brothers, and when the financial panic accelerated, we saw just a tremendous drop-off in the economy, as sharp as the beginning of the Great Depression.  So, I really do believe that it would have been a very, very serious and protracted downturn if the financial crisis had not been arrested.

JUDY WOODRUFF:  So, the title — in the title is “The Courage to Act.”

But I guess one question is, did you and your colleagues really have a choice?  If things were about to fall apart, what else could you have done?

BEN BERNANKE:  Well, the title refers to policy-makers around the world.

It was a very chaotic situation, a very scary situation, big, high-stakes decisions and in a very uncertain and politically difficult environment.  And people — policy-makers could have been passive.  That was what some commentators were urging, for example, that we should just step back and let the market take care of it.

So it was very difficult to do that.  And I’m glad to have been part of a Fed and Treasury team that took the action that was needed.