Posted: 20 Mar 2017 08:19 AM PDT
(NEW YORK) — David Rockefeller, the billionaire businessman and philanthropist who was the last in his generation of one of the country’s most famously philanthropic families, died Monday. He was 101. Rockefeller died in his sleep at his home in suburban Pocantico Hills, New York, according to his spokesman, Fraser P. Seitel. He was the youngest of six children born to John D. Rockefeller Jr. and the grandson of Standard Oil co-founder John D. Rockefeller. With the passing of his siblings, he became the guardian of his family’s fortune and head of a sprawling network of family interests, both business and philanthropic, that ranged from environmental conservation to the arts. To mark his 100th birthday in 2015, Rockefeller gave 1,000 acres of land next to a national park to the state of Maine. Aspects of the Rockefeller brothers’ upbringing became famous, including the 25-cent allowance, portions of which had to be set aside for charity and savings, and the inculcation that wealth brings great responsibility. Two of his brothers held elected office: Nelson Rockefeller served as the governor of New York, hungered for the White House and briefly served as vice president. Winthrop Rockefeller was a governor of Arkansas. David Rockefeller, however, wielded power and influence without ever seeking public office. Among his many accomplishments were spurring the project that led to the World Trade Center. And unlike his other brothers, John D. III and Laurance, who shied from the spotlight and were known for philanthropy, David Rockefeller embraced business and traveled and spoke widely as a champion of enlightened capitalism. “American capitalism has brought more benefits to more people than any other system in any part of the world at any time in history,” he said. “The problem is to see that the system is run as efficiently and as honestly as it can be.” Rockefeller graduated from Harvard in 1936 and received a doctorate in economics from the University of Chicago in 1940. He served in the Army during World War II, then began climbing the ranks of management at Chase Bank. That bank merged with The Manhattan Company in 1955. He was named Chase Manhattan’s president in 1961 and chairman and chief executive officer eight years later. He retired in 1981 at age 65 after a 35-year career. In his role of business statesman, Rockefeller preached capitalism at home and favored assisting economies abroad on grounds that bringing prosperity to the Third World would create customers for American products. He parted company with some of his fellow capitalists on income taxes, calling it unseemly to earn $1 million and then find ways to avoid paying taxes on it. He didn’t say how much he paid in taxes and never spoke publicly about his personal worth. In 2015, Forbes magazine estimated his fortune at $3 billion. As one of the Rockefeller grandchildren, David belonged to the last generation in which the inherited family billions were concentrated in a few hands. The next generation, known as “the cousins,” has more people. Rockefeller was estimated to have met more than 200 rulers in more than 100 countries during his lifetime, and often was treated as if he were a visiting head of state. Under Rockefeller, Chase was the first U.S. bank to open offices in the Soviet Union and China and, in 1974, the first to open an office in Egypt after the Suez crisis of 1956. In his early travels to South Africa, Rockefeller arranged clandestine meetings with several underground black leaders. “I find it terribly important to get overall impressions beyond those I get from businessmen,” he said. But Rockefeller took a lot of heat for his bank’s substantial dealings with South Africa’s white separatist regime and for helping the deposed, terminally ill Shah of Iran come to New York for medical treatment in 1979, the move that triggered the 13-month U.S. embassy hostage crisis in Tehran. Rockefeller maintained the family’s patronage of the arts, including its long-standing relationship with New York’s Museum of Modern Art, of which his mother had been a fervent patron. His private art collection was once valued at $500 million. The Rockefeller estate overlooking the Hudson River north of New York City is the repository of four generations of family history, including Nelson’s art and sculpture collection. One of the major efforts of Rockefeller’s later years was directed at restoring family influence in the landmark Rockefeller Center, most of which had been sold in the 1980s to Japanese investors. He eventually organized an investor group to buy back 45 percent of the property. His philanthropy and other activities earned him a Presidential Medal of Freedom, the nation’s highest civilian honor, in 1998. Rockefeller and his wife, the former Margaret McGrath, married in 1940 and had six children — David Jr., Richard, Abby, Neva, Margaret and Eileen. His wife, an active conservationist, died in 1996. |
Wednesday, March 22, 2017
David Rockefeller, Billionaire Businessman and Philanthropist, Dies at 101 - TIME Business
As Trump Trade Fades, Investors Reverse Course - Wall Street Journal
As Trump Trade Fades, Investors Reverse Course
Developing doubt about the administration’s ability to deliver quickly on its agenda upends a strategy
The Trump trade is over. Get ready for “Trump Lite.”
Developing doubt about the U.S. administration’s ability to deliver on its pro-growth policy agenda—at least any time soon—has upended a strategy that had been a winner since November’s U.S. election: sell bonds, buy the U.S. dollar and pick up cheap stocks that might benefit from improved U.S. growth.
That trade went into reverse in Tuesday’s U.S. trading: The S&P 500 fell 1.2%, its first decline of more than 1% this year and biggest drop since October, while the ICE U.S. dollar index, which tracks the dollar against a basket of six currencies, slipped below 100 for the first time since Feb. 6.
But even before the reversal there had been weeks of stall. In fact, a more successful strategy this year than the Trump trade has been to discount a U.S. recovery and bet instead on Europe and Asia, particularly China. The MSCI Emerging Markets Index is up 8.6% in 2017—driven by double-digit gains in Turkey, China, Hong Kong and India—trumping the S&P 500’s 4.7%. Even European stocks have outperformed the U.S. over the past month, despite concerns around France’s coming election.
“There’s a lack of confidence in the reforms and the overall policy agenda, and that’s been spoken about underpinning the whole market sentiment and animal spirits so far,” Catherine Yeung, investment director at Fidelity International, said about investors’ reconsideration.
The skittishness spilled into Asia Wednesday. Japan’s Nikkei 225 Stock Average fell 2.1% to 19183.27, erasing all its gains for the year. The yen strengthened to as much as ¥111.4350 to the dollar; a strong yen typically hurts the earnings of Japanese exporters. Shares also struggled in Hong Kong, with Chinese companies particularly hard hit.
America May Need Making GreatAgainAmerica May Need Making Great Again
This year, the MSCI Emerging MarketsIndex (blue) has outperformed the S&P500 (red) and the Stoxx 600 (yellow).This year, the MSCI Emerging Markets Index (blue) has outperformed the S&P 500 (red) and the Stoxx 600 (yellow).
Increasingly, investors are showing they believe the Trump trade has got out of hand. Around one-third of portfolio managers believe global equities are overvalued, the highest level on record going back to the turn of the century, according to Bank of America Merrill Lynch’s monthly survey of 200 funds managing $592 billion, and around four-fifths believe U.S. stocks are the most overvalued of all. Around a third believe the U.S. dollar is overvalued, the highest level since June 2006.
The “Trump Lite” trade hinges upon the administration’s getting sandbagged in policy fights, such as the current wrangling over health care. Drawn-out congressional debates over the details of stimulus measures could cause inflation to peter out, encouraging investors to resume the hunt for yield—buying bonds and stocks with sustainable dividend income.
From the start the market had been too optimistic about Donald Trump ’s ability to execute the finer details of his economic policy, said Megan E. Greene, chief economist at Manulife Asset Management.
“The risks were always going to become more balanced in the markets as it became apparent how aggressive and difficult the administration’s policy agenda is this year, with limited legislative days remaining in the calendar,” she said. “There is little doubt some stimulus will come through, but it is likely to be smaller and take longer to hit the real economy than many investors would like to believe.”
But if Mr. Trump’s current woes are bolstering emerging markets, he still has wide scope to spoil the party, particularly by pushing on his campaign pledges to get tough on the U.S.’s trade partners.
“The market seems to have forgotten about the rhetoric Trump has talked about regarding trade,” said Fidelity’s Ms. Yeung.
Wall Street Journal
Developing doubt about the administration’s ability to deliver quickly on its agenda upends a strategy
The Trump trade is over. Get ready for “Trump Lite.”
Developing doubt about the U.S. administration’s ability to deliver on its pro-growth policy agenda—at least any time soon—has upended a strategy that had been a winner since November’s U.S. election: sell bonds, buy the U.S. dollar and pick up cheap stocks that might benefit from improved U.S. growth.
That trade went into reverse in Tuesday’s U.S. trading: The S&P 500 fell 1.2%, its first decline of more than 1% this year and biggest drop since October, while the ICE U.S. dollar index, which tracks the dollar against a basket of six currencies, slipped below 100 for the first time since Feb. 6.
But even before the reversal there had been weeks of stall. In fact, a more successful strategy this year than the Trump trade has been to discount a U.S. recovery and bet instead on Europe and Asia, particularly China. The MSCI Emerging Markets Index is up 8.6% in 2017—driven by double-digit gains in Turkey, China, Hong Kong and India—trumping the S&P 500’s 4.7%. Even European stocks have outperformed the U.S. over the past month, despite concerns around France’s coming election.
“There’s a lack of confidence in the reforms and the overall policy agenda, and that’s been spoken about underpinning the whole market sentiment and animal spirits so far,” Catherine Yeung, investment director at Fidelity International, said about investors’ reconsideration.
The skittishness spilled into Asia Wednesday. Japan’s Nikkei 225 Stock Average fell 2.1% to 19183.27, erasing all its gains for the year. The yen strengthened to as much as ¥111.4350 to the dollar; a strong yen typically hurts the earnings of Japanese exporters. Shares also struggled in Hong Kong, with Chinese companies particularly hard hit.
America May Need Making GreatAgainAmerica May Need Making Great Again
This year, the MSCI Emerging MarketsIndex (blue) has outperformed the S&P500 (red) and the Stoxx 600 (yellow).This year, the MSCI Emerging Markets Index (blue) has outperformed the S&P 500 (red) and the Stoxx 600 (yellow).
Increasingly, investors are showing they believe the Trump trade has got out of hand. Around one-third of portfolio managers believe global equities are overvalued, the highest level on record going back to the turn of the century, according to Bank of America Merrill Lynch’s monthly survey of 200 funds managing $592 billion, and around four-fifths believe U.S. stocks are the most overvalued of all. Around a third believe the U.S. dollar is overvalued, the highest level since June 2006.
The “Trump Lite” trade hinges upon the administration’s getting sandbagged in policy fights, such as the current wrangling over health care. Drawn-out congressional debates over the details of stimulus measures could cause inflation to peter out, encouraging investors to resume the hunt for yield—buying bonds and stocks with sustainable dividend income.
From the start the market had been too optimistic about Donald Trump ’s ability to execute the finer details of his economic policy, said Megan E. Greene, chief economist at Manulife Asset Management.
“The risks were always going to become more balanced in the markets as it became apparent how aggressive and difficult the administration’s policy agenda is this year, with limited legislative days remaining in the calendar,” she said. “There is little doubt some stimulus will come through, but it is likely to be smaller and take longer to hit the real economy than many investors would like to believe.”
But if Mr. Trump’s current woes are bolstering emerging markets, he still has wide scope to spoil the party, particularly by pushing on his campaign pledges to get tough on the U.S.’s trade partners.
“The market seems to have forgotten about the rhetoric Trump has talked about regarding trade,” said Fidelity’s Ms. Yeung.
Wall Street Journal
Tuesday, March 21, 2017
What is James Comey’s game? The media must expose the truth together - Guardian
What is James Comey’s game? The media must expose the truth together
Jill Abramson
Tuesday 21 March 2017 22.13 AEDT Last modified on Tuesday 21 March 2017 22.15 AEDT
FBI director James Comey had a very busy July.
He closed a protracted investigation into Hillary Clinton’s use of a private email server. He filed no charges but blasted her conduct as “extremely careless” nonetheless, a lasting wound to her campaign. The public lashing contravened the normal procedure of staying silent on cases that are not prosecuted. Comey’s grandstanding press conference at the time seemed political.
Meanwhile, he confirmed at a congressional hearing yesterday, that in that same month the FBI had opened an investigation into Russian interference in the 2016 election, collusion intended to hurt the Clinton campaign and help Donald Trump. Confirming the existence of an investigation before it has concluded was also unusual and possibly political.
Trump-Russia collusion is being investigated by FBI, Comey confirms
Read more
During the campaign, Comey kept silent about this investigation into far graver matters than the endless pursuit of what Bernie Sanders called Clinton’s “damn emails”. Given the contacts between Trump campaign officials and the Russians, public acknowledgment of this investigation certainly could have damaged his candidacy. What is known about the Russian meddling has contributed to the historically low approval ratings for a new president.
Here’s the uncomfortable question that hung in the air at yesterday’s hearing: could the FBI director’s disproportionate treatment of the two cases have influenced the outcome of the election every bit as much as any Russian efforts? We will never know.
Comey’s testimony is very likely to be all that the FBI will reveal to the public until the investigation concludes, probably many months from now. Some of his statements were clarifying. We now know for certain that there is no evidence that Barack Obama wiretapped Trump, a nonsensical distraction that Trump tweeted after hearing speculation to that effect from a rightwing commentator. But he refused to answer questions about whether specific Trump associates were being investigated for criminal wrongdoing.
Jeff Sessions has recused himself from a role in the Russia investigation because the attorney general outrageously concealed his own contacts with the Russian ambassador. Sessions was one of the first lawmakers to endorse Trump and met with the ambassador twice during the GOP convention, also in July. His grossly misleading concealment of the meetings at his conformation hearing has stained the authority of any justice department investigation. The FBI is part of the department.
Donald Trump's first 100 days as president – daily updates
Read more
The congressional intelligence committees is also investigating the Russian hacking and contacts with the Trump campaign. But it’s doubtful given partisan rancor in Washington that these supposedly bipartisan panels can ever be above the political fray.
That leaves the press as the public’s best hope of getting to the bottom of the Russia matter. Reporters don’t have subpoena power, but the great investigative reporting that’s been done on the story already, by the New York Times, the Washington Post, Pro Publica, a non-profit organisation devoted to investigative journalism, and other newspapers, including this one, gives me hope.
Many of the answers to what really went on during the campaign reside in Russia, a notoriously difficult and dangerous terrain for journalists. Unfortunately, many news organizations have cut or eliminated their Moscow bureaus over the past decade as newspaper advertising collapsed and newsrooms were slashed.
The first amendment protects a free press for exactly this type of situation, to be a check against the abuse of centralized power and to hold the government accountable. I can think of no matter more worthy of concerted press inquiry than the possible subverting of the democratic process by a foreign power to aid an American presidential candidate.
The gravity of the matter calls for a change in the behavior of the press. Reputable news organizations that have committed resources to original reporting on the Russia story should not compete with one another, they should cooperate and pool information.
Russia hearing: Comey says no information to confirm Trump's wiretap claims – as it happened
James Comey and Mike Rogers appear before the House intelligence panel while Trump’s supreme court pick Neil Gorsuch has a confirmation hearing
Read more
I worry that the profusion of news stories, some focused on small developments, creates a confusing din for the public. Multiple stories in so many different publications also create the impression that the media are ganging up on Trump, which isn’t the case.
Stories could be jointly reported and published. This would not be the first time the news media formed a consortium to investigate wrongdoing or delve into very complex matters. The murder of Arizona Republic investigative reporter Don Bolles in 1976 by a car bomb, an incident connected to the Mafia, was one such case. After the deadlocked 2000 election, news organizations tried to work together on a reliable recount of the Florida vote and overseas ballots. Consortiums combed through WikiLeaks dumps, the Snowden documents and the Panama Papers, all to the benefit of public disclosure.
Surely, the president will call this fake news. But an authoritative, scrupulously factual investigation by a collective of great news organizations could actually be the best antidote. If we can solve the Russia-Trump puzzle, trust in the news media might begin tracking up once again.
Democracy does die in darkness, as the Washington Post’s new motto says. The truth is more important now than ever, as the New York Times new ad says. Now is the time to prove it.
Rex Tillerson Reportedly Plans To Skip NATO Meeting, Visit Russia Instead - Huffington Post
Secretary of State Rex Tillerson plans to skip a meeting with NATO foreign ministers next month in order to stay home for a visit by China’s president and will go to Russia later in April, U.S. officials said on Monday, disclosing an itinerary that allies may see as giving Moscow priority over them.
Tillerson intends to miss what would have been his first meeting of the 28 NATO allies on April 5-6 in Brussels so that he can attend President Donald Trump’s expected April 6-7 talks with Chinese President Xi Jinping at Trump’s Mar-a-Lago resort in Florida, four current and former U.S. officials said.
Skipping the NATO meeting and visiting Moscow could risk feeding a perception that Trump may be putting U.S. dealings with big powers first, while leaving waiting those smaller nations that depend on Washington for security, two former U.S. officials said.
Trump has often praised Russian President Vladimir Putin, and Tillerson worked with Russia’s government for years as a top executive at Exxon Mobil Corp, and has questioned the wisdom of sanctions against Russia that he said could harm U.S. businesses.
A State Department spokeswoman said Tillerson would meet on Wednesday with foreign ministers from 26 of the 27 other NATO countries ― all but Croatia ― at a gathering of the coalition working to defeat the Islamic State militant group.
POOL NEW / REUTERS
Secretary of State Rex Tillerson plans to miss what would have been his first meeting of the 28 NATO allies next month.
NATO Secretary General Jens Stoltenberg was due to have arrived in Washington on Monday for a three-day visit that was to include talks with U.S. Defense Secretary James Mattis and to take part in the counter-Islamic State meetings.
The State Department spokeswoman said Tillerson would not have a separate, NATO-focused meeting the 26 foreign ministers in Washington but rather that they would meet in the counter-Islamic State talks.
“After these consultations and meetings, in April he will travel to a meeting of the G7 (Group of Seven) in Italy and then on to meetings in Russia,” she added, saying U.S. Undersecretary of State for Political Affairs Tom Shannon would represent the United States at the NATO foreign ministers meeting.
‘GRAVE ERROR’
Representative Eliot Engel, the senior Democrat on the U.S. House of Representatives foreign affairs committee, said that Tillerson was making a mistake by skipping the Brussels talks.
“Donald Trump’s Administration is making a grave error that will shake the confidence of America’s most important alliance and feed the concern that this Administration simply too cozy with (Russian President) Vladimir Putin,” Engel said in a written statement.
“I cannot fathom why the Administration would pursue this course except to signal a change in American foreign policy that draws our country away from western democracy’s most important institutions and aligns the United States more closely with the autocratic regime in the Kremlin,” he added.
A former U.S. official echoed the view.
“It feeds this narrative that somehow the Trump administration is playing footsie with Russia,” said the former U.S. official on condition of anonymity.
“You don’t want to do your early business with the world’s great autocrats. You want to start with the great democracies, and NATO is the security instrument of the transatlantic group of great democracies,” he added.
X
Any Russian visit by a senior Trump administration official may be carefully scrutinized after the director of the Federal Bureau of Investigation on Monday publicly confirmed his agency was investigating any collusion between the Russian government and Trump’s 2016 presidential election campaign.
Trump has already worried NATO allies by referring to the Western security alliance as “obsolete” and by pressing other members to meet their commitments to spend at least 2 percent of gross domestic product on defense.
Last week, he dismayed British officials by shrugging off a media report, forcefully denied by Britain, that the administration of former President Barack Obama tapped his phones during the 2016 White House race with the aid of Britain’s GCHQ spy agency.
A former U.S. official and a former NATO diplomat, both speaking on condition of anonymity, said the alliance offered to change the meeting dates so Tillerson could attend it and the Xi Jinping talks but the State Department had rebuffed the idea.
The former diplomat said it was vital to present a united front toward Moscow. The North Atlantic Treaty Organization was created in 1949 to serve as a bulwark against the Soviet Union.
“Given the challenge that Russia poses, not just to the United States but to Europe, it’s critical to engage on the basis of a united front if at all possible,” the diplomat said.
Angela Merkel and her press corps show how big democracies are supposed to operate - Economist
German lessons
Angela Merkel and her press corps show how big democracies are supposed to operate
The contrast between the chancellor and Donald Trump could not be greater
Democracy in America
Mar 18th 2017by LEXINGTON
TO APPRECIATE how shocking President Donald Trump is to modern German sensibilities, consider the “America First!” slogan that so cheers his supporters. Then ponder how Germans—and indeed voters across Europe—would react if an avowed law-and-order nationalist were to seek the office of Bundeskanzler with the slogan: “Germany First!” Several issues divided Mr Trump and Chancellor Angela Merkel at their first meeting in the White House on March 17th. At an often awkward press conference in the East Room, the two leaders politely disagreed on everything from immigration to free trade and the value of seeking multinational agreements. Their comportment could hardly have been more different. Mrs Merkel was every inch the cool, reserved physicist-by-training, at moments giving her American host the icy stare of a Mother Superior told a dirty joke. Mr Trump was dyspeptic, defensive and visibly irritated by press questions about his latest controversial tweets.
But the real dividing line between the two involved the nature of political leadership. Mr Trump, being Mr Trump, presented himself as a tribune of the people, heeding and acting on public demands to end “unfair” treatment of America. He catalogued some of those resentments. He said it is time for members of the NATO alliance to pay their “dues”—countries “must pay what they owe”, he grumbled—though as members of NATO, governments do not technically “owe” anything but have merely made political commitments to spend the equivalent of 2% of GDP on defence. He cited public demands for tighter controls on immigration in the name of “national security,” adding that: “immigration is a privilege, not a right.” He condemned previous free trade deals and spoke of the need for American workers to come first from now on.
Mrs Merkel’s response was subtle but brutal. She noted that free trade agreements have “not always been that popular” in Germany, and referred to protests in her own country relating to free trade pacts that the European Union has either signed with foreign partners or wants to sign. She recalled the specific fears raised by an EU pact with South Korea, and the predictions that the German car industry would suffer from increased competition and more open markets. Instead, she said, the pact with South Korea “brought more jobs” and both sides won. “I represent German interests,” she said at one point, just as the American president “stands up for American interests.” Listen carefully and Mrs Merkel was telling Mr Trump that she, like every leader in the world, has domestic politics to think about. Left unspoken was the point that it is easy, even dangerously easy, to let such distinct national interests provoke a clash. Her core message to Mr Trump was that real political leadership involves seeking a co-operative solution that leaves everyone ahead, and that international relations do not have to be zero-sum.
Mrs Merkel had no desire to pick an open fight. She has long experience with swaggering male leaders who like to throw their weight around, from President Vladimir Putin of Russia to the former French leader, Nicolas Sarkozy. The German press corps that covers the chancellor has long swapped tales of the dry, off-the-record jokes that she cracks at the expense of such men, often under the cover of self-deprecation. After one European summit in Brussels at which the hyper-active Mr Sarkozy had been more manic than usual, Mrs Merkel told her press corps: “I think I am the most boring person that he has ever met.”
The German leader also came prepared. She is an atypical “Playboy” reader. But that magazine’s interview with Donald Trump in 1990 is one clue studied by Team Merkel before their first meeting. In that preview of his “America First” views, nearly 30 years ago, Mr Trump accused allies of subsidising exports while free-riding on American security, growling: "I'd throw a tax on every Mercedes-Benz rolling into this country.” The president remains an unlikely Merkel ally. He scorns detail, has praised Britain’s decision to leave the EU, obsesses over trade balances (Germany ran a $53bn trade surplus with America last year), and has called her decision to admit more than a million refugees into Germany “catastrophic”. He has appalled the German government with his open admiration for the iron-fisted nationalism of Mr Putin, his hints that he might lift sanctions imposed on Russia for its invasion of Ukraine, and his suggestions that NATO is obsolete.
At their press conference Mrs Merkel managed to persuade Mr Trump to state his “strong support” for NATO. She also heard the American leader praise Germany’s schemes for job training and retraining, and apprenticeships in industry. Earlier, she had introduced Mr Trump to bosses from firms like Siemens and BMW, who talked up their American factories and investments. That was smart. Apprenticeships are a big part of Germany’s global brand, and an impressed-sounding Mr Trump noted from the podium that his government is “in the process of rebuilding the American industrial base.”
The most awkward moments involved Mr Trump’s repeated claims that he was spied on as a candidate by the Obama administration. Republican and Democratic leaders in Congress have said no evidence exists to support Mr Trump’s tweeted claim of two weeks ago that his telephones at Trump Tower were tapped—a very serious claim. Undaunted, the president sent out his press secretary, Sean Spicer, on March 16th to read out a list of news reports, some of them from far-right conspiracy theorists, which support the idea that the current president was spied on by his predecessor. Mr Spicer stood in the White House briefing room and noted that a conservative retired judge, Andrew Napolitano, had claimed on Fox News television that a British spy agency, GCHQ, secretly intercepted Mr Trump’s communications at Mr Obama’s request.
The British government reacted with unusually open anger, calling the claim “utterly ridiculous”. At the Merkel-Trump press conference German reporters asked Mr Trump if he regretted making that claim. Mr Trump replied, in effect, that the buck does not stop with him. “We said nothing,” the president said. “All we did was quote a certain very talented legal mind who was the one responsible for saying that on television.”
Mr Trump then sought to lighten the mood by referring to the kerfuffle that followed the revelation, in 2013, that American spooks had tapped one of Mrs Merkel’s mobile telephones. Turning to his guest, he said: “At least we have something in common, perhaps.” The look that the chancellor shot back blended incredulity with horror. For Washington-based observers, increasingly used to the idea of an American president who makes baseless claims and attacks other leaders without shame, her dismay was a useful reminder. This is not normal.
Monday, March 20, 2017
Who is Neil Gorsuch? A guide to the Supreme Court nominee - CNBC
Who is Neil Gorsuch? A guide to the Supreme Court nominee
Neil Gorsuch could be the 113th justice of the Supreme Court in less than three weeks. But most Americans still don't know much about him.
Here's a guide to the 49-year-old federal appeals court judge, who was nominated by President Trumpon Jan. 31:
Straight out of central casting
For conservatives smarting at the loss of Justice Antonin Scalia, who died 13 months ago, Gorsuch is just what the doctor ordered. He has a Republican pedigree handed down from his mom, who served in President Ronald Reagan's administration. He graduated from Columbia University and Harvard Law School, then got a doctorate in philosophy from Oxford University.
Neil Gorsuch: Stellar résumé and Scalia-like legal philosophy Who is Neil Gorsuch? 5 things to know about Trump's nominee Former law clerks herald Supreme Court nominee Neil Gorsuch's independence
How does he compare to Scalia?
From Trump's original list of 21 potential nominees, Gorsuch was among the closest to being a Scalia clone in terms of his adherence to the Constitution and laws as written. In addition, his reader-friendly writing style has been compared favorably to Scalia's brilliant but more acerbic prose. And like Scalia, he's known for being an active questioner from the bench.
How would he change the court?
In the short term, Gorsuch could give conservatives the fifth vote they need to resolve some 4-4 deadlocks, such as last term's tie vote on the right of labor unions to collect dues from non-members, or this term's potential tie vote on whether religious institutions can compete for public funds. Longer term, he could help form a younger conservative nucleus, particularly if Trump gets to fill more vacancies.
What's he like as a judge?
This is where originalism and textualism come in: Gorsuch basically divorces himself from policy matters or raw emotion by focusing on the words in the Constitution or the statutes requiring interpretation. As a result, liberals often complain about who wins and who loses the cases that come before him — but conservatives contend ideology isn't driving his decisions.
Will he be confirmed?
Gorsuch has some hurdles to clear, such as vehement opposition from liberal interest groups and most Senate Democrats. His brief tenure at the Justice Department during the war on terror means his fingerprints are on controversial subjects, such as the treatment of detainees and the use of warrantless wiretaps.
But thus far, he has emerged from the confirmation battle relatively unscathed, and his unanimous popularity among Republicans should be enough to carry him over the finish line — either by winning the 60 votes needed to clear a Democratic filibuster, or through a Senate rules change that Majority Leader Mitch McConnell, R-Ky., has threatened to carry out.
CNBC
Neil Gorsuch could be the 113th justice of the Supreme Court in less than three weeks. But most Americans still don't know much about him.
Here's a guide to the 49-year-old federal appeals court judge, who was nominated by President Trumpon Jan. 31:
Straight out of central casting
For conservatives smarting at the loss of Justice Antonin Scalia, who died 13 months ago, Gorsuch is just what the doctor ordered. He has a Republican pedigree handed down from his mom, who served in President Ronald Reagan's administration. He graduated from Columbia University and Harvard Law School, then got a doctorate in philosophy from Oxford University.
Neil Gorsuch: Stellar résumé and Scalia-like legal philosophy Who is Neil Gorsuch? 5 things to know about Trump's nominee Former law clerks herald Supreme Court nominee Neil Gorsuch's independence
How does he compare to Scalia?
From Trump's original list of 21 potential nominees, Gorsuch was among the closest to being a Scalia clone in terms of his adherence to the Constitution and laws as written. In addition, his reader-friendly writing style has been compared favorably to Scalia's brilliant but more acerbic prose. And like Scalia, he's known for being an active questioner from the bench.
How would he change the court?
In the short term, Gorsuch could give conservatives the fifth vote they need to resolve some 4-4 deadlocks, such as last term's tie vote on the right of labor unions to collect dues from non-members, or this term's potential tie vote on whether religious institutions can compete for public funds. Longer term, he could help form a younger conservative nucleus, particularly if Trump gets to fill more vacancies.
What's he like as a judge?
This is where originalism and textualism come in: Gorsuch basically divorces himself from policy matters or raw emotion by focusing on the words in the Constitution or the statutes requiring interpretation. As a result, liberals often complain about who wins and who loses the cases that come before him — but conservatives contend ideology isn't driving his decisions.
Will he be confirmed?
Gorsuch has some hurdles to clear, such as vehement opposition from liberal interest groups and most Senate Democrats. His brief tenure at the Justice Department during the war on terror means his fingerprints are on controversial subjects, such as the treatment of detainees and the use of warrantless wiretaps.
But thus far, he has emerged from the confirmation battle relatively unscathed, and his unanimous popularity among Republicans should be enough to carry him over the finish line — either by winning the 60 votes needed to clear a Democratic filibuster, or through a Senate rules change that Majority Leader Mitch McConnell, R-Ky., has threatened to carry out.
CNBC
Bloomberg - Top 100 billionaire in the world - Bloomberg
As of March 20, 2017
The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. Details about the calculations are provided in the net worth analysis on each billionaire’s profile page. The figures are updated at the close of every trading day in New York.
Rank Name Total net worth
1 Bill Gates $86.2B
2 Warren Buffett $77.7B
3 Jeff Bezos $73.8B
4 Amancio Ortega $72.5B
5 Mark Zuckerberg $60.2B
6 Carlos Slim $55.4B
7 Charles Koch $48.1B
8 David Koch $48.1B
9 Larry Ellison $47.9B
10 Larry Page $43.7B
11 Ingvar Kamprad $43.7B
12 Sergey Brin $42.7B
13 Bernard Arnault $42.4B
14 Liliane Bettencourt $37.7B
15 Jack Ma $36.2B
16 Rob Walton $35.2B
17 Jim Walton $34.9B
18 Alice Walton $33.8B
19 John Mars $33.1B
20 Jacqueline Mars $33.1B
21 Wang Jianlin $31.3B
22 Li Ka-Shing $30.6B
23 Sheldon Adelson $29.8B
24 Jorge Paulo Lemann $29.4B
25 Mukesh Ambani $28.0B
26 Steve Ballmer $27.4B
27 George Soros $25.2B
28 Phil Knight $25.1B
29 Wang Wei $24.0B
30 Pony Ma $23.9B
31 Stefan Persson $22.0B
32 Giovanni Ferrero $22.0B
33 Dieter Schwarz $21.4B
34 Paul Allen $20.8B
35 Georg Schaeffler $20.2B
36 Lee Shau Kee $20.2B
37 Michael Dell $20.1B
38 Carl Icahn $19.8B
39 Alwaleed Al Saud $19.3B
40 Susanne Klatten $19.3B
41 Charlie Ergen $19.2B
42 Len Blavatnik $19.0B
43 Leonardo del Vecchio $18.5B
44 Ron Perelman $17.9B
45 Leonid Mikhelson $17.8B
46 Laurene Powell Jobs $17.7B
47 Stefan Quandt $17.5B
48 Francois Pinault $17.5B
49 William Ding $17.3B
50 Lee Kun Hee $17.1B
51 Alexey Mordashov $16.9B
52 Tadashi Yanai $16.8B
53 Lakshmi Mittal $16.8B
54 Serge Dassault $16.7B
55 Vladimir Potanin $16.6B
56 Donald Bren $16.6B
57 Elaine Marshall $16.5B
58 Joseph Safra $16.4B
59 Jim Simons $15.5B
60 Henry Sy Sr $15.0B
61 Alejandro Santo Domingo $15.0B
62 Dilip Shanghvi $15.0B
63 Ernesto Bertarelli $14.9B
64 Pallonji Mistry $14.8B
65 Viktor Vekselberg $14.8B
66 Alisher Usmanov $14.6B
67 Robert Kuok $14.6B
68 Thomas Peterffy $14.5B
69 Charoen Sirivadhanabhakdi $14.3B
70 Vladimir Lisin $14.2B
71 Ray Dalio $14.1B
72 Marcel Telles $14.1B
73 Stefano Pessina $14.0B
74 Iris Fontbona $13.8B
75 Dustin Moskovitz $13.6B
76 Masayoshi Son $13.5B
77 Mikhail Fridman $13.5B
78 Azim Premji $13.4B
79 Henry Cheng $13.4B
80 Gina Rinehart $13.3B
81 Harold Hamm $13.1B
82 Shiv Nadar $12.9B
83 John Menard Jr $12.8B
84 Si Newhouse $12.8B
85 Alberto Bailleres $12.8B
86 Robin Li $12.7B
87 Rupert Murdoch $12.7B
88 Charlene de Carvalho-Heineken $12.6B
89 Klaus-Michael Kuehne $12.6B
90 Peter Woo $12.4B
91 George Kaiser $12.4B
92 Yongxing Liu $12.4B
93 Dietrich Mateschitz $12.4B
94 Takemitsu Takizaki $12.3B
95 Yeung Kin-Man $12.2B
96 Steve Cohen $12.1B
97 Hugh Grosvenor $12.0B
98 Lukas Walton $12.0B
99 Hasso Plattner $12.0B
100 Lui Che Woo $11.9B
The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. Details about the calculations are provided in the net worth analysis on each billionaire’s profile page. The figures are updated at the close of every trading day in New York.
Rank Name Total net worth
1 Bill Gates $86.2B
2 Warren Buffett $77.7B
3 Jeff Bezos $73.8B
4 Amancio Ortega $72.5B
5 Mark Zuckerberg $60.2B
6 Carlos Slim $55.4B
7 Charles Koch $48.1B
8 David Koch $48.1B
9 Larry Ellison $47.9B
10 Larry Page $43.7B
11 Ingvar Kamprad $43.7B
12 Sergey Brin $42.7B
13 Bernard Arnault $42.4B
14 Liliane Bettencourt $37.7B
15 Jack Ma $36.2B
16 Rob Walton $35.2B
17 Jim Walton $34.9B
18 Alice Walton $33.8B
19 John Mars $33.1B
20 Jacqueline Mars $33.1B
21 Wang Jianlin $31.3B
22 Li Ka-Shing $30.6B
23 Sheldon Adelson $29.8B
24 Jorge Paulo Lemann $29.4B
25 Mukesh Ambani $28.0B
26 Steve Ballmer $27.4B
27 George Soros $25.2B
28 Phil Knight $25.1B
29 Wang Wei $24.0B
30 Pony Ma $23.9B
31 Stefan Persson $22.0B
32 Giovanni Ferrero $22.0B
33 Dieter Schwarz $21.4B
34 Paul Allen $20.8B
35 Georg Schaeffler $20.2B
36 Lee Shau Kee $20.2B
37 Michael Dell $20.1B
38 Carl Icahn $19.8B
39 Alwaleed Al Saud $19.3B
40 Susanne Klatten $19.3B
41 Charlie Ergen $19.2B
42 Len Blavatnik $19.0B
43 Leonardo del Vecchio $18.5B
44 Ron Perelman $17.9B
45 Leonid Mikhelson $17.8B
46 Laurene Powell Jobs $17.7B
47 Stefan Quandt $17.5B
48 Francois Pinault $17.5B
49 William Ding $17.3B
50 Lee Kun Hee $17.1B
51 Alexey Mordashov $16.9B
52 Tadashi Yanai $16.8B
53 Lakshmi Mittal $16.8B
54 Serge Dassault $16.7B
55 Vladimir Potanin $16.6B
56 Donald Bren $16.6B
57 Elaine Marshall $16.5B
58 Joseph Safra $16.4B
59 Jim Simons $15.5B
60 Henry Sy Sr $15.0B
61 Alejandro Santo Domingo $15.0B
62 Dilip Shanghvi $15.0B
63 Ernesto Bertarelli $14.9B
64 Pallonji Mistry $14.8B
65 Viktor Vekselberg $14.8B
66 Alisher Usmanov $14.6B
67 Robert Kuok $14.6B
68 Thomas Peterffy $14.5B
69 Charoen Sirivadhanabhakdi $14.3B
70 Vladimir Lisin $14.2B
71 Ray Dalio $14.1B
72 Marcel Telles $14.1B
73 Stefano Pessina $14.0B
74 Iris Fontbona $13.8B
75 Dustin Moskovitz $13.6B
76 Masayoshi Son $13.5B
77 Mikhail Fridman $13.5B
78 Azim Premji $13.4B
79 Henry Cheng $13.4B
80 Gina Rinehart $13.3B
81 Harold Hamm $13.1B
82 Shiv Nadar $12.9B
83 John Menard Jr $12.8B
84 Si Newhouse $12.8B
85 Alberto Bailleres $12.8B
86 Robin Li $12.7B
87 Rupert Murdoch $12.7B
88 Charlene de Carvalho-Heineken $12.6B
89 Klaus-Michael Kuehne $12.6B
90 Peter Woo $12.4B
91 George Kaiser $12.4B
92 Yongxing Liu $12.4B
93 Dietrich Mateschitz $12.4B
94 Takemitsu Takizaki $12.3B
95 Yeung Kin-Man $12.2B
96 Steve Cohen $12.1B
97 Hugh Grosvenor $12.0B
98 Lukas Walton $12.0B
99 Hasso Plattner $12.0B
100 Lui Che Woo $11.9B
Sunday, March 19, 2017
How a possible Yellen departure could spark a fire under the Fed to cut its $4.5 trillion balance sheet - Reuters
How a possible Yellen departure could spark a fire under the Fed to cut its $4.5 trillion balance sheet
Javier E. David | @TeflonGeek
11 Mins Ago
CNBC.com
It's often said that good things come to those who wait — but a bloated $4.5 trillion balance sheet might be a notable exception to that rule.
With the Federal Reserve facing a Herculean conundrum in unwinding its crisis-era monetary policy — and a likely leadership transition on the horizon — Goldman Sachssuggested on Saturday the central bank could move early to reduce the vast sums of government and mortgage-backed securities (MBS) it holds on its books.
In a research note to clients, the bank pointed to the likelihood that President Donald Trumpmay "reshape the leadership" of the Federal Open Market Committee (FOMC), the Fed's powerful policy-making body, as the terms of Fed Chair Janet Yellen and Vice Chair Stanley Fischer expire in early 2018.
"This could be important for balance sheet policy because many Republican-leaning economists have criticized quantitative easing (QE) and have expressed a preference for rapid balance sheet rundown, perhaps even through asset sales," wrote Daan Struyven, a Goldman economist.
If the new appointments—especially the new chair—are thought to favor aggressive balance sheet normalization, perhaps even including asset sales, and if all decisions are left up to the incoming team, financial markets might experience heightened uncertainty during the transition."
Goldman suggested there was a "strong 'risk management' case for an announcement of very gradual balance sheet runoff later this year," because of the political risk associated with new leadership at the Fed.
"Our forecast is that the discussion around reinvestment continues for most of this year and the plan is formally announced in December 2017," Struyven said. "At that meeting, we expect the committee to hold the funds rate steady after hiking in both June and September. We expect the quarterly hikes to resume in March 2018."
The economist harked back to 2013's "taper tantrum," in which markets reacted the Fed's suggestions of tighter monetary policy by sending bond yields surging and stocks reeling — albeit temporarily.
A potential fire sale of Treasurys and mortgage-backed securities by the Fed "could have significantly more adverse effects on financial conditions than gradual runoff, and the mere risk of such an outcome might set up another 'taper tantrum,' " Struyven added.
'The uncertainty is substantial'
As the central bank begins a campaign to tighten benchmark interest rates — making a quarter-point hike just last week — it's renewed a debate over how to unwind the Fed's massive bond buying program.
Some market observers have long argued that the Fed has distorted financial conditions with QE, and the central bank faces a huge task trying to pare down its bloated balance sheet.
"The bigger the Fed's credit footprint, the more it interferes with the efficient employment and pricing of credit," wrote George Selgin, a senior fellow and director of the Center for Monetary and Financial Alternatives at the libertarian-leaning Cato Institute, in a blog post last month.
"By directing a large share of savings to purchases of longer-term MBS and Treasury securities, for example, the Fed has artificially raised both the prices of those securities, and the importance of the housing market and the federal government relative to the rest of the U.S. economy," Selgin wrote. "It has also dramatically increased its portfolio's duration gap and, by so doing, the risk that it will suffer losses should it sell assets before they mature."
On Friday, Minneapolis Federal Reserve Bank President Neel Kashkari, the lone dissenter against the U.S. central bank's decision last week to raise interest rates, the U.S. economy is still falling short on employment and inflation.
Kashkari, an alumnus of both Goldman Sachs and the U.S. Treasury who oversaw the government's Temporary Asset Relief Program (TARP) during the financial crisis, believes the Fed should wait on raising interest rates until it publishes a detailed plan for how and when it will reduce its $4.5 trillion balance sheet.
Goldman set forth two scenarios under which the Fed could begin trimming its balance sheet. Under an "early start, passive runoff" scenario, the bank said the Fed "gradually tapers reinvestment in December 2017 over 10 months but does not sell assets."
Conversely, under a "late start, active sales" scenario, Goldman said the Fed could cease reinvesting in bonds in July 2018 "without tapering and actively sells $40bn of assets per month."
Under the latter, the Fed could shrink its balance sheet by about $250 billion per quarter starting in the second half of next year, "with similar contributions from maturing assets and active sales," the bank added.
However, neither scenario is without its risks, Goldman's economist wrote: "While our baseline estimate suggests relatively little tightening from balance sheet rundown, the uncertainty is substantial. The 2013 'taper tantrum' also provides a reminder that the impact of balance sheet policy on financial conditions is uncertain and could be larger than our baseline estimate."
--Reuters contributed to this article.
Javier E. David | @TeflonGeek
11 Mins Ago
CNBC.com
It's often said that good things come to those who wait — but a bloated $4.5 trillion balance sheet might be a notable exception to that rule.
With the Federal Reserve facing a Herculean conundrum in unwinding its crisis-era monetary policy — and a likely leadership transition on the horizon — Goldman Sachssuggested on Saturday the central bank could move early to reduce the vast sums of government and mortgage-backed securities (MBS) it holds on its books.
In a research note to clients, the bank pointed to the likelihood that President Donald Trumpmay "reshape the leadership" of the Federal Open Market Committee (FOMC), the Fed's powerful policy-making body, as the terms of Fed Chair Janet Yellen and Vice Chair Stanley Fischer expire in early 2018.
"This could be important for balance sheet policy because many Republican-leaning economists have criticized quantitative easing (QE) and have expressed a preference for rapid balance sheet rundown, perhaps even through asset sales," wrote Daan Struyven, a Goldman economist.
If the new appointments—especially the new chair—are thought to favor aggressive balance sheet normalization, perhaps even including asset sales, and if all decisions are left up to the incoming team, financial markets might experience heightened uncertainty during the transition."
Goldman suggested there was a "strong 'risk management' case for an announcement of very gradual balance sheet runoff later this year," because of the political risk associated with new leadership at the Fed.
"Our forecast is that the discussion around reinvestment continues for most of this year and the plan is formally announced in December 2017," Struyven said. "At that meeting, we expect the committee to hold the funds rate steady after hiking in both June and September. We expect the quarterly hikes to resume in March 2018."
The economist harked back to 2013's "taper tantrum," in which markets reacted the Fed's suggestions of tighter monetary policy by sending bond yields surging and stocks reeling — albeit temporarily.
A potential fire sale of Treasurys and mortgage-backed securities by the Fed "could have significantly more adverse effects on financial conditions than gradual runoff, and the mere risk of such an outcome might set up another 'taper tantrum,' " Struyven added.
'The uncertainty is substantial'
As the central bank begins a campaign to tighten benchmark interest rates — making a quarter-point hike just last week — it's renewed a debate over how to unwind the Fed's massive bond buying program.
Some market observers have long argued that the Fed has distorted financial conditions with QE, and the central bank faces a huge task trying to pare down its bloated balance sheet.
"The bigger the Fed's credit footprint, the more it interferes with the efficient employment and pricing of credit," wrote George Selgin, a senior fellow and director of the Center for Monetary and Financial Alternatives at the libertarian-leaning Cato Institute, in a blog post last month.
"By directing a large share of savings to purchases of longer-term MBS and Treasury securities, for example, the Fed has artificially raised both the prices of those securities, and the importance of the housing market and the federal government relative to the rest of the U.S. economy," Selgin wrote. "It has also dramatically increased its portfolio's duration gap and, by so doing, the risk that it will suffer losses should it sell assets before they mature."
On Friday, Minneapolis Federal Reserve Bank President Neel Kashkari, the lone dissenter against the U.S. central bank's decision last week to raise interest rates, the U.S. economy is still falling short on employment and inflation.
Kashkari, an alumnus of both Goldman Sachs and the U.S. Treasury who oversaw the government's Temporary Asset Relief Program (TARP) during the financial crisis, believes the Fed should wait on raising interest rates until it publishes a detailed plan for how and when it will reduce its $4.5 trillion balance sheet.
Goldman set forth two scenarios under which the Fed could begin trimming its balance sheet. Under an "early start, passive runoff" scenario, the bank said the Fed "gradually tapers reinvestment in December 2017 over 10 months but does not sell assets."
Conversely, under a "late start, active sales" scenario, Goldman said the Fed could cease reinvesting in bonds in July 2018 "without tapering and actively sells $40bn of assets per month."
Under the latter, the Fed could shrink its balance sheet by about $250 billion per quarter starting in the second half of next year, "with similar contributions from maturing assets and active sales," the bank added.
However, neither scenario is without its risks, Goldman's economist wrote: "While our baseline estimate suggests relatively little tightening from balance sheet rundown, the uncertainty is substantial. The 2013 'taper tantrum' also provides a reminder that the impact of balance sheet policy on financial conditions is uncertain and could be larger than our baseline estimate."
--Reuters contributed to this article.
Former Marine Corps captain says Trump defense budget is 'less bang for more bucks' - CNBC News
Former Marine Corps captain says Trump defense budget is 'less bang for more bucks'
Jeff Daniels | @jeffdanielsca
Sat, 18 Mar '17 | 8:43 AM ET
CNBC.com
If Americans think more defense spending will make them safer they should think again, according to a retired U.S. Marine Corps officer who served in Iraq and Afghanistan.
"Just because you're spending more on the military doesn't mean we're going to have a more effective military force," said Dan Grazier, a former Marine captain and defense industry expert at the Project On Government Oversight, a Washington watchdog group. "That has proved true throughout history."
President Donald Trump's fiscal 2018 budget blueprint calls for a $54 billion increase in national defense spending, which represents an increase of about 10 percent over the sequestered levels.
"If President Trump wants to truly rebuild the military, he should actually slash budgets," Grazier wrote in a POGO blog post Friday. "It would force the Pentagon and Congress to make the difficult choices necessary to produce a more effective fighting force."
He notes that if the fiscal 2018 budget plan gets approved in Congress it would mean total defense spending of nearly $640 billion, which includes $65 billion for so-called Overseas Contingency Operations war funding. When combining other national security spending and veterans costs, the government outlays represent more than $1 trillion per year, Grazier said.
In the budget document, the Trump administration stated "this defense funding is vital to rebuilding and preparing our armed forces for the future."
The White House's budget request said "key investments in maintenance capacity, training systems, and additional F-35 Joint Strike Fighters would enable the Air Force, which is now the smallest it has been in history, to counter the growing number of complex threats from sophisticated state actors and transnational terrorist groups."
Yet Grazier contended that just throwing more money at defense isn't the answer because "it is just going to get flushed down the typical Pentagon spending holes." In an interview, he said what matters most is "how you spend it — and we do not have a track record of spending it well."
Grazier added, "Basically, the Pentagon and defense contractors and their allies in Congress want to throw a whole lot money at these really complicated [weapons] systems and spread the subcontracts around the country."
On his blog, Grazier wrote that defense budgets during the Obama administration peaked in 2011 and went "down incrementally in the years since, but they remained higher than at any time during previous administrations, including at the peak of the Reagan buildup in the 1980s."
"What did we get for those massive budgets? We didn't get more fighter planes. We didn't get more ships," he said. "Almost every day we are bombarded with dire warnings from services that the force is the smallest it has ever been. For some people, there will never be enough spending on the Pentagon."
Indeed, on Thursday Senate Armed Services Chairman John McCain (R-Arizona) criticized Trump's proposed top-line defense budget plan as simply not enough. He said in a press statement that the budget doesn't amount to the 10 percent increase as touted by the White House but is "a mere 3 percent over President Obama's defense plan, which has left our military underfunded, undersized, and unready to meet the threats of today and tomorrow."
According to Grazier, the Pentagon waste needs to be addressed and overhead too. Moreover, he believes there's a need to "reexamine a dependence on contractors that can cost as much as four times more than federal employees. But none of this will happen unless Congress forces these changes, and they can only do that by restraining budgets."
Grazier also said spending big money on some of the programs with a history of problems needs to be looked at more closely, including the F-35 stealth fighter, as well as the Navy's newest class of aircraft carriers, the Ford Class. Then there's the Navy's littoral combat ship program, which the U.S. Government Accountability Office in December concluded "has taken longer, cost more, and delivered less capability than expected."
"None of these systems are performing all that well," he said.
Trump recently visited the USS Gerald R. Ford super-carrier, built by Huntington Ingalls Industries for around $13 billion, or $2.5 billion over budget. The Ford-Class carrier program has a price tag of approximately $40 billion and there have been calls to scale back the program. Some critics suggest even the new carriers are vulnerable at sea.
The president wants to increase the Navy's fleet to 350 ships, up from today's force of 275 deployable battle ships. That will require the investment of nearly $700 billionover 30 years and there's some concern whether the shipyards can meet the goal due to shortages of skilled workers and other obstacles.
Grazier questions the decision by the Navy to use a new electromagnetic launch technology system for aircraft on the Ford-Class carriers instead of sticking with the steam-powered catapult system on the battle-tested Nimitz-Class carriers. Swapping out older systems has resulted in a "very large expense and the system does not work all that well yet," he said.
Meantime, the retired Marine officer also is critical of the F-35, a program projected to cost more than $1 trillion over its life cycle of about 53 years. He said the Pentagon's top weapons tester wrote a report detailing 60 pages of problems with the aircraft but it's essentially been ignored.
Trump has been complained about the cost of the F-35 and suggested the possibility of replacing some of the F-35 purchases with the "comparable F-18 Super Hornet."Lockheed Martin built three variants of the F-35 Joint Strike Fighter, for the Air Force, Navy, and Marines.
The lot 10 deal for the F-35 was announced last month and cut the per-plane price on the F-35A (Air Force variant) to $94.6 million, or a 7.3 percent price reduction from the previous lot 9 terms. That marked the first time the F-35A had been below $100 million.
Even so, Grazier said the F-35 price still remains "vastly more expensive" compared with legacy fighters it is replacing. "We continue to get less bang for more bucks," he said. "Whether it's fighter planes or Navy ships or anything like that, they are always vastly more complicated than the one before. We spend more and more money for these things but we get fewer and fewer of them. So we keep getting these smaller and smaller forces."
Jeff Daniels | @jeffdanielsca
Sat, 18 Mar '17 | 8:43 AM ET
CNBC.com
If Americans think more defense spending will make them safer they should think again, according to a retired U.S. Marine Corps officer who served in Iraq and Afghanistan.
"Just because you're spending more on the military doesn't mean we're going to have a more effective military force," said Dan Grazier, a former Marine captain and defense industry expert at the Project On Government Oversight, a Washington watchdog group. "That has proved true throughout history."
President Donald Trump's fiscal 2018 budget blueprint calls for a $54 billion increase in national defense spending, which represents an increase of about 10 percent over the sequestered levels.
"If President Trump wants to truly rebuild the military, he should actually slash budgets," Grazier wrote in a POGO blog post Friday. "It would force the Pentagon and Congress to make the difficult choices necessary to produce a more effective fighting force."
He notes that if the fiscal 2018 budget plan gets approved in Congress it would mean total defense spending of nearly $640 billion, which includes $65 billion for so-called Overseas Contingency Operations war funding. When combining other national security spending and veterans costs, the government outlays represent more than $1 trillion per year, Grazier said.
In the budget document, the Trump administration stated "this defense funding is vital to rebuilding and preparing our armed forces for the future."
The White House's budget request said "key investments in maintenance capacity, training systems, and additional F-35 Joint Strike Fighters would enable the Air Force, which is now the smallest it has been in history, to counter the growing number of complex threats from sophisticated state actors and transnational terrorist groups."
Yet Grazier contended that just throwing more money at defense isn't the answer because "it is just going to get flushed down the typical Pentagon spending holes." In an interview, he said what matters most is "how you spend it — and we do not have a track record of spending it well."
Grazier added, "Basically, the Pentagon and defense contractors and their allies in Congress want to throw a whole lot money at these really complicated [weapons] systems and spread the subcontracts around the country."
On his blog, Grazier wrote that defense budgets during the Obama administration peaked in 2011 and went "down incrementally in the years since, but they remained higher than at any time during previous administrations, including at the peak of the Reagan buildup in the 1980s."
"What did we get for those massive budgets? We didn't get more fighter planes. We didn't get more ships," he said. "Almost every day we are bombarded with dire warnings from services that the force is the smallest it has ever been. For some people, there will never be enough spending on the Pentagon."
Indeed, on Thursday Senate Armed Services Chairman John McCain (R-Arizona) criticized Trump's proposed top-line defense budget plan as simply not enough. He said in a press statement that the budget doesn't amount to the 10 percent increase as touted by the White House but is "a mere 3 percent over President Obama's defense plan, which has left our military underfunded, undersized, and unready to meet the threats of today and tomorrow."
According to Grazier, the Pentagon waste needs to be addressed and overhead too. Moreover, he believes there's a need to "reexamine a dependence on contractors that can cost as much as four times more than federal employees. But none of this will happen unless Congress forces these changes, and they can only do that by restraining budgets."
Grazier also said spending big money on some of the programs with a history of problems needs to be looked at more closely, including the F-35 stealth fighter, as well as the Navy's newest class of aircraft carriers, the Ford Class. Then there's the Navy's littoral combat ship program, which the U.S. Government Accountability Office in December concluded "has taken longer, cost more, and delivered less capability than expected."
"None of these systems are performing all that well," he said.
Trump recently visited the USS Gerald R. Ford super-carrier, built by Huntington Ingalls Industries for around $13 billion, or $2.5 billion over budget. The Ford-Class carrier program has a price tag of approximately $40 billion and there have been calls to scale back the program. Some critics suggest even the new carriers are vulnerable at sea.
The president wants to increase the Navy's fleet to 350 ships, up from today's force of 275 deployable battle ships. That will require the investment of nearly $700 billionover 30 years and there's some concern whether the shipyards can meet the goal due to shortages of skilled workers and other obstacles.
Grazier questions the decision by the Navy to use a new electromagnetic launch technology system for aircraft on the Ford-Class carriers instead of sticking with the steam-powered catapult system on the battle-tested Nimitz-Class carriers. Swapping out older systems has resulted in a "very large expense and the system does not work all that well yet," he said.
Meantime, the retired Marine officer also is critical of the F-35, a program projected to cost more than $1 trillion over its life cycle of about 53 years. He said the Pentagon's top weapons tester wrote a report detailing 60 pages of problems with the aircraft but it's essentially been ignored.
Trump has been complained about the cost of the F-35 and suggested the possibility of replacing some of the F-35 purchases with the "comparable F-18 Super Hornet."Lockheed Martin built three variants of the F-35 Joint Strike Fighter, for the Air Force, Navy, and Marines.
The lot 10 deal for the F-35 was announced last month and cut the per-plane price on the F-35A (Air Force variant) to $94.6 million, or a 7.3 percent price reduction from the previous lot 9 terms. That marked the first time the F-35A had been below $100 million.
Even so, Grazier said the F-35 price still remains "vastly more expensive" compared with legacy fighters it is replacing. "We continue to get less bang for more bucks," he said. "Whether it's fighter planes or Navy ships or anything like that, they are always vastly more complicated than the one before. We spend more and more money for these things but we get fewer and fewer of them. So we keep getting these smaller and smaller forces."
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