Chris Hedges's Blog, page 387

The Washington Post All But Invites Venezuela’s Destruction

Tamara Taraciuk Broner of Human Rights Watch (HRW) and Johns Hopkins professor Kathleen Page took to the pages of the Washington Post (11/26/18) to whitewash Donald Trump’s successful efforts to make Venezuela’s economic crisis much worse.  Appropriately enough, at the end of the piece, the Post recommended four other articles (11/23/18, 9/11/18, 6/20/18,8/21/18) that either attacked Venezuela’s government or stayed conspicuously silent about the impact of US economic sanctions.

Propaganda works primarily through repetition. The vilification of Venezuela’s government in the Western media has been relentless for the past 17 years, as Alan MacLeod pointed out in his book Bad News From Venezuela.

NGOs like HRW play an important role in framing the Western imperial agenda from a supposedly “independent” and “humanitarian” perspective, as dramatically illustrated after the death of Sen. John McCain (FAIR.org, 8/31/18) when several HRW officials joined the US media in sanctifying an overtly racist warmonger. In contrast, a few hours after Hugo Chavez’s death in 2013, HRW rushed out a statement vilifying Chavez’s years in office, displaying total indifference to his achievements in reducing poverty and improving health outcomes, despite the violent, scorched-earth tactics of his US-backed opponents to prevent this from happening. No such statement was rushed out by HRW to attack George H.W. Bush—the recently departed butcher of Panama and initiator of the decades-long mass slaughter in Iraq, to mention only a few of his crimes.

HRW has repeatedly invoked the impact of an economic crisis in Venezuela to call for more US-led “pressure” on Venezuela’s government, as was done by Taraciuk and Page. They wrote:

But most sanctions—imposed by the United States, Canada and the European Union—are limited to canceling visas and freezing assets of key officials implicated in abuses and corruption. They have no impact on the Venezuelan economy.

In 2017, the United States also imposed financial sanctions, including a ban on dealings in new stocks and bonds issued by the government and its state oil company. But even these include an exception for transactions to purchase food and medicines. In fact, the government has purchased food from abroad, but these efforts have given rise to corruption allegations.

The idea that “most sanctions” have “no impact on the Venezuelan economy” is appalling nonsense (FAIR.org, 3/22/18).  Trump has extended Obama’s cynically declared  “national emergency” over Venezuela, and escalated by directly threatening holders of Venezuelan government bonds, making it it impossible for Venezuela to “roll over” any bonds governed under US law (i.e., borrow to pay off principal when a bond comes due, as governments usually do). In January, a Torino Capital report on Venezuela’s economy stated that “all foreign-currency bonds are denominated in dollars, and all are governed by New York law.” Trump also prohibited the Venezuelan government–owned CITGO corporation, based in Texas, from sending any profits or dividends back to Venezuela.

The US allies Taraciuk and Page mentioned mainly provide propaganda cover for a US-led assault. Bear in mind that the United States, Canada and other countries within the European Union are supplying weapons and other essential military support to Saudi Arabia, even as it inflicts famine on Yemen. Why do you suppose governments barbaric enough to arm Saudi Arabia also target Venezuela with economic sanctions? Does concern over human rights and corruption, which Taraciuk and Page uncritically cited as a rationale, pass the laugh test?

It should be said that the financial sanctions the US has applied to Venezuela could not even be justified against Saudi Arabia which, unlike Venezuela, really is a dictatorship. In fact, Saudi Arabia is perhaps the most brutal and backward dictatorship on Earth, and one engaged in horrific aggression abroad. What would be justified against Saudi Arabia is cutting off arm sales and all military collaboration. That appears to be a real possibility in the United States at the moment, but recall that support for the Saudis may be funneled through Israel and other allies, as was done decades ago in Guatemala when the atrocities of US clients became overly embarrassing.

Francisco Rodriguez, the Venezuelan chief economist of Torino Capital and a longtime Chávez (and Maduro) government opponent, produced the graph below, which clearly shows the impact of Trump’s financial sanctions on Venezuelan oil production, which Venezuela depends on to get almost all the foreign currency it uses for trade. The piece Rodriguez wrote calling attention to this alarming fact was ignored by the media, according to a Nexis search done two weeks after it first appeared.

Before the financial sanctions introduced by Trump, Venezuela’s oil production followed a similar pattern to Colombia’s: There was a fall in production following a drop in investment, due to the steep and sustained drop in oil prices that began near the end of 2014 and bottomed out in 2016.

However, after Trump imposed financial sanctions in August 2017, Venezuela’s oil production plummeted, while Colombia’s stabilized. The impact of US sanctions therefore became much worse, but also easier to calculate. It works out to $6 billion in lost revenue to Venezuela’s government in the first year after the sanctions alone, even if one assumes that Venezuela’s oil production would have continued to decline along its pre–financial sanctions path. That’s over 600 times more than the emergency aid the UN has just approved for Venezuela.

The “exception for transactions to purchase food and medicines” Taraciuk and Page pointed to in Trump’s financial sanctions is a laughable smokescreen. The sanctions deprive the Venezuelan government of billions of dollars to buy foods and medicine, regardless of whether there are dubious “exemptions” to illegal sanctions.

According to Datanálisis, an opposition-aligned pollster whose directors appear regularly in Venezuela’s private media, more than 60 percent of Venezuelan households received subsidized food and other basic products this year, through a government program known as CLAP (in its Spanish language acronym). Taraciuk and Page mention these “corruption allegations”—like the allegations that the government has used this system to “buy support”—to falsely suggest that what concerns the US and its accomplices are revenues lost to corruption (hardly a problem unique to Venezuela).

On the contrary, the US concern is that Venezuelan government revenues might benefit the public. The worry—apparently shared by apologists like Taraciuk and Page—is that the Maduro government has been able to retain popular support by responding to the economic crisis. Sanctions take direct aim at Venezuela’s population by denying the government the revenues to do that—a depraved objective, but consistent with the behavior of the governments of the United States, Canada, France and UK, which continue to arm Saudi Arabia.

I’ve cited Venezuelan opposition sources above, not because I think they should be assumed the most reliable, but to show how extremist commentary on Venezuela has been in Western media. Even Venezuelan opposition sources are ignored when they can’t be used to support US belligerence.

In recent years, HRW officials have taken to calling Venezuela a dictatorship (CBC, 4/1/17). Pinning this label on Venezuela has been crucial to removing all legal and moral constraints on US policy. Taraciuk and Page refrained from using that label explicitly, but readers were clearly meant to get that idea:

Maduro’s government remains as opaque and repressive as ever. In January, the president called those who spoke out about the crisis “traitors to the fatherland.” His threat should be taken seriously in a country without judicial independence, where critics have been arbitrarily jailed and tortured, and hunger has been used for social and political control.

In fact, basic democratic freedoms in Venezuela remain at a level the US government would never tolerate were it faced with similar circumstances: a major economic crisis deliberately worsened by a foreign power that openly backs the most violent elements of the opposition. Just consider that, in far less dire circumstances, the liberal end of US opinion is either ignoring or viciously applauding the likelihood of Julian Assange being imprisoned in the United States for publishing government secrets.

Aggressive Maduro government critics appear constantly in Venezuela’s private media. Francisco Rodriguez traveled all over Venezuela in May, campaigning for opposition presidential candidate Henri Falcón, whom he advised on economic policy. Rodriguez made numerous appearances in Venezuela’s media during the campaign in which he lashed out at Maduro’s government (examples here, here and here).

Falcón (defying US threats) launched his presidential campaign with a 35-minute speech on Venezuelan state media. In that speech, Falcón repeatedly called Maduro the “hunger candidate,” and said that it is now common to see Venezuelans looking through trash for food. Falcón said democracy has been destroyed, and that all Venezuela’s institutions are “slaves” to the executive, that Maduro’s government has made Venezuela into a “hell,” that Venezuela faces the risk of civil war. Falcon pledged the release of all “political prisoners” and demanded that the election be held at a later date. The election was then moved back a month to May 20.

In an interview on a large private network during the campaign, Falcón said that Maduro’s government was an “unscrupulous monster,” but also “beatable” if voters turned out. Unfortunately for Falcón, much of the opposition leadership not only advocated abstention to discredit the election, but also hurled wild accusations at Falcon, saying he was in cahoots with Maduro.

About 23 minutes into the interview, Falcón advised government opponents that it’s foolish to wait for a “military invasion to save Venezuela.” The contradictions and absurdity of the opposition’s discourse, including the moderate faction, beggar belief. One shudders to think what would become of such opposition figures in Paris or Washington, but you will be shielded from such considerations reading Western media—and from understanding why Maduro easily prevailed in the 2018 election, despite an economic depression. Most importantly, you’ll be prevented from understanding how the Western media’s lies and distortions over the past 17 years have allowed the US to now pose a grave military threat to a democracy.

CBS Blocks $120M Severance Payment to Moonves

NEW YORK — CBS announced Monday that former CEO Les Moonves will not receive his $120 million severance package after the board of directors concluded he violated company policy and was uncooperative with an investigation into sexual misconduct allegations.

The decision, which came after a five-month outside investigation, capped the downfall of one of television’s most influential figures, the biggest entertainment powerbroker to see his career derailed amid the #MeToo movement against sexual misconduct.

A lawyer for Moonves said the board’s conclusion “are without merit” but did not say whether the former CEO would challenge it in arbitration.

Moonves was ousted in September after allegations from women who said he subjected them to mistreatment including forced oral sex, groping and retaliation if they resisted.

“This is an important reminder that harassment happens everywhere, and that in this moment, even someone who has been perceived as untouchable will be held accountable,” said Fatima Goss Graves, a co-founder of the Time’s Up Legal Defense Fund, which provides legal assistance to victims of assault, harassment or abuse. “I hope other corporations are learning that lesson.”

New York-based CBS Corp. said at the time of Moonves’ departure that it had set aside $120 million in severance for him but warned that he would not get the money if the board concluded it had cause to terminate him.

“We have determined that there are grounds to terminate for cause, including his willful and material misfeasance, violation of company policies and breach of his employment contract, as well as his willful failure to cooperate fully with the company’s investigation,” the CBS said in a statement.

The board did not provide details. Earlier this month, The New York Times said a draft report from the outside investigation found that Moonves deleted numerous text messages and was “evasive and untruthful at times.”

Andrew Levander, an attorney for Moonves, said his client “vehemently denies any non-consensual sexual relations and cooperated extensively and fully with investigators.”

“Consistent with the pattern of leaks that have permeated this ‘process,’ the press was informed of these baseless conclusions before Mr. Moonves, further damaging his name, reputation, career and legacy,” Levander said.

Moonves had been widely admired for turning around the fortunes of CBS when he took over as entertainment chief in 1995 with hits as “Two and a Half Men” and “Survivor.” He was also one of the highest-paid executives in the nation, making about $70 million in each of the past two years.

Attorney Gloria Allred, who represents four women who have accused Moonves of misconduct, called on CBS to publicly release the details of the investigators’ findings and compensate those with provable misconduct claims.

“The public has a right to know who at CBS was aware of Mr. Moonves’ alleged misconduct and when they knew of it,” said Allred, whose clients all spoke to the investigators. “Instead of keeping this money and rewarding their corporation for Mr. Moonves’ alleged misconduct, they should share these many millions with those who can prove that they are victims.”

Three major figures at CBS have lost their jobs over misconduct allegations: Moonves, “60 Minutes” top executive Jeff Fager, and news anchor Charlie Rose.

Last week, CBS acknowledged that it reached a $9.5 million confidential settlement last year with actress Eliza Dushku, who said she was written off the show “Bull” in March 2017 after complaining about on-set sexual comments from its star, Michael Weatherly.

The board said the investigation, which was conducted by two outside law firms, “concluded that harassment and retaliation are not pervasive at CBS.”

Still, the board said investigators “learned of past incidents of improper and unprofessional conduct” and that CBS has not placed a “high institutional priority on preventing harassment and retaliation.”

The 11-member board, which includes six new members who came aboard during a shake-up following Moonves’ ouster, said it has “already begun to take robust steps to improve the working environment for all employees.”

In a move criticized by women’s rights activists, CBS had previously said Moonves would stay on as an adviser for up to two years, providing him with office and security services. The board did not say whether that decision remained in effect.

CBS declined to comment beyond its statement.

Last week, the CBS revealed a list of 18 women’s rights organizations that would receive $20 million donations with funds the company had previously said would be deducted from Moonves’ severance.

The groups, which included Time’s Up, praised the donations but called on CBS to publicly disclose the results of the Moonves investigation. It was unclear if CBS would do so.

Some activists involved in the #MeToo movement have praised CBS for hiring outside legal firms to conduct the investigation, a decision that contrasted with NBC’s handling of sexual misconduct allegations against Matt Lauer, who was fired last year as host of the “Today” show host. NBC’s investigation, which was overseen by the company’s general counsel, concluded that there was no culture of harassment at the news division.

A search for a new CEO is ongoing to replace interim CEO Joe Ianniello. Strauss Zelnick, filling Moonves’ role as board chairman on an interim basis, said at a shareholders’ meeting last week that a recruiting firm has been hired to conduct the search and that a decision will be made in due course.

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Associated Press Technology Writer Mae Anderson contributed to this report.

Yemen Remains on the Verge of a Large-Scale Famine

On December 14, Martin Griffiths—the UN Special Envoy for Yemen—briefed the UN Security Council about the talks that had just concluded in Sweden the previous day. Griffiths, sitting before a large UN logo from Jordan, spoke by video to a Council that had not been able to move an effective agenda to end the brutal war on this impoverished country.

Griffiths, who worked on each failed UN effort on Syria over the past decade, had been appointed to this post only in February, just after Mauritania’s Ismail Ould Cheikh Ahmed opted out of the impossible job that he had held from April 2015 to February 2018. No amount of talk had been able to bring the parties together. No amount of dialogue had convinced Saudi Arabia and the United Arab Emirates to stop the harsh bombardment of the country. And, no amount of pressure had moved the United States and the United Kingdom to stop providing logistical and military assistance to the Saudis and the Emiratis.

There was no real agreement in Sweden. Inside Yemen, there is bewilderment about what is going on. Haykal Bafana, a lawyer who lives in Sanaa—Yemen’s capital—told me, “It remains unclear to me what the actual terms of the ceasefire agreement are, or even whether an agreement was mutually agreed.” Griffiths told the Security Council much the same, but with language that indicated hope. The agreement does not end the fighting, he said. It is a “humanitarian stopgap to save lives and turn the tide of war towards peace.” One piece of evidence for the “humanitarian stopgap” is that all sides agree to allow humanitarian aid through Yemen’s lifeline—the Hudaydah port. “The ghastly prospect of famine,” Griffiths said, “has made solving Hudaydah urgent and necessary.”

Ghastly Prospect of Famine

The idea of Yemen as a “terrible tragedy” was expanded upon for the members of the Security Council by Mark Lowcock, who runs humanitarian affairs for the United Nations. A new study shows the “terrible tragedy” in its full scale: 67 percent of Yemen’s population needs “urgent action to save lives and livelihoods.” That means that 20 million Yemenis are vulnerable to death. A quarter of a million of these Yemenis are “on the brink of starvation.”

The study points out that “armed conflict remains the main driver of food insecurity in Yemen.” That’s an obvious point, but it needs to be made. The war on Yemen has to end to prevent the near-death of the Yemeni people.

The deal in Sweden was signed on Friday. By Saturday night and into Sunday, the crucial port of Hudaydah was hit by airstrikes by Saudi and Emirati jets. Gunfire ran across the city. Not even 24 hours would go by to preserve the peace. A senior UN official told me that such accords do not come into place immediately. They take time to settle in. The official date for the start of the ceasefire is Tuesday—December 18. But Yemen does not have the time. Near-famine is as bad as famine. Annihilation of Yemen remains in the cards.

Hisham al-Omeisy, the prominent Yemen-based political analyst, told me that both Saudi Arabia and the UAE “are trigger-happy at this point, but neither wants to be blamed for foiling agreements that came through immense international pressure.” There is a massive “global wave of public discontent,” al-Omeisy said. “Hudaydah will be the real litmus test for success of the process.”

United States Senate Weighs In

The day before the talks in Sweden ended, the United States Senate voted to end U.S. assistance to Saudi Arabia and its allies (including the United Arab Emirates) in their war on Yemen. The bill was sponsored by Bernie Sanders, the socialist from Vermont. Thanks to pressure from the U.S. peace movement—including Code Pink—and the Yemeni diaspora—such as Professor Shireen Al-Adeimi—56 senators agreed that the United States must not support this war. This is a very important statement to the capitals in the Gulf. It is to be seen if the United Kingdom will also make such a statement.

But—and there is always a but involved here—how will the U.S. specifically make sure its vast military assistance to Saudi Arabia is not diverted to the war on Yemen? Between 2013 and 2017, Saudi Arabia bought $9 billion worth of U.S. weapons—substantial parts of it now used in Yemen.

Further, journalist Samuel Oakford has documented the ways in which the U.S. has—in relatively anonymous ways—supported the war effort. Recently, Oakford and Ryan Goodman (a lawyer formerly for the U.S. Defense Department) found that the Saudis and the Emiratis owed the United States $331 million for refueling services toward their war on Yemen. Many more such services are doubtless buried.

The U.S. Senate vote sends a strong message, but whether it will have an impact on the entanglements between the U.S. armed forces and those of the Saudis is to be seen. It will require considerable vigilance by the U.S. Senate to make sure that collaboration is not ongoing. No such appetite is available in the Trump administration, which is eager to continue to support the Saudi regime regardless of war crimes and crimes against humanity.

Peacekeepers

As part of the UN process, Griffiths announced to the Security Council that a team of UN peacekeepers will arrive in Yemen this week. They will be led by the retired Dutch Major General Patrick Cammaert, a man who has been on several UN missions previously.

Recently, Cammaert led the team to investigate the failure of a UN peacekeeping force to protect civilians in South Sudan. Cammaert’s report criticized the mission for its “chaotic and ineffective response” during fighting in Juba, South Sudan, in July 2016. Based on the report, the UN Secretary General fired the commander of the force.

When women were assaulted in plain sight in front of the UN troops, they did nothing to intervene. Cammaert’s report whitewashed this aspect of the investigation. He is, as people in the UN say, fiercely loyal to the UN and to UN peacekeeping in particular. It is hoped that his loyalty to the institution does not blind the new mission from its broader goal—to make sure that the deal on Hudaydah holds.

Haykal Bafana worries about the entry of the UN peacekeeping force. “Composed of foreign troops,” he told me, the force “will be a dangerous new dynamic that may just start a completely new war in Yemen.” There are so many guns in Yemen, so much more mayhem possible.

Complications

Saudi Arabia and the UAE still have a lot of money. They have used this money liberally through the UN system—helping fund this relief operation and that. Even now, the UN Envoy Griffiths had to thank Saudi Arabia and the UAE—bizarrely—for their injections of foreign currency to stabilize Yemen’s rial and their funds toward relief for Yemen. In March, the Saudis and Emiratis gave nearly US$1 billion to the UN, with the architect of the Saudi-Emirati war—Crown Prince Mohammed bin Salman—standing with UN Secretary General Antonio Guterres in Geneva, smiling as the check was handed over.

The Saudis and the Emiratis bomb Yemen and then they help to fund the relief.

There is very little room for maneuver in the UN system to be critical of Saudi Arabia and the UAE.

China and Yemen

China has long said that it wants the war to end. The war has interrupted China’s ambitions to move the One Belt, One Road project into the Gulf, with Yemen’s Bab el-Mandeb Strait as a central avenue for the movement of Chinese goods and Gulf oil. China oscillates in its views on the conflict—on the one side taking positions on the war and on the other saying that it merely wants stability in Yemen. Early in the war, for instance, China pressured Pakistan not to send troops into Yemen to fight for the Saudis. Then later, China appeared to back the Saudis’ proxy, former Yemeni president Abdrabbuh Mansur Hadi. China has called for a “Yemen-led, Yemen-owned” peace deal. The agreement in Sweden is the start of such a process, say Chinese officials.

China’s Permanent Representative to the UN, Ma Zhaoxu, said that the ceasefire must hold, and that Yemen must be prevented from further collapse. A decade ago, the Chinese tried not to involve themselves in the political entanglements of such crises. Even peacekeeping does not go well. There were Chinese peacekeepers in Juba, when the UN did not act to protect civilians.

Now, China is much more eager to assert itself across West Asia—even in Yemen. In Beijing, officials do not say more than that they will do all they can to help protect the future of Yemen. China’s foreign ministry spokesperson Lu Kang said, “We are willing to continue to play a constructive role to resolve the Yemen issue.” Whether China can use its considerable influence in Saudi Arabia to bring this war to a conclusion is to be seen. Certainly, the Chinese—unlike the United States—have far more reason to see the war end. They are not beholden to the Israelis or paranoid about Iran. The Chinese view is simple: war is bad for business, and life. That much is true.

This article was produced by Globetrotter , a project of the Independent Media Institute.

Flynn’s Ex-Business Associates Charged with Illegal Lobbying

ALEXANDRIA, Va.—Two business associates of Michael Flynn, President Donald Trump’s former national security adviser, were charged Monday with illegally lobbying for Turkey as part of a campaign to pressure the United States to expel a Turkish cleric.

Bijan Kian and Ekim Alptekin are accused in an indictment of conspiring to “covertly and unlawfully” influence U.S. public opinion and politicians, all while concealing that the Turkish government was directing their work. The campaign came during the final months of the 2016 presidential campaign while Flynn was a top surrogate for Trump’s campaign.

The case sheds further light on how Flynn and those around him worked to benefit a foreign country in the months before he became one of America’s top national security officials. The goal of the work was to get the United States to expel Turkish cleric Fethullah Gulen from the country.

Gulen, who holds a U.S. green card and lives in Pennsylvania, is a rival of Turkish President Recep Tayyip Erdogan, who has accused the cleric of directing a failed coup and who wanted the U.S. to extradite him back to Turkey. Gulen has denied any involvement in the coup.

Though Flynn and his company feature prominently in the latest indictment, he is not charged with any new crimes. A retired three-star U.S. Army general, Flynn is to be sentenced Tuesday in a separate case brought by special counsel Robert Mueller, who is investigating Russian interference in the 2016 election. Flynn has pleaded guilty to lying about his Russian contacts.

As part of his cooperation in that probe, he has provided prosecutors with voluminous records from his business, Flynn Intel Group, which carried out the lobbying work. Flynn and Kian were co-founders of the firm.

On Monday, Kian, a former Trump transition official whose full name is Bijan Rafiekian, made a brief appearance in federal court in Alexandria, Virginia. He has an arraignment scheduled for Tuesday. His lawyer, Robert Trout, declined to comment.

Alptekin, a dual Turkish-Dutch citizen living in Istanbul whose full name is Kamil Ekim Alpetekin, remains at large. He has previously denied any wrongdoing and said he directed the lobbying on his own.

“Ekim maintains that the government of Turkey was not a participant in any of the work that he did with the Flynn Intel Group. He has not changed his story, and he does not plan to,” said Molly Toomey, a spokeswoman for Alptekin.

Both men are charged with conspiracy and acting as an unregistered agent of a foreign government. Alptekin is also charged with lying during an interview with the FBI.

The indictment brought by federal prosecutors in Virginia accuses the two men of using Alptekin’s company as a cutout to disguise the Turkish government’s involvement. Prosecutors say that Turkish officials approved the budget for the $600,000 lobbying contract and received regular progress reports.

The indictment does not say Turkey’s government directly funded the effort, but it raises questions about an unusual payment arrangement revealed last year.

According to the indictment, Alptekin paid Flynn’s firm through wire transfers from a Turkish bank account in his name. But prosecutors say he also received portions of the money as “kickbacks” arranged by Kian. Flynn’s company was ultimately paid $530,000. Alptekin has said the payments were refunds for unfulfilled work.

The indictment also provides the backstory behind a Nov. 8, 2016, op-ed Flynn published in The Hill newspaper titled “Our Ally Turkey Is in Crisis and Needs Our Support,” which compares Gulen to Iran’s Ayatollah Khomeini. The indictment notes that Flynn’s column uses identical or very similar language to that prepared by Kian in a draft op-ed.

“We all remember another quiet, bearded elder cleric who sat under an apple tree … in the suburbs of Paris in 1978,” Flynn wrote in the op-ed, mimicking language provided to him by Kian. “He claimed to be a man of God who wanted to be a dictator.”

Several days before the column was published, Kian crowed to Alptekin in an email about the advantageous timing of the pending op-ed piece coinciding with Election Day. “The arrow has left the bow!”

Alptekin, who had complained a week earlier that the Flynn Group had not done enough work to honor the contract, responded that Kian’s op-ed was “right on target.”

But by the end of November that year, the op-ed caught the Justice Department’s attention , and that scrutiny ultimately led to Monday’s indictment.

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Day reported from Washington. Associated Press writers Eric Tucker and Michael Balsamo contributed to this report.

Dow Jones Industrials Take Second Straight 2 Percent Plunge

NEW YORK—Another day of big losses knocked U.S. stocks to their lowest levels in more than a year Monday.

Selling was widespread. Investors dumped high-growth technology and retail companies as well as steadier, high-dividend companies. Hospitals and health insurers slumped after a federal judge in Texas ruled that the 2010 Affordable Care Act is unconstitutional.

The Dow Jones Industrial Average fell 507 points after a 496-point drop Friday, and all the major stock indexes fell at least 2 percent. Oil closed below $50 a barrel for the first time since October 2017. Bonds rose and their yields fell.

Mark Hackett, chief of investment research at Nationwide Investment Management, attributed Monday’s action in stocks to investor concerns about the slowing global economy. But he felt it was overdone. “That is basically retail investors panicking,” he said. “Investors basically are confusing the idea of a slowdown with a recession.”

Investors sold almost everything. Less than 40 of the 500 stocks comprising the S&P 500 finished the day higher. Amazon led a rout among retailers and tech companies including Microsoft turned sharply lower. Some of the largest losses went to utilities and real estate companies, which have done better than the rest of the market during the turbulence of the last three months.

The S&P 500 index, the benchmark for many investors and funds, finished at its lowest level since Oct. 9, 2017. It has fallen 13.1 percent since its last record close on Sept. 20. The Russell 2000, an index of smaller companies, has dropped more than 20 percent since the end of August, meaning that index is now in what Wall Street calls a “bear market.”

Germany’s main stock index also fell into a bear market Monday as companies like Siemens and SAP kept falling.

Smaller U.S. stocks have taken dramatic losses as investors have lost confidence in the U.S. economy’s growth prospects. Smaller companies are considered more vulnerable in a downturn than larger companies because they are more dependent on economic growth and tend to have higher levels of debt.

Hackett said the current drop is similar to the market’s big plunge in late 2015 and early 2016, which was also tied to fears that the global economy was weakening in a hurry. But even though the economy is slowing down after its surge in 2017 and 2018, it should continue to do fairly well.

“It’s a slowdown from extremely high levels to healthy levels,” he said. “The globe isn’t going into a recession.”

The S&P 500 skidded 54.01 points, or 2.1 percent, at 2,545.94. The Dow Jones Industrial Average lost 507.53 points, or 2.1 percent, to 23,592.98. The Nasdaq composite fell 156.93 points, or 2.3 percent, to 6,753.73. The Russell 2000 index dipped 32.97 points, or 2.3 percent, to 1,378.14.

Following the health care ruling, hospital operator HCA dropped 2.8 percent to $123.1 and health insurer UnitedHealth lost 2.6 percent to $258.07. Centene, a health insurer that focuses on Medicaid and the Affordable Care Act’s individual health insurance exchanges, fell 4.8 percent to $121.42 and Molina skidded 8.9 percent to $120.

Many experts expect the ruling will be overturned, but with the markets suffering steep declines in recent months, investors didn’t appear willing to wait and see.

Benchmark U.S. crude fell 2.6 percent to $49.88 a barrel in New York. Brent crude, used to price international oils, dipped 1.1 percent to $59.61 a barrel in London. Weaker economic growth would mean less demand for oil, and traders have been concerned there is too much crude supply on the market. That’s chopped oil prices by one-third since early October.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86 percent from 2.89 percent.

The Federal Reserve is expected to raise interest rates again Wednesday, the fourth increase of this year. It’s been raising rates over the last three years, and investors will want to know if the Fed is scaling back its plans for further increases based on the turmoil in the stock market over the last few months and mounting evidence that world economic growth is slowing down.

Hackett, of Nationwide, said investors will be happy if the Fed adjusts its plans and projects fewer increases in interest rates next year. But he said investors might be startled if the Fed decides to not raise rates this week.

British Prime Minister Theresa May said Parliament will vote Jan. 14 on her deal setting terms for Britain’s departure from the European Union. She canceled a vote on the deal last week because it was clear legislators were going to reject it. May insists she can save the deal, but pressure is mounting for either a vote by lawmakers or a new referendum on the issue.

Britain is scheduled to leave the EU in late March, and if it does so without a deal in place governing its trade and economic relationships with the bloc, it could bring huge disruptions to the British and European economies and financial markets.

Germany’s DAX lost 0.9 percent. That means the DAX, which represents Europe’s largest single economy, is also in a bear market. France’s CAC 40 and Britain’s FTSE 100 both fell 1.1 percent.

Japan’s Nikkei 225 index added 0.6 percent and the Kospi in South Korea gained 0.1 percent. Hong Kong’s Hang Seng was less than 0.1 percent lower. Both the Kospi and Hang Seng are in bear markets as well.

In other energy trading, wholesale gasoline shed 1.7 percent to $1.41 a gallon and heating oil slid 1 percent to $1.83 a gallon. Natural gas dropped 7.8 percent to $3.53 per 1,000 cubic feet.

Gold rose 0.8 percent to $1,251.80 an ounce. Silver added 0.8 percent to $14.76 an ounce. Copper dipped 0.3 percent to $2.75 a pound.

The dollar slipped to 112.75 yen from 113.29 yen. The euro rose to $1.1350 from $1.1303. The British pound rose to $1.2629 from $1.2579.

Poll: Republicans Scarce Among Those Who Want Action on Climate Change

“Climate change is the defining issue of our time,” U.N. Secretary-General Antonio Guterres declared in September. In October, a report from the Intergovernmental Panel on Climate Change, a U.N.-convened group, described “a world of worsening food shortages and wildfires, and a mass die-off of coral reefs as soon as 2040,” according to The New York Times. And in a new NBC/Wall Street Journal poll, Americans are beginning to heed these warnings, with 66 percent of respondents saying there is enough evidence to convince them that action is needed, up from 51 percent in 1998. Forty-five percent of them believe that action should taken immediately.

Among the 66 percent of concerned respondents are Democrats and independents. Notably missing in the growing consensus on climate change are significant numbers of Republicans.

As CNBC reports, “A 56 percent majority of the GOP says either that concern about climate change is unwarranted or that more research is necessary before taking action.” Only 15 percent of Republicans believe immediate action is needed, the same percentage of Republicans, the Journal points out, “who supported immediate action nearly 20 years ago, in a 1999 survey.”

These results, according to CNBC, show “how deeply the Republican rank and file has absorbed the messages from GOP leaders and media outlets that fears about the issue have been either exaggerated or fabricated outright.”

Since taking office, President Trump has pulled out of the 2015 Paris Climate Accord, which seeks to keep earth’s temperature from rising by 2 degrees Celsius (3.6 F) by the end of the century. He has called climate change a hoax and said that the costs of addressing the issue outweigh any environmental benefits. Poll respondents disagree on this point, with 52 percent saying that damage from such change-fueled weather events as hurricanes and floods will cost more than not doing anything at all.

Whether Americans’ belief that climate change is real and dangerous will lead to either individual behavioral changes or collective political action remains to be seen. As David Wallace-Wells wrote Friday in New York Magazine, “[E]ven in the moment of acknowledged environmental crisis, a sort of climate NIMBYism prevails.”

Wallace-Wells cites how, just weeks after the U.N. climate report was released, “[V]oters in deep-blue Washington rejected a modest carbon tax and those in crunchy Colorado rejected a slowdown of oil and gas projects.” Such inaction is international, he notes: “In France—conservative America’s cartoon of unchecked left-wing-ism—the worst protests in 50 years were provoked by a proposal to increase the gasoline tax.”

On the other hand, newly elected progressive Democrats are developing a “Green New Deal”—a series of proposals designed to reduce America’s dependence on fossil fuels. The plan may not have great name recognition yet, but according to survey results from the Yale Program on Climate Change Communication (via HuffPost), its individual policies, including increasing the use of renewable energy, upgrading the power grid and providing job training, have bipartisan support.

Read the results of the WSJ/NBC poll here.

U.K.’s May Says Postponed Brexit Vote to Be Held in Mid-January

LONDON — Prime Minister Theresa May said Monday that the postponed vote in Parliament on Britain’s Brexit agreement with the European Union will be held the week of Jan. 14 — more than a month after it was originally scheduled and just 10 weeks before Britain leaves the EU.

But even as May insisted she could salvage her unpopular divorce deal, pressure was mounting for dramatic action — a new referendum or a vote among lawmakers — to find a way out of Britain’s Brexit impasse and prevent the economic damage of a messy exit from the EU on March 29 with no agreement in place.

The British government and the EU sealed a divorce deal last month, but May postponed a parliamentary vote intended to ratify the agreement last week when it became clear legislators would overwhelmingly reject it.

She tried to win changes from the EU to sweeten the deal for reluctant lawmakers, but was rebuffed by the bloc at a summit in Brussels last week. May’s authority also has been shaken after a no-confidence vote from her own party on Wednesday that saw more than a third of Conservative lawmakers vote against her.

May told lawmakers in the House of Commons on Monday that they would resume debate on the deal when Parliament comes back after its Christmas break the week of Jan. 7, with the vote held the following week.

“I know this is not everyone’s perfect deal,” May said. “It is a compromise. But if we let the perfect be the enemy of the good then we risk leaving the EU with no deal.”

Opposition legislators — and many from May’s Conservative Party — remain opposed to the deal, and accused May of deliberately wasting time by delaying the vote for several more weeks.

“The prime minister has cynically run down the clock trying to maneuver Parliament into a choice between two unacceptable outcomes: her deal and no deal,” Labour Party leader Jeremy Corbyn said.

A growing number of politicians from across the political spectrum believe a new referendum may be the only way to break the political logjam over Brexit.

But May told lawmakers that staging another referendum would ride roughshod over voters’ 2016 decision to leave the EU and “would say to millions who trusted in democracy that our democracy does not deliver.”

May’s deal is loathed both by pro-Brexit lawmakers, who think it keeps Britain bound too closely to the bloc, and pro-Europeans, who see it as inferior to staying in the EU.

The main concern for pro-Brexit lawmakers is a contentious insurance policy known as the “backstop,” which would keep the U.K. tied to EU customs rules in order to guarantee the border between Ireland and Northern Ireland remains open after Brexit.

EU officials insisted at last week’s summit that the withdrawal agreement cannot be renegotiated, although they also stressed that the backstop was meant only as a temporary measure of last resort.

May said she had had “robust” exchanges with other EU leaders in Brussels, but that the two sides were still holding talks about “further political and legal assurances” about the backstop.

European Commission chief spokesman Margaritis Schinas, however, said Monday that “at this stage, no further meetings with the United Kingdom are foreseen.”

With Britain’s departure from the bloc just three months away, it remains unclear whether the country will leave with a deal or crash out with no deal— a chaotic outcome that could see economic recession, gridlock at U.K. ports, planes grounded and shortages of essential goods.

The Cabinet will discuss “no-deal” planning at its weekly meeting on Tuesday, with details to be announced soon of 2 billion pounds ($2.5 billion) in government funding to absorb some of the potential economic shock.

Pro-EU Cabinet ministers, meanwhile, are seeking to work with opposition politicians to find a way out of the morass.

One suggestion is to give members of Parliament votes on a range of options — from leaving without a deal to holding a new referendum — to see if there is majority support for any course of action.

May’s spokesman, James Slack, said Monday that the government had “no plans” to hold such an indicative vote. But the idea has support in Cabinet.

“We can’t just have continuing uncertainty and I think Parliament should be invited to say what it would agree with,” Business Secretary Greg Clark told the BBC.

He said that “I think businesses up and down the country would expect elected members to take responsibility, rather than just be critics.”

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Follow AP’s full coverage of Brexit at: https://www.apnews.com/Brexit

At Least 60 Dead in U.S. Airstrikes on Somalia

NAIROBI, Kenya—Six U.S. airstrikes that killed more than 60 people in a coastal Somali town were pre-emptive strikes to prevent a major extremist attack, according to a Somali intelligence officer.

The U.S. military said Monday it carried out four strikes on Dec. 15 in which 34 people were killed and two more on Dec. 16 which killed 28. The air attacks targeted Gandarshe, south of the capital, Mogadishu, it said.

No civilians were injured or killed in the attacks, it said.

The strikes were carried out in close coordination with Somalia’s government and were “conducted to prevent al-Shabab from using remote areas as a safe haven to plot, direct, inspire, and recruit for future attacks,” said the U.S. military statement.

The U.S. airstrikes were aimed at al-Shabab fighters who were preparing a major attack on a Somali government military base in the Lower Shabelle region, said a Somali intelligence official, who insisted on anonymity because he was not authorized to speak to the press.

“The strike has neutralized an imminent attack,” he said. The airstrikes hit both a military camp and battle vehicles in Gandarshe, the official told The Associated Press.

Al-Shabab has long used historic Gandarshe town, roughly 48 kilometers (30 miles) southwest of Mogadishu, as a launching pad from for attacks, including car bombs that hit the capital.

Al-Shabab uses parts of southern and central Somalia to plot and direct extremist attacks, steal humanitarian aid, extort the local populace to fund its operations, and shelter radicals, said U.S. military statement.

With these attacks, the U.S. military has carried out at least 46 airstrikes so far this year against al-Shabab, which is allied to al-Qaida and Africa’s most active Islamic extremist group. Al Shabab, which is fighting to establish its version of Shariah law in Somalia, controls parts of rural southern and central Somalia and continues to stage deadly attacks in Mogadishu and other cities.

The U.S. airstrikes have picked up dramatically since President Donald Trump took office and approved expanded military operations in the Horn of Africa nation. Airstrikes also target a small presence of fighters linked to the Islamic State group. The U.S. has about 500 military personnel in Somalia and earlier this month opened a permanent diplomatic presence in Mogadishu.

Several years ago, al-Shabab controlled large swathes of Somalia, including much of the capital city. The African Union forces succeeded in pushing the extremists from Mogadishu and most other major cities. However, al-Shabab continues to be active in Somalia’s rural areas and launches suicide car bomb attacks in the capital. In October last year, a massive truck bomb killed more than 500 people.

Malaysia Files Criminal Charges Against Goldman Sachs

KUALA LUMPUR, Malaysia — Malaysia filed criminal charges against Goldman Sachs and two former executives on Monday for their role in the alleged multibillion-dollar ransacking of state investment fund 1MDB.

Attorney General Tommy Thomas said the government is seeking several billion dollars in fines from Goldman Sachs for breaches of securities laws that involved it making false and misleading statements to investors.

He said his office will seek prison sentences of up to 10 years for the former Goldman executives, Roger Ng Chong Hwa and Tim Leissner, who is married to model Kimora Lee Simmons.

Malaysian and U.S. prosecutors allege that bond sales organized by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.

The scandal, first reported by Sarawak Report and the Wall Street Journal, resulted in Najib and his ruling coalition losing power in a historic election defeat earlier this year.

Najib himself is facing corruption charges. He has said that more than $700 million that moved through his bank account was a political donation from the Saudi royal family, but U.S. prosecutors say it came from 1MDB, of which Najib was the top official.

U.S. legal filings that are part of a Justice Department civil case to recover assets bought with 1MDB funds allege the money was used to finance Hollywood films and spent on luxuries such as diamond jewelry for Najib’s wife, a yacht, artworks and high-end properties.

Goldman Sachs denied any wrongdoing in response to Malaysia’s criminal charges.

“We believe these charges are misdirected and we will vigorously defend them and look forward to the opportunity to present our case,” bank spokesman Edward Naylor said in a statement. “The firm continues to cooperate with all authorities investigating these matters.”

Thomas, the Malaysian attorney general, said $2.7 billion was stolen from three bond sales organized by subsidiaries of Goldman Sachs. The investment bank, he said, received $600 million in fees for organizing the bond deals, which was several times higher than industry norms.

Leissner and Ng conspired with Najib associate Low Taek Jho, a key architect of the entire 1MDB fraud, to bribe Malaysian government officials to use Goldman Sachs as the arranger of the bond deals, according to Thomas. They and Goldman Sachs knew that the money would be stolen, he said.

“Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs,” the attorney general’s statement said. “They have fallen far short of any standard. In consequence, they have to be held accountable.”

Prosecutors plan to seek fines “well in excess” of the amount allegedly stolen because of the severity of the violations of Malaysia’s laws, Thomas said.

Leissner, who headed Goldman’s operations in Southeast Asia, pleaded guilty in the U.S. last month to money laundering conspiracy and conspiring to violate foreign bribery laws after the Justice Department charged him, Ng and Low in relation to the 1MDB scandal.

Ng was arrested in Malaysia in early November and Low, also known as Jho Low, remains at large. He has previously maintained his innocence in statements via a lawyer.

“As has been stated previously, Mr. Low will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process,” a spokesperson for Low said in a statement on Monday. “It is clear that Mr. Low cannot get a fair trial in Malaysia, where the regime has proven numerous times that they have no interest in the rule of law.”

Malaysian police said in July that Low had fled Macau to an unknown destination.

Before facing criminal charges, Low became well known in the New York City and Los Angeles club scenes. In 2012, he threw a lavish 31st birthday bash attended by Leonardo DiCaprio, Kim Kardashian and other celebrities.

The Trump Administration’s Approach to the Environment Is Immoral

A new report by the Union of Concerned Scientists accuses Trump’s Interior Department of “relentless attacks on science ranging from suppressing and sidelining the work of the department’s scientists to systematically refusing to act on climate change.”

To put it mildly, this is concerning.

The Union of Concerned Scientists is an advocacy group whose words are chosen to advance their viewpoint. They refer often to “science,” which we assume to be non ideological, universal, and true. In this sense, science is the highest guiding principle that all should follow, as it is in the best interest of our nation and planet.

In practice, the power dynamics and other social divisions within our society don’t go away when one does “science.”

Yale sociologist Justin Farrell points out that disputes over the management of nature can be more moral than scientific in nature. Science can tell us how many wolves or grizzly bears live in Wyoming, or how much habitat and genetic diversity they need to survive as a species. But the belief that humans should manage nature to preserve intact ecosystems is a moral one.

Economics and politics matter too, as we determine whose interests and opinions matter most.

What’s it worth to us to protect Bears Ears National Monument, which encompasses land sacred to Native Americans? To Native Americans and those who support them, the land is priceless. The mining industries can put a specific price tag on the minerals in the ground.

Whether it’s worth banning mining on land that is beautiful, ecologically valuable, and sacred to Native Americans is a moral question, not a scientific one.

That said, science is needed to help us make sound decisions that compromise between groups with competing values and interests. The government needs to produce, believe, and disseminate science that will allow it to act in the best interests of the American people, and to help the people hold the government accountable.

The Trump administration clearly isn’t doing that.

According to the LA Times, “Interior isn’t the only science agency that has been turned into a billboard for political and ideological propaganda. The Environmental Protection Agency has been similarly hollowed out, and the Department of Health and Human Services has all but abandoned its duty to advance Americans’ access to affordable healthcare.”

There’s another reason why we need solid science within the government: to enable the government to follow its own laws.

Trump’s administration is taking a see no evil, hear no evil approach. Without information about how a mining project might impact an endangered species, or human health, or water quality, they’re going to end up enabling projects that violate existing laws. Which is probably the point.

It’s understandable that some people disagree with our laws or don’t wish to follow them. However, we have a democratic process for changing those laws. When it comes to public safety regulations, industries and politicians have no business going around voters by suppressing the science needed to uphold the laws that protect them.