Atlantic Monthly Contributors's Blog, page 195

April 7, 2016

Why Bernie Sanders Says Clinton Isn't 'Qualified' to Be President

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New Yorkers are a blunt and confrontational bunch, so it’s only appropriate that as the presidential campaign heads to the Empire State—birthplace of Bernie Sanders and adopted home of Hillary Clinton—ahead of the April 19 primary, the Democratic race is getting a little chippy.



Speaking in Philadelphia on Wednesday, Sanders unloaded on Clinton, arguing she is unqualified to be president (and then sending out the remarks to reporters in a press release):




I don’t believe that she is qualified if she is through her super PAC taking tens of millions of dollars in special-interest funds.



I don’t think that you are qualified if you get $15 million from Wall Street through your super PAC.



I don’t think you are qualified if you voted for the disastrous war in Iraq.



I don’t think you’re qualified if you supported almost every disastrous trade agreement.



I don’t think you are qualified if you supported the Panama free trade agreement, something I very strongly opposed, which has gave the green light to wealthy people and corporations all over the world to avoid paying taxes owed to their countries.




The first thing to say about these remarks is that the escalation is almost entirely semantic, rather than material. All of the attacks that Sanders leveled here—Clinton’s support for free trade, backing for the war in Iraq, and coziness with Wall Street, and dependence on big donors—are things he’s talked about for months now.



Sanders cast his remarks as simple turnabout. “Secretary Clinton appears to be getting a little nervous,” he said. “She has been saying lately that I am not qualified to be president.”



The Vermonter appears to be referring to an interview Clinton did with MSNBC’s Morning Joe, in which she criticized Sanders for his vague answers in a meeting with the New York Daily News editorial board. The Clinton campaign has leapt on that interview with the News, even sending out the full transcript as a fundraising email. (Sanders’s defenders continue to insist, contra the transcript, that he was crystal clear.) In the TV interview, Joe Scarborough tried three times to get Clinton to say that she didn’t think Sanders was qualified.



Here’s her first answer:




I think the interview raised a lot of really serious questions. I look at this way: The core of his campaign has been ‘break up the banks,’ and it didn’t seem in reading his answers that he understood exactly how that would work under Dodd-Frank…




Her second:




I think he hadn’t done his homework, and he’d been talking for more than a year about doing things he obviously hadn’t really studied understood. That does raise a lot of questions.




And her third:




I think that what he has been saying about the core issue in his whole campaign doesn’t seem to be rooted in an understanding of either the law or the practical ways you get something done. And I will leave it to voters to decide who of us can do the job that the country needs, who can do all aspects of the job.




It’s classic Clinton: She’s cautious, careful, and stays on message. And the “qualified” broadside is classic Sanders too. He’s angry, and he’s not afraid to show that. This directness—and its contrast with the impression that Clinton is calculating—is one of the forces that has powered Sanders’s campaign.



He may have overdone it in this case. There’s a certain logic to attacking Clinton’s qualifications, since her campaign is built not on charismatic appeal so much as her experience and resume: Attack the strengths, not the weaknesses. But this sort of attack will only motivate and energize her own voters, who won’t hear it as a commentary on Iraq so much as a personal slam. Besides, Sanders has said in the past that he would support Clinton if she were the nominee, a stance his campaign manager affirmed Thursday. Clinton, meanwhile, seemed delighted to be able to take the high road. “I don't know why he's saying that but I will take Bernie Sanders over Ted Cruz or Donald Trump any time,” she said Thursday morning.  (Of course, she also happily turned his remarks into a fundraising plea.)



ABC’s Rick Klein argues that “qualified” is a Rubicon—it’s pretty hard to go back and endorse someone you’ve said is unqualified. Maybe, though candidates have walked back stronger statements, and they’ll continue to do so. Sanders’s campaign seems to already be backing off his comments. Even if he walks them back, you can be assured they’ll return in the general election if Clinton is the Democratic nominee.



Regardless, some perspective on the “qualified” fight is in order. Remember the 2008 Democratic primary? Remember “You’re likable enough, Hillary”? Remember the 3 a.m. phone call? Remember Clinton defending her decision to stay in the race into June by citing Robert Kennedy’s assassination? And those are just the public comments. The acrimony inside the the Clinton camp was much worse. One reason this brouhaha is getting so much attention is that the Democratic campaign has been a much friendlier affair in 2016.




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Published on April 07, 2016 07:36

Belgian Police Release Footage of Third Attacker

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Belgian federal police have released new video footage of the third man who attacked Brussels airport last month, along with the route he took after leaving the area.




Have you seen the 3rd attacker of Brussels Airport during his escape? https://t.co/XbIevWS1qB #brusselsattack pic.twitter.com/d9pWM7mzdc


— Police Fédérale (@PolFed_presse) April 7, 2016



The March 22 attacks on Brussels airport and the city’s subway system killed 32 people and three of the attackers. At least one attacker—the unidentified man at the airport—is still at large. The carnage raised questions about security in Belgium, home to many of the ISIS militants who staged the Paris attacks last year and last month’s Brussels attacks, as well.  


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Published on April 07, 2016 06:15

Putin Dismisses Panama Papers Claims

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President Vladimir Putin, in his first public comments on the allegations, described revelations his associates laundered money through shell accounts as an attempt to destabilize Russia.



, close associates of Putin along with Bank Rossiya, a Russian bank that has been blacklisted by the U.S. and the EU, laundered hundreds of millions of dollars, according to the Panama Papers. The International Consortium of Investigative Journalists, which has access to the documents from Mossack Fonseca, alleged that Sergey Roldugin, a close friend of Putin, is listed as the owner of offshore companies that have obtained payments from other companies worth tens of millions of dollars. More on the ICIJ’s allegations:




It’s possible Roldugin, who has publicly claimed not to be a businessman, is not the true beneficiary of these riches. Instead, the evidence in the files suggests Roldugin is acting as a front man for a network of Putin loyalists—and perhaps for Putin himself.






The Russian president is never named in the files. Not all the actions described in the Panama Papers, and attributed to other prominent figures, are illegal. Indeed, as Brooke Harrington noted, “the real scandal is what is legal.”




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Published on April 07, 2016 05:49

Kesha’s Legal Paradox

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Say that everything that Kesha alleges about the producer Dr. Luke raping and abusing her is true. She still loses her lawsuit against him.



This is not a hypothetical scenario. In the ruling where the New York judge Shirley Werner Kornreich dismissed all of Kesha’s claims against the man born Lukasz Gottwald, his affiliated companies, and Sony Music Entertainment, the veracity of Kesha’s allegations were taken as a given. “On a motion to dismiss, the court must accept as true the facts alleged in the complaint, as well as all reasonable inferences that may be gleaned from those facts,” Kornreich explained.





Anyone who has read the vivid and unsettling complaint Kesha filed in October 2014 may find this outcome jarring. Kesha said that after Gottwald brought her into the music industry at a young age, he plied her with substances and then forced himself on her. It mentioned harsh insults about her body and her worthiness as a human. It said that he threatened to hurt her and her family. And it asked that the court see all of this and release her from her contract with him.



Why didn’t it work? The biggest thing seems to be statutes of limitations. “While Kesha’s [claim] alleges that she was sexually, physically and verbally abused by Gottwald for a decade, she describes only two specific instances of physical/sexual abuse,” Kornreich wrote. Those instances: In 2005, she says he forced her to snort drugs and get drunk before boarding an airplane where he made advances on her; in 2008, she says he gave her “sober pills” that turned out to be GHB, enabling what she believes was the rape of her unconscious body.



A few different laws might have been violated by these acts, but “whether the statute of limitations is … 5 years, 3 years, or 1 year, it expired at the latest in 2013,”  Kornreich wrote. Kesha’s side had cited a New York City ordinance saying that the statute of limitations on gender-motivated crimes was actually seven years, with a chance to extend the time period if the victim was so incapacitated by the violence that they couldn’t file a complaint within those seven years—a provision that kicked in, Kesha said, because of her having to go to rehab. Gottwald’s side said the longer statute of limitations was invalid because it conflicted with other laws. Kornreich declined to take a side on that issue, “as there are other reasons to dismiss the claim.”



One of those reasons include the very definition of “hate crime”: Kornreich did not see any evidence for Kesha’s claim that Gottwald committed any. Kesha’s filings “do not allege that Gottwald harbored animus toward women or was motivated by gender animus when he allegedly behaved violently toward Kesha,” she wrote. “Every rape is not a gender-motivated hate crime.” In a footnote, she added, “Gottwald is alleged to have made offensive remarks about Kesha’s weight, appearance, and talent, not about women in general.”



The definition of “intentional infliction of emotional distress” was also at issue. Kesha alleged that Luke emotionally abused her; Kornreich wrote that for such a charge to stick, “the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” But the statute of limitations on the most egregious alleged conduct—sexual assault—were up. The remaining conduct, the judge found, did not meet the standard for intentional infliction of emotional distress. Kesha’s “claims of insults about her value as an artist, her looks, and her weight are insufficient to constitute extreme, outrageous conduct intolerable in civilized society.”



Kesha’s “claims of insults about her value as an artist, her looks, and her weight are insufficient to constitute extreme, outrageous conduct intolerable in civilized society.”

Perhaps the most mind-bending aspect of Wednesday’s decision involves location. Kesha initially filed her claims against Gottwald in a California court and said all along that the abuse happened in California. But Gottwald’s side successfully requested that the case be moved to New York, citing a provision in Kesha’s record contract about selecting the venue where legal disputes related to that contract are heard. Once there, though, Luke’s side argued for dismissal of Kesha’s claims on the ground that they happened in California and therefore did not violate New York law. Kornreich agreed with this argument, which would seem to raise the question of how Kesha’s allegations could ever get full consideration in civil court if the defense can move the case away from where the abuse actually happened.



Reading through Kornreich’s ruling, you get the sense that she was not impressed by the work of Kesha’s lawyer Mark Geragos, lamenting the fact that there were not more dates or specifics about recent abuse by Gottwald. She also shot down some of his arguments saying that Gottwald’s legal maneuvers had voided Kesha’s contract. The dispute isn’t over: The California case may still move forward, and Kornreich’s dismissal can be appealed. But in either case, it seems likely that many of the obstacles cited by Kornreich would need to be surmounted in order for Kesha to get what she wants.


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Published on April 07, 2016 05:22

Bangladeshi Student Activist Is Killed

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Nazimuddin Samad, a law student and secular activist, was killed by three assailants in the capital, Dhaka.



Here’s The New York Times on the recent targeted violence:




In the last 18 months, there has been a rise in extremist violence in Bangladesh, including a series of assassinations of bloggers or intellectuals who have criticized militant Islam. Many writers and journalists have become hesitant to publish work that could attract the attention of Islamists, and a growing list of activists, fearing for their lives, have applied for asylum in Western countries.






No arrests have been made, but Samad had criticized religious extremism on his Facebook page. The Dhaka Tribune quoted police officials as saying the assailants shouted “Allahu Akbar” as they attacked the activist. Islam is Bangladesh’s state religion though the Constitution proclaims secularism as one of its main tenets.


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Published on April 07, 2016 05:20

April 6, 2016

Remembering Merle Haggard, Outlaw and Poet

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Merle Haggard is dead at 79, and that seems impossible. The performer—an American poet, ambivalent culture warrior, reformed criminal, and all-around good-time character who changed country music by returning to its roots—was such an institution that it’s hard to believe his career only spanned five decades, just as it’s painful to imagine a future without him.



The singer, songwriter, guitarist, and violinist reportedly died in Bakersfield, California—his home town, which he helped put on the map as a music center—on Wednesday, his 79th birthday. Along with Buck Owens, Haggard was one of the progenitors of the Bakersfield sound, a twangy, guitar-driven, hard-edged style of country that provided an alternative to the increasingly smooth, commercial music being made in Nashville in the 1950s and ’60s.



If Southern California seems like a strange place for country music to return to its roots, there was a logic to it. The Inland Empire was full of people who’d flocked there during the Great Depression and the Dust Bowl, leaving poor areas of the South in search of work and bringing a honky-tonk sensibility with them. Haggard was born to parents who’d left Oklahoma in 1935 after their barn burned down. Three years later, Merle was born at the family home in Oildale, an unincorporated town outside of Bakersfield—a boxcar his father, a railroad worker, had converted into a house.



Haggard drew on his Sooner State roots for one of his most famous songs, “Okie From Muskogee”:






We don’t smoke marijuana in Muskogee;

We don’t take our trips on LSD

We don’t burn no draft cards down on Main Street;

We like livin’ right, and bein’ free.



I’m proud to be an Okie from Muskogee,

A place where even squares can have a ball

We still wave Old Glory down at the courthouse,

And white lightnin’s still the biggest thrill of all




The song was released in 1969 and quickly became a counter-countercultural anthem—capturing backlash against hippies who were protesting the Vietnam War. The song made Haggard a darling of conservatives, and was one of several such songs hailed as anthems of the Silent Majority. The same year, he released “Workin’ Man Blues,” a classic blue-collar lament about hard work with a pointed shot in the final verse: “Well, hey, hey, the working man, the working man like me/He’s never been on welfare and that’s one place he will not be.” In a third 1969 track, “The Fightin’ Side of Me,” Haggard once again criticized the anti-war movement. It’s a subtler song than it might initially appear—not a simple condemnation of the anti-war movement, but still a cry of aggrieved patriotism. “I don’t mind ‘em switching sides, and standing up for things they believe in,” Haggard said. But “when they’re running down my country, man, they’re walking on the fightin’ side of me.”



There was some debate about just how serious Haggard was about all this. In 2010, he explained the lyrics as sincere: “America was at its peak and what the hell did these kids have to complain about? These soldiers were giving up their freedom and lives to make sure others could stay free,” he said. “I wrote the song to support those soldiers.” Yet other critics have interpreted the lyrics of these songs, and particularly “Okie,” as somewhat tongue-in-cheek, sending up redneck and hippie stereotypes alike. Looking for a single, simple meaning is likely a fool’s errand. Country music, like all of the best folk forms, is a style in which there’s often more ambiguity and more meanings than the straightforward lyrics would suggest.



Haggard’s politics were never especially rigid, anyway. After winning Kennedy Center Honors in 2010 and meeting President Obama, he praised the Democrat and complained, “It’s really almost criminal what they do with our president.” In 2015, no matter what they do in Muskogee, he even recorded a song with Willie Nelson full of marijuana double entendres. It turns out Haggard started smoking weed at the ripe old age of 41.



Autobiography was a continuing source of material for Haggard’s songwriting. As a young man, he had a series of scrapes with the law, bouncing in and out of juvenile detention and later San Quentin State Prison. It was at San Quentin that Haggard—who’d taken up the guitar as a boy—heard Johnny Cash play, which he said spurred him to join the prison band and then pursue a career in music. Songs about living on the wrong side of the law became an essential part of Haggard’s repertoire, like the classic “Mama Tried.”






I turned 21 in prison doing life without parole.

No one could steer me right but Mama tried, Mama tried.

Mama tried to raise me better, but her pleading, I denied.

That leaves only me to blame ‘cause Mama tried.




Like many crime songs, it’s a tribute to traditional values masquerading as a chronicle of wrongdoing—he praises “Sunday learning,” family values, and the hard work of his widowed mother, even if it all came to naught. Haggard didn’t get life in prison, of course (and then-Governor Ronald Reagan pardoned him in 1972), but his crime songs were among his most poignant. In one, he tells a story as chilling as the cold-blooded folk murder ballad “Pretty Polly”:




I do life in prison for the wrongs I’ve done

And I pray every night for death to come

My life will be a burden every day

If I could die my pain might go away.




In “Sing Me Back Home,” an even finer song, an inmate honors a fellow prisoner’s last request before execution. As the man is lead “down the hallway to his doom,” he asks the narrator to “sing me back home with a song I used to hear, make my old memories come alive / Take me away and turn back the years, sing me back home before I die.”



As a honky-tonk hero, Haggard could of course spin a great drinking song. My favorite is “The Bottle Let Me Down,” an absolute masterpiece of country songwriting—keening, bleak, witty, and poetic. “Tonight your memory found me much too sober,” Haggard sings. “The one true friend I thought I’d found—

tonight the bottle let me down.” Later in the song he succinctly captures a drunk’s heartbreak: “I’ve always had a bottle I could turn to, and lately I’ve been turning every day.”





Whatever Haggard felt about the hippies, many of them became huge fans of his. The Grateful Dead played “Mama Tried” and “Sing Me Back Home.” (The lead guitarist Jerry Garcia’s sound—a clear, bell-like tone, quick riffs, and lots of string bends—showed the heavy influence of Haggard’s longtime lead guitarist Roy Nichols, as well as Buck Owens sideman Don Rich.) The Byrds recorded “Life in Prison” on the landmark country-rock album Sweetheart of the Rodeo, and they and the closely related Flying Burrito Brothers performed “Sing Me Back Home.” Gram Parsons and the Burritos recorded “The Bottle Let Me Down,” as, later, did Elvis Costello.



One reason these musicians were attracted to Haggard was his musical sophistication and reach. Haggard married the sound of earlier Bakersfield star Buck Owens—stinging Telecaster licks, singing pedal-steel guitar, and honky-tonk directness—to blues and jazz. (Haggard married Owens’s ex-wife Bonnie Owens, too. They divorced 13 years later, but she continued to sing in his band.) He could swing like the Texas fiddler and the bandleader Bob Wills, to whom he recorded a 1970 tribute album that showed off his own fiddle chops. His bands were full of musicians who could play jazz nearly as well as country—piano, fiddle, steel, and guitar. And Haggard was no slouch on Telecaster himself, a purveyor of tasty, understated licks.



In a 1990 New Yorker profile, Haggard’s drummer Biff Adam said, “All those people want to talk about is honky-tonk. Honky-tonk, my ass. I’m getting awful goddam sick of that word. There’s more to it than that. What Merle plays is country jazz. That’s what he calls it, and that’s what it is.”



Lest anyone still believe Haggard was just playing simple hillbilly music, take this rendition of “Workin’ Man Blues.” The song is basically just a funky blues shuffle, relying on the same I, IV, and V chords as any blues (or most country songs). Like blues and jazz, it’s a style that showcases instrumentalists’ chops—Nichols takes the first guitar solo, Haggard the second, and there are violin and piano solos as well. The song is also spiritually of a piece with the blues, a style often typecast as music of sadness that is in fact (as Albert Murray demonstrated) about transcending it, making happy music that deals forthrightly with life’s burdens.





Later in his career, alongside figures Willie Nelson and Waylon Jennings, he was hailed as a hero of “Outlaw Country,” a new heterodox movement of country musicians who rejected Nashville strictures and mixed in lots of blues. (Sometimes this is also called “progressive country,” a label that would have confused anyone listening to “Fightin’ Side of Me” in 1969.)



Personally, Haggard was a character, the type who seemed irresistible to women and magazine profile writers alike. One of his most off-the-wall theories was that Elvis Presley’s death may have been faked: “It would be the first chance for freedom in his entire life—and it could have been a scheme Colonel Parker dreamed up,” he told People in 1979. In addition to his marriage to Bonnie Owens, he was married four other times. In the New Yorker profile, Bryan Di Salvatore wrote, “Friends suggest that Merle remains married so as not to be under an obligation to divorce and marry again.” (He did so anyway a few years later.) But he remained friends with some of those ex-wives, including Owens.



His manager, Fuzzy Owen, who confirmed his death to The Bakersfield Californian, had been with him for 54 years. And Haggard could be extremely generous. In 1981, he scored a late hit with “Big City.” The song was inspired by an offhand comment by Dean Holloway, a childhood friend who’d been driving Haggard’s bus since 1966. During a recording session in L.A., Holloway remarked to Haggard, “I hate this place. I’m tired of this dirty old city.” In less than an hour, Haggard wrote a song around the phrase and recorded it. He gave Holloway a co-writing credit that came to be worth a half a million dollars.



Having been a touring musician since the mid-1960s, Haggard spent a lot of time on buses. What he really loved was trains—he sang about them, including an entire album of train songs; his tour bus bore the logo of the Santa Fe line; he even played with model trains. But as he told Di Salvatore, buses had basically become his home. With his health failing a few days ago, Owen told the Californian, Haggard had asked to be taken to his bus. He died on the rig, surrounded by his friends and family. Tonight, the bottle will let many heartbroken fans down.


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Published on April 06, 2016 13:22

What’s Next for Europe’s Refugee Rules?

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Asylum-seekers to the European Union have for years sought refuge in the country in which they first arrive, under the so-called “Dublin rules” that govern refugee policy in the bloc. But last summer, at the height of the Syrian civil war, the number of people, Syrians and others, who began to seek refuge in Europe soared. The two countries that buckled most under the strain of the hundreds of thousands of newcomers were Greece and Italy.



Nearly a year later, Europe’s refugee policy is in tatters. Germany’s decision last year to suspend the Dublin rules for asylum-seekers from Syria created regional bottlenecks for migrants and refugees, leaving many EU member states unable to cope with the influx. This spring, the EU struck a controversial deal with Turkey, which is home to more Syrian refugees than any other country. Under that agreement, some of the asylum-seekers who entered Europe illegally will be sent to Turkey; in exchange, Europe will accept an equal number of Syrians who have gone through the process legally. But even with those measures now in place, Syrians and others still undertake the often-deadly journey from Turkey, across the Mediterranean, to Greece and, to a lesser extent, Italy. Others, who traveled by land, or the Balkan route, to Europe, end up in Hungary—before making their way west.



Last fall, Greece and Italy eventually stopped registering the asylum-seekers who arrived and allowed them to continue their journeys to Germany, their favored destination, or elsewhere. But this overwhelmed other countries along the route, and many of them erected fences, and undertook other measures, to deter the migrants from crossing. Greece and Italy were especially affected by the backlog of asylum-seekers and the mounting arrivals across the Mediterranean.



On Wednesday, the European Commission released new proposals that would ease some of the burden on those two countries. The goal of the proposals, the EC said, was to, among other things, establish “a fair and sustainable system for allocating asylum applicants among Member States.” Frans Timmermans, the EC’s first vice president, acknowledged that the refugee crisis “has shown the weakness” in Europe’s common asylum policy. Timmermans said that those people who truly need help should continue to receive it. He blamed different national approaches for asylum shopping—the process by which an asylum-seeker submits multiple applications in different countries—and illegal migration, and added that too much responsibility was being placed on just a few member states.



“In the immediate term we have to apply the existing law to stabilize the situation,” he said. “Beyond that, we need a sustainable system for the future, based on common rules, a fairer sharing of responsibility, and safe legal channels for those who need protection to get it in the EU.”



The EC’s proposals include changing the Dublin rules either by amending them to one in which the first-country provision is accompanied by a “corrective fairness mechanism” that helps a country under particular strain, or by scrapping  the rules in favor of distributing the asylum-seekers more equitably. The EC also proposed measures to discourage asylum shopping, including making certain rights conditional upon registration and fingerprinting to ensure asylum-seekers stay in the country to which they are assigned.



“Human mobility will be an inherent feature of the 21st century,” Dimitris Avramopoulos, the EC’s migration and home-affairs commissioner, said of the proposals, adding Europe needs to “set up a robust and effective” asylum system that is fair to its member states, migrants, and others.



That might be easier said than done. Not all EU member states want refugees and even if they do, they don’t necessarily want the current rules to change. For instance, Italy wants the first-country rules to be scrapped. Germany is less keen—though it supports a relocation scheme for asylum-seekers that would ease the pressure on Greece and Italy. Then there are Hungary and Slovakia, newer EU states that have consistently opposed not only asylum-seekers, but also any binding quotas for EU member states.



Divisions such as these are what have prevented a common EU-wide response to the worst refugee crisis in Europe since World War II. But at a news conference in Brussels on Wednesday, Timmermans said he hoped a final plan could eventually win approval from member states and the European Parliament.



“The current system,” he said, “is not sustainable.”


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Published on April 06, 2016 11:05

The End of Halliburton's Merger With Baker Hughes

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The U.S. Department of Justice filed a civil antitrust lawsuit Wednesday to block a merger between Halliburton, the world’s second-largest oilfield-services company, and the third-largest, Baker Hughes.



The deal, which was announced in November 2014, was originally valued at $35 billion. It would have seen Halliburton acquire Baker Hughes’s shares, and combine their 136,000 employees in 80 countries. But in a statement announcing the suit, which was filed in Delaware, where both companies are incorporated, the Justice Department said the deal would raise prices and eliminate competition.



Attorney General Loretta Lynch said the deal would “skew energy markets and harm American consumers.”



The two companies had tried to assuage the Justice Department’s concerns before Wednesday’s lawsuit. They offered to sell assets worth $7.5 billion to reassure officials there’d be enough competition. But low oil prices have weakened competition all around. To stave off the pain of falling prices, Halliburton has already laid off thousands of workers; the deal with Baker Hughes was supposed to strengthen it against competition in a global environment that’s now characterized by low energy prices, and bolster it against Schlumberger, the market leader in the sector.



Halliburton seemed confident the deal would pass. It had agreed to a $3.5 billion breakup fee with Baker Hughes, which Halliburton is on the hook for if the deal fizzles. Both companies said they’d both contest the suit. In a statement released Wednesday, they said the Justice Department’s “action is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing.”



The proposed merger also faced scrutiny from the European Union’s competition authority, as well as from regulators in Australia and Brazil.


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Published on April 06, 2016 10:36

Panama Papers: The Real Scandal Is What's Legal

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In the past few days, hundreds (if not thousands) of media reports have linked the Panamanian wealth management firm Mossack Fonseca to a series of financial crimes. The massive “Panama Papers” leak documents the firm’s involvement in facilitating activities that may constitute fraud, money laundering, and theft, including by officials at the highest levels of governments worldwide. But the real scandal is that most of what Mossack Fonseca and the rest of the wealth-management industry do is perfectly legal.



Anyone reading this article can evade taxes, or even dabble in offshore finance, without expert intervention. With just an Internet connection and a few thousand dollars, anybody can create shell corporations and other offshore vehicles in a matter of minutes. It’s child’s play to dodge taxes, debts, child support, and so on by putting assets in one of those structures—though there is  a risk of getting caught, audited, and possibly prosecuted.



But that’s not what many of the world’s richest people are doing: They can afford the privilege of defeating the spirit of the laws without violating them formally. What Mossack Fonseca and its counterparts all over the world really provide is the expertise that allows their clients to stay just on the right side of the law—or far enough into the legal grey zones that the clients have a real chance to prevail if they end up in court. That’s why many of the people who have seemingly been exposed by this leak will likely never face charges of any kind. To the extent that Mossack Fonseca’s work facilitated crime, that was a bug rather than a feature.



Understanding this may help resolve the cognitive dissonance that arises from reading about the Panama Papers against the insistence by Mossack Fonseca that their hands are clean. When the firm writes that “we have a strong compliance record” and “we are responsible members of the global financial and business community,” they are not lying through their teeth, as some might suspect. Keeping clients out of legal trouble is a core element of their business model: that is how they earn their money. If they, or firms like them, were to lose their reputations for keeping clients on the right side of the law, the clients would take their business elsewhere.



To the extent that Mossack Fonseca’s work facilitated crime, that was a bug rather than a feature.

Some of the activity uncovered in the Panama Papers will turn out to be illegal. But if past is prologue, then the majority of what we learn from the leak will merely be embarrassing for those exposed—showing them to be opportunistic and perhaps unethical, but not criminal. And that is why many of the people named in the documents are unlikely to see the inside of a courtroom concerning the services that Mossack Fonseca provided to them: not because they have the power now to quash prosecutions (with some notable exceptions!), but because some time ago they had the power to hire expert advisers who carefully designed their tax-avoidance (or law-avoidance) strategies.



This kind of expertise is expensive, and can run into hundreds of thousands of dollars per year, depending on which laws one wants to avoid. But paying for secrecy is typically worth it: If it weren’t for leaks like the Panama Papers, most people would have no idea that so much law avoidance is possible, let alone legally permitted. Many governments know about it, and as the Panama Papers reveal, many public officials take advantage of the benefits these firms provide.



That is one reason so many of their names appear in the leak: 140 politicians and officials from more than 50 countries. While some of those countries are known to have problems with fraud and crime by individuals in government, others are not. Iceland, France, Chile, and Botswana—all of which have officials listed as clients of Mossack Fonseca—are ranked highly on anti-corruption indexes such as the one from Transparency International. Use of offshore services by officials from those countries is unlikely to be connected to illegal activity, although it may well become a political liability for them.



That is how things shaped up for Icelandic Prime Minister Sigmundur Gunnlaugsson, who resigned following revelations that he was once part-owner of an offshore company incorporated with the help of Mossack Fonseca. Although the firm has been wholly owned by his wife since 2009, it stands to reap millions from the deal Gunnlaugsson negotiated for claimants on Iceland’s bankrupt financial institutions. Although reports show no evidence to suggest tax avoidance, evasion, or any dishonest financial gain on the part of Gunnlaugsson,” his mere association with Mossack Fonseca and an offshore firm was enough to cost him his job, and possibly his career.



Public officials who want to put a stop to offshore financial activities face a losing battle due to entrenched conflicts of interest. Because these activities are often formally legal and extremely lucrative—particularly for nominally onshore countries—there is little will to shut them down, and thereby turn off the spigots of economic growth. This means that reform-minded officials are unlikely to gain the cooperation of their colleagues and government agencies in fighting against the secrecy and shell games through which the tax avoidance business operates. Anyone pushing for change rapidly comes to the realization that, at both the personal and institutional levels, many governments are deeply enmeshed in the kind of financial activities revealed by the Panama Papers. Often, the very same people who rail against tax avoidance and offshore finance are themselves beneficiaries of those strategies.



Take the U.K. as an example of this problem. Prime Minister David Cameron has been an outspoken opponent of “dodgy tax-avoiding schemes” by well-to-do U.K. citizens, describing such schemes as "morally wrong." At the 2013 meeting of the G8, Cameron spearheaded an international initiative to “fight the scourge of tax evasion and aggressive tax avoidance.” But Cameron has also benefitted personally from such schemes, including an offshore corporation created by his late father Ian: Blairmore Holdings Inc., which is a client of Mossack Fonseca and incorporated in Panama, is still in operation and owns $31 million in assets. Profits from that corporation have never been taxed in the UK, and were reported to have been a part of the inheritance the Prime Minister received when his father died.



Even if Cameron lacked this personal conflict of interest, he would still face the problem of his country’s institutional entrenchment in tax avoidance and offshore finance. For example, the U.K. economy is closely tied to the offshore world through its property markets. Buying London real estate is among the favored method for oligarchs, particularly from Asia and the former Soviet states, to avoid taxes and launder the proceeds of corruption. Their investments, usually made through offshore corporations and trusts, have contributed significantly to the U.K. economy: London housing stock is now estimated to be worth more than the entire GDP of Brazil. Anything that impinged on those transactions, for example by making it harder to buy real estate through shell corporations, could deflate property values and threaten the British economy overall (although it might make the city affordable again for non-oligarchs).



Of equal or greater importance is the role of the City of London in the tax-haven business. The City, a square-mile financial services hub in the heart of the U.K.’s capital, serves as “the centre of the most important part of the global offshore system.” Last year, that square mile alone contributed $64 billion to the nation’s GDP, and its economic output is growing faster than that of the U.K. as a whole. Any move that impinges on offshore financial activity, including cracking down on tax avoidance, would strike directly at that important source of economic growth for the country. Thus, a former U.K. government official who worked under Cameron wrote that the Prime Minister cannot and will not make any real effort toward ending tax-haven activity, because such a move “would have severely hurt the City of London” and that “it was and is a top U.K. government priority to head that off.”



The U.K. is far from unique in holding this conflicted position relative to the offshore world, and nations like Panama know it. For example, the U.S. has been very aggressive about cracking down on overseas tax avoidance in recent years. But it has also become a popular tax and secrecy haven in its own right, earning it the nickname “the new Switzerland.” Thus, calls by European and North American countries for crackdowns on “harmful tax competition” are increasingly met with derision and anger offshore. Panama and other offshore financial centers know that individual firms like Mossack Fonseca are just part of a web of “legal corruption” that reaches virtually every country in the world. Destroying that web would bring down many firms, and probably a few governments as well. So far, no one has been willing to do more than pull at a few strands at a time.


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Published on April 06, 2016 10:14

The Revolution Will Be Streamed

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The first episode of Hulu’s new drama The Path follows the template of many contemporary TV dramas. After a barnstorming opening sequence showing the aftermath of a tornado strike on a small town, the series introduces the cult that shows up and pulls survivors out of the wreckage. Their leader, Cal Roberts (Hugh Dancy) is driven and imperious; Eddie (Aaron Paul) is another cult member who’s conflicted about his involvement; and Sarah (Michelle Monaghan) was born into her role as a recruiter. As soon becomes clear, the organization they’re all part of is mysterious and possibly evil. It’s a compelling premise, and some of the group’s darker secrets do come to the surface—but only once viewers are 10 or so hour-long episodes in.






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The Future of Media Will Be Streamed






The television industry is currently in the middle of a radical paradigm shift, as streaming networks like Amazon, Netflix, and Hulu look to create as much original content as possible. One of the most notable changes evident in the flood of new content is the total abandonment of the long-accepted idea that a show needs to hook a viewer in its first act, or at least its first episode. But streaming shows like The Path, Bloodline, Hand of God, Love, Sense8, and many others are taking this to extremes, seeming barely concerned with letting stories pay off until viewers have sat through a whole season.



The New York Times critic James Poniewozik’s take on The Path was particularly apt (and telling): “I could see it having a strong second season.” That’s the new reality of the medium—it can take a whole year before a show even needs to be good, which has unfortunately led to pervasive issues with pacing and plotting that hurts the overall viewing experience for streaming audiences.



Poniewozik has written more extensively on the topic, noting that streaming networks don’t have to worry about the situational strictures of broadcast television. A viewer can discover a show at her own pace and (more than likely) watch it all at once. A streaming network exists simply to offer a broad repository of content for subscribers to check in with, rather than a daily deluge of explosive plot twists and special guest stars to keep people tuning back in. Even comedies like Netflix’s BoJack Horseman have this type of structure—one episode viewed in the abstract might be mildly funny, but watch the entire season in a short burst and it feels suddenly like a work of art.



There’s a strange loyalty demanded by a show like BoJack (which is outright bad for its first few episodes before gathering steam) or The Path. Sure, nothing much happens for the first six or seven hours, but the viewer has to be trusting enough to know that their patience will be rewarded. “Netflix’s chief content officer, Ted Sarandos, has said he considers the first season of a series, not the first episode, to be the ‘pilot,’” Poniewozik noted. It’s an insidiously clever approach: You need a whole season to decide whether or not you like a show, and by the time you’ve watched all that, you’re in too deep to turn back.



It’d be easy to pinpoint the premiere of Netflix’s House of Cards, with its ominous title “Chapter One” (it’s up to “Chapter 52” now), as the ostensible beginning of this trend. But Netflix was simply playing into viewer patterns it had already identified from how people watched other shows in its streaming database. David Simon’s masterpiece The Wire, which ran on HBO for five seasons in relative obscurity, was the original and best example for the critics’ refrain of “Give it five episodes, and you’ll be hooked.” Simon’s approach was novelistic, where TV before (even HBO shows like The Sopranos) had been almost totally focused on the entertainment value of single episodes. With The Wire, you had a show that needed time to percolate and gather its story threads together. That approach didn’t draw strong viewership on HBO, or much attention from Emmy voters, but it worked perfectly for platforms like Netflix and Amazon that prompt audiences to immediately hit “play” for the next episode.



Other serialized hits, from network shows like Lost to cable successes like The Shield, were suited to this model, too. The comedian James Adomian had a great stand-up routine mocking the new culture of binge-watching: “I love that I’m expected to watch an entire television series on DVD before someone will even talk to me as a human being at a party,” he said. “You know how many hours there are of Lost? There’s like 200 hours! You just asked me to watch 100 feature-length films.”



At the end of the day, “television” might be the wrong word for streaming shows.

The problem with Lost, of course, is that its finale was notoriously unpopular—it’s a binge-watching classic, but even casual TV fans know they might be setting themselves up for disappointment by watching all six seasons of a show that ends in confusing fashion. Early Netflix hits like House of Cards and Orange Is the New Black seem to be doing everything they can to avoid that fate—by simply never ending. House of Cards was just renewed for a fifth and sixth season even though its creator Beau Willmon has departed the series, and Orange Is the New Black will be back for at least three more years, even though the prison stay it’s inspired by only lasted for 18 months.



That’s what’s most troubling about the new binge economy: There’s even less emphasis on a show’s quality or consistency. The network TV model, which hinges on ratings, can certainly be cruel and unfair—there are dozens of cult classics that were unfairly cut short because they didn’t fare well enough with the right advertising demographics. But the streaming model doesn’t seem much better either. Outright critical bombs like Hemlock Grove and Fuller House are auto-renewed as a matter of course, and genuine hits like House of Cards will pump out new chapters as long as their casts can stay under contract. Name recognition is everything—it’s why burgeoning streaming networks like the now-dead Yahoo! Screen will spend millions to revive marginal network shows like Community—and even the most unpopular returning shows are at least established titles.



At Vox, Todd VanDerWerff pointed out the clear flaw of the hyper-serialized Netflix storytelling style, and how even its best shows tend to sag in the middle.  “Streaming services have an unfortunate tendency to assume they should use all the time in a season—including the extra moments freed up by not having to remind viewers of certain plot developments—to tell a single story,” he wrote. Serial TV hits like Breaking Bad might have something in common with this approach, but even they delivered powerful, punchy episodes week after week because they had to stay in viewers’ minds amid all the other networks’ competitors.



At the end of the day, “television” might be the wrong word for streaming shows. This may not be the dawning of a new era in TV, but an entirely different (though related) entertainment medium that’s much more focused on extended, drawn-out storytelling. It’s been suited to superhero adaptations—Netflix’s Daredevil and Jessica Jones were hits that tapped into the drawn-out narratives of a comic book. Half-hour comedies like Transparent or Unbreakable Kimmy Schmidt tend to fare better, simply because viewers expect less propulsive storytelling from them.



The advantages are clear: There’s no pressure to insert artificial plot twists at the end of every hour, and to use unnecessary cliffhangers and other storytelling gimmicks to keep the viewer coming back. TV has always offered the chance for writers to flesh out a character’s story over months, years, and streaming shows can extend that even further and dig even deeper. But there’s an immediacy that’s lost: a sense that a show’s creative personnel are pushing against the strictures of their format and cramming in only their best material as a result. The Path could be part of the medium’s future, but for now, audiences are stuck waiting for a payoff.


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Published on April 06, 2016 08:00

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