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Trump’s Battle With The Fed Makes For a Rough 2019

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Asia couldn’t be happier that the Federal Reserve just took interest-rate hikes off the table. Yet the region hasn’t seen the last of its troubles from America’s central bank.

Not so much Chairman Jerome Powell, but the political chaos looming over the Fed’s 2019. The source, it almost goes without saying, is President Donald Trump’s embattled White House.

Try as he may, Powell will have a hard time dispelling perceptions he caved to Trump. It’s entirely possible that Powell & Co would’ve left rates alone Wednesday even if the US president hadn’t called it “crazy.” Perhaps underlying economic dynamics support a shift into “wait-and-see” mode on tightening.

The optics are troubling, though, if for no other reason than where Trump goes next with his anti-Fed rhetoric. Will he feel emboldened to jawbone the Fed to cut rates back toward zero? And, it follows, will he carry through on threats to push the dollar lower, ruining Asia’s year?

The odds are, the answers are “yes” and “yes.”

Trump, after all, wanted to fire Powell as recently as late December. The Fed is independent for a reason. From a recent Bloomberg report, we know Trump “many times” discussed aloud sacking his hand-picked Fed leader.

By now, markets get that Trump doesn’t care about political guardrails. In May 2016, Trump, a man with a long history of driving casinos into bankruptcy, actually flirted with the idea of default. Asked by CNBC how he’d respond if the US issued too much debt, then-candidate Trump replied: “I would borrow knowing that if the economy crashed, you could make a deal.”

In January 2018, he told reporters in Davos, Switzerland that “obviously a weaker dollar is good for us as it relates to trade and opportunities” and that the specter of a drop is “not a concern of ours at all.”

Trump’s next focus is almost sure to be the dollar. Getting Powell to back off on rates was the first step in that direction. Next is likely to be prodding the Fed to cut rates. Odds are growing, too, that Trump will direct Treasury Secretary Steven Mnuchin to act on the White House’s weak-dollar ambitions.

Though Trump long complained exchange rates are “killing us,” it was Mnuchin who 12 months ago suggested the gripe might become operational. In January 2018, he told reporters in Davos, Switzerland, that “obviously a weaker dollar is good for us as it relates to trade and opportunities” and that the specter of a drop is “not a concern of ours at all.”

Team Trump stepped back from the brink a day later as markets tanked. That calculus is changing after the Dow Jones Industrial Average ended 2018 in the red. So far, it is down 4% in 2019. Chatter about slowing US growth is growing loader amid surging public debt, which about the US$22 trillion mark.

Trump’s legislative prospects are nil just as intensifying investigations dog his presidency. That has him looking for quick wins overseas. One clear target: a bilateral trade deal with Japan. Another is boosting US manufacturing via a weaker dollar.

Here, Powell holding short-term rates steady in the 2.25%-2.50% range is unlikely to placate the White House. Not when Trump has explicitly blamed the Fed for the vicious December sell-off in stocks. Despite the chaos emanating from his administration, Trump could always point to giddy stocks as proof his policies were working after the Dow surged 24% in 2017.

In Trump’s view, the quickest way to reignite the rally may be Fed support. But stepping up his public brawl with the Fed poses two big risks for Asia – surging US Treasury yields (Asian governments owns trillions of dollars of US Treasuries) and less competitive exchange rates.

Export data already point to accelerating downshifts in Japan, Singapore, South Korea, Taiwan and elsewhere. A rising yen is the last thing Prime Minister Shinzo Abe needs as headwinds zoom Japan’s way. The same goes for South Korea’s Moon Jae-in, who needs all the growth he can muster to press on with vital structural reforms.

Surely, a respite from the Fed’s rate cycle – three tightening moves last year alone – is a plus for Asia. But as Trump puts the screws on the world’s biggest monetary power, it’s best to tighten those seatbelts a bit. ATIMES

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Behind Trump’s Push for ‘Patriotic Education’ in US History

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Amid the ongoing national crisis over the deadly COVID-19 virus, the President of the United States warned of another national crisis on Thursday: the “ideological poison” of “radical” history education.

Speaking on Constitution Day from the National Archives—where original copies of the Declaration of Independence, the Constitution of the United States and the Bill of Rights are on display—during a White House conference on American History, President Donald Trump announced that he was signing an executive order to establish the “1776 Commission,” a group that would “promote patriotic education,” and that the National Endowment for the Humanities would be awarding a grant to support the development of a “pro-American curriculum that celebrates the truth about our nation’s great history.”

In the course of his announcement, Trump claimed that people on the left want to “bully Americans into abandoning their values, their heritage and their very way of life,” and denounced the forces that he blamed for propagating that view in history classes. He called the New York Times’ 1619 Project, which reframes the story of nation’s founding around the arrival of the first enslaved Africans in Virginia, “toxic propaganda,” and he also singled out the late Howard Zinn, author of A People’s History of the United States. Zinn’s book, widely used in schools since it was published in 1980, is credited for helping popularize a bottom-up approach to history, as an alternative to telling the story of the U.S. via the top-down achievements of elite white men.

Such approaches to history, which encourage students to challenge long-standing narratives about national heroes, are “ideological poison, that if not removed will dissolve the civic bonds that tie us together,” Trump said. Under his plan, he said, “Our youth will be taught to love America with all of their heart and all of their soul.”

The federally-funded “patriotic” curriculum Trump promised is set to be an adaptation of Land of Hope: An Invitation to the Great American Story, by Wilfred M. McClay, a University of Oklahoma historian who also spoke at the Thursday event. Prior to the President’s speech, a panel of professors and education experts—as well as Ben Carson, Secretary of the U.S. Department of Housing and Urban Development—sang the book’s praises. When it came out last year, it was hailed by the right-leaning The National Review as “essential” and “an extraordinary act of patriotism”; on the other side, Georgetown University history professor Michael Kazin argued it “ignores most social movements ” and gives the “silent treatment to the long struggle for black freedom.”

While there are voluntary national guidelines for history education, the U.S. has no specific federally mandated curriculum for the subject.

But this wasn’t the first time Trump has tackled the topic of history curricula. His speech elaborated on a tweet he sent last week expressing horror that schools were teaching the 1619 Project’s accompanying curriculum, not long after he told federal agencies to halt sensitivity trainings that incorporate critical race theory, a framework that examines American history and culture through the lens of race.

“We will never submit to tyranny,” Trump assured the audience, arguing baselessly that radicals want to keep Americans from speaking the truth. “We will reclaim our history.”

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And while Trump’s push for “patriotic education” via McClay’s work may be new, it in fact echoes decades of conservative efforts to counter Zinn’s narrative, says Adam Laats, historian and author of The Other School Reformers: Conservative Activism in American Education. Examples include David Barton’s WallBuilders project, “dedicated to presenting America’s forgotten history and heroes,” and A Patriot’s History of the United States: From Columbus’s Great Discovery to the War on Terror, a 2004 book by Larry Schweikart and Michael Allen. (Zinn’s work has come in for criticism from academic historians on the left too, but the field today broadly acknowledges that a full recounting of history cannot be made without taking into account the lived experiences of people beyond the halls of power.)

More general efforts to encourage the inculcation of patriotism via the history classroom are even older than that, as TIME reported earlier this week. During the Red Scare of the 1920s, the American Legion attempted to develop a patriotic textbook. And in the 1960s and ’70s, the U.S. Supreme Court’s nixing of school-sponsored prayer, combined with busing efforts to integrate schools, fueled conservative concerns about the state of public education that continue to this day, Laats says.

But, all along, other historians have argued that, even accepting the premise that history education should instill patriotism—a premise to which many object—the way to do so is to give students the full picture, not to focus exclusively on the moments of glory. In 1948, when his work was banned from schools for seeming too favorable to communism, curriculum writer Paul Hanna argued that students would be more likely to fall for propaganda if they were spared the more unsavory parts of their own country’s history.

On Twitter, historian Joanne Freeman echoed that idea Thursday, writing that to “love a nation is to embrace it with all its complexity.”

And while Trump worries Howard Zinn and the 1619 Project will make Americans “ashamed” of their country, recent polls indicate that Americans are ready to learn. A Southern Poverty Law Center poll published Thursday found that 70% of Americans support anti-racism education policies “to reduce and prevent hate and extremism”; Pew polling found that roughly the same majority believe that acknowledging the nation’s historical flaws makes the U.S. stronger today.

Not everyone who feels that way was entirely dismayed by the President’s announcement. Nikole Hannah-Jones, one of the creators of the 1619 Project, tweeted that she takes “great satisfaction” from some aspects of the fight against her work—after all, those who try to suppress it only prove how significant its impact has been.

Write to Olivia B. Waxman at [email protected].

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Pentagon Papers leaker Ellsberg backing Assange

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Daniel Ellsberg, one of the most famous whistleblowers in American history, came to the defense of WikiLeaks founder Julian Assange in his legal fight to avoid extradition to the United States from Britain, claiming he would not get a fair trial in the US.

The 89-year-old, who is widely credited for helping to turn the tide against the Vietnam War, told London’s Central Criminal Court via a video link that WikiLeaks had acted in the public interest much like he did, The Guardian reported.

Australian-born Assange, 49, is fighting efforts to send him to the United States, where he is charged with conspiring to hack government computers and violating an espionage law over the release of confidential cables by WikiLeaks in 2010-2011.

Daniel Ellsberg, who in 1971 leaked documents known as the Pentagon Papers to the New York Times and other news outlets, told the court that WikiLeaks’ disclosures had shown Americans how they had been misled about US action in Iraq and Afghanistan just as his leaks, which also revealed previously secret information, did about the Vietnam War, The Guardian reported.

Ellsberg cited a US military video, which WikiLeaks published in 2010 under the title “Collateral Murder”, showing a 2007 attack by Apache helicopters in Baghdad that killed a dozen people, including two Reuters news staff.

“I was acutely aware that what was depicted in that video deserved the term murder, a war crime,” he told London’s Old Bailey court via videolink. “I was very glad that the American public was confronted with this reality of our war.”

James Lewis, the lawyer representing the US authorities, said Assange was not wanted for publishing the 2007 video, but for disclosing a small number of documents with the unredacted names of sources or informants, The Guardian reported.

Lewis said many of these had suffered harm or threats because they had been named. He said some had disappeared, although he conceded that there was no evidence that this was directly linked to WikiLeaks’ publication.

“How can you possibly say … that there is no evidence that Mr Assange’s publication of WikiLeaks put anyone in danger? That’s just pure nonsense,” Lewis said.

Ellsberg, who was himself charged with breaking the espionage law in a case that was later dismissed, said there was no evidence of physical harm or deaths because of the leaks, The Guardian reported.

Earlier, John Goetz, an investigative reporter who worked for Germany’s Der Spiegel magazine on the first publication of the documents in 2010, said Assange was careful to ensure that the names of informants in hundreds of thousands of leaked secret US government documents were never published.

Goetz said WikiLeaks was frustrated when a password that allowed access to the full, unredacted material was published in a book by Guardian reporters in February 2011.

Assange’s lawyers argue that he would not receive a fair trial in the United States and that the charges are politically motivated.

They have also said he would be a suicide risk if sent to the United States, where they say he could be sentenced to 175 years in prison.

In 2012, Assange took refuge in Ecuador’s London embassy to avoid extradition to Sweden, where he was accused of sex crimes.

He always denied the charges and they were later dropped. After seven years, he was dragged from the embassy by British police in 2019 and then jailed for skipping bail related to the Swedish case. He has remained in prison ever since.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world’s first benchmark cross sector Chinese Bond Indices. Read ATF now. 

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Trump Flails In Attempt To Defend High-Risk, Indoor Campaign Rally In Nevada

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Republican presidential Donald Trump listens to a question as he appears at the "Retired American Warriors" conference during a campaign stop in Herndon, Virginia, U.S. REUTERS/Mike Segar

Donald Trump attempted to defend his decision to hold an indoor campaign rally in Henderson, Nevada, on Sunday by blaming Nevada Gov. Steve Sisolak (D) and ignoring the possibility that he’s risking Americans’ health.

Speaking with the Las Vegas Review-Journal after the rally, Trump didn’t answer a question about attendees potentially getting COVID-19; instead, he talked about how he isn’t putting his own health at risk.

Here’s the line of questioning from Review-Journal White House correspondent Debra Saunders:

Aren’t you concerned about getting COVID in an enclosed room?

“No, I’m not concerned.”

What about people here?

“I’m more concerned about how close you are,” he said, ignoring the question and gesturing to Saunders’ proximity.

Sorry about that.

“Because you know why?” Trump continued. “I’m on a stage that’s very far away. And so I’m not at all concerned.”

Nevada hasn’t permitted gatherings of more than 50 people since May, a guideline based on White House recommendations, so the Trump rally openly violated that order. Sisolak condemned the “reckless and selfish” action on Twitter.

The president claimed that Sisolak had prevented the campaign’s use of six outdoor venues, thereby forcing Trump to rally supporters inside the Xtreme Manufacturing facility, which Trump’s friend Don Ahern owns. The Trump campaign estimated that about 5,000 people attended.

However, the accusation that Sisolak was actively obstructing Trump from holding outdoor rallies doesn’t seem to hold water: Trump held an outdoor rally in northern Nevada just the night before. The governor’s office didn’t immediately respond to a request for comment Monday.

While it is true the Trump campaign couldn’t hold a planned outdoor rally at a hangar near McCarran International Airport, it was the Reno-Tahoe Airport Authority that canceled the event over concerns the 5,000-person rally would interfere with the airport’s normal operations. Sisolak disavowed any involvement in the decision.

“This has nothing to do with politics,” airport authority CEO Daren Griffin said in a statement to the Reno Gazette-Journal. “The letter we sent is about directives and safety and not political campaigns. We would hold our tenants to the same standard whether it was a Democratic or Republican rally or any other type of gathering.”

Trump last held an indoor rally in June in Tulsa, Oklahoma. The event “likely contributed” to a dramatic surge in coronavirus cases in the following weeks, according to Tulsa City-County Health Department Director Dr. Bruce Dart. It’s possible Herman Cain, who died from COVID-19 in July, contracted the virus at the event, which he boasted about attending without wearing a mask.

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