#China Drop In Anchors factory

[redeyedroid]

This week saw the 80th anniversary of one of the most famous and heroic deeds of the Second World War – 617 Squadron’s attack on the hydroelectric dams of the Ruhr.

Flying at extremely low level in 4-engined Lancaster heavy bombers, the men of 617 Squadron displayed extraordinary skill and courage in the attack, using specially designed bombs, codenamed UPKEEP to strike at the dams. The bombs were large, drum-like in construction and spun up before being dropped. The spin caused them to skip like a stone across the waters of the reservoirs and hold close to the walls of the dam before exploding. Because they had to be at an altitude more precise than the instruments of the day could measure, the Lancasters were equipped with spotlights that intersected at the correct height, a weaponisation of maths as old as war itself.

The stone walls of the Möhne and Eder dams were breached that night, though the earthen construction of the Sorpe resisted.

617’s commander, Guy Gibson won a Victoria Cross on the mission, repeatedly circling round to make dummy attacks on the Möhne and trying to draw flak away from other planes as they made their runs, then flying to the Eder and doing the same. Gibson would be die in 1944. Having finished his tour and been removed from operations and used as a popular hero for propaganda purposes, he would return to ops and be killed when the Mosquito he was in was crashed in the Netherlands.

Leonard Cheshire – also a holder of the VC - became commander of 617 Squadron and led it through the rest of the war and it’s later successes such as the Limoges raid, where he flew over a factory at 20 feet to give the French workers inside warning before the bombs fell; and the sinking of the German battleship, Tirpitz, capsized by 12,000lb Tallboy earthquake bombs. After the war, Cheshire would found a charity that helps disabled people live independently and which still bears his name.

The dams raid itself was a propaganda and political success. The dams were repaired in short order – the RAF did not follow up the raid and refused the opportunity to harass the repair work, but the work cost a huge amount - billions in today's money. The Upkeep bomb was never used again. A smaller version, intended to be used against ships like the Tirpitz and which was codenamed HIGHBALL was never employed, either.

8 aircraft were shot down on the raid. Only 3 of the 56 aircrew on these machines were lucky enough to survive the high speed, low-level crashes. Around 1,600 people were killed in the floods caused by the breached dams. Over 1,000 of them were POWs and slave labourers, mostly Ukrainian and Russian women from the Nazi-occupied USSR.

A lot of resources were expended on a mission that probably had a noticeable impact on the German war effort. The price paid in lives was low, considering the slaughter in Russia, China and the Pacific. It was the very essence of the Allies philosophy of using technology in place of humans. Steel not flesh.

But if we're being honest, the raid’s fame today derives mostly from the film.

There are many British movies about the Second World War. We’ll probably never stop making them. But those made in the 1950s and early 60s often shaped the consciousness and understanding of the war in the public’s imagination. They often star men who had served, and fall into two groups: stories written and made by people who were there that are entirely fictional; and fictionalised accounts of real events.

The best of them is The Cruel Sea which was based on a novel by Nicholas Monsarrat, who served in the Royal Navy during the Battle of the Atlantic. Anchored by a magnificent Jack Hawkins, it tells of the men and service of the fictional HMS Compass Rose, a Flower-class corvette on convoy duty, played in the film by the actual Flower-class HMS Coreopsis on which much of the film was shot.

The most famous, though, is The Dambusters, which is a remarkably accurate representation of the attack, has an all-time great theme tune and a strong central performance by Richard Todd as Gibson (Todd, a paratrooper during the war, was among the first men to drop on D-Day as part of the amazingly named Geoffrey Pine-Coffin’s 7th Parachute Battalion. He found Gibson’s closing line in the film of “I have to write some letters [to the families of the dead] first” very hard to deliver, having done it himself, for real).

Yet the film, in it’s original cut, is today unwatchable.

The problem is the dog.

Like many squadron commanders, Guy Gibson had a pet dog. And like many of these, the black labrador became a mascot for the whole squadron and was spoiled rotten. It was knocked down and killed by a car the morning of the raid, and it’s name was used as a codeword for the successful strike on the Möhne, ringing out across Europe that night and making the dog and it’s profoundly offensive name a part of the story.

Because the name of the dog was the n-word. It’s use peppers the original cut of the film, because the dog is in many scenes (equally horrifically, the dog that appeared in the film had the same name. You wonder how many homes in 1950s Britain had pets with astonishingly offensive names) and this means that multiple edits and overdubs have been shown down the years (I recently discovered the one on Amazon Video in the UK is the original, which is how I know it’s unwatchable). Peter Jackson floated the idea of a remake after making The Lord of the Rings. The project never went anywhere and I have to think that the problem of the dog was part of why (also, it’s a struggle to make American money men cut loose for movies that don’t tell stories of American heroism, but that’s another thing entirely).

James Holland and Max Hastings – white Englishmen both - have written books about the raid in recent and both have wrestled with the dog devoting pages to the issue and pointing out that, yes it’s very offensive, but it was a long time ago and it’s part of the story. Then they use the name repeatedly throughout their books.

(To be clear, I like both historians and they have done very good work, but, to me, it’s very unconvincing to write about how bad the name was without then making any effort to avoid using the word. Though I don’t think I do much better when all is said and done).

Today, because everything is terrible, it has become a front in the culture war. A few years ago, during the BLM protests of 2020, the RAF changed the dog’s gravestone (because yes, they buried it at 617’s wartime base of RAF Scampton and gave it a gravestone) so that it no longer features the name. They were immediately accused of rewriting history and how dare they bow to the woke BLM snowflakes it’s part of the story it’s just a name and how offensive can a dog be anyway. Someone started a petition trying to get Parliament to debate it and have the original headstone put back.

History is messy and many, if not most, of our nation’s heroes do not stand up to scrutiny, but the feelings of people complaining about a headstone that should never have been put up in the first place can get in the fucking sea. Like statues, it’s not rewriting history to say that something or someone does not deserve that place in society today. The feelings of RAF servicepeople of colour over the 75 years the original headstone was in place were never considered, but that doesn’t matter to these people. Nor that people knew it was horrible and offensive at the fucking time, but didn’t care, because it was a word and attitude that was socially acceptable. Hammering on about it does distract from the story of the heroism of 133 men, 53 of whom never came home that night in 1943. But there's no way round it. The heroism and racism go hand in hand.

(As an illustration, I’ve written more here about the fucking dog than I did about the actual raid).

Most recently the raid has been back in the news, because our authoritarian, fascist-leaning Conservative government have decided to dump shipping containers all over RAF Scampton and use it as housing for asylum seekers. The worst people in the world are crawling out from whatever fetid sewer they exist in to complain. Housing these people at Scampton would be a disgrace to the memory of the raid, they say, trying to turn it and the raid into a symbol of xenophobic nationalism, no matter that the RAF had men and women from all over the world in it during the Second World War. Adding to it, there’s a proposal to move the dog’s grave to 617 Squadron’s current base at RAF Marham so it is not damaged by the inmates of our new concentration camp.

Opposition to this plan mostly hinges on there being an existing plan to use the airfield as part of a regeneration scheme, bringing jobs and money to an area that desperately needs it. Left out of the argument is that people will be housed there is abominable conditions, dehumanised and misrepresented, their very existence treated as criminal. And this will happen because the government’s asylum policy is a fucking obscenity, in flagrant opposition to international law, and – much like the attacks on the rights of trans people – a crisis artificially created by the Tories so they can distract us from how fucking terrible they are at running the country, the continuing destruction of public services, and the enrichment of their friends.

People use the Second World War to make political points. They always have. History is written and then rewritten again and again. Myths die hard – even today the idea the German Army was supreme and only lost because it sabotaged by Hitler’s incompetence is still taken at face value; while the myth of the clean Wehrmacht, separate from the crimes of the Nazi regime and SS, persists. Both come from the self-serving memoirs and testimonies of German generals. History is always rewritten and the people who oppose the changes are the same who complain about statues being removed or talk about Britain's role in the slave trade. They want history to be a monologue of the bits that make them feel good. They don't want to engage with the uncomfortable and and bad things that were done by this country, or it's racist heroes. They don't want history to be a dialogue where they have to listen to the people on the other end of the discrimination, or the imperial repression. Or the bombs.

And it is hardly new for dickheads to repurpose it for their own ends. In a couple of weeks politicians with fake tans and faker teeth will task their interns with posting social media tributes to the D-Day landings. A few will use images of German soldiers, betraying the performative hollowness of the public face. Other, less famous blue tick accounts run by truly fucking awful human beings, will make shit jokes about there being no safe spaces on the beaches, or drag BLM. Transphobia will run rife in the hashtags, possibly alongside the odd WWG1WGA. Tankies will make fanposts about the war’s other great mass murderer, Joseph Stalin and assert that it was the USSR which really won the war and diminish the contributions of the USA and Britain.

And I will look at it all, and think about it all, and be angered and saddened. When I can find something worth fact-checking, or think of a funny and/or interesting dunk to make, I’ll probably post about it. Because what else is there when the most complex events in human history are distilled down to the worst people in the world standing up for a dog’s hideously offensive name?

[fixdex-fastening-technology]

China Factory Drop In Anchors Zinc Plated

Click here to see more of this product

[themedicalstate]

The Coronavirus Unveiled

Video: An atom-by-atom model of the coronavirus. Lorenzo Casalino, Amaro Lab, U.C. San Diego.

In February, as the new coronavirus swept across China and shut down entire cities, a scientist named Sai Li set out to paint its portrait.

At the time, the best pictures anyone had managed to take were low-resolution images, in which the virus looked like a barely discernible smudge.

Dr. Li, a structural biologist at Tsinghua University in Beijing, joined forces with virologists who were rearing the virus in a biosafety lab in the city of Hangzhou. Those researchers doused the viruses with chemicals to render them harmless and then sent them to Dr. Li.

Dr. Li and his colleagues then concentrated the virus-laden fluid from a quart down to a single drop. He could only hope that they had done everything just right, so that the weeks of work to produce that drop would not have been a waste.

“At the time, you don’t know what’s inside,” Dr. Li said. “It’s just liquid, right?”

Glimpsing the Structure

Dr. Li carefully froze the drop in a fraction of a second. If he made the slightest mistake, ice crystals could spear the viruses, tearing them apart.

Hoping for the best, Dr. Li placed the smidgen of ice into a cryo-electron microscope. The device fired beams of electrons at the sample. As they bounced off the atoms inside, Dr. Li’s computer reconstructed what the microscope had seen. When the picture formed, he was taken aback.

“I saw a screen full of viruses,” Dr. Li recalled.

A cryo-electron tomography image of SARS-CoV-2 viruses, in gray, with a computer reconstruction of one virus. Sai Li, Tsinghua University School of Life Sciences.

He could see thousands of coronaviruses packed in the ice like jellybeans in a jar. They were beautifully intact, allowing him to inspect details on the viruses that measured less than a millionth of an inch.

“I thought, I was the first guy in the world to see the virus in such good resolution,” Dr. Li recalled.

Over the following weeks, Dr. Li and his colleagues pored over the viruses. They inspected the proteins that studded its surface and they dove into its core, where the virus’s strand of genes was coiled up with proteins. The pictures reminded Dr. Li of eggs in a nest.

A computer reconstruction overlaid on an image of several SARS-CoV-2 viruses. Sai Li, Tsinghua University School of Life Sciences.

Thanks to the work of scientists like Dr. Li, the new coronavirus, known as SARS-CoV-2, is no longer a cipher. They have come to know it in intimate, atomic detail. They’ve discovered how it uses some of its proteins to slip into cells and how its intimately twisted genes commandeer our biochemistry. They’ve observed how some viral proteins throw wrenches into our cellular factories, while others build nurseries for making new viruses. And some researchers are using supercomputers to create complete, virtual viruses that they hope to use to understand how the real viruses have spread with such devastating ease.

“This time is unlike anything any of us has experienced, just in terms of the bombardment of data,” said Rommie Amaro, a computational biologist at the University of California at San Diego.

Probing the Spike

Earlier this year, Dr. Amaro and other researchers directed much of their attention to the proteins, called spikes, that stud the virus’s surface. Spike proteins have an essential job to play: They latch onto cells in our airway so the virus can slip inside. But it soon became clear that the name is a misnomer. The spike protein is not sharp, narrow or rigid.

Each spike protein snaps together with two others, forming a structure that has a tulip-like shape. A long stem anchors the proteins to the virus, and their top looks like a three-part flower.

Gerhard Hummer, a computational biophysicist at the Max Planck Institute of Biophysics, and his colleagues used the frozen microscopy method to take pictures of spike proteins embedded in the virus membrane. Then they calculated how the atoms in the proteins pushed and pulled on each other. The result was a molecular dance: The spike proteins swivel around on three hinges.

A simulation of four spike proteins, each bending on three hinges. Sören von Bülow, Mateusz Sikora and Gerhard Hummer, Max Planck Institute of Biophysics.

“You can see these flowers waving with all kinds of bending angles,” Dr. Hummer said. “It’s quite surprising to have such a long, slender stalk with so much flexibility.”

A Sugar Shield

Dr. Hummer speculated that the flexibility of the spike was important to the virus’s success. By sweeping around, the spike increases its odds of encountering the protein on the surface of our cells it uses to attach.

As they sweep around, however, the spikes can be attacked by antibodies, the powerful soldiers of our immune system. To hide, they create a shield out of sugar. Sugar molecules, in navy below, swirl around the proteins and hide them from antibodies.

A spike protein, at left, and a protective coating of sugars, at right. Lorenzo Casalino, Amaro Lab, U.C. San Diego.

A little hook at the end of the spike protein, in light blue below, sometimes flips up above the sugar shield. If it encounters a particular protein on the surface of our cells, it sets off a series of reactions that allows the virus to fuse to a cell membrane and inject its genes.

Latching on to an ACE2 receptor, in yellow, allows the coronavirus to enter human cells. Lorenzo Casalino, Amaro Lab, U.C. San Diego.

Tangled Loops

The genes of the new coronavirus are arrayed on a molecular strand called RNA. On Jan. 10, Chinese researchers published its sequence of 30,000 letters. That genetic text stores the information required for a cell to make the virus’s proteins.

But the genome is more than a cookbook. The strand folds into a devilishly complex tangle. And that tangle is crucial for the virus’s exploitation of our cells. “You have a lot more information stored in how it’s shaped,” said Sylvi Rouskin, a structural biologist at the Whitehead Institute.

Dr. Rouskin led a team of scientists who mapped that shape. In a high-security lab at Boston University, her colleagues infected human cells with the viruses and gave them time to make thousands of new RNA strands. Tagging the genetic letters on the strands with chemicals, Dr. Rouskin and her colleagues could determine how the strand folded in on itself.

In some places it only formed short side-loops. In other places, hundreds of RNA letters ballooned out into big hoops, with loops coming off, and more loops coming off of them. By comparing millions of viral genomes, Dr. Rouskin and her colleagues discovered places where the virus slips from one shape to another.

A number of researchers are now closely examining some of these regions to figure out what they’re doing. Their studies suggest that these knots allow the virus to control our ribosomes, the tiny cellular factories that pump out proteins.

After the virus enters a human cell, our ribosomes attach to its RNA strands and glide down them like a roller coaster car running along a track. As the ribosomes pass over the genetic letters, they build proteins with corresponding structures. Scientists suspect that the loops of RNA may throw the roller coaster car off its track and then guide it to a spot thousands of positions away.

Other loops force the ribosome to back up a bit and then move forward again. This little hiccup can cause the virus to make entirely different proteins from the same stretch of RNA.

Jamming the Machinery

The viral proteins that spew out of our ribosomes fan out across the cell to carry out different tasks. One of them, called Nsp1, helps seize control of our molecule machinery.

Joseph Puglisi, a structural biologist at Stanford, and his colleagues mixed Nsp1 proteins and ribosomes together in test tubes. They found that the proteins, in pink below, slipped neatly into the channels inside the ribosomes where RNA would normally fit.

A ribosome with RNA, in blue, and with Nsp1, in pink.Christopher Lapointe, Stanford University School of Medicine. Ribosome models by Angelita Simonetti et al., Cell Reports and Matthias Thoms et al., Science.

Dr. Puglisi suspects that Nsp1 stops our cells from making proteins of their own — especially the antiviral proteins that could destroy the virus. But that raises the question of how the virus gets its own proteins made.

One possibility is that “somehow the virus is just amped up in its ability to produce protein,” Dr. Puglisi said. From time to time, Nsp1 falls out of ribosomes, and somehow the virus does a better job of taking advantage of those brief opportunities. “We hoped it was going to be something simple,” he said. “But, as usual in science, it wasn’t.”

Blobs and Droplets

While Nsp1 is manipulating ribosomes, other viral proteins are busy making new viruses. A half-dozen different proteins come together to make new copies of the virus’s RNA. But something remarkable happens along the way: Together, the proteins and RNA spontaneously turn into a droplet, akin to a blob in a lava lamp. Physicists have long known that molecules in a liquid spontaneously form droplets if the conditions are right. “This is just making salad dressing,” said Amy Gladfelter, a cell biologist at the University of North Carolina.

But only in recent years have biologists discovered that our cells regularly make droplets for their own purposes. They can bring together certain molecules in high concentrations to carry out special reactions, shutting out other molecules that can’t enter the droplets.

Richard Young, a biologist at the Whitehead Institute, and his colleagues have mixed together SARS-CoV-2 proteins that build new RNA along with RNA molecules. When the molecules assemble, they spontaneously form droplets. The virus likely gets the same benefits as the cell does from this strategy.

Given the sophistication of the coronavirus in so many other regards, Dr. Young wasn’t surprised by his discovery. “Why wouldn’t viruses exploit a property of matter?” he said.

Pores and Tunnels

Coronaviruses can coax human cells to form new chambers to house their genetic material. But when Monsterrat Barcena, a microscopist at the Leiden University Medical Center in the Netherlands, inspected those chambers, she was baffled: There seemed to be no holes in the membranes, allowing no path for the RNA to get in or out.

Recently, Dr. Barcena and her colleagues took a closer look and discovered a way through. One of the coronavirus’s proteins, called Nsp3, folds into a tunnel, which then plugs itself into the membranes.

“It’s a coronavirus escape route,” Dr. Barcena said. “We had this riddle, and now we have an answer.”

Assembling New Viruses

In a matter of hours, an infected cell can make thousands of new virus genomes. The cell’s ribosomes read their genes, spewing out even more viral proteins. Eventually, some of those proteins and the new genomes assemble themselves to make new viruses.

This is no easy task, because the coronavirus’s strand of genes is a hundred times longer than the virus itself.

Recent experiments suggest that, once again, SARS-CoV-2 uses lava-lamp physics to its advantage. Proteins called nucleocapsids glue themselves to spots along the length of the RNA strand. Together, the molecules quickly collapse into droplets.

New coronaviruses, in pink, form inside cell vesicles. Steffen Klein et al., bioRxiv.

Dr. Gladfelter speculated that this strategy prevented two strands of genes from becoming tangled with each other. As a result, each new virus winds up with just one set of genes.

These droplets are swallowed up inside viral membranes and spike proteins, and the new viruses are ready to escape the cell. To simulate these viruses down to every atom, Dr. Amaro is gathering the emerging pictures of SARS-CoV-2 proteins and RNA. She and her colleagues then construct virtual viruses on supercomputers, each consisting of a half-billion atoms. These machines can then use the laws of physics to simulate the dancing of the viruses every femtosecond: in other words, a millionth of a billionth of a second.

Dr. Amaro and her colleagues hope to use her simulated viruses to tackle one of the most contentious questions about Covid-19: how the virus spreads from person to person.

When infected people exhale, talk or cough, they release tiny drops of water laden with viruses. It’s not clear how long SARS-CoV-2 can survive in these drops. Dr. Amaro is planning to build these drops, down to their individual water molecules, on her computer. Then she’ll add viruses and watch what happens to them.

“I’m pretty confident that probably within a year, we would be able to have the whole virus, including all the bits on the inside,” she said.

Drugs and Vaccines

Already, however, the new pictures of SARS-CoV-2 have become essential for the fight against the pandemic. Vaccine developers study the virus’s structure to ensure that the antibodies made by vaccines grip tightly to the virus. Drug developers are concocting molecules that disrupt the virus by slipping into nooks and crannies of proteins and jamming their machinery.

A drug molecule, in blue, blocks the tip of the coronavirus spike. Ian Haydon, Institute for Protein Design.

The virus’s genome may offer other targets. Drugs may be able to lock onto loops and tangles to prevent the virus from controlling our ribosomes. “It’s very important that you know what the shape is, so you can develop the right chemistry to bind to that shape,” Dr. Rouskin said.

Dr. Gladfelter, meanwhile, wants to see if the physics of viral droplets may offer a new line of attack against SARS-CoV-2.

“You could get a compound that would make them stickier, make them more jelly,” she said. “There are probably a lot of Achilles’ heels.”

Future Research

While the past few months have delivered a flood of data about the virus, some studies have made it clear that it will take years to make sense of SARS-CoV-2.

Noam Stern-Ginossar and her colleagues at the Weizmann Institute in Israel, for example, have found evidence that the virus makes proteins that scientists have yet to find.

Dr. Stern-Ginossar and her colleagues surveyed the RNA of the virus in infected cells, tallying up all the ribosomes that were reading it. Some ribosomes clustered along known genes. But others were reading genes that had never been found before.

Ribosomes sometimes read just a section of the spike protein gene, for example. Presumably they make a mini-spike, which may very well carry out some essential job for the virus. A drug that disables it might cure Covid-19.

But scientists can’t even begin to guess at these possibilities, because no one has yet spotted the mini-spike in the wild. And the same will be true for the other new genes, Dr. Stern-Ginossar’s team has found.

“Each one will require additional work to figure out what they’re doing,” she said. “Biology takes time.”

By Carl Zimmer (The New York Times). Produced by Jonathan Corum.

[fatehbaz]

[Environmental racism of major corporate bauxite mine in Amazonian riparian forest at quilombola community of Boa Vista]

Well before dawn, a loud jarring industrial bang shatters the silence of the Amazon rainforest. Awakened, three-year-old Amanda, heart pounding, races to her grandfather’s hammock. “She’s always frightened when she hears that racket. After that, no one in the community can get back to sleep,” explains [AdJ], coordinator for Boa Vista, a hamlet of just 800 people, mostly Afro-Brazilian, and one of dozens of quilombola communities established in Para more than 140 years ago by runaway slaves. The “racket” that so startles Amanda can erupt at any moment, day or night; it happens every time a gigantic transatlantic ore carrier drops anchor in the busy Trombetas River port just half a mile away. [...] Mineracao Rio do Norte (MRN) arrived in the Trombetas River basin in the 1970s with plans to mine bauxite on a gigantic scale. Today, MRN is the fourth largest producer of bauxite in the world, providing the valuable aluminum ore to nations and manufacturers around the planet. [...]

The quilombola story is remarkable: starting in the middle of the 18th century, runaway slaves began settling along the Trombetas River as part of a region-wide movement that was fracturing the slave-based structure in Para state. “My [...] great-grandparents were slaves,” says Jose dos Santos. “They fled from plantations in Santarém [an Amazon River port] and came up the Trombetas River to hide.” [...] Even before slavery ended in 1888, the runaways’ descendants began moving downstream to more navigable stretches of the river.

Still, life remained far from easy, particularly during the military dictatorship (1964-1985) when the government encouraged mining companies, like MRN, to move in.

The quilombos were simply ignored and community lands taken over.

[Bauxite]

On arriving in the Amazon, MRN immediately annexed lands from the traditional riverine community of Boa Vista, reportedly displacing 90 families to build its port company town. Boa Vista is a quilombo, a community of Afro-Brazilians (known as quilombolas), the descendants of runaway slaves. [...] Quilombo residents report a decade of horrendous water pollution from mine waste — never cleaned up — the loss of fisheries [...], rampant poverty, a lack of electricity, health services, and proper sanitation. [...]

The oceangoing ships are coming up the Amazon and Trombetas rivers to collect ore from Mineracao Rio do Norte (MRN), the world’s fourth largest producer of bauxite. That ore is then shipped downriver to processing mills in Barcarena in Para, or on the Atlantic coast in Sao Luis in Maranhao state. Some ore is also sent, unprocessed, abroad [...]. The finished aluminium is then destined for Brazilian manufacturing plants, or factories in the U.S., Canada, China, the EU or elsewhere, where the ubiquitous metal [...] is shaped into beer and soda cans, or used in computers, mobile phones, planes, cars and other end products.

[The company town]

Today, Porto Trombetas and Boa Vista are two very different worlds. The company town has electric lights, supermarkets, banks, schools that teach English, restaurants, clubs, gyms and an airport. A half mile away, Boa Vista is made up of rough wooden houses often crammed together and built beside dirt tracks; the village lacks basic sanitation. Running water was only installed last year. [...]

[The poisoning of Batata Lake]

MRN began discharging bauxite tailings into Batata Lake in 1979, eventually blanketing the once pristine fishery with red ooze. The sludge accumulated on the lake bottom as a solid layer several meters thick. It’s calculated that 24 million tons were deposited in Batata Lake over a period of ten years. [...] Trace elements found in bauxite — a naturally occurring material — can include poisonous arsenic, beryllium, cadmium, chromium, lead, manganese, mercury, and nickel.“ It’s the biggest industrial disaster ever in Amazonia,” Jardim told Mongabay. “Almost twice the volume  of tailings was discharged in Batata Lake compared with the Brumadinho disaster.”

It was only in 1989, after international condemnation, that MRN built its first mining waste storage dam and stopped direct discharges into Batata Lake. Although Lake Batata may appear cleaner today, people living beside it complain of a lack of fish and also suffer from itchy skin and allergies, particularly during the summer, when water levels drop and the red sludge deposits become visible.

Animals suffer harm too. “If you’d been here in the summer, you’d have seen caiman and turtles stuck in the mud. They can’t get out and they die.”

--

Headline, images, captions, graphics, and text published by: Thais Borges and Sue Branford. “MRN bauxite mine leaves legacy of pollution, poverty in Brazilian Amazon. Mongabay. 4 June 2020. Photos by Thais Borges. [Bracketed headings added by me.]

[newstfionline]

Headlines

The sinking price of oil (Eurointelligence, The New York Times)​ The Covid-19 crisis acted as a trigger for an oil price war that has seen benchmarks drop to a third of where they were three months ago, from the $60-75/bbl range to the low twenties. The prospect of $10 oil is not far-fetched. Those with storage capacity are taking advantage of increased Saudi oil production and lower prices to build up inventories, and that is actually keeping up demand and so propping up prices. But inventories will max out soon and then demand for oil will fall as people are still not driving or flying due to lock-downs, and so the price of oil could drop further.​

Soldiers around the world get a new mission: Enforcing coronavirus lockdowns (Washington Post) Around the world, as a consensus has formed around the need for quarantine and social distancing to fight the coronavirus, a more delicate question has emerged: How do you enforce those new rules? In every region, under all kinds of political systems, governments are turning to increasingly stringent measures--and deploying their armed forces to back them up. Countries as varied as China, Jordan, El Salvador and Italy have sent service members into the streets. Guatemala has detained more than 1,000 people. In Peru, those who flout government restrictions can be jailed for up to three years. In Saudi Arabia, it’s five. Deploying troops is a startling but often effective way to keep people indoors, but its impact could ripple well beyond the end of the coronavirus, as countries decide when--and if--to cede the powers endowed by a global pandemic.

Flushing money down the drain (Bloomberg) New toilets onboard the U.S. Navy aircraft carriers USS Gerald R. Ford and USS George H. W. Bush reportedly clog so often that a cleaning service using specialized acid is required to unclog them. The process costs around $400,000 per clog, according to a new congressional audit.

Good news for dogs (Foreign Policy) A surge in applications from homebound New Yorkers has led to a shortage in dogs to adopt and foster. A similar trend has emerged in Los Angeles, where the American Society for the Prevention of Cruelty to Animals noted a 70 percent increase in animals entering foster care. “For the moment we definitely don’t have any dogs left to match” with foster homes, said Anna Lai, of Muddy Paws Rescue, “Which is a great problem to have.”

3.3 million seek US jobless aid (AP) Nearly 3.3 million Americans applied for unemployment benefits last week--almost five times the previous record set in 1982--amid a widespread economic shutdown caused by the coronavirus. The surge in weekly applications was a stunning reflection of the damage the viral outbreak is inflicting on the economy. Filings for unemployment aid generally reflect the pace of layoffs. Revenue has collapsed at restaurants, hotels, movie theaters, gyms and airlines. Auto sales are plummeting, and car makers have closed factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.

Coping with virus through humor (AP) Neil Diamond posts a fireside rendition of “Sweet Caroline” with its familiar lyrics tweaked to say, “Hands ... washing hands.” A news anchor asks when social distancing will end because “my husband keeps trying to get into the house.” And a sign outside a neighborhood church reads: “Had not planned on giving up quite this much for Lent.” Laughter can be the best medicine, and in a crisis, it can be a powerful coping mechanism.

Funerals Are Another Thing That Now Must Wait (NYT) The rituals of honoring and saying goodbye to the dead run deep. Reaching out to touch in sympathy and condolence feels instinctive. But the coronavirus, in its confounding and confining effects--stay-at-home orders, bans on large gatherings and fears of travel and exposure--is blowing those traditions apart, no matter the cause of death. Postponement and uncertainty, and for many families a painful triage of who can physically attend a service and who cannot, are becoming part of the language of obituaries and family discussions even as people grieve.

U.S. indicts Venezuela’s Maduro on narcoterrorism charges, offers $15 million reward for his capture (Washington Post) The Trump administration unsealed sweeping indictments against Venezuelan President Nicolás Maduro and members of his inner circle on narcoterrorism charges on Thursday, a dramatic escalation in the U.S. campaign to force the authoritarian socialist from power that effectively turns the embattled leader into an internationally wanted man. The administration offered a $15 million reward for information leading to Maduro’s capture or conviction, an extraordinary bounty for a man still recognized by the Russians, Chinese and others as Venezuela’s rightful leader.

Europe’s Leaders Ditch Austerity and Fight Pandemic With Cash (NYT) A British prime minister from the party of Margaret Thatcher has effectively nationalized the national railway system, while forsaking budget austerity in favor of aggressive public spending. Germany has set aside its traditional detestation for debt to unleash emergency spending, while enabling the rest of the European Union to breach limits on deficits. The coronavirus pandemic sweeping the globe with lethal and wealth-destroying consequences has proved so jarring to the powers-that-be on the European side of the Atlantic that they have discarded deep-set taboos to forge atypically swift and pragmatic responses. “This pandemic is really like a war,” said Maria Demertzis, an economist and deputy director of Bruegel, a research institution in Brussels. “In a war, you do what you have to do.”

Coronavirus leaves Paris street in 1940s time warp (Reuters) A Parisian neighbourhood has been left stuck in a World War Two time-warp after the makers of a 1940s-era film had to abandon their set before France went into a lockdown. War propaganda and Socialist posters are plastered on walls along the cobbled Rue Androuet, in the Montmartre district, now lined by a mock jeweller’s store, tailor and off-licence in war-time decor. German road signs point towards medical facilities. “Just in case quarantined Paris wasn’t disorienting enough: my neighbourhood was being used as a film set when the lockdown hit. Now the whole block has been frozen in 1941,” resident Tim McInerney wrote on Twitter.

France pulls out of Iraq (Foreign Policy) The coronavirus is causing knock-on effects for Western counterterrorism efforts. On Wednesday, the chief of staff of the France’s armed forces in Iraq announced that it was suspending its anti-terrorism operations in the country and would withdraw its troops to combat the coronavirus at home. France will maintain its presence in Kuwait and Qatar, as well as air operations in Syria. The decision comes as French President Emmanuel Macron initiated a special military operation in France to assist in the response to the pandemic.

Crisis in Spanish health care (Bloomberg News) In the emergency room at one of Madrid’s biggest hospitals, Daniel Bernabeu signed the death certificate for one patient and immediately turned to help another who was choking. People are dying in waiting rooms before they can even be admitted as the coronavirus pandemic overpowers medical staff. With some funeral services halted in the Spanish capital and no space left in the morgues, corpses are being stored at the main ice rink. Intensive-care wards overflowing and new rules dictate that older patients miss out to younger people with a better shot at surviving, Bernabeu said by telephone. “That grandpa, in any other situation, would have had a chance,” he said. “But there’s so many of them, all dying at the same time.”​ (Foreign Policy) Spain has recorded just under 50,000 cases, 27,000 of which are undergoing hospital care. Spain has recorded 3,647 deaths from COVID-19.

China orders sharp cuts in flights in, out of country to curb coronavirus risk (Reuters) China has ordered airlines to sharply cut the number of flights in and out of the country out of concern that travelers from overseas could reignite the coronavirus outbreak that paralyzed the country for two months.

Boko Haram attacks in Chad (Foreign Policy) Nearly 100 Chadian soldiers were killed yesterday in an ambush staged by Boko Haram militants in the village of Boma in the country’s west. “I have taken part in many operations … but never in our history have we lost so many men at one time,” President Idriss Deby said on a visit to the attack site. It’s the second Islamist attack in the region this week after militants killed 70 Nigerian soldiers on Tuesday.

South Africa on the eve of lockdown (AP) South Africa on the eve of a three-week lockdown announced its coronavirus cases are nearing 1,000, while the president urged police to have compassion as they ensure that most of the country’s 57 million people stay at home. “Our people are terrified right now and we should not do anything to make their situation worse,” President Cyril Ramaphosa said. “Psychologically they are already scared that they could get the virus, lose income, lose jobs, get sick without medication.”

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CBN Moves To Halt $4bn Capital Flight In Textile Sector

The Central Bank of Nigeria (CBN) yesterday took bold steps to reverse the $4billion Nigeria spends annually on imported textiles and ready-made clothing by kicking off the distribution of cotton seeds and other inputs to farmers in Katsina State. CBN governor, Mr. Godwin Emefiele, who flagged-off the distribution of cotton seeds and other inputs to 100,000 farmers in Katsina State for the 2019 farming season under the CBN-Anchor Borrower Programme, said that the gesture was aimed at reviving the country’s moribund cotton, textile and garment sector. He noted that the past 20 years had been very difficult for the cotton, textile and garment sector resulting in 130 firms in the industry being shut down. To sanitise the system, the apex bank threatened to blacklist individuals, banks and companies involved in illegal textile importation so that the local players can survive and remain in business. Emefiele said: “Farmers and processors have had to deal with low-quality seeds, rising operating cost and weak sales due to high energy cost of running factories, smuggling of textile goods and poor access to finance. Smuggling of textile goods alone is also estimated to have cost the nation over $2.2billion.’’ According to him, Nigeria was home to African largest textile industry with over 180 textiles mills in operation, which employed close to 250,000 people but “only 25 textile factories are operating today, and the workforce stands at less than 20, 000 people.”

He explained that the CBN resolved to initiate support measures that would drive productivity in the critical sectors of the economy following the over 60 per cent drop in crude oil prices from 2015 to 2017 and its attendant effects on economic growth, inflation and the nation’s external reserves. The distribution of the cotton seeds to farmers is targeted at improving the commodity’s production from 80,000 tonnes in 2018 to over 300,000 tonnes by 2020 and reviving Nigeria’s cotton, textiles and garments sector. Emefiele who reiterated that the foreign exchange restriction on finished textiles and other 42 items remained in force noted that the smuggling of textile goods alone was also estimated to cost Nigeria over $2.2 billion annually. The CBN governor said that the measures taken by the apex bank were yielding results and had helped in driving interest by potential investors who are seeking to make investments to support improved production of textiles in Nigeria. To curb smuggling, Emefiele said that the CBN was gathering data about and investigating the accounts of individuals and corporate entities involved in smuggling and dumping textile materials in Nigeria with a view to blacklisting them, adding that all banks in Nigeria would be barred from conducting any banking business with such companies, their owners and top management. He further said that the CBN had identified insufficient cotton seeds as one of the major challenges facing Nigerian farmers, hence the apex bank sought to change the narrative on the cotton and textile industry through the distribution of high yielding cotton seeds to the beneficiaries. The provision of the seedlings to more than 100,000 farmers cultivating over 200,000 hectares of farmland, along with extensive training on proper farming techniques, Emefiele said would boost the production of high grade cotton lint at much-improved yields of up to four tonnes per hectare, from the current cultivation rate of less than one tonne per hectare. He added that the move would also reduce the amount spent by Nigeria on imported textiles and ready-made clothing estimated at about $4billion annually. Nigeria in the 1970s and early 1980s was home to Africa’s largest textile industry, with over 180 textile mills which employed over 450,000 people, representing about 25 per cent of the workforce in the manufacturing sector.

Emefiele recalled that the industry was supported by the production of cotton by 600,000 local farmers across 30 of the 36 states of the federation, thousands of ginnery workers who processed the cotton from farmers, and a large number of distributors who sold the finished cloths to consumers. He, however, expressed regrets that the farmers and processors had to deal with low-quality seeds, rising operating cost and weak sales due to high energy cost of running the factories, poor access to finance and smuggling of textile goods, which he estimated cost Nigeria over $2.2 billion annually. He lamented that only 25 textile factories were currently operating in Nigeria with a workforce of less than 20,000 people, stressing that a large proportion of clothing materials were being imported from China and European countries Emefiele disclosed that no fewer than 130 textile companies had closed shop in the country in recent times due to various constraints. He told Governor Masari that ‘‘textile industries used to be the largest employers of labour in Nigeria after the public service but due to certain constraints, such as smuggling, dumping, lack of access to finance and issue bordering on power, over 130 textile companies have so far perished. Today, we are complaining about insecurity and kidnapping, the reasons for these are joblessness and hopelessness; so, we need to do something about it. We must revitalise the textile industry to be the largest employer of labour, we feel that we will set the stage rolling, we must come to Katsina State which is the largest producer of cotton to begin a process.’’ He said that the CBN has held a lot of meetings with the farmers and other people on the value chain on how to achieve the desired success and urged Nigerians to stop smuggling and dumping of cotton and textile materials in order to revive the industry. In his remarks, Masari said that agriculture was the next sector that the state government accorded priority after education. He said that reviving the textile industry was the biggest and quickest way of solving unemployment in the country and commended the CBN for its efforts in that direction. Masari, however, urged the apex bank to review the procedures for accessing loan facilities by the farmers. Masari insisted that agricultural revival was akin to breathing life into the people of Katsina State, adding that if the sector was provided with the necessary support, it could employ over 80 per cent of Nigerians. “The best and quickest way to fight poverty is through agriculture because investment in agriculture will start yielding dividends only after six months and in every planting season and with so many dams around the country, we can produce 12 months in a year,” Masari said. Welcoming the stakeholders, the deputy governor, who doubles as the commissioner for Agriculture, Alhaji Mannir Yakubu, said that about N19 billion had been spent on agriculture by the Masari-led administration in the past three and a half years.

He said: “The funds released for the implementation of the agricultural activities are aimed at boosting agricultural production and the provision of employment to our teeming population particularly the youths. It is in the light of this that the state government has provided facilities, incentives and enabling environment to ensure small-scale farmers in the state are engaged massively all the year round,” he added. The minister of Agriculture and Rural Development, Chief Audu Ogbeh, said that the reforms initiated by the Emefiele-led CBN had helped Nigeria to escape the economic crisis far worse than the situation in Venezuela today. Ogbeh, who led the apex bank’s chief executive on the courtesy call on Governor Masari, commended the courage of Emefiele in initiating the Anchor Borrowers Programme at one digit interest rate. He said: “It’s one of the greatest things that has ever happened in this country in the last 40 years and I am in a position to say so because I have been around in the system. I want to commend you, the CBN governor, for being so tenacious in following this up.” Ogbeh continued: “If this CBN administration had not decided to invest in this method of bypassing the obstacle and mountains standing in the way of agricultural development, by now this country would have been in far worse than the situation in Venezuela because accessing the credit had always been the problem.” The minister stressed that the revival of the cotton industry remained imperative to stem the collapse of the industry and its implications for the economy in terms of job loss and taxes. Source: By ANDY ASEMOTA & BUKOLA IDOWU Read the full article

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Sotkl – Sino Ocean Taikoo Li in Chengdu, Sichuan

Sotkl – Sino Ocean Taikoo Li, Chengdu Shopping Mall Interior, Chinese Architecture Images

Sotkl – Sino Ocean Taikoo Li in Chengdu

3 Aug 2020

Sotkl – Sino Ocean Taikoo Li

Design: Elena Galli Giallini Ltd

Location: Chengdu, China

Sotkl – Sino Ocean Taikoo Li Chengdu is a lower ground Shopping arcade forming part of a mixed-use development which includes a luxury boutique hotel and Grade A office uses. It sits in a prime location in the city centre of Chengdu, the capital of Sichuan province located in southwest China. Chengdu is now a burgeoning second tier city, renowned for its social, leisurely lifestyle and tea houses. The development is becoming the centre of Chengdu’s major shopping and cultural district, a place imbued in tradition and history. Directly connecting to Chunxi Road metro station, it links with the popular Chunxi Road area in Jinjiang District.

“The brief of this retail project required an innovative approach that could set this shopping mall apart from conventional images and formulas. We started from the consideration that modern shopping malls need to change the role they perform in peoples’ lives, becoming hubs for urban lifestyle that includes work, play, eat and shop. Our scheme exemplifies this new approach, introducing novelty in design and strong individuality”.

The retail complex is spread over three floors above ground and a basement shopping mall-arcade; it features a low rise, open air plan and lane-driven scheme defined by outdoor shopping mixed carefully with dining, drinking, entertainment and live performances. The site features traditional courtyards and buildings throughout with the Buddhist DACI TEMPLE, first built in 618AD as the composition focus.

Around, heritage led architecture embraces the traditional Sichuan style with modern interpretation. Visitors mingling and gathering amidst lanes, courtyards and plazas can enjoy unique experiences. The client brief aimed to define an interior design for the lower ground arcade (GFA 18,000sqm) which would complement the development and its uniquely distinct site, whilst providing a strong interrelationship with the upper retail complex.

Juxtapositions of old and new, heritage and nature, place and history were the essential themes for this project. The design created an environment which relates precisely to the place’ history and culture, its local spirit (its “Genius Loci”), avoiding the trap of making an indistinct shopping mall. It finds a language which defines its character amongst the repurposed, traditional architecture above. The lower arcade layout privileges interconnectedness, linking key areas above whilst working as a functional network below. It forms a loop of public space flanked by high street retail. Significant elements anchor the corners cinema, supermarket, bookshop and a Metro station.

The design aimed to generate dynamism and distinction, while maintaining an atmosphere of coherency and serenity. A vibrant environment, attractive visual elements and multiple amenities are key to providing leisure and entertainment for compelling experiences for the customers. Materials, colours and lights enhance quality through subtle elegance, defining the mall identity. Spatial layout and features emphasize naturalness with sophistication.

“Our project refers to the underground world of the Chinese landscape, rocks symbolism and “caves” imagery with their complex system of “worlds within worlds”, underground streams, lakes and “skylights” as reference for the compositions. Caves are containers for mystery and are believed to be places of special purified “QI”. Our design aimed to evoke that special kind of energy with its mysterious qualities”. A subterranean stream, the arcade loop flows with a fluid, seamless design eroding the clusters of shops. The ambiance exhibits warmth and a tranquil quality encouraging inhabitation. The ceiling is a key element characterized by rhythmically distributed fissures and holes that incorporate lighting and signage systems. Strategical skylights lined with copper mesh and theatrically lit act as focal points and facilitate navigation. The arcade has a counterpoint in the dramatic, sculptural design of functionally specific areas that generate memorable unique spaces, immediately recognizable.

The Metro entrance, the main access for people arriving by public transport, is a modern gateway. Envisaged as massive cave with angled stone walls and light penetrating from the plaza above, the Entrance hall leads to the core of the arcade loop through a digital corridor, a place unfolding like a traditional folded scroll for visual, digital art and exhibitions.

As metaphorical, massive caves, escalator lobbies display organic forms and striking proportions. Lobbies allow vertical circulation and invite people to linger. They open up toward the arcade, eliciting a feeling of expansion and openness. Inside, carefully defined geometry of stone-clad walls display a variety of man-made “rock” formations in granite and lava-stone rods with a variety of surface finishes. This system of bespoke prefabricated panels, factory –made and mounted on site achieved accuracy and cost control whilst the stone palette relates to the local materials of surrounding heritage buildings.

Sculptural frames in GRC, encased within illuminated back drops of glass rods and copper, showcase the advertisement panels as jewellery boxes.

Throughout the scheme, natural materials, stone, meshes and metals combinations with different colours, textures and finishes, blend in harmonious interplay.

Delicately detailed metalwork highlights the key features with a mix of grey steel and naturally burnished copper. A split rectangle forms the door handles, the inclined glass balustrade held with brackets crafted from solid metal, hanging shop signage, all are balancing the boldness of the scheme with clear-cut detailing. Strong shapes generate eye-catching points and visual interest.

The washrooms display a dynamism complementing the liveliness and sculptural qualities of the overall design. While fulfilling functionality and user-friendliness, the design focuses on attractiveness and novelty, encompassing a playful dimension. Vigorous shapes hewn in a white and dark grey solid surface material and unconventional lighting set them apart from the typical washroom ambiance. A collection of freestanding sinks are clustered beneath mirror units suspended from the ceiling, folded planes line up to form cubicles, urinals purposely disguise their function with angled, multifaceted partitions, other standard units provide function variety, seating, makeup counters or baby change areas, through subtle diversification.

The designers focused on creating a World-Class environment that would attract and retain consumers, and the leasing team set ambitious targets for brands that are not yet in Chengdu.

The development is becoming Chengdu’s new lifestyle epicentre contributing to its growth. Chengdu was listed by Forbes Magazine in 2010 as one of the fastest growing cities in the world.

Sotkl – Sino Ocean Taikoo Li, Chengdu – Buildng Information

Client: Swire Properties and Sino-Ocean Land Lead Interior Designers: Elena Galli Giallini Ltd and Spawton Architecture Project Location: Chengdu, Sichuan Province, China Area: overall Retail complex: 114,000 m2; Shopping Mall Arcade: 18,000m2 Status: built

Awards: “Urban Land Institute (ULI)” – Global Excellence Awards 2015: Winner “Society of British and International Design 2015 (SBID)”- New Build and Development: Winner “Asia Property Awards (China Property Awards 2015) – Best of the Best ‘Best Commercial Development in China’: Winner “Architizer A+ Awards 2016”: Finalist “HKIA – Merit Award 2015”: Winner (with Architectural Team) “FX Awards 2015” Retail Design: Finalist “FX Awards 2015” Global Design: Finalist “FX Awards 2015” Public Space Design: Finalist “WAN – Commercial Awards 2015”: Finalist

Photography: Virgile Simone Bertrand

Sotkl – Sino Ocean Taikoo Li in Chengdu, Sichuan images / information received 030820

Location: Chengdu, China

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Valextra Flagship Store Architects: Neri&Hu photograph : Pedro Pegenaute Valextra Flagship Store

‘Sliced Porosity Block’ Design: Steven Holl Architects photo © Iwan Baan Chengdu Building Complex

Chengdu Tianfu Cultural Centre Design: Massimiliano and Doriana Fuksas Chengdu Tianfu Cultural Centre

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Comments / photos for Sotkl – Sino Ocean Taikoo Li in Chengdu, Sichuan page welcome

Chengdu, China is the capital of southwestern China’s Sichuan province.

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China reports 5,000 new COVID-19 cases, cruise ship passengers disembark in Cambodia

New Post has been published on https://apzweb.com/china-reports-5000-new-covid-19-cases-cruise-ship-passengers-disembark-in-cambodia/

China reports 5,000 new COVID-19 cases, cruise ship passengers disembark in Cambodia

BEIJING/SIHANOUKVILLE, Cambodia — China’s coronavirus outbreak showed no sign of peaking with health authorities on Friday reporting more than 5,000 new cases, while passengers on a cruise ship blocked from five countries due to virus fears finally disembarked in Cambodia.

News of the first death from the virus in Japan rattled Asian markets, already on edge after hopes that the epidemic was stabilizing appeared to be dashed by a sharp rise in the number of cases on Thursday.

READ MORE: 12 Canadians from Diamond Princess have COVID-19, as passengers prepare to leave quarantine

In its latest update, China’s National Health Commission said it had recorded 121 new deaths and 5,090 new coronavirus cases on the mainland on Feb. 13, taking the accumulated total infected to 63,851 people.

Some 55,748 people are currently undergoing treatment, while 1,380 people have died of the flu-like virus that emerged in Hubei province’s capital, Wuhan, in December.

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The new figures give no indication the outbreak is nearing a peak, said Adam Kamradt-Scott, an infectious diseases expert at the Centre for International Security Studies at the University of Sydney.

READ MORE: Reality check: Why 15K new cases of COVID-19 doesn’t mean the outbreak is exploding

“Based on the current trend in confirmed cases, this appears to be a clear indication that while the Chinese authorities are doing their best to prevent the spread of the coronavirus, the fairly drastic measures they have implemented to date would appear to have been too little, too late,” he said.

2:04 Toronto couple trapped on quarantined cruise ship

Toronto couple trapped on quarantined cruise ship

The epidemic has given China’s ruling Communist Party one of its sternest challenges in years, constrained the world’s second-largest economy and triggered a purge of provincial bureaucrats.

Japan confirmed its first coronavirus death on Thursday — a woman in her 80s living in Kanagawa prefecture near Tokyo. The death was the third outside mainland China, after two others in Hong Kong and the Philippines.

Japan is one of the worst affected of more than two dozen countries and territories outside mainland China that have seen hundreds of infections.

READ MORE: COVID-19 travel restrictions based on misinformation, racism: health law scholars

Japanese policymakers vowed to step up testing and containment efforts after the death and confirmation of new cases, including a doctor and a taxi driver.

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The world’s third-largest economy is already bracing for a sharp slowdown in growth and some analysts expect another contraction in the current quarter as the virus outbreak hurts exports, output and consumption through a sharp drop in overseas tourists.

“Investors will surely avoid Asia for the time being and will shift funds to the U.S., geographically the most separated from the region,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

CAMBODIA WELCOMES CRUISE PASSENGERS

A cruise liner quarantined off a Japanese port has more than 200 people confirmed with the disease, including 12 Canadians. Authorities have said they will allow some elderly people to disembark on Friday.

Canadian Foreign Affairs Minister Francois-Philippe Champagne said four Standing Rapid Deployment Team members landed in Tokyo on Wednesday, with three Canadian public health officials set to arrive on Friday and and two Canadian Armed Forces medical officers to soon be deployed.

Update #DiamondPrincess 🇯🇵

➡️4 Standing Rapid Deployment Team members have arrived in Tokyo on Feb. 12 ➡️3 Public Health Agency Canada members will arrive on Feb. 14 ➡️2 Canadian Armed Forces medical officers will soon be deployed

More information to follow. pic.twitter.com/P9F2RuDhfH

— François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) February 14, 2020

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Passengers on another cruise ship that spent two weeks at sea after being turned away by five countries over coronavirus fears started disembarking in Cambodia on Friday.

The MS Westerdam, carrying 1,455 passengers and 802 crew, docked in the Cambodian port town of Sihanoukville on Thursday. It had anchored offshore early in the morning to allow Cambodian officials to board and collect samples from passengers with any signs of ill health or flu-like symptoms.

Cambodian Prime Minister Hun Sen greeted the passengers with handshakes and bouquets of roses as they stepped off the ship and boarded a waiting bus.

READ MORE: COVID-19 travel restrictions based on misinformation, racism: health law scholars

“My wife and I gave him some chocolates as a show of our appreciation,” Lou Poandel, a tourist from New Jersey, told Reuters after he disembarked and met the Cambodian leader.

Australian health officials tested a passenger onboard another cruise ship that docked in Sydney harbor for a “respiratory illness” on Friday, causing passengers to fret about the potential of another shipboard outbreak of the coronavirus.

The health ministry did not specify the nature of the respiratory illness, or specifically rule out the coronavirus.

READ MORE: Vancouver couple on board cruise ship stranded outside Taiwan

Separately, Royal Caribbean Cruises Ltd said it had canceled 18 cruises in Southeast Asia and joined larger rival Carnival Corp in warning that its full-year earnings would be hit by the coronavirus outbreak.

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Global health authorities are still scrambling to find “patient zero” — a person who carried the disease into a company meeting in Singapore from which it spread to five other countries.

1:49 Coronavirus outbreak: Cruise ship turned away by 5 countries docks in Cambodia

Coronavirus outbreak: Cruise ship turned away by 5 countries docks in Cambodia

ECONOMIC IMPACT

The rise in China’s reported cases on Thursday reflected a decision by authorities there to reclassify a backlog of suspected cases by using patients’ chest images, and did not necessarily indicate a wider epidemic, a World Health Organization official said on Thursday.

Economists are assessing the impact of the outbreak on the world’s second-largest economy and scaling back their expectations for growth this year.

1:01 Coronavirus outbreak: Cambodia governor says no passengers on docked cruise ship have illness

Coronavirus outbreak: Cambodia governor says no passengers on docked cruise ship have illness

After the extended Lunar New Year holiday, many migrant workers may still be stuck in their hometowns, far from their factories. Analysts at Nomura estimated only about 21% had returned as of Thursday.

China’s economy will grow at its slowest rate since the global financial crisis in the current quarter, according to a Reuters poll of economists who said the downturn will be short-lived if the outbreak is contained.

— With a file by Global News

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[mikemortgage]

In GM country, workers aren’t abandoning Trump – so far

LORDSTOWN, Ohio — Since General Motors announced its decision this week to shut down its hulking Lordstown plant — the anchor of this northeast Ohio town — workers on the line have had nothing but questions. Will they have jobs come spring? Should they put in for transfers and move their families to Texas or Tennessee? How much should they spend on Christmas?

One they haven’t yet answered: Who is to blame?

It was working-class voters like these who bucked the area’s history as a Democratic stronghold and backed Donald Trump in 2016, helping him win the White House with promises to put American workers first and bring back disappearing manufacturing jobs. Whether they stick with him after the GM news and other signs that the economy may be cooling could determine Trump’s political future.

For now, many people here are still behind the man who won them over with his sky-high promises. But they took those pledges seriously, and still expect him to fulfil them.

“Do I feel like there’s still time to put down Twitter and stop doing what he’s doing and focus on us? Yeah,” said Tommy Wolikow, who followed in his father’s footsteps to work at GM Lordstown before he was laid off on the same day as Trump’s inauguration.

The 36-year-old father of three was in the crowd at a 2017 rally in Youngstown when Trump boasted he would bring jobs back.

“Don’t sell your house,” the president said — and Wolikow took him at his word. But things only got worse. He’s since started travelling to Trump rallies to draw attention to the troubles in Lordstown and elsewhere where he says promises haven’t been kept. But he says he will support Trump again if he sees action, not just words.

“If you help get jobs back here in our community … you’ll have my vote,” he said.

GM said Monday it would cut up to 14,000 workers in North America and marked five plants for possible closure, including the Lordstown plant, which previous rounds of layoffs already had left operating with just one shift. Once-full parking lots around the plant now sit largely empty. Assembly plants in Detroit and Ontario and transmission plants near Baltimore and in Warren, Michigan, also could be shuttered.

Michigan, like Ohio, was among the states with large numbers of once-reliably Democratic union workers who backed Trump two years ago. But Michigan seemed to be swinging back to the left in the November midterm election, when Democrats won the governor’s office and other statewide races and picked up two congressional seats.

Ohio seemed to be holding firm for the GOP. Democratic Sen. Sherrod Brown — a possible 2020 presidential candidate — won re-election, but Republicans won the governor’s race and four other statewide offices for the third straight time, an outcome Ohio Democratic Party Chairman David Pepper attributed partly to Ohioans’ loyalty to the president. “The Trump factor,” he said.

In northeast Ohio, where Democrats for decades took 60 per cent or more of the vote, the GOP picked up steam. While statewide Democratic candidates won in Mahoning County, where Youngstown is located, it was by much smaller margins than four years ago. County GOP Chairman Mark Munroe credits Trump and a “newfound sense of optimism.”

“If anything, support for the president has gotten stronger,” he said. “People have an appreciation for what the president has done. I think he’ll do even better in 2020.”

The Trump presidency has coincided with factory job gains, although not in some of the traditional manufacturing centres that he promised to revive. The number of people working in factories has not passed the totals of a decade ago, right before the 2008 financial crisis forced a crushing wave of layoffs.

Ohio has shed auto-making jobs on Trump’s watch, while Michigan, California and Kentucky have seen growth.

Trump does appear to be getting credit for the economy, even from those who aren’t personally benefiting.

With low unemployment and a largely strong stock market until relatively recently, nearly two-thirds of midterm voters nationwide considered the economy to be good, according to VoteCast, the Associated Press’ survey of the electorate. And while just 44 per cent of voters said they approved of his job performance overall, 55 per cent gave him high marks on the economy.

In rural and small-town America, the heart of Trump’s support, a solid majority — 58 per cent — of voters making less than $50,000 said they approve of his handling of the economy. That’s only a slightly smaller share than rural voters overall.

In Ohio, backing for Trump and his handling of the economy was strong. Even as voters nearly split evenly on their opinion of Trump overall, 57 per cent gave him good marks on the economy.

“I don’t think he can perform miracles,” said Lordstown Mayor Arno Hill, a Trump supporter who, like others in this community near Youngstown, is hopeful GM will assign the plant another product to replace the Chevy Cruze, a model workers here produce but the company is abandoning. He blames market forces, not Trump or GM, and says the community is otherwise doing well.

“If we were giving out grades, I’d give (Trump) a B right now,” Hill said. “If Lordstown gets another product, I’ll give him an A.”

Trump criticized GM and the company’s chief executive officer, Mary Barra, after the shutdown announcement, noting on Twitter that the company isn’t closing plants in China or Mexico.

“The U.S. saved General Motors, and this is the THANKS we get!” he wrote. The president also said this week he wants to cut federal subsidies for the company, and signalled he may place tariffs on car imports.

The White House has not clarified those comments, and there are questions about whether the president has the authority to act without congressional approval.

Union leaders and Democratic officials say Trump should have done more, and sooner. After the latest round of layoffs in July, Union President Dave Green sent a letter to Trump asking him to get involved and noting a large number of union members voted for him. Trump’s silence on the situation, Green wrote, was “disturbing.”

Trump this week pinned blame on others, including Brown, telling The Wall Street Journal the senator “didn’t get the point across” to GM. Brown said the president should stop “pointing fingers” and called on him to sit down and discuss ways to save the plant.

News like the GM announcement could sway opinion and create a line of attack for a Democratic candidate. And there are other indications of U.S. economic trouble: Sales of new U.S. homes dropped in October by almost 9 per cent, and the number of unsold, newly built homes on the market reached its highest level since 2009.

Tim O’Hara, vice-president of United Auto Workers 1112, says whether support for Trump continues is a matter of “wait and see, like everything else.” He said he believes a Democrat still has a chance to win in Ohio if that candidate talks about issues people care about, like jobs and trade.

O’Hara, who backed Hillary Clinton in 2016, retired from the plant earlier this year after 41 years, though his wife still works there. He said a lot of people in the area “seemed to buy in to Trump” two years ago, and he agreed most are still with the president.

“But worst-case scenario — let’s say the plant closes for good — I don’t know what their opinion is going to be at that point,” he said.

——

Associated Press writers Hannah Fingerhut and Josh Boak contributed from Washington.

from Financial Post https://ift.tt/2PckjYO via IFTTT Blogger Mortgage Tumblr Mortgage Evernote Mortgage Wordpress Mortgage href="https://www.diigo.com/user/gelsi11">Diigo Mortgage

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The Coming Boom Of Productivity Will Get Our Economy Back On Track

My good friend Gary Shilling draws some crucial distinctions with respect to wage and jobs and explains why our perplexing US labor market is actually quite rational.

Gary and I share a fundamental optimism regarding our prospects for long-term economic growth, and in this report, he tells us why.

This kind of in-depth dissection of macro trends is what Gary is known for. So without further ado, I’ll let him take it from here.

Wages vs. Jobs

(Excerpted from the August 2017 edition of A. Gary Shilling's INSIGHT newsletter)

Real wages have been stagnant in the US and other developed countries for over a decade. As we’ve discussed in numerous past Insights, this has made people “mad as hell” and has resulted in populist uprisings that spawned Brexit and the election of Donald Trump. Extremely aggressive monetary policy that reduced central bank-controlled interest rates to essentially zero did little to revive economic growth since creditworthy borrowers already had plenty of money, and banks—scared and chastened after the financial crisis—had little desire to lend to the rest.

Just Around the Corner

Yet, the Fed, first and foremost, but other major central banks as well, remain convinced that rapid economic growth and surging labor costs are just around the corner, so they better tighten credit now to head off these threats of serious inflation. It appears that credit authorities believe the nation is in a typical 1950–1960s business cycle and are not taking into account the many significant economic changes in recent decades. A number of these explains why labor markets are perplexing in the context of that earlier era, but quite rational in today’s climate.

Here are six major aspects of the current atmosphere.

1. Globalization. First and foremost is globalization—the shift of manufacturing and other production in the last three decades from developed countries in Europe and North America to developing economies in Asia, where costs are much lower. The resulting collapse in manufacturing employment in the West has been dramatic (Chart 1).

Furthermore, legal, accounting, medical billing, and other services are being outsourced abroad, putting downward pressure on jobs and compensation in those sectors as well. A recent survey by Deloitte reveals the rapid rise in respondents’ plans to outsource many functions (Chart 2). As economies grow, a growing share of spending is on services and a declining portion on goods.

Note that with globalization, many US goods prices continue to deflate. Meanwhile, domestic and international downward pressure is being felt on services as diverse as education, health care, retailing, and financial service fees and commissions.

2. Ample worldwide men and machines also restrain US wages and prices. Some policymakers fret that the output gap—the percentage of unutilized output in the US economy—is shrinking fast (Chart 3). This is debatable since the economy’s output potential isn’t a fixed number but depends on speed of growth, which influences the economy’s flexibility. It can adapt much better to slow, predictable growth than to an unexpected surge in demand.

Also, capacity is sensitive to wages and prices. Higher pay attracts new workers who otherwise are comfortable drawing welfare, unemployment, and disability benefits. By the same token, high-selling prices can make otherwise obsolete machinery profitable to utilize.

On numerous tours of economic consulting clients’ factories, we’ve seen decades-old equipment next to state-of-the-art machines. The old machines are normally unprofitable to operate, but become so in times of high demand for their output and leaping prices. The current overall operating rate (Chart 4) remains below the levels that in the past have initiated capital spending surges. But even previous peaks would not indicate full capacity under the right economic circumstances.

More important, in today’s globalized world, supplies of labor and productivity capacity need to be considered on a worldwide basis, but data is woefully lacking—especially in rapidly-expanding developing economies. By all accounts, global supplies are ample and will remain so, barring all-out protectionist wars and tariff walls in advanced countries that could drastically chop imports.

Like Japan before her, China is moving up the scale of manufacturing sophistication while low-end output is shifting to lower-cost venues such as Vietnam, Pakistan, Indonesia, and our long-term favorite, India—which is already robust in technological services exports.

With her rising population growth, democratic government, large privately-owned companies, the English language, and a legal system inherited from the British, India seems destined to best China in economic growth and power in the long run, as we have discussed in past Insights. Prime Minister Narendra Modi’s efforts to reduce widespread corruption, oversized subsidies for the rural poor, and excessive government regulations are all encouraging.

3. US labor surpluses. Back in December 2012, the headline unemployment rate was 7.7% and the Fed stated that the federal funds rate, then in the 0-¼% range, would be “appropriate at least as long as the unemployment rate remains above 6.5%, inflation one and two years ahead is projected to be no more than a half percentage point above the [policy] Committee’s 2% long-run goal and long-term inflation expectations continue to be well anchored.”

U-3 is a well-known measure of labor market conditions and that's probably why the Fed picked it, but it's a very poor indicator of labor market slack or tightness. It is the ratio of those actively looking for work to that group plus the people who are employed.

Consequently, the unemployment rate declines if more are employed, but it also falls if fewer are looking for jobs. The latter has dominated in recent years, as shown by the big drop in the labor participation rate—the percentage of all Americans over age 16 who are employed or actively seeking jobs (Chart 5). It peaked at 67.3% in early 2000 and fell to 62.4% in September 2015.

As reported in past Insights, our analysis revealed that about 60% of that decline was due to retiring post-war babies. The remaining 40%, however, was composed of those under 35 years old who stayed in school in the hope that more education would improve their job prospects in the weak job atmosphere initiated by the 2007–2009 Great Recession, and those 35 to 64 who gave up looking for work in a tough employment climate.

Furthermore, the labor participation rate earlier was driven up by women entering the job market, but by the early 2000s, they joined men in reducing their involvement. Further post-war baby retirements in future years will cut participation rates even more.

Without the precipitous drop in the labor participation rate, the headline unemployment rate, now at 4.4%, would be in double digits. The Fed, of course, was forced to abandon its 6.5% unemployment rate target for raising interest rates as U-3 fell and pierced that level in April 2014 when it fell to 6.2%. And U-3 continues to be a poor measure of slack in the labor market for several reasons.

Poor Measure

To begin, our analysis shows the growth in the working-age population will provide ample people to fill further available jobs, even if economic growth jumps from the economic recovery average of 2.1% to our forecast 3% to 3.5%—assuming they have the needed skills.

In addition, many of those who dropped out have not disappeared, but may well be drawn back to work for expanding job opportunities. Indeed, the labor force of those age 20 to 29 has been growing since 2012 (Chart 6).

At the same time, people over 65 who are employed or actively looking has been rising since the early 1990s. Many seniors remain in good health and prefer active work to vegetating in front of the TV. Others, among them many post-war babies born in the 1946–1964 years, have been notoriously poor savers throughout their lives and need to keep working due to lack of retirement assets.

As a result of these developments on the young and old ends of the age spectrum, the total labor participation rate appears to have bottomed out. From September 2015 to this June, it rose from 62.4% to 62.8%.

Also, keep in mind that, like capacity utilization data, measures of labor market slack on a global basis aren't available. It certainly appears, however, to be ample, and the skills of workers in Asia are rising rapidly—not only in the production of goods but in services as well.

4. Cost-Cutting. The Fed was, no doubt, aware that after the Great Recession, US corporate cost-cutting propelled earnings in lieu of significant unit volume growth and with negative pricing power. Since most business costs, directly or indirectly, are for labor, those actions axed employee compensation’s share of national income while profits’ share leaped (Chart 7).

In the last several years, however, those share movements have reversed. Whether that’s due to exhausting cost-cutting or picking all the low-hanging fruit while waiting for more to ripen remains to be seen, but compensation’s rising share of national income probably has gotten the central bank’s attention.

5. Shift to lower-paid jobs. Another wage-restraining force in this economic recovery is the job-creation emphasis on low-paid US jobs, as we’ve explored in past reports. It’s been in low-paid sectors such as retail trade where many more people have gained jobs since the depths of the Great Recession, while real wages in retailing have risen just 0.9% in total since the beginning of 2007.

Similarly, the 3.0 million rise in hotel clerks, waiters, and other leisure & hospitality jobs in this business recovery has far outstripped the 900,000 gain in manufacturing. In June, manufacturing employees were paid $26.51 per hour, 1.72 times the $15.43 per hour earned by leisure and hospitality workers. In addition, manufacturing employees worked 1.56 times as many hours, so their weekly pay, $1,081.61, was 2.69 times the $402.72 paid to the average leisure and hospitality employee. So the effect of differing sector employment growth has been to retard average wages.

The robust demand for low-skilled, low-paid workers is pushing up their wages as is the proliferation of minimum wage increases in many states and cities. But at the same time, pay increases of those in the 90th percentile are slowing (Chart 8). Nevertheless, so far in this expansion, workers in the 90th percentile have received 20% pay increases while those in the bottom 10th percentile have gained 12.5%, not enough to offset inflation.

Even within industrial sectors, wages have been depressed as post-war babies at the top of their pay scales retire and are replaced by lower-paid new recruits. In contrast, during the Great Recession, layoffs were centered in lower-paid people, many of whom were nice to have around in the previous good times, but not necessary when business declined. That elevated average wages.

More recently, however, new hires have come in at the low end of pay raises, depressing average pay. Furthermore, more so than in past recessions, part-time workers have moved to full-time jobs and 80% of them do so at below-median wages, according to a study by the San Francisco Federal Reserve.

This is especially true for those working part-time “for economic reasons,” i.e., those who want to work more hours than they are offered (Chart 9). This, too, pulls down overall median compensation. Also, 79% of those who have gained full-time jobs but were previously not in the labor force got below-median pay. Ditto for 72% of those previously unemployed when they got jobs.

As a result of these pay differences, the Atlanta Fed’s Wage Tracker series, which measures the wages of continuously full-time employees, has recovered more sharply than other earnings series, even the Employment Cost Index that corrects for employment shifts among industries (Chart 10).

This is a phenomenon similar to the ongoing income polarization discussed earlier. In any event, the fact that those with continuing full-time jobs have fared better than the rest doesn’t mitigate the depressing effect of consumer purchasing power on overall slow wage growth.

6. Union membership. With globalization devastating US manufacturing jobs and cost-cutting pressure on those that remained, union membership in the private sector has collapsed from a quarter of the total workforce in 1973 to 6.4% last year.

This has had tremendous depressing effects on wages since private union jobs pay 19% more, on average, than non-union positions in base pay and over 50% more when health care, retirement, and other benefits are included.

State and local government employees have enjoyed much higher pay and even more lush benefits than private sector workers. Nevertheless, municipal employee compensation is under fire from the many states and local governments with strained budgets and vastly-underfunded pension plans. At the same time, municipal union membership is slipping.

Quiescent Labor, Aggressive Management

Despite their lack of purchasing power growth, many employees are reluctant to demand higher pay. Memories of joblessness in the Great Recession are still fresh, as is the understanding that those who quit in the hope of getting a higher-paying job will probably end up with lower pay.

On the other side, most employers, in the face of excruciating foreign and domestic competition, don’t believe they can pass on increased labor costs through selling price hikes. The only alternative is increased productivity, which makes it possible to pay higher wages without cutting into business profits. To put it another way, the value added of any factor of production, including labor, must exceed its costs. And the miserable productivity growth in recent years (Chart 11) has not provided the value added to justify higher wages.

7. Productivity. The definition of productivity is simple. It’s the physical output in relation to all required inputs. It’s the measurement that’s tough. You can measure the widgets stamped out per hour on a punch press, but how do you determine the output of a cell phone?

Furthermore, the number of hours worked is straightforward, but the quality of the work by different employees is problematic. Also, other inputs such as capital, technical expertise, and managerial talent are hard to measure. Consequently, the usual but unsatisfactory measure of productivity is output per hour worked.

By this measure, productivity growth averaging 0.53% per year in the 2011–2016 period has been far below the earlier norm of 2% to 2½%. The reasons for the slowdown are unclear, but many possibilities are being discussed that suggest that productivity growth is being significantly understated.

Measurement of Output

Cell phones and other high-tech gear probably enhance efficiency of doing business far beyond their cost. Consider the value of time saved by shopping online, which is not captured in the statistics. The costs of new wonder drugs, high as they are, probably do not measure their value in saving lives.

Another explanation for slow US productivity growth as officially reported is that much of it is hidden overseas. In order to avoid paying US taxes, American multinationals have moved intangible assets overseas. Estimates are that between 2004 and 2008, these actions slowed US reported productivity gains by 0.25 percentage points per year.

Delays

We’ve discussed in many past Insights that productivity-soaked new technologies mushroom, but often take decades before becoming big enough to raise the overall productivity needle.

The Industrial Revolution began in England and New England in the late 1700s, but only after the 1860–1865 Civil War had it expanded to the point of hyping nationwide productivity. As a result, between 1869 and 1898, real GDP leaped by 4.32% per year (Chart 12) and output per capita leaped at a 2.11% annual rate. In contrast, it’s now rising around 1% annually (Chart 13).

We continue to believe that many of today’s new technologies such as biotech, robotics, cell phones, computers, and self-driving vehicles are still in their infancy. In time, however, they should expand to the point that their rapid productivity advances propel overall productivity and economic growth.

That’s a big reason we expect a return to 3% to 3.5% real economic growth in the years ahead, especially as overall demand is driven by fiscal stimuli.

CapEx and Productivity

Many believe that the lack of significant productivity growth in recent years is due to sluggish capital spending, and they attribute that to excessive government regulations, business uncertainty over global developments, and lack of clear policies in Washington.

Our research, however, indicates that the greatest driver of plant and equipment spending is operating rates. When they’re high, capacity is strained and more is needed to fulfill orders. When they’re low, as in recent years, there’s little need for more capital spending beyond that aimed at cutting costs and improving efficiency. We found other forces have only small influences on plant and equipment outlays, including corporate profits, cash flow, and the growth rates of capacity utilization.

Improved productivity may be embedded in new plant and equipment, but there’s little evidence that big increases in capital expenditures result in surges in productivity. Chart 14 shows the growth rates of the two, and it’s clear that there is little correlation between the change in capital expenditures and the change in productivity. The correlation has an R2 of just 0.8% on a quarter vs. same quarter basis. Leading and lagging data doesn’t help much later. It shows that a productivity rise now promotes capital spending four quarters later, the reverse of what you’d expect, and that R2 is still a small 31.5%.

Productivity Outlook

Our conclusion is that rapid productivity and, therefore, the wherewithal to increase real wages will revive with the resumption of rapid economic growth in several years—the result of massive fiscal stimuli as well as the maturation of today’s new technologies. Other forces may well push in the same direction.

They include significant tax reform, significant government deregulation (but don't hold your breath; every president since Jimmy Carter has attempted to reduce the financial costs of regulations, but with little success), education reform, unifying licensing requirements, which often vary widely by state, to improve labor mobility and reforming disability, Social Security, and other programs that can encourage people not to work.

Also, there’s nothing like a stronger economy to create labor demand and the resulting high employment and wages. As noted earlier, we foresee this in several years as a result of massive fiscal stimuli, spurred by voters “mad as hell” over weak purchasing power for over a decade.

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The Fed is doing good work — the economic policy problems are elsewhere

The American monetary authority is holding the economy and the financial system in a reasonably good shape in an environment of price stability. That is a laudable achievement under conditions of rising uncertainty about public finances, structural economic and social reforms and foreign trade issues.

Many people militantly disagree with this view, even though the financial markets are taking U.S. equity valuations to record-high levels in response to properly calibrated monetary policies. The question to naysayers is this: What else are the markets responding to?

Federal Reserve Chair Janet Yellen testifies before a Senate Banking Committee hearing on the ‘Semiannual Monetary Policy Report to the Congress’ on Capitol Hill in Washington, July 13, 2017.

Would they like to try these for better answers: (a) stalled health-care legislation, (b) difficulties with passing the proposed tax code changes, (c) no evidence of sorely needed infrastructure investments, (d) tinkering around the edges of foreign trade problems or (e) absence of any progress in swaying China and a German-led Europe to change their trade policies that cost America $512 billion in trade deficits last year and $204.5 billion in the first five months of this year?

And all of that is happening at a time when the Republican Party comfortably controls America’s legislative and executive authorities.

Meanwhile, that’s all in full view of America’s strategic competitors, who understand that they are dealing with a country whose economy is held back by a pathetic 1.6 percent growth potential as a result of inadequate labor and physical capital resources.

Monetary policy and ‘nothing-burgers’

This broader context is necessary to understand the Fed’s role in the management of the U.S. economy. Crucially, that uninspiring broader context also explains the Fed’s hesitation to initiate a more systematic process of “policy normalization” — a short-hand for liquidity withdrawals and a move out of negative real short-term interest rates.

In fact, some of the most recent Fed statements are clearly implying that they don’t think much of the announced economic stimulus measures: tax cuts, infrastructure investments, market deregulations and better foreign trade policies. The Fed maintains modest growth expectations — somewhere around 2 percent — and an apparent intent to move toward a neutral policy and a slow and gradual credit tightening over the next few years.

Here is what some of that means: Assuming that inflation (measured by the CPI) remains at about 2 percent over the relevant policy horizon, the effective federal funds rate would have to be raised by 84 basis points (from its current level of 1.16 percent) to match that inflation rate and reach a roughly defined point of monetary neutrality. To get there, there would have to be at least three more interest rate increases of 25 basis points.

Obviously, this scenario would be radically different if the Fed felt more confident about the implementation of meaningful economic stimulus measures. Anticipating those events, the Fed would accelerate its schedule of interest rate increases to anchor inflation expectations and limit bond market problems. The fact that it is not doing that simply means the Fed has serious doubts about the fiscal agenda and the rest of the proposed growth-enhancing actions. So, the Fed sounds like it wants to change the subject and stay away from a policy argument. It is puzzling instead over the wage and price inflation while telling the White House “good luck with your 3 percent GDP growth target.”

Raise the supply and quality of labor

But that’s hardly changing the substance of the dialogue about economic policies because rising wages and prices can only happen as a result of increasing demand pressures in labor and product markets.

One of the Fed governors aptly observed last week that wage inflation will begin to accelerate when we see a real tightening in labor markets. In other words, he is telling people not to fret about a 4.4 percent unemployment rate, and he is absolutely right.

Indeed, America’s executive and legislative authorities have some work to do to improve the labor markets. The actual unemployment rate is double the officially reported rate of 4.4 percent once you add people without a stable employment (involuntary part-time workers) and people who gave up looking for a job or dropped out of the labor force (people marginally attached to the labor force). Some 6.9 million people fall into those two labor market categories in addition to the 7 million people without a job recorded in the usual monthly surveys.

And then 37 percent of the active civilian labor force remains out of the actual labor supply, with 1.7 million of the officially reported job seekers who are becoming virtually unemployable.

That huge pool of labor supply — rather than the idea of low-paying jobs — largely explains why nominal compensations in the year to the first quarter rose only 2.3 percent, even though the reported unemployment rate declined over that period to 4.5 percent from 5 percent.

That also explains rising profits and soaring equity prices because wage growth minus productivity gains kept unit labor cost increases down to 1.1 percent, showing that capital is taking most of the expanding output shares.

The message for the White House and the Congress is simple: Get back to work some of the 102 million people who are either out of the labor force or without stable employment, and make it possible for them to get a proper training to be more productive and to fit new job opportunities. That would boost America’s potential growth rate back to an average of 3.2 percent (from 1.6 percent now) observed during the 1990s.

Raising the country’s growth potential would also trigger increasing business capital outlays. Lowering the corporate tax rate is only part of the story. Cutting down the cost of capital may just accelerate the implementation of existing investment projects, but it won’t raise the level of the desired capital stock. Businesses will only expand factory floors and buy new machinery and equipment if they cannot satisfy actual and expected sales from production capacities they already have.

Active labor market policies have also to be accompanied by greater investments in education and health care to increase the stock and the efficiency of human capital.

In the absence of that complex set of policies, the White House pledge of a 3 percent growth rate will remain out of reach with the current noninflationary growth potential of 1.6 percent — the sum of the annual labor force growth of 1.4 percent and dismal productivity gains of 0.2 percent.

Investment thoughts

The Fed is maintaining its exceptionally easy policy stance because it is not expecting substantial economic stimulus measures in the months ahead. The key items of the administration’s economic and social agenda — tax code changes and a health-care plan — are moving slowly (if at all) through the legislative channels, even though the Republican Party has a majority in both chambers of Congress.

There are also no signs of advancing infrastructure investments programs.

Meanwhile, foreign trade remains a significant drag on economic growth. In the first five months of this year, the trade deficit is running 9 percent above its year-earlier level. A further deterioration is expected since there is no agreement with Europe and China on a more balanced trade relationship.

Equity markets are responding to monetary policies that are supporting moderate economic growth, where subdued unit labor costs are translating into rising corporate profits.

But the outlook for longer-term growth and financial market stability is quite uncertain. The administration’s economic stimulus and reform programs are experiencing difficulties in an unexpectedly complicated legislative process.

source-cnbc

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