The US Is Facing A Sputnik Moment In The International Economy – Analysis

 February 13, 2022  Published by the Foreign Policy Research Institute 

 

A sign showing that a store accepts digital RMB, e-CNY, in Shenzhen, Guangdong, China. Photo Credit: 30000lightyears, Wikipedia Commons

By Robert Murray*

Beijing is ahead in the race for establishing a global digital currency standard

(FPRI) — At the Beijing Olympics—in addition to showcasing a 60-foot snowman and an ambitious (if controversial) environmental initiative—China is debuting its newly minted central bank digital currency, or CBDC. The country had hoped to make a splash by having thousands of international visitors experience the high-tech convenience of downloading currency directly to a smartphone wallet or a dedicated card, bypassing the ATM or foreign exchange bureau. Sadly, foreign spectators will not be permitted to attend this year’s games.

Still, the coming of age of the e-CNY, as the digital currency is known, is a significant development. It should also constitute a serious cause for concern among the U.S. and its allies.

China has a substantial lead in developing a CBDC which has important strategic implications. The U.S. government exerts outsize influence overseas thanks in part to the U.S. . These levers enable Washington and its allies to enforce economic sanctions, fight crime, punish military adventurism, and promote ideologies such as democracy, human rights, and liberal capitalism.

The Chinese government—being often on the receiving end of U.S. pressure—has sought to undermine Washington’s soft power by promoting its own currency, technological infrastructure, and technology standards. Over the past year, China has made substantial progress toward this goal by advancing and internationalizing the e-CNY. Additionally, the e-CNY will enable Beijing to embed surveillance and control mechanisms deep into the fabric of tomorrow’s economy. Having built a comprehensive system of surveillance and repression at home, China has the capacity through the e-CNY to internationally scale core elements and functions of its police state.

To be sure, it is unlikely that China will succeed in quickly toppling America’s dominance over international finance. The renminbi does not even circulate internationally in a meaningful way, and China, as its steward, suffers from trust and transparency issues. Moreover, although the U.S. is behind in developing a CBDC, it is a world leader in the complex technologies needed to launch one, and it has begun researching the alternatives. Last week, the Boston Fed published its work on an open-source CBDC (“OpenCBDC”) with MIT researchers that includes “selected concepts from cryptography, distributed systems, and blockchain technology to build and test platforms that would give policymakers substantial flexibility in the potential creation of a CBDC.”

Nevertheless, China’s e-CNY successes amount to a Sputnik moment for the U.S.— an alert that a formidable competitor has taken steps to weaken or even usurp a key strategic advantage.

The e-CNY Comes of Age

As mentioned in my previous articles on the e-CNY, the People’s Bank of China (PBOC) began researching the development of a CBDC in 2014. At the behest of President Xi Jinping, work accelerated in the second half of 2019 after Facebook announced plans to launch its own digital currency, the Libra (renamed Diem in 2020, then dismantled altogether a few weeks ago). In 2020, the PBOC launched pilot tests in four cities and expanded that to twelve locations last year.

While those tests have been successful, the e-CNY is facing friction. Notably, China already has two private payment networks—Alipay and WeChat—that are widely used for everyday transactions and have more than a billion combined users. Both networks have announced that they would enable users to fund their accounts via e-CNY wallets (rather than direct links from their bank account). Yet skeptics ask, what will motivate users to do this, or to switch from the existing payment networks to using an e-CNY wallet directly?

While the answer to that question may be unclear, if government statistics are accurate, China has made quick progress in proliferating the e-CNY. The PBOC released an e-CNY wallet app on smartphone stores on January 4, 2022. It became the most downloaded app on China’s Apple iOS app store on January 8, and it kept that position for five days. Within the first two weeks, 261 million users had installed the app, according to a Chinese press event, although only those in the 12 pilot locations are currently able to use the wallet.

That pace of uptake stretches credibility. Research by Sensor Tower, cited by Reuters, found that the app had been downloaded To date, e-CNY transactions worth more than 87.5 billion yuan (US$13.78 billion) have been made, according to government figures. Additionally, by November, more than 10 million corporate wallets had been created, according to Mu Changchun, Director of the PBOC’s Digital Currency Institute.

The e-CNY: An Enticing Export

Among the locations in the pilot program, several have launched efforts to expand the e-CNY abroad. The Qianhai district, adjacent to Hong Kong, about US$1.5 million each year to motivate enterprises to develop cross-border uses of the e-CNY and to support e-CNY research. The Guangxi autonomous region and Hainan province are planning similar promotions.

Numerous senior Chinese officials—including business leaders, PBOC representatives, academics, and researchers—have publicly hailed the advancement and internationalization of the e-CNY. In October, Li Lihui, head of the Blockchain Research Working Group at the National Internet Finance Association of China and former president of the Bank of China, said, “China’s central bank digital currency experiments lead the world and should strive for a dominant position in the process of globalizing the central bank digital currency.” As his priorities, Lihui mentioned using the digital currency to clear international financial institutions’ payments, building a digital international financial center, and creating a digital international wealth center.

Far from the Olympics or the flurry of domestic activity surrounding the newly minted e-CNY app, perhaps the most worrying development has been an initiative that would enable China to trade the e-CNY directly with other countries, a project known as the Multiple Central Bank Digital Currency Bridge, or mBridge for short. China joined the initiative last year, in partnership with Hong Kong, Thailand, the United Arab Emirates, and the Bank for International Settlements’ Innovation Hub (BISIH).

The mBridge, which is in a pilot phase, promises various benefits that appeal to businesses and governments. It would allow international transfers to occur in seconds; these take several days using the existing network of commercial banks. The cost to users of such transactions could be reduced by up to half. Payments could occur at all hours of day and night, eliminating the time zone mismatches that render payment on delivery of goods impractical in transcontinental transactions. By enabling real-time verifiable payments, the mBridge would dramatically reduce the risks and administrative burden inherent in global commerce.

The mBridge’s benefits may sound like minor incremental changes. They are not. The current system of international exchange is outdated. It requires numerous manual touches and is vulnerable to fraud and even large-scale theft. Think of China’s approach as the high finance and international commerce version of Venmo. In comparison, the reigning U.S.-led system is akin to mailing a check. If the mBridge is scaled as planned, it would dramatically facilitate and accelerate the cross-border movement of money.

The mBridge has several characteristics that advance China’s interests at the expense of the West. Because the mBridge works on distributed ledger technology (DLT), it allows regulatory requirements to be streamlined while accommodating nuanced differences in national CBDC protocols. While this could have beneficial applications—such as expanding international compliance with anti-money laundering regulations—it could also have nefarious ones. For instance, mBridge would allow China to extend the reach of its centralized economy well beyond its borders, enabling it to enforce capital flow restrictions on an international scale. China would also use the mBridge as a fig leaf for extending its surveillance network internationally, delivering an ocean of exquisite and granular intelligence on economic, political, and strategic activities across the globe. Add in China’s leading edge in artificial intelligence (AI), and the totality of the strategic problem is clear, given China’s prodigious appetite for digital repression. More than half of the world’s closed-circuit television (CCTV) cameras are in China, and the country is home to sixteen of the top twenty most surveilled cities. The government uses facial recognition technology broadly, with applications ranging from catching and publicly shaming jaywalkers to identifying and oppressing racial minorities.

As alluded to above, the mBridge would make it more difficult for the West to enforce economic sanctions and investigate crime by creating an alternative means of international exchange. The existing dollar-based system of international exchange relies on a global network of correspondent banks and a communications network known as SWIFT. Because the U.S. and its allies dominate this system—consider this a hub-and-spoke infrastructure where most of the hubs depend on a presence in the West—they are able to enforce sanctions and monitor for money laundering and other crimes. Any bank that does not diligently comply with Western demands risks being cut off from the system, with potentially major business implications.

As an encrypted and opaque channel external to western jurisdictions, the mBridge would provide a work-around. In addition to weakening the West’s sanctions power, the mBridge would incrementally advance China’s long-held goal of establishing the yuan as a reserve currency and a dominant medium of exchange for international trade, eventually rivaling the U.S. dollar.

In fact, the mBridge explicitly seeks to seize ground currently held by the U.S.-dominated financial order. According to the BIS, the mBridge project aims to create a system that “can support the full process of international trade settlement and, in due course, other use cases proposed as part of the project.” It is welcoming more central banks and private sector firms to participate: “As central banks around the world increase their [CBDC efforts], the issue of interoperability and linkage of national systems is critical.”

The mBridge project has made significant progress. As of 2021, twenty-two large international banks—including Goldman Sachs, UBS, Standard Chartered, and Société Général—had identified fifteen advantageous mBridge business uses: international trade, capital market transactions, digital-native corporate bond issuance, supply chain finance, and programmable trade finance. Beginning in 2022, Goldman Sachs will test tokenized bond issuance, and HSBC will test programmable trade finance. Already, eleven industries in the four participating countries have begun testing sample trade settlement transactions.

While some users may be drawn to using the mBridge by convenience and utility, China could boost adoption and internationalize the e-CNY by requiring countries in its Belt and Road Initiative (BRI) to link their own CBDCs to the mBridge and use it for transactions. With more than 2,500 projects valued at $3.7 trillion, BRI is “a major driver of project activity globally, with many roads, railways, ports and other connectivity infrastructure planned or underway.”

The mBridge is not the only project in Asia that stands to weaken U.S. dominance of cross-border finance. In January, the Asian Development Bank launched a project to improve the speed, efficiency, and security of cross-border securities transactions among investors in China, Japan, Korea, and ASEAN countries. Currently, like foreign exchange, such transactions are routed through custodians and correspondent banks in the U.S. and Europe. ADB is working with ConsenSys, Fujitsu, R3, and Soramitsu to enable the transactions to occur directly via blockchain technology.

A Global Response

To reiterate, it is hard to imagine the proliferation and internationalization of the e-CNY rapidly overtaking the substantial financial hegemony exercised by the U.S. Instead, the effort is an example of China’s “salami-slicing” approach—the slow accumulation of changes, none of which in isolation would cause a geopolitical outcry, but which, aggregated over time, result in seismic strategic change. In the near term, China could use the currency and related infrastructure to circumvent U.S. sanctions. A blockchain-based direct currency link could facilitate commerce and support in places like Iran, Venezuela, and North Korea. It would also alleviate the pressure of sanctions on Russia, which has been dumping its USD reserves for years in anticipation of this moment. Undoubtedly, Putin is less fearful than ever about enduring the U.S. sanctions campaign that would follow an invasion of Ukraine.

The excellent work published by MIT and the is the right start. But the Fed can only go as far as Congress empowers it to. Right now, the U.S. must wake up to the evolution in digital money that is happening all around us, and policymakers must educate and immerse themselves in this brave new world. At its essence, the efficacy of any money is deeply rooted in the trust of its users, and so as the custodians of the world’s preeminent currency, U.S. leaders should not feel cowed into reacting in some tit-for-tat fashion to the e-CNY. However, the starting gun has sounded, and the race is on for establishing the new standards for what money will be in the twenty-first century and beyond.

Washington’s strategic advantage in the global economy is clearly slipping, and the stakes for defending its position against new challengers are getting larger every day. The U.S. cannot afford to be cavalier about the threat because all indicators point to the threat as being a deeply ideological one that challenges traditional western values on several fronts: centralized economies vs. free markets; state-owned data vs. data privacy as a human right; totalitarianism vs. self-determination.

In 2020, China committed to spending $1.4 trillion on “next generation” digital infrastructure by 2025. The free world awaits Washington’s strategy to compete.

The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

*About the author: Bob Murray, a Fellow in the Program in National Security at the Foreign Policy Research Institute, brings extensive experience in technology, cybersecurity, digital content and international and mobile payments.

Source: This article was published by FPRI

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Report reveals improper employee fundraising, use of prison labor at Illinois prisons

Investigation concludes officials were improperly using prison labor as a means of generating money for an employee benefits fund.

By The Center Square Staff
By Andrew Hensel
Updated: February 12, 2022 

An investigation done by the Office of the Executive Inspector General reveals improper employee benefit fundraising by the Illinois Department of Corrections, including the misuse of prison labor.

The investigation, which stemmed from an anonymous complaint in June 2017, showed that although IDOC’s administrative directives limit the primary source of employee benefit fund (EBF) revenues to profits from vending machines and the employee commissaries, most of the EBFs have expanded their revenue streams by generating large sums of money from fundraising.

Jenny Vollen Katz of with the prison watchdog group The John Howard Association explained what was in the OEIG report.

"Unfortunately the report highlighted some really unfortunate behavior and a complete lack of oversight over fundraising around employee benefit funds for the Illinois Department of Corrections," Vollen Katz said.

The report also showed that the IDOC was improperly using prison labor as a means of generating money for the EBF.

State Sen. Terri Bryant, R-Murphysboro, is a former employee at Pinckneyville Correctional Center and told a story from her time at the prison and how Pinckneyville was illegally raising money by hosting a car wash.

"I wouldn't buy tickets for the car wash because I asked the warden we had then, how can you use inmates help to do car washes when the money is going to the employee benefit fund, I don't think that is legal," Bryant said. "The warden we had at that time did not agree with me, so I am glad they looked at that."

The EBF profits are supposed to come from vending machines and the employee commissaries but the report shows that from 2012 through 2017, more than 70% of those profits came from "other" sources.

Of the 29 EBFs, 10 facilities in Illinois raised over 90% of their profits from other sources:

Big Muddy 99%Centralia 93%Fox Valley17 100%Jacksonville 95%Kewanee18 95%Pinckneyville 99%Sheridan 92%Southwestern 95%Springfield 97%Vandalia 96%

The use of inmate labor at Pinckneyville Correctional for the car wash would qualify as a profit listed as "other."

Vollen Katz criticized the use of inmate labor for employee gain.

"The use of prison labor in order to generate fundraising streams is truly disturbing," Vollen Katz said.

The report also showed how correctional facilities across the state were illegally accepting donations from state vendors.

In 2017 at Pinckneyville Correctional, funds were being raised by the use of a 5k walk or run.

Although they were not legally allowed to accept donations from state vendors, the documents show that 22 businesses and governmental entities sponsored the Pinckneyville EBF’s 2017 5K race.

The OEIG sent out a news release regarding the findings of the report.

"These expansive fundraising efforts led to various problematic practices, such as soliciting donations from local businesses without ensuring that they were not State vendors, improperly holding raffles, selling merchandise in a way that evaded statutory and IDOC limitations, and devoting large amounts of State time to EBF activities," the agency said. "In addition, the investigation discovered that the EBFs spent much of the funds they raised on employee entertainment; in some cases, they spent their funds in ways that benefited only a select few employees."

In response to the report, and at the direction of the prior and current governors' administrations, IDOC undertook an extensive review and overhaul of EBF procedures. A senior IDOC employee was also suspended for 15 days.

El Nino – La Nina, How Natural Cycles Control Temperature

February 12, 2022 Jonathan DuHamel

The blue area throughout the center of this image shows the cool sea surface temperature along the equator in the Pacific Ocean during this La Niña episode. [Credit: NASA/Goddard's Scientific Visualization Studio

Solar-driven El Nino-La Nina events arise in the equatorial Pacific Ocean and control global weather and climate on annual, decadal, and multidecadal time frames. El Nino is the warm cycle; La Nina is the cold cycle. Together they are known as the El Nino-Southern Oscillation (ENSO). Currently we are in a La Nina cycle.

The graphic below shows the relative sea surface temperatures for February, 2022. (Blue is cold, red is warm.)

You can see the correlation of the El Nino-La Nina cycles with temperatures derived from global measurements by satellite:

According to an article by Paul Dorian, “Numerous computer models suggest that these colder-than-normal sea surface temperatures in the tropical Pacific will last into at least the beginning part of the upcoming summer season. If so, La Nina may indeed have an impact on global tropical activity this summer as it did during the last tropical season in 2021. In addition to its impact on tropical activity in the Atlantic and Pacific Oceans, these back-to-back La Nina episodes have seemingly affected global temperatures during the past many months which have dropped to nearly normal levels in the latest monthly reading.”

“What goes on in the tropical Pacific Ocean with respect to ENSO does indeed have an effect on tropical activity in the Atlantic Basin. El Nino, which refers to warmer-than-normal waters in the equatorial Pacific Ocean, tends to be an inhibiting factor for tropical storm formation/intensification in the Atlantic Basin.”

“On the other hand, La Nina, which refers to colder-than-normal waters in the equatorial part of the Pacific Ocean, is usually correlated with weaker wind shear over the breeding grounds of the tropical Atlantic Ocean. This typically leads to a more favorable environment in the tropical Atlantic for the development/intensification of tropical activity. Indeed, with La Nina in full force last summer, the Atlantic Basin tropical season was the third-most active on record in terms of the number of named storms with 21.”

In other words, we can expect a strong hurricane season this year.

For more information, see my post:

An Illustrated Guide to El Nino and La Nina and How They Control Climate

Note to readers:

Index with links to all my ADI articles: http://wp.me/P3SUNp-1pi

Visit my blog at: https://wryheat.wordpress.com/

My comprehensive 30-page essay on climate change: http://wp.me/P3SUNp-1bq

A shorter ADI version is at https://arizonadailyindependent.com/2013/08/01/climate-change-in-perspective/

New Zealand’s prime minister signals harsher stance on vaccine protest

The convoy has continued to disrupt the capital of Wellington.

Protesters near the parliament in Wellington (New Zealand Herald via AP)

By Nick Perry, AP
February 14 2022 

New Zealand’s prime minister Jacinda Ardern has accused coronavirus restrictions protesters of using “intimidation and harassment”, as a convoy of demonstrators continues to disrupt the capital, Wellington.

Police initially allowed protesters to set up tents and camp on the grounds of New Zealand’s parliament before arresting 122 people on Thursday, before backing off again.

The size of the protest dropped to a few hundred last week but increased again to around 3,000 over the weekend.

Ms Ardern said the conduct of some demonstrators ‘cannot be tolerated’ (New Zealand Herald via AP)

Ms Ardern has told reporters that the conduct of the camped out protesters “cannot be tolerated”.

Her comments come as authorities have moved to taking a harsher stance toward the convoy of demonstrators that have camped out on New Zealand parliament’s grounds for nearly a week and blocked surrounding streets.

Ms Ardern said: “I very clearly have a view on the protesters and the way that they’ve conducted their protest because it has moved beyond sharing a view to intimidation and harassment of the people around central Wellington.

“That cannot be tolerated.”

The protesters are not planning to leave any time soon (New Zealand Herald via AP)

Parliament speaker Trevor Mallard tried to make the protesters uncomfortable last week by turning on lawn sprinklers and blasting out decades-old Barry Manilow songs and the 1990s hit Macarena on a repeat loop.

Police on Monday told protesters to move their illegally parked vehicles as soon as possible, offering them alternative parking at a nearby stadium.

“Wellingtonians have the right to move freely and safely around the city so all roads being clear is a top priority,” said Superintendent Corrie Parnell, the Wellington district commander.

The protesters, who oppose coronavirus vaccine mandates and were inspired by similar protests in Canada, appear fairly well organised after trucking in portable toilets, crates of donated food, and bales of straw to lay down when the grass turned to mud.

The demonstration has been going on for nearly a week (New Zealand Herald via AP)

Despite the arrests and scuffles with police last week, dozens of tents remain on parliament’s grounds, with cars and trucks blocking surrounding streets. Protesters lined up on Monday for a breakfast of barbecued sausages and schnitzels after surviving a weekend of torrential rain.

New Zealand has mandated that certain workers get vaccinated against Covid-19, including teachers, doctors, nurses, police and military personnel.

A vaccine pass is also required to enter most stores and restaurants.

The protests come just as New Zealand experiences its first widespread outbreak of Covid-19, after keeping its borders closed for much of the pandemic.

Ms Ardern signalled a tougher response from authorities (Andrew Milligan/PA)

Daily case numbers jumped to a new high of nearly 1,000 on Monday, up from about 200 per day just five days earlier.

However, not a single patient was in intensive care, thanks in part to a vaccination rate of 77% and what experts have described as the comparatively less severe symptoms of the Omicron variant.

New Zealand was spared the worst of the pandemic after it closed its borders and implemented strict lockdowns, limiting the spread of the virus. The nation has reported just 53 virus deaths among its population of five million.

Ms Ardern said the timing of the mass demo could not be any worse.

“At the very point where we are seeing an increase in cases, and an increase in risk to the public health and wellbeing of New Zealand, they want to see removed the very measures that have kept us safe, well and alive,” she said.

Sanitation and 'squalor' causing emerging health issues at Parliament protest, concerns for children

Sophie Cornish and Tom Hunt

SCOOP NZ

Feb 13 2022

Protesters dance to the Macarena, which was one of the songs played loudly to deter people who had gathered on the lawn in front of parliament.

Sanitation issues, including faeces on the ground, along with the presence of children at the Parliament protest are causing major concern for police as the event looks to stretch into its seventh day.

Speaking to media on Sunday evening, Wellington district commander Superintendent Corrie Parnell said as a result of extensive rain, wider health issues beyond the spread of Covid-19, are emerging.

“You've seen a number of medical events over the past few days, and those will continue to exacerbate. Nonetheless, the primary concern to me is the presence of the children,” he said.

Parnell described the scenes of children playing on the ground and the “squalor of water” and defecation as being of concern.

READ MORE:
* Manilow, the Macarena, and Mallard versus the Parliamentary protesters
* Loud music blasted to deter Parliament protesters in Wellington
* Soggy morning for Parliament protesters as they dig trenches to redirect sprinklers

Unblocking several central Wellington roads remains the key focus for police, but conversations with organisers so far have been unsuccessful.

“The primary focus now is to appeal to those key organisers, leaders of the various factions, to engage with us,” he said.

KEVIN STENT/STUFF
A night of heavy rain and wind is causing health issues at the Parliament protest.

Parnell promised a “highly visible presence” around the Parliament grounds on Monday, with Police foot patrols up Molesworth Street, in the streets next to the protest, and around the train station.

Commuters travelling to the area are advised to plan for continued disruption to traffic, but Parnell said “we want everyone coming into the city to feel safe”.

Police will offer vehicle owners the opportunity to move their vehicles to a new location.

The Defence Force has also been involved in discussions about unblocking the roads.

“The plan is not to wait this out,” Parnell said.

“We simply won't resolve this overnight. There's a number of complexities there, and we simply won't arrest our way out of it.”

JERICHO ROCK-ARCHER/STUFF
Wellington district commander Superintendent Corrie Parnell.

On Thursday, a skirmish between a line of police and protesters resulted in more than 120 arrests. Some of those arrested have bail conditions to not return to the protest but had done so, he said.

“We're very conscious and aware of their presence there.”

Police are continuing to capture evidence where possible and will look to take “assertive action downstream” of unlawful behaviour, Parnell said.

STUFF
Protesters huddle around a gas heater.

The decision to blast loud music and turn on the sprinklers by Speaker Trevor Mallard in an attempt to deter protesters from Parliament’s front lawn was not made by police.

“It’s not a tactic we would encourage,” he said, but added “it is what it is, it happened”.

KEVIN STENT
A protester walks over what has been dubbed the ‘Mallard Bridge’.

Wellingtonians should expect “a very high presence” of police on the ground on Monday, in an attempt to reduce “unacceptable behaviours” such as threats to members of the public.

Businesses, individuals or groups offering catering and accommodation to protesters, described by Parnell as “sympathisers”, were ultimately supporting an unlawful occupation, he said.

ROSS GIBLIN/STUFF
The group of protesters has steadily increased in numbers over the day.

“I'm not happy with that because that hasn't assisted in terms of ultimately returning Wellington to some freedom.”

When asked whether police could have acted sooner, Parnell said “hindsight is a wonderful thing”.

“I don't think we could ever have predicted the scalability and actually what has played out here,” he said.

ROSS GIBLIN/STUFF
Repairs were carried out to camping equipment damaged overnight.

At its peak over the weekend, 3000 people attended the protest. About 400-500 people were staying in tents.

Police are aware of weapons on site, but not firearms. "We've seen the presence of baseball bats which are unlawful and won't be tolerated,” Parnell said.

ROSS GIBLIN/STUFF
Protesters doing the baby shark dance.

On Sunday, protesters donning rain ponchos, jackets, and umbrellas appear unfazed by the weather, chanting and dancing in the mud.


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Despite rumours circulating online about a woman with Covid-19 at the event, the Ministry of Health confirmed it was not aware of any.

KEVIN STENT/STUFF
Mats, carpet and hay have been put down to reduce the muddy conditions.

Earlier on Sunday morning, protesters were seen repairing camping equipment damaged by wind and heavy rain overnight, with broken gazebos, chairs, and tents piling up on the outskirts of the lawn.

Several more bales of hay have been brought in to cover the mud. A small group was seen warming themselves up around a large gas patio heater that had been brought onto the grounds.

In Canada, frustrations linger even as bridge reopens to traffic

Danielle Bochove and David Welch, Bloomberg News

The Close The government shouldn't let this protest take our economy hostage: Canadian Chamber of Commerce CEO

Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, joins BNN Bloomberg to discuss his thoughts on the convoy protest happening at the Windsor-Detroit border. Beatty says that it is a very difficult situation and would like the police to have the political support needed to resolve the situation. He talks on the sectors that are greatly impacted by this disruption to shipments and how businesses will be affected

It was a most Canadian protest -- except when it wasn’t.

Largely civil and without violence, a demonstration in Windsor, Ontario was finally cleared by police Sunday morning after blocking one of North America’s busiest cross-border trade arteries for more than five days. But while the stand-off is over, and the Ambassador Bridge has reopened, deeply divisive issues remain.

Many of the Ambassador Bridge protesters hold views that are uncompromising, including a hardened mistrust of media and of the doctors and scientists responsible for giving advice about COVID-19. They often mentioned their love of country, even as their upside-down Canadian flags billowed in the frigid breeze. Fury with Prime Minister Justin Trudeau was expressed in profanity-strewn banners, but dealings with reporters, police, and residents were largely polite.

So while aspects of the bridge protest -- and in particular its quiet end -- reflected Canada, the divisions it exposed are similar to those emerging elsewhere. Confusion, anger and exasperation after more than two years of the pandemic drew support from like-minded groups in the U.S. and parts of Europe amid chafing at what they see as governmental overreach, economic fears and a deeply emotional desire to return to something like normal. 

Police officers move in to clear traffic and protesters blocking access to the Ambassador Bridge during a demonstration in Windsor, Ontario, Canada, on Saturday, Feb. 12, 2022.

As elsewhere, Canada’s protesters were opposed to vaccine mandates, but some had other reasons for being there, including concerns about inequality. The consequences of pandemic-related decisions in Ottawa are being borne by the working class, said Jerome Beal, a self-employed construction worker. Food, housing and energy costs are soaring and people are losing their homes, he said.

THE MEANING OF MIDDLE CLASS IS 'WHITE' 

“They’re making it impossible for the middle-class people to be middle class,” Beal said. “There’s either going to be the yays or the nays. And that’s a shame because what that does is systematically divide us.”

A number of protesters said they had lost jobs or been put on leave because they refused to get vaccinated. One pair who declined to give their full names said it’s either get jabbed or go broke.

Police officers move in to clear traffic and protesters blocking access to the Ambassador Bridge during a demonstration in Windsor, Ontario, Canada, on Saturday, Feb. 12, 2022.

“Think about that: lose your job, that you might have worked 10, 20 years for, and because you won’t get this experimental jab, your family’s going to suffer,” said retired toolmaker Rick Armstrong. He criticized the media, saying he turned off the news two years ago and now gets his information from people in the “real world.” 

The protest created its own economic consequences, shuttering auto plants and interrupting the flow of millions of dollars in trade. An average of US$13 million in goods is shippedamba across the bridge per hour. At a McDonald’s Corp. restaurant adjacent to the rallying point, a store manager said revenue plunged from $20,000 (US$15,700) a day to $3,000 because the only customers were protesters, media and police. 

Holly, a trucker who also attended protests in Ottawa and would not give her last name, said the bridge blockade was costing her money but she believed she had no choice. She was there to ensure a positive future for “every single citizen of Canada, whether they like it or not,” she said. “It’s all peaceful. There’s no violence. It’s love.”

Protesters confront police officers as they move in to clear a blockade at the Ambassador Bridge during a demonstration in Windsor, Ontario, Canada, on Saturday, Feb. 12, 2022.

But a mistrust of politicians, doctors and media ran deep at the protest. Kim Kroeker, a health-care worker, said she mostly gets her information from social media sites like Rumble, an online video platform -- anywhere but mainstream news which is “censored,” she claimed. She doesn’t trust official tallies of COVID illness. 

“You’ve got to keep the numbers up to keep the people in fear. This is a message of fear, not about health care. It’s about compliance.”

Many demonstrators spoke about their love of Canada and need to defend it. Ronald Lyons teared up while speaking about an uncle who died in Normandy during the Second World War. “There’s no way I’m going to let him go in vain for that,” he said. 

Prime Minister Justin Trudeau and other leaders have appealed to Canadians to make sacrifices and respect COVID restrictions designed to protect hospitals, the elderly, and those with medical conditions that would make them more vulnerable. But several protesters said at-risk people have the “choice” to stay home -- and everyone else should be free to reject masks and vaccine mandates without fear of consequences.

“If you want to cover your face, cover your face, and if you want to take an experimental jab, take your experimental jab,” said Mike McCou, a former support worker for people with intellectual disabilities who said he no longer has a job because of the vaccine mandates. “But don’t think for two seconds that you have the right to force your fear and your beliefs upon me.”

‘She paved the way for Trump’: will Sarah Palin stay in the Republican spotlight?

Sarah Palin arrives at court in New York City on 4 February. 

Photograph: Brendan McDermid/Reuters

Palin’s return to the headlines – for her defamation trial and flouting Covid rules – is a reminder to many that her ascent in 2008 was a pivotal moment in US politics

David Smith in Washington
THE OBSERVER
Sun 13 Feb 2022

Removing a white face mask as she took the witness stand behind a Plexiglass shield, Sarah Palin likened herself to the biblical David taking on the mighty Goliath of American media, the New York Times newspaper.

The 58-year-old’s appearance in a Manhattan courtroom this week was a far cry from her heyday on the campaign trail, whipping up crowds with incendiary rhetoric as a US vice-presidential candidate in 2008.

But in making her pitch to a jury – the only nine voters who matter this time – Palin still had a star power, and reflex for bashing the media, that served as a reminder of how she paved the populist way for Donald Trump.

And when the former governor of Alaska was asked whether she might run for office again, she teased a back-to-the-future scenario for the Republican party and America. “The door’s always open,” she told the court.

Anyone wondering, “Whatever happened to Sarah Palin?” has not been paying attention to headlines of late. She declared that she would get the coronavirus vaccine “over my dead body”, duly tested positive for Covid-19 and went dining out in New York anyway, flouting public health guidelines.

The infection did cause a delay in her defamation trial against the New York Times, which published a 2017 editorial that incorrectly linked Palin to a mass shooting six years earlier (it corrected the editorial the following day but she contends that the correction did not go far enough).

Once the trial got under way, Palin told jurors she was “mortified” by the mistake and called the Times “the be-all, end-all, the loud voice in American media”. She said: “It was devastating to read a false accusation that I had anything to do with murder. I felt powerless – that I was up against Goliath. The people were David. I was David.”

Sarah Palin, as seen in a courtroom sketch on 11 February. 

Photograph: Jane Rosenberg/Reuters

But she faces an uphill battle against a paper that has not lost a defamation case in more than half a century. She must convince jurors that the Times acted with “actual malice”, meaning that it knew the editorial was false or had reckless disregard for the truth.

The court has heard Palin – she and husband Todd divorced in 2020 after 31 years – describe herself as a single mother and grandmother who “holds down the fort” for her family in Alaska when not advising candidates about “the good, bad and ugly” of politics. She also recalled the surprise over her eruption on the national political stage in 2008, saying: “I don’t think they were prepared for me.”

That is an understatement. Palin was a wildly improbable choice back then as running mate for Republican John McCain in the contest with Democrat Barack Obama, bidding to become the first Black president, and his running mate, Joe Biden.

The ascent of Palin – going outside what had been deemed an acceptable talent pool in terms of experience and judgment – is now seen as a pivotal moment in American political history, opening a Pandora’s box of divisive, nativist, anti-intellectual, celebrity-driven smash-mouth politics.

Steve Schmidt, then a senior adviser to the McCain campaign, was the first to float the idea of Palin as running mate. In an interview with the Guardian, Schmidt said his exact words were: “We should take a look at Sarah Palin. I don’t know a lot about her other than she’s the most popular governor in the country with an 87% approval level.”

So it was that in August 2008 McCain invited Palin to his ranch in Sedona, Arizona, to consider the bold move. Schmidt recalled: “Mark Salter [another adviser] and I are there with McCain, and McCain says, ‘Come on, boys, let’s go talk to her.’

“I said to him, ‘It’s completely inappropriate for us to be in this meeting. This is a presidential-level decision. Only you can make the determination she’s prepared to take the 35-word oath and become president.’”

So Schmidt and Salter did not attend. “The singularly greatest regret of my life,” Schmidt acknowledged this week. “It’s the dumbest thing I’ve ever done.”

Sarah Palin and John McCain at a campaign rally in Hershey,

 Pennsylvania, in October 2008. 

Photograph: Brian Snyder/Reuters

He is convinced that, had they been in the room, they would have immediately realized how unprepared and unqualified Palin was and done everything in their power to talk McCain out of it.

“No one will ever know what the discussion was,” continued Schmidt, a co-founder of the anti-Trump Lincoln Project. “There were two people in the room: him and her. I’m fairly certain if there was a substantive conversation that I was party to I would’ve chained myself to the back of the bumper to stop her from being announced.

“I’ve never encountered a person and I’ve never experienced in my political career someone so abjectly dishonest. You could not get a straight answer on a question on the most basic informational level, which was my initial warning sign about her in the hours after McCain picked her.”

McCain’s impulsive and fateful decision – for which he later expressed regret – is chronicled in a new book, Insurgency: How Republicans Lost Their Party and Got Everything They Ever Wanted, by Jeremy Peters. He writes: “McCain turned to his wife, Cindy. ‘John, it’s a gamble,’ she said.

“This made McCain’s face light up. ‘Well, I wish you hadn’t said that,’ he said. McCain, an avid craps player, balled up his fist and blew on it, then shook it like he was about to roll a pair of dice. ‘Fuck it,’ he said. ‘Let’s do it.’”

The gamble backfired as McCain still lost the election and, in the eyes of critics, tainted his legacy by accelerating the Trumpification of the Republican party. During the campaign Palin’s ignorance became clear as she stumbled over basic questions such as what newspapers and magazines she read.

She accused Obama of “palling around with terrorists” and used the term “shuck and jive” to portray him as evasive and dishonest. (She later wrote on Facebook: “For the record, there was nothing remotely racist in my use of the phrase ‘shuck and jive’.”)
She is the tip of the spear for Donald Trump and everything he unleashed in American politicsJeremy Peters

Peters, a journalist at the New York Times, said in an interview: “She is the tip of the spear for Donald Trump and everything he unleashed in American politics. Like Trump, her appeal to her supporters was as much about who her perceived enemies were and as it was about her herself.

“She also had a really intuitive sense of how to go into combat with those enemies, especially the media. She was the canary in the coalmine when it came to doing lasting damage to the reputation of the mainstream media, which had already been taking a beating but had never been made into a real political enemy to the extent it would be under under Trump.”
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Palin’s loose talk of the media “making things up” and claims that it should “quit lying” foreshadowed Trump’s popularisation of phrases such as “‘enemy of the people” and “fake news”.

Sarah Palin and Donald Trump at a rally in Ames, Iowa,

 in January 2016. Photograph: Mary Altaffer/AP

Peters added: “She also had a real sense for social media and using that to basically say whatever she wanted and get attention that wouldn’t require her to go to the mainstream media, because the mainstream media would then just cover whatever she said on Facebook.”

Palin went on to campaign for the Tea Party, a conservative revolt fuelled by rage against elites, distrust in government and racial hostility to Obama. It was another harbinger of the “Make America Great Again” white grievance movement.

Palin had a five-year stint as a contributor to the conservative Fox News channel on a reported $1m contract, endorsed Trump for president and, emulating his past career as a reality TV star, made a surprise appearance on The Masked Singer, rapping and dancing in a pink bear costume.
Would there be a Donald Trump without Sarah Palin? It’s hard to imagine Trump coming out of nowhereLarry Jacobs

Now, should she pull off an unlikely legal victory over his old foe the New York Times – a judgment that could have a chilling effect on freedom of the press – Trump would probably be the first to congratulate her. What he may never grasp is the political debt he owes her.

Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota, said: “Would there be a Donald Trump without Sarah Palin? It’s hard to imagine Trump coming out of nowhere. Sarah Palin paved the way for Donald Trump.”

Last year Palin hinted at an Alaska Senate run against Republican moderate Lisa Murkowski. If Trump regains the White House in 2024, she might find another comeback path. Jacobs admitted: “I find it impossible to make predictions about a Republican party that has veered so far to the extreme, so far towards irresponsibility.

“This is a party without a measure of itself. It’s a chaotic party that no longer has core principles so yes, I could see Palin ending up in the cabinet if she were able to rehabilitate herself and find a way to become relevant again.”