Opinion: The coronavirus-led economic recession may be over, but the depression has barely begun

Working people, small businesses and local governments need more income now, or other dominoes will fall

Small-business revenue is down 19% from pre-COVID days, and is flat over the past month despite the heralded re-opening of the economy. Something is seriously wrong. OPPORTUNITY INSIGHTS/TRACKTHERECOVERY.ORG

Published: June 26, 2020 By Rex Nutting

Now that businesses are reopening and calling back furloughed workers, the COVID-19 recession may already be over. The depression has barely begun.

The economy is growing again, but, with 2 million people filing for unemployment checks last week and about 30 million workers already on the dole, it’s still struggling mightily.


There’s no official definition of a depression. Still, today’s economy seems to be a close fit: Millions of workers are losing their jobs permanently. Thousands of small businesses are closed permanently or operating at only a fraction of profitable levels. Debts are mounting, and incomes are not growing fast enough. State and local governments are slashing jobs and services. And only massive, but temporary, federal support prevents millions of families from falling into poverty.

It’s no time to declare Mission Accomplished.


Also read: ‘Make no mistake…the pandemic morphed into a Depression-like crisis,’ says UCLA economist, who predicts U.S. economy won’t recover from coronavirus until 2023
No quick recovery

It’s not just that the coronavirus pandemic is reaching new heights after a bungled reopening. That was to be expected. States experiencing rapidly growing case numbers are already seeing softer growth and even economic contraction in some cases, says Aneta Markowska, chief economist at Jefferies.


Growth at small businesses has lost momentum nationally, she said.

Some policy makers agree that the reinvigorated pandemic will hurt the economy for the rest of this year.

“We’ll be in a situation where the economy is growing more slowly than we might have hoped a few months ago,” Boston Federal Reserve President Eric Rosengren said in an interview with Yahoo Finance this week. He expects the unemployment rate to remain above 10% for the rest of the year.

Some economic forecasters are beginning to agree with Rosengren and other more pessimistic voices, and are dialing back their expectations for a V-shaped recovery that would return the economy to its pre-COVID level within a year.


“Many factors point to what is more likely to be a quarter-to-quarter ‘V’ that does not have staying power, including that COVID is not vanquished, trade remains in contraction, business investment is collapsing, financial conditions are not loose, and equity markets are disconnected from the real economy, potentially contributing to uncertainty enhancing financial turbulence,” says a team of economists at Citi Research led by Catherine Mann.



A longer-term worry is that vital parts of the economy — workers, businesses, lenders, creditors, and state and local governments — won’t get the support they need to survive financially until the virus is beaten.

Bizarrely given the election calendar, there is little urgency in Washington for another round of stimulus payments, especially among Republicans. Treasury Secretary Steven Mnuchin wants the government to send out another check to everyone before Election Day (and Donald Trump apparently agrees), but anonymous White House aides and Republican senators have quashed that idea. Democrats in the House have passed a bill, but that proposal too is dead on arrival in the Senate.

In the end, something will be done, but the fiscal response will be timid and underwhelming, as always.
The pandemic is getting its fuel; the economy is not

Here’s the thing: Both the coronavirus pandemic and the economy need fuel in order to grow, but right now, only the pandemic is getting enough.

Both the pandemic and the economy rely on the most basic human behaviors to thrive: our sociability. The pandemic is getting all the fuel it needs to race out of control from the reckless way unmasked and unrepentant Americans are getting back together to work, play, shop and pray.

These are also the behaviors that would literally sustain the American people (if done in a way that promotes public health).

Consumer spending, which has traditionally been the bedrock of the economy, can’t save us this time because the economy is being starved of its starter fuel: income.

In macroeconomics, it all starts with income. If you have income, you can spend, which then becomes income to the shopkeeper and her employees. And their spending then becomes someone else’s income, and so on and so forth.
Starved of income growth

But in America today, incomes are not growing fast enough, especially for working families, small businesses, and state and local governments.

No income, no spending; no spending, no growth. In fact, incomes may be falling as one-time government payments, expanded unemployment benefits and support for small businesses expire or are scaled back.

There’s another reason why consumer spending can’t spark a strong recovery: The upper-middle class and the rich aren’t spending the way they normally do, according to credit-card data analyzed by Raj Chetty’s Opportunity Insights. They aren’t going out to the theater, or dining out or taking expensive vacations because it’s too dangerous. Furthermore, why engage in conspicuous consumption if no one can see you do it?

If the only people whose incomes haven’t plunged are unwilling to spend until the virus has been beaten, how can the businesses that cater to the carriage trade avoid layoffs and bankruptcy?

If Washington won’t provide more support to working-class families now, there won’t be enough consumer spending to keep struggling Main Street businesses alive much longer. And if those businesses fail, other dominoes will fall. That’s what’s bothering the equity markets.

Read:Consumer sentiment slips in late June as confidence in U.S. economic policies slumps to Trump-era low
State and local governments on the ropes

The most immediate concern is the huge decline in state and local governments’ tax receipts, especially sales and hotel taxes. Current estimates suggest state government’s receipts for the upcoming fiscal year may be down by 10% to 20%, or about $500 billion, with local governments down an equal amount.

The fiscal year for most states starts next week, and without massive support from Congress, most will be cutting services and employment severely. Already, 1.57 million state and local government workers have lost their jobs.

Read:A warning to muni bond investors: Coronavirus recession will decimate state finances

Also:State sales-tax receipts plunge as much as 41% in April amid coronavirus shutdowns — and May could be worse

“It can really weigh on the economy if the states are in tight financial straits,” said Fed Chairman Jerome Powell, at a congressional hearing last week. Already, states and local governments are cutting back on their infrastructure spending and other services.

State and local government spending collapsed after the Great Recession of 2008-2009 as well, which was a major factor in the slow recovery.

The Democrats’ $3 trillion Heroes Act, languishing in the Senate, would provide significant grants to state and local governments to help them avoid spending and employment cuts, but Senate Leader Mitch McConnell has said bankruptcy is a better option.

America seems to be exceptionally bad at public health, but it isn’t much better at economic policy.

Rex Nutting is a MarketWatch columnist.

Exclusive: Obscure Indian cyber firm spied on politicians, investors worldwide

Jack Stubbs, Raphael Satter, Christopher Bing

Fahmi Quadir, founder of Safkhet Capital, poses in New York City, New York, U.S., June 9, 2020. REUTERS/Brendan McDermid

By Jack Stubbs, Raphael Satter and Christopher Bing

LONDON/WASHINGTON (Reuters) - A little-known Indian IT firm offered its hacking services to help clients spy on more than 10,000 email accounts over a period of seven years.

New Delhi-based BellTroX InfoTech Services targeted government officials in Europe, gambling tycoons in the Bahamas, and well-known investors in the United States including private equity giant KKR and short seller Muddy Waters, according to three former employees, outside researchers, and a trail of online evidence.

Aspects of BellTroX’s hacking spree aimed at American targets are currently under investigation by U.S. law enforcement, five people familiar with the matter told Reuters. The U.S. Department of Justice declined to comment.

Reuters does not know the identity of BellTroX’s clients. In a telephone interview, the company’s owner, Sumit Gupta, declined to disclose who had hired him and denied any wrongdoing.

Muddy Waters founder Carson Block said he was “disappointed, but not surprised, to learn that we were likely targeted for hacking by a client of BellTroX.” KKR declined to comment.

Researchers at internet watchdog group Citizen Lab, who spent more than two years mapping out the infrastructure used by the hackers, released a report here on Tuesday saying they had "high confidence" that BellTroX employees were behind the espionage campaign.

“This is one of the largest spy-for-hire operations ever exposed,” said Citizen Lab researcher John Scott-Railton.

Although they receive a fraction of the attention devoted to state-sponsored espionage groups or headline-grabbing heists, “cyber mercenary” services are widely used, he said. “Our investigation found that no sector is immune.”

A cache of data reviewed by Reuters provides insight into the operation, detailing tens of thousands of malicious messages designed to trick victims into giving up their passwords that were sent by BellTroX between 2013 and 2020. The data was supplied on condition of anonymity by online service providers used by the hackers after Reuters alerted the firms to unusual patterns of activity on their platforms.

The data is effectively a digital hit list showing who was targeted and when. Reuters validated the data by checking it against emails received by the targets.


On the list: judges in South Africa, politicians in Mexico, lawyers in France and environmental groups in the United States. These dozens of people, among the thousands targeted by BellTroX, did not respond to messages or declined comment.

Reuters was not able to establish how many of the hacking attempts were successful.

BellTroX’s Gupta was charged in a 2015 hacking case in which two U.S. private investigators admitted to paying him to hack the accounts of marketing executives. Gupta was declared a fugitive in 2017, although the U.S. Justice Department declined to comment on the current status of the case or whether an extradition request had been issued.

Speaking by phone from his home in New Delhi, Gupta denied hacking and said he had never been contacted by law enforcement. He said he had only ever helped private investigators download messages from email inboxes after they provided him with login details.

“I didn’t help them access anything, I just helped them with downloading the mails and they provided me all the details,” he told Reuters. “I am not aware how they got these details but I was just helping them with the technical support.”

Reuters could not determine why the private investigators might need Gupta to download emails. Gupta did not return follow-up messages. Spokesmen for Delhi police and India’s foreign ministry did not respond to requests for comment.

HOROSCOPES AND PORNOGRAPHY

Operating from a small room above a shuttered tea stall in a west-Delhi retail complex, BellTroX bombarded its targets with tens of thousands of malicious emails, according to the data reviewed by Reuters. Some messages would imitate colleagues or relatives; others posed as Facebook login requests or graphic notifications to unsubscribe from pornography websites.

Fahmi Quadir’s New York-based short selling firm Safkhet Capital was among 17 investment companies targeted by BellTroX between 2017 and 2019. She said she noticed a surge in suspicious emails in early 2018, shortly after she launched her fund.

Initially “it didn’t seem necessarily malicious,” Quadir said. “It was just horoscopes; then it escalated to pornography.”

Eventually the hackers upped their game, sending her credible-sounding messages that looked like they came from her coworkers, other short sellers or members of her family. “They were even trying to emulate my sister,” Quadir said, adding that she believes the attacks were unsuccessful.

U.S. advocacy groups were also repeatedly targeted. Among them were digital rights organizations Free Press and Fight for the Future, both of whom have lobbied for net neutrality. The groups said a small number of employee accounts were compromised, but the wider organizations' networks were untouched. The spying on those groups was detailed in a report here by the Electronic Frontier Foundation in 2017, but has not been publicly tied to BellTroX until now.

Timothy Karr, a director at Free Press, said his organization “sees an uptick in breach attempts whenever we’re engaged in heated and high-profile public policy debates.” Evan Greer, deputy director of Fight for the Future, said: “When corporations and politicians can hire digital mercenaries to target civil society advocates, it undermines our democratic process.”

While Reuters was not able to establish who hired BellTroX to carry out the hacking, two former employees said the company and others like it were usually contracted by private investigators on behalf of business rivals or political opponents.

Bart Santos of San Diego-based Bulldog Investigations was one of a dozen private detectives in the United States and Europe who told Reuters they had received unsolicited advertisements for hacking services out of India - including one from a person who described himself as a former BellTroX employee. The pitch offered to carry out “data penetration” and “email penetration.”

Santos said he ignored those overtures, but could understand why some people didn’t. “The Indian guys have a reputation for customer service,” he said.

Additional reporting by Alasdair Pal in NEW DELHI and Ryan McNeill in LONDON; Editing by Jonathan Weber, Chris Sanders and Edward Tobin

U.S. fireworks purveyor sees 'perfect storm' of forces behind explosive demand

EVERYBODY IS GUY FAWKES THESE DAYS

NEW YORK (Reuters) - The piercing boom of illegal fireworks in New York is music to the ears of Joe VanOudenhove, who runs a legal fireworks business in Pennsylvania.

Shoppers look through fireworks for sale at Sky King Fireworks in Morrisville, Pennsylvania, U.S., June 24, 2020. REUTERS/Lucas Jackson

VanOudenhove is by no means the only source of the nighttime explosions that have drawn a raft of complaints in New York, but his stores are enjoying an unprecedented pyrotechnics craze in a country constrained by the coronavirus.

“It’s a banner year for the fireworks industry,” he said. “The uptick in demand and sales of fireworks is coast to coast.”

VanOudenhove, the managing partner of Sky King Fireworks whose 20 stores in four states make it one of the largest purveyors of fireworks on the East Coast, estimates that recent sales are up from 50% to 200% from last year, more than anything he has seen in 25 years.

A “perfect storm” of forces is behind the burst of demand for the sky rockets, roman candles and other glittering and exploding consumer grade fireworks Sky King sells, VanOudenhove said.

But much of it has to do with families being starved for entertainment in a locked-down world without concerts or sporting events, he said.

“A few weeks ago, we had a family drive to Erie, Pennsylvania, from either New Jersey or New York somewhere and spend $150 on fireworks because they just wanted to get out of the house,” he said.

The fireworks rage has shattered the evening quiet of many a U.S. neighborhood, prompting a flood of complaints, especially in New York where calls to police about fireworks in the first half of June jumped one-hundredfold from last year.

VanOudenhove said on Friday he has not seen any out-of-state police around his stores since New York officials launched a fireworks crackdown on Tuesday.

Customers are asked to sign forms saying that they understand the rules of the fireworks’ final destination, he said.


And they keep coming.

“I don’t think we’ll see this again,” he said. “I think is a one-time deal.”


So seriously, what’s up with the fireworks everywhere these days?

Published: June 24, 2020 By Associated Press

Fireworks explode during Juneteenth celebrations above the Bedford-Stuyvesant neighborhood in Brooklyn on June 19. ASSOCIATED PRESS

NEW YORK — They are a symbol of celebration, loudly lighting up the night sky and best known in the U.S. as the explosive exclamation point to Fourth of July festivities.

This year, fireworks aren’t being saved for Independence Day.

They’ve become a nightly nuisance ringing out from Connecticut to California, angering sleep-deprived residents and alarming elected officials.


All of them want to know: Why the fascination with fireworks, and where is everybody getting the goods?


“I had that same question,” said Julie L. Heckman, executive director of the American Pyrotechnics Association.

Theories range from coordinated efforts to blame those protesting police brutality to bored people blowing off steam following coronavirus lockdowns. Most states allow at least some types of consumer fireworks, making them difficult to contain in cities like New York where they’re banned because people can drive a couple of hours away to buy them legally.


New York Mayor Bill de Blasio set up a multiagency task force in hopes of getting answers, after blasts from Brooklyn to the Bronx have people in the city that never sleeps desperate to actually get some.

Made up of police, firefighters and the Sheriff’s Bureau of Criminal Investigation, the task force will conduct sting operations to try to stop the sales of explosives that are proving dangerous. A 3-year-old boy was injured Wednesday while watching fireworks from her apartment window.

“This is a real problem. It is not just a quality-of-life problem and a noise problem,” de Blasio said.

Many Fourth of July celebrations will be smaller or eliminated entirely because of coronavirus restrictions. Yet the business of fireworks is booming, with some retailers reporting 200% increases from the same time last year, Heckman said.


Her industry had high hopes for 2020, with July 4 falling on a Saturday. Then came the pandemic and its closures and cancellations, leaving fireworks retailers worried they wouldn’t be able to scratch out much of a sales season.

Those fears have gone up in smoke.

“Sales are off the hook right now. We’re seeing this anomaly in use,” Heckman said. “What’s concerning to us is this usage in cities where consumer fireworks are not legal to use.”

Officials have the same concern.

New Jersey Gov. Phil Murphy said there are too many reports of fireworks being set off across the state, where they are mostly illegal.

“This is no way to blow off steam,” he told reporters Tuesday in Trenton, the capital.

New Jersey outlaws pyrotechnics except for sparklers and snakes, which produce smoke but don’t explode, though residents have easy access to fireworks at shops in Pennsylvania.

In Morrisville, Pa., Trenton’s neighbor, a big shop sits at the foot of the bridge leading to New Jersey. On Tuesday, the parking lot was nearly full, with cars primarily from New Jersey and Pennsylvania, but others from New York, North Carolina and even Texas.

Officials in Oakland, Calif., say they have received more complaints of illegal fireworks and reports of celebratory gunfire this year than is typical before the Fourth of July. At least five fires have been linked to fireworks since late May, officials said.

In Denver, authorities seized up to 3,000 pounds of illegal fireworks discovered during a traffic stop this week.

Theories abound for why fireworks have gotten so popular.

Some speculate on social media that police are either setting them off themselves or giving them to local teens in hopes people blame those protesting racist policing. Another claim says police are just harassing communities of color.

“My neighbors and I believe that this is part of a coordinated attack on Black and Brown communities by government forces,” tweeted the writer Robert Jones Jr., whose recent posts on fireworks have been retweeted thousands of times.

A video captured in New York appears to show fire department staff setting off the explosives outside their station.

Pyrotechnics expert Mike Tockstein, who has directed hundreds of professional fireworks shows, thinks there’s an easier explanation: the upcoming holiday and a nation filled with young people fed up with quarantines.

“I’ve heard a lot of conspiracy theories, and none of them are based in logic or data or facts,” said Tockstein, owner of Pyrotechnic Innovations, a California-based company that trains fireworks professionals.

“Fireworks are used across the entire country for a full month leading up to the Fourth of July,” he said. “There is a slight uptick, but I don’t think it’s anything more than people are stuck at home and hey, look, fireworks are available.”

One theory that can probably be blown up: organizers of canceled Fourth of July events passing surplus products to recreational users.

“Nothing could be further from the truth in that regard,” Heckman said, “because that would be a felony.”

Those who sell professional fireworks, which are much more dangerous for amateurs to fire, need licenses from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, and goods are housed in secure facilities, often guarded.

“It’s like the Fort Knox of fireworks,” said Larry Farnsworth, a spokesman for the National Fireworks Association.

Retail use falls under the U.S. Consumer Product Safety Commission.

The fireworks Heckman is seeing aren’t professional. Retail aerial fireworks are capped at under 2 inches in diameter and burst at just under 200 feet. Professional fireworks are wider and can explode hundreds of feet higher.

Still, they can be a bother at any height for young children, pets and veterans and others with post-traumatic stress disorder.

In Hartford, Conn., police say they have been responding to up to 200 complaints a day. Connecticut allows only fireworks that don’t explode or launch into the air, but they’re legal a drive away in New Hampshire and Pennsylvania.

Philadelphia has some restrictions on fireworks and warned of their dangers this week after a number of complaints.

“We understand the absence of in-person festivals may cause some to crave the excitement of an enormous fireworks display over the river. But the simple fact is that these are extremely dangerous products, and the risks far outweigh the momentary excitement of the explosions,” city Managing Director Brian Abernathy said.

The light shows could last a while longer. Many pop-up seasonal stores only opened this week. Tockstein predicts more people will buy fireworks in the coming weeks as they realize traditional July 4 displays won’t happen.

“I think with all these public events being canceled, more families will bring the celebration home for the Fourth of July,” Heckman said.

DERELICTION OF DUTY

White House does not commit to temperature checks in meeting with U.S. airlines

WASHINGTON/CHICAGO (Reuters) - Top U.S. airline executives met on Friday with Vice President Mike Pence and other senior administration officials but did not come away with any commitments from the White House on mandating temperature checks for airline passengers.

Pence met with the chief executives of United Airlines, Delta Air Lines, American Airlines, JetBlue Airways and the president of Southwest Airlines at the White House alongside Transportation Secretary Elaine Chao, Centers for Disease Control (CDC) director Mark Redfield, Health and Human Services Secretary Alex Azar and other officials.

Airlines want the U.S. government to administer temperature checks to all passengers in a bid to reassure the public.


The Trump administration is open to the idea of having the Transportation Security Administration conduct the tests, but there are still many unanswered questions, including what would happen to passengers who had high fevers and were denied boarding and how to pay for the screening.

Major airlines on Thursday said they would refund air fares to passengers denied boarding if the government conducted tests.

The CDC does not want to be responsible for travelers with high fevers, two people briefed on the meeting said.

The aviation industry, suffering an unprecedented downturn in travel, has urged the government to mandate measures that could help reassure passengers on the safety of travel. Airline executives told government officials that the public views temperature checks and face coverings as two key factors to boost confidence in air travel. Government officials plan to keep studying the idea, officials said.

Trade group Airlines for America said it looked “forward to working with the administration to identify and implement initiatives that help relaunch the U.S. airline industry.”

Representative Bennie Thompson, who chairs the House Homeland Security Committee, said last week the Trump administration should not mandate temperature checks without adopting formal regulations.

CME Group fines Andersons Inc $2 million for wheat trading violations

CRIMINAL CAPITALISM BUSINESS AS USUAL

CHICAGO (Reuters) - CME Group (CME.O), parent of the Chicago Board of Trade (CBOT), has ordered The Andersons Inc (ANDE.O), an Ohio-based grain business, to pay a $2 million fine for violating futures trading rules in late 2017, the exchange said in a statement on Friday.

The Andersons confirmed the settlement in a statement to Reuters and said it cooperated with the CME’s investigation.

“We do not believe we engaged in any wrongdoing,” it said in the statement.

The 6th-largest U.S. commercial grain handler by capacity operates several Ohio grain warehouses that also serve as delivery points for CBOT wheat futures.

According to CME, The Andersons registered 2,000 contracts of wheat certificates for delivery against CBOT December 2017 wheat futures on Nov. 29, 2017 - a day before the first notice day for deliveries – in an effort to manipulate the spread, or price difference, between futures contracts.

At the time, the wheat registrations surprised traders, and CBOT December futures fell sharply the next day, widening the price spread between the December and back-month contracts. The exchange said The Andersons placed bids in futures spreads in anticipation of the market impact of its delivery registrations.

A large number of CBOT delivery registrations can signal that end-users such as flour mills are amply supplied and that there is plenty of wheat to go around. That information, in turn, can depress futures prices.

“The Andersons registered the certificates with the belief that the wheat spread would widen and trade into its resting bids. The Andersons then re-purchased certificates at reduced prices,” the CME Group statement said. In the month leading up to the first notice day, the Andersons sold wheat to flour mills in the Toledo, Ohio, area in order to limit demand for the grain, the CME statement said. Such a move could further support the perception of weak cash-market demand, one trader said.

Attorney General Barr forms panel on 'anti-government extremism'

Simon Lewis

WASHINGTON (Reuters) - Attorney General William Barr on Friday ordered the establishment of a task force to counter what he called “anti-government extremists” committing violence as protests against police brutality convulse the United States.

In a memo to law enforcement and prosecutors released by the Department of Justice, Barr said alleged extremists had “engaged in indefensible acts of violence designed to undermine public order,” including attacking police officers, damaging property and threatening innocent people.

Protests have spread nationwide over George Floyd’s death in police custody last month and the deaths of other African Americans at the hands of police.

FALSE EQUIVALENCIES 

Although largely peaceful, some demonstrators have turned violent, which President Donald Trump and his allies have blamed on left-wing extremists among the protesters.

Barr said the extremists “profess a variety of ideologies.”

“Some pretend to profess a message of freedom and progress, but they are in fact forces of anarchy, destruction, and coercion,” Barr said.

Barr named the militant anti-government movement known as the “boogaloo,” as well as the left-wing Antifa as among those posing “continuing threats of lawlessness”.

Antifa is an amorphous movement whose adherents use confrontational tactics to oppose people or groups they consider authoritarian or racist.

ANTIFASCISTS DEFEND PEACEFUL PROTESTERS FROM ASSAULTS BY FASCISTS

“Boogaloo” members believe the United States will enter into a second civil war, according to the Southern Poverty Law Center, which tracks hate groups. While the ideology itself is not white supremacist, some white supremacist groups have embraced it, the Anti-Defamation League has found.

Federal prosecutors filed charges early this month against three alleged members of the movement accused of plotting to cause violence and destruction at a Las Vegas protest.


The new task force would be headed by two U.S. attorneys, from Texas and New Jersey, Barr said.

It would include members from different law enforcement agencies, but would “particularly draw on the capabilities of the FBI,” he said.

Facebook will label newsworthy posts that break rules as ad boycott widens

Elizabeth Culliford, Sheila Dang

(Reuters) - Facebook Inc said on Friday it will start labeling newsworthy content that violates the social media company’s policies, and label all posts and ads about voting with links to authoritative information, including those from politicians.

A Facebook spokeswoman confirmed its new policy would have meant attaching a link on voting information to U.S. President Donald Trump’s post last month about mail-in ballots. Rival Twitter had affixed a fact-checking label to that post.

Facebook has drawn heat from employees and lawmakers in recent weeks over its decisions not to act on inflammatory posts by the president.

“There are no exceptions for politicians in any of the policies I’m announcing here today,” Chief Executive Mark Zuckerberg said in a Facebook post.

Zuckerberg also said Facebook would ban ads that claim people from groups based on race, religion, sexual orientation or immigration status are a threat to physical safety or health.

The policy changes come during a growing ad boycott campaign, called “Stop Hate for Profit,” that was started by several U.S. civil rights groups after the death of George Floyd, to pressure the company to act on hate speech and misinformation.

Zuckerberg’s address fell short, said Rashad Robinson, president of civil rights group Color Of Change, which is one of the groups behind the boycott campaign.

“What we’ve seen in today’s address from Mark Zuckerberg is a failure to wrestle with the harms FB has caused on our democracy & civil rights,” Robinson tweeted. “If this is the response he’s giving to major advertisers withdrawing millions of dollars from the company, we can’t trust his leadership.”

Shares of Facebook closed down more than 8% and Twitter ended 7% lower on Friday after Unilever PLC said it would stop its U.S. ads on Facebook, Instagram and Twitter for the rest of the year, citing “divisiveness and hate speech during this polarized election period in the U.S.”

More than 90 advertisers including Japanese carmaker Honda Motor Co Ltd’s U.S. subsidiary, Unilever’s Ben & Jerry’s, Verizon Communications Inc and The North Face, a unit of VF Corp, have joined the campaign, according to a list by ad activism group Sleeping Giants

Hours after Facebook's announcement, Coca-Cola Co said starting from July 1, it would pause paid advertising on all social media platforms globally for at least 30 days. bit.ly/3geAHpF
One of Facebook’s top spenders, consumer goods giant Procter & Gamble Co, on Wednesday pledged to conduct a review of ad platforms and stop spending where it found hateful content. P&G declined to say if it had reached a decision on Facebook.

The campaign specifically asks businesses not to advertise on Facebook’s platforms in July, though Twitter has also long been urged to clean up alleged abuses and misinformation on its platform.

“We have developed policies and platform capabilities designed to protect and serve the public conversation, and as always, are committed to amplifying voices from under-represented communities and marginalized groups,” said Sarah Personette, vice president for Twitter’s Global Client Solutions.
]

“We are respectful of our partners’ decisions and will continue to work and communicate closely with them during this time.”

In a statement, a Facebook spokeswoman pointed to its civil rights audit and investments in Artificial Intelligence that allow it to find and take action on hate speech.

“We know we have more work to do,” she said, noting that Facebook will continue working with civil rights groups, the Global Alliance for Responsible Media, and other experts to develop more tools, technology and policies to “continue this fight.”


Reporting by Sheila Dang and Elizabeth Culliford; Additional reporting by Katie Paul and Rama Venkat, Editing by Dan Grebler, Jonathan Oatis and Richard Chang

Trump's spending for border wall rejected by U.S. appeals court
Jonathan Stempel

(Reuters) - A federal appeals court on Friday said U.S. President Donald Trump was wrong to divert $2.5 billion meant for the Pentagon to build part of his long-sought wall along the U.S.-Mexico border.


FILE PHOTO - U.S. President Donald Trump tours a section of recently constructed U.S.-Mexico border wall in San Luis, Arizona, U.S., June 23, 2020. REUTERS/Carlos Barria

In a pair of 2-1 decisions, the 9th U.S. Circuit Court of Appeals said the White House lacked constitutional authority for the transfer, noting that Congress had denied the funding and finding no “unforeseen military requirement” to justify it.

The court also said California and New Mexico, which share a border with Mexico and were among 20 states suing the government, had legal standing to sue.

Chief Judge Sidney Thomas said “the Executive Branch’s failure to show, in concrete terms, that the public interest favors a border wall is particularly significant given that Congress determined fencing to be a lower budgetary priority and the Department of Justice’s own data points to a contrary conclusion.”

Trump had declared a national emergency at the border in February 2019 to access the funds.


A Justice Department spokeswoman declined to comment.

California Attorney General Xavier Becerra praised the San Francisco-based court for halting Trump’s “unlawful money grab,” saying taxpayers deserve to know their money goes where Congress intends.

U.S. House Speaker Nancy Pelosi called the decisions “a great victory for the rule of law,” saying Trump undermined military readiness to fulfill his “outrageous campaign promise” to build a wall.

The appeals court also ruled that the Sierra Club and Southern Border Communities Coalition could sue over the diversion and deserved an injunction.

That ruling may be symbolic because the U.S. Supreme Court said last July the nonprofits likely had no legal right to sue.


The Supreme Court also let the $2.5 billion be spent while litigation continued, blunting the likely impact of Friday’s decisions.

President Bill Clinton appointed both judges in Friday’s majority. Trump appointed the dissenting judge. Friday’s decisions totaled 184 pages and upheld lower court rulings.

The cases are California et al v Trump et al, 9th U.S. Circuit Court of Appeals, No. 19-16299 and 19-16336; and Sierra Club et al v Trump et al in the same court, Nos. 19-16102 and 19-16300.


Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Sonya Hepinstall

SPANISH FLU 2.0

Coronavirus traces found in March 2019 sewage sample, Spanish study shows

Nathan Allen, Inti Landauro

MADRID (Reuters) - Spanish virologists have found traces of the novel coronavirus in a sample of Barcelona waste water collected in March 2019, nine months before the COVID-19 disease was identified in China, the University of Barcelona said on Friday.


FILE PHOTO: The ultrastructural morphology exhibited by the 2019 Novel Coronavirus (2019-nCoV), which was identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China, is seen in an illustration released by the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, U.S. January 29, 2020. Alissa Eckert, MS; Dan Higgins, MAM/CDC/Handout via REUTERS.

The discovery of virus genome presence so early in Spain, if confirmed, would imply the disease may have appeared much earlier than the scientific community thought.

The University of Barcelona team, who had been testing waste water since mid-April this year to identify potential new outbreaks, decided to also run tests on older samples.

They first found the virus was present in Barcelona on Jan. 15, 2020, 41 days before the first case was officially reported there.

Then they ran tests on samples taken between January 2018 and December 2019 and found the presence of the virus genome in one of them, collected on March 12, 2019.

“The levels of SARS-CoV-2 were low but were positive,” research leader Albert Bosch was quoted as saying by the university.


The research has been submitted for a peer review.

Dr Joan Ramon Villalbi of the Spanish Society for Public Health and Sanitary Administration told Reuters it was still early to draw definitive conclusions.

“When it’s just one result, you always want more data, more studies, more samples to confirm it and rule out a laboratory error or a methodological problem,” he said.

There was the potential for a false positive due to the virus’ similarities with other respiratory infections.

“But it’s definitely interesting, it’s suggestive,” Villalbi said.

Bosch, who is president of the Spanish Society of Virologists, said that an early detection even in January could have improved the response to the pandemic. Instead, patients were probably misdiagnosed with common flu, contributing to community transmission before measures were taken.


Prof. Gertjan Medema of the KWR Water Research Institute in the Netherlands, whose team began using a coronavirus test on waste water in February, suggested the Barcelona group needs to repeat the tests to confirm it is really the SARS-CoV-2 virus.

Spain has recorded more than 28,000 confirmed deaths and nearly 250,000 cases of the virus so far.


Reporting by Emma Pinedo, Nathan Allen and Inti Landauro, writing by Inti Landauro and Andrei Khalip, Editing by Angus MacSwan

Delta will warn pilots about possible furloughs, offers early retirement

Maria Ponnezhath

(Reuters) - Delta Air Lines (DAL.N) said late on Friday it will soon send warning notices to about 2,500 pilots regarding possible furloughs at the airline, as the industry takes a huge blow after the coronavirus pandemic slashed air travel demand.

“In an effort to best prepare our pilots should furloughs be needed, Delta will send required notices to approximately 2,500 pilots,” a Delta spokesperson said in a statement, adding that the so-called ‘WARN’ notices will be sent next week.


Delta also reached a tentative agreement with the Air Line Pilots Association (ALPA) labor union on a pilot-specific voluntary early retirement option.

The early-out plan is a meaningful step as the carrier is working to manage the impact of the pandemic and align staffing with expected flying demand, the statement said.

ALPA did not immediately respond a request for comment after office hours.

A day ago, Delta Chief Executive Ed Bastian had informed employees in an internal memo that the company is planning to add about 1,000 flights in August but not many more for the remainder of 2020.

“While it’s encouraging to see flights returning ... we likely remain at least two years away from a return to normal,” Bastian said in the memo.


Reporting by Maria Ponnezhath in Bengaluru; editing by Richard Pullin

Former Trump 2016 Republican rival Fiorina to back Biden

WASHINGTON (Reuters) - Carly Fiorina, a formal rival of Donald Trump for the 2016 Republican presidential nomination, plans to cast her vote for Democrat Joe Biden in November.

“I’ve been very clear that I can’t support Donald Trump,” Fiorina told The Atlantic magazine in an interview published on Thursday.

Fiorina, the former Hewlett-Packard Co chief executive, fell in line behind Trump like many Republicans in his 2016 race against Democrat Hillary Clinton. Since then, she has become increasingly critical and last year called for his impeachment.

“I am encouraged that Joe Biden is a person of humility and empathy and character. I think he’s demonstrated that through his life,” Fiorina told The Atlantic. “And I think we need humility and empathy everywhere in public life right now. And I think character counts.”


While Trump insulted a number of his 16 Republican rivals in the 2016 presidential campaign, Fiorina was the target of what was arguably one of the nastiest swipes.

“Look at that face. Would anyone vote for that?” Trump said, according to Rolling Stone magazine, of the only woman candidate in the Republican field.

Trump dismissed the news of Fiorina’s backing Biden, calling her on Twitter a “failed presidential candidate” who “lost so badly to me.”

Fiorina is the latest Republican to publicly split with the party’s president as the country faces widespread protests over police brutality against Black Americans, the coronavirus pandemic and a sharp economic downturn.


Former Secretary of State Colin Powell, a Republican who served under Republican Presidents George W. Bush and George H.W. Bush, has endorsed Biden. Trump’s former defense secretary, retired General Jim Mattis, denounced what he called Trump’s “deliberate” efforts to divide the country. [nL1N2DK04N]

Republican Senator Lisa Murkowski has said she was “struggling” with whether to support Trump’s re-election, while Republican Senator Mitt Romney praised Mattis’ words.


Reporting by Doina Chiacu; Editing by Leslie Adler

Trump Rambles Unintelligibly About Plan for Second Term
By Adam K. Raymond VISION 2020 JUNE 26, 2020

President Donald Trump thinks. Photo: Erin Schaff/The New York Times/Bloomberg via Getty Images

Sean Hannity would never intentionally ask President Trump a difficult question. But he would ask Trump an easy question that Trump found difficult to answer. It happened Thursday during a Wisconsin town hall when the Fox News host teed Trump up to rattle off a list of all the marginalized people he plans to harm in a potential second term. Instead, Trump garbled out an unintelligible answer that a very charitable interpreter would explain as: “I have experience now, so I would know better than to do things like hire John Bolton, who sucks.”

Charitable or not, no one would be able to find a second-term priority in this answer:

Trump’s words are even more striking in written form.

"Well, one of the things that will be really great, you know the word experience is still good. I always say talent is more important than experience. I’ve always said that. But the word experience is a very important word. It’s an — a very important meaning

I never did this before. I never slept over in Washington. I was in Washington, I think, 17 times. All of a sudden, I’m president of the United States. You know the story. I’m riding down Pennsylvania Avenue with our First Lady and I say, ‘This is great. But I didn’t know very many people in Washington. It wasn’t my thing. I was from Manhattan, from New York. Now I know everybody, and I have great people in the administration.”

You make some mistakes. Like, you know, an idiot like Bolton. All he wanted to do was drop bombs on everybody. You don’t have to drop bombs on everybody. You don’t have to kill people."

At another point in the sit-down with Hannity, Trump said Joe Biden “can’t speak.”

Trump Just Admitted to a Crime Against Humanity. No, He Wasn’t Joking.

The president said he tried to slow down COVID-19 testing to cover up America’s high rate of infection.

by David Atkins

June 21, 2020

Jamelle Bouie/Flickr

Trump’s rally in Tulsa last night was a disaster on so many levels it’s difficult to count them. From the bad optics and public health risks of holding a rally in the first place, to the mistake of originally setting it on Juneteenth in the location of the Tulsa race massacre, to the bizarre game of overinflated expectations the campaign made in promoting a million sign-ups for the rally that were largely generated by trolling Zoomers on Tiktok, to the desultory 6,200 person turnout forcing the overflow stage to speak to an empty parking lot, to the campaign placing the blame for the low turnout not on the responsible behavior of even hardcore Trump supporters during the pandemic (a good and encouraging development!) but on fear of “antifa protesters,” thereby not only lying but making his own supporters appear weak and intimidated in the bargain–all of it was a disaster of enormous proportions. And that’s before we even talk about what came out of Trump’s mouth during the event.


Because among the bizarre statements and absurdist pieces of performance art Trump displayed onstage (including a 10-minute riff on his own ability to walk down a gentle ramp, and a strange demonstration that he can actually drink a glass of water–if only slowly and carefully) came one of the most shocking admissions by a president in all modern history. Trump boasted that he had asked his officials to slow down COVID-19 testing because the rising number of cases was making him look bad.


“Here’s the bad part: when you do testing to that extent, you’re going to find more people, you’re going to find more cases. So I said to my people, slow the testing down please.”


He then emphasized the point by implying that many of the positive test results didn’t really matter if they were among young people likely to recover. He spoke dismissively of a “young man, 10 years old” who “got the sniffles–he’s gonna recover in about 15 minutes.” And then he waited for applause. Of course, some young people do die of COVID-19, and many more may have lifelong health complications that we are only just now beginning to understand. Most importantly, even that healthy 10-year-old can then become a vector to transmit the disease to an aging or more vulnerable person with potentially fatal consequences. So of course it matters if he tests positive, and Trump’s dismissal of the importance of testing him speaks volumes about his lack of understanding of the pandemic and of his callousness in placing his own political interest ahead of public health.


But let’s come back to the main shocking statement: “I said to my people, slow the testing down please.” It is hard to overstate the sheer evil of it. The only way to stop a widespread pandemic is through mass, universal testing, aggressive contact tracing and isolation measures. To slow down testing for any reason virtually guarantees the deaths of thousands, to say nothing of broader damage to the social fabric and to the economy. To slow down testing for political reasons is particularly abominable.


It constitutes a criminal, negligent abuse of power so unspeakable and so unthinkable that there isn’t even a law, federal or international, to adequately cover the case. It is the sort of high crime that impeachment was explicitly designed for, because the potential for abuses of power by a chief executive potentate is so vast and variegated that it would be impossible to write laws for all the potential scenarios. But to explicitly slow walk testing in a once-in-a-century pandemic, just to reduce the number of publicized cases for purely political purposes, allowing the virus to spread unchecked just to keep the economy humming along a little longer and to make his own response appear somewhat less incompetent, is the essence of a high crime. Because the consequences are so deadly–potentially killing literally hundreds of thousands of his own fellow citizens and endangering the entire interconnected world–it constitutes nothing less than a national and global crime against humanity.


Of course, the Trump campaign and administration (is there even a difference at this point?) knew they would have to perform damage control. White House trade advisor Peter Navarro claimed that Trump was only “joking” in a “light moment.” But listen to the audio again. It is very clear that Trump wasn’t joking, and that the moment was anything but light. Trump was blithe, sarcastic and dismissive, but that’s very different from engaging in pretense. Trump clearly meant every word he said at that moment.


It’s also not the first time Trump has intimated as much. At the very beginning of the pandemic Trump insisted that the virus would not spread and did not need to be taken too seriously, saying “You have 15 people, and the 15 within a couple of days is going to be down to close to zero.” Throughout the course of the pandemic he pooh-poohed the need for mass testing because the virus was either “under control” or would “disappear like a miracle.” The United States did not seek help from the World Health Organization to acquire tests (the WHO does tend to assist developing countries), but then the CDC bungled the creation and implementation of domestic tests while Trump dithered. He repeatedly lied about the U.S. having the most stringent testing regimen in the world, while also saying that tests weren’t that helpful, and while not taking the necessary steps to ramp up testing. And Trump has repeatedly claimed that “testing is overrated” because “it makes us look bad.”


In other words, the president’s admission at his fizzled campaign rally last night that he asked his administration to slow down the testing because healthy 10-year-olds testing positive was made him look bad unfairly wasn’t a joke. It was merely the most direct confirmation of what was already obvious and what he had obliquely already mentioned before.


And yes: it is a crime against humanity. It is no joke. The resulting death toll could number in the hundreds of thousands domestically alone. And it constitutes one of the greatest criminal abuses of power in all of American history by a sitting president.

David Atkins is a writer, activist and research professional living in Santa Barbara. He is a contributor to the Washington Monthly's Political Animal and president of The Pollux Group, a qualitative research firm.

No One Is Attempting to Silence White Men

But plenty of them are freaking out as old power structures are starting to get ripped apart.

by Nancy LeTourneau

June 15, 2020

The White House/Flickr

Andrew Sullivan characterizes the movement in journalism away from objectivity (read: bothsiderism) as a threat to civil discourse. In reference to an article about how revolts are erupting in American newsrooms, Sullivan also takes issue with the foundational beliefs being put forward as media organizations grapple with police brutality.
https://nymag.com/intelligencer/2020/06/andrew-sullivan-you-say-you-want-a-revolution.html

And what is the foundational belief of such moral clarity? That America is systemically racist, and a white-supremacist project from the start, that, as Lowery put it in The Atlantic,“the justice system — in fact, the entire American experiment — was from its inception designed to perpetuate racial inequality.”

For Sullivan, all of this is an attempt to silence the voices of dissent.

Question any significant part of this, and your moral integrity as a human being is called into question. There is little or no liberal space in this revolutionary movement for genuine, respectful disagreement, regardless of one’s identity, or even open-minded exploration. In fact, there is an increasingly ferocious campaign to quell dissent, to chill debate, to purge those who ask questions, and to ruin people for their refusal to swallow this reductionist ideology whole.

Similarly, in 2007, Glenn Greenwald suggested that there were speech rules that silenced discussions about race.

It is always preferable to have views and sentiments — even ugly ones — aired out in the open rather than forcing them into hiding through suppression. And part of the reason people intently run away from discussions of race…is because it is too easy to unwittingly run afoul of various unwritten speech rules, thereby triggering accusations of bigotry. That practice has the effect of keeping people silent, which in turn has the effect of reinforcing the appearance that nobody thinks about race (which is why nobody discusses it), which in turn prevents a constructive discussion of hidden and unwarranted premises.

Writing at the Unapologetic Mexican, Nezua didn’t attempt to spare his feelings in calling that out.

In this analysis (or this part of his post at least) the problem is the various unwritten speech rules. But guess what? There really aren’t any. There are just poor attitudes we keep about people who look different. Or who we’ve been taught to think of differently. And there is a “White” attitude of deciding for everyone else how they should live, be, self-identify, and do many other things. There are old slurs and old tropes that hurt people. These are the things that are flushed out when people speak: attitudes, thoughts, beliefs, manners of speaking that hint at lurking attitudes.

People avoid talking about race because they are scared of exposing their thoughts and views on race…They are not afraid of “unwritten speech rules.” They are afraid that what they really think and feel will cause them to be ridiculed or ostracized in public, or that they may see a part of themselves they have to feel bad about. So they keep the potential to themselves.

Our country is going through a fundamental transformation—especially when it comes to both patriarchy and white supremacy. In referring to presidential politics, here is how Rebecca Traister put it.

The public spectacle of this presidential election, and the two that have preceded it, are inextricably linked to the racialized and gendered anger and violence we see around us…

Whatever their flaws, their political shortcomings, their progressive dings and dents, Barack Obama and Hillary Clinton mean a lot. They represent an altered power structure and changed calculations about who in this country may lead.

The first time this country grappled with these questions it resulted in a civil war that ended slavery. In the 1960s a civil rights movement rose up to challenge Jim Crow laws, resulting in laws that both prohibited discrimination and guaranteed the right to vote. As Reverend William Barber has suggested, we are now facing the possibility of a Third Reconstruction. While laws such as those designed to rein in police brutality and hold officers accountable are currently on the table, activists like those involved in the 1619 Project at the New York Times are going deeper, attempting to expose the ways that racism and misogyny have been built into our systems and culture.

That isn’t sitting very well with a lot of folks. As the saying goes, “When you’re accustomed to privilege, equality feels like oppression.” So Andrew Sullivan isn’t the only white man who feels silenced. The editors at the Washington Examiner expressed similar thoughts.

A republic in which people are not tolerant of those who disagree, in which the mob aims to erase parts of culture that are uncomfortable, is not one that can long endure.

No one is silencing Sullivan or the editors at the Washington Examiner, as the publication of these articles proves. What has changed is that their views have to compete with others in a culture in which the power structure is being altered.

As these movements begin to delve more deeply into the systemic nature of racism and sexism in our culture, foundational beliefs are being challenged. We can see that in the way that the dominance model of organizing human relations is being challenged due to its overt embrace by both Trump and law enforcement. Here is how Riane Eisler explained the issue in her book Chalice and the Blade.

The underlying problem is not men as a sex. The root of the problem lies in a social system in which the power of the blade is idealized – in which both men and women are taught to equate true masculinity with violence and dominance and to see men who do not conform to this ideal as too soft or effeminate.

These days, even the idea of wearing a mask during a pandemic is being challenged as weak and unmanly. So we’re having these conversations that are making a lot of people uncomfortable. That does not mean that there are speech rules or that anyone is being silenced.

What activists are attempting to do is to get at some of the ways that patriarchy and racism have been cooked into the culture that aren’t as obvious as calling someone the “n” word. As the power dynamics shift, that kind of conversation is going to be inevitable and terribly threatening to those who are intent on clinging to the past.

None of this is to suggest that we all need to simply embrace the views of feminists or those involved in the Black Lives Matter movement. Here’s where I actually agree with Sullivan.

Liberalism is not just a set of rules. There’s a spirit to it. A spirit that believes that there are whole spheres of human life that lie beyond ideology — friendship, art, love, sex, scholarship, family. A spirit that seeks not to impose orthodoxy but to open up the possibilities of the human mind and soul. A spirit that seeks moral clarity but understands that this is very hard, that life and history are complex, and it is this complexity that a truly liberal society seeks to understand if it wants to advance.

The issue is that our culture is evolving to a place where patriarchy and white supremacy aren’t merely differences that need to be tolerated, but represent moral challenges that need to be exposed and eliminated. That process will require listening and being able to tell the difference between the truth and something that simply makes us uncomfortable.

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60