"The Month That Was - June 2017"

Sydney M. Williams

The Month That Was – May 2017

June 5, 2017

“What is so sweet and dear

As a prosperous day in May,

The confident prime of the day,

And the dauntless youth of the year…?”

                                                                                                             Sir William Watson (1858-1935)

                                                                                                             English Poet

                                                                                                            “Ode to May” 1880

The recent Islamic-inspired killings in Manchester, Kabul and London make more urgent the President’s message on his first trip abroad.  

The focus of Donald Trump’s first foreign trip as President was radical Islam. In Riyadh, Mr. Trump, a man the media calls an Islamophobe, was well received by leaders of fifty Muslim nations. He did not patronize them. He did not mince words. He told them we have a common enemy – Islamic extremists who have subsumed the Muslim religion for their purpose. He said: “This is not a battle between different faiths…or different civilizations…This is a battle between barbaric criminals who seek to obliterate human life and decent people, all in the name of religion.” In Jerusalem, he spoke frankly to the duplicitous Mahmoud Abbas and the stolid Benjamin Netanyahu, that living in peace is better than dying in war. To the Pope, he talked of radical Islam in terms of immigration. To the pampered elites in Brussels, he told them what they knew, but had ignored – that peace is not free, that security requires a strong NATO that must be funded. He told them they must live up to their financial and defense obligations. In Sicily, he met with the Group of Seven. Their main concern was the Paris Climate Accord – an “agreement,” as the New York Times put it, that “does not require any country to do anything.” – when the immediate risk is Islamic extremism.

Europe has been living in a cocoon. With the United States providing the bulk of their security needs, their welfare systems have blossomed. Birth rates are far below replacement rates, challenging economic growth and indicative of a pessimistic outlook. The situation cannot endure. Mr. Trump understands consequences of radical Islam better than do European leaders – that the risk is not just terrorists who maim and kill; it is the cultural challenges radical Islam poses for the West – an adherence to religious intolerance, the rise of multiculturalism and the nihilism that is its progeny. As William Butler Yeats wrote:

“Things fall apart; the center cannot hold;

Mere anarchy is loosed upon the world,

…………………………………….

The best lack all conviction, while the worst

Are full of passionate intensity.”

The West needs people who will lead from the front; people who will show that patriotism does not mean retreat from the world. We need leaders who will restore values we are at risk of losing and who will provide a sense of morality – that evil must be confronted, good must be commended and peace can be achieved only through strength. We are a conglomeration of independent nations, each with its individual culture. Countries must respect one another; they must be mindful of one another’s laws. They should encourage trade, with peace as a goal; but all must understand that all compete for economic advantage. In terms of immigration, it is not pluralism we seek, but assimilation, so we can become one. This is not to say that one culture is superior to another, but nations have identities, which should be maintained. It is what makes them unique. As Pierre Manent, the French philosopher, once said regarding immigrants to America: “…people came from all over the world, not to be human beings, but to be citizens of the United States.”

Angela Merkel, in a tight race for re-election to a fourth term as Chancellor, distanced herself from Mr. Trump, interpreting his words to her needs: “The times when we could count on others are over, in a certain extent (sic). I have experienced this in the last few days…But we must know we must fight for our future ourselves, as Europeans, for our destiny.” Mr. Trump was right to point out Germany’s obligations. Tough love demands responsibility. Growing up, as my mother used to say, is not easy.

Germany bears watching. Reunification in 1990 made them stronger. The country has been the prime beneficiary of the Euro, which has provided her a currency far weaker than if she had stayed with the Deutschmark. With Great Britain leaving the European Union, she stands alone, with France a weak number two. Are we witnessing a return of Pax Germania, as some have suggested?

Elsewhere in the news, ISIS claimed responsibility for the Islamic terrorist who blew himself up inside the Manchester (England) Arena. Twenty-two died and fifty remain hospitalized. Most of the dead were teen-age girls, a preferred target of misogynist Islamic radicals. ISIS Members in Libya killed twenty-eight Coptic Christians (another favored target) on a bus in Egypt. Even with a twenty-four-hour news cycle, we in the West are too often ignorant of how ubiquitous have become Islamists’ killings. However, the Religion of Peace (TROP), a “non-partisan, fact-based site,” tracks the carnage. For the thirty days ended May 30, there were 190 Islamic attacks in 25 countries, killing 1358 and wounding 1555. Most of the dead are Muslims.

Iranian president Hassan Rouhani won re-election. Emmanuel Macron was elected president of France. He has begun putting together a cabinet that reaches across the political spectrum, with conservatives in economic and financial positions and liberals in Interior. Russia, Iran and Turkey agreed to set up safe zones for refugees in Syria. Hackers, looking for ransom and using software tools stolen from the N.S.A., shut down dozens of computer systems in Britain, Russia, Ukraine, India, Taiwan and 140 other nations. In South Korea, Moon Jae-in, a left-of center politician who supports talks with North Korea and who would like to dismantle America’s missile defense system, won the presidency. His predecessor, Park Geun-hye was impeached. North Korea conducted three more missile tests.

President Trump fired FBI Director James Comey. (See my TOTD of May 22.) The House voted on the health overhaul bill, which then moved to the Senate. Deputy Attorney General Rod Rosentein named Robert Mueller special counsel to oversee investigations into alleged Russia meddling in the 2016 election. The White House submitted their 2018 budget to Congress, which, in typical Washington fashion, was attacked before it was read. A 3% GDP growth assumption by 2021 is deemed too optimistic by the CBO and the Federal Reserve, which project 1.9% and 1.8% respectively.  Keep in mind, both agencies have been poor predictors in the past. On May 3^rd, Puerto Rico, with liabilities of $123 billion, became the largest bankruptcy in the history of U.S. public bond market – a “canary in the coal mine” for states like Connecticut and Illinois? The FISA Court (Foreign International Surveillance Act) rebuked President Obama’s N.S.A. for unlawfully releasing personnel data. A Mississippian shot eight people, after an argument with his wife. Mark Zuckerberg suggested government provide a guaranteed income for all its citizens – showing a willingness to sacrifice future GDP growth for current expansion of the welfare state.  

Two Muslim brothers with “ties to the Middle East,” Abdullah Alrifahe and Majid Alrifahe, were arrested in Minnesota. Inside their car were found a loaded AK-47, another rifle and handgun, large amounts of ammunition, a drone and bomb-making materials. Charter school advocates in Los Angeles won a majority of the district’s Board of Education seats. Unions spoke of an increase in graduation rates, but did not mention that half of last year’s graduating seniors were ineligible for the state’s public universities. The U.S. successfully tested its missile defense system.

U.S. household debt totaled $12. 7 trillion for the first quarter, exceeding the previous high of $12.6 trillion set in the third quarter of 2008. The quality of the debt, except for student loans, has improved. For example, only $18 billion of mortgages were carried by those with weaker credit scores, compared to $115 billion in the first quarter of 2007. On the other hand, student loan debt, which in 2008 was $640 billion, rose to $1.34 trillion at the end of the first quarter, with delinquency rates now higher than on credit card debt. Markets moved slightly ahead during the month, despite antagonism toward President Trump. On May 17^th, the DJIA declined 1.8%, the worst collapse since June 24, 2016. That followed allegations Mr. Trump had asked FBI Director to go easy on Michael Flynn, a few days after he had been fired. GDP growth in the U.S. was revised up for the first quarter, from 0.7% to 1.2%. GDP growth in the Eurozone grew at 0.5% in the first quarter. A study released during the month indicated that 15%-18% of the European workforce is without a job and would like to work, or work longer hours. Mario Draghi, the president of the European Central Bank (ECB), told Dutch MPs that the Central Bank had bought 1.8 trillion of Euro-denominated assets, but when asked what would happen if a Eurozone member needed to restructure its debt, he responded: “We don’t need to speculate on the probability of things that have no chance of happening.” Really? Moody’s downgraded China’s debt, but their May PMI data suggested renewed economic growth.

President Trump spoke at the Coast Guard Academy, in New London, Connecticut. When he deplaned, no governor, U.S. Senator or Representative was there to greet him – not smart for a state with financial problems, in need of infrastructure spending and dependent on defense. After 164 years in Hartford, Aetna said it would be moving its headquarters out of state. Stephen Colbert, of CBS’s “The late Show,” used four-letter words in a tempestuous tirade against Mr. Trump, but was bested by CNN’s Kathy Griffin who displayed a mask of his severed head. (Incredibly, she has since blamed the President for her loss of a job.) Prince Philip took early retirement, giving up his official duties at a youthful 95. At Wellesley College’s commencement, Hillary Clinton compared Donald Trump to Richard Nixon, who she falsely claimed was impeached. Mr. Nixon resigned. It was her husband who was impeached! After 146 years, Ringling Brothers circus gave its last show, a piece of Americana disappearing into the mists of time. A computer glitch stranded 75,000 British Air passengers, which could cost the airline £100 million. Huma Abedin served her husband, Anthony Weiner, divorce papers, then invited him back to her apartment. In New Orleans, a statue of Robert E. Lee, one of America’s great generals and a link to our fallible past, was taken down, as history fell to political correctness. Fidelity announced Bitcoins will be in their cafeteria. A race at Thunderhill Raceway in California, saw ten driverless cars entered, compared to three last year, indicating technology is advancing. And in Florida, thousands of male mosquitoes, injected with a chemical that renders the females they mate with unable to produce eggs, were released into the Everglades.

Death made its rounds. Wilburn Ross, a World War II Medal of Honor winner, died at age 94. Zbigniew Brzezinski, who served as national security advisor to President Jimmy Carter, died at 89. Roger Ailes, who single-handedly re-wrote rules for TV news, died at 77. Former Panamanian dictator Manuel Noriega died at age 83. Roger Moore, who starred in seven James Bond films, died at 89. Jim Bunning, a legendary pitcher for the Detroit Tigers and the Philadelphia Phillies before becoming a U.S. Senator, died at 85. And a friend I knew at Oppenheimer Capital thirty years ago, Joe LaMotta, died at 84.

The weather has been cool and rainy in Connecticut, with temperatures often running ten to fifteen degrees below normal. But here’s hoping May showers will bring June flowers!

Welcome to June!