Wednesday Night #1909 with Peter Berezin

We are fortunate to have Peter Berezin with us to help make some (economic) sense out of the past tumultuous week (and month since he was last here) we have experienced.
An added treat will be the introduction of brilliant, talented, Sauvé Fellow Charlotte Sobolewski who has very recently joined the Montreal-based start-up Element AI and looks forward to spending quite a bit of time in our city, and, we hope, many Wednesday Nights.

So, Brett Kavanaugh has been confirmed, sworn in and started hearing his first case as an Associate Justice of the Supreme Court. This is, to many of us, the most depressing news of the week. And, while we deplore the way that Dr. Ford was treated, it is not her testimony that should have been the focus of the hearings. What should have counted far more is the fact that he is highly partisan and a serial liar whose nomination was opposed by  2,400+ Law Professors, and a long list of others including The National Council of Churches,, the Jesuit magazine America, former classmates and even friends. The last (for now) word belongs to Michael Gerson of the Washington Post: The media mishandled Kavanaugh — and made Trump a winner

Niki Haley will be leaving her post as US Ambassador to the UN and, you’ll be relieved to know that Ivanka Trump Says She Won’t Replace her – although, with the Trump administration denials often come before confirmation of statements. So far, nobody has mentioned the dreaded John Bolten and we fervently hope that nobody will. Her time at the UN has generally met with approval even from the anti-Trump camp. Even the NYT editorial board says she will be missed.

Michaëlle Jean will also be leaving her job as Canada has decided not to back her candidacy for a second tour as  secretary-general of the Francophonie.

As the news filters out of Indonesia in the wake of the devastating tsunami, Jamil Zaki writes about a topic that was often addressed when Margo Somerville was a frequent WN participant – ‘Compassion collapse’. In Indonesia’s Tsunami and the Problem of Human Empathy, he examines the reasons why, as the death toll keeps rising, the compassion of faraway observers either can’t—or won’t—keep pace and how to combat the problem. Our only quibble with this excellent piece is that the author does not address the effects on compassion  – and philanthropy – of the individual’s knowledge of the country, or place, where the tragedy has taken place and/or the fact of having friends or acquaintances who live there.

The Global economy
Peter’s 28 September Global Investment Strategy report mentions that “new policy risks are rising to the fore, chief among them protectionism. We expect the trade war to heat up, with the Trump administration increasingly directing its ire at China.” Indeed, Peter’s former employer, the IMF, released a major report on Tuesday that projected the world’s economy will grow by 3.7 percent, which is 0.2 points lower than they had estimated in April and signaling a slight slowdown — and Trump’s trade policies are a major reason why. “[T]he forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of US imports from China,” reads the IMF’s “World Economic Outlook” report. One source we follow quite regularly is the South China Morning post. Tuesday’s article Trade war: China ‘risks disengagement with US unless it changes’ about the forum hosted by Peking University’s national school of development and Washington-based Heritage Foundation is a blunt reminder of the many economic issues that require diplomatic negotiation, not a strong suite of the Trump administration.

Trump Claims Trade Victories but Businesses Struggle Under His Approach
(NYT) American businesses still face a cloud of trade uncertainty as Trump seeks to replace the North American Free Trade Agreement, Nafta, with the new deal. The biggest concern: Lingering tariffs on foreign steel and aluminum.
The metal tariffs, combined with retaliatory taxes that foreign governments have placed on American products, are undercutting the concessions that Mr. Trump won in the deal. While the new trade pact gives American farmers greater access to Canada’s dairy market and requires that a higher percentage of a car be produced in the United States, business and trade groups are raising questions about whether the agreement will actually deliver the economic boost the president promises.

Market UPDATE : U.S. stocks tumbled the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares. Treasuries rose with the yen amid demand for haven assets.
The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years. All 30 members of the blue-chip index retreated, with Boeing and Caterpillar dropping at least 3.8 percent. Computer companies led the S&P 500 to a fifth straight loss, the longest slide since Donald Trump’s election win.

We would also mention the recently-released IPCC Report Hidden Costs of Climate Change Running Hundreds of Billions a Year – A new report warns of a high price tag on the impacts of global warming, from storm damage to health costs. We are happy to see that the Washington Post is advocating sustained emphasis, by the media and the public, all over the world, “if we stand a chance of maintaining a livable planet. ” It will be hard to maintain the momentum in the face of the onslaught of news of all kinds. Plus, this profoundly disturbing commentary from Robinson Meyer in The Atlantic Brett Kavanaugh Could Extend Trump’s Environmental Legacy by Decades – Long after the president leaves office, the new justice will bring a skepticism of the EPA to the highest levels of government.

And here we should note that this year’s Nobel prize for economics was awarded to William Nordhaus and Paul Romer for their work on sustainable growth. The US economists’ research focuses on how climate change and technology have affected the economy. Prof Nordhaus, of Yale University, was the first person to create a model that described the interplay between the economy and the climate, while Prof Romer, of New York University’s Stern School of Business, has shown how economic forces govern the willingness of firms to produce new ideas and innovations.

In less happy international news,  the outcome of the elections in Brazil is no surprise. Rightwinger Jair  Bolsonaro, who rallied  supporters with ‘make Brazil great again’ slogan. is compared to Donald Trump and the Philippines’ Rodrigo Duterte, and has pledged to scrap Brazil’s environment ministry, open indigenous reserves to mining and ditch the Paris climate accord, has won the first round of the presidential election, but still fell short of the magic 50%, so will face his left-wing rival in a run-off vote on 28 October. His victory is not a pleasant prospect.

Meanwhile, in the Middle East another authoritarian regime is in the midst of a scandal. Saudi Arabia is suspected of having abducted and quite possibly murdered journalist Jamal Khashoggi, who criticized Saudi policies towards Qatar and Canada, the war in Yemen, and a crackdown on dissent and the media in the kingdom. Khashoggi hasn’t been seen since he went into the Saudi consulate in Istanbul, a week ago, to get papers. His fiancée, who waited outside for eleven hours, said he never emerged.

The last person that one would expect to be abducted, is surely the head of Interpol, but in another bizarre news story, Meng Hongwei, the first Chinese person to head Interpol, went missing some two weeks ago. On Sunday evening, the Communist Party’s internal graft investigation body and a national anti-corruption agency said in a one-sentence statement that Meng was under investigation. Not long after, Interpol said that the 64-year-old had resigned.

We must all give thanks that we live in this wonderful country where even the politicians you would not mind peacefully disappearing rise again … thus  Stephen Harper is back (not necessarily by popular demand) with an about-to-be -published book, Right Here, Right Now: Politics and Leadership in the Age of Disruption. Bloomberg notes that “The book lists his achievements uncritically”, while John Geddes takes issue with Mr. Harper’s thesis in Stephen Harper has some ideas about conservative populism  Meanwhile, the undaunted former PM is happily doing the rounds of media interviews and carrying the message that Trump’s trade target should have been China, not NAFTA.

A final note. Last week we were so preoccupied with Quebec elections and the Kavanaugh circus that we did not pay proper tribute to Charles Aznavour who died on October 1. On Friday, France Paid Tribute to the great singer and songwriter at a memorial service where mourners included Emmanuel Macron, Armenia’s Prime Minister Nikol Pashinyan. Former French Presidents Nicolas Sarkozy and Francois Hollande and actor Jean-Paul Belmondo. We are sure that Miss Piggy is also in mourning.