The Full Belmonte, 11/19/2022
A line of voters stretches outside the Citizens Service Center in Columbus, Georgia, on Monday as early voting began for the midterm elections.
Midterm elections
“It's just under three weeks from Election Day and nearly 2.5 million Americans have already cast their ballots in the midterm elections, according to data from election officials. While it's too early to predict if 2022 will eventually reach the exceptionally high turnout levels of 2018 -- and it's likely voting patterns have changed as the Covid-19 pandemic pushed more people to vote early -- the numbers show preelection voting is keeping pace with the same point four years ago. Voters already are starting to cast ballots in some of 2022's most critical swing states: More than 370,000 ballots have been cast in Michigan, nearly 237,000 in Pennsylvania and nearly 160,000 in Wisconsin. And in Georgia, long lines and a record turnout of more than 131,000 people marked the first day of early voting in the state this week.” Read more at CNN
Rich Pedroncelli/AP
“Nearly $20 billion in unemployment money that was meant for pandemic relief was stolen in California by domestic and international criminals, making it the largest cause of pandemic fraud in any state. Now, a special task force is investigating claims and freezing accounts to determine who legitimately qualified for the relief money.” Read more at NPR
Trump
“The House select committee investigating the January 6, 2021, attack on the US Capitol will issue a subpoena to former President Donald Trump ‘shortly’ to seek his testimony under oath as well as documents, according to GOP Rep. Liz Cheney. On Tuesday, the committee's vice chair did not commit to what the panel will do if Trump does not comply with the subpoena but said ‘we'll take the steps we need to take.’ Separately, Trump is scheduled to answer questions under oath today in the defamation lawsuit brought by E. Jean Carroll, a former magazine columnist who accused Trump of raping her in a department store in the mid-1990s. Trump has denied the allegations.” Read more at CNN
Inflation Adjustments Mean Lower Tax Rates for Some in 2023
Filers whose salaries have not kept pace with inflation could see savings on their federal income tax bills.
“WASHINGTON — The rapidly rising cost of food, energy and other daily staples could allow many Americans to reduce their tax bills next year, the I.R.S. confirmed on Tuesday.
Tax rates are adjusted for inflation, which in typical times means incremental movements in the thresholds for what income is taxed at what rate. But after a year that saw America’s fastest price growth in four decades, the shift in rates is far more dramatic: an increase of about 7 percent.
Other parts of the tax code will also be affected by the inflation adjustment. Those include the standard deduction Americans can claim on their tax returns.
The shift would be slightly larger if not for a change Republicans made as part of President Donald J. Trump’s tax overhaul that was passed in 2017. It tied rates to a measure of inflation, called the chained Consumer Price Index, that typically rises more slowly than the standard Consumer Price Index. In September, chained C.P.I. was up about a quarter of a percentage point less, compared to the previous year, than standard C.P.I.” Read more at New York Times
Durham loses again in court, but trial airs FBI flaws
The Danchenko verdict is the latest setback for the Trump-appointed special counsel's investigation into the FBI and Russia inquiry.
Igor Danchenko walks to the Albert V. Bryan U.S. Courthouse during a lunch break in his trial Oct. 11, 2022, in Alexandria, Va. | Drew Angerer/Getty Images
“Special Counsel John Durham’s probe into the origins of the FBI’s Trump-Russia investigation suffered another high-profile blow Tuesday, but his disciples see a silver lining in the veteran prosecutor’s checkered courtroom record.
After about nine hours of deliberations, a federal jury acquitted Russian policy researcher Igor Danchenko on Tuesday on four felony false-statement charges brought as part of Durham’s probe of misinformation that triggered the FBI probe of former President Donald Trump’s 2016 campaign.
Simply put, federal prosecutors are not used to losing. So, Durham’s defeat at the Danchenko trial — which came less than five months after a similar acquittal in another case brought by the special prosecutor — represents an unmistakable defeat.
However, Durham and his aides used the forum of the recent trials to air evidence of what they suggested was a failure by FBI personnel to pursue leads as they probed the sourcing of the Steele dossier, a compendium of allegations former British intelligence officer Christopher Steele assembled about links between Trump and Russia. Danchenko was Steele’s key source when compiling the dossier.
Durham’s open criticism of the FBI produced an unusual spectacle at the trial, as he and his team attacked the competence of FBI agents and analysts who were the prosecution’s key witnesses. The back-and-forth led to disclosures about senior investigators’ refusal to pursue inquiries that more junior FBI personnel thought were warranted, as well as ongoing efforts to discipline FBI personnel over issues related to the Trump-Russia investigation.
Defenders of the FBI’s Trump-Russia probe have said Durham’s criticisms have focused on a relatively small part of the broad investigation, although Durham could offer more disclosures in a forthcoming report. However, his back-to-back courtroom defeats suggest he and his aides misjudged those cases and committed some of the same investigative gaffes they’ve decried in the original probe.
Danchenko managed to defeat the charges against him even though he declined to take the stand in his own defense and called no witnesses during the trial. His attorneys suggested to the jury that he was the victim of a politically inspired prosecution by Durham, who was tapped in 2019 by then-Attorney General William Barr to look into how the Trump-Russia probe began and played out.” Read more at POLITICO
Biden promises abortion law if Dems control Congress
Anna Moneymaker/Getty Images
“Tuesday, President Joe Biden promised to codify abortion rights into law if Democrats maintain control of the legislature in the upcoming midterm elections.” [Vox] Read more at Associated Press / Seung Min Kim
“Democrats need to keep control of the House and add to their majority in the Senate to make good on Biden’s promise. They appear unlikely to do so, based on current polling.” [Vox] Read more at Politico / Christopher Cadelago and Alice Miranda Ollstein
“At least 14 states have banned most abortions since the Supreme Court overturned Roe v. Wade in June — though some bans currently face court challenges.” [Vox] Read more at New York Times / Alan Rappeport
“Residents of eight states could see more abortion rights restrictions depending on the outcome of state midterm elections.” [Vox] Read more at Vox / Nicole Narea
“It’s unclear how much Biden’s pledge will motivate voters; recent polling suggests persistent inflation and the economy are top concerns.” [Vox] Read more at CNN / MJ Lee, Jeremy Diamond, and Kevin Liptak
Biden to complete release from emergency oil reserves; could take more action on gas prices
“WASHINGTON – President Joe Biden will announce Wednesday he’s releasing 15 million barrels of oil from the nation’s emergency reserves, one of the few actions he can take before next month’s midterm elections to show voters he feels their pain at the pump.
The move completes Biden’s March directive to release 180 million barrels from the Strategic Petroleum Reserve, the largest sale in the reserve’s nearly 50-year history.
The national average pump price for a gallon of gas has significantly dropped since summer but has ticked up since September and is still higher than it was last year.
Biden’s move comes about two weeks after OPEC and its oil-exporting allies announced it would cut oil production by 2 million barrels per day to boost prices.
The national average pump price for a gallon of gas has significantly dropped since summer but has ticked up since September and is still higher than it was last year.
Biden’s move comes about two weeks after OPEC and its oil-exporting allies announced it would cut oil production by 2 million barrels per day to boost prices.
The final 15 million barrels of oil that will be added to the market in December is less than one full day’s use of oil in the U.S., according to the Energy Information Administration.” Read more at USA Today
“Senator Marco Rubio of Florida and his Democratic challenger, Representative Val Demings, clashed on guns and abortion in a debate. Here are takeaways.” Read more at New York Times
Sen. Marco Rubio (R-FL) and U.S. Rep. Val Demings (D-FL) greet each other before a televised debate at Duncan Theater an the campus of Palm Beach State College in Palm Beach County, Fla., on Tuesday, October 18, 2022. THOMAS CORDY, THE PALM BEACH POST
Los Angeles City Council elects new president after leaked racist audio rocked city
“A week after a leaked audio recording erupted Los Angeles in scandal and left the city in a state of uncertainty over its leadership, the city council on Tuesday elected Councilmember Paul Krekorian as its new president. In a four-hour meeting, which was held remotely due to exposure to COVID-19, councilmembers listened to hours of public comment before voting Krekorian in. He will replace Nury Martinez's empty seat following her resignation last Wednesday. He took the role of president immediately following the unanimous vote.” Read more at USA Today
The big chill
Image: Weatherbell.com
“It's not supposed to be this cold yet: Areas from the Midwest to the South and East Coast are 15°–30°F below average right now for this time of year, Axios' Andrew Freedman reports.
Freeze warnings are in effect for at least 61 million people, according to the National Weather Service.
The thermometer reached a record low of 16°F in Omaha and 21°F in Des Moines.
Lows in Atlanta are forecast to be in the 30s tomorrow morning, with many areas reaching 32°F.
Meanwhile, out West: British Columbia and Alberta have seen July-like temperatures in the 70s early this week, while Pacific Northwest temperatures are 10°–20°F above average for this time of year.” Read more at Axios
California jury finds man guilty in the 1996 murder of Kristin Smart
By Paul Vercammen, Taylor Romine and Amir Vera, CNN
Paul Flores, left, and his father, Ruben Flores.
SLO County Sheriff
CNN —
“A California jury has found Paul Flores, the man accused of the 1996 murder of Kristin Smart, guilty of first-degree murder, according to a news release from the San Luis Obispo County District Attorney’s Office.
Meanwhile, a separate jury found Flores’ father, Ruben, now 81, not guilty of being an accessory to Smart’s murder, the release said.
Kristin Smart
‘The impact that Kristin’s disappearance and its investigation have had on the Smart family and our community, spanning a quarter century, is profound,’ District Attorney Dan Dow said in the release. ‘We thank them for the tremendous trust and patience they have placed in the investigation and prosecution of this terrible crime. This verdict provides some sense of justice for Kristin, the Smarts, and our community. Today, justice delayed is not justice denied.’” Read more at CNN
Person of interest in Oklahoma river killings case taken into custody on unrelated chargeNYT columnist says this could be Putin's 'Hail Mary'
“The man who was named as a person of interest in the gruesome killings of four men who were shot, dismembered and found in an Oklahoma river last week was taken into custody Tuesday in Florida on an unrelated charge, authorities said.
Joe Kennedy, 67, was arrested in Daytona Beach Shores in a vehicle that was reported stolen on Monday, Okmulgee Police said. He is being held on a charge of grand theft of a motor vehicle with no bond, according to the Volusia County inmate record.
‘The District Attorney and the Sheriff will begin the process of getting Kennedy back to Okmulgee County,’ police said in a statement. ‘The murder investigation is ongoing and investigators continue to follow leads every day.’
Police have not detailed why Kennedy is a person of interest and they have not named him a suspect in the murders.
He is also being held on a warrant issued for his arrest in Okmulgee County District Court in relation to a shooting in 2012. He is set to appear before a Volusia County judge on Wednesday afternoon, according to the clerk of courts.
4 bodies pulled from an Oklahoma river amid search for missing bike riders
The arrest comes a week since four men – Mark Chastain, 32; Billy Chastain, 30; Mike Sparks, 32; and Alex Stevens, 29 – were reported missing after leaving Billy Chastain’s home on bicycles around 9 p.m. on October 9, according to Police Chief Joe Prentice.
Their bodies, which had been shot and dismembered, were found days later in a river outside Okmulgee, a city of about 11,000 people roughly a 35-mile drive south of Tulsa.
‘Although the official cause and manner of death is still pending, each victim suffered gunshot wounds,’ Prentice said. ‘All four bodies were dismembered before being placed in the river, and that is what caused difficulty in determining identities.’
The remains were recovered over several days, and it’s not clear what kind of evidence investigators will be able to recover.
‘Whenever water is involved, it makes it much more difficult to identify evidence,’ the chief said.
Police have not recovered any bicycles, nor the gun used in the killings.” Read more at CNN
“The US Senate plans to hold a hearing next month on Kroger’s planned $24.6 billion takeover of rival supermarket chain Albertsons. Minnesota Senator Amy Klobuchar and Utah Senator Mike Lee, the top Democrat and Republican on the Senate Judiciary antitrust panel, expressed ‘serious concerns about the proposed transaction.’” Read more at Bloomberg
“Someone has to pay. The biggest increase to Social Security checks since 1981 was good news for US retirees. But it also served as a stark reminder that the program is expensive, with cuts to the critical American safety net looming unless it’s soon retooled. But alongside news of the benefit increase last week was a tax hike to pay for it, with the wages subject to the Social Security payroll tax set to rise almost 9% next year.” Read more at Bloomberg
Ukraine war: Russia begins evacuation from Kherson in south
Image caption, Russia's Izvestia website showed footage of people gathering to cross the Dnieper river
By Paul Kirby
BBC News
“Tens of thousands of civilians and Russian-appointed officials are being moved out of Ukraine's southern Kherson region ahead of a Ukrainian offensive, says the Russia-installed local leader.
Vladimir Saldo said 50-60,000 civilians would leave four towns on the west bank of the Dnieper river in an ‘organised, gradual displacement’.
All Russian-appointed departments in Kherson city would cross the river too.
Russian TV footage showed a number of people gathering near the Dnieper.
As they queued for boats, it was not clear how many were leaving. The transfer or deportation of civilians by an occupying power from occupied territory is considered a war crime.
Ukrainian presidential adviser Mykhailo Podolyak pointed out it was less than a month since Russia had held a ceremony to annex Kherson: ‘Reality can hurt if you live in a fictional fantasy world.’
Late on Monday, Russia's new military commander in Ukraine, Gen Sergei Surovikin, had described the situation in Kherson city, the regional capital, as difficult.
A Russian-installed official, Kirill Stremousov, warned Kherson residents that Ukrainian forces would launch an assault on the city ‘in the very near future’. ‘No one is going to retreat but we also want to save your life. Please move as quickly as possible to the left bank,’ he added.
Mr Saldo, who was appointed governor of the region by Moscow, told Russian TV that no-one was about to surrender, but it was "undesirable" for residents to remain in a city facing military action. "In the past two days, more than 5,000 people have left Kherson," he was quoted as saying.
Earlier this month, Kherson's exiled deputy mayor said only 100,000 residents remained in Kherson city of the pre-war population of 320,000, with many fleeing Russia's occupation.
The mayor of Russian-occupied Melitopol, Ivan Fedorov, warned that Kherson's civilians were facing enforced deportation and being deprived of their homes so that Russia could populate the city with "soldiers and traitors". Last month, Ukraine said 2.5 million people had been forcibly deported from Ukraine to Russia.
The Russian-appointed governor accused Ukraine of building up for a large-scale offensive and planning to destroy the Kakhovka dam on the River Dnieper, flooding the area.
Kherson was the first major city to fall to Russian forces when they invaded Ukraine in February. However, in just a few weeks the Ukrainian military has recaptured territory in the north of the region and pushed as far as 30km (19 miles) south along the Dnieper, threatening to trap Russian troops.
As well as annexing Kherson, the Kremlin also announced last month that three other Ukrainian regions were part of Russia - a claim rejected internationally.” Read more at BBC
Ukraine
“Large portions of Ukrainian territory have been hit with electricity and water outages as Russia ramps up its strikes on energy facilities in the country. Ukraine's military said it shot down 13 Iranian-made ‘kamikaze’ drones over the Mykolaiv region overnight, and many residents are bracing for more attacks. The US, France and the UK plan to discuss Iran's drone transfers to Russia during a UN Security Council meeting today, a US official told CNN. The three countries have said that the transfers are a violation of a UN security resolution, which restricts certain arms transfers to or from Iran. It is unclear whether they will raise this specific point in the meeting or move to snap back sanctions on Iran for the arms transfers.” Read more at CNN
“Vladimir Putin spent years racing against Russia’s looming demographic clock, only to order an invasion of Ukraine that augurs another historic decline for his country. Besides Russian ca and an even bigger flight of men seeking to avoid fighting have derailed Putin’s goal of stabilizing Russia’s population. Crippling disruptions from the war are converging with a 30-year-old demographic crisis for ‘a perfect storm.’” Read more at Bloomberg
“Slogans attacking President Xi Jinping featured on banners draped over a Beijing bridge last week have spread to other Chinese cities. Phrases from the original handwritten signs criticized the strict lockdowns and restrictions that have defined Xi’s ‘Covid zero’ policy, while also calling for his removal in favor of democracy. ‘We want food, not PCR tests. We want freedom, not lockdowns and controls. We want respect, not lies,’ one of the banners read.” Read more at Bloomberg
Britain's Prime Minister Liz Truss attends a press conference. | Daniel Leal/Pool Photo via AP, File
“PANNED AND SEARED — Not long into her tenure, British Prime Minister Liz Truss’ chancellor, Kwasi Kwarteng, unveiled a catalog of unfunded tax cuts — the largest in 50 years — as part of a ‘Growth Plan.’
Markets recoiled. The pound hemorrhaged value, almost reaching a historic parity with the dollar. Government borrowing costs spiked along with mortgage rates. The IMF stepped in to issue a sharp warning that the proposals in the so-called mini-budget would exacerbate the U.K.’s cost-of-living crisis.
Prominent critics came out of the woodwork. Even President Joe Biden, holding a chocolate chip waffle cone in an Oregon Baskin Robbins, said that Truss made a “mistake,” and the consequences were “predictable.”
On Friday, Truss fired Kwarteng, subbing in Jeremy Hunt — who went ahead and tore up most of what remained of Truss’ mini-budget on Monday.
While markets are responding positively to the reversal in policy, Truss’ reputation remains in shreds. Tory MPs have publicly called upon her to resign, and many more are understood to have submitted letters of no confidence. Latest YouGov polling shows Truss’ net approval at -70 — the lowest in history, 17 percentage points below her disgraced predecessor Boris Johnson’s worst score and almost as low as the rating for Russian President Vladimir Putin.
The mini-budget fiasco may or may not prove fatal to Truss, but the damage to the Conservative Party is wide and deep. ‘The government has completely lost its credibility on its ability to manage the economy and to be seen as a solid custodian of people’s money,’ said Mark Leonard, director of the European Council on Foreign Relations.
The public won’t forgive quickly, Leonard added, citing the plummeting popularity the Tories suffered after Black Wednesday, when a 1992 collapse of the pound forced Britain to withdraw from the European Exchange Rate Mechanism.
‘A cliche is that the Tory Party’s purpose is to be economically competent. If it loses that, people start to ask, ‘What’s the point in the Conservative Party?’ said Garvan Walshe, former national and international security policy adviser for the Conservatives.
Indeed, a recent poll-of-polls predicted that Labour would seize a landslide 507 seats if a general election were held today, and the Tories would fall behind the SNP to third place, with 48 seats.
In an interview Monday, Truss apologized for ‘mistakes’ made, claiming that she had ‘fixed’ them. She also vowed to ‘lead the Conservatives into the next general election,’ scheduled for January 2025 at the latest.
Beyond the domestic calamity, the Conservatives face an uphill battle convincing the rest of the world that the U.K. is a country to be taken seriously. The mini-budget drama has been ‘extremely damaging to British reputation abroad,’ Leonard said.
Global expectations are that U.K. macroeconomic policymaking should be at least somewhat consistent and professional — yet Truss’ policy circus and the monthslong merry-go-round of job-hopping Tories smacks of a government losing control.
Aside from Biden’s comments in the ice cream parlor, other leaders have weighed in, some tongue-in-cheek: The Greek Prime Minister, Kyriakos Mitsotakis, told the Sunday Times: ‘If you need experience in dealing with the IMF, we are here to help!’
The Egyptian delegation at a D.C. IMF meeting reportedly joked that their pound had brighter prospects than the British counterpart. But behind every joke there is some truth; mini-budget fallout has ‘created a sense in many international debates that Britain is now like an emerging economy,’ Leonard added.
The recent fiasco is compounded by previous knocks to the U.K.’s global credibility — notably, Brexit. ‘Truss and her team hadn’t really understood how Britain’s international reputation had already been damaged by Brexit,’ said Walshe. While the Conservatives may have been able to get away with the raft of tax cuts pre-Brexit, the U.K. is now ‘associated with a more unreliable type of political economy,’ he added.
Biden, in particular, has been trying to move away from the sort of Reaganite economics reflected in the ‘Trussonomics’ mini-budget, said Leonard. In this way, the plan’s utter failure should reassure America that trickle-down policies are a no-go in the current economic climate.
Whether Truss is ousted or not, the Conservatives face a reputation struggle domestically and globally. Rebuilding trust begins at home: By and large, governments that ‘have strong support from the population have more credibility on the international stage,’ said Leonard. Projecting ‘stability and policy continuity,’ said Walshe, will also be important. Yet that is unachievable as long as the domestic situation remains volatile.
Probabilities based on Betfair Exchange wagers give a 1-in-3 chance that Truss will stay in Downing Street for the remainder of the year. Just six weeks into her premiership, she has managed to become the least popular prime minister in recent history. In aiming at ‘Britannia Unchained ,’ the U.K.’s prime minister has done nothing less than forge her own cage.” Read more at POLITICO
Indian outlet on defensive after its explosive claims of Meta political censorship
“NEW DELHI — Last week, The Wire, a small but gutsy Indian news outlet, seemed to land one explosive punch after another on Meta, the social media giant that owns Instagram and Facebook.
The California company had given an influential official from India’s ruling party the extraordinary power to censor Instagram posts that he didn’t like, The Wire reported, citing a document leaked by a Meta insider. A day later, The Wire reported that Meta executives were scrambling to find the mole who leaked the story, citing a new internal email the publication had obtained.
Finally, after Meta executives denied both reports on social media — and, in an unusual move, insisted that The Wire’s documents appeared fabricated — The Wire released a lengthy rebuttal on Saturday that the outlet said would lay to rest any doubts about its reporting.
It did not. Instead, The Wire is now investigating itself.
The publication said Tuesday it launched an internal review of its stories about Meta, adding a new twist to a sensational dispute between a reputed Indian news organization and a powerful Silicon Valley company — a clash that has captivated the technology and media industries in both India and the United States.
The investigation came after a bitter week during which Meta and The Wire accused each other of fabrication. But Wire editors were pressed to review their work after technology experts in both countries pointed out a mounting list of apparent discrepancies in videos and emails that the outlet had presented as proof of its reporting.
The final straw came Tuesday. One of the experts that Wire journalists said had served as a technical consultant said that he never helped with the outlet’s reporting. The expert, Kanishk Karan, told The Washington Post that he was informed that Wire staffer Devesh Kumar had showed his boss, Wire founding editor Siddharth Varadarajan, an email from Karan that supported Kumar’s reporting. But Karan had never sent that email, he said….
With a staff of about two dozen people, The Wire has often been lauded as a rare voice of journalistic courage at a time when many Indian outlets, particularly television networks, hew close to the government’s line. And Varadarajan, the editor, was seen not only as a thorn in the government’s side but also a probable target of surveillance. In 2021, forensic analysis conducted by Amnesty International found that Varadarajan’s phone was infected with the Pegasus spyware, which is sold only to government clients.
(The Wire was a reporting partner with The Washington Post and other news organizations in the Pegasus Project, a global investigation of government spyware, last year.)
The growing questions about The Wire’s integrity and accuracy have damaged the credibility ‘of an independent and trusted news platform that India needs today,’ said Apar Gupta, head of the Internet Freedom Foundation in New Delhi.
‘This outcome is tragic, ‘Gupta said, ‘because it has focused public energy [more] on fact-checking The Wire than continuing the need for human rights assessments of Silicon Valley platforms.’
The saga has been particularly charged in India because it touches one of the biggest criticisms Silicon Valley has faced in recent years — that powerful companies, including Meta, have abetted abuse and disinformation around the world and facilitated censorship by authoritarian governments.
In India, a massive and important internet market, Meta has for years been accused of turning a blind eye to hate speech made by government supporters against India’s religious minorities, particularly Muslims. Meta has also been accused of being overly deferential toward the government when it comes to content moderation decisions. In 2020, a top Meta executive in India resigned after the Wall Street Journal reported that she warned her staff against enforcing hate-speech rules upon Hindu nationalist figures linked with Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP).
The Wire seemed to confirm those long-standing suspicions when it published a damning story on Oct. 10 alleging Meta gave special privileges to Amit Malviya, who heads the BJP’s IT department and social media efforts, as part of the company’s internal “cross-check” program, which shields VIP users from usual speech enforcement procedures. According to The Wire, Instagram records leaked by a Meta employee showed that Instagram removed a post satirizing a BJP politician simply because it had been reported by Malviya.
The reporting was quickly praised by critics of the Indian government and of Meta. But Facebook strenuously denied the report, saying that the post was taken down by Instagram’s algorithm rather than through any intervention by BJP officials.” Read more at Washington Post
“Protests sweep France. France’s mass strikes for higher wages, which first began in major oil refineries, have since grown to encompass other industries including nuclear plant workers, nurses, and railway staff. The French Education Ministry reported that almost 10 percent of all high school educators participated in Tuesday’s strikes.” Read more at Foreign Policy
“Germany’s cybersecurity fears. Germany has dismissed Arne Schönbohm, the country’s top cybersecurity official, over his potential links to Russia; an investigation is now underway.
Claims of Russian ties have ‘permanently damaged the necessary public trust in the neutrality and impartiality’ of Schönbohm, although he is assumed to be innocent until the investigation concludes, said Britta Beylage-Haarmann, Germany’s Interior Ministry spokesperson.” Read more at Foreign Policy
“In his bid to reclaim the Brazilian presidency, Luiz Inacio Lula da Silva is focusing on Sao Paulo, where he emerged as a political force in the 1970s, founding the metalworkers’ union, organizing strikes and leading marches. While he won the city in the first round of voting, his unexpected loss of the state as a whole to incumbent Bolsonaro by almost seven percentage points has Lula’s team scrambling to shore up support before the Oct. 30 runoff.” Read more at Bloomberg
Lula is lifted by metalworker colleagues after a union rally in Sao Bernardo do Campo in 1979. Photographer: Claudinei Petroli/AFP/Getty Image
“Iranian climber Elnaz Rekabi was greeted by cheering crowds at a Tehran airport after she returned from competing in an international tournament without wearing a head scarf in contravention of Iran’s Islamic laws.” Read more at Bloomberg
“For more than a decade, Viktor Orban was an idol for populist movements around the world as he pursued his vision of an ‘illiberal democracy’ in Hungary. Now he risks being a cautionary tale.
While investors have mostly focused on the turmoil in Brexit Britain under its new prime minister, Liz Truss, the crisis unfolding in Orban’s Hungary is perhaps an even more stark example of what happens when a political project becomes untethered from economic reality.
The European Union’s longest-serving prime minister defied the bloc’s norms on everything from immigration to judicial independence. In the midst of Europe’s energy crisis over Vladimir Putin’s war in Ukraine, he struck side deals with Russian energy giant Gazprom and cast doubt on EU sanctions against Moscow.
He won accolades from other right-wing leaders who challenged Western liberal establishments including former US President Donald Trump and Brazil’s Jair Bolsonaro.
The problem for Orban is that Hungary’s bills are paid by the EU he’s antagonized for so long. After funneling billions of dollars to help teh country’s post-communist transformation, Brussels is now threatening to cut off aid.
That’s helped trigger a selloff in Hungarian assets and an emergency interest rate hike to 18% — by far the highest level in the EU. While the move stabilized the currency, the forint is still down about 12% against the euro this year.
Orban, who is facing protests and has backtracked on lavish utility subsidies that bolster his political support, has two months to implement anti-corruption legislation to unfreeze the EU funds.
But damage to the economy — and the concept that one can defy traditional allies unscathed — has been done.
With right-wing forces embarking on new experiments in Italy and Sweden, the question is what lessons other populists will draw from Orban’s experiences.” — Michael Winfrey Read more at Bloomberg
A poster of Putin and Orban during a Fidesz party march in Budapest on March 15. Photographer: Akos Stiller/Bloomberg
“Pitching expats | Hong Kong Chief Executive John Lee today unveiled a plan to woo back foreign talent and ease housing woes, in a bid to revive the city’s status as a thriving international finance hub. In his first policy address, he vowed to cut property taxes for non-permanent residents and relax visa rules to reverse a brain drain prompted by years of isolationist Covid-19 policies and political turmoil.” Read more at Bloomberg
“Leadership test | Venezuelan President Nicolas Maduro, who has stayed in Caracas for most of the past four years, is making rare trips outside the capital to survey damage caused by flooding and massive landslides. The visits also represent an opportunity to shore up his diminishing support ahead of presidential elections in 2024 in which Maduro’s widely expected to seek a third term.” Read more at Bloomberg
Maduro and First Lady Cilia Flores visit an area damaged during floods in Las Tejerias on Oct. 10. Photographer: Matias Delacroix/AP
Efforts to stockpile fuel mean Europe and Asia are approaching winter with healthy inventories as governments seek to counter shrinking supplies from Russia. Europe’s natural gas storage sites are about 92% full, while Germany has hit 95%, a level it aimed to reach by Nov. 1. The picture is similar in Asia.
“A French cement company agreed to pay nearly $780 million in fines after pleading guilty to making payments to the Islamic State and other terrorist groups.” [Vox] Read more Reuters / Luc Cohen and Karen Freifeld
By German Lopez
Good morning. Europe’s inflation crisis is different from America’s.
Oxford Circus in London this year.Alice Zoo for The New York Times
Global costs
“Political and economic crises typically have multiple causes. But many right now are driven by one main factor: the rising cost of living.
In Britain, Prime Minister Liz Truss is facing calls to resign after just six weeks in office over a now-abandoned tax cut plan that experts warned would worsen inflation, if not wreak economic havoc. Europe is bracing for skyrocketing energy costs this winter. In the U.S., the Federal Reserve is considering more aggressive steps to bring down price increases, but its moves could also cause a recession, as The Times reported yesterday.
This chart by my colleague Ashley Wu shows how quickly prices have risen across many of the world’s advanced democracies. Officials generally aim to keep the rate of inflation around 2 percent — enough to keep the economy growing yet preserve stability in prices. Many of the countries are at least four times above that pace:
Chart shows annual change in total Consumer Price Index each month through August 2022. | Source: O.E.C.D.
So what happened? It helps to think of inflation as two related crises instead of one. In the first, global disruptions from the pandemic and Russia’s invasion of Ukraine prompted inflation to spike around the world. In the second, some countries — particularly the U.S. — also made inflation worse for themselves through domestic policy decisions. In today’s newsletter, I’ll explain both.
Global trends
From 2020 to early 2022, Covid largely explained the trends on the chart. The pandemic and its fallout created a supply shortage (factories closed and logistics chains sputtered) and a spike in demand (for purchases like home furniture and airfares). That imbalance prompted price increases.
The chart’s trends show a change near the beginning of this year. From last year until early 2022, prices in the U.S. rose more quickly than in the other countries. But the E.U. and Britain are now ahead, as data released today demonstrates. (The outlier is Japan, which has dealt with a stagnating economy and deflation for decades.)
Europe began outpacing the U.S. when the war in Ukraine created its own disruptions. Russia’s invasion shut down Ukraine — one of the world’s breadbaskets and a major exporter of grain — and raised food prices. And Western sanctions in response to the war cut off Europe from Russian oil and gas, on which the continent relied heavily. So worldwide energy prices went up, too.
As this second chart by Ashley shows, Europe took the hardest hit. The war affected energy costs in other parts of the world, but countries less dependent on Russian oil and gas adapted more quickly:
Chart shows annual change in energy prices each month through August 2022. | Source: O.E.C.D.
Europe’s challenge now is finding alternative energy sources. Building up the infrastructure, after dedicating pipelines and terminals to Russian oil and gas, will take time.
Even countries with bigger buffers from the supply shock are taking steps to address energy prices. The Department of Energy is planning to release 15 million more barrels of oil from strategic reserves.
Domestic causes
Government responses to the global crises also influenced inflation, at times making it worse than it otherwise would have been.
Policymakers’ initial instinct during the pandemic was economic preservation. To prevent Covid from setting off a deep recession, they enacted relief measures. In some cases, they might have gone too far: The point of stimulus packages is to elevate spending and demand, keeping the economy afloat. But if supply can’t keep up with the new demand, prices will rise.
Once they did, central banks were also slow to respond — believing that the inflation would subside as the impact of global catastrophes like the pandemic faded. So inflation increased unchecked.
The U.S. suffered from both problems. America spent among the most of any country in the world on economic relief, likely leading to too much demand and then worse inflation. And for much of 2021, the Federal Reserve viewed rising prices as a temporary phenomenon; it didn’t acknowledge that inflation was enduring until late last year.
That combination of overstimulus and central bank inaction helps explain why the U.S. had the highest inflation rate among its peers until Russia’s invasion of Ukraine.
If it weren’t for the war, the U.S. could still be worse off than the others. America still has a higher core inflation rate, which excludes food and energy prices, than many of its peers — indicating it has deeper problems than the global events that are primarily driving up food and energy costs. The labor market in particular remains hot, with an unusually high number of job openings for each unemployed worker. These are the problems that the Fed is trying to address without causing a deep recession (as I explained in this newsletter).
In simple terms: Inflation is the big problem. But in Europe, the causes and solutions are related to supply. And in the U.S., they are more about demand.” Read more at New York Times
Netflix added 2.4 million subscribers in the latest quarter.
“That’s more than twice as many as expected, reversing back-to-back quarters of defections and giving the streaming giant a jolt as it works to introduce an ad-supported subscriber tier and crack down on password sharing. Netflix’s quarterly customer additions are still smaller than the year-earlier period, when the company attracted 4.4 million new customers. The company’s revenue grew 5.9% to $7.93 billion, while net profit fell 3.5% to $1.4 billion.” Read more at Wall Street Journal
“Using hair-straightening chemicals can lead to an increased risk of developing uterine cancer for some women, according to a study released Monday.” [Vox] Read more at Washington Post / Adela Suliman
Amazon Workers Reject Union in Vote at Upstate New York Warehouse
Results are a setback for Amazon Labor Union, which aimed to expand after April victory in Staten Island
Amazon workers and supporters at an Amazon Labor Union rally in Castleton-on-Hudson, N.Y., earlier this month.PHOTO: RACHEL PHUA/ASSOCIATED PRESS
“Amazon.com Inc. AMZN 2.26%▲ workers in upstate New York voted against unionizing, a setback for labor activists trying to expand their unionization push at the tech company.
The National Labor Relations Board said about 66% of employees who cast valid ballots at a company facility near Albany rejected the Amazon Labor Union, which earlier this year won a landmark union vote at an Amazon warehouse in Staten Island, N.Y.
An Amazon spokeswoman said the company is glad that workers chose to keep a ‘direct relationship with Amazon,’ which the company sees as best for employees and customers.” Read more at Wall Street Journal
Inmate Suicides Rose Sharply in U.S. Prisons, Jails During Pandemic
More inmates kill themselves amid pandemic isolation, increased use of drugs, staff shortages
The Louisville, Ky., corrections department was recommended earlier this year to reduce its use of isolation cells to help prevent inmate suicides.
“Suicides in prisons and jails across the U.S. have risen sharply over the past two years, data collected by The Wall Street Journal show, a trend that officials and inmate advocates say is driven in part by the increased isolation of inmates during the pandemic, more abuse of drugs including fentanyl and staff shortages.
In the Texas prison system last year, 61 inmates took their own lives, the most in two decades. In Louisiana, 13 state prison inmates died by suicide from January 2021 through the beginning of October, more than triple the number during the prior three years combined. Kentucky prisons have seen six suicides so far in 2022, compared with one last year.
Local jails have seen a similar rise. At the Louisville, Ky., jail, five inmates killed themselves over the past 11 months, compared with none in 2018, 2019 and 2020. In New York City correctional facilities, which include Rikers Island, one of the nation’s largest detention centers, there were four suicides in 2021 compared with one the prior two years.
Prison and jail officials in several states said that they are making extensive efforts to assist offenders with mental health and self-harm issues and that rising suicides coincided with the onset of the pandemic.
In addition to being confined to their cells for extended time during Covid-19 outbreaks, inmates often weren’t able to meet with family members as visits were curtailed during the pandemic.
‘The amount of isolation that people are experiencing is greater than before,’ said Susan Pollitt, supervising attorney with Disability Rights North Carolina, an advocacy group focused on discrimination, abuse and other rights violations, including in prisons.” Read more at Wall Street Journal
“More and more people want to learn Korean, with U.S. college enrollment in Korean language classes rising 78% from 2009 to 2016. The demand is thanks to the success of Korean pop culture.” Read more at NPR
“George Floyd's family is suing Ye, formerly Kanye West, for $250 million over Ye's speculation on the podcast Drink Champs that Floyd died from fentanyl use. A medical examiner's office ruled that Floyd's death was a homicide caused by Derek Chauvin kneeling on his neck for over eight minutes.” Read more at NPR
US currency
“A groundbreaking movie star will be the first Asian American to appear on US currency. Anna May Wong, an actress who broke through during the silent film era, will soon be featured on the back of new US quarters. Considered the movie industry's first Chinese American star, Wong overcame widespread discrimination to carve out a four-decade career in film, theater and radio. The new design is the fifth to emerge from the US' American Women Quarters Program, which highlights pioneering women in their respective fields. The other four quarters, all put into production this year, feature poet and activist Maya Angelou; the first American woman in space, Sally Ride; Cherokee Nation leader Wilma Mankiller; and suffragist Nina Otero-Warren.” Read more at CNN
Non-white adults are hospitalized for influenza at higher rates and tend to have lower flu vaccination rates, CDC data show
“From 2009 to 2022, flu hospitalization rates were some 80% higher among Black adults, 30% higher among American Indian adults and 20% higher among Hispanic adults, compared with white adults. Lower vaccination rates aren’t the only factor for the disparities in hospitalizations, CDC officials said, but targeted outreach and increasing flu vaccination could help lower the differences in severe outcomes. Some health experts anticipate a more severe than usual flu season this fall and winter.” Read more at Wall Street Journal
Poll of the day
“People line up Monday at the Citizens Service Center in Columbus, Ga., on the state's first day of early voting for midterms. Photo: Cheney Orr/Reuters
Share of U.S. adults who think democracy is working "extremely" or "very" well, in an AP-NORC poll out today:
9%.” Read more at Axios
“MacKenzie Scott donated more than $84 million to the Girl Scouts, the largest individual donation in its history.” Read more at New York Times
COVID baby boom
Illustration: Natalie Peeples/Axios
“Remote work likely contributed to a mini-baby boom in the U.S. last year — a reversal of a years-long decline in the birth rate, Axios' Emily Peck writes from a working paper published by three economists this week.
Why it matters: It's surprising. Economists predicted a crash in birth rates at the outset of the pandemic. The quick economic recovery and the rise of remote work may have changed the trajectory.
The findings suggest that workplace flexibility might be one solution to the long-term issue of falling birth rates — a possible driver of declining economic growth — seen across richer countries.
‘It's the first recession where we actually see birth rates go up,’ said Hannes Schwandt, a professor at Northwestern University, who co-authored the paper with Martha Bailey of UCLA and Janet Currie of Princeton.
What's happening: The CDC released preliminary data on 2021 birth rates earlier this year, and found a small increase. The researchers of the new paper dug deeper.
They were able to further parse new restricted-use microdata from the CDC and look at births to U.S.-born mothers — compared with births to foreign-born mothers.
They found that the birth rate for U.S. mothers increased by 6.2% relative to the 2015-2019 trend line — and that the pandemic led to a net increase in births for U.S.-born mothers of around 46,000 children.
They also discovered that a widely publicized drop in fertility rates in 2020 — agonized over in the press — was largely due to a sharp decline in births to foreign-born women, who were blocked from entering the country.
Between the lines: The increase in birth rates was more pronounced for first-time mothers and college-educated women. Women with less education saw continuing declines.
Those with more education saw their financial prospects soar in 2021 and the back half of 2020, due to rising stock and housing markets — making it a good time to have a baby, economically at least.
Much of that cohort was able to work from home.
What we're watching: The researchers looked at birth data from California in 2022 and found that the uptick there has continued — suggesting the pandemic changed the trajectory of fertility in the U.S. longer-term.
‘The pandemic baby dividend might keep paying,’ said Schwandt.” Read more at Axios
“Irsay supports Snyder ouster: The Colts owner Jim Irsay became the first N.F.L. team owner to publicly call for removing the Commanders owner Daniel Snyder from the league, after years of workplace misconduct investigations.” Read more at The Athletic
“Yankees and Phillies earn wins: The Yankees advanced to meet the Astros in the A.L.C.S. with a 5-1 win over Cleveland. And Philadelphia is up 1-0 in the N.L.C.S. after a gritty 2-0 victory in San Diego last night, thanks to home runs from Bryce Harper and Kyle Schwarber.” Read more at The Athletic
“Celtics start strong: The defending Eastern Conference champions defended their turf on opening night with a 126-117 win over the 76ers, who many think could supplant Boston as the East’s best this season.” Read more at The Athletic
“The proposed new Titans stadium would get $1.26 billion in tax dollars, the most public money ever committed to an NFL stadium project. Go deeper.” Read more at Axios
First electric Rolls
Photo: Adrian Dennis/AFP via Getty Images
“300+ U.S. buyers have made deposits on the $413,000 Rolls-Royce Spectre, the first fully electric motor car from the British ultra-luxury icon, CNBC reports:
‘The two-door coupe, which is sleeker than a typical Rolls, has a range of about 320 miles and can go from 0-60 mph in 4.4 seconds.’
Photo: Rolls-Royce via Reuters
Rolls-Royce says its entire ‘product portfolio’ will be fully electric by the end of 2030.” Read more at Axios
“Lives Lived: Charles W. Duncan Jr. got into the energy business as a Texas roustabout digging pipeline ditches and later became Jimmy Carter’s energy secretary at the height of the 1979 oil crisis. He died at 96.” Read more at New York Times