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Day: June 9, 2024
By Yasar Yakis
America’s economy and society are strong, but there are discrepancies regarding the functioning of the country’s democracy. The voters have to choose between a presidential candidate who is fighting to cover up his wrongdoings and another who shows other weaknesses. Journalists are making lists of the many court cases in which Donald Trump is the defendant, while American society could produce scores of impeccable candidates. It looks as if the voters are looking for the least-qualified candidate.
One court case was initiated when the adult film star Stormy Daniels was paid $130,000 hush money by former President Trump. According to US laws, paying hush money is not a punishable act. However, Trump hid this money as administrative costs.
Although he could be jailed for up to four years, the judge may punish Trump with a short prison sentence. He may also put Trump in jail during the week and on parole at weekends. House arrest is another alternative. In this case, he would have to wear an ankle monitor. If his punishment exceeds one year, he would have to serve his sentence in a federal jail.
There is no restrictive measure to prevent Trump from continuing with his candidacy for the presidency. The conditions are limited to being over 35 years of age, being a natural born citizen and having resided in the US for at least 14 years. This means that Trump may become president while he is serving his jail sentence.
Whether Trump will be able to vote in his home state of Florida depends on several scenarios. If Trump is in jail on Nov. 5, he will not be able to vote. However, he would be able to do so if the Republican governor of Florida authorized it.
This scenario leads us to uncertainty because nothing similar has occurred in the past. Therefore, there is no precedent. If Trump is put in jail and wins the election, his lawyers may ask for the sentence to be canceled so that a sitting president is not behind bars.
Briefly, Trump’s presidency seems to be the most likely scenario.
Despite being found guilty on 34 counts last month, Trump was able to divide the American electorate as much as he could and it appears that his supporters remain strong.
While Democrats celebrated the verdicts, the Republicans are doing everything they can to weaponize justice. The court’s sentencing verdict will be disclosed on July 11.
Meanwhile, an intervention by the Trump team in the court case relating to the attack on the Capitol in Washington on Jan. 6, 2021, was very important. It could have had a much bigger effect if this case was handled before the election. But Trump’s lawyers have been able to delay the case.
There are Trump supporters who consider his gang to be a lawless one, while there are others who do not care whether he will be brought to justice. In a law-abiding country, a former president being punished would shock society. In the divided society of the US, where anger and fear prevail, people do not care exactly what is taking place around them. Other leaders around the world applaud people like Trump, Vladimir Putin and Benjamin Netanyahu. Daniels advised Trump’s wife, Melania, to leave him, “not because of what he did with me or other women but because he is a convicted felon.”
New data shows that legal fees are costing Trump millions. His political operation spent more than $4 million on legal-related expenses in March alone.
The Republican and Democratic programs have become a subsidiary issue in the election campaign because few people will make their decision on who to vote for based on them.
On the other side of the equation is 81-year-old Joe Biden. If reelected, how is he going to cope with being the leader of the free world?
Biden’s future, despite the big legislative packages passed early in his presidential term, is not promising. Last week, he was rallying allies in support of Ukraine against the Russian invasion.
As if this was not enough, President Biden’s son, Hunter Biden, is on trial accused of having lied on an application form to purchase a gun while he was addicted to a stimulant narcotic drug. This creates the impression that many things are rotten in American society.
Whoever wins between Trump and Biden, can the free world really be led by someone who has so many shortcomings?
- Yasar Yakis is a former foreign minister of Turkiye and founding member of the ruling AK Party. X: @yakis_yasar
By Lisa Vives
Thirty years after the first democratic elections in 1994, South Africa finds itself at a political inflection point. The 2024 election saw a collapse in the vote for the ruling African National Congress which received only 40% of the vote, 17 percentage points lower than 2019 – less than a majority of votes cast for the first time.
Turnout was also down 6%. The loss was even more notable as it followed a bitter pre-election split in the ANC with former president Jacob Zuma leading a break away party (MK Party).
At stake is whether or not South Africa will make rapid progress on poverty and inequality or whether it sends its population even deeper into a state of deprivation.
South Africa’s voting age population is roughly 42 million, just over 27 million of whom are registered and of those, only 16 million registered voters cast ballots. In other words, according to Liberation news, abstention was the biggest winner of the 2024 election.
Some have framed this loss as a rejection of the ANC government. But others say the results show that the election was a rejection of the entire political establishment and the idea that casting a ballot can bring positive change—a reflection of the dire state of the country.
South Africa’s mineral wealth is generating at least $125 billion a year with at the least $2.4 trillion worth of minerals still left in the ground. Yet 50% of the country lives in poverty, 65% live in rural areas. Unemployment officially stands at 32.9%, 55% of households are without running water and 34% still don’t have flush toilets.
South Africa has the highest level of income inequality on earth. In addition, 75% of farmland is still owned by whites.
The ANC, Zuma’s MK party and the Economic Freedom Fighters (EFF) of Julius Malema have all pledged to address these issues more vigorously if elected. The ANC told voters they would end poverty by 2030. MK and EFF promised voters they would expropriate land without compensation and nationalize mines and banks. All promised to expand access to healthcare, housing and education, at little to no cost.
According to the socialist Liberation news, a clear majority of South African voters are looking for policies that seriously roll back poverty and the legacies of settler colonialism while taking an anti-imperialist approach to international relations.
A government of national unity?
Meanwhile, the ANC is considering its options, including being a government of national unity with coalition partners.
“A government of national unity is the most viable, most effective and most powerful way of meeting the expectations of all South Africans at this particular moment,” declared South African President Cyril Ramaphosa.
“It’s the best option to move our country forward.”.
A coalition of major parties would resemble the cabinet of Nelson Mandela who worked with other parties – even the Afrikaner-led National Party which was responsible for the racist system of apartheid—back in 1994.
But this drive to create some sort of coalition government – particularly between the ANC and Democratic Alliance – would represent a shift to the right and involve further privatization os state-owned companies, implementation of austerity budgets, and take the country in the opposite direction of where 60% of the electorate would like it to go.
The ANC is under pressure to find coalition partners and conclude negotiations by June 16 according to South Africa’s constitution.
But the election outcome has created a complex situation for Ramaphosa and his party and a difficult search for partners.
Most of the opposition parties differ with the ANC on various socioeconomic policies and are also at odds with each other on policies like land redistribution and affirmative action.
Julius Malema, leader of the Economic Freedom Fighters party, has already rejected President Ramaphosa’s proposal of a government of national unity and has accused the ANC of arrogance despite having lost the election.
The Democratic Alliance, for its part, is fiercely opposed to the ANC’s efforts to create a welfare state – especially a;government funded national health service which the DA rejects as too expensive and;threatens the future of the private health sector.
Any deal with the Democratic Alliance would be welcomed by financial markets but unpopular with many ANC supporters who regard it as the party of South Africa’s wealthy white minority.
“A lot of people that are disaffected in South Africa … want to see a much more radical policy orientation than what the ANC could provide,” said Oscar Van Heerden, researcher and author of books on the ANC..
Will South Africa move towards eliminating poverty and stake out its own ground in a multipolar world order, asks Eugene Puryear of Liberation news. Or regress towards a role more akin to the former apartheid regime as a node for the West in Africa and beyond?
“South Africa’s pivotal election has thrown the country into uncharted waters.The country now faces opportunities and risks requiring leadership,” writes the Africa Center for Strategic Studies. “The challenges of building a government of national unity are formidable.”
By Douglas French
For lending, as in all things, necessity is the mother of invention. No matter the rate, lenders want to lend and borrowers want to borrow, with both sides tending to overdo it. The;Wall Street Journal;reports;that the newest collateral thing is the AI chip. Wall Street heavyweight Blackstone led a $7.5 billion financing last week for;CoreWeave, “a New Jersey–based startup that owns artificial-intelligence chips and associated computing gear in data centers.”
The collateral of the realm these days is Nvidia’s;graphics-processing-unit, or GPU, chip. For the moment, Nvidia can’t keep up with demand from the likes of Amazon and Microsoft. These companies are gorging themselves on the chips, sending GPU chip prices skyward.;“For Wall Street, their utility has given them another kind of power, turning them into assets that can backstop loans,”;write Asa Fitch and Miriam Gottfried for the;WSJ.
Over $10 billion has been raised using GPU chips as collateral. Startups in the AI space, while growing quickly, are not profitable. Thus, loan interest rates are in the low double digits as traditional lenders, which charge lower rates, have avoided the sector. Instead, asset-based lenders, which small businesses and real estate developers have typically had to turn to are providing capital for this high-flying technology niche.
“When you’re trying to build and scale a company at the speed that we’re going, it is access to capital that defines success or failure,”;Michael Intrator, CoreWeave’s;chief executive, told the;WSJ. Over time, he hopes his company can obtain cheaper funding. However, for now,;“it gets us what we need, which is the powder to be able to move at this size and scale.”
Fitch and Gottfried describe the deal structure as;“a metaphorical lockbox, housing all of CoreWeave’s;AI chips,”;with all;“revenue the company generates from clients using those chips;.;.;. [going] first toward paying its lenders.”;Most accounts-receivable factoring structures work much the same way. However, the term;“metaphorical lockbox”;will make a veteran lender scoff.
“When I started doing this, everybody thought I was nuts. Now people are starting to see the light,”;said Stéphane Fisch, a principal at Argo Capital who has pitched one such deal.
At the retail investor end of the AI boom, lending and borrowing continues apace.;Almost Daily Grant’s;reports;that the people’s;brokerage, Robinhood, has cut margin lending rates to “6.75% financing on balances up to $50,000, with that rate dropping to 5.7% on accounts of $50 million and above.”;The favorite of millennials and Gen Zers previously was made to pony up margin loan rates ranging from 8 percent to 12 percent. Rival brokerage Charles Schwab offers much stiffer rates of 11.83 percent to 13.58 percent.
For readers wondering when the next market accident is about to happen, Robinhood chief brokerage officer Steve Quirk may be offering a clue when he told MarketWatch, “People use [margin investing] episodically when they see a great opportunity or love a specific investment. But I think where the opportunity lies is, in addition to our current customers, we’re seeing a whole lot of new customers that are more frequent margin users with larger balances.”
Almost Daily Grant’s;warns us that;“aggregate margin debt outstanding registered at $775.5 billion at the end of April according to FINRA. That’s;up 23% from the same period last year and equivalent to 2.8% of 2023 GDP, roughly matching the output-adjusted figure logged at the peak of the late 1990s;dot.com bubble.”
Those numbers are no match for the $936 billion reached in the fall of 2021, equivalent to 3.43 percent of the gross domestic product.
Of course, lending and borrowing success depends on the strength of the AI boom. For the moment, the demand for AI chips appears insatiable. At the same time, big tech companies and startups can’t seem to generate enough revenue from AI to justify the cost of the computing power that underlies it—a story that sounds very familiar.
- About the author: Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe. His website is DouglasInVegas.com.
- Source: This article was published by the Mises Institute
By Vivek Mishra
In the wake of the helicopter crash that tragically claimed the lives of President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian, Iran finds itself at a critical juncture, grappling with both internal and external challenges. Foremost among them is its relationship with the US.
Iran is in the middle of a tense regional competition with Israel over the latter’s war in Gaza with Hamas. Washington is invariably drawn into what constitutes a historically contested triad shaping stability and instability in broader West Asia. Iran’s leadership crisis may have come at an important time for the US, amid an ongoing political slugfest at home in an election cycle and a litmus test for US relations with Israel. Two factors, however, are likely to dampen any US expectations from Iran. Iran’s topmost leadership remains intact under the aegis of the supreme leader, Ayatollah Ali Khamenei, and the next president will be expected to meet the benchmarks set by previous leaders.
For the US, the Iran challenge is likely to remain complex, both due to the leadership transition inside Iran and the growing regional power and influence projected by Tehran. If the Biden administration, despite its initial will, couldn’t bind Iran within the constraints of the Joint Comprehensive Plan of Action (JCPOA), a possible Trump presidency would be even less likely to succeed. Regional anti-American sentiments in West Asia, especially among Iran and its proxy groups, seem further entrenched. However, the Biden administration has an opportunity to mitigate regional hostilities by fostering a Saudi-US détente, which remains on the table but is heavily dependent on how much influence Washington can wield with Israel’s highly conservative cabinet in restraining its behaviour in Gaza.
Iran’s regional outlook and relations with the US may not be poised for significant shifts, given the predictability associated with the regime, yet the challenge of nurturing inter-generational leaders looms large for Iran. Leadership succession in Iran’s internal politics has always been meticulously planned and nurtured over the years, undergoing a rigorous process to ensure continuity. Internally, Iran faces a crucial test of its leadership amid a situation it has not encountered in decades. However, there is solace in the fact that Supreme Leader Ayatollah Khamenei remains alive, poised to select the most suitable candidate.
Internally, the vacuum left by the untimely demise of two top leaders presents a crisis as well as an opportunity. However, the socio-cultural divergence with the West, exemplified by the Iranian leadership’s lingering reluctance to embrace any change, may continue to strain the relationship. The crisis in leadership compounds this internal struggle, as no state wishes to appear leaderless during times of uncertainty.
Externally, the challenges for Iran are manifold, particularly in filling the leadership void that has been growing since the death of General Qasem Soleimani in 2020 after a US-targeted strike. The new leadership in Iran will be tested in how it continues to project its regional influence and maintain the momentum of clandestine efforts it has propagated across its axis. Internationally, the Iranian leadership’s challenge will primarily be in its tussle with the West on the one hand and maintaining poise in its relationships with varied actors such as China, Russia, and India, all while avoiding Western sanctions. Iran, which has been persistently characteristic in its distinct political stance even in the face of sanctions and regional tensions, has found an alternative axis of support, most notably through partnerships with China and Russia.;
Besides, Iran has fostered a network of regional support through proxy groups such as Hezbollah, Kataib Hezbollah, the Houthis, Hamas, and others. This solidarity axis is now bolstered by a shared commitment to the Palestinian cause. However, the post-October 7, 2023, landscape has seen a nuanced shift in perceptions, including those of regional Arab leaders. As such, the current period is particularly tumultuous in West Asiawith the unabating Israel-Hamas conflict. The loss of key figures in Iran’s leadership couldn’t have come at a worse time, especially as Iran finds itself at a crossroads, balancing unfinished conflicts and shifting regional loyalties.
According to the International Atomic Energy Agency, Iran is now enriching uranium to as much as 60% purity and possesses enough of this material that, if further enriched, could be sufficient for two nuclear weapons. Now that the ‘breakout’ time is close to zero, there are strong incentives for keeping Tehran engaged through the IAEA, if not bilaterally.
Despite the seeming belligerence of Iran’s leadership, avoiding war and efforts towards regional peace and stability lie at the core of Tehran’s long-term regional vision. Just a week before the fatal crash, Iran’s foreign minister met with the IAEA chief, and Iran engaged with US officials through intermediaries in Oman on how to avoid the risks of a wider regional war. If anything, these efforts show that both the Biden administration and the Iranian leadership are still willing to sit at the table. That may not be bad inspiration for the next generation of leaders in Tehran to pick up from.
- About the author: Vivek Mishra is a Fellow with ORF’s Strategic Studies Programme. His research interests include America in the Indian Ocean and Indo-Pacific and Asia-Pacific regions, particularly the role of the US in security in South Asia, Indo-US defence relations, and the Indian defence sector.
- Source: This article was published by the Observer Research Foundation and originally appeared in Deccan Herald.
The Kremlin’s increasing use of criminals to man its expanded invasion of Ukraine and the criminalization of Russian units there both as a result of that and of the nature of the war Moscow is waging there will be a major trigger of a civil war in Russia itself when they return en masse at the end of the conflict, Vladimir Pastukhov says.
At present, some of the returning soldiers with this past or experience are committing crimes on an individual basis in the belief that as the core of a new elite Putin talks about they are immune from any serious punishment, a belief that has at least some basis in Russian realities.
But the London-based Russian analyst says that these individual crimes are only the harbinger of something much more serious when at the end of the war such soldiers are not returning individually but in a large numbers and even in units (t.me/v_pastukhov/1108 reposed at kasparov.ru/material.php?id=6660B375BF0FF).
When that happens, Pastukhov says, “situations like ‘the cold summer of 1953 when thousands of criminals were amnestied all at once by Beria’s decree and post-war Odesa where actual power was seized for a time by criminal groups will inevitably be reproduced in the Russian Federation,” will last for some time, and will provoke a response.
“In the event of a ceasefire” and even more in the event of a peace accord, he continues, “a stream of criminal rabble will simply pour into Russia … [and] local communities will have to confront a situation in which the Kremlin will seek to position this criminal rabble as the new elite ‘like veterans of the Afghan and Chechen war’” but in much larger numbers.
All this “will only add fuel to the fire and make the conflict even deeper,” as will “the connivance of the police who will try to avoid taking sides in what will increasingly appear to everyone to be a civil war between these criminal groups of returning soldiers, other criminal groups and the population, Pastukhov says.
He concludes that these conflicts will not be “the central battle in the looming civil war,” but it is “obvious that they will not be its least important or noticeable features,” all the more so because this massive phenomenon is one that the Putin regime by its decision to use criminals in the military in large numbers has created.
Pastukhov does not say, but it is an equally obvious conclusion from his argument that many Russians may thus fear the end of the war even as they fear its continuation and that Putin is relying on this to ensure that support for his aggression will remain relatively high.