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Berny Belvedere

Jun 2, 2017

12 min read

The Weekly Arc: June 2, 2017

Welcome to Arc’s newsletter, sent out once per week, highlighting the best and most interesting stories from around the web. The Weekly Arc is curated by Berny Belvedere. Past editions can be accessed here.

Underwhelming Jobs Report

The Bureau of Labor Statistics just released a new jobs report. While unemployment numbers are low, the number of jobs added underperformed expectations.

US job growth missed expectations in May, while April’s figure was revised significantly lower, data released less than two weeks before the next Federal Reserve meeting showed.

Employers added 138,000 jobs in May, a report from the labour department shows. That compares with Wall Street expectations of 182,000. The April gain was revised lower to 174,000 from 211,000 previously.

Wage growth was also a tad weaker than forecast. Average hourly earnings were up 2.5 per cent year-over-year, matching the April pace, but missing expectations for a rise to 2.6 per cent. Meanwhile, the jobless rate dipped to 4.3 per cent from 4.4 per cent. That was the lowest level since 2001. — Financial Times

Trump Dumps Paris Climate Agreement

President Trump announced Thursday afternoon that he is withdrawing the United States from the landmark Paris climate agreement, an extraordinary move that dismayed America’s allies and set back the global effort to address the warming planet.

Trump’s decision set off alarms worldwide, drawing swift and sharp condemnation from foreign leaders as well as top environmentalists and corporate titans, who decried the U.S. exit from the Paris accord as an irresponsible abdication of American leadership in the face of irrefutable scientific evidence.

Trump, who has labeled climate change a “hoax,” made good on a campaign promise to “cancel” the Paris agreement and Obama-era regulations that he said were decimating industries and killing jobs. The president cast his decision as a “reassertion of America’s sovereignty,” arguing that the climate pact as negotiated under President Barack Obama was grossly unfair to the U.S. workers he had vowed to protect with his populist “America First” platform.

“I was elected to represent the citizens of Pittsburgh, not Paris,” Trump proclaimed in a forceful, lengthy and at times rambling speech from the Rose Garden of the White House. He added, “As of today, the United States will cease all implementation of the nonbinding Paris accord and the draconian financial and economic burdens the agreement imposes on our country.”

The United States joins only two countries — Nicaragua and Syria — in opposing a climate agreement reached by all other nations in 2015. A signature diplomatic achievement for Obama, the Paris accord was celebrated at the time as a universal response to the global warming crisis. — The Washington Post

(Nicaragua, of course, decided not to join due to the agreement not being far-reaching enough! So, their rejection of the Paris Agreement is not quite analogous to ours.)

Writing in Bloomberg View, Ramesh Ponnuru has a reaction worth reading:

Reactions to President Donald Trump’s withdrawal from the Paris accord on climate change are — forgive me — overheated. The ACLU is calling it an “assault on communities of color,” for some reason, and environmental activist Tom Steyer says it’s a “traitorous act of war against the American people.” For his part, Trump says that staying in the agreement would have assured us a future of “lost jobs, lower wages, shuttered factories and vastly diminished economic production.”

Yet both Trump and his critics know that very little in the accord is binding on the parties to it. As a result, withdrawing from it can’t have major consequences by itself.

The NBA Finals Are Here

Rejoice! The Finals are here!

Technically, the series has already started. But it’s also the case that a Finals series doesn’t really start until Game 2, which is when the team that loses Game 1 attempts to make the adjustments necessary to win. So much rides on Game 2 that it makes it the true beginning point of drama, in my judgment. Game 2 can either send the series in one direction in near decisive fashion, or it can bring everything back to zero, turning it all into a new 5-game showdown.

Prior to the start of the Finals, I called it Warriors in six. The Warriors are impossibly good at scoring — you effectively have to contain two or three of their four superstars to win a game against them, and you’ve got to do this four times in seven chances. That’s a really tall order.

Haven’t gotten into it yet? Let Arc contributor Brandon Anderson give you his 50 Reasons To Get Excited For the NBA Finals.

50 Reasons to Be Excited for the NBA Finals

Cavs Warriors III is here, and there are a million little things to look forward to. Here are 50 of them!

arcdigital.media

Kushner Under Fire

Jared Kushner’s reported attempt to establish a “back-channel” line of communication between Russia and Donald Trump’s presidential transition team is proving divisive, even if such talks aren’t unusual.

Supporters of the president say it’s laudable that Kushner, Trump’s son-in-law and a trusted adviser, was working even before the inauguration to foster better relations with Russia.

Critics say it’s a matter of context and timing. They call it a giant and arrogant step over the line — perhaps even treasonous — for a private citizen to try to set up covert communications with a hostile power like Russia, particularly after U.S. intelligence agencies accused Moscow of trying to interfere in the 2016 election to help Trump.

Read PBS Newshour’s full explainer here.

Merkel Says Europe Cannot Rely on U.S.

Chancellor Angela Merkel of Germany, Europe’s most influential leader, has concluded, after three days of trans-Atlantic meetings, that the United States of President Trump is not the reliable partner her country and the Continent have automatically depended on in the past.

Clearly disappointed with Mr. Trump’s positions on NATO, Russia, climate change and trade, Ms. Merkel said in Munich on Sunday that traditional alliances were no longer as steadfast as they once were and that Europe should pay more attention to its own interests “and really take our fate into our own hands.”

“The times in which we could rely fully on others — they are somewhat over,” Ms. Merkel added, speaking on the campaign trail after a contentious NATO summit meeting in Brussels and a Group of 7 meeting in Italy. “This is what I experienced in the last few days.”

Ms. Merkel’s strong comments were a potentially seismic shift in trans-Atlantic relations. With the United States less willing to intervene overseas, Germany is becoming an increasingly dominant power in a partnership with France.

The new French president, Emmanuel Macron, has shown a willingness to work with Germany and to help lead the bloc out of its troubles. And Ms. Merkel sees Germany’s future more and more with the European Union of 27 nations, without Britain after its vote to leave the bloc.

“This seems to be the end of an era, one in which the United States led and Europe followed,” said Ivo H. Daalder, a former United States envoy to NATO who is now the director of the Chicago Council on Global Affairs. “Today, the United States is heading into a direction on key issues that seems diametrically opposite of where Europe is heading. Merkel’s comments are an acknowledgment of that new reality.”

Ms. Merkel’s emphasis on the need of Europe to stand up for its own interests comes after Mr. Trump declined to publicly endorse NATO’s doctrine of collective defense or to agree to common European positions on global trade, dealing with Russian aggression or mitigating the effects of climate change.

“We have to know that we must fight for our future on our own, for our destiny as Europeans,” Ms. Merkel said. — The New York Times

On the issue of the U.S.’ trade deficit with Germany, Trump has recently been outspoken.

Ana Swanson, of The Washington Post, explains that even though Trump may be wrong to focus on trade deficits, his broader point about German trade policies has merit.

Germany maintained a $69 billion trade surplus with the U.S. in 2016 — reflecting $49.4 billion in U.S. exports to Germany and $114.2 billion imports from Germany.

In general, economists say that trade deficits are a poor way to measure economic success or failure. But while Trump’s criticism of the country in the U.S. context may not be entirely fair, they say, his broader point has merit.

Germany, overall, exports $270 billion more than it imports, and critics say that partially reflects questionable policies the German government has promoted during years of economic unrest on the continent.

Germany, as the strongest economy in Europe, has benefited from a situation where it shares a currency — the euro — with many weaker countries. As a result, the euro is valued far less than any German currency would likely be on its own. It also means that other Euro zone countries’ exports are more expensive than they might otherwise be. Countries that have had economic crises in recent years, such as Italy, Greece and Spain, are particularly hard hit.

For those reasons, U.S. economic officials under the Obama administration also chided Germany, though in far more diplomatic terms. They said Germany, whose famously austere budget policies lead to a culture of saving and not spending, should do more to stimulate consumer demand, which would boost the amount Germany imports.

“You have him saying Germany is bad, and it’s just such a strange way to put things. It’s so undiplomatic that it comes off as, okay, this is out of the blue and crazy,” said Caroline Freund, a senior fellow at the Peterson Institute for International Economics. “But there is a kernel of truth, absolutely, that the euro crisis is born in Germany as much as in Greece.”

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This Week In History

1935 — Babe Ruth, for many the greatest baseball player of all time, announces his retirement at the age of 40. If you haven’t seen it in a while, take the time to rewatch “The Sandlot.”

1926 — Allen Ginsberg (d. 1997), the American “Beat” poet, is born. Take some time to go through his most famous work, “Howl.”

1989 — Beginning of the Tiananmen Square Protests. Chinese government opens fire on pro-democracy demonstrators.

1945 — The United States, Britain, France, and Russia agree to divide occupied Germany.

1883 — John Maynard Keynes (d. 1946), one of the most influential economists of our time, is born. Here’s a primer on the system associated with his economic thought.

1967 — The Six-Day War between Israel and some of its Arab neighbors begins.

2004 — Ronald Reagan (b. 1911), conservative icon and highly successful president, passes away.

1929 — The Vatican — more technically, Vatican City — becomes a sovereign state.

1959 — Mike Pence, the current Vice President of the United States, is born.

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To live is the rarest thing in the world. Most people exist, that is all.

— Oscar Wilde

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Berny Belvedere

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