The Pronk Pops Show 1396, February 11, 2020, Story 1: Divided Democrats Decide New Hampshire’s Radical Extremist Democratic Socialists (REDS) Presidential Candidate in 2020 — The Winner Is Bernie Sanders — Videos– Story 2: Trump Rally in Manchester, New Hampshire Attracts Tens of Thousand — Americans Love A Winner — Videos — Story 3: What Are American Concerned About? Not Climate Change — Videos

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Story 1: Divided Democrats Decide New Hampshire’s Radical Extremist Democratic Socialist (REDS) Presidential Candidate in 2020 — The Winner Is Bernie Sanders — Videos–

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Left or Liberal?

The Left Ruins Everything

Left but Really Right

Every American Needs To Hear This Speech

‘We’ve got this.’ New Hampshire state officials promise no repeat of Iowa caucus chaos as state holds first in the nation election

  • New Hampshire votes on Tuesday with polls closing at 8 p.m. ET
  • Amy Klobuchar won two of first three small towns that start voting at midnight
  • Candidates are making their closing arguments
  • Bernie Sanders leads in polls
  • Pete Buttigieg is searching for a win
  • Joe Biden is looking ahead to next round of voting in Nevada and South Carolina
  • Officials expect a victor Tuesday night – unlike Iowa caucuses 
  • ‘We’ve got this. We know what we’re doing here,’ Dem chair Ray Buckley said 

Democrats are expected to have a winner Tuesday night after a tumulus start in their presidential primary process and officials hope a victor here offers some clarity on who the party will ultimately name to take on President Donald Trump in November.

‘We’ve got this. We know what we’re doing here. The only way it will last that long if the numbers are so close we have a virtual tie,’ New Hampshire Democratic Party chair Ray Buckley told reporters on a phone call Monday.

‘Everything here is paper ballot. Nothing is connected to the internet. The ballots are immediately impounded by the state police. There is just no question for anyone to have any fear,’ he added.

Amy Klobuchar visits a polling stop in Manchester

Elizabeth Warren brings donuts to a polling site Portsmouth

Small New Hampshire town votes for Bloomberg in primary

Polls close at 8 p.m. ET. Unlike Iowa, where party officials and volunteers run the caucuses, state officials run the New Hampshire primary. Both Republicans and Democrats are voting on Tuesday.

The real contest is among the Democrats, however, as President Trump is expected to win the Republican primary.

But one Democratic winner doesn’t mean the party will have their nomination all wrapped and ready to take on the president, who held a rally in Manchester Monday night to taunt his political rivals.

No single candidate has yet united the Democrats nationally and the current field of contenders represent all corners of the party: young, old, moderate, liberal, pragmatic, hopeful.

And where the candidates enter the field on Tuesday may not be where they exit.

Bernie Sanders held his final campaign rally with Alexandria Ocasio-Cortez Monday night

Bernie Sanders held his final campaign rally with Alexandria Ocasio-Cortez Monday night

Bernie Sanders: The leader in the New Hampshire polls, Sanders wants the victory. He won the 2016 Democratic primary in New Hampshire but lost the nomination that year to Hillary Clinton. He and Pete Buttigieg are fighting over who came out on top in the Iowa caucuses (Buttigieg picked up the most delegates and Sanders is asking for a recanvass). He needs a clear cut New Hampshire victory to boost him to finish what he couldn’t in the last presidential cycle.

‘If we win here tomorrow, I think we’ve got a path to victory for the Democratic nomination,’ the Vermont senator told supporters at one of his rallies on Monday.

He closed out his campaigning Monday evening with over 7,500 attendees with Rep. Alexandria Ocasio-Cortez and a performance by The Strokes.

Pete Buttigieg: Buttigieg touted himself the front runner after Iowa’s caucus debacle but now he needs to show he comes out on top when all the votes are counted. The youngest candidate in the field, he’s come under attack for his lack of experience but has argued his ability to bring out support makes up for never having held national office.

Pete Buttigieg walks and N.H. Rep. Annie Kuster while carrying doughnuts to a poling station in Hopkinton

Pete Buttigieg walks and N.H. Rep. Annie Kuster while carrying doughnuts to a poling station in Hopkinton

‘It feels good out here,’ he told reporters on Monday.

He fell behind Sanders in the latest round of New Hampshire polls and started to down play a victory in the state in its final hours.

‘Look we are competing against home region competition, two New England senators I recognize that, but I still think we’re going to have a great night,’ he told NBC News in an interview that aired on the ‘Today’ show Tuesday morning, referring to Sanders and Elizabeth Warren.

Warren promises to continue fighting ahead of NH primary

But the former mayor was up and out early Tuesday morning, bringing donuts to a polling place in Hopkinton and appearing on MSNBC’s ‘Morning Joe.’

Amy Klobuchar changes into more comfortable shoes after a rally

Amy Klobuchar changes into more comfortable shoes after a rally

Amy Klobuchar: A few polls put her in third place going into Tuesday, giving her momentum in the closing hours of the primary. A bronze medal keeps her campaign viable and the cash flowing in. She’s already guaranteed a spot on the Las Vegas debate stage thanks to her coming out of Iowa with one delegate but a third place finish or higher gives her bid a big boost going into the next round of contests in Nevada and South Carolina.

‘I need your help,’ Klobuchar told a rally in Exeter, New Hampshire, her voice breaking as she spoke the words.

‘Right now we are on the cusp of something really great,’ she said, ‘but I can’t call everyone you know. So I’m asking you to do that today.’

The Minnesota senator won two out of the three small northern New Hampshire towns that gather at their polling places at midnight: Hart’s Location and Millsfield.

Joe Biden and Elizabeth Warren: Polls show them tied for fourth, which is particularly troubling for the former vice president. Both candidates spent Monday explaining why their campaigns are viable and both have announced their next round of campaign stops after Tuesday’s vote is counted.

Joe Biden is looking ahead to the next round of contests

The big question mark is money. Do they have the funds to keep their campaigns afloat until they can rack up a primary win? And when will that win come? Nevada and South Carolina are the next two contests. The pressure will be on.

Warren visited her press bus on Monday to give a rare talk about the state of her campaign. The Massachusetts senator doesn’t typically discuss strategy.

‘I just have to keep fighting. That’s, that’s what it’s all about. I cannot say to all those little girls: ‘This got hard and I quit.’ My job is to persist,’ she said.

Biden also lowered expectations for New Hampshire.

Elizabeth Warren told reporters she has to ‘keep fighting’

‘It’s an uphill race here,’ he told CNN Monday night. ‘We’re running against two senators from neighboring states, has never been a good thing to happen to any other candidates going in the race.’

And he emphasized there are more contests to come.

‘The path is South Carolina, and going into Nevada and Super Tuesday,’ he told NBC News.

Andrew Yang: It’s unclear what path forward he has if he doesn’t have a decent showing in New Hampshire, where he invested both time and money heavily early on.

But, on the other end of this round, Michael Bloomberg and his billions are waiting for which ever Democratic contender emerges from the next round of contests in Nevada and South Carolina.

The former New York City mayor skipped the four early contests to focus his time and money on the Super Tuesday states, where a huge chunk of delegates will be awarded.

But, on Tuesday, all eyes are on New Hampshire and officials claim the contest is wide open.

‘This is anyone’s race to win. I still believe that and I truly do,’ Buckley, the Democratic chair, said Monday. ‘We have multiple candidates representing the perspective of all the voters so they all have choices.’

President Trump got into the action Monday with a rally in Manchester where he suggested Republicans could cause some mischief on Tuesday.

‘I hear a lot of Republicans tomorrow will vote for the weakest candidate possible of the Democrats,’ the president said. ‘My only problem is I’m trying to figure out who is their weakest candidate. I think they’re all weak.’

But only registered Democrats and voters not registered with either party can participate in the state’s Democratic presidential primary.

The spectra of the Iowa caucuses – where problems with an app the party developed to count the votes led to a hand count of paper ballots with delayed and questionable results – has haunted New Hampshire.

The candidates have joked that – as opposed to last week’s contest New Hampshire can count – but under the laughter is the fear that even if the state has a winner, there still won’t be a clear front runner for the nomination.

And that is what worries party elders, who are harboring fears by the time a nominee emerges, that person will be so damaged politically it’ll be 2016 all over again when Donald Trump defeated Hillary Clinton.

President Trump held a rally in Manchester Monday night and suggested Republicans could make some mischief

The Strokes performed at a Bernie Sanders rally Monday night

Sanders is leading by 8 points in the RealClearPolitics polling average of New Hampshire polls but the unexpected can happen.

Polls showed a third of New Hampshire voters remain undecided, making the last 24 hours in the state crucial for the candidates ahead of Tuesday’s primary.

Almost half New Hampshire voters – 47 per cent – are independents and tend to pick their candidates late in the process.

Attendance was heavy at rallies for all the candidates in the last 24 hours, indicating voters are still shopping for a contender to support.

New Hampshire Secretary of State Bill Gardner anticipates turn out Tuesday night 420,000 voters, which would be the most votes cast in a presidential primary when an incumbent is running for re-election.

Trump holds first rally after being acquitted in impeachment trial

Patton (1/5) Movie CLIP – Americans Love a Winner (1970) HD

Story 3: What Are American Concerned About? Not Climate Change — Videos

 

Economy outranks other issues among potential 2020 voters, according to new survey

Policy 2020: Unpacking the issues shaping the 2020 election

America’s Biggest Issues: Spending

Jul 21, 2019
Despite their promises to the contrary, every year, politicians continue to spend hundreds of billions of dollars more than the government takes in. And every year, they put it on the national credit card and the bill grows bigger. That bill currently averages $67,000 for every single American. If you’re a family of three, that’s over $200,000. The Heritage Foundation’s Romina Boccia explains how it’s not too late to save the incredible promise that is America. But first, we have to convince leaders to end their runaway spending habits and adopt spending controls. View more: https://www.heritage.org/budget-and-s…

How to Solve America’s Spending Problem

The Bigger the Government…

Why Private Investment Works & Govt. Investment Doesn’t

Social Security Won’t Give You Security

America’s Debt Crisis Explained

America’s Biggest Issues: Health Care

Dec 14, 2018
Most Americans agree that the health care system in the United States is in need of an overhaul. What many are not in agreement on is how best to do it. As we weigh our options, The Heritage Foundation’s Genevieve Wood explains a few basic facts you need to know. View more: https://www.heritage.org/health-care-…

How the Government Made You Fat

What Creates Wealth?

What’s Wrong with Government-Run Healthcare?

America’s Biggest Issues: Education

Jun 23, 2019
American colleges and universities are failing in one of their most basic missions: to equip students with the tools they need for a career. Many students graduate ill-prepared to earn a living and pay off the debt they’ve accumulated getting their degrees. Forty percent of those who start college don’t finish within six years. Additionally, students are often subject to indoctrination into socialist ideology. They face hostility toward opinions that don’t conform to the predominantly leftist thinking on campus. They’re also immersed in identity politics that pit students of different backgrounds against one another. Despite these problems, colleges continue to raise tuition. The Heritage Foundation’s Lindsey Burke explains how to stop the sharp rise in both college tuition and student debt by getting the federal government out of the student loan business. View more: https://www.heritage.org/education/he…

How the Liberal University Hurts the Liberal Student

America’s Biggest Issues: Welfare

Aug 4, 2019

When President Lyndon Johnson launched his War on Poverty in the 1960s, he pledged to eliminate poverty in America. But more than five decades, several welfare programs, and $25 trillion later, the welfare system has largely failed the poor. The Heritage Foundation’s Genevieve Wood explains that the United States currently spends about a trillion dollars a year on over 90 different federal, state, and local welfare programs. Yet around 12 percent of Americans are still considered poor. We are clearly spending a lot of money so why do we still have such a high poverty rate? View more: https://www.heritage.org/poverty-and-…

There Is Only One Way Out of Poverty

America’s Biggest Issues: Immigration

Apr 29, 2019
Immigration is one of the fundamental building blocks that help make America the unique nation that it is. But the debate over border security and immigration has become toxic because politicians have put politics before principles. And reasonable Americans find themselves trapped between zealots on both sides. So what does a thoughtful agenda for American immigration reform look like? The Heritage Foundation’s Genevieve Wood takes us through four guiding principles to keep us focused on what is best for the welfare of all Americans, both those of today and those of the future. View more: https://www.heritage.org/immigration/…

A Nation of Immigrants

America Wants Legal Immigrants

Illegal Immigration: It’s About Power

America’s Biggest Issues: Environment

Jul 7, 2019
In the 1970s, Americans were told we were in a global cooling crisis and if something weren’t done, we’d enter a new ice age. When that didn’t happen, a few decades later we were told that entire nations could be wiped off the face of the Earth by rising sea levels if the global warming trend was not reversed by the year 2000. Despite the consistent failure of these apocalyptic warnings, that hasn’t stopped climate change alarmism. We’re now being told we only have 12 years to combat climate change and the solution is to fundamentally dismantle the system of free enterprise. That means Washington controls things like how we produce our energy, what food we eat and what type of cars we drive. The question is, even if we believed their alarmist, catastrophic predictions, would their proposals work? The Heritage Foundation’s Nick Loris helps dispel some environmental myths, and explains how America can ensure affordable, reliable, and cleaner energy by keeping our economy growing. View more: https://www.heritage.org/environment/…

Can Climate Models Predict Climate Change?

Is Climate Change Our Biggest Problem?

Climate Activists Use Kids to Fuel Hysteria

Is Climate Change an Existential Threat?

You Can’t Fix Other People, But You Can Fix Yourself

Pew Research 2019 survey: ‘Climate Change’ Still Ranks As Low Priority – 17th place out of 18

By:  – Climate DepotFebruary 11, 2020 11:38 AM with 0 comments

Most Important Problem

Climate Change Still Ranks As Low Priority In Polls

by Donna Laframboise

Recently, I reported on a poll that Gallup has conducted in America every month of every year since 2001. Admirably, it makes no attempt to prompt or influence.

It asks people to name the most important problem facing the country, then it records their answers.

If one seeks honest, genuine insight into ordinary people’s lives, that’s a great approach.

Pew Research Center, another American polling outfit, conducts a different kind of survey. For 25 years (from 1994 to 2019 inclusive), it has read members of the public a long list of pre-selected topics in random order. People have been asked to attach a label to each one.

Should it be a ‘top priority’ for the President and Congress this year? Should it be a lower priority? Is it unimportant? Does it deserve no attention at all?

In 2007, Pew added ‘global warming’ to this list of potential top priorities. In 2016, it started calling it ‘climate change’ instead.

Last year, 44% of respondents told Pew that ‘Dealing with global climate change’ should be a top priority.

That sounds significant until you notice thatevery single item on the list received at least 39% support.

In such cases, raw percentages are meaningless. What matters is how a topic ranks compared to its fellows. Those results couldn’t be clearer.

In 2019, climate change ended up in 17th place out of 18.

70% of people said strengthening the economy should be a top priority.

69% said reducing healthcare costs should be.

68% said the education system needs attention.

Those are very strong numbers, involving more than two-thirds of the population. What came next?

4. ‘Defending the country from future terrorist attacks’ – 67%

5. ‘Taking steps to make the Social Security system financially sound’ – 67%

6. ‘Taking steps to make the Medicare system financially sound’ – 67%

7. ‘Dealing with the problems of poor and needy people’ – 60%

8. ‘Protecting the environment’ – 56%

9. ‘Dealing with the issue of immigration’ – 51%

10. ‘Improving the job situation’ – 50%

11. ‘Reducing crime’ – 50%

12. ‘Dealing with drug addiction’ – 49%

13. ‘Reducing the budget deficit’ – 48%

14. ‘Addressing race relations in this country’ – 46%

15. ‘Strengthening the US military’ – 45%

16. ‘Improving the country’s roads, bridges and public transportation systems’ – 45%

17. ‘Dealing with global climate change’ – 44%

18. ‘Dealing with global trade issues’ – 39%

In other words, another long-running US poll tells us the public’s climate concerns are weak. Ask people if they care about it, and many will say ‘yes.’

But they feel more urgency about a long list of other issues.

‘Dealing with global warming’ ended up in second last place in 2007. Between 2008 and 2013, it ranked last (select a year and then ‘Overall’ here). Here’s what happened after that:

2014: second last

2015 second last

2016 third last (the first year Pew began calling it ‘global climate change’)

2017: second last (see bottom of the page)

2018: second last

2019 second last

Moral of the story: There has never been any evidence that climate change is a top concern for most Americans. This is not a crowd-pleaser or a vote-getter.

https://nofrakkingconsensus.com/2020/02/10/poll-results-climate-is-always-low-priority/

 

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The Pronk Pops Show 1306, August 14, 2019, Story 1: President Trump Delays Tariffs on Chinese Goods to After Christmas — Videos — Story 2: Normal Flight Operations Resume Again in Hong Kong — Videos — Story 3: Progressives Try To Panic American People Over Inverted Yield Curve Leading To Recession — U.S. Economy is Growing — Missy Higgins Singing — Videos — Story 4: President Trump Energy Speech at Shell Pennsylvania Petrochemicals Complex in Monaca, Pennsylvania 

Posted on August 15, 2019. Filed under: 2020 Republican Candidates, Addiction, Addiction, American History, Banking System, Blogroll, Breaking News, Budgetary Policy, Business, Cartoons, China, Coal, Coal, Communications, Congress, Corruption, Countries, Culture, Currencies, Donald J. Trump, Donald J. Trump, Donald J. Trump, Donald Trump, Economics, Economics, Education, Elections, Empires, Employment, Energy, Fiscal Policy, Foreign Policy, Free Trade, Freedom of Speech, Government, Government Dependency, Government Spending, Health, Health Care, Health Care Insurance, History, House of Representatives, Human, Human Behavior, Illegal Immigration, Immigration, Independence, Labor Economics, Language, Law, Legal Immigration, Life, Liquid Natural Gas (LNG), Lying, Media, Monetary Policy, National Interest, Natural Gas, Natural Gas, News, Nuclear, Oil, Oil, People, Philosophy, Photos, Politics, Polls, President Trump, Private Sector Unions, Progressives, Public Corruption, Public Sector Unions, Radio, Raymond Thomas Pronk, Regulation, Resources, Rule of Law, Scandals, Security, Senate, Social Science, Social Sciences, Solar, Success, Tax Policy, Taxation, Taxes, Trade Policy, U.S. Dollar, Unemployment, Unions, United States of America, Videos, Violence, Wealth, Welfare Spending, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

 

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Story 1: President Trump Delays Tariffs on Chinese Goods to After Christmas — Americans Would Have Been Paying The Tariff or Tax — Videos —

Trump Blinked With China Tariff Delay, Exante Data’s Setser Says

Trump says China tariffs delayed for ‘Christmas season’

China Is Changing Strategy in Trade War, Says LSE’s Jin

 

Trump CAVES on China tariffs and puts off levies on laptops, cell phones and toys until after Christmas shopping season following ‘very good call’ with Beijing – in move set to boost faltering stock market

  • The Trump administration announced Tuesday morning that is delaying tariffs on Chinese-manufactured goods like laptops and cell phones until Dec. 15
  • Trump’s trade office says that certain products ‘will not face additional tariffs of 10 percent’ due to health, safety or national security concerns 
  • Some of e products it listed were cell phones, laptop computers, video game consoles, computer monitors, footwear and clothingth
  • USTR said it will post a list of items that are being excluded on its website
  • It announced the postponement shortly after the the stock market opened, and the Dow jumped nearly 500 points within minutes of the news
  • Donald Trump has not commented directly but hinted n a tweet that the action was intended to get China to move forward with large agricultural orders

The Trump administration announced Tuesday morning that is delaying tariffs on Chinese-manufactured goods like laptops and cell phones until Dec. 15, when price hikes from the penalties won’t drive up the price of popular Christmas presents.

Trump’s trade office says that certain products ‘will not face additional tariffs of 10 percent’ due to health, safety or national security concerns.

However, the categories of goods that are being protected suggest that Trump was concerned about the consumer pricing index and the billions of dollars in value of this month’s stock losses.

The U.S. trade office announced the postponement shortly after the the stock market opened in the United States, causing the Dow Jones Industrial Average jump nearly 500 points within minutes.

That excitement tempered off as the day wore on. The Dow leveled out at a 400-point rise that was close to 1,000 points off from where it was a month ago when it started to drop.

Speaking to reporters on the tarmac in New Jersey, before a day trip to Pennsylvania from his vacation, the president defended his tough-on-China stance, saying that other presidents should have tightened the screws on Beijing, too.

He said that he backed off on tariffs because he had a ‘very good call with China.

The Trump administration announced Tuesday morning that is delaying tariffs on Chinese-manufactured goods like laptops and cell phones until Dec. 15. Donald Trump is seen here at the White House the previous Friday

The Trump administration announced Tuesday morning that is delaying tariffs on Chinese-manufactured goods like laptops and cell phones until Dec. 15. Donald Trump is seen here at the White House the previous Friday

The Dow Jones Industrial Average jumped nearly 500 points within minutes of the statement

The Dow Jones Industrial Average jumped nearly 500 points within minutes of the statement

Donald Trump said he’d impose a 10 percent penalty on $300 billion in untaxed goods on Sept. 1, if China continued drag out trade talks. 

U.S. negotiators say a deal was nearly finished, when Beijing backed away from major provisions.

A new round of talks was scheduled for September, however Trump drove down skittish markets with claims last week that the meetings could be cancelled.

On Tuesday morning, USTR announced it was loosening the noose on China, specifically on items in the tech and and clothing manufacturing industries.

‘Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,’ according to a United States Trade Representative statement.

USTR said it will post a list of items that are being excluded on its website today.

The president continued to defend his position in a Tuesday morning in tweet that claimed consumers have not paid the price for the 25 percent tariffs on $250 billion of other Chinese items that he’s put in place.

Trump did not mention the policy shift in that tweet or one that he sent a half-hour after the the USTR announcement, however, he hinted that unfilled agricultural orders were part of the calculus.

He said of China’s retracted promises to purchase more American agricultural goods: ‘Maybe this will be different!’ 

Less than an hour prior, the president had been ripping China. He blasted Beijing for financial tinkering the U.S. has blasted as currency manipulation while promising American buyers that tariffs wouldn’t affect everyday product pricing.

‘Through massive devaluation of their currency and pumping vast sums of money into their system, the tens of billions of dollars that the U.S. is receiving is a gift from China. Prices not up, no inflation. Farmers getting more than China would be spending. Fake News won’t report!’ he said.

‘Later, at a manufacturing event in Pennsylvania, the president said in an extended riff on China that it had ‘ripped off our country for years’ and taken advantage of World Trade Organization rules that allow the nation to be classified as a developing economy.

‘And I’m being nice when I say took advantage,’ he argued.

He recounted his threat to leave the WTO, unless it started adjudicating cases in his favor.

‘And it’s only because of attitude,’ he said of a change in behavior. ‘Because we know that they have been screwing us for years.’

He added, ‘And I’d like to use a different word but there’s no word that’s quite as descriptive.’

https://www.dailymail.co.uk/news/article-7352783/Trump-postpones-new-tariffs-China-months-stock-shares-lose-billions-value.html

 

Story 2: Normal Flight Operations Resume Again in Hong Kong — Videos

 

Normal operations resume at Hong Kong airport as city braces for more protests

Hong Kong’s Airport Authority said normal flight operations would resume on Thursday after pro-democracy protests forced the cancellation of nearly 1,000 flights this week, while the city braced for more mass protests through the weekend.

China reiterated on Wednesday that Hong Kong’s protest movement was “near terrorism” and more street clashes followed ugly and chaotic scenes at the airport on Tuesday, when protesters set upon two men they suspected of being government sympathisers.

Police and protesters faced off again on the streets of the financial hub overnight, with riot officers quickly firing tear gas as their response to demonstrators toughens .

Ten weeks of increasingly violent confrontations between police and protesters have plunged Hong Kong into its worst crisis since it reverted from British to Chinese rule in 1997.

Heightened security would remain at the city’s international airport and the Hong Kong Airport Authority said late on Wednesday an application for protests to be held in the terminal must be made in advance with a “Letter of No Objection” to be obtained from police.

More protests are planned on Friday and over the weekend in different areas of the Chinese-controlled territory.

Protesters have expressed remorse after a peaceful sit-in turned violent at one of the world’s busiest airports earlier this week.

It was not clear whether the violent clashes might have eroded the broad support the movement has so far attracted in Hong Kong. The protests have also hit the city’s faltering economy.

The United States said it was deeply concerned at news of Chinese police forces gathering near the border, urged Hong Kong’s government to respect freedom of speech, and issued a travel advisory urging caution when visiting the city. (Writing by Farah Master Editing by Paul Tait)

https://www.dailymail.co.uk/wires/reuters/article-7358413/Normal-operations-resume-Hong-Kong-airport-city-braces-protests.html

 

Story 3: Progressives Try To Panic American People Over Inverted Yield Curve Leading To Recession — U.S. Economy is Growing — Missy Higgins Singing — Videos

See the source image

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See the source image

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Missy Higgins – Any Day Now (Live)

Any Day Now

Missy Higgins

How long, how long, how long will we take to come undone?
If you know the answer tell me now and I’ll write up a calendar for our count down.
‘Cause what if what we see is all, is all we’ve got?
Say you’ve kept some fire aside to set light to me some surprising night.
And say you’ve locked some fire away to set light to me some surprising day.
To me some surprising day, any day now
How come, how come, how come I’m now on a road holding out my thumb?
If you know my destination please buy me the fastest car and throw me the keys.
‘Cause what if what we see is all, is all we’ve got?
Say you’ve kept some fire aside to set light to me some surprising night.
And say you’ve locked some fire away to set light to me some surprising day.
‘Cause finger by finger we’re losing grasp and
I’m questioning the reason why nothing beautiful does last
Say you’ve kept some fire aside to set light to me some surprising night.
And say you’ve locked some fire away to set light to me some surprising day,
To me some surprising day any day now.
Source: LyricFind
Songwriters: Melissa Higgins
Any Day Now lyrics © Peermusic Publishing, Words & Music A Div Of Big Deal Music LLC

Why Investors Are Obsessed With the Inverted Yield Curve

Fed Must Act on Inverted Yield Curve, Credit Suisse’s Golub Says

What Is An Inverted Yield Curve And How Does It Affect The Stock Market? | NBC News Now

Yield curve inversion does not mean there will be a recession tomorrow, strategist says

Mohamed El-Erian talks yield curve, recession and global economy

President Trump calls Fed Chair Jerome Powell ‘clueless’ and inverted yield curve ‘crazy’

Missy Higgins (9-27-2008) Sugarcane

Sugarcane

Missy Higgins

Baby ballerina’s hiding
Somewhere in the corner
Where the shadow wraps around her
And our torches cannot find her
She will stay there till the morning
Crawl behind us as we are yawning
And she will leave our games
To never be the same
So grow tall, sugarcane
Eat that soil, drink the rain
But know they’ll chase you
If you play their little games
So run, run fast, sugarcane
You see my peep show booth is handy
There’s a one way only mirror
So I can dance here with my hair down
But I don’t see if you get bitter
And there’s a button right beside me
If I happen to want a wall to hide me
If only the ballerina had one too
So grow tall, sugarcane
Eat that soil, drink the rain
But know they’ll chase you
If you play their little games
So run, run fast, sugarcane
And she said, “Always be afraid”
Yes, she said, “Always be afraid”
So grow tall, sugarcane
Eat that soil, drink the rain
But know they’ll chase you
If you play their little games
So run, run fast, sugarcane
Yeah, you’d better run, run fast, sugarcane
Yeah, you’d better run, run fast sugarcane
Source: LyricFind
Songwriters: Melissa Higgins
Sugarcane lyrics © Peermusic Publishing

Missy Higgins – Where I Stood (Official Video)

Where I Stood

Missy Higgins

I don’t know what I’ve done
Or if I like what I’ve begun
But something told me to run
And honey, you know me, it’s all or none
There were sounds in my head
Little voices whispering
That I should go and this should end
Oh, and I found myself listening
‘Cause I don’t know who I am, who I am without you
All I know is that I should
And I don’t know if I could stand another hand upon you
All I know is that I should
‘Cause she will love you more than I could
She who dares to stand where I stood
See, I thought love was black and white
That it was wrong or it was right
But you aren’t leaving without a fight
And I think, I am just as torn inside
‘Cause I don’t know who I am, who I am without you
All I know is that I should
And I don’t know if I could stand another hand upon you
All I know is that I should
‘Cause she will love you more than I could
She who dares to stand where I stood
And I won’t be far from where you are if ever you should call
You meant more to me than any one I, I’ve ever loved at all
But you taught me how to trust myself
And so I say to you, this is what I have to do
‘Cause I don’t know who I am, who I am without you
All I know is that I should
And I don’t know if I could stand another hand upon you
All I know is that I should
‘Cause she will love you more than I could
She who dares to stand where I stood
She who dares to stand where I stood
Source: LyricFind
Songwriters: Melissa Higgins
Where I Stood lyrics © Peermusic Publishing

Kimberley Music – Missy Higgins

Missy Higgins on why she used to break into cemeteries | The Weekly

Missy Higgins & Friends Live

Dow plummets 800 points and 3% in a day amid fears of economic crisis as Treasury yields invert for the first time since the Great Recession

  • Dow Jones plunged more than 800 points on Wednesday on recession fears
  • Yield on the 10-year Treasury note briefly dipped below the two-year yield
  • Known as an ‘inverted yield curve,’ it is a sign investors fear a recession 
  • The past five inverted yield curves have all preceded a recession
  • Trump blasts Fed over rates and calls chairman Jerome Powell ‘clueless’ 

Stocks plunged on Wednesday after the bond market threw up one of its last remaining warning flags on the economy.

The yield on the 10-year Treasury briefly dropped below the two-year Treasury’s yield Wednesday morning, the first time those yields have flipped since 2007. The so-called inversion has correctly predicted many past recessions and is the loudest warning bell yet about a possible recession ahead.

Investors responded by dumping stocks, more than erasing gains from a rally the day before.

The Dow Jones Industrial Average closed down 801 points at 25,479, a loss of 3%, in the largest one-day point drop since October 2018,

A one-day view of the yield spread between the 10-year and two-year Treasury bond shows two brief yield curve inversions when the ratio drops below the red line on Wednesday

Based on the latest available data, the S&P 500 lost 85.72 points, or 2.93%, to 2,840.6, and the Nasdaq Composite dropped 242.42 points, or 3.02%, to 7,773.94.

While the market was falling Wednesday, President Donald Trump took to Twitter to again criticize the Federal Reserve for hampering the U.S. economy by raising rates “far too quickly” last year and not reversing its policy aggressively enough – the Fed cut its key rate by a quarter point last month. 

Trump blasted Federal Reserve Chairman Jerome Powell as ‘clueless’. 

He also defended his trade policy, even though investors remain worried that the trade war between the world’s two largest economies may drag on through the 2020 U.S. election and cause more economic damage.

“We still see a substantial risk that the trade dispute will escalate further,” said Mark Haefele, global chief investment officer at UBS in a note to clients.

‘The relief rally inspired by the Trump administration delaying tariffs on some Chinese imports was short lived – blink and you missed it,’ said Fiona Cincotta, senior market analyst at City Index.

With bond yields falling, banks took heavy losses Wednesday. Lower bond yields are bad for banks because they force interest rates on mortgages and other loans lower, which results in lower profits for banks. Citigroup sank 5.1% and Bank of America gave up 5%.

Trump is seen at a White House meeting last month. He is relying upon a strong economy to bolster his reelection chances, and the latest economic signal is a worrying one

Trump is seen at a White House meeting last month. He is relying upon a strong economy to bolster his reelection chances, and the latest economic signal is a worrying one

Much of the market’s focus was on the U.S. yield curve, which has historically been one of the more reliable recession indicators.

If all this talk about yield curves sounds familiar, it should. Other parts of the curve have already inverted, beginning late last year. But each time, some market watchers cautioned not to make too much of it.

Academics tend to pay the most attention to the spread between the three-month Treasury and the 10-year Treasury, which inverted in the spring. Traders often pay more attention to the two-year and 10-year spread.

Each of the last five times the two-year and 10-year Treasury yields have inverted, a recession has followed.

The average amount of time is around 22 months, according to Raymond James’ Giddis.

The indicator isn’t perfect, though, and it’s given false signals in the past.

Some market watchers also say the yield curve may be a less reliable indicator this time because technical factors may be distorting longer-term yields, such as negative bond yields abroad and the Federal Reserve’s holdings of $3.8 trillion in Treasurys and other investments on its balance sheet.

What is a yield curve inversion?

The yield, or the effective interest rate paid, on a 10-year Treasury bond is usually higher than the yield on a two-year bond — because investors typically want to see a higher return for a longer-term investment.

However, bond yields move in the opposite direction of bond prices, which are driven by demand. When investors clamor for bonds, driving prices up, yields go down.

The inversion of the 10-year and two-year yield curves is a signal that investors are rushing money from stocks into bonds, depressing yields and flipping the return on long- and short-term bonds in a way that appears to make little economic sense.

Data from Credit Suisse going back to 1978 shows:

  • The last five 2-10 inversions have eventually led to recessions.
  • A recession occurs, on average, 22 months following a 2-10 inversion.
  • The S&P 500 is up, on average, 12% one year after a 2-10 inversion.
  • It’s not until about 18 months after an inversion when the stock market usually turns and posts negative returns.

This chart shows the spread between 10-year and two-year Treasury bonds since 1978. The portions below the black line represent yield inversions, and shaded areas are recessions

This chart shows the spread between 10-year and two-year Treasury bonds since 1978. The portions below the black line represent yield inversions, and shaded areas are recessions

Macy’s plunged 11.4%, the sharpest loss in the S&P 500, after it slashed its profit forecast for the year. The retailer’s profit for the latest quarter fell far short of analysts’ forecasts as it was forced to slash prices on unsold merchandise. The grim results from Macy’s sent other retailers sharply lower, too. Nordstrom sank 10% and Kohl’s dropped 11%.

Energy stocks also sank sharply, hurt by another drop in the price of crude oil on worries that a weakening global economy will drag down demand. National Oilwell Varco slumped 7.4% and Schlumberger skidded 6.5%. The price of benchmark U.S. crude slid 3.9% to $54.88 per barrel. Brent crude, the international standard, lost 3.7% to $59.04.

Gold gained $13.70 to $1,515.90 per ounce, close to a six-year high. Investors also bid up shares in mining company Newmont Goldcorp 1.8%.

Overseas, Germany’s DAX dropped 2.3% following the weak German economic data. France’s CAC 40 fell 2.2%, and the FTSE 100 in London lost 1.7%.

In Asia, Japan’s Nikkei 225 rose 1%, the Kospi in South Korea gained 0.7% and the Hang Seng in Hong Kong added 0.1%.

Trader Andrew Silverman works on the floor of the New York Stock Exchange on Tuesday. The threat of a recession doesn't seem so remote anymore, and stocks sank Wednesday

Trader Andrew Silverman works on the floor of the New York Stock Exchange on Tuesday. The threat of a recession doesn’t seem so remote anymore, and stocks sank Wednesday

Markets have largely been in a spin cycle since Trump announced on Aug. 1 that he would impose 10% tariffs on about $300 billion in Chinese imports, which would be on top of 25% tariffs already in place on $250 billion in imports.

On Tuesday, responding to pressure from businesses and growing fears that a trade war is threatening the U.S. economy, the Trump administration is delaying most of the import taxes it planned to impose on Chinese goods and is dropping others altogether.

Investors are still worried that the trade war between the world’s two largest economies may drag on through the 2020 U.S. election and cause more economic damage.

For all its whipsawing up and down, the S&P 500 remains within 5% of its record, which was set in late July.

A five-day view of the Dow shows a sharp drop at the open of trading on Wednesday

A five-day view of the Dow shows a sharp drop at the open of trading on Wednesday

https://www.dailymail.co.uk/news/article-7356699/Warnings-economic-crisis-Treasury-yields-invert-time-Great-Recession.html

Federal funds rate

From Wikipedia, the free encyclopedia

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Federal Funds Rate compared to U.S. Treasury interest rates

2 to 10 year treasury yield spread

Inflation (blue) compared to federal funds rate (red)

Quarterly gross domestic product compared to Federal Funds Rate.

Federal Funds Rate and Treasury interest rates from 2002-2019

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions’ reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.[1][2]

The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.

The Federal Reserve uses open market operations to make the federal funds effective rate follow the federal funds target rate. The target rate is chosen in part to influence the money supply in the U.S. economy[3]

Mechanism

Financial institutions are obligated by law to maintain certain levels of reserves, either as reserves with the Fed or as vault cash. The level of these reserves is determined by the outstanding assets and liabilities of each depository institution, as well as by the Fed itself, but is typically 10%[4] of the total value of the bank’s demand accounts (depending on bank size). For transaction deposits of size $9.3 million to $43.9 million (checking accountsNOWs, and other deposits that can be used to make payments) the reserve requirement in 2007–2008 was 3 percent of the end-of-the-day daily average amount held over a two-week period. Transaction deposits over $43.9 million held at the same depository institution carried a 10 percent reserve requirement.

For example, assume a particular U.S. depository institution, in the normal course of business, issues a loan. This dispenses money and decreases the ratio of bank reserves to money loaned. If its reserve ratio drops below the legally required minimum, it must add to its reserves to remain compliant with Federal Reserve regulations. The bank can borrow the requisite funds from another bank that has a surplus in its account with the Fed. The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The federal funds target rate is set by the governors of the Federal Reserve, which they enforce by open market operations and adjustments in the interest rate on reserves.[5] The target rate is almost always what is meant by the media referring to the Federal Reserve “changing interest rates.” The actual federal funds rate generally lies within a range of that target rate, as the Federal Reserve cannot set an exact value through open market operations.

Another way banks can borrow funds to keep up their required reserves is by taking a loan from the Federal Reserve itself at the discount window. These loans are subject to audit by the Fed, and the discount rate is usually higher than the federal funds rate. Confusion between these two kinds of loans often leads to confusion between the federal funds rate and the discount rate. Another difference is that while the Fed cannot set an exact federal funds rate, it does set the specific discount rate.

The federal funds rate target is decided by the governors at Federal Open Market Committee (FOMC) meetings. The FOMC members will either increase, decrease, or leave the rate unchanged depending on the meeting’s agenda and the economic conditions of the U.S. It is possible to infer the market expectations of the FOMC decisions at future meetings from the Chicago Board of Trade (CBOT) Fed Funds futures contracts, and these probabilities are widely reported in the financial media.

Applications

Interbank borrowing is essentially a way for banks to quickly raise money. For example, a bank may want to finance a major industrial effort but may not have the time to wait for deposits or interest (on loan payments) to come in. In such cases the bank will quickly raise this amount from other banks at an interest rate equal to or higher than the Federal funds rate.

Raising the federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure. Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely.[6] This interest rate is used as a regulatory tool to control how freely the U.S. economy operates.

By setting a higher discount rate the Federal Bank discourages banks from requisitioning funds from the Federal Bank, yet positions itself as a lender of last resort.

Comparison with LIBOR

Though the London Interbank Offered Rate (LIBOR) and the federal funds rate are concerned with the same action, i.e. interbank loans, they are distinct from one another, as follows:

  • The target federal funds rate is a target interest rate that is set by the FOMC for implementing U.S. monetary policies.
  • The (effective) federal funds rate is achieved through open market operations at the Domestic Trading Desk at the Federal Reserve Bank of New York which deals primarily in domestic securities (U.S. Treasury and federal agencies’ securities).[7]
  • LIBOR is based on a questionnaire where a selection of banks guess the rates at which they could borrow money from other banks.
  • LIBOR may or may not be used to derive business terms. It is not fixed beforehand and is not meant to have macroeconomic ramifications.[8]

Predictions by the market

Considering the wide impact a change in the federal funds rate can have on the value of the dollar and the amount of lending going to new economic activity, the Federal Reserve is closely watched by the market. The prices of Option contracts on fed funds futures (traded on the Chicago Board of Trade) can be used to infer the market’s expectations of future Fed policy changes. Based on CME Group 30-Day Fed Fund futures prices, which have long been used to express the market’s views on the likelihood of changes in U.S. monetary policy, the CME Group FedWatch tool allows market participants to view the probability of an upcoming Fed Rate hike. One set of such implied probabilities is published by the Cleveland Fed.

Historical rates

As of 19 December 2018 the target range for the Federal Funds Rate is 2.25–2.50%.[9] This represents the ninth increase in the target rate since tightening began in December 2015.[10]

The last full cycle of rate increases occurred between June 2004 and June 2006 as rates steadily rose from 1.00% to 5.25%. The target rate remained at 5.25% for over a year, until the Federal Reserve began lowering rates in September 2007. The last cycle of easing monetary policy through the rate was conducted from September 2007 to December 2008 as the target rate fell from 5.25% to a range of 0.00–0.25%. Between December 2008 and December 2015 the target rate remained at 0.00–0.25%, the lowest rate in the Federal Reserve’s history, as a reaction to the Financial crisis of 2007–2008 and its aftermath. According to Jack A. Ablin, chief investment officer at Harris Private Bank, one reason for this unprecedented move of having a range, rather than a specific rate, was because a rate of 0% could have had problematic implications for money market funds, whose fees could then outpace yields.[11]

Federal funds rate history and recessions.png

Explanation of federal funds rate decisions

When the Federal Open Market Committee wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, the price of borrowed funds – the federal funds rate – falls. Conversely, when the Committee wishes to increase the federal funds rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, the interest rate will normally rise.[12]

The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee’s lowering has recently predated recessions,[13] in order to stimulate the economy and cushion the fall. Reducing the federal funds rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.

The charts linked below show the relation between S&P 500 and interest rates.

  • July 13, 1990 — Sept 4, 1992: 8.00%–3.00% (Includes 1990–1991 recession)[14][15]
  • Feb 1, 1995 — Nov 17, 1998: 6.00–4.75 [16][17][18]
  • May 16, 2000 — June 25, 2003: 6.50–1.00 (Includes 2001 recession)[19][20][21]
  • June 29, 2006 — (Oct. 29 2008): 5.25–1.00[22]
  • Dec 16, 2008 — 0.0–0.25[23]
  • Dec 16, 2015 — 0.25–0.50[24]
  • Dec 14, 2016 — 0.50–0.75[25]
  • Mar 15, 2017 — 0.75–1.00[26]
  • Jun 14, 2017 — 1.00–1.25[27]
  • Dec 13, 2017 — 1.25–1.50[28]
  • Mar 21, 2018 — 1.50–1.75[29]
  • Jun 13, 2018 — 1.75–2.00[30]
  • Sep 26, 2018 — 2.00–2.25[9]
  • Dec 19, 2018 — 2.25–2.50[31]

Bill Gross of PIMCO suggested that in the prior 15 years ending in 2007, in each instance where the fed funds rate was higher than the nominal GDP growth rate, assets such as stocks and housing fell.[32]

International effects

A low federal funds rate makes investments in developing countries such as China or Mexico more attractive. A high federal funds rate makes investments outside the United States less attractive. The long period of a very low federal funds rate from 2009 forward resulted in an increase in investment in developing countries. As the United States began to return to a higher rate in 2013 investments in the United States became more attractive and the rate of investment in developing countries began to fall. The rate also affects the value of currency, a higher rate increasing the value of the U.S. dollar and decreasing the value of currencies such as the Mexican peso.[33]

See also

References

  1. ^ “Fedpoints: Federal Funds”Federal Reserve Bank of New York. August 2007. Retrieved October 2, 2011.
  2. ^ “The Implementation of Monetary Policy”. The Federal Reserve System: Purposes & Functions (PDF). Washington, D.C.: Federal Reserve Board. August 24, 2011. p. 4. Retrieved October 2, 2011.
  3. ^ “Monetary Policy, Open Market Operations”. Federal Reserve Bank. January 30, 2008. Archived from the original on April 13, 2001. Retrieved January 30, 2008.
  4. ^ “Reserve Requirements”. Board of Governors of The Federal Reserve System. December 16, 2015.
  5. ^ Stefan Homburg (2017) A Study in Monetary Macroeconomics, Oxford University Press, ISBN 978-0-19-880753-7.
  6. ^ “Fed funds rate”. Bankrate, Inc. March 2016.
  7. ^ Cheryl L. Edwards (November 1997). Gerard Sinzdak. “Open Market Operations in the 1990s” (PDF)Federal Reserve Bulletin (PDF).
  8. ^ “BBA LIBOR – Frequently asked questions”. British Bankers’ Association. March 21, 2006. Archived from the original on February 16, 2007.
  9. Jump up to:a b “Federal Reserve issues FOMC statement” (Press release). Board of Governors of the Federal Reserve System. December 19, 2018. Retrieved June 2, 2019.
  10. ^ Tankersley, Jim (March 21, 2018). “Fed Raises Interest Rates for Sixth Time Since Financial Crisis”The New York Times. Retrieved March 22, 2018.
  11. ^ “4:56 p.m. US-Closing Stocks”. Associated Press. December 16, 2008. Archived from the original on July 18, 2012.
  12. ^ David Waring (February 19, 2008). “An Explanation of How The Fed Moves Interest Rates”. InformedTrades.com. Archived from the original on May 5, 2015. Retrieved July 20, 2009.
  13. ^ “Historical Changes of the Target Federal Funds and Discount Rates, 1971 to present”. New York Federal Reserve Branch. February 19, 2010. Archived from the original on December 21, 2008.
  14. ^ “$SPX 1990-06-12 1992-10-04 (rate drop chart)”. StockCharts.com.
  15. ^ “$SPX 1992-08-04 1995-03-01 (rate rise chart)”. StockCharts.com.
  16. ^ “$SPX 1995-01-01 1997-01-01 (rate drop chart)”. StockCharts.com.
  17. ^ “$SPX 1996-12-01 1998-10-17 (rate drop chart)”. StockCharts.com.
  18. ^ “$SPX 1998-09-17 2000-06-16 (rate rise chart)”. StockCharts.com.
  19. ^ “$SPX 2000-04-16 2002-01-01 (rate drop chart)”. StockCharts.com.
  20. ^ “$SPX 2002-01-01 2003-07-25 (rate drop chart)”. StockCharts.com.
  21. ^ “$SPX 2003-06-25 2006-06-29 (rate rise chart)”. StockCharts.com.
  22. ^ “$SPX 2006-06-29 2008-06-01 (rate drop chart)”. StockCharts.com.
  23. ^ “Press Release”. Board of Governors of The Federal Reserve System. December 16, 2008.
  24. ^ “Open Market Operations”. Board of Governors of The Federal Reserve System. December 16, 2015.
  25. ^ “Decisions Regarding Monetary Policy Implementation”. Board of Governors of The Federal Reserve System. Archived from the original on December 15, 2016.
  26. ^ Cox, Jeff (March 15, 2017). “Fed raises rates at March meeting”CNBC. Retrieved March 15, 2017.
  27. ^ “Federal Reserve issues FOMC statement”. Board of Governors of The Federal Reserve System. June 14, 2017.
  28. ^ “Federal Reserve issues FOMC statement”. Board of Governors of The Federal Reserve System. December 13, 2017.
  29. ^ “Federal Reserve issues FOMC statement”. Board of Governors of The Federal Reserve System. March 21, 2018.
  30. ^ “Federal Reserve issues FOMC statement”. Board of Governors of The Federal Reserve System. June 13, 2018.
  31. ^ “Federal Reserve issues FOMC statement”. Board of Governors of The Federal Reserve System. December 19, 2018.
  32. ^ Shaw, Richard (January 7, 2007). “The Bond Yield Curve as an Economic Crystal Ball”. Retrieved April 3, 2011.
  33. ^ Peter S. Goodman, Keith Bradsher and Neil Gough (March 16, 2017). “The Fed Acts. Workers in Mexico and Merchants in Malaysia Suffer”The New York Times. Retrieved March 18,2017Rising interest rates in the United States are driving money out of many developing countries, straining governments and pinching consumers around the globe.

External links

https://en.wikipedia.org/wiki/Federal_funds_rate

Missy Higgins

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Missy Higgins
A woman in her twenties with short blonde hair, wearing a black jacket and grey shirt with black stripes.

Missy Higgins, ARIA No. 1 Chart Awards, 10 August 2012
Background information
Birth name Melissa Morrison Higgins
Born 19 August 1983 (age 36)
Origin MelbourneVictoria
Genres Pop rockindieacoustic
Occupation(s) Singer-songwritermusician
Instruments Vocalspianosynthesiserguitarmelodicaxylophonecowbellukulele
Years active 2001–present
Labels Eleven
Reprise
Warner Bros.
Associated acts
Website missyhiggins.com.au

Melissa Morrison Higgins (born 19 August 1983) is an Australian singer-songwriter, musician and actress. Her Australian number-one albums are The Sound of White (2004), On a Clear Night (2007) and The Ol’ Razzle Dazzle (2012), and her singles include “Scar“, “The Special Two“, “Steer” and “Where I Stood“. Higgins was nominated for five ARIA Music Awards in 2004 and won ‘Best Pop Release’ for “Scar”. In 2005, she was nominated for seven more awards and won five. Higgins won her seventh ARIA in 2007. Her third album, The Ol’ Razzle Dazzle, was released in Australia in June 2012 (July 2012 in the US). As of August 2014, Higgins’ first three studio albums had sold over one million units.[1]

Higgins’ fourth studio album, OZ, was released in September 2014 and consists of cover versions of Australian composers, as well as a book of related essays.

Alongside her music career, Higgins pursues interests in animal rights and the environment, endeavouring to make her tours carbon neutral. In 2010 she made her acting debut in the feature film Bran Nue Dae and also performed on its soundtrack.

Biography

Early life

Higgins was born in Melbourne, Victoria, to Gregory Higgins, an English-Australian Tipstave, and Margaret (née Morrison), an Australian childcare centre operator.[2][3] Her sister, Nicola, is seven years older and her brother, David, six years older.[3] Higgins learned to play classical piano from age six, following in the footsteps of Christopher and David, but realised she wanted to be a singer at about 12, when she appeared in an Armadale Primary School production of Andrew Lloyd Webber‘s musical Joseph and the Amazing Technicolor Dreamcoat.[4] Bored with practice, she gave up playing piano at that time.[5] Hoping for more freedom, she urged her parents to send her to Geelong Grammar School, an independent boarding school that her siblings attended. At Geelong, Higgins took up the piano again, this time playing jazz and performing with her brother David’s group on weekends.[6]Introverted by nature, Higgins found that piano practice helped her cope with living at boarding school.[5]

At 15, while attending Geelong Grammar’s Timbertop, she wrote “All for Believing” for a school music assignment, completing it just hours before the deadline.[7] The assignment earned an A and she performed her song in front of classmates. She approached a Melbourne record company and was told that they wanted more than one song.[5] She wrote more songs and worked with the Kool Skools project, which enables students to record music.[8] In 2001, Missy’s sister Nicola entered “All for Believing” on her behalf in Unearthed, radio station Triple J‘s competition for unsigned artists. The song won the competition and was added to the station’s play list.[9]

Two record companies showed an interest in Higgins—Sony and Eleven.[5] She signed with Eleven, partly because they agreed that she would not be “made into a pop star”[10] and partly because they were happy for her to take time off for a backpacking holiday.[5]Higgins’ manager is Eleven’s John Watson, who also manages rock band Silverchair.[2] Watson later disclosed that “Missy’s the only time in my career I knew after 90 seconds I really wanted to sign her.”[11] The backpacking trip had been planned with a friend for years and the pair spent most of 2002 in Europe; while Higgins was travelling, “All for Believing” started to receive airplay on Los Angeles radio station KCRW.[12] Such radio exposure attracted the attention of American record labels and, by year’s end, an international recording deal with Warner Bros. had been negotiated.[13]

2003–2005: The Sound of White

Higgins is seated. She sings into a microphone and plays a keyboard instrument. The lettering RD-300SX and Roland are visible across its front.

Higgins, San Francisco, 11 August 2005
Courtesy Nabeel Hyatt

Higgins was the support act on a 2003 Australian tour by folk rock band The Waifs and rock band george.[13] She travelled to the US to work with John Porter, who produced her first EPThe Missy Higgins EP,[14] which was released in November and entered the Australian Recording Industry Association (ARIA) Singles Chart Top 50 in August 2004.[15]

She toured Australia, supporting Pete Murray and John Butler Trio.[16] Her four-track single “Scar'” was released in July 2004 and debuted at No. 1 on the ARIA Charts.[15][17] Her first album, The Sound of White, was released in September, and debuted at No. 1 on the ARIA Albums Chart.[15] Also produced by Porter, it sold over 500,000 copies.[18] She was nominated in five categories at the ARIA Music Awards of 2004 for “Scar”: Best Female Artist’, ‘Single of the Year’, ‘Best Pop Release’, ‘Breakthrough Artist – Single’ and ‘Best Video’ (directed by Squareyed Films).[19] At the awards ceremony on 17 October she received the award for Best Pop Release, beating Delta GoodremThe DissociativesKylie Minogue and Pete Murray.[19] This was followed by her first national headline tour.[20] Her second single “Ten Days” was co-written with Jay Clifford (guitarist in US band Jump, Little Children) and was inspired by Higgins’ 2002 break-up with her boyfriend before she travelled to Europe.[21] Released in November, it peaked at No. 12.[15]

On 29 January 2005 Higgins performed with other local musicians including Nick Cave and Powderfinger at the WaveAid fundraising concert in the Sydney Cricket Ground.[22] The concert raised A$2.3 million for four charities supporting the victims of the 2004 Indian Ocean earthquake.[23] In March Higgins performed at the MTV Australia Awards and won the prize for ‘Breakthrough Artist of the Year’.[24] The following month she released her third single, “The Special Two”, which was a radio hit and reached No. 2.[15] “The Special Two” was released on an EP which included her cover of the Skyhooks song, “You Just Like Me Cos I’m Good In Bed”, recorded for Triple J‘s 30th anniversary. The song had been the first track played on Triple J when it launched (as Double J) in 1975.[25] In May, Higgins won the ‘Song of the Year’ and ‘Breakthrough’ awards for “Scar” from the Australasian Performing Right Association (APRA).[26] She continued touring in mid-2005 and released her fourth single, “The Sound of White”, in August.[15] In September she played a sold out performance at the Vanguard in Sydney with the proceeds going to charity.[27] She was nominated for seven more ARIAs and in October won ‘Album of the Year’, ‘Best Pop Release’, ‘Breakthrough Artist – Album’ and ‘Highest Selling Album’ (all for The Sound of White) and ‘Best Female Artist’ (for “Scar”).[28] She teamed up with fellow ARIA award-winning singer Ben Lee in late 2005 for a national tour.[29]

2006–2009: On a Clear Night

Higgins stands and plays an acoustic guitar with her left hand high on the fret board. She sings into a microphone. Her right arm and bottom of guitar are not in view. Background has large stage lights.

Higgins, Live Earth concert, Sydney, 7 July 2007
Courtesy Itapp

During 2006, Higgins lived in Broome, Western Australia for six months, away from the entertainment industry. The relaxed lifestyle helped her focus on writing new material.[30] The landscape made a big impression, “It was the first place I’d ever felt honestly connected with my country, with the physical land of my country” and inspired her to write “Going North”.[31] She then toured the United States and South Africa, writing more material on the road.[32] In September she based herself in Los Angeles to record her second album, On a Clear Night, with producer Mitchell Froom.[33][34] “Steer” was released as an EP, followed a fortnight later by its album on 28 April 2007, both debuted at No. 1 on their respective charts.[15]

In February, Higgins had contributed a tribute song to the album, Cannot Buy My Soul, for noted indigenous singer, Kev Carmody, singing “Droving Woman” with musician Paul Kelly and group Augie March.[35] On 7 July, she participated in the Live Earth concert in Sydney, performing her own set before joining Carmody, Kelly and vocalist John Butler on stage for the song “From Little Things Big Things Grow“.[36] Emily Dunn in The Sydney Morning Herald wrote “[the song] could have been the event’s anthem”.[37] Rolling Stone‘s Dan Lander pointed out a highlight, when the “whole crowd sung along – all eleven verses.”[38]

Higgins returned to Los Angeles to focus on the US market—she spent September and October touring—where she was still relatively unknown.[39] On 26 October, backed by the Sydney Youth Orchestra, she headlined the annual Legs 11 concert, a breast cancer benefit held in The DomainRoyal Botanic Gardens, Sydney.[40] Two days later Higgins performed at the 2007 ARIAs where she was nominated for ‘Best Pop Release’, ‘Highest Selling Album’ and ‘Highest Selling Single’ (for “Steer”) and won ‘Best Female Artist’ (for On a Clear Night)—her seventh ARIA Music Award.[41] On 31 October, she was a guest at television music channel MAX‘s inaugural Concert for the Cure, a private concert for people affected by breast cancer. She sang headline act Powderfinger’s “Sunsets” with front man Bernard Fanning and joined in with the encore of “These Days“.[42][43] She spent November and December on her For One Night Only Tour, taking in Cairns, Sydney and Perth. You Am I lead singer, Tim Rogers, joined her on some shows.[44]

On a Clear Night, was released in the US on 26 February 2008, supported by a tour in March. Her ten-month stay in Los Angeles during 2008 promoted her songs for films and television shows.[33][45] Her first US single “Where I Stood” was featured in US series including Grey’s AnatomyOne Tree Hill and So You Think You Can Dance.[46] During 2008, Higgins supported the Indigo Girls and then Ben Folds on their respective US tours.[47] February and March 2009 saw her co-headlining a US tour with Canadian Justin Nozuka.[48] On 31 March she released an EP, More Than This in Australia that features cover versions of “More Than This” by Roxy Music, “(I’m) In Love Again” by Peggy Lee, “Breakdown” by Tom Petty and “Moses” by Patty Griffin.[49] “Moses” had been included on Triple J’s 2005 compilation album Like a Version: Volume One and “More Than This” was recorded as part of Covered, A Revolution in Sound, a Warner Bros. tribute album also released in March 2009.[50]

2010–2013: The Ol’ Razzle Dazzle

Higgins performing live in December 2012

Higgins started writing music for her third album in 2009.[51] After about seven years of touring and recording she took a break from the music industry to pursue other interests.[52] In 2010 she enrolled in a course in indigenous studies at the University of Melbourne.[53] Her acting debut was as Annie in 2010 film Bran Nue Dae directed by Rachel Perkins. The film is an adaptation of the 1990 musical, Bran Nue Dae, “Australia’s first Aboriginalmusical”.[54] Although Higgins would consider future acting projects she has no plans to actively pursue it as a career.[51][55]

In July and August 2010, Higgins played several dates of Sarah McLachlan‘s Lilith Fair tour in the US.[56][57] At Lilith Fair, she met Australian musician Butterfly Boucher and they decided to work together. In 2011, Higgins travelled to where Boucher was living in Nashville to record her third album, which is co-produced by Boucher and Brad Jones.[58] Titled The Ol’ Razzle Dazzle, the album was released on 1 June 2012.[59] Its first single, “Unashamed Desire“, co-written with Boucher, was released on 23 April.[60] In November 2011, at the ARIA Music Awards, Higgins performed a duet of “Warwu”with Geoffrey Gurrumul Yunupingu, from his Rrakala album.[61]

“The Ol’ Razzle Dazzle” album debuted at #1 on the ARIA Albums Chart the week of 12 June 2012. It was Higgins’ 3rd straight number one album. As of January 2019, Higgins ties Olivia Newton-John for the 3rd highest tally of Australian Number One albums by an Australian female artist. Only Delta Goodrem (with four Number 1 ARIA albums) and Kylie Minogue and Kasey Chambers (with five each) have achieved more.

2014: Oz

In September 2014, Higgins released her fourth studio album, Oz, which features cover versions of Australian composers, including The Angels, Slim Dusty, Something For Kate, Warumpi Band, Paul Kelly and The Drones. The album is also accompanied by a book of related essays, in which Higgins uses each of the recordings to reflect upon subjects such as music and love.[62] Higgins collaborated with Dan Sultan for the recording of the Slim Dusty song “The Biggest Disappointment”.[63]

Higgins explained in an October 2014 interview that she experienced a significant bout of writer’s block following the completion of her second album and someone suggested an album of cover versions at the time, but she only revisited the idea during the conception of Oz. Higgins further explained:

I responded to all these songs on an emotional level, when I first heard them. I wanted songs I felt I could tell with my own voice, and interpret them authentically … But it was important to maintain the emotional integrity and the heart of the song. It was a high priority to keep true to the songs.[63]

The album was co-produced by Jherek Bischoff, who previously worked with David Byrne, formerly of Talking Heads, and Amanda Palmer.[1]

Oz debuted at number 3 on the ARIA Albums chart[64] and remained in the top five positions until 18 October 2014.[65]

The national Australian tour in support of Oz commenced on 20 September 2014 in Cairns, Queensland, and ended in Melbourne in October 2014. Higgins was accompanied by Bischoff, and Australian artist Dustin Tebbutt appeared as a special guest.[1]

2015–present: Solastalgia and The Special Ones

Higgins, performing live in Taronga Zoo, February 2016.

On 19 February 2016, Higgins released a new single titled, “Oh Canada“,[66] in her response to the Death of Alan Kurdi.

In May 2017, Higgins released “Torchlight“, for the Australian drama film, Don’t Tell.[67]

In October 2017, Higgins appeared in a revival of the 1996 musical Miracle City by Nick Enright and Max Lambert at the Sydney Opera House, playing the role of Bonnie Mae.[68]

In February 2018, Higgins released the single “Futon Couch“, the first single from her fifth studio album, called Solastalgia, released in May 2018.[69]

In February 2018, it was announced that Missy Higgins would support Ed Sheeran‘s tour around Australia.[70]

In November 2018, Higgins released her first greatest hits album titled The Special Ones.[71]

Musical influences and technique

Higgins grew up in the 1980s and 1990s listening to artists that her older siblings liked—Nicola played Mariah Carey and Whitney Houston, while David favoured Queen and Kiss.[72][73] Departing for boarding school at age 13, she was exposed to alternative artists like Nirvana and Hole and started teaching herself guitar and writing her own music.[73] She also began singing with David’s jazz group on weekends. As an adult she prefers Nina Simone and Ray Charles to “poppy dance music”.[73] She has cited Patty GriffinRon SexsmithRufus WainwrightPaul Kelly and Sarah McLachlan as influences.[5][51][74] Material from her third album is influenced by ambient music from LowJon Hopkins, Icelandic band Sigur Rós and Estonian classical composer Arvo Pärt.[51]

Higgins’ song writing grew out of a desire to express her emotions when she was at school and her lyrics describe her feelings about her own life and relationships.[75][76] The piano was the first instrument she learned to play, and she continues to use it as well as digital pianos including a Roland RD-300SX, RD-700 and KR-15.[77][78] She also uses guitars extensively in her music particularly when touring, due to their portable nature and favours the Australian brand, Maton.[78] On occasion she plays keytarxylophone and melodicaduring performances.[31][79]

On 7 September 2012, Higgins recorded a cover version of Gotye‘s “Heart’s A Mess” for the “Like a Version” segment on Australian radio station Triple J, explaining on-air that the song is her favourite Gotye composition. Higgins had travelled with Gotye previously and referred to him as “an incredible singer” in the interview prior to the rendition.[80]

Causes

As a vegetarian, Higgins promoted the health benefits of not eating meat in a 2005 advertising campaign by People for the Ethical Treatment of Animals (PETA);[81] and has supported their anti-fur stance.[45] She is interested in environmental issues and is involved with the Sierra Club, a grassroots organisation based in California.[45] She has protested against the proposed industrialisation of the Kimberley region of Western Australia and donated the royalties from her 2009 EP More Than This.[49] Since early 2007, Higgins has tried to make her tours carbon neutral, she purchases green energy to power venues, uses hybrid cars where possible and purchases carbon offsets.[82]

On 5 October 2012, Higgins performed at two “Save the Kimberley” events held at Federation Square in Melbourne and The Esplanade in Fremantle, Western Australia.[83][84] A march to protest against the proposed gas refinery construction at James Price Point accompanied the free concert and campaign supporters were photographed with banners and placards.[85]

As of 2012, Higgins is one of numerous publicly known advocates for the ‘Oscar’s Law’ campaign. The campaign, launched in 2010, protests against the existence of “puppy factories” in Australia, whereby animals are factory farmed. One of the campaign’s slogans is “Break the Puppy Trade—Don’t buy puppies from pet shops” and the list of notable advocates includes Paul Dempsey (musician), Kate Ceberano (singer) and Mick Molloy (comedian).[86]

In response to the proposed dumping of around 3 million cubic metres (110 million cubic feet) of dredged seabed onto the Great Barrier Reef,[87] a legal fighting team was formed by World Wide Fund for Nature (WWF)-Australia and the Australian Marine Conservation Society (AMCS) in late 2013/early 2014.[88] The legal team received further support in April 2014, following the release of the “Sounds For The Reef” musical fundraising project. Produced by Straightup, the digital album features Higgins, in addition to artists such as The HerdSiettaJohn ButlerThe Cat EmpireFat Freddys Drop, The Bamboos (featuring Kylie Auldist) and Resin Dogs. Released on 7 April, the album’s 21 songs were sold on the Bandcamp website.[89][90]

Personal life

Higgins has been a patron of multiple mental health charities since 2003. She described her younger self as “a bit of a depressed child” and “introverted”, and that she had “experienced various degrees of depression”.[14][91] Prescribed antidepressant medication while in high school, she learned to channel low moods into songwriting, calling music her “emotional outlet”.[3][72] In a 2006 interview she said that her songs were “coming from more of a happier place”.[92] While recording her second album she discovered a passion for rock climbing, as a “meditative pursuit”[93] and that, “It’s the first and last thing I’ve had — other than music — that I’m passionate about.”[72]

From 2004 to 2007, Higgins’ sexual orientation was the subject of media speculation based partly on interpretations of her lyrics and her interviews. In an October 2007 interview with Australian lesbian magazine Cherrie, she was asked if she fell under the moniker of “not-so-straight” girls. She replied “Um, yeah, definitely. … I think sexuality is a fluid thing and it’s becoming increasingly more acceptable to admit that you’re that way.”[94] In November her Myspace page reported, “I’ve been in relationships with both men and women so I guess I fall most easily under the category ‘Bisexual'”.[95][96]

In 2013, Higgins began a relationship with Broome playwright and comedian Dan Lee.[97][98] Higgins gave birth to her son named Samuel Arrow Lee, on 5 January 2015.[99] They got married in March 2016,[100][101] and she gave birth to daughter named Luna, on 13 August 2018.

Discography

Filmography

Awards and nominations

Higgins at the ARIA Awardsceremony, December 2013, Star Event Centre, Sydney

APRA Awards

The APRA Awards are presented annually from 1982 by the Australasian Performing Right Association (APRA).[102] Higgins has won two awards from six nominations.[103][104]

 
Year Nominee / work Award Result
2005 Scar” (Missy Higgins, Kevin Griffin) – Missy Higgins Song of the Year[103] Won
Ten Days” (Missy Higgins, Jay Clifford) – Missy Higgins Song of the Year[105] Nominated
Missy Higgins Breakthrough Award[104] Won
2006 The Special Two” (Missy Higgins) – Missy Higgins Song of the Year[106] Nominated
Most Performed Australian Work[106] Nominated
“Ten Days” (Missy Higgins, Jay Clifford) Most Performed Australian Work[106] Nominated

ARIA Awards

The ARIA Music Awards are presented annually from 1987 by the Australian Recording Industry Association (ARIA). Higgins has won nine awards from twenty-four nominations.[107][108]

 
Year Nominee / work Award Result
2004 Scar Single of the Year Nominated
Best Female Artist Nominated
Breakthrough Artist – Single Nominated
Best Pop Release Won
“Scar” – Squareyed Films Best Video Nominated
2005 The Sound of White Album of the Year Won
Best Female Artist Won
Highest Selling Album Won
Breakthrough Artist – Album Won
Best Pop Release Won
The Sound of White – Cathie Glassby Best Cover Art Nominated
The Special Two Single of the Year Nominated
Highest Selling Single Nominated
2006 If You Tell Me Yours, I’ll Tell You Mine Best Music DVD Nominated
2007 On a Clear Night Best Female Artist Won
Best Pop Release Nominated
Highest Selling Album Nominated
Steer Highest Selling Single Nominated
2008 Peachy Best Female Artist Nominated
2012 The Ol’ Razzle Dazzle Best Female Artist Nominated
Album of the Year Nominated
Best Adult Contemporary Artist Won
Everyone’s Waiting” – Natasha Pincus Best Video Won
2013 “Set Me on Fire” Best Female Artist Nominated
2018 Solastalgia Best Adult Contemporary Album Nominated

Other awards

She has won an MTV Australia Video Music Award.[24]

References …

https://en.wikipedia.org/wiki/Missy_Higgins

 

 

Story 4: President Trump Energy Speech at Shell Pennsylvania Petrochemicals Complex in Monaca, Pennsylvania 

FULL SPEECH: President Trump speech on energy in Pennsylvania

Trump was supposed to give a speech on energy. He went way off script.

Updated 

President Donald Trump on Tuesday headed to a Shell petrochemicals plant being built outside Pittsburgh to give what was billed by the White House as a speech on “America’s Energy Dominance and Manufacturing Revival.”

But the hourlong address was light on energy policy and heavy on stump speech material and off-script riffs, as Trump touched on everything from his love of trucks to his assessment of his potential 2020 rivals. The meandering speech came on a day when the president had already attacked a CNN anchor, endorsed a controversial World Series hero’s potential congressional bid and defended his parroting of a conspiracy theory concerning the apparent suicide of his onetime friend Jeffrey Epstein.

Here are some of Trump’s most off-key comments:

On the supposed benefits of natural gas over renewable energy: “When the wind stops blowing, it doesn’t make any difference does it? Unlike those big windmills that destroy everybody’s property values, kill all the birds. One day the environmentalists are going to tell us what’s going on with that. And then all of a sudden it stops. The wind and the televisions go off. And your wives and husbands say: ‘Darling, I want to watch Donald Trump on television tonight. But the wind stopped blowing and I can’t watch. There’s no electricity in the house, darling.’”

On his construction chops: “I was a good builder. I built good. I love building; in fact, I’m going to take a tour of the site.”

On doing some campaigning: “I’m going to speak to some of your union leaders to say, ‘I hope you’re going to support Trump, OK?’ And if they don’t, vote ‘em the hell out of office because they’re not doing their job — it’s true.”

On his love of trucks: “I love cranes, I love trucks of all types. Even when I was a little boy at 4 years old, my mother would say, ‘You love trucks.’ I do, I always loved trucks, I still do. Nothing changes — sometimes you know you might become president, but nothing changes — I still love trucks. Especially when I look at the largest crane in the world, that’s very cool. You think I’ll get to operate it? We’ll put the media on it and I’ll give them a little ride, right?”

On pundits suggesting he might not leave office willingly: “Can you imagine if I got a fair press? I mean, we’re leading without it; can you imagine if these people treated me fairly? The election would be over. Have they ever called off an election before? Just said, ‘Look just let’s go, go on four more years.’ You want to really drive them crazy? Go to #ThirdTerm, #FourthTerm — you’ll drive them totally crazy.”

On what Trump perceives as a trade imbalance with Japan: “They send us thousands and thousands — millions of cars, we send them wheat. Wheat. That’s not a good deal. And they don’t even want our wheat. They do it because they want us to at least feel that we’re OK, you know, they do it to make us feel good.” This assertion is false.

On the price tag of the presidency: “This thing is costing me a fortune, being president. Somebody said, ‘Oh, he might have rented a room to a man from Saudi Arabia for $500.’ What about the $5 billion that I’ll lose — you know, it’s probably going to cost me, including, upside, downside, lawyers, because every day they sue me for something. These are the most litigious people. It’s probably costing me from $3 to $5 billion for the pleasure of being — and I couldn’t care less, I don’t care. You know if you’re wealthy, it doesn’t matter. I just want to do a great job.”

On his pledge to salvage manufacturing jobs: “You guys, I don’t know what the hell you’re going to do. You don’t want to make widgets, right? You don’t want to make — do you want to learn how to make a computer? A little tiny piece of stuff. … You put it with those big, beautiful hands of yours like … you’re going to take these big hands, going to take this little tiny part. You’re going to go home, ‘Alice this is a tough job.’ Nah, you want to make steel, and you want to dig coal — that’s what you want to do!”

On the number of members of the media at the event, at about 2:45 p.m.: “That’s a lot people back there for, like, an 11 o’clock speech. That’s a lot of people.”

On the Oscars: “Like the Academy Awards during the day, it used to be — you know the Academy Awards is on hard times now, you know that right? Nobody wants to watch it. You know why? Because they started taking us on, everyone got tired of it. It’s amazing. That used to be second after the Super Bowl, and then all of a sudden now it’s just another show because people got tired of people getting up and making fools of themselves and disrespecting the people in this room and the people that won the election in 2016.”

On attacking Sen. Elizabeth Warren and former Vice President Joe Biden, potential 2020 rivals: “I did it very early with Pocahontas, I should have probably waited. She’s staging a comeback on Sleepy Joe. I don’t know who’s going to win, but we’ll have to hit Pocahontas very hard again if she does win. But she’s staging a little bit of a comeback. What a group — Pocahontas and Sleepy Joe.”

On Mexico deploying soldiers to stem the flow of Central American migrants: “I want to thank Mexico, it’s incredible. We have close to 27,000, you think of that. We never had three — I think we had about 2½ soldiers, one was sitting down all the time. We had nobody.”

https://www.politico.com/story/2019/08/13/donald-trump-energy-speech-pittsburgh-1461337

 

Shell Pennsylvania Petrochemicals Complex
Monaca, Pennsylvania

2:06 P.M. EDT

AUDIENCE:  USA!  USA!  USA!

THE PRESIDENT: Well, thank you very much.  And thank you, Gretchen.  It’s great to be back in the incredible Commonwealth of Pennsylvania.  Great place.  And this is my 13th visit to Pennsylvania during my administration, which is more than any other President to this point in the term.

And I really love Pennsylvania.  I went to school in Pennsylvania — Philadelphia.  So, we love this state.  And I love the unions and I love the workers.  And, you know, when I built buildings in New York — (applause) — I built them exclusively with unions.  People don’t understand that.  I was exclusive.

And, in the last really great election, our election of 2016, you know, we did great with the union workers.  Great.  But we didn’t do good with the leadership.  The leadership said, “Well, we’ve always gone Democrat.  Let’s keep going that way.”  That didn’t work out too well for some of them, I want to tell you.  (Applause.)  I’ll tell you.  And as Gretchen said, this would have never happened without me and us.  This would have never happened.  So, I’m with you.  I’m with you.  Remember that.
And remember that Pennsylvania — you know, Pennsylvania has the best numbers they’ve ever had in the history of the state.  And that’s for a very good reason.  And you know what that reason is.

(Audience member waves.)  Hello.  Here I am.  (Applause.)

And I’m truly honored to be here with the amazing energy workers and construction workers.  These are talented people.  The craft workers who make America run and who make America proud.  We’re proud again.  We’re proud again.  (Applause.)

And no one in the world does it better than you.  Nobody.  Nobody does it better.  There’s nobody in the world that does it.  And we’re unleashing that power again like we’ve never seen before, I will say.

And we are doing well and we’re fighting against a lot of countries that have taken advantage of us for many, many years.  But they’re not doing it so much anymore.  And in a little period of time, they won’t be doing it at all anymore.  They have taken advantage of this country.  (Applause.)

Today, we celebrate the revolution in American energy that’s helping make our economy the envy of the world.  This Shell petrochemical plant in Beaver County, Pennsylvania — I did very well here.  We did very well.  How many points did we win by?  Does anybody know?  I’ll tell you.  Isn’t it, I think, 28 points?  That’s a lot.  That’s against a Democrat — (laughter) — or whatever.

It’s one of the single-biggest construction projects in the nation.  And it made it possible and was possible by clean, affordable, all-American natural gas.  Powerful, clean, natural gas.  (Applause.)

And when the wind stops blowing, it doesn’t make any difference, does it?  Unlike those big windmills that destroy everybody’s property values, kill all the birds.  Someday, the environmentalists are going to tell us what’s going on with that.  And then, all of a sudden, it stops; the wind and the televisions go off.  And your wives and husbands say, “Darling, I want to watch Donald Trump on television tonight.”  (Laughter.)  “But the wind stopped blowing and I can’t watch.  There’s no electricity in the house, darling.”  No, we love natural gas and we love a lot of other things, too.

Each of you is taking part in the largest investment in Pennsylvania history.  It’s the largest investment in the history of Pennsylvania, in the history of our country — the money that’s being invested in your state right now.

With your help, we’re not only unleashing American energy, we’re restoring the glory of American manufacturing, and we are reclaiming our noble heritage as a nation of builders again.  (Applause.)  A nation of builders.

I was a good builder.  I built good.  I love building.  In fact, I’m going to take a tour of the site.  They said, “Sir, we were going to do it before the speech, but we’re waiting for it to stop raining.”  I said, “Don’t worry about the rain.  Do we have umbrellas?  Don’t worry about the rain.  Umbrellas work very well, especially when they’re made in America.”  (Laughs.)  (Applause.)  So, I don’t care.  But we’re going to take a tour afterwards.

I’m going to speak to some of your union leaders to say, “I hope you’re going to support Trump.”  Okay?  (Applause.)  And if they don’t, vote them the hell out of office because they’re not doing their job.  It’s true.  It’s true.  (Applause.)  Vote them out of office.

When completed, this facility will transform abundant natural gas — and we have a lot of it — fracked from Pennsylvania wells, which they never would have allowed you to take if I weren’t President.  If my opponent won, this would be a lot of nice, new structures outside.  I guess you would have stopped long ago.  You would have stopped construction before it started too much.

But I was talking to Gretchen.  They would have never gotten the approvals to do what’s needed to fuel these plants.  That wouldn’t have been good.  So, probably, they wouldn’t have started.  But if they would have started, it would have stopped.

But they put it into plastic through a process known as “cracking.”  That raw material will then be shipped all over the country and all over the world to be fashioned into more products stamped with that very beautiful phrase: “Made in the USA.”  Right?  “Made in the USA.”  (Applause.)  Beautiful.

AUDIENCE:  USA!  USA!  USA!

THE PRESIDENT:  That is a beautiful phrase.

Getting this massive job done right has required more than 1,500 pieces of heavy equipment; one of the largest cranes anywhere in the world — I look forward to seeing it.  I love cranes.  I loves trucks of all types.  Even when I was a little boy at four years old, my mother would say, “You love trucks.”  I do.  I always loved trucks.  I still do.  Nothing changes.  Sometimes, you know, you might become President but nothing changes.  I still love trucks, especially when I look at the largest crane in the world.  That’s very cool.  Do you think I’ll get to operate it?  I don’t know.  (Applause.)  We’ll put the media on it, and I’ll give them a little ride, right?   (Applause.)

And you have thousands of tons of concrete, aluminum and steel, and nearly 6,000 of the strongest, toughest, and most talented workers anywhere on Earth.  (Applause.)  True.  I know.  It was the Trump administration that made it possible.  No one else.  Without us, you would never have been able to do this.

I want to thank all of our great union members: the boilermakers, carpenters — (applause) — cement finishers — (applause) — electricians — (applause) — iron workers — (applause) — laborers — (applause) — millwrights — (applause) — operators — (applause) — plumbers — (applause) — painters — (applause) — steamfitters; I know them well.

And a group that I’ve used more than anybody that’s ever run for office times 1,000, because in New York City they would drive those cement trucks up to my building and those trucks were always on time, and sometimes they were lined up for six blocks when I was doing different things.  Even when I was doing the Wollman Rink, the city couldn’t build it.  Took them nine years.  They had no idea what they were doing.

And I had that whole big — about 70,000 feet — it’s like a massive office floor — bigger than an office floor.  We did it all in one day, and the trunks were lined up from Central Park all the way back into Harlem.  And they did it all in one day — that pour.  It was called a contiguous pour.  The city used to build little pieces.  A little piece here.  A little piece there.  A little piece here.  A little there.  (Laughter.)  A few years later: a little piece here.  Then they had pipes underneath and the pipes were made out of copper.

And during the evening, things would happen, like the copper would be stolen because it was very valuable.  (Laughter.)  So they’d have a little piece with copper, and then the rest of the pipe they’d lay.  And they’d get ready to pour, and they’d leave, and everybody would steal the copper.  So they — this took place for — I guess, from seven to nine years.  Nobody actually knows.  Nobody wants to talk about it.  (Laughter.)  But those trucks were operated incredibly well, and I never missed a delivery.  And it’s called the “Teamsters.”  (Applause.)

I also want to thank I also want to thank Bechtel, a real incredible company.  We talk about the great builders of the world: President Jack Futcher.  Where is he?  Where is he?  Jack.  Where is Jack?  (Applause.)  Jack.  What a great job you’ve done, Jack.  Some big ones.  Think of it this way, Jack.  If we don’t win, you won’t be doing anything in this country.  (Laughter.)  And, you know, the world follows us.  You see that.  The world follows us.  And it won’t be so good.  But you and I are friends, and you’re going to have a lot of work to do, I think, Jack.  A lot of work.  Thank you, Jack.  Great job.  (Applause.)  Jack has done an incredible job.  That’s an incredible company.  Incredible — they’re incredible builders.

And the Secretary-Treasurer of North America’s Building Trades Unions, Brent Booker.  Where’s Brent?  Brent.  Thank you.  Great job.  (Applause.)  Young guy.  You’re so young, Brent.  How the hell did you get that job?  (Laughter.)  Man.

We’re honored to be joined by two leaders who truly have the backs of American workers.  They’ve become friends of mine.  They do such an incredible job.  They break up the roadblocks.  We have a lot of roadblocks in this country, where you have — a little clause can stop a project.  A little clause can stop it for years.  And we break up those little clauses.  We break them up fast.  Energy Secretary Rick Perry.  Where’s Rick?  Rick?  (Applause.)  Thank you, Rick.  What a great guy.

I had to compete with him.  You know, he wanted to be President.  He was tough.  He was nasty.  Man.  (Laughter.)  He was nasty.  But then he said, “I want to do something great.”  And you have been incredible.  He ran Texas for like 14 years — (applause) — and he did it well.  And now he’s running a little thing called “Energy.”  And nobody has ever done it better.  Thank you, Rick, very much.  Great job.

And a man who has been incredible in every way.  You know, EPA — Environmental Protection Agency.  You’ve heard a lot of horror stories where nothing can get done, nothing gets passed.  It takes years and years and years to get a simple permit.  It can take 20, 21 years to get a road, before they reject it.  How about this?  They go 20 years — 21 years, in certain cases — for a highway or a road.  Not even a highway.  At the end of the 21st year, they vote to reject it.  How would you like to be — you’re a young person, you’re starting out, and you’re all excited about this project.  And it starts off as being a simple, straight road, and then it ends up being a total catastrophe because of nesting and lots of other things that we can take care of.  And it’s 20 years later, and then they reject it.  You’ve devote half of your working life to a rejection.  It happened to many people.

And we have a man that knows how to break it up but he’s also a great lover of the environment: EPA Administrator Andrew Wheeler.  He’s done an incredible job.  Andrew?  (Applause.)  Great job, Andrew.  Great.  Really great job.

And I also want to recognize some of my great friends that have helped me so much: Congressman John Joyce.  John?  (Applause.)  John.  Where is John?  John.  John, usually you’re in the front row.  I can’t believe this.  I guess you got shut out by the unions.  Look.  (Laughter.)  Thank you, John.  Fantastic job.  John Joyce.  Been a great friend — a great friend of all of us.

Speaker of the Pennsylvania House of Representatives Michael Turzai.  (Applause.)  Michael Turzai.  Thank you.  Michael, great job.  Thank you.  Good to see you, Michael.  Michael Turzai.  Great name in this state, I’ll tell you, for a long time.  How long has it been, Michael?  You’ve been there a long time.  How long?

SPEAKER TURZAI:  (Inaudible.)

THE PRESIDENT:  Okay.  Good luck.  (Laughter.)  It’s not that long.  Thank you, Mike.

And one of my good friends from Beaver County, David Urban.  David.  (Applause.)  David.  Where’s David?  David?  Thank you, David.  Great football player.  Great athlete.  And he was a Trump supporter.  He liked Trump.  And when he liked Trump, nobody was going to get in his way.  Right, David?

AUDIENCE MEMBER:  We love Trump!

THE PRESIDENT:  (Laughs.)  Thank you.  Thank you.
How are we doing in the state, David?  We looking good?

AUDIENCE MEMBER:  Four more years!

THE PRESIDENT:  Thank you.  I appreciate it.  (Applause.)  Thank you.

I think we’re looking very good.  I think we’re looking good all over: in Ohio, in North Carolina, in South Carolina, Florida.  We just got numbers in Florida.  We’re looking fantastically good.

Now, you know, sometimes — and they do.  They do.  They say, “Donald Trump…”  Can you imagine if I got a fair press?  I mean, we’re leading without it.  Can you imagine if these people treated me fairly?  (Applause.)  The election would be over.  Have they ever called off an election before?  Just said, “Look, just — let’s go.  Go on.  Four more years.”

Yeah.  And then, you want to really drive them crazy?  Go to “#thirdterm”; “#fourthterm.”  You’ll drive them totally crazy.  (Laughter.)  I mean, you have one guy on television: “I’m telling you, he’s not leaving.  He’s going to win and then he’s not leaving.  So, in 2024, he won’t leave.  I’m telling you…”  This is a serious person.  These people have gone stone-cold crazy.  (Laughter.)

And we’re grateful especially to the Chairman of Royal Dutch Shell.  That’s big stuff, folks.  You know, I’m a business guy.  When I hear “Royal Dutch Shell” — you know, until I became President, that was like a big deal, but now I don’t view it the same.  (Laughter.)  Once you’re President, nothing seems big.  Right?  Chad Holliday.  Where’s Chad?  (Applause.)  Chad understands it.  That’s a big deal, Chad.  But thank you for coming.  That’s a big deal.  You don’t get any bigger.  That’s an incredible company.

Shell’s U.S. President — you just met her and you know her; everybody knows her, and she’s got a lot of other things in store.  And she’s thanked me for what we’ve done here.  But I said, “Forget this.  We got a lot of jobs.  Let’s do a couple of more fast.  Do them fast.  We’ll get you fast approvals.”  And you may get rejected, you know, if it’s not going to be environmentally good, environmentally sound; if something is going to be wrong.  But we’re not going to take 20 years to reject you, like they did with the pipelines.  It didn’t matter; I approved them.  But that’s okay.

So we have pipelines — (applause) — oh — (applause) — we got plenty of pipeline folks here, don’t we?  Huh?  (Applause.)  I’ll tell you.  Hey, you know, that’s a bigger hand than we got from the Teamsters.  Do you believe that?  No, but, you know, they did that with the pipelines, right?  Keystone XL.  They did it with the pipelines.  Dakota Access Pipeline.  We’re building pipelines.  And if we get the pipelines approved, then you better work.  The EPA is working right now to get them approved in Texas.  And if we can do — we can increase our — we can increase.  We’re now the largest in the world in energy, by far.  But if we get those approved, Andrew — I hope Andrew is listening — EPA.  Andrew, you know what I’m saying, right?  If we get them approved in Texas fast — they said it will take 18 years.  I said, “Could you do it in about a month?”  (Applause.)  Right?

If we get, though — oh, look at those pipeline guys.  They’re so happy.  That’s a lot of jobs.  But, Andrew, if we get them approved fast, we can increase our entire output.  Texas is so big.  And it’s bigger — it turned out to be much bigger.

I also got you ANWR, in Alaska, which may be bigger than everything.  And they couldn’t get it.  Ronald Reagan couldn’t get it.  No President could get it.  And I got it approved, and we’re all set.  And so — (applause) — so we’re all set.

So, Andrew, in Texas, if you can get those pipelines going, you will be so happy.  We’ll have dinner with your family.  I’ll tell them how great you were.  (Laughter.)  Okay?  EPA.  Thank you, Andrew.

So I want to thank, though, Gretchen.  She’s been fantastic.  I also want to thank Vice President of Pennsylvania Chemicals Hilary Mercer.  I want to thank you very much for investing in the people of Pennsylvania.  (Applause.)  Hilary?  Where’s Hilary?  Thank you, Hilary.  (Applause.)  You’re investing in the people of Pennsylvania, so that’s a guarantee, as far as I’m concerned.

For generations, American greatness was forged, and fueled, and won by the extraordinary workers of this region.  This region is an incredible region.

Pennsylvania Steel raised the skyscrapers that built our cities.  And, by the way, steel — steel was dead.  Your business was dead.  Okay?  I don’t want to be overly crude.  Your business was dead.  And I put a little thing called “a 25 percent tariff” on all of the dumped steel all over the country.  And now your business is thriving.  Probably there’s few businesses that have gone proportionately up like steel and aluminum.
We did it with aluminum, too.  But they are doing well — 25 percent and 10 percent on aluminum.

And they still dump, but now the United States takes in billions of dollars and the dumping is much less, and the steel companies are thriving again.

We have to have a steel industry.  We can’t — (applause) — I mean, we need steel for defense.  We need steel — what are we going to do?  We have a little bit of a problem.  We have a little bit of a conflict.  We’ll say, “Listen, China, could you do us a favor?  We need help.  All our steel mills are closed.  Oh, damn it.  Could you send us some steel, please?  We don’t make steel anymore.”

Well, we make it now.  And I’ll tell you what: Those steel mills — U.S. Steel and all of them, all of them — they’re expanding all over the place.  New mills.  New expansions.  We hadn’t have — we didn’t have a new mill built in 30 years, and now we have many of them going up.

Many car plants — they’re coming in from Japan.  I told Prime Minister Abe — great guy.  I said, “Listen, we have a massive deficit with Japan.”  They send thousands and thousands — millions — of cars.  We send them wheat.  Wheat.  (Laughter.)  That’s not a good deal.  And they don’t even want our wheat.  They do it because they want us to at least feel that we’re okay.  You know, they do it to make us feel good.

But the deficit is massive, which — changing rapidly.  But what they’re doing is they’re buying a lot of our stuff, including our military equipment.  They’re building car plants now in the United States — in Michigan, in Pennsylvania.  Many, many of the Japanese car companies are coming over and building car plants in the United States.  It doesn’t fully do the trick, but it helps.  And those deficits will start coming down very substantially.

But we’re losing $78 billion.  For many years, we’re losing billions and billions with these countries.  And, frankly, the countries that we do the worst with are the allies — our allies.  Does that make sense to you?  Our allies take advantage of us far greater than our enemies.  And someday, I’m going to explain that to a lot of people.

Pennsylvania miners.  Do we love our miners?  (Applause.)  They lit up our towns and powered our industries.  And Pennsylvania factory workers made the American brand into the universal symbol of excellence all around the world — all over.

But, in recent decades, the loyalty of Pennsylvania workers was repaid only with betrayal.  They betrayed you.  They let your companies move to Mexico, to Canada, to China, to many other places.  We ended up with no income and massive unemployment.  Well, right now, our employment has reached the lowest level that it’s seen since the 1960s, and we’ll soon be breaking that record, I predict.  (Applause.)

And you’ve heard me say it, but now it’s even better.  Numbers just came out.  African American unemployment — lowest in history.  (Applause.)  Asian American, Hispanic American — lowest in the history of our country.  Women — lowest in 70 years.  (Applause.)  Sorry, women.  I let you down again.  Think of it: Lowest in 70 years, and I have to apologize to women.  But soon we’re going to have that — that will be a record very soon.  We’re very close to saying “lowest in history” for women — unemployment.

Today, we have more workers working in the United States than — almost 160 million — than at any time in the history of our country.  Think of that.  That’s a hell of a stat.  (Applause.)

The political class in Washington gutted your factories with horrendous trade deals — horrible.  NAFTA — one of the worst trade deals ever.  By the way, World Trade Organization, it made China.  China made themselves.  They did a good job.  But they ripped off our country for years, and with our money and World Trade Organization backing.  And then they took advantage of the rules of the World Trade Organization.  And I’m being nice when I say “took advantage.”  Much more than “took advantage.”  They went up like a rocket ship.  They were flat-lined for 100 years.  And then, one day, World Trade Organization — a terrible move.

And, you know, we were losing all our cases until I came along.  We were losing all our cases in the World Trade Organization.  Almost every case, we were — lost, lost, lost.  They thought we were stupid.  They were the ones ruling.

And then I came along.  Now we’re winning a lot of cases because they know that they’re not on very solid ground.  We will leave, if we have to.  And all of the sudden, we’re winning a lot of cases.  We’re winning most of our cases.  And it’s only because of attitude, because we know that they have been screwing us for years.  And it’s not going to happen any longer.  They get it.  They get it.  So they’re giving us victories.  They’re giving us victories.  (Applause.)

And I’d like to use a different word, but there’s no word that’s quite as —

AUDIENCE MEMBER:  (Inaudible.)

THE PRESIDENT:  Right?  There’s no word that’s quite as descriptive.  I’d like to.  But that’s exactly what they were doing.  They were taking advantage of us for years and years.  And now they understand that if it’s not going to be fair, it’s not going to be at all.  We don’t need it.  We don’t need it.

So, a lot of good things.  And I think we will — I think they will treat us fairly.  I mean, the concept should work.  But people have taken advantage.

Like, for instance, they view certain countries — like China, India, many countries — for a long time, they viewed them as “they’re growing.”  Right?  They’re “growing nations.”  We’re a “mature nation.”  They’re growing.  These are “growing nations.”

Well, they’ve grown.  And they had tremendous advantages.  But we’re not letting that happen anymore, okay?  We’re not letting that happen anymore.  Everybody is growing but us.  You know, they’re all “growing nations.”  We have to work with them, but nobody ever wants to work with the United States.  It’s a disgrace.  But it’s changing, and it’s changing fast.

And I think it’s the primary reason, probably, that I ran for President.  (Applause.)  I’d see these factories all over the country, and I’d see them empty, and I’d see the jobs going to other countries.  And I just never understood why the politicians didn’t do anything about it.  But now we’re doing it.

And, by the way, the USMCA — that’s Mexico and Canada — that deal is a fantastic deal.  And it’s a great deal for your unions, too.  We have the farmers, the unions, the manufacturers.  It’s good for everybody.  We have to get the Democrats to put it up for a vote.  And most Democrats are going to vote for it, too.  They’re under a lot of pressure to vote for it.

But that replaces one of the worst trade deals ever made, which is NAFTA.

But I watched them crush your industries with taxes and regulations, and they targeted American energy for total destruction.  You weren’t going to be able to take anything out.  That’s our gold.  That’s gold underneath our feet.  And they weren’t going to allow it to happen.

The Paris Accord: The Paris Accord was good for other countries.  It wasn’t good for us.

All the while, they expected you to stay on the sidelines, silence your voices, and surrender the future of our nation.  And you didn’t do it, but you didn’t have the right people representing you, so it didn’t matter.  But when you finally had the right person — the person that really cared — because let me tell — this thing is costing me a fortune, being President.  Somebody said, “Oh, he might have rented a room for — to a man from Saudi Arabia for $500.”  What about the $5 billion that I’ll lose?  You know, it’s probably going to cost me — including upside, downside, lawyers — because every day, they sue me for something.  (Laughter.)  These are the most litigious people.  It’s probably costing me from 3 to 5 billion for the privilege of being — and I couldn’t care less.  I don’t care.  You know, if you’re wealthy, it doesn’t matter.  I just want to do a great job.  That’s why — I don’t care.  I want to do the right job.

When this great building company comes here and wants to build a plant, I want to make it easy for them, not hard for them.  I’m not jealous of them.  I couldn’t care less.  Bechtel.  (Applause.)  I’m not jealous of them.

I got sued on a thing called “emoluments.”  Emoluments.  You ever hear the word?  Nobody ever heard of it before.  They went back.  Now, nobody looks at Obama getting $60 million for a book.  That’s okay.  Even though nobody in history ever got that money for a book.  Obama got $60 million.  Think of it: $60 million for a book.  Nobody looks — nobody looks at any —

But with me, it’s everything.  Emoluments.  Nobody knows what it is.  Here’s the good news: Last month, I just won two cases on emoluments.  And the judge was scolding of the other side.  And what it is, is presidential harassment because this thing is costing me a fortune, and I love it, okay?  I love it because I’m making the lives of other people much, much better.  (Applause.)
And each of you here today is living proof that America never surrenders.  We don’t surrender.  And we were in bad shape.  This area was in really bad shape.  And now you look outside, and you say, “That’s like the eighth wonder of the world.”

Under my administration, we’re fighting back and we’re winning because we are truly and finally putting America first.  (Applause.)  After years of building up foreign countries, we are finally building up our country.  Think of it, we protect the border of South Korea, but we don’t protect our own border.  But now we are.

And the wall is being built.  We won that case two weeks ago.  (Applause.)  We won that case.  The wall is being — and we’re going to have a lot of it.  We’re going to have anywhere from 400 to 500 miles built by the end of next year.  We’re building a lot of wall and we need it.  We need it.  We want people to come into our country.  They have to come in legally and we want them to come in through merit.  (Applause.)

The last administration tried to shut down Pennsylvania coal and Pennsylvania fracking.  If they got in, your fracking is gone, your coal is gone, you guys — I don’t know what the hell you’re going to do.  You don’t want to make widgets, right?  (Laughter.)  You don’t want to make — do you want to learn how to make a computer?  A little tiny piece of stuff you put in with those big, beautiful hands of yours.  (Laughter.)  They’re going to take these big hands — he’s going to take this little tiny part.  (Laughter.)  He’s going to go home, “Alice, this is a tough job.”  (Laughter.)  No, you want to make steel and you want to dig coal, and that’s what you want to do.

I was in West Virginia when Hillary made that terrible statement that she wants to close up all of the coal.

AUDIENCE:  Booo —

THE PRESIDENT:  She forgot: In three weeks, she was going to West Virginia.  Remember, she wanted to close up all coal.  She was in an area where they didn’t do the coal.  And she said, “Well, I look forward to closing up all coal.  It’s going to be closed.  Steel — going to be in big trouble.”  She forgot: In three weeks, she was going to West Virginia.  That didn’t work out too well.  (Laughter.)  I won that one by 42 points.  Forty-two points.  West Virginia.  (Applause.)

And I actually think, this time, we have a good chance of winning Virginia, which is a tough one to win because, you know, you have some people there that maybe don’t agree with us.  But I think we have a really good chance of Virginia, too, which is something that hasn’t been won by a Republican in a long time.  But it’s common sense.  Some — a lot of this is — you know, they say, politics — politics — great politics is common sense.

But on my first day in office, I ended the war on American energy.  And that’s common sense, I think.  You know, that’s common sense.  (Applause.)

We’re lucky.  You go to places like China, they don’t have oil and gas.  They don’t have it under their — they have to go buy it and then they devalue their currency and manipulate their currency.  And that costs them a fortune to go out and buy it.  They hurt themselves in the long run.  But they’re devaluing all over the place, as others are.

But we have this unbelievable — the greatest in the world.  We have the greatest resources, which really came about over the last few years.  Nobody knew this.  Fracking made it possible.  Other new technologies made it possible.  And now we’re the number-one — think of it, as I said — the number-one energy producer in the world.

I’m so proud of that because we wouldn’t have been number five.  They were going to close it up.  They were going to close it up.  And it’s common sense.  They wanted to take away our wealth.

That’s what the Paris Accord would have done.  It would have taken away our wealth.  It wasn’t for us; it was good for others.  It wasn’t for us.  We had to pay money to other countries that are very substantial countries.  They wanted to take away your wealth.  They didn’t want you to drill.  They didn’t want you to frack.  They didn’t want you to do steel.  They wanted to take away your wealth.

Now, the press will try and spin that differently, but I’m right, okay?  The fake news.  (Applause.)  That’s a lot of people back there for a — like an 11 o’clock speech.  That’s a lot of people.  (Laughter.)  That’s a lot.  That’s like the Academy Awards during the day.  (Laughter.)

It used to be.  You know, the Academy Awards is on hard times now.  You know that.  Nobody wants to watch it.  You know, why?  Because they started taking us on.  Everyone got tired of it.  It’s amazing.  That used to be second after the Super Bowl, and then, all of a sudden, now it’s just another show because people got tired of people getting up and making fools of themselves and disrespecting the people in this room and the people that won the election in 2016 — (applause) — and the people that won the Senate, without me on the ticket, in 2018.

You know, they never say that.  We won the Senate.  That’s why we’ll have appointed, within two months, 179 federal judges and two Supreme Court judges.  Think of that: 179.  (Applause.)  But they don’t say we won the Senate; they say we lost the House.  And, you know, there were a lot of people running for the House; it’s hard for me to campaign.  But almost everybody I campaigned for won.  We had tremendous records in ’18 and I wasn’t running.  There’s a big difference.  In 2020, we’re running, so you better get out there and make sure we win.  (Applause.)

And we have a record that nobody’s ever had.  Remember, when I was running, I was saying, “We’re going to do this.  We’re going to create jobs.”  Everyone — you know, big yawn.  And, you know, we like — “Let’s give him a shot.  What do we have to lose, right?”

I said that with African Americans.  They had the worst crime rates, the worst education, the worst everything.  They had like 10 things — I’m reading it off a list.  I looked — I said, “What the hell do you have to lose?”

But I really sort of said the same thing to everybody because our country wasn’t doing well with Biden and Obama.  It wasn’t doing well.  And they were pouring money in — pouring, pouring money in.  And it wasn’t doing well.

Even now, you know, you see the interest rates.  I’m paying a normalized interest rate.  We should be paying less, frankly.  This guy has made a big mistake.  He’s made a big mistake — the head of the Fed.  That was another beauty that I chose.  But even with that, we’re paying a normalized interest rate.

The nice thing is you get some interest from the bank.  With President Obama, he was paying nothing.  It’s easy to make money when you you’re paying nothing; you’re paying zero.  Easy.  But even with that, our economy is roaring and his wasn’t.  It was the weakest economy since the Great Depression.  The weakest up.

So we have it going.  Our country now has the hottest economy anywhere in the world.  Every time a prime minister, president, king, queen, dictator, whatever they may be — some are sort of mutual.  Some you have presidents and prime ministers who are actually dictators.  But they come in and they see me at the Oval Office, they always say — almost everybody — “Congratulations on your incredible economy.  What you’ve done is incredible: the tax cuts, the regulation cuts, all of the things we’ve done.”

And they were all saying — and they want to try and copy us.  It’s not easy to copy us. And part of the reason it’s not easy is because of the people like this, all over the country — the people in this room.  You are incredible people.  That was an incredible win.  Thank you.  (Applause.)  Incredible.  Incredible people.  Incredible people.

And here in the Appalachian region, where the Marcellus and Utica shale formations generate one-third of American natural gas — think of that.  You’ve been sitting on this for a long time, and yet, look at the numbers.  Look at the way you lived.  Because you never had anybody that wanted to take advantage of it, but now we’re taking advantage of it.  You’re sitting on gold, and we’re taking advantage of it.  And your future has never looked brighter or better.  It’s so great that you stayed, because you suffered.  This whole region — Appalachia.  The whole re- — it just suffered, this whole region, with great people — the greatest people.  And you suffered.

When this plant opens, 600 American workers will get the fulltime jobs, with quality healthcare, pensions, and great pay to support a family.  And you have — I said before — almost 2,000 construction workers.  And you’re going to another plant because we’re going to talk to Bechtel after this, and we’re talking to Shell.  I mean, you got the boss from Shell.  You people don’t realize, that’s a big deal.  I don’t know where the hell he comes from.  Where are you based?  It’s not in this country.  Hey, how about moving Shell to the United States?  (Applause.)  Well, we’re ready if you are.  Just let me know.  But they have their big USA division.  But that’s a great company.  It’s a big deal.  And that you’re here is a big deal.  That’s a big deal to me, and it’s a big deal to everybody in this room.  (Applause.)  You have the top man — top man at Shell.

But this is just the beginning.  My administration is clearing the way for other massive, multi-billion-dollar investments.  We just did one in Louisiana.  It’s a 10-billion-dollar plant.  There’s more pipes in that plant that I’ve ever seen in my life.  There’s more plant — you know that.  LNG.  It’s an LNG plant.  Ten billion dollars.  And we’re now — it’s totally sold out.  They sell it like you rent office space.  Can you believe it?  It’s all sold out.

All over the world, people have used it.  And you haven’t had a plant like that built in this country, really, ever, because there’s never been anything that big.  But you didn’t build plants like that because, environmentally, they weren’t letting you.  And yet, environmentally, it’s so good what they’ve done and what they can build today.

Investments that could bring more than 100,000 new jobs to this region are now being looked at very seriously.  And I think the hundred-thousand-doll- — I really do.  I feel the hundred thousand jobs, Andrew, is going to be a very low number.  I think you’re going to have many more.  This is an incredible region.  You’re sitting on top of something special.  It’s all fueled by the greatest treasure on the planet: American energy.  And we don’t want people taking that away from us.

Two more companies have recently proposed a 10-billion-dollar investment in the great state of Ohio.  Incredible state.  (Applause.)  We have tens of billions of dollars’ worth of investments, and this is really good stuff that we’re now negotiating.  But these two are in Ohio.  The energy revolution is also creating new jobs in West Virginia, [New] Mexico, Colorado, Texas, Kansas, Louisiana, Indiana, Michigan, Illinois, Tennessee, North Carolina, South Carolina, all across our beautiful land.  You have no idea what’s going on, including, as I said before, car companies.  We didn’t make cars.  Look, we lost 32 percent of our car companies to Mexico — before I got there, by the way.  Now it’s very, very hard to do that anymore.  Nobody is going to be looking that way, I don’t think.

And I want to thank Mexico because the President now has been great, and he’s got 27,000 soldiers on our southern border and on his border with Guatemala, keeping our borders safe.  (Applause.)  Our numbers are plummeting — the people coming in — (applause) — all because the Democrats won’t approve fixing the loopholes and asylum.  So, I want to thank Mexico.  It’s incredible.  We have close to 27,000 — so, you think of that.  We never had three.  I think we had about two and a half soldiers.  One was sitting down all the time.  We had nobody.

And don’t forget, the southern border is 2,000 miles, from the Gulf to the Pacific.  We have 27,000, and they’re doing a great job.  And they’re helping themselves too because they’re disrupting and really hurting the cartels.  So much of that stuff is run illegally by the cartels: human trafficking, drugs, people.  It’s terrible.  And Mexico, I’ll tell you, they’re — so far.  I hope they’re going to keep it up.  I hope they’re going to keep it up.  But they’ve been great.  And 27,000 people.  They wouldn’t have done that for any other President, that I can tell you.  That I can tell you.

With us today are a few of the hardworking Pennsylvania patriots who are making this comeback possible.

Jason Eckhart is the third generation of his family to work on these grounds.  And he’s doing better than any of them.  His father and — by the way, three years ago, you wouldn’t have said that.  Three years ago, his father would say, “Hey, I had it made.”  His grandparents would say, “We had it made.”  Now he can look at them and say, “Dad, we have it made.”

His father and grandfather worked for the zinc smelting company previously housed at this site.  When that plant closed in 2014, 500 jobs disappeared — like magic.  Remember President Obama, “You need magic to bring back manufacturing jobs.  You need a magic wand.”  You remember?  “Not going to happen.”  Well, so far, we’ve brought back 600,000 manufacturing jobs.  (Applause.)

And Jason never imagined he would get the chance to carry on his family’s legacy. But now, he has.  He is carrying it on, and he’s carrying it on proudly.  He’s a great American.  Jason — where are you, Jason?  Jason.  Jason.  Come on up, Jason.  Come on.  Let’s get Jason up.  (Applause.)  Come on up.  Jason.  I’d like Jason to tell us what this great facility means to him and to his family.  Thank you.

Jason, come tell us what this facility means to you.

MR. ECKHART:  Thank you, Mr. President.  (Applause.)

It’s been amazing to see the transformation on this site, from a 100-year-old zinc smelter to a state-of-the-art petrochem facility.  I’m very proud to be part of Pennsylvania Chemicals, to redevelop this site, and create the jobs in Western Pennsylvania for all of you.  (Applause.)

And it’s very exciting to think about what we have to come, starting this place up and having jobs into the future for our families.

As a native from this area — I’m from right here in Center Township — I can appreciate how much this means to the area.  I’m really proud to be a part of this and be proud of all you guys.  Thanks.  (Applause.)

THE PRESIDENT:  Thank you, Jason.  Great.  Did you enjoy doing that, Jason?  Huh?  I think so.  You had a big group of people back here that likes you a lot.  They’re giving him a hard time back there, right?  His friends.  Thanks, Jason.

Heather Michaux grew up here in Beaver County, and has been working for Shell in other states for several years.  Now she can raise her family right near her parents and loved ones, and actually be home, where she wants to be and where she belongs.

Heather, please come up and tell us about your journey.  (Applause.)

MS. MICHAUX:  Thank you, Mr. President.

THE PRESIDENT:  Thank you.

MS. MICHAUX:  So, for me, when Shell announced that we were going to be building a facility in Beaver County, I was in Texas and I was so excited — but not just for me getting to further my career and move home; I was excited for all the possibilities that had opened up for my hometown.  I was excited because I recognized the potential that a place like this has, for us to be able to hone our existing skills and to gain new ones, too.

So I knew that we, the hardworking people of Western Pennsylvania — and other places in the U.S., too — would now have this fresh opportunity and would take advantage of it.  And that’s the opportunity that I see the thousands of you folks taking advantage of now — not only today, but we’re also creating something that is going to well outlive us by building this site.  And I am really proud to be a part of that legacy, sir.

THE PRESIDENT:  Thank you very much.  (Applause.)  Great job.  Thank you.  She’ll be running for office soon.  (Laughter.)  Fantastic job.

Samantha Polizotto was a single mom working full-time when she learned about process technology training programs at the local community college, funded by Shell.  She became the first woman to graduate from that program, and she made the Dean’s List.  That’s pretty good.  Now she’s leading the way as one of the very first production operators hired here at Shell.

Samantha, please come up and say a few words.  Please.  (Applause.)

MS. POLIZOTTO:  Growing up in Beaver County, I can recall people talking of the “good old days,” when steel mills were running and, often, people were born and spent their whole lives in the same town.  Local families had multiple generations working the same industry and, in many cases, the same companies.

This was a fact for our parents.  But with the fall of the steel mills in this area, it began to see a period of stagnation.  Hardworking men and women in this area, full of pride, still lace up their work boots, driving by the vacant skeletons of the old mills and refineries, holding onto the hope that, one day, this area would see its former glory.

The announcement of Shell Pennsylvania Chemicals Plant seems to have kindled that spark within the community.  It has provided an opportunity for steady employment for many different skilled tradesmen, emptying many of the local union halls.

As a young woman, this has also afforded me an incredible opportunity to come into the ground floor of an unprecedented project.  In school, I chose a field far different than many of my female colleagues.  Process technology is a focused area of studies around production and operations.

Predominantly male-dominated careers, I knew there would be challenges as I entered the workforce.  Being a mother and a wife, I must balance my responsibilities at work and at home.  The challenges I have faced have been softened by a network of support that has been given to me not only by my family, but also through the Community College of Beaver County, my coworkers, and, now, the culture of care at Shell.  I am proud to play a role in this project, as it restores this area and makes Beaver County great again.  (Applause.)

THE PRESIDENT:  Thank you, Samantha.  That was a great job.  Thank you.

To help create more opportunities for workers like Jason, Heather, and Samantha, my administration started the Pledge to America’s Workers.  Our partners are providing over 12 million training and enhanced career opportunities to American workers.  And my daughter, Ivanka, is working so hard on it.  She’s done a great job.  Twelve million people, so far, have been positively affected.

Today, I’m pleased to announce that Shell is signing the Pledge to America’s Workers to provide enhanced career opportunities.  By the way, Shell, thank you.  (Applause.)  They’re providing career opportunities to 3,300 workers over five years, right here in Western Pennsylvania.  That’s great.  Thank you, fellas.  Thank you very much.  And thank you, Hilary, for that tremendous commitment that you’ve made.  We really appreciate it.  Fantastic job.

Under this administration, we live by two very simple words: Buy American.  That’s what we want.  I’m going to add something: “Hire American.”  It’s about hiring American, buying American.  It’s about “America First.”  It’s about “Make America Great Again.”  It’s about “Keep America Great.”  (Applause.)

Despite all of this exceptional progress, however, some politicians in this country still want to keep America’s vast energy treasures buried deep underground and let other nations take advantage of our country.  Not happening anymore.

They see factories like this one not as a cause for celebration, but for condemnation.  Democrats in Congress are pushing hard for the Green New Deal.  How about that one?  Green New Deal.

AUDIENCE:  Booo —

THE PRESIDENT:  Where it puts everybody in this room out of work — hate to tell you — and a lot more people.  Everybody out of work.  And other — but I don’t want to speak badly about it.  You know, you’ve heard me say this: I want to encourage them.  That should be their platform.  (Laughter.)  I don’t want to do it too early.  I did it very early, with Pocahontas; I should have probably waited.  She’s staging a comeback on Sleepy Joe.  (Laughter.)  I don’t know who’s going to win, but we’ll have to hit Pocahontas very hard again if she does win.  But she’s staging a little bit of a comeback.

What a group: Pocahontas and Sleepy Joe.  (Laughter.)  I don’t think they give a damn about Western Pennsylvania, do you?

AUDIENCE:  No!

THE PRESIDENT:  I don’t think so.  And other radical plans to wipe out our coal.  That’s what they want.  They want to wipe out our oil.  They want to wipe out our natural gas industries, while allowing other countries to steal our jobs.

Virtually every leading Democrat has vowed to eliminate fossil fuels, obliterating millions of American jobs, devastating communities, and bankrupting factories, families, and senior citizens all across this region.

And, by the way, this is only fuel that has the power for plants.  When you have to steam up and you have to fuel up on these giant plants, these giant generators, these giant electrical factories, you need what you’re doing.  You need this.  It’s got the power.  The other doesn’t have the power; certainly not yet.  Probably never will.

And we’re not taking chances.  And we have the cleanest air and water we’ve ever had in our country right now.  The cleanest we’ve ever had.  And we’re going to keep it that way.  (Applause.)

But we’re never going to allow other countries and outside sources to take away our great wealth, because that’s what they want to do.  They want to take away our wealth, take away our jobs.  We’re not going to let it happen.

To see the destructive results of the far-left’s energy nightmare, just compare the enormous success here in Pennsylvania with the tremendous folly happening right across a line — a little line — ina New York.  Both states have vast energy reserves, but New York prohibits development while Pennsylvania welcomes it.

From 2010 to 2017, natural gas production plummeted by nearly 70 percent in New York, but it soared almost 1,000 percent in Pennsylvania.  And New York won’t allow us to build a pipeline across because New York is sort of a long state and we can’t have pipelines going across, helping a region that’s not a wealthy region at all.  They have a lot of economic problems.  People are leaving, left and right.

We want to get it over to the waters.  We want to get it over to the oceans.  We want to get it up to New England, where they have the highest energy costs anywhere in the United States.  We can’t get energy because New York doesn’t allow the pipelines to go through.  And that’s going to be very costly for New York, ultimately.

As a result, families in Pennsylvania shale country got more jobs, billions of dollars in royalty payments, and wages that are significantly higher compared to their neighbors just across the state line.

Meanwhile, families in New York — I love New York; that’s where I’m from.  Probably, most of you don’t know that.  (Laughter.)  That’s where I’m from.  They’re burdened with more power outages and electricity rates — you never saw anything like this — that are much, much higher than neighboring states and than your state.  New York energy rates are through the roof.  New England, through the roof.  A lot of it has to do with the fact that we can’t get pipelines through New York.  New York won’t let us.  They won’t let us.

All New York likes to do is sue me.  They like to sue me.  (Laughter.)  They’re always suing.  I said, “Which lawyer is handling that case?”  No, they sue me for everything so they can try to stop us by any means possible.  The radical Left wants to do to America what they’ve done to New York: raise prices, kill jobs, and leave our nation less independent and far less secure.

My vision is the exact opposite.  And we want to work with New York and we want to help New York.  They need jobs in New York so badly.

You know, they talk about the environment.  So you have the state line, and over here you have machinery fracking.  And over here you have nothing, except poverty.  Over here you have people driving new cars and nice cars.  And over here you have cars that are 40 years old.  Now, what does that have to do with the environment?  It’s the same.  It’s an artificial line.

And I wonder what happens when they get down there.  What happens?  I just wonder, is New York losing its wealth?  You know what I’m talking about, right?  What happens when those lines go down and they can go in any direction now?  The equipment is so incredible.

So, hopefully, we can help New York.  I want to help New York so much.  We will never allow ourselves to be at the mercy of foreign energy suppliers.  And that’s what’s fighting us.  They don’t want us to have great energy.  They’ve made a fortune selling us energy.

You probably saw the Straits the other day.  Very few American boats are there.  They capture — Iran, I broke up that deal.  That was a good thing to do.  It’s a whole different country right now.  (Applause.)

But they’re capturing boats from other countries.  They’re not taking our boats.  And one of the things that was brought up by the media, actually — and wisely and correctly brought out — we have very few boats going there anymore because we have our own oil and gas.  We don’t need it from the Middle East anymore.  (Applause.)

And that’s why we’re pursuing a future not only of energy independence — but not just words.  You know, you’ve been hearing “energy independence” for years and years, and you’d hear it.  We have real independence.  But what we want now is not independence; we want American energy dominance.  Dominance.  (Applause.)

Instead of relying on foreign countries, we are now relying on American producers.  And we are relying on American workers to build our own future right here on American soil.  It’s time.  (Applause.)

And together, we’re defending the oil and gas workers who light up our cities and uplift our communities.  We’re fighting for the technicians and construction workers here in Beaver County who are building a powerful engine of American commerce.  There’s no place like what you’re seeing right outside these doors.  There is no place like it.

We’re here once again to stand up for the engineers and the factory workers who will shape the work of your hands into American-made products sold all over the world.  That’s what’s going to happen.  That’s what you’re producing.

And everyday patriots who make this all possible, you are the backbone of America.  The absolute backbone.  And you haven’t been given the honor of having that said by other people.  But you are the backbone of this country.  (Applause.)  It’s true.  So true.

You are the ones who work hard, pay your taxes, build your neighborhoods, obey our laws, safeguard our values, raise up your children, make this land the greatest nation ever to exist on the face of the Earth.  You are the ones who do it.  We work with a lot of people, but you are there and you are doing it.  You’ve always been loyal to America, and now you finally have a President of the United States who is loyal to you.  (Applause.)

Our vision is pro-worker, pro-jobs, pro-family, pro-growth, pro-energy, and 100 percent pro-American.  (Applause.)

And we’re taking care of our military, and we’re taking care of our vets.  Veterans Choice: You’ve been hearing it about for 45 years.  I got it approved.  Veterans Choice.  We’re taking care of our veterans.  We’re taking care of our military like never, ever before.  (Applause.)

Because Americans can do anything, go anywhere, and outperform anyone.  Nobody can beat us.  Nothing can stop us because winning is what Americans do.  Winning is what we know best.  We will keep winning, wining, winning.

And I used to tell you the story about winning.  I used to say that your great leaders would come to Washington and they would say, “President, we’re winning too much.  We can’t take it anymore.  The people of Pennsylvania cannot stand winning.  We haven’t won for years and years and now we’re winning too much.  Mr. President, please, for the good of the people of Pennsylvania, stop winning.  Stop creating all these jobs.  Stop creating all this product.  Please, sir.  Please, stop winning.”

And I said to them, and I will say to them, “We’re never going to stop winning because nobody has ever won like what’s happened over the last couple of years.  Nobody has ever won like you’re winning.”  I’ve more than fulfilled my promises.  Even they said, “He promised things, and he actually produced more than he promised.”  That’s true.  But we’re going to produce more and more.

I just want to thank everybody.  With your help, factory floors across this land are once more crackling with life.  (Applause.)  Our steel mills are fired up and blazing bright.  The assembly lines are roaring.  Industry is booming.  And the hearts of our workers, the American spirit, is soaring higher, stronger, freer, and greater than ever before.

I want to thank you all for giving this nation your very best.  And your very best cannot be beaten.  I want to thank you for filling America with pride.  We are proud of you.  We think you are just incredible, incredible people.  And it’s an honor for me to be with you in Pennsylvania.

Thank you very much.  God bless you.  (Applause.)  God bless you.

END

https://www.whitehouse.gov/briefings-statements/remarks-president-trump-american-energy-manufacturing-monaco-pa/

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The Pronk Pops Show 1288, July 11, 2019, Part 2: Story 1: Federal Reserve Will Cut the Federal Funds Target Rate Range in July By .25% or 25 Basis Points If Second Quarter Real Gross Domestic Product Rate of Growth Falls Below 3% — Otherwise No Change in Federal Funds Rate Target Range — Huge Uncertainty Generated By Rapidly Growing Annual Deficits in Federal Government Spending Resulting in Rising National Debt Approaching $23,000,000,000,000 and Unfunded Liabilities and and Obligations Over $230,000,000,000,000! — Bubbles Bubbles Everywhere — Beyond Bubbles — U.S. Government Bankrupt Now! — Make It Rain on The Blockchain — Trust and Truth — Videos

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Pronk Pops Show 1288 July 11, 2019

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Pronk Pops Show 1232 April 1, 2019 Part 2

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Part 2: Story 1: Federal Reserve Will Cut the Federal Funds Target Rate Range in July By .25% or 25 Basis Points If Second Quarter Real Gross Domestic Product Rate of Growth Falls Below 3% — Otherwise No Change in Federal Funds Rate Target Range — Huge Uncertainty Generated By Rapidly Growing Annual Deficits in Federal Government Spending Resulting in Rising National Debt Approaching $23,000,000,000,000 and Unfunded Liabilities and and Obligations Over $230,000,000,000,000! — Bubbles Bubbles Everywhere — Beyond Bubbles — Make It Rain on The Blockchain — Trust and Truth — Videos

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Fed Chair Jerome Powell testifies before Congress

Streamed live on Jul 10, 2019

House Financial Services Committee holds hearing on “Monetary Policy & the State of the Economy.” Fed Chair Powell testifies. All eyes will be on Powell when he testifies before a House panel on monetary policy in the first of his 2-day semiannual testimony to Congress. Investors are looking to Powell for what to expect at the next policy meeting at the end of July. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York — the business capital of the world — FBN launched in October 2007 and is the leading business network on television, topping CNBC in Business Day viewers for the second consecutive year. T he network is available in more than 80 million homes in all markets across the United States. Owned by FOX, FBN has bureaus in Chicago, Los Angeles, Washington, D.C. and London.

 

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How the blockchain is changing money and business | Don Tapscott

TED

Published on Sep 16, 2016

What is the blockchain? If you don’t know, you should; if you do, chances are you still need some clarification on how it actually works. Don Tapscott is here to help, demystifying this world-changing, trust-building technology which, he says, represents nothing less than the second generation of the internet and holds the potential to transform money, business, government and society. TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate

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By appearing to buckle to Trump on rates, is the Fed chief creating problems down the road?

By appearing to buckle to Trump on rates, is the Fed chief creating problems down the road?
Federal Reserve Board Chairman Jerome Powell speaks at a news conference in Washington on June 19. (Nicholas Kamm / AFP/Getty Images)

In signaling that the Federal Reserve is almost certain to cut interest rates at the end of this month, Fed Chairman Jerome H. Powell may have given President Trump what he wants.

But the central bank now looks more vulnerable to criticism that it is caving to political pressures that will only grow as the election cycle heats up.

Powell, in testimony to lawmakers Wednesday, essentially argued that heightened uncertainty, from trade tensions and slowing global economic growth, along with low inflation, was enough to justify a cut in interest rates.

Historically, the Fed has lowered rates to ward off recession or when it sees substantial risks of a downturn.

The U.S. economy expanded at a nearly 3% pace last year and, although it has slowed in recent months, the Fed and most private forecasters see growth continuing at a decent rate. The latest jobs report for June showed hiring remains strong, and Trump recently agreed to a ceasefire in the trade war with China, tenuous as it may be.For those reasons, Powell’s remarks Wednesday came as a pleasant surprise to financial markets. Stocks rose to record highs.

Lowering the rate by a quarter point later this month may help borrowers a little. The Fed’s main rate is a benchmark for credit cards, auto loans and other short-term consumer lending, but long-term rates such as mortgages already have dropped in anticipation of a Fed rate cut, meaning it’s unlikely to provide much of a boost to the housing market or the broader economy.

“We’ve already gotten 90% of the benefit; it’s already priced into the market,” said Dean Baker, senior economist at the Center for Economic and Policy Research.

Investors are expecting at least one more quarter-point rate cut after July, and some even two. Powell and his colleagues at the Fed will have their hands full managing investors’ expectations on future rate reductions, so they don’t set themselves up for a sharp fall.

“The issue that the Fed is going to run into … is just like parenting,” said Ryan Sweet, an economist at Moody’s Analytics. “They can’t bend every time the markets throw a tantrum. At some point, you’ve got to put your foot down.”

Market expectations aside, Powell’s bigger challenge is likely to come from Trump. The president has been publicly hammering Powell to lower interest rates. Trump has criticized the Fed for raising rates four times last year, and no one thinks he will be satisfied if the Fed drops its benchmark rate by a quarter point on July 31, as it’s now expected to do.

Trump and his economic team have pressed the Fed to slash rates by a full point, and Trump isn’t likely to stop jawboning the Fed in the coming months.

Some economic experts say Trump already has succeeded in getting into the heads of Fed decision makers.

“Powell does seem to be going a little bit out of his way to reverse the rate hikes made last year,” said Chris Rupkey, managing director and chief economist at MUFG Union Bank in New York. “The president’s like another active member of the Fed board in the room. I wouldn’t tell him no, would you?”

Rupkey and some other Fed watchers say Powell is moving a bit too early in readying rate cuts, especially with job growth still running very strong. Only a few months ago, the Fed’s stance on interest rates was to wait and see.

“Should they cut rates at this time? Absolutely not!” said Bernard Baumohl, chief global economist at Economic Outlook Group. “There is no economic justification to take that step now.

“For one, there is little to suggest this business cycle [is] struggling. The softness we see in some data points have little to do with economic fundamentals. The trade war with China and the havoc it has caused to global supply chain are the primary reasons those sectors have weakened.”

But other analysts argue that there’s good reason for the shift in the Fed’s posture. According to minutes from their last meeting in June, released Wednesday, Fed policymakers were feeling that the downside risks to the economy “had increased significantly over recent weeks.”

And in his testimony Wednesday to the House Financial Services Committee, Powell said that since May, crosscurrents that seemed to moderate earlier in the year “have reemerged, creating greater uncertainty.” Among other concerns, he said, business spending, trade and manufacturing activity have slowed.

“The issue really is more now on the business side where we see business confidence and business investment weakening a bit,” he told lawmakers, adding that there’s rising risk as well to consumer spending, which accounts for 70% of U.S. economic activity. “Household confidence has remained high, but over time uncertainty can cause households to hold back as well.”

Powell, sensitive to the political pressures bearing on the Fed, took pains in his prepared remarks to defend the integrity of the central bank and the basis for its policymaking.

“Congress has given us an important degree of independence so that we can effectively pursue our statutory goals based on objective analysis and data,” Powell said as he began his testimony.

Trump has reportedly considered firing Powell or demoting him, although it’s not clear whether the president has the legal authority to do so. Powell reiterated Wednesday that the law is on his side and that he intends to serve the full four-year term as Fed chair, which he assumed in February 2018.

Lawmakers on both sides of the aisle have cautioned Trump against taking steps to remove Powell as Fed leader. And on Wednesday, Democratic lawmakers sought to drive home that point.

“Mr. Chairman, if you got a call from the president today or tomorrow, and he said, ‘I’m firing you. Pack up. It’s time to go,’ what would you do?” asked Rep. Maxine Waters (D-Los Angeles), chair of the Financial Services Committee.

“Well, of course I would not do that,” Powell responded, to which Waters added, “I can’t hear you,” eliciting laughter.

But the president’s unusually persistent and heavy pressure on the Fed is anything but a laughing matter.

Alan Blinder, a Fed vice chairman in the mid-1990s, said the concern about the bank’s independence stemming from the president’s attacks was such that it could legitimately be a factor in a Fed decision not to raise rates.

Apart from the potential harm to its credibility, a more immediate risk for the Fed in cutting rates is that it could limit the central bank’s arsenal in fighting the next recession. The Fed’s main benchmark rate is less than 2.5%, low by historical standards.

In response to lawmakers’ questioning, Powell said the resumption of trade talks between the United States and China was a “constructive step” but that doesn’t really change the outlook.

“I would say that the bottom line for me is that the uncertainties around global growth and trade continue to weigh on the outlook.”

https://www.latimes.com/business/la-fi-jerome-powell-interest-rates-20190710-story.html

July 10, 2019

Semiannual Monetary Policy Report to the Congress

Chair Jerome H. Powell

Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.

 

Chair Powell submitted identical remarks to the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on July 11, 2019.

Chairwoman Waters, Ranking Member McHenry, and other members of the Committee, I am pleased to present the Federal Reserve’s semiannual Monetary Policy Report to Congress.

Let me start by saying that my colleagues and I strongly support the goals of maximum employment and price stability that Congress has set for monetary policy. We are committed to providing clear explanations about our policies and activities. Congress has given us an important degree of independence so that we can effectively pursue our statutory goals based on objective analysis and data. We appreciate that our independence brings with it an obligation for transparency so that you and the public can hold us accountable.

Today I will review the current economic situation and outlook before turning to monetary policy. I will also provide an update of our ongoing public review of our framework for setting monetary policy.

Current Economic Situation and Outlook 
The economy performed reasonably well over the first half of 2019, and the current expansion is now in its 11th year. However, inflation has been running below the Federal Open Market Committee’s (FOMC) symmetric 2 percent objective, and crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and the outlook.

The labor market remains healthy. Job gains averaged 172,000 per month from January through June. This number is lower than the average of 223,000 a month last year but above the pace needed to provide jobs for new workers entering the labor force. Consequently, the unemployment rate moved down from 3.9 percent in December to 3.7 percent in June, close to its lowest level in 50 years. Job openings remain plentiful, and employers are increasingly willing to hire workers with fewer skills and train them. As a result, the benefits of a strong job market have been more widely shared in recent years. Indeed, wage gains have been greater for lower-skilled workers. That said, individuals in some demographic groups and in certain parts of the country continue to face challenges. For example, unemployment rates for African Americans and Hispanics remain well above the rates for whites and Asians. Likewise, the share of the population with a job is higher in urban areas than in rural communities, and this gap widened over the past decade. A box in the July Monetary Policy Report provides a comparison of employment and wage gains over the current expansion for individuals with different levels of education.

Gross domestic product increased at an annual rate of 3.1 percent in the first quarter of 2019, similar to last year’s pace. This strong reading was driven largely by net exports and inventories—components that are not generally reliable indicators of ongoing momentum. The more reliable drivers of growth in the economy are consumer spending and business investment. While growth in consumer spending was weak in the first quarter, incoming data show that it has bounced back and is now running at a solid pace. However, growth in business investment seems to have slowed notably, and overall growth in the second quarter appears to have moderated. The slowdown in business fixed investment may reflect concerns about trade tensions and slower growth in the global economy. In addition, housing investment and manufacturing output declined in the first quarter and appear to have decreased again in the second quarter.

After running close to our 2 percent objective over much of last year, overall consumer price inflation, measured by the 12-month change in the price index for personal consumption expenditures (PCE), declined earlier this year and stood at 1.5 percent in May. The 12-month change in core PCE inflation, which excludes food and energy prices and tends to be a better indicator of future inflation, has also come down this year and was 1.6 percent in May.

Our baseline outlook is for economic growth to remain solid, labor markets to stay strong, and inflation to move back up over time to the Committee’s 2 percent objective. However, uncertainties about the outlook have increased in recent months. In particular, economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy. Moreover, a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than we currently anticipate. We are carefully monitoring these developments, and we will continue to assess their implications for the U.S economic outlook and inflation.

The nation also continues to confront important longer-run challenges. Labor force participation by those in their prime working years is now lower in the United States than in most other nations with comparable economies. As I mentioned, there are troubling labor market disparities across demographic groups and different parts of the country. The relative stagnation of middle and lower incomes and low levels of upward mobility for lower-income families are also ongoing concerns. In addition, finding ways to boost productivity growth, which leads to rising wages and living standards over the longer term, should remain a high national priority. And I remain concerned about the longer-term effects of high and rising federal debt, which can restrain private investment and, in turn, reduce productivity and overall economic growth. The longer-run vitality of the U.S. economy would benefit from efforts to address these issues.

Monetary Policy 
Against this backdrop, the FOMC maintained the target range for the federal funds rate at 2‑1/4 to 2-1/2 percent in the first half of this year. At our January, March, and May meetings, we stated that we would be patient as we determined what future adjustments to the federal funds rate might be appropriate to support our goals of maximum employment and price stability.

At the time of our May meeting, we were mindful of the ongoing crosscurrents from global growth and trade, but there was tentative evidence that these crosscurrents were moderating. The latest data from China and Europe were encouraging, and there were reports of progress in trade negotiations with China. Our continued patient stance seemed appropriate, and the Committee saw no strong case for adjusting our policy rate.

Since our May meeting, however, these crosscurrents have reemerged, creating greater uncertainty. Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture report heightened concerns over trade developments. Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the U.S. economy. These concerns may have contributed to the drop in business confidence in some recent surveys and may have started to show through to incoming data.

In our June meeting statement, we indicated that, in light of increased uncertainties about the economic outlook and muted inflation pressures, we would closely monitor the implications of incoming information for the economic outlook and would act as appropriate to sustain the expansion. Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook. Inflation pressures remain muted.

The FOMC has made a number of important decisions this year about our framework for implementing monetary policy and our plans for completing the reduction of the Fed’s securities holdings. At our January meeting, we decided to continue to implement monetary policy using our current policy regime with ample reserves, and emphasized that we are prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments. At our March meeting, we communicated our intention to slow, starting in May, the decline in the Fed’s aggregate securities holdings and to end the reduction in these holdings in September. The July Monetary Policy Report provides details on these decisions.

The July Monetary Policy Report also includes an update on monetary policy rules. The FOMC routinely looks at monetary policy rules that recommend a level for the federal funds rate based on inflation and unemployment rates. I continue to find these rules helpful, although using these rules requires careful judgment.

We are conducting a public review of our monetary policy strategy, tools, and communications—the first review of its kind for the FOMC. Our motivation is to consider ways to improve the Committee’s current policy framework and to best position the Fed to achieve maximum employment and price stability. The review has started with outreach to and consultation with a broad range of people and groups through a series of Fed Listens events. The FOMC will consider questions related to the review at upcoming meetings. We will publicly report the outcome of our discussions.

Thank you. I am happy to respond to your questions.

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Last Update: July 10, 2019

Financial Stability Oversight Council

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Financial Stability Oversight Council
FSOC Meeting.jpg
3rd FSOC Meeting (January 18, 2011)
Agency overview
Formed July 21, 2010
Jurisdiction United States Government
Website Treasury.gov/FSOC

The Financial Stability Oversight Council (FSOC) is a United States federal government organization, established by Title I of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which was signed into law by President Barack Obama on July 21, 2010.[1] The Office of Financial Research is intended to provide support to the council.

The Dodd-Frank Act provides the Council with broad authorities to identify and monitor excessive risks to the U.S. financial system arising from the distress or failure of large, interconnected bank holding companies or non-bank financial companies, or from risks that could arise outside the financial system; to eliminate expectations that any American financial firm is “too big to fail“; and to respond to emerging threats to U.S. financial stability.[2]

The Act also designates the Secretary of the Treasury as Chairperson. Inherent to the FSOC’s role as a consultative council is facilitation of communication among financial regulators. The FSOC has the authority to set aside certain financial regulations published by the Consumer Financial Protection Bureau if those rules would threaten financial stability.

Contents

Purpose and duties

At minimum, it must meet quarterly.

Specifically, there are three purposes assigned to the Council:[3]

  1. identify the risks to the financial stability of the United States from both financial and non-financial organizations
  2. promote market discipline, by eliminating expectations that the Government will shield them from losses in the event of failure
  3. respond to emerging threats to the stability of the US financial system

Activities

On July 26, 2011, the First Annual Financial Stability Oversight Council Report [4] was issued by the Council fulfilling the Congressional mandate to report on the activities of the Council. The Report is intended to describe significant financial market and regulatory developments, analyze potential emerging threats, and make certain recommendations. The July 26, 2011 report warned that the United States faces potential losses connected with the European debt crisis.[5]

In September 2014, a group of Republican lawmakers accused U.S. regulators of “disparate treatment” of nonbank financial firms currently considered for tougher oversight. The lawmakers stated that the regulators should conduct the same level of analysis and due diligence for the insurance industry as it has for the asset management industry before formally considering whether to designate another insurance company.[6]

After much anticipation and debate about whether FSOC would and should designate individual asset managers (a nonbank financial firm) as systemically important financial institutions (SIFIs) which would subject them to greater oversight, FSOC announced in August, 2014, that rather than designating individual asset managers as SIFIs, it would focus on examining systemic risk posed by asset managers’ products, and activities. As a result of FSOC’s announcement the Securities and Exchange Commission is now expected and assumed to take a prudential supervisory role of individual asset managers, in addition to exercising its traditional mandate of investor protection.[7]

Since the inception of FSOC, the Council has designated select financial market utilities (FMUs) as “systemically important.” The designation of systemically important subjects the FMU to enhanced regulatory oversight. The three supervisory agencies charged with regulating systemically important FMUs are: the Federal Reserve Board, Securities and Exchange Commission, and Commodity Futures Trading Commission.[8]

Resources

The Federal Advisory Committee Act, which limits the powers of advisory committees, does not apply to the council. The council has an almost unlimited budget in that the Council may draw on virtually any resource of any department or agency of the federal government. Any employee of the federal government may be detailed to the Council without reimbursement and without interruption or loss of civil service status or privilege. Any member of the Council who is an employee of the federal government serves without additional compensation. In addition, “An employee of the Federal Government detailed to the Council shall report to and be subject to oversight by the Council during the assignment to the Council, and shall be compensated by the department or agency from which the employee was detailed.”[9] Additionally, “Any expenses of the Council shall be treated as expenses of, and paid by, the Office of Financial Research”.[10]

Authority

The Council has very broad powers to monitor, investigate and assess any risks to the US financial system. The Council has the authority to collect information from any state or federal financial regulatory agency, and may direct the Office of Financial Research, which supports the work of the Council, “to collect information from bank holding companies and nonbank financial companies”.[11] The Council monitors domestic and international regulatory proposals, including insurance and accounting issues, and advises Congress and the Federal Reserve on ways to enhance the integrity, efficiency, competitiveness and stability of the US financial markets. On a regular basis, the Council is required to make a report to Congress describing the state of the U.S. financial system. Each voting member of the Council is required to either affirm that the federal government is taking all reasonable steps to assure financial stability and mitigate systemic risk, or describe additional steps that need to be taken.[12] Under specific circumstances, the Chairman of the Council (who is also the Secretary of the Treasury), with the concurrence of 2/3 voting members, may place nonbank financial companies or domestic subsidiaries of international banks under the supervision of the Federal Reserve if it appears that these companies could pose a threat to the financial stability of the US.[13] The Federal Reserve may promulgate safe harbor regulations to exempt certain types of foreign banks from regulation, with approval of the Council.[14] Under certain circumstances, the Council may provide for more stringent regulation of a financial activity by issuing recommendations to the primary financial regulatory agency, which the primary financial agency is obliged to implement – the Council reports to Congress on the implementation or failure to implement such recommendations.[15]

Financial reporting to the Council

The Council may require any bank or non-bank financial institution with assets over $50 billion to submit certified reports as to the company’s:[16]

  • financial condition
  • systems in place to monitor and control any risks
  • transactions with subsidiaries that are regulated banks
  • the extent to which any of the company’s activities could have a potential disruptive impact on financial markets or the overall financial stability of the country

The Comptroller General of the United States may audit the Council or anyone working for the Council, and may have access to any information under the control of or used by the Council.[17]

Review 2017

On April 21, 2017, President Donald Trump signed one Executive Order13789;[18][19][20] and two Presidential memorandaOrderly Liquidation Authority Review and Financial Stability Oversight Council[21][22][23] to review the Council and parts of the Dodd–Frank Wall Street Reform and Consumer Protection Act.

Organization

Voting members

The Financial Stability Oversight Council has ten voting members:[24]

  1. Secretary of the Treasury (chairs the Council)
  2. Chairman of the Federal Reserve
  3. Comptroller of the Currency
  4. Director of the Consumer Financial Protection Bureau
  5. Chairman of the U.S. Securities and Exchange Commission
  6. Chairman of the Federal Deposit Insurance Corporation
  7. Chairman of the Commodity Futures Trading Commission
  8. Director of the Federal Housing Finance Agency
  9. the Chairman of the National Credit Union Administration Board
  10. an independent member (with insurance expertise), appointed by the President

Current voters[edit]

Current Voters (sortable)
Agency Currently Party Appointed Removable Notes
Treasury Steven Mnuchin Republican Directly Any time
SEC Jay Clayton Independent From 5 Board Members After 5-year term
CFTC J. Christopher Giancarlo Republican From 5 Board Members After 5-year term
Fed Jerome Powell From 7 Board Members After 4-year term
OCC Joseph Otting Directly After 5-year term
CFPB Kathleen Kraninger Directly After 5 year term
FDIC Jelena McWilliams From 3 Board Members After 5-year term
FHFA Mel Watt Democratic Directly After 5-year term
NCUA J. Mark McWatters Republican From 3 Board Members After 6-year term
Insurance Thomas E. Workman Directly After 6-year term

Non-voting Members

There are five non-voting members:

  1. Director of the Office of Financial Research (an independent agency within the Treasury Department and established by the Dodd-Frank Act): Richard Berner
  2. Director of the Federal Insurance Office (part of the Treasury Department and established in this Act): Steven E. Seitz
  3. a state insurance commissioner, to be designated by a selection process determined by the state insurance commissioners (2-year term): Maine Superintendent Eric Cioppa web|url=http://naic.org/members_bios/missouri.htm%7Ctitle=Commissioner Bio – Missouri|publisher=}}</ref> delegate to the FSOC.[25]
  4. a state banking supervisor, to be designated by a selection process determined by the state banking supervisors (2-year term): John P. Ducrest, Commissioner of the Louisiana Office of Financial Institutions
  5. a state securities commissioner (or officer performing like function) to be designated by a selection process determined by such state security commissioners (2-year term): Melanie Senter Lubin, Maryland Securities Commissioner.

See also

References

  1. ^ “Bill Summary & Status – 111th Congress (2009–2010) – H.R.4173 – All Information – THOMAS (Library of Congress)”. Library of Congress. Retrieved July 22, 2010.
  2. ^ Stupak, Jeffrey M. (February 12, 2018). Financial Stability Oversight Council (FSOC): Structure and Activities(PDF). Washington, DC: Congressional Research Service. Retrieved 27 February 2018.
  3. ^ H.R. 4173, § 112(a)(1)
  4. ^ “2011 Annual Report”. U.S. Department of the Treasury. Retrieved August 8, 2011.
  5. ^ The Center for Public Integrity. “U.S. Stock Market Plunge Followed Financial Stability Oversight Council Warning”. The National Law Review. Retrieved August 8, 2011.
  6. ^ Stephenson, Emily. “U.S. Republican lawmakers say regulators treat insurers unfairly”Reuters.
  7. ^ “Asset managers: FSOC stands down, SEC stands up”(PDF). PwC Financial Services Regulatory Practice. December 2014.
  8. ^ “A closer look: Financial market utilities: Is the system safer?”(PDF). PwC Financial Services Regulatory Practice. February 2015.
  9. ^ H.R. 4173 § 111(j)
  10. ^ H.R. 4173 § 118
  11. ^ H.R. 4173 § 112(a)(2)
  12. ^ H.R. 4173 § 112(b)
  13. ^ H.R. 4173 § 113
  14. ^ H.R. 4173 § 170
  15. ^ H.R. 4173 § 120
  16. ^ H.R. 4173, § 116
  17. ^ H.R. 4173 § 122
  18. ^ Office of the Press Secretary (April 21, 2017). “Presidential Memorandum on Orderly Liquidation Authority Review”whitehouse.govWashington, D.C.White House. Retrieved May 3, 2017.
  19. ^ Tausche, Kayla; Javers, Eamon (April 20, 2017). “Trump to sign ‘financial-related’ executive actions on Friday”CNBCEnglewood Cliffs, New JerseyNBCUniversal (CNBC LLC). Retrieved May 3, 2017.
  20. ^ Boyd, Brecke (April 21, 2017). “POTUS Memo on Orderly Liquidation Review May Clear Path for Legislation Amending Bankruptcy Code”Baker BottsHouston: Baker Botts L.L.P. Retrieved May 3, 2017.
  21. ^ Office of the Press Secretary (April 21, 2017). “Presidential Memorandum on the Financial Stability Oversight Council”whitehouse.govWashington, D.C.White House. Retrieved May 3, 2017.
  22. ^ Lane, Sylvan (April 20, 2017). “Trump to sign executive order, memoranda on financial regulation at Treasury”The HillWashington, D.C.: Capitol Hill Publishing Corp. Retrieved May 3,2017.
  23. ^ Puzzanghera, Jim (April 21, 2017). “Trump targets Dodd-Frank rules designed to wall off risky banks”Los Angeles TimesTromc Inc. Retrieved May 3, 2017.
  24. ^ H.R. 4173, § 111
  25. ^ “SPECIAL SECTION: Financial Stability Oversight Council”.

Further reading

External links

https://en.wikipedia.org/wiki/Financial_Stability_Oversight_Council

The shift away from LIBOR: implications for retail lenders

OUT-LAW ANALYSIS | 28 Mar 2019 | 9:30 am | 4 min. read

ANALYSIS: Use of the London Interbank Offered Rate (LIBOR) as a benchmark interest rate is likely to come to an end in 2021 or shortly afterwards, with implications for millions of pounds-worth of retail banking contracts.

Financial services regulators and central banks around the world have been pushing for a transition away from the use of interbank offered rates (IBORs), given the previous attempted market manipulation, false reporting and the decline in liquidity in interbank unsecured funding markets. They include the New York Federal Reserve Bank, the Bank of England and the Financial Conduct Authority (FCA), whose director of markets and wholesale policy made the comments above in an industry speech in January 2019.

Whilst there has been understandable focus on the impact of LIBOR transition on the wholesale banking industry and especially on the £30 trillion global derivatives market, the impact of LIBOR transition on other parts of financial markets should not be forgotten. A variety of loan products reference LIBOR, such as auto finance, personal loans and credit cards, while loans and mortgages that reference LIBOR are still being issued in some parts of the market.

Those lending to consumers will have to consider how the transition affects their legacy contracts, as well as any new business still being written that still references LIBOR. There may also be other ways in which LIBOR is referenced in retail lending contracts, for example in relation to penalty rates or default rates. Retail lenders will need to consider how LIBOR transition affects funding models and risk mitigation techniques. The transition may also give rise to regulatory conduct risk and litigation risk. It is not inconceivable that more mis-selling cases connected to LIBOR could arise in the retail space.

What practical preparations can retail lenders make?

The first step is to identify contracts which are LIBOR-linked as well as any other contractual references to LIBOR, such as penalty rates. Firms should then plan their transition, taking appropriate steps from a legal, regulatory and operational perspective to transition legacy contracts and future business not only from LIBOR, but also from other IBORs, such as Euribor and the Tokyo Interbank Offered Rate (TIBOR).

Firms looking to replace LIBOR rates in legacy contracts should not underestimate the task ahead. The journey to an IBOR replacement begins with a detailed review of loan portfolios. It will be necessary to identify the relevant IBOR reference rate used and whether a fall-back position has been catered for in the contract if the reference rate ceases to be published. An assessment of whether the fall-back rate can be relied on for the remainder of the term would then need to be undertaken.

If no fall-back has been catered for, or the proposed fall-back cannot be used long term, firms are going to have to start looking to the variation terms in their contracts. Contractual variation rights will not be the end of the problem, as firms will then need to identify a risk-free rate (RFR) that is a suitable replacement (see below).

If variation terms need to be relied on, the FCA’s finalised guidance on the fairness of variation terms in financial services consumer contracts will be relevant for firms. If firms have not already done so, they should consider whether their existing variation terms are fair and if the firm has the power to unilaterally vary the contract terms in the way they need. Any suggestion of unfair variation terms and consequent unfair treatment of customers will certainly attract the attention of the regulator.

What alternative reference rates are available?

Global regulators have taken steps to adopt RFRs in place of IBORs. However, these rates do not provide an exact replacement for IBORs, while there has been little uniformity in the adoption of RFRs in relation to the different IBORs, jurisdictions and markets.

The panel banks whose submissions currently inform the LIBOR rate have voluntarily agreed to continue to support it until the end of 2021, although other IBORs are likely to continue beyond this date. The Financial Stability Board, in its November 2018 progress report, said that “it is recognised that transition to RFRs may take longer and therefore maintaining IBORs is still necessary”. This may present a challenge not only in relation to fall-back triggers or fall-back rates in legacy retail lending contracts, but also as regards the most appropriate alternative rates for these contracts.

RFRs such as SONIA, an overnight rate administered by the Bank of England, are not an exact replacement for LIBOR – particularly three-month and six-month LIBOR. This is likely to present challenges for lenders requiring a term rate going forward, and where they seek to replace three and six-month LIBOR in legacy contracts.

For firms, participation in relevant consultations issued by industry-led bodies such as the Bank of England’s Working Group on Sterling Risk Free Reference Rates to assist in shaping transition away from IBORs in a way which is beneficial to your part of the market will be important.

What positions have the UK regulators taken?

The FCA and the Prudential Regulation Authority (PRA) set out their position on LIBOR transition in a joint ‘Dear CEO’ letter of 19 September 2018 (2-page / 277KB PDF). In that letter, to the largest UK banks and insurers, the regulators highlighted that insufficient preparation for LIBOR transition could negatively impact the safety and soundness of firms, their clients and the markets in which they operate. The letter sought assurances from those firms’ senior managers and boards that they were making suitable preparations for LIBOR transition.

Although this letter focused on the largest firms – the so-called ‘category 1’ firms – lenders outside of that group may still wish to reflect not only on their own preparations for LIBOR transition, but also any related conduct risk. Areas of focus should include risks in relation to the Senior Managers and Certification Regime (SMCR) and treating customers fairly, against a backdrop where mortgage debt accounts for over 80% of total UK household liabilities and the FCA has been undertaking a mortgage market review.

There is potential for consumer detriment in relation to mortgages or loans which reference LIBOR, where LIBOR transition has been handled poorly. Firm strategies for communicating their planned changes with consumers, clients, regulators and other stakeholders should be carefully considered and planned.

Charlotte Pope-Williams is a financial regulation expert at Pinsent Masons, the law firm behind Out-Law.com.

https://www.pinsentmasons.com/out-law/analysis/shift-away-from-libor-implications-for-retail-lenders

Blockchain

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Blockchain formation. The main chain (black) consists of the longest series of blocks from the genesis block (green) to the current block. Orphan blocks (purple) exist outside of the main chain.

blockchain,[1][2][3] originally block chain,[4][5] is a growing list of records, called blocks, that are linked using cryptography.[1][6] Each block contains a cryptographic hash of the previous block,[6] a timestamp, and transaction data (generally represented as a Merkle tree).

By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[7] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault toleranceDecentralized consensus has therefore been claimed with a blockchain.[8]

Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.[1] The identity of Satoshi Nakamoto is unknown. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications,[1][3] and blockchains that are readable by the public are widely used by cryptocurrencies. Blockchain is considered a type of payment rail.[9] Private blockchains have been proposed for business use. Sources such as Computerworld called the marketing of such blockchains without a proper security model “snake oil“.[10]

Contents

History

Bitcoin transactions (January 2009 – September 2017)

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[6][11] They wanted to implement a system where document timestamps could not be tampered with. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several document certificates to be collected into one block.[6][12]

The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. Nakamoto improved the design in an important way using a Hashcash-like method to add blocks to the chain without requiring them to be signed by a trusted party.[6] The design was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.[1]

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB (gigabytes).[13] In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size.

The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016.

Smart contracts that run on a blockchain, for example ones that “creat[e] invoices that pay themselves when a shipment arrives or share certificates that automatically send their owners dividends if profits reach a certain level.”[1] require an off-chain oracle to access any “external data or events based on time or market conditions [that need] to interact with the blockchain.”[14]

According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase.[15] Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term ‘planning or [looking at] active experimentation with blockchain’.[16]

Structure

A blockchain is a decentralizeddistributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.[1][17] This allows the participants to verify and audit transactions independently and relatively inexpensively.[18] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.[19] Such a design facilitates robust workflow where participants’ uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. A blockchain has been described as a value-exchange protocol.[20] A blockchain can maintain title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.

Blocks

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree.[1] Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain.[1] This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.[21]

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher score can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.[21] Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Blockchains are typically built to add the score of new blocks onto old blocks and are given incentives to extend with new blocks rather than overwrite old blocks. Therefore, the probability of an entry becoming superseded decreases exponentially[22] as more blocks are built on top of it, eventually becoming very low.[1][23]:ch. 08[24] For example, bitcoin uses a proof-of-work system, where the chain with the most cumulative proof-of-work is considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.[25]

Block time

The block time is the average time it takes for the network to generate one extra block in the blockchain. Some blockchains create a new block as frequently as every five seconds. By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[citation needed]

Hard forks

hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.

If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to “make whole” the investors in The DAO, which had been hacked by exploiting a vulnerability in its code. In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment. Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.[26]

Decentralization

By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.[1] The decentralized blockchain may use ad-hoc message passing and distributed networking.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of public-key cryptography.[4]:5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.[1]

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication[8] and computational trust. No centralized “official” copy exists and no user is “trusted” more than any other.[4] Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions,[21] add them to the block they are building, and then broadcast the completed block to other nodes.[23]:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes.[27] Alternative consensus methods include proof-of-stake.[21] Growth of a decentralized blockchain is accompanied by the risk of centralization because the computer resources required to process larger amounts of data become more expensive.[28]

Openness

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[29][30][31][32][33] Proponents of permissioned or private chains argue that the term “blockchain” may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases.[34] Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.[35]:30–31 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision.[29][31] Nikolai Hampton of Computerworld said that “many in-house blockchain solutions will be nothing more than cumbersome databases,” and “without a clear security model, proprietary blockchains should be eyed with suspicion.”[10][36]

Permissionless

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.[22] This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.[22]

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper “Pricing via Processing or Combatting Junk Mail”.

Financial companies have not prioritised decentralized blockchains.[citation needed]

In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China.[37] Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April 2018, bitcoin has the highest market capitalization.

Permissioned (private) blockchain

Permissioned blockchains use an access control layer to govern who has access to the network.[38] In contrast to public blockchain networks, validators on private blockchain networks are vetted by the network owner. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.[citation needed] Permissioned blockchains can also go by the name of ‘consortium’ blockchains.[39][better source needed]

Disadvantages of private blockchain

Nikolai Hampton pointed out in Computerworld that “There is also no need for a ’51 percent’ attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished.”[10] This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 2007–08, where politically powerful actors may make decisions that favor some groups at the expense of others,[40][41] and “the bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing power — it’s time consuming and expensive.”[10] He also said, “Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.”[10]

Blockchain analysis

The analysis of public blockchains has become increasingly important with the popularity of bitcoinEthereumlitecoin and other cryptocurrencies.[42] A blockchain, if it is public, provides anyone who wants access to observe and analyse the chain data, given one has the know-how. The process of understanding and accessing the flow of crypto has been an issue for many cryptocurrencies, crypto-exchanges and banks.[43][44] The reason for this is accusations of blockchain enabled cryptocurrencies enabling illicit dark market trade of drugs, weapons, money laundering etc.[45] A common belief has been that cryptocurrency is private and untraceable, thus leading many actors to use it for illegal purposes. This is changing and now specialised tech-companies provide blockchain tracking services, making crypto exchanges, law-enforcement and banks more aware of what is happening with crypto funds and fiat crypto exchanges. The development, some argue, has led criminals to prioritise use of new cryptos such as Monero.[46][47][48] The question is about public accessibility of blockchain data and the personal privacy of the very same data. It is a key debate in cryptocurrency and ultimately in blockchain.[49]

Uses

Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. There are a few operational products maturing from proof of concept by late 2016.[37] Businesses have been thus far reluctant to place blockchain at the core of the business structure.[50]

Cryptocurrencies

Most cryptocurrencies use blockchain technology to record transactions. For example, the bitcoin network and Ethereum network are both based on blockchain. On 8 May 2018 Facebook confirmed that it is opening a new blockchain group[51] which will be headed by David Marcus who previously was in charge of Messenger. According to The Verge Facebook is planning to launch its own cryptocurrency for facilitating payments on the platform.[52]

Smart contracts

Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[53] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But “no viable smart contract systems have yet emerged.” Due to the lack of widespread use their legal status is unclear.[54]

Financial services

Major portions of the financial industry are implementing distributed ledgers for use in banking,[55][56][57] and according to a September 2016 IBM study, this is occurring faster than expected.[58]

Banks are interested in this technology because it has potential to speed up back office settlement systems.[59]

Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.[60][61]

Berenberg, a German bank, believes that blockchain is an “overhyped technology” that has had a large number of “proofs of concept”, but still has major challenges, and very few success stories.[62]

Video games

A blockchain game CryptoKitties, launched in November 2017.[63] The game made headlines in December 2017 when a cryptokitty character – an in-game virtual pet – was sold for more than US$100,000.[64] CryptoKitties illustrated scalability problems for games on Ethereum when it created significant congestion on the Ethereum network with about 30% of all Ethereum transactions being for the game.[65]

Cryptokitties also demonstrated how blockchains can be used to catalog game assets (digital assets).[66]

Supply chain

There are a number of efforts and industry organizations working to employ blockchains in supply chain logistics and supply chain management.

The Blockchain in Transport Alliance (BiTA) works to develop open standards for supply chains.[citation needed]

Everledger is one of the inaugural clients of IBM’s blockchain-based tracking service.[67]

Walmart and IBM are running a trial to use a blockchain-backed system for supply chain monitoring — all nodes of the blockchain are administered by Walmart and are located on the IBM cloud.[68]

Hyperledger Grid develops open components for blockchain supply chain solutions.[69][70]

Other uses

Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users[71] or musicians.[72] In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution.[73] Imogen Heap‘s Mycelia service has also been proposed as blockchain-based alternative “that gives artists more control over how their songs and associated data circulate among fans and other musicians.”[74][75]

New distribution methods are available for the insurance industry such as peer-to-peer insuranceparametric insurance and microinsurance following the adoption of blockchain.[76][77] The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers.[78] Online voting is another application of the blockchain.[79][80]

Other designs include:

  • Hyperledger is a cross-industry collaborative effort from the Linux Foundation to support blockchain-based distributed ledgers, with projects under this initiative including Hyperledger Burrow (by Monax) and Hyperledger Fabric (spearheaded by IBM)[81]
  • Quorum – a permissionable private blockchain by JPMorgan Chase with private storage, used for contract applications[82]
  • Tezos, decentralized voting.[35]:94
  • Proof of Existence is an online service that verifies the existence of computer files as of a specific time[83]

Types

Currently, there are at least four types of blockchain networks — public blockchains, private blockchains, consortium blockchains and hybrid blockchains.

Public blockchains

A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol).[84][self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.

Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain.

Private blockchains

A private blockchain is permissioned.[38] One cannot join it unless invited by the network administrators. Participant and validator access is restricted.

This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.[citation needed]

Hybrid blockchains

A hybrid blockchain[85] simply explained is a combination between different characteristics both public and private blockchains have by design. It allows to determine what information stays private and what information is made public. Further decentralization in relation to primarily centralized private blockchains can be achieved in various ways. Instead of keeping transactions inside their own network of community run or private nodes, the hash (with or without payload) can be posted on completely decentralized blockchains such as bitcoin. Dragonchain uses Interchain[86] to host transactions on other blockchains. This allows users to operate on different blockchains, where they can selectively share data or business logic. Other blockchains like Wanchain use interoperability mechanisms such as bridges.[87][88] By submitting the hash of a transaction (with or without the sensitive business logic) on public blockchains like bitcoin or Ethereum, some of the privacy and blockchain concerns are resolved, as no personal identifiable information is stored on a public blockchain. Depending on the hybrid blockchain its architecture, multicloud solutions allow to store data in compliance with General Data Protection Regulation and other geographical limitations while also leveraging bitcoin’s global hashpower to decentralize transactions.

Academic research

Blockchain panel discussion at the first IEEE Computer Society TechIgnite conference

In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology.[89]

Energy use of proof-of-work blockchains

External video
 Cryptocurrencies: looking beyond the hypeHyun Song ShinBank for International Settlements, 2:48[90]
 Blockchains and Cryptocurrencies: Burn It With Fire, Nicholas Weaver, Berkeley School of Information, 49:47, lecture begins at 3:05[91]

The Bank for International Settlements has criticized the public proof-of-work blockchains for high energy consumption.[92][90][93]

Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley examines blockchain’s online security, and the energy efficiency of proof-of-work public blockchains, and in both cases finds it grossly inadequate.[91][94]

Journals

In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016.[95] The journal covers aspects of mathematicscomputer scienceengineeringlaweconomics and philosophy that relate to cryptocurrencies such as bitcoin.[96][97]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[98]

See also

References …

Further reading

  •  Media related to Blockchain at Wikimedia Commons

https://en.wikipedia.org/wiki/Blockchain

What is Blockchain Technology? A Step-by-Step Guide For Beginners

Ameer Rosic

3 years ago
Was ist Blockchain-Technologie

What is Blockchain Technology? A Step-by-Step Guide For Beginners

[Updated – Mar 01 2019]

Is Blockchain Technology the New Internet?

The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?

By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currencyBitcoin, (Buy Bitcoin) the tech community has now found other potential uses for the technology.

In thisguide, we are going to explain to you what the blockchain technology is, and what its properties are that make it so unique. So, we hope you enjoy this, What Is Blockchain Guide. And if you already know what blockchain is and want to become a blockchain developer please check out our in-depth blockchain tutorial and create your very first blockchain.

What is Blockchain Technology?

What is Blockchain Technology? A step-by-step guide than anyone can understand“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors Blockchain Revolution (2016).

A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).

So, what is so special about it and why are we saying that it has industry disrupting capabilities?

The blockchain network has no central authority — it is the very definition of a democratized system. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.

Blockchain Explained

A blockchain carries no transaction cost. (An infrastructure cost yes, but no transaction cost.) The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many others ways.

Blockchain is the most disruptive invention since the Internet itself

Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and unfalsifiable record (like Bitcoin), so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.

But the key here is this: it’s free. Not only can the blockchain transfer and store money, but it can also replace all processes and business models which rely on charging a small fee for a transaction. Or any other transaction between two parties.

Here is another example. The gig economy hub Fivver charges 0.5 dollars on a 5 transaction between individuals buying and selling services. Using blockchain technology the transaction is free. Ergo, Fivver will cease to exist. So will auction houses and any other business entity based on the market-maker principle.

Even recent entrants like Uber and AirBnB are threatened by blockchain technology. All you need to do is encode the transactional information for a car ride or an overnight stay, and again you have a perfectly safe way that disrupts the business model of the companies which have just begun to challenge the traditional economy. We are not just cutting out the fee-processing middle man, we are also eliminating the need for the match-making platform.

Because blockchain transactions are free, you can charge minuscule amounts, say 1/100 of a cent for a video view or article read. Why should I pay The Economist or National Geographic an annual subscription fee if I can pay per article on Facebook or my favorite chat app. Again, remember that blockchain transactions carry no transaction cost. You can charge for anything in any amount without worrying about third parties cutting into your profits.

Blockchain may make selling recorded music profitable again for artists by cutting out music companies and distributors like Apple or Spotify. The music you buy could even be encoded in the blockchain itself, making it a cloud archive for any song purchased. Because the amounts charged can be so small, subscription and streaming services will become irrelevant.

It goes further. Ebooks could be fitted with blockchain code. Instead of Amazon taking a cut, and the credit card company earning money on the sale, the books would circulate in encoded form and a successful blockchain transaction would transfer money to the author and unlock the book. Transfer ALL the money to the author, not just meager royalties. You could do this on a book review website like Goodreads, or on your own website. The marketplace Amazon is then unnecessary. Successful iterations could even include reviews and other third-party information about the book.

In the financial world the applications are more obvious and the revolutionary changes more imminent. Blockchains will change the way stock exchanges work, loans are bundled, and insurances contracted. They will eliminate bank accounts and practically all services offered by banks. Almost every financial institution will go bankrupt or be forced to change fundamentally, once the advantages of a safe ledger without transaction fees is widely understood and implemented. After all, the financial system is built on taking a small cut of your money for the privilege of facilitating a transaction. Bankers will become mere advisers, not gatekeepers of money. Stockbrokers will no longer be able to earn commissions and the buy/sell spread will disappear.

How Does Blockchain Work?

Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.

Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.

To go in deeper with the Google spreadsheet analogy, I would like you to read this piece from a blockchain specialist.


What is Blockchain Technology? A step-by-step guide than anyone can understand“The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once.That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. The distributed part comes into play when sharing involves a number of people.

Imagine the number of legal documents that should be used that way. Instead of passing them to each other, losing track of versions, and not being in sync with the other version, why can’t *all* business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow. You don’t need a blockchain to share documents, but the shared documents analogy is a powerful one.” – William Mougayar, Venture advisor, 4x entrepreneur, marketer, strategist and blockchain specialist

The reason why the blockchain has gained so much admiration is that:

  • It is not owned by a single entity, hence it is decentralized
  • The data is cryptographically stored inside
  • The blockchain is immutable, so no one can tamper with the data that is inside the blockchain
  • The blockchain is transparent so one can track the data if they want to

The Three Pillars of Blockchain Technology

The three main properties of Blockchain Technology which has helped it gain widespread acclaim are as follows:

  • Decentralization
  • Transparency
  • Immutability

Pillar #1: Decentralization

Before Bitcoin and BitTorrent came along, we were more used to centralized services. The idea is very simple. You have a centralized entity which stored all the data and you’d have to interact solely with this entity to get whatever information you required.

Another example of a centralized system is banks. They store all your money, and the only way that you can pay someone is by going through the bank.

The traditional client-server model is a perfect example of this:

What is Blockchain

When you google search for something, you send a query to the server who then gets back at you with the relevant information. That is simple client-server.

Now, centralized systems have treated us well for many years, however, they have several vulnerabilities.

  • Firstly, because they are centralized, all the data is stored in one spot. This makes them easy target spots for potential hackers.
  • If the centralized system were to go through a software upgrade, it would halt the entire system
  • What if the centralized entity somehow shut down for whatever reason? That way nobody will be able to access the information that it possesses
  • Worst case scenario, what if this entity gets corrupted and malicious? If that happens then all the data that is inside the blockchain will be compromised.

So, what happens if we just take this centralized entity away?

In a decentralized system, the information is not stored by one single entity. In fact, everyone in the network owns the information.

In a decentralized network, if you wanted to interact with your friend then you can do so directly without going through a third party. That was the main ideology behind Bitcoins. You and only you alone are in charge of your money. You can send your money to anyone you want without having to go through a bank.

blockchain

Pillar #2: Transparency

One of the most interesting and misunderstood concepts in blockchain technology is “transparency.” Some people say that blockchain gives you privacy while some say that it is transparent. Why do you think that happens?

Well… a person’s identity is hidden via complex cryptography and represented only by their public address. So, if you were to look up a person’s transaction history, you will not see “Bob sent 1 BTC” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”.

The following snapshot of Ethereum transactions will show you what we mean:

Ethereum transactions

So, while the person’s real identity is secure, you will still see all the transactions that were done by their public address. This level of transparency has never existed before within a financial system. It adds that extra, and much needed, level of accountability which is required by some of these biggest institutions.

Speaking purely from the point of view of cryptocurrency, if you know the public address of one of these big companies, you can simply pop it in an explorer and look at all the transactions that they have engaged in. This forces them to be honest, something that they have never had to deal with before.

However, that’s not the best use-case. We are pretty sure that most of these companies won’t transact using cryptocurrencies, and even if they do, they won’t do ALL their transactions using cryptocurrencies. However, what if the blockchain technology was integrated…say in their supply chain?

You can see why something like this can be very helpful for the finance industry right?

Pillar #3: Immutability

Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.

Can you imagine how valuable this will be for financial institutes?

Imagine how many embezzlement cases can be nipped in the bud if people know that they can’t “work the books” and fiddle around with company accounts.

The reason why the blockchain gets this property is that of cryptographic hash function.

In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. In the context of cryptocurrencies like bitcoin, the transactions are taken as an input and run through a hashing algorithm (bitcoin uses SHA-256) which gives an output of a fixed length.

Let’s see how the hashing process works. We are going to put in certain inputs. For this exercise, we are going to use the SHA-256 (Secure Hashing Algorithm 256).

hashing

As you can see, in the case of SHA-256, no matter how big or small your input is, the output will always have a fixed 256-bits length. This becomes critical when you are dealing with a huge amount of data and transactions. So basically, instead of remembering the input data which could be huge, you can just remember the hash and keep track.

A cryptographic hash function is a special class of hash functions which has various properties making it ideal for cryptography. There are certain properties that a cryptographic hash function needs to have in order to be considered secure. You can read about those in detail in our guide on hashing.

There is just one property that we want you to focus on today. It is called the “Avalanche Effect.”

What does that mean?

Even if you make a small change in your input, the changes that will be reflected in the hash will be huge. Let’s test it out using SHA-256:

blockchain hashing

You see that? Even though you just changed the case of the first alphabet of the input, look at how much that has affected the output hash. Now, let’s go back to our previous point when we were looking at blockchain architecture. What we said was:

The blockchain is a linked list which contains data and a hash pointer which points to its previous block, hence creating the chain. What is a hash pointer? A hash pointer is similar to a pointer, but instead of just containing the address of the previous block it also contains the hash of the data inside the previous block.

This one small tweak is what makes blockchains so amazingly reliable and trailblazing.

Imagine this for a second, a hacker attacks block 3 and tries to change the data. Because of the properties of hash functions, a slight change in data will change the hash drastically. This means that any slight changes made in block 3, will change the hash which is stored in block 2, now that in turn will change the data and the hash of block 2 which will result in changes in block 1 and so on and so forth. This will completely change the chain, which is impossible. This is exactly how blockchains attain immutability.

Maintaining the Blockchain – Network and Nodes

The blockchain is maintained by a peer-to-peer network. The network is a collection of nodes which are interconnected to one another. Nodes are individual computers which take in input and performs a function on them and gives an output. The blockchain uses a special kind of network called “peer-to-peer network” which partitions its entire workload between participants, who are all equally privileged, called “peers”. There is no longer one central server, now there are several distributed and decentralized peers.

Why do people use the peer-to-peer network?

One of the main uses of the peer-to-peer network is file sharing, also called torrenting. If you are to use a client-server model for downloading, then it is usually extremely slow and entirely dependent on the health of the server. Plus, like we said, it is prone to censorship.

However, in a peer-to-peer system, there is no central authority, and hence if even one of the peers in the network goes out of the race, you still have more peers to download from. Plus, it is not subject to the idealistic standards of a central system, hence it is not prone to censorship.

If we were to compare the two:

Image courtesy: Quora

The decentralized nature of a peer-to-peer system becomes critical as we move on to the next section. How critical? Well, the simple (at least on paper) idea of combining this peer-to-peer network with a payment system has completely revolutionized the finance industry by giving birth to cryptocurrency.

The use of networks and nodes in cryptocurrencies.

The peer-to-peer network structure in cryptocurrencies is structured according to the consensus mechanism that they are utilizing. For cryptos like Bitcoin and Ethereum which uses a normal proof-of-work consensus mechanism (Ethereum will eventually move on to Proof of Stake), all the nodes have the same privilege. The idea is to create an egalitarian network. The nodes are not given any special privileges, however, their functions and degree of participation may differ. There is no centralized server/entity, nor is there any hierarchy. It is a flat topology.

These decentralized cryptocurrencies are structured like that is because of a simple reason, to stay true to their philosophy. The idea is to have a currency system, where everyone is treated as an equal and there is no governing body, which can determine the value of the currency based on a whim. This is true for both bitcoin and Ethereum.

Now, if there is no central system, how would everyone in the system get to know that a certain transaction has happened? The network follows the gossip protocol. Think of how gossip spreads. Suppose Alice sent 3 ETH to Bob. The nodes nearest to her will get to know of this, and then they will tell the nodes closest to them, and then they will tell their neighbors, and this will keep on spreading out until everyone knows. Nodes are basically your nosy, annoying relatives.

What is Blockchain Technology? A step-by-step guide than anyone can understand
So, what is a node in the context of Ethereum? A node is simply a computer that participates in the Ethereum network. This participation can be in three ways

  • By keeping a shallow-copy of the blockchain aka a Light Client
  • By keeping a full-copy of the blockchain aka a Full Node
  • By verifying the transactions aka Mining

 

However, the problem with this design is that it is not really that scalable. Which is why, a lot of new generation cryptocurrencies adopt a leader-based consensus mechanism. In EOS, Cardano, Neo etc. the nodes elect leader nodes or “super nodes” who are in charge of the consensus and overall network health. These cryptos are a lot faster but they are not the most decentralized of systems.

So, in a way, cryptos have to make the trade-off between speed and decentralization.

Who Will Use The Blockchain?

As web infrastructure, you don’t need to know about the blockchain for it to be useful in your life.

Currently, finance offers the strongest use cases for the technology. International remittances, for instance. The World Bank estimates that over $430 billion US in money transfers were sent in 2015. And at the moment there is a high demand for blockchain developers.

The blockchain potentially cuts out the middleman for these types of transactions. Personal computing became accessible to the general public with the invention of the Graphical User Interface (GUI), which took the form of a “desktop”. Similarly, the most common GUI devised for the blockchain are the so-called “wallet” applications, which people use to buy things with Bitcoin, and store it along with other cryptocurrencies.

Transactions online are closely connected to the processes of identity verification. It is easy to imagine that wallet apps will transform in the coming years to include other types of identity management.

What is Blockchain? And What New Applications Will It Bring Us?

The blockchain gives internet users the ability to create value and authenticates digital information. What new business applications will result from this?

#1 Smart contracts

Distributed ledgers enable the coding of simple contracts that will execute when specified conditions are met. Ethereum is an open source blockchain project that was built specifically to realize this possibility. Still, in its early stages, Ethereum has the potential to leverage the usefulness of blockchains on a truly world-changing scale.

At the technology’s current level of development, smart contracts can be programmed to perform simple functions. For instance, a derivative could be paid out when a financial instrument meets certain benchmark, with the use of blockchain technology and Bitcoin enabling the payout to be automated.

#2 The sharing economy

With companies like Uber and Airbnb flourishing, the sharing economy is already a proven success. Currently, however, users who want to hail a ride-sharing service have to rely on an intermediary like Uber. By enabling peer-to-peer payments, the blockchain opens the door to direct interaction between parties — a truly decentralized sharing economy results.

An early example, OpenBazaar uses the blockchain to create a peer-to-peer eBay. Download the app onto your computing device, and you can transact with OpenBazzar vendors without paying transaction fees. The “no rules” ethos of the protocol means that personal reputation will be even more important to business interactions than it currently is on eBay.

#3 Crowdfunding

Crowdfunding initiatives like Kickstarter and Gofundme are doing the advance work for the emerging peer-to-peer economy. The popularity of these sites suggests people want to have a direct say in product development. Blockchains take this interest to the next level, potentially creating crowd-sourced venture capital funds.

In 2016, one such experiment, the Ethereum-based DAO (Decentralized Autonomous Organization), raised an astonishing $200 million USD in just over two months. Participants purchased “DAO tokens” allowing them to vote on smart contract venture capital investments (voting power was proportionate to the number of DAO they were holding). A subsequent hack of project funds proved that the project was launched without proper due diligence, with disastrous consequences. Regardless, the DAO experiment suggests the blockchain has the potential to usher in “a new paradigm of economic cooperation.”

#4 Governance

By making the results fully transparent and publicly accessible, distributed database technology could bring full transparency to elections or any other kind of poll taking. Ethereum-based smart contracts help to automate the process.

The app, Boardroom, enables organizational decision-making to happen on the blockchain. In practice, this means company governance becomes fully transparent and verifiable when managing digital assets, equity or information.

#5 Supply chain auditing

Consumers increasingly want to know that the ethical claims companies make about their products are real. Distributed ledgers provide an easy way to certify that the backstories of the things we buy are genuine. Transparency comes with blockchain-based timestamping of a date and location — on ethical diamonds, for instance — that corresponds to a product number.

The UK-based Provenance offers supply chain auditing for a range of consumer goods. Making use of the Ethereum blockchain, a Provenance pilot project ensures that fish sold in Sushi restaurants in Japan has been sustainably harvested by its suppliers in Indonesia.

#6 File storage

Decentralizing file storage on the internet brings clear benefits. Distributing data throughout the network protects files from getting hacked or lost.

Inter Planetary File System (IPFS) makes it easy to conceptualize how a distributed web might operate. Similar to the way a BitTorrent moves data around the internet, IPFS gets rid of the need for centralized client-server relationships (i.e., the current web). An internet made up of completely decentralized websites has the potential to speed up file transfer and streaming times. Such an improvement is not only convenient. It’s a necessary upgrade to the web’s currently overloaded content-delivery systems.

#7 Prediction markets

The crowdsourcing of predictions on event probability is proven to have a high degree of accuracy. Averaging opinions cancels out the unexamined biases that distort judgment. Prediction markets that payout according to event outcomes are already active. Blockchains are a “wisdom of the crowd” technology that will no doubt find other applications in the years to come.

The prediction market application Augur makes share offerings on the outcome of real-world events. Participants can earn money by buying into the correct prediction. The more shares purchased in the correct outcome, the higher the payout will be. With a small commitment of funds (less than a dollar), anyone can ask a question, create a market based on a predicted outcome, and collect half of all transaction fees the market generates.

#8 Protection of intellectual property

As is well known, digital information can be infinitely reproduced — and distributed widely thanks to the internet. This has given web users globally a goldmine of free content. However, copyright holders have not been so lucky, losing control over their intellectual property and suffering financially as a consequence. Smart contracts can protect copyright and automate the sale of creative works online, eliminating the risk of file copying and redistribution.

Mycelia uses the blockchain to create a peer-to-peer music distribution system. Founded by the UK singer-songwriter Imogen Heap, Mycelia enables musicians to sell songs directly to audiences, as well as license samples to producers and divvy up royalties to songwriters and musicians — all of these functions being automated by smart contracts. The capacity of blockchains to issue payments in fractional cryptocurrency amounts (micropayments) suggests this use case for the blockchain has a strong chance of success.

#9 Internet of Things (IoT)

What is the IoT? The network-controlled management of certain types of electronic devices — for instance, the monitoring of air temperature in a storage facility. Smart contracts make the automation of remote systems management possible. A combination of software, sensors, and the network facilitates an exchange of data between objects and mechanisms. The result increases system efficiency and improves cost monitoring.

The biggest players in manufacturing, tech and telecommunications are all vying for IoT dominance. Think Samsung, IBM and AT&T. A natural extension of existing infrastructure controlled by incumbents, IoT applications will run the gamut from predictive maintenance of mechanical parts to data analytics, and mass-scale automated systems management.

#10 Neighbourhood Microgrids

Blockchain technology enables the buying and selling of the renewable energy generated by neighborhood microgrids. When solar panels make excess energy, Ethereum-based smart contracts automatically redistribute it. Similar types of smart contract automation will have many other applications as the IoT becomes a reality.

Located in Brooklyn, Consensys is one of the foremost companies globally that is developing a range of applications for Ethereum. One project they are partnering on is Transactive Grid, working with the distributed energy outfit, LO3. A prototype project currently up and running uses Ethereum smart contracts to automate the monitoring and redistribution of microgrid energy. This so-called “intelligent grid” is an early example of IoT functionality.

#11 Identity management

There is a definite need for better identity management on the web. The ability to verify your identity is the lynchpin of financial transactions that happen online. However, remedies for the security risks that come with web commerce are imperfect at best. Distributed ledgers offer enhanced methods for proving who you are, along with the possibility to digitize personal documents. Having a secure identity will also be important for online interactions — for instance, in the sharing economy. A good reputation, after all, is the most important condition for conducting transactions online.

Developing digital identity standards is proving to be a highly complex process. Technical challenges aside, a universal online identity solution requires cooperation between private entities and government. Add to that the need to navigate legal systems in different countries and the problem becomes exponentially difficult. E-Commerce on the internet currently relies on the SSL certificate (the little green lock) for secure transactions on the web. Netki is a startup that aspires to create an SSL standard for the blockchain. Having recently announced a $3.5 million seed round, Netki expects a product launch in early 2017.

#12 AML and KYC

Anti-money laundering (AML) and know your customer (KYC) practices have a strong potential for being adapted to the blockchain. Currently, financial institutions must perform a labour intensive multi-step process for each new customer. KYC costs could be reduced through cross-institution client verification, and at the same time increase monitoring and analysis effectiveness.

Startup Polycoin has an AML/KYC solution that involves analysing transactions. Those transactions identified as being suspicious are forwarded on to compliance officers. Another startup Tradle is developing an application called Trust in Motion (TiM). Characterized as an “Instagram for KYC”, TiM allows customers to take a snapshot of key documents (passport, utility bill, etc.). Once verified by the bank, this data is cryptographically stored on the blockchain.

#13 Data management

Today, in exchange for their personal data people can use social media platforms like Facebook for free. In future, users will have the ability to manage and sell the data their online activity generates. Because it can be easily distributed in small fractional amounts, Bitcoin — or something like it — will most likely be the currency that gets used for this type of transaction.

The MIT project Enigma understands that user privacy is the key precondition for creating of a personal data marketplace. Enigma uses cryptographic techniques to allow individual data sets to be split between nodes, and at the same time run bulk computations over the data group as a whole. Fragmenting the data also makes Enigma scalable (unlike those blockchain solutions where data gets replicated on every node). A Beta launch is promised within the next six months.

#14 Land title registration

As Publicly-accessible ledgers, blockchains can make all kinds of record-keeping more efficient. Property titles are a case in point. They tend to be susceptible to fraud, as well as costly and labour intensive to administer.

A number of countries are undertaking blockchain-based land registry projects. Honduras was the first government to announce such an initiative in 2015, although the current status of that project is unclear. This year, the Republic of Georgia cemented a deal with the Bitfury Group to develop a blockchain system for property titles. Reportedly, Hernando de Soto, the high-profile economist and property rights advocate, will be advising on the project. Most recently, Sweden announced it was experimenting with a blockchain application for property titles.

#15 Stock trading

The potential for added efficiency in share settlement makes a strong use case for blockchains in stock trading. When executed peer-to-peer, trade confirmations become almost instantaneous (as opposed to taking three days for clearance). Potentially, this means intermediaries — such as the clearing house, auditors and custodians — get removed from the process.

Numerous stock and commodities exchanges are prototyping blockchain applications for the services they offer, including the ASX (Australian Securities Exchange), the Deutsche Börse (Frankfurt’s stock exchange) and the JPX (Japan Exchange Group). Most high profile because the acknowledged first mover in the area, is the Nasdaq’s Linq, a platform for private market trading (typically between pre-IPO startups and investors). A partnership with the blockchain tech company Chain, Linq announced the completion of it its first share trade in 2015. More recently, Nasdaq announced the development of a trial blockchain project for proxy voting on the Estonian Stock Market.

Ian Khan, TEDx SpeakerAs revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.” – Ian Khan, TEDx Speaker | Author | Technology Futurist

https://blockgeeks.com/guides/what-is-blockchain-technology/

Making sense of bitcoin, cryptocurrency and blockchain

Bitcoin, cryptocurrency, blockchain… So what does it all mean?

Some of the noise is hype, but some of it points to important forces in the financial services industry. To help you make sense of it, we’ve pulled together content explaining why a lot of industry observers are paying close attention.

Let’s start with some quick definitions. Blockchain is the technology that enables the existence of cryptocurrency (among other things). Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.

A look at blockchain technology

What is it?

The blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, settling trades, voting and many other issues.

blockchain how it works
blockchain cyrptocurrency
blockchain benefits

 

Blockchain also has potential applications far beyond bitcoin and cryptocurrency.

Blockchain is, quite simply, a digital, decentralized ledger that keeps a record of all transactions that take place across a peer-to-peer network. The major innovation is that the technology allows market participants to transfer assets across the internet without the need for a centralized third party.

From a business perspective, it’s helpful to think of blockchain technology as a type of next-generation business process improvement software. Collaborative technology, such as blockchain, promises the ability to improve the business processes that occur between companies, radically lowering the “cost of trust.” For this reason, it may offer significantly higher returns for each investment dollar spent than most traditional internal investments.

Financial institutions are exploring how they could also use blockchain technology to upend everything from clearing and settlement to insurance.

For an overview of cryptocurrency, start with “Money is no object.” This paper, from PwC’s Financial Services Institute, focuses on cryptocurrency. We explain where it came from, how much consumers know about it and use it, what it will take for the market to grow and what the regulators think. We also look at how market participants, such as investors, technology providers and financial institutions, will be affected.

For some quick background on blockchain, take a look at our Top Trends in Financial Services page on Blockchain, where we discuss some of the ways FS firms are using blockchain, and how we expect the blockchain technology to develop in the future.

For a deeper dive into blockchain’s implications, read “A strategist’s guide to blockchain.” This article, from strategy+business, examines the potential benefits of this important innovation—and also suggests a way forward for financial institutions. Put simply, proceed deliberately. Explore how others might try to disrupt your business with blockchain technology and how your company could use it to leap ahead instead. In all cases, link your investments to your value proposition and give your business partners and your customers what they want most: speed, convenience and control over their transactions.

For a peek into the application of blockchains for smart contracts, check out “Blockchain and smart contract automation”. This short series of articles explore how blockchains, both public and private, have triggered a global hunt for ways to remove friction from transaction-related processes, including the process of reaching contractual agreements. Learn about the precursors, challenges and future outlook of implementing smart contracts. We also chat with Gideon Greenspan of Coin Sciences to learn about his views on the legal ramifications of public blockchains and why companies are seeking alternatives.

When a technology moves so quickly, it’s dangerous to sit on the sidelines. We’re watching blockchain move from a startup idea to an established technology in a tiny fraction of the time it took for the internet or even the PC to be accepted as a standard tool. Blockchain technology could result in a radically different competitive future for the financial services industry. These articles will help you understand these changes—and what you should do about them.

https://www.pwc.com/us/en/industries/financial-services/fintech/bitcoin-blockchain-cryptocurrency.html

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FairTax

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The FairTax is a proposal to reform the federal tax code of the United States. It would replace all federal income taxes (including the alternative minimum taxcorporate income taxes, and capital gains taxes), payroll taxes(including Social Security and Medicare taxes), gift taxes, and estate taxes with a single broad national consumption tax on retail sales. The Fair Tax Act (H.R. 25/S. 18) would apply a tax, once, at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or “prebate”, of tax on purchases up to the poverty level.[1][2] First introduced into the United States Congress in 1999, a number of congressional committees have heard testimony on the bill; however, it has not moved from committee and has yet to have any effect on the tax system. In recent years, a tax reform movement has formed behind the FairTax proposal.[3] Attention increased after talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign.

As defined in the proposed legislation, the tax rate is 23% for the first year. This percentage is based on the total amount paid including the tax ($23 out of every $100 spent in total). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[4] The rate would automatically adjust annually based on federal receipts in the previous fiscal year.[5] With the rebate taken into consideration, the FairTax would be progressive on consumption,[2] but would also be regressive on income at higher income levels (as consumption falls as a percentage of income).[6][7] Opponents argue this would accordingly decrease the tax burdenon high-income earners and increase it on the middle class.[4][8] Supporters contend that the plan would effectively tax wealth, increase purchasing power[9][10] and decrease tax burdens by broadening the tax base.

The plan’s supporters state that a consumption tax would increase savings and investment, ease tax compliance and increase economic growth, increase incentives for international business to locate in the US and increase US competitiveness in international trade.[11][12][13] The plan is intended to increase cost transparency for funding the federal government. Supporters believe it would increase civil liberties, benefit the environment and effectively tax illegal activity and undocumented immigrants.[11][14] Opponents contend that a consumption tax of this size would be extremely difficult to collect, and would lead to pervasive tax evasion.[4][6] They also argue that the proposed sales tax rate would raise less revenue than the current tax system, leading to an increased budget deficit.[4][15] Other concerns include the proposed repeal of the Sixteenth Amendment, removal of tax deduction incentives, transition effects on after-tax savings, incentives on credit use and the loss of tax advantages to state and local bonds.

Legislative overview and history

Rep John Linder holding the 133 page Fair Tax Act of 2007 in contrast to the then-current U.S. tax code and IRS regulations.

The legislation would remove the Internal Revenue Service (after three years), and establish Excise Tax and Sales Tax bureaus in the Department of the Treasury.[16] The states are granted the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury. The plan was created by Americans For Fair Taxation, an advocacy group formed to change the tax system. The group states that, together with economists, it developed the plan and the name “Fair Tax”, based on interviews, polls, and focus groups of the general public.[4] The FairTax legislation has been introduced in the House by Georgia Republicans John Linder (1999–2010) and Rob Woodall (2011–2014),[17] while being introduced in the Senate by Georgia Republican Saxby Chambliss (2003–2014).

Linder first introduced the Fair Tax Act (H.R. 2525) on July 14, 1999, to the 106th United States Congress and a substantially similar bill has been reintroduced in each subsequent session of Congress. The bill attracted a total of 56 House and Senate cosponsors in the 108th Congress,[18][19] 61 in the 109th,[20][21] 76 in the 110th,[22][23] 70 in the 111th,[24][25] 78 in the 112th,[26][27] 83 in the 113th (H.R. 25/S. 122), 81 in the 114th (H.R. 25/S. 155), and 46 in the 115th (H.R. 25/S. 18). Former Speaker of the House Dennis Hastert (Republican) had cosponsored the bill in the 109th–110th Congress, but it has not received support from the Democratic leadership.[21][22][28] Democratic Representative Collin Peterson of Minnesota and Democratic Senator Zell Miller of Georgia cosponsored and introduced the bill in the 108th Congress, but Peterson is no longer cosponsoring the bill and Miller has left the Senate.[18][19] In the 109th–111th Congress, Representative Dan Boren has been the only Democrat to cosponsor the bill.[20][22] A number of congressional committees have heard testimony on the FairTax, but it has not moved from committee since its introduction in 1999. The legislation was also discussed with President George W. Bush and his Secretary of the Treasury Henry M. Paulson.[29]

To become law, the bill will need to be included in a final version of tax legislation from the U.S. House Committee on Ways and Means, pass both the House and the Senate, and finally be signed by the President. In 2005, President Bush established an advisory panel on tax reform that examined several national sales tax variants including aspects of the FairTax and noted several concerns. These included uncertainties as to the revenue that would be generated, and difficulties of enforcement and administration, which made this type of tax undesirable to recommend in their final report.[8] The panel did not examine the FairTax as proposed in the legislation. The FairTax received visibility in the 2008 presidential election on the issue of taxes and the IRS, with several candidates supporting the bill.[30][31] A poll in 2009 by Rasmussen Reports found that 43% of Americans would support a national sales tax replacement, with 38% opposed to the idea; the sales tax was viewed as fairer by 52% of Republicans, 44% of Democrats, and 49% of unaffiliateds.[32] President Barack Obama did not support the bill,[33] arguing for more progressive changes to the income and payroll tax systems. President Donald Trump has proposed to lower overall income taxation and reduce the number of tax brackets from seven to three.

Tax rate

The sales tax rate, as defined in the legislation for the first year, is 23% of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total, or $30 on top of every $100 spent—$130 total).[4] After the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year.

The effective tax rate for any household would be variable due to the fixed monthly tax rebate that are used to rebate taxes paid on purchases up to the poverty level.[2] The tax would be levied on all U.S. retail sales for personal consumption on new goods and services. Critics argue that the sales tax rate defined in the legislation would not be revenue neutral (that is, it would collect less for the government than the current tax system), and thus would increase the budget deficit, unless government spending were equally reduced.[4]

Sales tax rate

During the first year of implementation, the FairTax legislation would apply a 23% federal retail sales tax on the total transaction value of a purchase; in other words, consumers pay to the government 23 cents of every dollar spent in total (sometimes called tax-inclusive, and presented this way to provide a direct comparison with individual income and employment taxes which reduce a person’s available money before they can make purchases). The equivalent assessed tax rate is 30% if the FairTax is applied to the pre-tax price of a good like traditional U.S. state sales taxes (sometimes called tax-exclusive; this rate is not directly comparable with existing income and employment taxes).[4] After the first year of implementation, this tax rate would be automatically adjusted annually using a formula specified in the legislation that reflects actual federal receipts in the previous fiscal year.[5]

Effective tax rate

A household’s effective tax rate on consumption would vary with the annual expenditures on taxable items and the fixed monthly tax rebate. The rebate would have the greatest effect at low spending levels, where they could lower a household’s effective rate to zero or below.[9] The lowest effective tax rate under the FairTax could be negative due to the rebate for households with annual spending amounts below poverty level spending for a specified household size. At higher spending levels, the rebate has less impact, and a household’s effective tax rate would approach 23% of total spending.[9] A person spending at the poverty level would have an effective tax rate of 0%, whereas someone spending at four times the poverty level would have an effective tax rate of 17.2%. Buying or otherwise receiving items and services not subject to federal taxation (such as a used home or car) can contribute towards a lower effective tax rate. The total amount of spending and the proportion of spending allocated to taxable items would determine a household’s effective tax rate on consumption. If a rate is calculated on income, instead of the tax base, the percentage could exceed the statutory tax rate in a given year.

Monthly tax rebate

Proposed 2015 FairTax Prebate Schedule[34]
One adult household Two adult household
Family
Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
Family
Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
1 person $11,770 $2,707 $226 couple $23,540 $5,414 $451
and 1 child $15,930 $3,664 $305 and 1 child $27,700 $6,371 $531
and 2 children $20,090 $4,621 $385 and 2 children $31,860 $7,328 $611
and 3 children $24,250 $5,578 $465 and 3 children $36,020 $8,285 $690
and 4 children $28,410 $6,534 $545 and 4 children $40,180 $9,241 $770
and 5 children $32,570 $7,491 $624 and 5 children $44,340 $10,198 $850
and 6 children $36,490 $8,393 $699 and 6 children $48,500 $11,155 $930
and 7 children $40,890 $9,405 $784 and 7 children $52,660 $12,112 $1,009
The annual consumption allowance is based on the 2015 DHHS Poverty Guidelines as published in the Federal Register, January 22, 2015. There is no marriage penalty as the couple amount is twice the amount that a single adult receives. For families/households with more than 8 persons, add $4,160 to the annual consumption allowance for each additional person. The annual consumption allowance is the amount of spending that is “untaxed” under the FairTax.

Under the FairTax, family households of lawful U.S. residents would be eligible to receive a “Family Consumption Allowance” (FCA) based on family size (regardless of income) that is equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services.[1] The FCA is a tax rebate (known as a “prebate” as it would be an advance) paid in twelve monthly installments, adjusted for inflation. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive.[4] Households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member.[1] The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a “smartcard” that can be used like a debit card.[1]

Opponents of the plan criticize this tax rebate due to its costs. Economists at the Beacon Hill Institute estimated the overall rebate cost to be $489 billion (assuming 100% participation).[35] In addition, economist Bruce Bartlett has argued that the rebate would create a large opportunity for fraud,[36] treats children disparately, and would constitute a welfare payment regardless of need.[37]

The President’s Advisory Panel for Federal Tax Reform cited the rebate as one of their chief concerns when analyzing their national sales tax, stating that it would be the largest entitlement program in American history, and contending that it would “make most American families dependent on monthly checks from the federal government”.[8][38] Estimated by the advisory panel at approximately $600 billion, “the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined.”[8] Proponents point out that income tax deductions, tax preferences, loopholescredits, etc. under the current system was estimated at $945 billion by the Joint Committee on Taxation.[35] They argue this is $456 billion more than the FairTax “entitlement” (tax refund) would spend to cover each person’s tax expenses up to the poverty level. In addition, it was estimated for 2005 that the Internal Revenue Service was already sending out $270 billion in refund checks.[35]

Presentation of tax rate

Mathematically, a 23% tax out of $100 yields approximately the same as a 30% tax on $77.

Sales and income taxes behave differently due to differing definitions of tax base, which can make comparisons between the two confusing. Under the existing individual income plus employment (Social Security; Medicare; Medicaid) tax formula, taxes to be paid are included in the base on which the tax rate is imposed (known as tax-inclusive). If an individual’s gross income is $100 and the sum of their income plus employment tax rate is 23%, taxes owed equals $23. Traditional state sales taxes are imposed on a tax base equal to the pre-tax portion of a good’s price (known as tax-exclusive). A good priced at $77 with a 30% sales tax rate yields $23 in taxes owed. To adjust an inclusive rate to an exclusive rate, divide the given rate by one minus that rate (i.e. {\displaystyle 0.23/(1-0.23)=0.23/0.77=0.30}).

The FairTax statutory rate, unlike most U.S. state-level sales taxes, is presented on a tax base that includes the amount of FairTax paid. For example, a final after-tax price of $100 includes $23 of taxes. Although no such requirement is included in the text of the legislation, Congressman John Linder has stated that the FairTax would be implemented as an inclusive tax, which would include the tax in the retail price, not added on at checkout—an item on the shelf for five dollars would be five dollars total.[29][39] The legislation requires the receipt to display the tax as 23% of the total.[40] Linder states the FairTax is presented as a 23% tax rate for easy comparison to income and employment tax rates (the taxes it would be replacing). The plan’s opponents call the semantics deceptive. FactCheck called the presentation misleading, saying that it hides the real truth of the tax rate.[41] Bruce Bartlett stated that polls show tax reform support is extremely sensitive to the proposed rate,[37] and called the presentation confusing and deceptive based on the conventional method of calculating sales taxes.[42] Proponents believe it is both inaccurate and misleading to say that an income tax is 23% and the FairTax is 30% as it implies that the sales tax burden is higher.

Revenue neutrality

A key question surrounding the FairTax is whether the tax has the ability to be revenue-neutral; that is, whether the tax would result in an increase or reduction in overall federal tax revenues. Economists, advisory groups, and political advocacy groups disagree about the tax rate required for the FairTax to be truly revenue-neutral. Various analysts use different assumptions, time-frames, and methods resulting in dramatically different tax rates making direct comparison among the studies difficult. The choice between static or dynamic scoring further complicates any estimate of revenue-neutral rates.[43]

A 2006 study published in Tax Notes by the Beacon Hill Institute at Suffolk University and Dr. Laurence Kotlikoff estimated the FairTax would be revenue-neutral for the tax year 2007 at a rate of 23.82% (31.27% tax-exclusive).[44] The study states that purchasing power is transferred to state and local taxpayers from state and local governments. To recapture the lost revenue, state and local governments would have to raise tax rates or otherwise change tax laws in order to continue collecting the same real revenues from their taxpayers.[38][44] The Argus Group and Arduin, Laffer & Moore Econometrics each published an analysis that defended the 23% rate.[45][46][47] While proponents of the FairTax concede that the above studies did not explicitly account for tax evasion, they also claim that the studies did not altogether ignore tax evasion under the FairTax. These studies presumably incorporated some degree of tax evasion in their calculations by using National Income and Product Account based figures, which is argued to understate total household consumption.[44] The studies also did not account for capital gains that may be realized by the U.S. government if consumer prices were allowed to rise, which would reduce the real value of nominal U.S. government debt.[44] Nor did these studies account for any increased economic growth that many economists researching the plan believe would occur.[44][47][48][49]

In contrast to the above studies, William G. Gale of the Brookings Institution published a study in Tax Notes that estimated a rate of 28.2% (39.3% tax-exclusive) for 2007 assuming full taxpayer compliance and an average rate of 31% (44% tax-exclusive) from 2006 to 2015 (assumes that the Bush tax cuts expire on schedule and accounts for the replacement of an additional $3 trillion collected through the Alternative Minimum Tax).[4][15][50] The study also concluded that if the tax base were eroded by 10% due to tax evasion, tax avoidance, and/or legislative adjustments, the average rate would be 34% (53% tax-exclusive) for the 10-year period. A dynamic analysis in 2008 by the Baker Institute For Public Policy concluded that a 28% (38.9% tax-exclusive) rate would be revenue neutral for 2006.[51] The President’s Advisory Panel for Federal Tax Reform performed a 2006 analysis to replace the individual and corporate income tax with a retail sales tax and estimated the rate to be 25% (34% tax-exclusive) assuming 15% tax evasion, and 33% (49% tax-exclusive) with 30% tax evasion.[8] The rate would need to be substantially higher to replace the additional taxes replaced by the FairTax (payroll, estate, and gift taxes). Several economists criticized the President’s Advisory Panel’s study as having allegedly altered the terms of the FairTax, using unsound methodology, and/or failing to fully explain their calculations.[35][44][52]

Taxable items and exemptions

The tax would be levied once at the final retail sale for personal consumption on new goods and services. Purchases of used items, exports and all business transactions would not be taxed. Also excluded are investments, such as purchases of stock, corporate mergers and acquisitions and capital investmentsSavings and education tuition expenses would be exempt as they would be considered an investment (rather than final consumption).[53]

A good would be considered “used” and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has been paid previously on the good, which may be different from the item being sold previously. Personal services such as health care, legal services, financial services, and auto repairs would be subject to the FairTax, as would renting apartments and other real property.[4] Food, clothing, prescription drugs and medical services would be taxed. (State sales taxes generally exempt these types of basic-need items in an effort to reduce the tax burden on low-income families. The FairTax would use a monthly rebate system instead of the common state exclusions.) Internet purchases would be taxed, as would retail international purchases (such as a boat or car) that are imported to the United States (collected by the U.S. Customs and Border Protection).[53]

Distribution of tax burden

Boston University study of the FairTax. Lower rates claimed on workers from a larger tax base, replacing regressive taxes, and wealth taxation.

President’s Advisory Panel’sanalysis of a hybrid National Sales Tax. Higher rates claimed on the middle-class for an income tax replacement (excludes payroll, estate, and gift taxes replaced under the FairTax).

The FairTax’s effect on the distribution of taxation or tax incidence (the effect on the distribution of economic welfare) is a point of dispute. The plan’s supporters argue that the tax would broaden the tax base, that it would be progressive, and that it would decrease tax burdens and start taxing wealth (reducing the economic gap).[9] Opponents argue that a national sales tax would be inherently regressive and would decrease tax burdens paid by high-income individuals.[4][54] A person earning $2 million a year could live well spending $1 million, and as a result pay a mere 11% of that year’s income in taxes.[4] Households at the lower end of the income scale spend almost all their income, while households at the higher end are more likely to devote a portion of income to saving. Therefore, according to economist William G. Gale, the percentage of income taxed is regressive at higher income levels (as consumption falls as a percentage of income).[6]

Income earned and saved would not be taxed until spent under the proposal. Households at the extreme high end of consumption often finance their purchases out of savings, not income.[6][37] Economist Laurence Kotlikoff states that the FairTax could make the tax system much more progressive and generationally equitable,[2] and argues that taxing consumption is effectively the same as taxing wages plus taxing wealth.[2] A household of three persons (this example will use two adults plus one child; the rebate does not consider marital status) spending $30,000 a year on taxable items would devote about 3.4% of total spending ([$6,900 tax minus $5,888 rebate]/$30,000 spending) to the FairTax after the rebate. The same household spending $125,000 on taxable items would spend around 18.3% ([$28,750 tax minus $5,888 rebate]/$125,000 spending) on the FairTax. At higher spending levels, the rebate has less impact and the rate approaches 23% of total spending. Thus, according to economist Laurence Kotlikoff, the effective tax rate is progressive on consumption.[2]

Studies by Kotlikoff and David Rapson state that the FairTax would significantly reduce marginal taxes on work and saving, lowering overall average remaining lifetime tax burdens on current and future workers.[9][55] A study by Kotlikoff and Sabine Jokisch concluded that the long-term effects of the FairTax would reward low-income households with 26.3% more purchasing power, middle-income households with 12.4% more purchasing power, and high-income households with 5% more purchasing power.[10] The Beacon Hill Institute reported that the FairTax would make the federal tax system more progressive and would benefit the average individual in almost all expenditures deciles.[7] In another study, they state the FairTax would offer the broadest tax base (an increase of over $2 trillion), which allows the FairTax to have a lower tax rate than current tax law.[56]

Gale analyzed a national sales tax (though different from the FairTax in several aspects[7][45]) and reported that the overall tax burden on middle-income Americans would increase while the tax burden on the top 1% would drop.[6] A study by the Beacon Hill Institute reported that the FairTax may have a negative effect on the well-being of mid-income earners for several years after implementation.[49] According to the President’s Advisory Panel for Federal Tax Reform report, which compared the individual and corporate income tax (excluding other taxes the FairTax replaces) to a sales tax with rebate,[8][35] the percentage of federal taxes paid by those earning from $15,000–$50,000 would rise from 3.6% to 6.7%, while the burden on those earning more than $200,000 would fall from 53.5% to 45.9%.[8] The report states that the top 5% of earners would see their burden decrease from 58.6% to 37.4%.[8][57]FairTax supporters argue that replacing the regressive payroll tax (a 15.3% total tax not included in the Tax Panel study;[8] payroll taxes include a 12.4% Social Security tax on wages up to $97,500 and a 2.9% Medicare tax, a 15.3% total tax that is often split between employee and employer) greatly changes the tax distribution, and that the FairTax would relieve the tax burden on middle-class workers.[2][52]

Predicted effects

The predicted effects of the FairTax are a source of disagreement among economists and other analysts.[41][42][54] According to Money magazine, while many economists and tax experts support the idea of a consumption tax, many of them view the FairTax proposal as having serious problems with evasion and revenue neutrality.[4] Some economists argue that a consumption tax (the FairTax is one such tax) would have a positive effect on economic growth, incentives for international business to locate in the U.S., and increased U.S. international competitiveness (border tax adjustment in global trade).[11][12][13] The FairTax would be tax-free on mortgage interest (up to a basic interest rate) and donations, but some lawmakers have concerns about losing tax incentives on home ownership and charitable contributions.[58] There is also concern about the effect on the income tax industry and the difficulty of repealing the Sixteenth Amendment (to prevent Congress from re-introducing an income tax).[59]

Economic

Americans For Fair Taxation states the FairTax would boost the United States economy and offers a letter signed by eighty economists, including Nobel Laureate Vernon L. Smith, that have endorsed the plan.[12] The Beacon Hill Institute estimated that within five years real GDP would increase 10.7% over the current system, domestic investment by 86.3%, capital stock by 9.3%, employment by 9.9%, real wages by 10.2%, and consumption by 1.8%.[49] Arduin, Laffer & Moore Econometrics projected the economy as measured by GDP would be 2.4% higher in the first year and 11.3% higher by the 10th year than it would otherwise be.[47] Economists Laurence Kotlikoff and Sabine Jokisch reported the incentive to work and save would increase; by 2030, the economy’s capital stock would increase by 43.7% over the current system, output by 9.4%, and real wages by 11.5%.[10] Economist John Golob estimates a consumption tax, like the FairTax, would bring long-term interest rates down by 25–35%.[60] An analysis in 2008 by the Baker Institute For Public Policyindicated that the plan would generate significant overall macroeconomic improvement in both the short and long-term, but warned of transitional issues.[51]

FairTax proponents argue that the proposal would provide tax burden visibility and reduce compliance and efficiency costs by 90%, returning a large share of money to the productive economy.[2] The Beacon Hill Institute concluded that the FairTax would save $346.51 billion in administrative costs and would be a much more efficient taxation system.[61] Bill Archer, former head of the House Ways and Means Committee, asked Princeton University Econometrics to survey 500 European and Asian companies regarding the effect on their business decisions if the United States enacted the FairTax. 400 of those companies stated they would build their next plant in the United States, and 100 companies said they would move their corporate headquarters to the United States.[62] Supporters argue that the U.S. has the highest combined statutory corporate income tax rate among OECD countries along with being the only country with no border adjustment element in its tax system.[63][64] Proponents state that because the FairTax eliminates corporate income taxes and is automatically border adjustable, the competitive tax advantage of foreign producers would be eliminated, immediately boosting U.S. competitiveness overseas and at home.[65]

Opponents point to a study commissioned by the National Retail Federation in 2000 that found a national sales tax bill filed by Billy Tauzin, the Individual Tax Freedom Act (H.R. 2717), would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.[66] Wall Street Journal columnist James Taranto states the FairTax is unsuited to take advantage of supply-side effects and would create a powerful disincentive to spend money.[54] John Linder states an estimated $11 trillion is held in foreign accounts (largely for tax purposes), which he states would be repatriated back to U.S. banks if the FairTax were enacted, becoming available to U.S. capital markets, bringing down interest rates, and otherwise promoting economic growth in the United States.[11] Attorney Allen Buckley states that a tremendous amount of wealth was already repatriated under law changes in 2004 and 2005.[67] Buckley also argues that if the tax rate was significantly higher, the FairTax would discourage the consumption of new goods and hurt economic growth.[67]

Transition

Stability of the tax base: a comparison of personal consumption expenditures and adjusted gross income

During the transition, many or most of the employees of the IRS (105,978 in 2005)[68] would face loss of employment.[44] The Beacon Hill Institute estimate is that the federal government would be able to cut $8 billion from the IRS budget of $11.01 billion (in 2007), reducing the size of federal tax administration by 73%.[44] In addition, income tax preparers (many seasonal), tax lawyers, tax compliance staff in medium-to-large businesses, and software companies which sell tax preparation software could face significant drops, changes, or loss of employment. The bill would maintain the IRS for three years after implementation before completely decommissioning the agency, providing employees time to find other employment.[16]

In the period before the FairTax is implemented, there could be a strong incentive for individuals to buy goods without the sales tax using credit. After the FairTax is in effect, the credit could be paid off using untaxed payroll. If credit incentives do not change, opponents of the FairTax worry it could exacerbate an existing consumer debt problem. Proponents of the FairTax state that this effect could also allow individuals to pay off their existing (pre-FairTax) debt more quickly,[11] and studies suggest lower interest rates after FairTax passage.[60]

Individuals under the current system who accumulated savings from ordinary income (by choosing not to spend their money when the income was earned) paid taxes on that income before it was placed in savings (such as a Roth IRA or CD). When individuals spend above the poverty level with money saved under the current system, that spending would be subject to the FairTax. People living through the transition may find both their earnings and their spending taxed.[69] Critics have stated that the FairTax would result in unfair double taxation for savers and suggest it does not address the transition effect on some taxpayers who have accumulated significant savings from after-tax dollars, especially retirees who have finished their careers and switched to spending down their life savings.[38][69] Supporters of the plan argue that the current system is no different, since compliance costs and “hidden taxes” embedded in the prices of goods and services cause savings to be “taxed” a second time already when spent.[69] The rebate would supplement accrued savings, covering taxes up to the poverty level. The income taxes on capital gains, estates, social security and pension benefits would be eliminated under FairTax. In addition, the FairTax legislation adjusts Social Security benefits for changes in the price level, so a percentage increase in prices would result in an equal percentage increase to Social Security income.[16] Supporters suggest these changes would offset paying the FairTax under transition conditions.[11]

Other indirect effects

The FairTax would be tax free on mortgage interest up to the federal borrowing rate for like-term instruments as determined by the Treasury,[70] but since savings, education, and other investments would be tax free under the plan, the FairTax could decrease the incentive to spend more on homes. An analysis in 2008 by the Baker Institute For Public Policy concluded that the FairTax would have significant transitional issues for the housing sector since the investment would no longer be tax-favored.[51] In a 2007 study, the Beacon Hill Institute concluded that total charitable giving would increase under the FairTax, although increases in giving would not be distributed proportionately amongst the various types of charitable organizations.[71] The FairTax may also affect state and local government debt as the federal income tax system provides tax advantages to municipal bonds.[72] Proponents believe environmental benefits would result from the FairTax through environmental economics and the re-use and re-sale of used goods. Advocates argue the FairTax would provide an incentive for illegal immigrants to legalize as they would otherwise not receive the rebate.[1][11] Proponents also believe that the FairTax would have positive effects on civil liberties that are sometimes charged against the income tax system, such as social inequalityeconomic inequalityfinancial privacyself-incriminationunreasonable search and seizureburden of proof, and due process.[14]

If the FairTax bill were passed, permanent elimination of income taxation would not be guaranteed; the FairTax bill would repeal much of the existing tax code, but the Sixteenth Amendment would remain in place. Preventing new legislation from reintroducing income taxation would require a repeal of the Sixteenth Amendment to the United States Constitution with a separate provision expressly prohibiting a federal income tax.[59] This is referred to as an “aggressive repeal”. Separate income taxes enforced by individual states would be unaffected by the federal repeal. Passing the FairTax would require only a simple majority in each house of the United States Congress along with the signature of the President, whereas enactment of a constitutional amendment must be approved by two thirds of each house of the Congress, and three-quarters of the individual U.S. states. It is therefore possible that passage of the FairTax bill would simply add another taxation system. If a new income tax bill were passed after the FairTax passage, a hybrid system could develop; albeit, there is nothing preventing a bill for a hybrid system today. To address this issue and preclude that possibility, in the 111th Congress John Linder introduced a contingent sunset provision in H.R. 25. It would require the repeal of the Sixteenth Amendment within 8 years after the implementation of the FairTax or, failing that, the FairTax would expire.[73] Critics have also argued that a tax on state government consumption could be unconstitutional.[67]

Changes in the retail economy

Since the FairTax would not tax used goods, the value would be determined by the supply and demand in relation to new goods.[74] The price differential/margins between used and new goods would stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods. Because the U.S. tax system has a hidden effect on prices, it is expected that moving to the FairTax would decrease production costs from the removal of business taxes and compliance costs, which is predicted to offset a portion of the FairTax effect on prices.[11]

Value of used goods

Since the FairTax would not tax used goods, some critics have argued that this would create a differential between the price of new and used goods, which may take years to equalize.[37] Such a differential would certainly influence the sale of new goods like vehicles and homes. Similarly, some supporters have claimed that this would create an incentive to buy used goods, creating environmental benefits of re-use and re-sale. Conversely, it is argued that like the income tax system that contains embedded tax cost (see Theories of retail pricing),[75] used goods would contain the embedded FairTax cost.[69] While the FairTax would not be applied to the retail sales of used goods, the inherent value of a used good includes the taxes paid when the good was sold at retail. The value is determined by the supply and demand in relation to new goods.[74] The price differential / margins between used and new goods should stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods.

Theories of retail pricing

supply and demand diagram illustrating taxes’ effect on prices.

Based on a study conducted by Dale Jorgenson, proponents state that production cost of domestic goods and services could decrease by approximately 22% on average after embedded tax costs are removed, leaving the sale nearly the same after taxes. The study concludes that producer prices would drop between 15% and 26% (depending on the type of good/service).[76] Jorgenson’s research included all income and payroll taxes in the embedded tax estimation, which assumes employee take-home pay (net income) remains unchanged from pre-FairTax levels.[4][77] Price and wage changes after the FairTax would largely depend on the response of the Federal Reservemonetary authorities.[29][37][78] Non-accommodation of the money supply would suggest retail prices and take home pay stay the same—embedded taxes are replaced by the FairTax. Full accommodation would suggest prices and incomes rise by the exclusive rate (i.e., 30%)—embedded taxes become windfall gains. Partial accommodation would suggest a varying degree in-between.[29][78]

If businesses provided employees with gross pay (including income tax withholding and the employee share of payroll taxes),[44] Arduin, Laffer & Moore Econometrics estimated production costs could decrease by a minimum of 11.55% (partial accommodation).[47] This reduction would be from the removal of the remaining embedded costs, including corporate taxes, compliance costs, and the employer share of payroll taxes. This decrease would offset a portion of the FairTax amount reflected in retail prices, which proponents suggest as the most likely scenario.[29] Bruce Bartlett states that it is unlikely that nominal wages would be reduced, which he believes would result in a recession, but that the Federal Reserve would likely increase the money supply to accommodate price increases.[37] David Tuerck states “The monetary authorities would have to consider how the degree of accommodation, varying from none to full, would affect the overall economy and how it would affect the well-being of various groups such as retirees.”[78]

Social Security benefits would be adjusted for any price changes due to FairTax implementation.[16] The Beacon Hill Institute states that it would not matter, apart from transition issues, whether prices fall or rise—the relative tax burden and tax rate remains the same.[44] Decreases in production cost would not fully apply to imported products; so according to proponents, it would provide tax advantages for domestic production and increase U.S. competitiveness in global trade (see Border adjustability). To ease the transition, U.S. retailers will receive a tax credit equal to the FairTax on their inventory to allow for quick cost reduction. Retailers would also receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs,[79] which amounts to around $5 billion.

Effects on tax code compliance

One avenue for non-compliance is the black market. FairTax supporters state that the black market is largely untaxed under the current tax system. Economists estimate the underground economy in the United States to be between one and three trillion dollars annually.[80][81] By imposing a sales tax, supporters argue that black market activity would be taxed when proceeds from such activity are spent on legal consumption.[82] For example, the sale of illegal narcotics would remain untaxed (instead of being guilty of income tax evasion, drug dealers would be guilty of failing to submit sales tax), but they would face taxation when they used drug proceeds to buy consumer goods such as food, clothing, and cars. By taxing this previously untaxed money, FairTax supporters argue that non-filers would be paying part of their share of what would otherwise be uncollected income and payroll taxes.[11][83]

Other economists and analysts have argued that the underground economy would continue to bear the same tax burden as before.[13][82][83][84] They state that replacing the current tax system with a consumption tax would not change the tax revenue generated from the underground economy—while illicit income is not taxed directly, spending of income from illicit activity results in business income and wages that are taxed.[13][82][83]

Tax compliance and evasion

“No, No! Not That Way”—Political cartoon from 1933 commenting on a general sales tax over an income tax.

Proponents state the FairTax would reduce the number of tax filers by about 86% (from 100 million to 14 million) and reduce the filing complexity to a simplified state sales tax form.[52] The Government Accountability Office (GAO), among others, have specifically identified the negative relationship between compliance costs and the number of focal points for collection.[85] Under the FairTax, the federal government would be able to concentrate tax enforcement efforts on a single tax. Retailers would receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs.[79] In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses.[44] Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses (“Big-Box” retailers). 85.7% of all retail sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.[29]

The FairTax is a national tax, but can be administered by the states rather than a federal agency,[86] which may have a bearing on compliance as the states’ own agencies could monitor and audit businesses within that state. The 0.25% retained by the states amounts to $5 billion the states would have available for enforcement and administration. For example, California should receive over $500 million for enforcement and administration, which is more than the $327 million budget for the state’s sales and excise taxes.[87] Because the federal money paid to the states would be a percentage of the total revenue collected, John Linder claims the states would have an incentive to maximize collections.[11] Proponents believe that states that choose to conform to the federal tax base would have advantages in enforcement, information sharing, and clear interstate revenue allocation rules.[85][86] A study by the Beacon Hill Institute concluded that, on average, states could more than halve their sales tax rates and that state economies would benefit greatly from adopting a state-level FairTax.[85]

FairTax opponents state that compliance decreases when taxes are not automatically withheld from citizens, and that massive tax evasion could result by collecting at just one point in the economic system.[37] Compliance rates can also fall when taxed entities, rather than a third party, self-report their tax liability. For example, ordinary personal income taxes can be automatically withheld and are reported to the government by a third party. Taxes without withholding and with self-reporting, such as the FairTax, can see higher evasion rates. Economist Jane Gravelle of the Congressional Research Service found studies showing that evasion rates of sales taxes are often above 10%, even when the sales tax rate is in the single digits.[83] Tax publications by the Organisation for Economic Co-operation and Development (OECD), IMF, and Brookings Institution have suggested that the upper limit for a sales tax is about 10% before incentives for evasion become too great to control.[37] According to the GAO, 80% of state tax officials opposed a national sales tax as an intrusion on their tax base.[37] Opponents also raise concerns of legal tax avoidance by spending and consuming outside of the U.S. (imported goods would be subject to collection by the U.S. Customs and Border Protection).[88]

Economists from the University of Tennessee concluded that while there would be many desirable macroeconomic effects, adoption of a national retail sales tax would also have serious effects on state and local government finances.[89] Economist Bruce Bartlett stated that if the states did not conform to the FairTax, they would have massive confusion and complication as to what is taxed by the state and what is taxed by the federal government.[37] In addition, sales taxes have long exempted all but a few services because of the enormous difficulty in taxing intangibles—Bartlett suggests that the state may not have sufficient incentive to enforce the tax.[42] University of Michigan economist Joel Slemrod argues that states would face significant issues in enforcing the tax. “Even at an average rate of around five percent, state sales taxes are difficult to administer.”[90] University of Virginia School of Law professor George Yin states that the FairTax could have evasion issues with export and import transactions.[38] The President’s Advisory Panel for Federal Tax Reformreported that if the federal government were to cease taxing income, states might choose to shift their revenue-raising to income.[8] Absent the Internal Revenue Service, it would be more difficult for the states to maintain viable income tax systems.[8][89]

Underground economy

Opponents of the FairTax argue that imposing a national retail sales tax would drive transactions underground and create a vast underground economy.[4] Under a retail sales tax system, the purchase of intermediate goods and services that are factors of production are not taxed, since those goods would produce a final retail good that would be taxed. Individuals and businesses may be able to manipulate the tax system by claiming that purchases are for intermediate goods, when in fact they are final purchases that should be taxed. Proponents point out that a business is required to have a registered seller’s certificate on file, and must keep complete records of all transactions for six years. Businesses must also record all taxable goods bought for seven years. They are required to report these sales every month (see Personal vs. business purchases).[40] The government could also stipulate that all retail sellers provide buyers with a written receipt, regardless of transaction type (cash, credit, etc.), which would create a paper trail for evasion with risk of having the buyer turn them in (the FairTax authorizes a reward for reporting tax cheats).[52]

While many economists and tax experts support a consumption tax, problems could arise with using a retail sales tax rather than a value added tax (VAT).[4][37] A VAT imposes a tax on the value added at every intermediate step of production, so the goods reach the final consumer with much of the tax already in the price.[91] The retail seller has little incentive to conceal retail sales, since he has already paid much of the good’s tax. Retailers are unlikely to subsidize the consumer’s tax evasion by concealing sales. In contrast, a retailer has paid no tax on goods under a sales tax system. This provides an incentive for retailers to conceal sales and engage in “tax arbitrage” by sharing some of the illicit tax savings with the final consumer. Citing evasion, Tim Worstall wrote in Forbes that Europe’s 20-25% consumption taxes simply would not work if they were a sales tax: that’s why they’re all a VAT.[91] Laurence Kotlikoff has stated that the government could compel firms to report, via 1099-type forms, their sales to other firms, which would provide the same records that arise under a VAT.[52] In the United States, a general sales tax is imposed in 45 states plus the District of Columbia (accounting for over 97% of both population and economic output), which proponents argue provides a large infrastructure for taxing sales that many countries do not have.

Personal versus business purchases

Businesses would be required to submit monthly or quarterly reports (depending on sales volume) of taxable sales and sales tax collected on their monthly sales tax return. During audits, the business would have to produce invoices for the “business purchases” that they did not pay sales tax on, and would have to be able to show that they were genuine business expenses.[40] Advocates state the significant 86% reduction in collection points would greatly increase the likelihood of business audits, making tax evasion behavior much more risky.[52] Additionally, the FairTax legislation has several fines and penalties for non-compliance, and authorizes a mechanism for reporting tax cheats to obtain a reward.[40] To prevent businesses from purchasing everything for their employees, in a family business for example, goods and services bought by the business for the employees that are not strictly for business use would be taxable.[40] Health insurance or medical expenses would be an example where the business would have to pay the FairTax on these purchases. Taxable property and services purchased by a qualified non-profit or religious organization “for business purposes” would not be taxable.[92]

FairTax movement

A FairTax rally in Orlando, Floridaon July 28, 2006.

The creation of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT), which has grown into a large tax reform movement.[3][29] This organization, founded in 1994, claims to have spent over $20 million in research, marketing, lobbying, and organizing efforts over a ten-year period and is seeking to raise over $100 million more to promote the plan.[93] AFFT includes a staff in Houston and a large group of volunteers who are working to get the FairTax enacted.

In 2007 Bruce Bartlett said the FairTax was devised by the Church of Scientology in the early 1990s,[42] drawing comparisons between the tax policy and religious doctrine from the faith, whose creation myth holds that an evil alien ruler known as Xenu “used phony tax inspections as a guise for destroying his enemies.”[94] Representative John Linder told the Atlanta Journal-Constitution that Bartlett confused the FairTax movement with the Scientology-affiliated Citizens for an Alternative Tax System,[95] which also seeks to abolish the federal income tax and replace it with a national retail sales tax. Leo Linbeck, AFFT Chairman and CEO, stated “As a founder of Americans For Fair Taxation, I can state categorically, however, that Scientology played no role in the founding, research or crafting of the legislation giving expression to the FairTax.”[93]

Much support has been achieved by talk radio personality Neal Boortz.[96] Boortz’s book (co-authored by Georgia Congressman John Linder) entitled The FairTax Book, explains the proposal and spent time atop the New York Times Best Seller list. Boortz stated that he donates his share of the proceeds to charity to promote the book.[96] In addition, Boortz and Linder have organized several FairTax rallies to publicize support for the plan. Other media personalities have also assisted in growing grassroots support including former radio and TV talk show host Larry Elder, radio host and former candidate for the 2012 GOP Presidential Nomination Herman Cain, Fox News and radio host Sean Hannity, and Fox Business Host John Stossel.[97] The FairTax received additional visibility as one of the issues in the 2008 presidential election. At a debate on June 30, 2007, several Republican candidates were asked about their position on the FairTax and many responded that they would sign the bill into law if elected.[30] The most vocal promoters of the FairTax during the 2008 primary elections were Republican candidate Mike Huckabee and Democratic candidate Mike Gravel. The Internet, blogosphere, and electronic mailing lists have contributed to promoting, organizing, and gaining support for the FairTax. In the 2012 Republican presidential primary, and his ensuing Libertarian Party presidential run, former Governor of New Mexico and businessman Gary Johnson actively campaigned for the FairTax.[98] Former CEO of Godfather’s Pizza Herman Cain has been promoting the FairTax as a final step in a multiple-phase tax reform.[99] Outside of the United States, the Christian Heritage Party of Canadaadopted a FairTax proposal as part of their 2011 election platform[100] but won no seats in that election.

See also

Notes

  1. Jump up to:abcde Fair Tax Act, 2009, Chapter 3
  2. Jump up to:abcdefgh Kotlikoff, 2005
  3. Jump up to:ab Linbeck statement, 2005
  4. Jump up to:abcdefghijklmnopq Regnier, 2005
  5. Jump up to:ab Fair Tax Act, 2009, Chapter 1
  6. Jump up to:abcde Gale, 1998
  7. Jump up to:abc Tuerk et al., 2007
  8. Jump up to:abcdefghijk Tax Reform Panel Report, Ch. 9
  9. Jump up to:abcde Kotlikoff and Rapson, 2006
  10. Jump up to:abc Kotlikoff and Jokisch, 2007
  11. Jump up to:abcdefghij The FairTax Book
  12. Jump up to:abc Open Letter to the President
  13. Jump up to:abcd Auerbach, 2005
  14. Jump up to:ab Sipos, 2007
  15. Jump up to:ab Gale, 2005
  16. Jump up to:abcd Fair Tax Act, 2009, Title III
  17. ^ “Archived copy”. Archived from the original on 2015-02-05. Retrieved 2015-02-04.
  18. Jump up to:ab H.R.25 108th Cosponsors
  19. Jump up to:ab S.1493 108th Cosponsors
  20. Jump up to:ab H.R.25 109th Cosponsors
  21. Jump up to:ab S.25 109th Cosponsors
  22. Jump up to:abc H.R.25 110th Cosponsors
  23. ^ S.1025 110th Cosponsors
  24. ^ H.R.25 111th Cosponsors
  25. ^ S.296 111th Cosponsors
  26. ^ H.R.25 112th Cosponsors
  27. ^ S.13 112th Cosponsors
  28. ^ Bender, 2005
  29. Jump up to:abcdefg Boortz and Linder, 2008
  30. Jump up to:ab Davis, 2007
  31. ^ CBS News, 2007
  32. ^ Rasmussen Reports, 2009
  33. ^ Obama, 2008
  34. ^ 2015 prebate
  35. Jump up to:abcde Rebuttal to Tax Panel Report, 2006
  36. ^ Bartlett, 2007
  37. Jump up to:abcdefghijk Bartlett, 2007, Tax Notes
  38. Jump up to:abcd Yin, 2006, Fla. L. Rev.
  39. ^ Linder and Boortz, 2007
  40. Jump up to:abcde Fair Tax Act, 2009, Chapter 5
  41. Jump up to:ab Miller, 2007
  42. Jump up to:abcd Bartlett, 2007, Wall Street Journal
  43. ^ Gingrich and Ferrara, 2005
  44. Jump up to:abcdefghijk Bachman et al., 2006
  45. Jump up to:ab Burton and Mastromarco, 1998
  46. ^ Burton and Mastromarco, 1998a
  47. Jump up to:abcd Arduin, Laffer & Moore Econometrics, 2006
  48. ^ Altig et al., 2001
  49. Jump up to:abc Tuerk et al., 2007
  50. ^ Esenwein, 2005
  51. Jump up to:abc Diamond and Zodrow, 2008
  52. Jump up to:abcdef Kotlikoff, 2008
  53. Jump up to:ab Fair Tax Act, 2009
  54. Jump up to:abc Taranto, 2007
  55. ^ Kotlikoff and Rapson, 2006
  56. ^ Tuerk et al., 2007
  57. ^ Zodrow and McClure, 2006
  58. ^ Giuliani, 2007
  59. Jump up to:ab Vance, 2005
  60. Jump up to:ab Golob, 1995
  61. ^ Tuerk et al., 2007
  62. ^ Gaver, 2006
  63. ^ Hodge and Atkins, 2005
  64. ^ Linbeck, 2006a
  65. ^ Linbeck, 2007
  66. ^ Vargas, 2005
  67. Jump up to:abc Buckley, 2008
  68. ^ IRS Labor Force, 2005
  69. Jump up to:abcd Taranto, 2007a
  70. ^ Fair Tax Act, 2009, Chapter 8
  71. ^ Tuerck et al., 2007
  72. ^ Types of Bonds
  73. ^ Fair Tax Act, 2009, Title IV
  74. Jump up to:ab Landsburg, 1998
  75. ^ Forbes, 2007
  76. ^ Jorgenson, 1998
  77. ^ Boortz, 2005
  78. Jump up to:abc Tuerck, 2008
  79. Jump up to:ab Fair Tax Act, 2009, Chapter 2
  80. ^ McTague, 2005
  81. ^ Schlosser, 2004
  82. Jump up to:abc Taranto, 2007
  83. Jump up to:abcd American Enterprise Institute, 2007
  84. ^ Moffatt, 2006
  85. Jump up to:abc Tuerck at el, 2007
  86. Jump up to:ab Fair Tax Act, 2009, Chapter 4
  87. ^ California Legislative Analyst’s Office
  88. ^ Karvounis, 2007
  89. Jump up to:ab Fox and Murray, 2005
  90. ^ Slemrod, 2005
  91. Jump up to:ab Worstall, 2015
  92. ^ Fair Tax Act, 2009, Chapter 7
  93. Jump up to:ab Linbeck, 2007
  94. ^ Bartlett, Bruce (7 September 2007). “Scientology’s Fair Tax Plot”CBS News. Archived from the original on 13 December 2014. Retrieved 17 June2015.
  95. ^ Galloway, 2007
  96. Jump up to:ab Boortz, 2005
  97. ^ Boortz, 2006
  98. ^ Gary Johnson 2012 Campaign Site, 2011
  99. ^ RedState, 2011
  100. ^ Christian Heritage, 2011

References