On Our "Virtual Route 66" In the World This Week

 

A New quarter is before us.   It has been a very challenging week in our World evermore.    Our team chose images of hope from ancient Iran that we found quite beautiful to headline our quarter as spring is in the air and as over 20 countries around the world celebrated the ancient celebration of Nowruz.

As we went to press with this first edition of "Virtual Route 66" for the New quarter, we were assessing the situation in Pakistan as the current Prime Minister, Imran Khan, faces a vote of no confidence after potentially losing the biggest province, Punjab.   We have also been assessing the ongoing negotiations on Iran's Nuclear Deal which seems to have entered a dead zone yet again.   We have also been continuing our daily assessment of the ongoing War in Ukraine as we saw reports attributed to Ukrainian Officials whereby negotiations on a  peace treaty between Russia and Ukraine are at an "Advanced Stage" as Russians apparently are switching focus to the South in Ukraine.    This is as we have also been seeing reports of War Crimes committed by Russian Forces which our team will continue to assess.    India and China seem to be standing by Russia's side.   In addition, as we went to press, We also reviewed reports that the Russians have said they will halt their participation in the International Space Station.   Key elections loom in France (where President Macron noted he might lose) and Hungary over the ensuing weeks.    This is as elections are on tap in Brazil and the Philippines.   Furthermore, as we went to press, Iraq continued its' political paralysis due to Iranian-backed factions refusing to attend the parliamentary session to elect a President who would in turn name the Prime Minister.  One bright spot in our World, though, is the FIFA World Cup in Qatar.   The drawings for teams has been finalized and everyone awaits as the competition begins in earnest. 

Meanwhile Here in the United States, we have been assessing the ongoing probe by the House Committee on the January 6 attack on the US Capitol and what in our view was a coup to overturn the US Election of 2020.   We have also been following the nomination of Judge Jackson and the upcoming vote.  Based on our assessment, so far, we believe that she will be confirmed--albeit by the narrowest of margins.  This is as the US economy continued to create jobs (with an official unemployment rate of 3.6% and the staggering statistic that for every unemployed American, there are 1.6 job openings available).   The Biden Administration has presented its budget for the new fiscal year.       This is as the Primary Election season begins in earnest as we are seeing election signs even in our own community of Orange County.   

 We present a curation of the week that was courtesy of the team at Financial Times, The Washington Examiner, Defense One, The Marshall Project, Politico, and other leading thinkers and Media Players around the World: 

April 2, 2022 Heather Cox Richardson Apr 3 Today, Ukrainian soldiers recaptured the areas around Kyiv that Russian forces had taken early in the invasion. Retaking the territory, they found mined homes, executed civilians, and, in the city of Bucha near Kyiv, a mass grave of nearly 280 civilians. In the town of Trostyanets, the evacuating Russians defecated in the rooms of the police station and on a dead civilian outside. The reported war crimes and atrocities have made it impossible to separate the Russian troops from Russian president Vladimir Putin. Their shared criminality will have the effect of solidifying Putin’s power by making all the Russians outcasts together as they have deliberately demonstrated they reject the western rules of war. As Russia expert Tom Nichols put it: “If Putin's goal was to cement his grip on power by making Russia hated for decades to come, well, congratulations, I guess.” That Putin has taken as many as 400,000 Ukrainians to Russia as potential hostages as he tries to bargain his way out of crippling sanctions or into land concessions is cause for concern. Russian troops continue to bombard the valuable deepwater Black Sea port of Odessa. Refugees fleeing Russia for Finland before the last train service between Russia and Europe ended last week told writer William Doyle of a population in Russia gradually coming to realize they have fallen under the iron hand of a dictator as the government cracks down on dissent. “The problem is that there are many Russians who cannot admit our mistakes, cannot realize that we are trapped in a nightmare,” an art director told Doyle. “It’s much easier to watch TV and absorb the government propaganda. It’s easier to not think…. You have this vast country with many people who are poor and who have never travelled abroad. They are very isolated, with no communication, only their television. They work hard all day, come home exhausted and the TV is their only source.” A business manager told Doyle: “It seems to me that a majority of people support [the war], but I am not sure. The government propaganda tries to make it seem that a majority support it, but I don’t know. None of my friends, none of the people I know support it.” Another man talked of the sanctions squeezing Russia and said: “As a consequence of believing the lies and spreading the lies on a national scale, maybe some Russian people will see that they won’t have any of these nice, good, warm, cozy comfortable things coming from the West anymore…. Maybe,” he said, “they should reconsider their attitude toward the propaganda they are listening to from the TV set.” At home, CNN has reported more news about the gap of seven and a half hours in the White House diary and phone logs from the crucial hours of the January 6 insurrection. It turns out that about two weeks ago, the House Select Committee to Investigate the January 6th Attack on the U.S. Capitol interviewed the person in charge of compiling the president’s diary record. In order to compile that official record, the White House diarist normally gets information from the Secret Service about the president’s movements, the phone logs from the switchboard, and the records from the Oval Office, including phone calls, visitors, and activities. That record-keeping system was in place until January 4, 2021, but by then the plot to overturn the election was in high gear. Yesterday, the January 6 committee revealed a text message to Trump’s White House chief of staff Mark Meadows dated January 3, saying: “I have details on the call that [trade advisor Peter] Navarro helped convene yesterday with legislators as part of his effort to get Pence to delay certification…including that the president participated….” That call appears to have been reported at the time as including “nearly 300 state lawmakers” who were provided with resources to use “as they make calls for state legislatures to meet to investigate the election and consider decertifying their state election results.” An article about it stated: “A similar briefing is being scheduled in Washington, D.C., at the request of Members of Congress.” On January 3, lawyer John Eastman wrote his memo outlining a plan for then–Vice President Pence to overturn the election results. That night, Trump’s public schedule for the next day, tweeted by CNN’s Daniel Dale, read simply: “President Trump will work from early in the morning until late in the evening. He will make many calls and have many meetings. The president will depart the White House at 6:10PM for a victory rally in Dalton, GA.” One of those “many meetings,” was with Eastman, Pence, Pence’s counsel Greg Jacob, and Pence’s chief of staff Marc Short to show Pence and his team the memo. Pence (who would have been the fall guy if the plan blew up) said he had no power to do what they were asking him to do. Trump’s published schedule for January 5 was even shorter. It read: “President Trump will work from early in the morning until late in the evening. He will make many calls and have many meetings.” On that day, the information for the White House diary stopped abruptly. In a dramatic departure from normal operations, on the 5th the diarist didn’t get any of the normal information. Trump’s schedule for January 6, published the night of the 5th, read again: “President Trump will work from early in the morning until late in the evening. He will make many calls and have many meetings.” This time, though, it added: “The President will depart for the Ellipse at 10:50AM to deliver remarks at a Save America Rally.” They were just little things, those silly schedules and the articles about some deluded plan to decertify the state election results, littler than the many other norms Trump had broken. They were easily ignored or explained away by those who supported the president as well as by those just eager to see him gone. And yet, it turns out we should have been paying better attention: they were the signs that we were on the verge of losing our democracy.   1 APRIL 2022   Israel and the UAE complete negotiations on a bilateral free trade agreement

Economy The man who predicted the Great Resignation has more big news Quitting rates could stay higher than average for years, says Anthony Klotz APRIL 3, 2022 by Pilita Clark

World Ukraine war sparks European debate on merits of neutrality Countries with history of military non-engagement consider whether it is time to dump the policy APRIL 3, 2022 by Jude Webber in Dublin, Richard Milne in Helsinki and Sam Jones in Zurich

Politics Leftwinger Mélenchon courts youth vote as he eyes election run-off spot Firebrand’s chances of causing first-round upset on April 10 depend on how he fares with young voters APRIL 3, 2022 by Sarah White in Nanterre

World Orban’s bid for a fourth straight term comes down to a knife-edge vote Hungarians go to the polls after a closely fought campaign upended by the Ukraine war APRIL 3, 2022 by Marton Dunai in Budapest

Global Economy China is less likely to back Russia while facing troubles of its own Systemic risk in the property sector and early signs of Japanification threaten both its economy and alliances MARCH 27, 2022 by Ruchir Sharma World Ukrainian film-maker Natalka Vorozhbit: ‘I tried to warn the world’ The playwright and director on how her unblinking movie ‘Bad Roads’, about Donbas, presaged the current war MARCH 30, 2022 by Izabella Kaminska SPECIAL EDITION: UKRAINE Ukraine’s cultural heritage faces destruction as Russian bombing continues. Sites of profound historic, artistic and archaeological importance, including UNESCOs world heritage monuments, placed under risk from ongoing heavy bombardment, with severity of the damage to Ukraine’s cultural inheritance yet to be assessed. Google to pause ads that exploit or dismiss Russia-Ukraine war. Google bars ads from appearing alongside content that incites, dismisses or condones the ongoing Russia-Ukraine conflict. Ukrainian rebel region to hold referendum on joining Russia. The Russian-backed self-proclaimed Luhansk People's Republic in eastern Ukraine could hold a referendum on joining Russia. CONFLICT Sudanese security forces dismantle barricades set up by pro-democracy protesters. Sudanese security forces have removed street barricades placed by pro-democracy protesters in Khartoum’s sister cities of Bahri and Omdurman, foiling their attempt to halt life in the capital. Colombia's violence causes more displacement. The International Committee of the Red Cross (ICRC) says surging violence has caused the internal displacement of people, forced restriction of movement and injury or death by explosives to reach the highest level in five years. Solomon Islands defends security pact with China. According to a leaked document, Chinese military could establish a presence on the Solomon Islands under a new security pact with the South Pacific island nation, creating unease amongst Australia and New Zealand. Court charges Lebanon’s Geagea over Beirut violence. A Lebanese military court has charged Christian politician Samir Geagea over deadly clashes in Beirut last October, in a move that could stoke political tension two months before parliamentary elections. Armed attacks in Mozambique cause thousands to flee. Escalating violence by unidentified armed groups in northern Mozambique’s oil-rich Cabo Delgado Province has sent tens of thousands of people fleeing for their lives since the start of the year. DEVELOPMENT UN to roll out global early-warning systems for extreme weather. The United Nations is pledging that early-warning weather monitoring to predict when extreme events might occur, will cover everyone on the planet in five years. Taliban backtrack on reopening high schools for girls. The Taliban have reversed a decision to allow Afghan girls to return to high schools, saying a ruling is still to be made on the uniforms they must wear. Schools were set to open nationwide after months of restrictions. Drinking water in Africa could be available for decades. Research has suggested that African countries could survive decades on groundwater reserves, however, due to the lack of investment in equipment and shortage of professionals and knowledge, millions still do not have enough clean water to drink. Extreme hunger threatens millions in East Africa. At least 28 million people in East Africa are at risk of extreme hunger due to the increase of food and commodity prices because of the Russia-Ukraine war and lack of rainfall. ECONOMICS  Egypt raises transit fees for vessels in the Suez Canal transit. Fees will go up by 15% for oil-laden and petroleum products-laden tankers. This could be later revised or called off, according to changes in global shipping. Putin wants 'unfriendly' countries to pay for Russian gas in roubles. Russia will seek payment in roubles for gas sales from “unfriendly” countries, sending European gas prices soaring on concerns the move would exacerbate the region's energy crunch. Inflation continues to increase in the UK, reaching its highest level in 30 years. The Office for National Statistics identified that the rise in food, energy, transport and goods related to household prices have pushed this figure. This increase will likely continue in the upcoming months. Nigeria launches largest fertiliser plant in Africa. Nigeria’s president has inaugurated a $2.5 billion fertiliser plant which he hopes will contribute to the global supply amid the increase of prices due to the Russia-Ukraine conflict. Canada says it can provide more oil, gas & uranium to help solve the energy crisis. Canada, the world's fourth biggest oil producer, has committed to exporting an extra 200,000 barrels of oil, as well as an additional 100,000 barrels of natural gas. While it is limited in how much oil it can export because its pipelines are running near full capacity, Canada's Natural Resources Minister Jonathan Wilkinson​ says sending it via the United States is an option. POLITICS Jamaica PM tells British royals it wants to be independent. Jamaican Prime Minister Andrew Holness told Britain's Prince William that his country wants to become fully independent, a day after protesters called on the UK to pay reparations for slavery during the recent Royal tour. Angola, Eswatini and Zimbabwe ranked among countries with worst press freedom. The publication of the Freedom in the World 2022 Report says that Angola, Eswatini and Zimbabwe are among the countries with the most oppressive authorities to media in the region. Iran's foreign minister says nuclear deal closer than ever. Iranian Foreign Minister Hossein Amirabdollahian said that the Islamic Republic and world powers are closer than ever to reviving a 2015 nuclear deal. Australian defence experts urge politicians to recognise climate change as a key security priority. Senior retired defence and security personnel have called on political leaders to make the security risks posed by climate change a central issue of the forthcoming Australian federal election.  Iraq parliament fails to elect new state president over lack of quorum. Iraq’s parliament failed again to vote for a president after Iran-backed groups boycotted the session, in a setback to an alliance led by cleric Moqtada al-Sadr, which won the election and threatened to remove them from politics. SOCIAL The universe’s background starlight is twice as bright as expected.  The galaxies that we know about can account for about half of the level of light we see, raising questions about where the rest of the light comes from. Motorbike movement banned in Nigeria. An increasing number of states in Nigeria’s northwest have imposed bans on the movement of motorcycles due to an increase of attacks by armed bandits. After committing stock theft, kidnappings and other crimes, the criminals use motorcycles to escape. Brain implants allow fully paralysed man to communicate. A fully paralysed man suffering from amyotrophic lateral sclerosis (ALS) can now communicate with his family after receiving microchip implants in his brain. It is the first time a person – who is conscious and cognitively able but fully paralysed – was able to communicate in full sentences. Elderly population contributing to the economy in South Korea. In South Korea, 69% of people 65 and older are working somewhere, far higher than 38.1% in Japan and 13.2% for the peer group average. The heavy concentration of job increases in the elderly population shows the fragile nature of the domestic economy, experts say. COVID reduces the amount of grey matter in the brain. After a bout of COVID-19, people had, on average, less grey matter in the brain, especially in the parts that help handle the sense of smell, according to a large brain scan study. Yesterday, a decision by Judge David Carter said that Trump had likely committed a federal crime when he was part of a conspiracy to obstruct Congress’s count of the votes of the Electoral College on January 6, 2021. Today, a Trump spokesperson called yesterday’s decision “absurd and baseless.” But the investigation into the events of January 6 is producing more and more evidence about the attempt to overturn the results of the 2020 election, and it is neither absurd nor baseless. Today, journalists Bob Woodward and Robert Costa broke a story about the internal White House records turned over to the House Select Committee to Investigate the January 6th Attack on the U.S. Capitol. Those records show previously unreported brief calls on the morning of January 6 between then-president Trump and unofficial advisor Stephen Bannon and between Trump and his personal lawyer Rudy Giuliani. They also show a ten-minute phone call with Representative Jim Jordan (R-OH), who was, as Woodward and Costa note, “a key figure in pushing fellow [Republican] lawmakers to object to the certification of Biden’s election.” Trump also talked for 26 minutes with senior advisor Stephen Miller, who had publicly pushed the idea that alternative electors from contested states would replace the official electors who cast ballots for Biden. Trump then talked, cryptically, “to an unidentified person.” And that was the last call identified before a seven hour and 37 minute gap in Trump’s phone logs. This blackout includes the crucial hours in which the Capitol was under attack. There is no record of any calls to or from Trump for 457 minutes, from 11:17 am to 6:54 pm. Since there have already been reports of a number of phone calls during that time, including calls to Senator Mike Lee (R-UT) and House Minority Leader Kevin McCarthy (R-CA), the committee is now investigating whether Trump hid his calls or communicated through the phones of his aides, or perhaps through unsecure “burner” phones, cheap prepaid mobile phones that are untraceable and are thrown out when no longer needed. Trump tried to kill this idea by saying in a statement: “I have no idea what a burner phone is, to the best of my knowledge I have never even heard the term.” But former national security advisor John Bolton contradicted that, saying he personally heard Trump using the term “burner phones” in several discussions and had discussed with him how burner phones helped people keep phone calls secret. In November 2021, Hunter Walker of Rolling Stone reported that the organizers of the January 6 events used burner phones to communicate with the White House and the Trump family, including Eric Trump, his wife Lara Trump, and chief of staff Mark Meadows. The news of this gap in the record is significant because Trump and his allies have maintained that they were challenging the election results because they honestly believed the results were false, and that they believed they were operating within the law. If so, why the seven-hour blackout? The missing logs might not, in the end, obscure any phone calls made in that time, though, not only because witnesses can fill in some of the holes, but also because last summer, the January 6 Committee instructed 35 telecom and social media companies to preserve records of calls. When news broke today of the missing records, Crooked Media editor in chief Brian Beutler recalled McCarthy’s threat to punish telecom companies that cooperate with the January 6 Committee. The ten-minute phone call with Jordan suggests that the 139 members of the House of Representatives who objected to the counting of the certified ballots were perhaps not simply making a protest vote, but rather were part of a larger organized Republican effort to steal the election. That story dovetails with yesterday’s story by Michael Kranish in the Washington Post about Senator Ted Cruz (R-TX), who worked hard to keep Trump in power despite the will of the American voters, intending to lay the groundwork for his own presidential bid in 2024. Cruz and John Eastman, the author of the Eastman memo outlining a strategy for then–vice president Mike Pence to throw the election to Trump, have been friends for close to 30 years, since they clerked together for then–U.S. Appeals Court judge J. Michael Luttig. While Eastman presented a plan by which Pence could refuse to count Biden’s electors, Cruz wrote a plan for congress members to object to the results in six critical states that Biden won, establishing a 10-day “audit” that would have enabled Republican-dominated state legislatures to overturn the election results in their states. Ten other senators backed Cruz’s plan, offering a path to create enough chaos to keep Trump in power. Luttig told Kranish that Cruz was central to the events of January 6. Contesting the states’ electoral votes required one senator and one representative for each state. Then–Senate majority leader Mitch McConnell (R-KY) made an effort to keep his caucus from working with representatives who planned to challenge the count. But junior senator Josh Hawley (R-MO) broke ranks and said he would join the challenges. Not to be outflanked by Hawley on the right, Cruz immediately stepped aboard the train and brought 10 senators with him. “Once Ted Cruz promised to object,” Luttig said, “January 6 was all but foreordained, because Cruz was the most influential figure in the Congress willing to force a vote on Trump’s claim that the election was stolen.” Along with Representative Paul Gosar (R-AZ), Cruz was the first to challenge an electoral ballot: that of Arizona. Cruz’s plan was similar to a plan White House advisor Peter Navarro explained in fall 2021 called the “Green Bay Sweep.” According to Navarro, that plan was to block the counting of electoral votes until public pressure forced Republican-dominated state legislatures to overturn the election results and give the presidency to Trump. (It is worth noting that Navarro’s plan absolves Trump of responsibility for the Capitol violence, and seems to have been deployed in part for that reason.) Cruz’s spokesperson said the senator “does not know Peter Navarro, has never had a conversation with him, and knew nothing about any plans he claims to have devised.” Navarro has his own problems. Yesterday, the January 6 committee moved to hold him and another Trump aide, Dan Scavino, in criminal contempt of Congress, sending the resolution to the full House for a vote. Navarro has ignored the committee’s subpoena, saying—falsely—that Trump had asserted executive privilege over his testimony and so he could not testify, despite the fact he had written extensively about his participation in the attempt to overturn the election. Scavino, Trump’s director of social media, has also ignored the committee’s subpoena. A budget proposal from the Department of Justice yesterday revealed that it wants 131 more lawyers to handle January 6 cases. In the request, Deputy Attorney General Lisa Monaco said, "Regardless of whatever resources we see or get, let's be very, very clear: we are going to hold those perpetrators accountable, no matter where the facts lead us,... no matter what level.” Today, on a right-wing news show, Trump appeared to try to change the subject and regain control over the political trends when he called for Russian president Vladimir Putin to release dirt on the Biden family, since “he’s not exactly a fan of our country.” Russian state TV featured a Russian government official calling for “regime change” in the United States, asking the people of the U.S. to replace President Biden with Trump “to again help our partner Trump to become President.” — Notes: https://www.washingtonpost.com/politics/2022/03/29/trump-white-house-logs/ https://www.usatoday.com/story/news/politics/2022/03/28/justice-department-prosecutors-jan-6-cases/7195328001/ Manu Raju @mkraju Cheney says “more than a dozen Trump WH staff members” have spoken to the Jan. 6 committee; says they’ve learned that the Trump WH was warned repeatedly that Jan. 6 would turn violent. Committee about to recommend Scavino and Navarro be held in contempt March 28th 2022 749 Retweets3,166 Likes https://www.washingtonpost.com/politics/january-6-committee-telecoms/2021/08/30/a2592168-0997-11ec-a6dd-296ba7fb2dce_story.html https://www.washingtonpost.com/opinions/2022/03/29/trump-missing-phone-logs-key-takeaways/ https://talkingpointsmemo.com/news/trump-was-100-making-phone-calls-during-the-jan-6-attack-heres-the-list Aaron Rupar @atrupar Trump calls for Putin to release dirt on the Biden family right now since now "he's not exactly a fan of our country" during new interview with Real America's Voice March 29th 2022 2,115 Retweets6,517 Likes https://www.rollingstone.com/politics/politics-news/jan-6-rally-organizers-trump-white-house-1262122/ Julia Davis @JuliaDavisNews Meanwhile on Russian state TV: Host Evgeny Popov says it's time for the Russian people to call on Americans to change "the regime in the U.S." before its term expires "and to again help our partner Trump to become President." Julia Davis @JuliaDavisNews Kremlin TV Hopes Russia’s Unhinged Bioweapons Claim Will Help Re-Elect Trump: State TV pundits are delighted that Russian propaganda about Hunter Biden’s supposed funding of bioweapons in Ukraine has “served up a beneficial deck of cards for Trump.” https://t.co/fjI07KfUFx March 29th 2022 6,088 Retweets9,134 Likes A trader works on the New York Stock Exchange floor. | Nicole Pereira/New York Stock Exchange via AP AHEAD OF THE CURVE — This week, a very wonky event took place in a corner of the U.S. bond market. The “yield curve,” which sounds a lot sexier than it is, “inverted.” Or one of the most closely watched yield curves did. Oh my. Some economists and financial Twitter nerds (of which I am one) exclaimed: “This means a recession is coming soon!” Well, maybe. But it’s far from a lock and there are a lot of “recession indicators” telling a different story. What happened in the bond market this week needs just a brief explanation. So please bear with us for the following use of a few boring words. On Tuesday, for a flicker of a moment, the two-year Treasury bond yielded more than the 10-year bond, a phenomenon which in the past has preceded many recessions. Ordinarily, investors unsurprisingly demand higher returns on their money when they commit it for a longer time period (10 years) than a short one (two years). When that reverses, it can mean bond investors think growth may be stalling out. So everyone went fairly bonkers for a few hours on Tuesday, waving their “Recession Warning” flags. But this particular yield “inversion” is but one of dozens of indicators followed by Wall Street and the economists at the U.S. Federal Reserve, whose two main jobs are to maintain maximum employment and keep inflation at a reasonable level around 2 percent. It’s not even an especially reliable indicator. It just happens a lot. Joseph Brusuelas, chief economist at consulting firm RSM US, even refers to it as the “two-year, 10-year fallacy,” noting that following it closely would more or less always make you fear imminent recession. “I always like to say that the 10-year/two-year spread has predicted 21 of the last 3 recessions,” Brusuelas told Nightly. Several economic indicators do suggest that we might see a recession in the next year or so. The Fed has begun a campaign of rate hikes to fight persistent, nasty, Covid-related inflation. Consumer confidence is softening. People’s views on the economy are quite dour. A lot of the dismal views are driven by soaring energy prices, which rose 3.5 percent in February. Both regular gas and diesel prices keep shooting higher.   But other indicators, including some favored by the Fed, are much less worrisome. Here are a few to amaze your friends at parties when you shrug off the latest inversion and show you know better. Other bond yields — Comparing three-month yields to 18-month yields, or 10 years to three months, “both imply sustained growth compared to the inversion of the 10-year/two-year spread,” Brusuelas said. He added, “That is consistent with the strong labor market and solid consumer spending.” Veteran investor David Kotok of Cumberland Advisors emailed a similar sentiment: “I’m not very concerned. … If you look at longer-term bond spreads,” he said, “the curve is not flat.” So. Never mind. Economic growth — This one may seem obvious. It’s how we ultimately measure recessions. But what the economy is currently doing helps inform the timing of any upcoming recession. The economy grew a sharp 6.9 percent in the fourth quarter of 2021, continuing the bounce back from Covid. Early this year is likely to bring a sharp pullback, with estimates of first quarter growth around 1 percent as all of the drawbacks from the Omicron wave show up. Most consensus forecasts have perhaps one negative quarter next year, but probably not enough for a real recession. Employment — There’s a big structural problem in the labor market right now: Around 2 million workers expected to return to the labor force as Covid waned have not yet returned. But the jobless rate is still quite low, at 3.8 percent. And monthly jobs reports remain strong, at 678,000 in February and another half million expected in March. The stock market continues to march higher, for the most part, and corporate profits haven’t rolled over from recent strong gains. There is a great deal of demand in the economy. If labor market participation begins to heal, that should ease inflationary pressure on the Fed — because it would likely ease pressure on rising wages as well as push labor supply closer to demand levels.    World Orban faces voters at home — and isolation abroad Ambiguity on Ukraine and ties to Putin have weakened Hungary PM even if he wins election MARCH 31, 2022 by Marton Dunai in Budapest Global Economy Russia sanctions threaten to chip away at dominance of US dollar, says IMF Ukraine war could cause more ‘fragmentation’ in global financial system, warns top official MARCH 31, 2022 by Jonathan Wheatley in London and Colby Smith in Washington The March jobs report came out this morning and, once again, it was terrific. The economy added 431,000 jobs in March, and the figures for January and February were revised upward by 95,000. The U.S has added 1.7 million jobs between January and March, and unemployment is near an all-time low of 3.6%. As employment has risen, employers have had to raise wages to get workers. So, wages are up 5.6% for the year that ended in February. Inflation in the U.S. is the highest it’s been in 40 years at 7.9%, but those high numbers echo other developed countries. In the 19 countries that use the euro, inflation rose by an annual rate of 7.5% in March, the highest level since officials began keeping records for the euro in 1997. Russia’s war on Ukraine, which is driving already high gasoline prices upward, and continuing supply chain problems are keeping inflation numbers high.  “America's economic recovery from the historic shock of the pandemic has been nothing short of extraordinary,” CNN’s Anneken Tappe wrote today. The nation is “on track to recover from the pandemic recession a gobsmacking eight years sooner than it did following the Great Recession.” These numbers matter not just because they show the U.S. coming out of the pandemic, but because they prove that Biden’s approach to the economy works. The key to this economic recovery was the American Rescue Plan, passed in March 2021 without a single Republican vote, that dedicated $1.9 trillion to helping the economy recover from the pandemic shutdowns. The vote on the American Rescue Plan indicated the dramatic difference in the way Democrats and Republicans believe the economy works. After the Depression hit, in the 1930s, Democrats argued that the way to build the economy was for the government to make sure that workers and consumers had the resources to buy products and services. Raising wages, providing a basic social safety net, and improving education would enable the “demand side” of the economy to buy the goods that would employ Americans and increase productivity. Democrats regulated businesses, imposing rules on employers, and funded their programs with taxes that fell on Americans according to their ability to pay.  When this system pulled the country out of the Depression and funded the successful military mobilization of World War II, members of both parties embraced it. Once in office, Republican Dwight D. Eisenhower called for universal health insurance and backed the massive $26 billion Federal-Aid Highway Act of 1956 to build an initial 41,000 miles of roads across the United States, an act that provided jobs and infrastructure. To pay for these programs, he supported the high taxes of the war years, with the top marginal income bracket pegged at 91%. “Our underlying philosophy,” said a Republican under Eisenhower, “is this: if a job has to be done to meet the needs of people, and no one else can do it, then it is a proper function of the federal government.” Americans had, “for the first time in our history, discovered and established the Authentic American Center in politics. This is not a Center in the European sense of an uneasy and precarious mid-point between large and powerful left-wing and right-wing elements of varying degrees of radicalism. It is a Center in the American sense of a common meeting-ground of the great majority of our people on our own issues, against a backdrop of our own history, our own current setting and our own responsibilities for the future.” But Republicans since the 1980s have rejected that “Authentic American Center” and argued instead that the way to build the economy is by putting the weight of the government on the “supply side.” That is, the government should free up the capital of the wealthy by cutting taxes. Flush with cash, those at the top of society would invest in new industries that would, in turn, hire workers, and all Americans would rise together. Shortly after he took office, President Ronald Reagan launched government support for “supply side economics” with the first of many Republican tax cuts.   But rather than improving the living standards of all Americans, supply side economics never delivered the economic growth it promised. It turned out that tax cuts did not generally get reinvested into factories and innovation, but instead got turned into financial investments that concentrated wealth at the top of the economic ladder. Still, forty years later, Republicans have only hardened in their support for tax cuts. They insist that any government regulation of business, provision of a social safety net, or promotion of infrastructure is “socialism” because it infringes on the “freedom” of Americans to do whatever they wish without government interference.  The conflict between these two visions came to the fore yesterday, when 193 Republicans voted against lowering the copays for insulin, the drug necessary to keep the 30 million Americans who live with diabetes alive. Twelve Republicans joined all the Democrats to pass the bill. The price of insulin has soared in the U.S. in the past 20 years while it has stayed the same in other developed countries. A vial of insulin that cost $21 in 1999 in the U.S. cost $332 in 2019. Currently, insulin costs ten times more in the United States than in any other developed country.  According to the nonprofit academic medical center Mayo Clinic, the cost of insulin has skyrocketed because people need it to live, there is a monopoly on production, there is no regulation of the cost, and there are companies that profit from keeping prices artificially high. While all drug prices are high, the reasons that pharmaceutical companies have given for the high pricing of other drugs do not apply to insulin. The drug is more than 100 years old, so there are no development costs. The cost is not a result of free market forces, since the jump in cost does not track with inflation. Indeed, insulin operates in a system that is the opposite of the free market: because people need insulin to survive, they cannot simply decide not to buy it if the price gets too high.  According to experts, there are currently only three clear options to bring down the price if the companies won’t. The government could negotiate with pharmaceutical companies on prices, as every other western country does, but the influence of drug companies in Congress makes such a measure hard to pass. We could shift the cost of the high prices onto insurers: employers and the government, which pays for healthcare through Medicare, Medicaid, the Veterans Administration, and so on. Or we can keep shifting the cost to the consumers. Democrats wrote a much more sweeping proposal to lower a range of drug costs into the Build Back Better bill that Senate Republicans killed, and say they want to continue to push for the government to be able to negotiate with drug companies. At the same time, they say, we cannot wait any longer to make insulin affordable for the diabetics who need it. So House Democrats and 12 House Republicans have passed a law regulating the cost that consumers—who will die if they don’t get insulin—have to pay for the product. That cap will shift the cost onto insurers, including the government. The insurance industry opposed the measure, saying it would not actually bring down costs and might create higher premiums as insurers have to cover the costs consumers won’t. Most Republicans opposed the measure, saying it would give the government too much say in healthcare. The Republican members on the House Committee on Ways and Means said it was a “socialist drug pricing scheme from [the Democrats’] failed radical tax and spending spree.” Politics Rouble payment demand consolidates Europe’s plan to wean itself off Russian gas Lack of clarity on consequences of Putin decree prompts EU capitals to plan for the worst APRIL 1, 2022 by Valentina Pop Confronting the bear Russia’s invasion of Ukraine pushes the West to re-arm But defence spending is rising relatively slowly in America and haphazardly in Europe Interview in Kyiv Volodymyr Zelensky on why Ukraine must defeat Putin At his headquarters in Kyiv, Ukraine’s president speaks to The Economist about his country’s battle and the struggle of light over dark Interview Volodymyr Zelensky in his own words The transcript from his meeting with our journalists EYEWITNESS In the war room with Volodymyr Zelensky Tired but still cracking jokes, Ukraine’s hunted president says “I’m not a hero” Advancing in a different direction Russia says it is changing its war aims in Ukraine Having failed to take Kyiv, Russia may focus on the east From skyrocketing gas bills to surging prices at the pump, Europe is facing one of its most intense energy crises in recent years amid the war in Ukraine. That’s because about 40% of Europe’s natural gas and oil consumption relies on supply from Russia, and it's difficult for the region to find alternatives. In the latest episode of Exchanges at Goldman Sachs, Goldman Sachs Research’s Samantha Dart, senior energy strategist on the commodities team, Alberto Gandolfi, head of the European utilities research team, and Michele Della Vigna, head of natural resources research in EMEA, speak with host Allison Nathan on how the war is reshaping the global energy landscape. Replacing Russian gas and oil will take time. “It's such a difficult thing to accomplish in the near term because again it's the scale of that exposure to Russian oil and gas,” says Samantha Dart. “This is a situation where we think this high-price environment is unlikely to go away anytime soon. I mean we're really talking a few years here before we can see additional supply globally to replace that exposure.” The conflict is likely to reverse a multiyear decline in energy capex. “This war is that catalyst that I think completely changes the perception of the importance of energy availability and diversification of sources, and underpins the structural change in investment in a way we've last seen in the early 2000s,” says Michele Della Vigna. Renewables have a key role to play. “Renewables have been a very important factor in achieving climate goals over the past 20 years in the European Union and now they're becoming probably even more central,” explains Alberto Gandolfi. “Essentially, every megawatt hour of electricity that you generate from wind and solar is a molecule that you don't have to import from Russia.” Listen to podcast Global Economy Living in a world of higher interest rates Identifying who will be affected and how remains a complex task APRIL 1, 2022 by The editorial board We close out with a snapshot of the state of our World courtesy the team at Predictt: Thursday’s One Big Thing: Setting the Stage for Sunday’s Hungarian Election Viktor Orbán, Prime Minister, Hungary. Photo: Annika Haas / EU2017EE Estonian Presidency / Flickr / CC BY 2.0. Sunday’s Hungarian Election May Turn Out to be the Closest and Most Exciting in Years A head of Sunday’s general election, doomsday scenarios are being painted by both the government and the joint opposition in Hungary. Billboards of Prime Minister Viktor Orbán’s Fidesz Party portray the opposition as the “ultimate danger” for the nation and urge voters to stop them once and for all. Meanwhile, the opposition depicts Orbán as the Russian President Vladimir Putin’s muppet and a corrupt tyrant, who has delivered nothing in the last 12 years and pushed the country further away from the West. To say the atmosphere is tense would be an understatement. But, for good reason. For the first time since winning by a landslide 12 years ago, Orbán’s Fidesz faces the real possibility of being dumped out of power — or at the very least being seriously challenged by a united opposition. Market Data at 6 a.m. EDT: Who will be the prime minister of Hungary on July 1? While government-allied pollsters have regularly predicted a comfortable 5% to 7% lead for the government over the united opposition, op-eds in the many government-loyal media outlets reveal a very different picture of the Fidesz ranks. Independent pollster Závecz Research found this week only a 3% lead for the government, which was within the margin of error. If those numbers were to hold, the April 3 vote would be Hungary’s closest and most exciting election in the country’s democratic history. “It will be tight,” predicts Andrea Szabo, senior research fellow at the Institute for Political Science. Adding that ultimately it could come down to a case of the opposition losing the election rather than Fidesz actually winning it. The opposition, United for Hungary, is a rainbow coalition of leftist, liberal, green, centrist and former extreme right parties led by its candidate for prime minister, Peter Marki-Zay. Marki-Zay, a previously little-known conservative mayor from a town in southern Hungary, emerged as the surprise winner of last October’s primaries to run against Orbán. Marki-Zay raised hopes of a new beginning in the country’s politics, but in a twist, it appears that the opposition seemed just as caught out as the government at Marki-Zay’s victory, and quickly became embroiled in internal battles. Market Data at 6 a.m. EDT: How many seats will Fidesz-KDNP win in the 2022 Hungarian election? That has allowed Orbán to regain control of proceedings. His administration launched a full court press to lure back wavering voters at any cost as measures to return income taxes to families with children, extra pensions to the elderly and freezing fuel and food price rises to curb inflation were all rolled out. Then came Russia’s invasion of Hungary’s neighbor, Ukraine. Orbán has walked a tightrope, trying to create distance between himself and Russia’s leader, with whom he’s cultivated close relations over the past decade, while offering limited support for Ukraine out of concern that he may antagonize Putin. The four-term premier’s message that he’d keep Hungary out of the war has really resonated. Nine in 10 Fidesz voters believe the party will win Sunday’s election, double the share of opposition supporters, according to a Median poll for weekly news magazine HVG released this week. And in a nod to Orbán’s tightrope walking, some 43% of Fidesz voters also said they believed Russia’s invasion of Ukraine was justified, compared with 9% of voters backing the opposition alliance. Market Data at 6 a.m. EDT: Which of these 10 European leaders will leave office next? Predicting Sunday’s Outcome: Mobilization Will be Key According to Závecz Research, Fidesz has a solid core of 1.9 million voters. In contrast, United for Hungary’s core voting base stands at 1.7 million Hungarians. There are about 600,000 Hungarian voters who plan to cast a ballot, but are still undecided. Fidesz would need to mobilize 100,000 to 150,000 passive voters on Sunday, while the opposition needs to mobilize 200,000 to 250,000. All that said, mobilization will be absolutely key in Sunday’s outcome — and this is an area where Fidesz has an advantage. Part of that advantage has to do with effectively buying off voters — sometimes by handing out free potatoes and cooking oil, and other times by making it known to the population in grander ways that loyalty pays and disloyalty is costly. Another potential advantage for Orbán’s Fidesz lies outside of Hungary’s borders. There are a total of 450,000 Hungarians in the diaspora who have the right to vote by mail-in ballot for a party list. The proportion of Fidesz supporters in this voting pool, especially among 193,000 ethnic Hungarians from Romania, is overwhelmingly high. In practice, those voters will have an advantage over those further afield. Many voters in North America will not be able to mail their ballot back in time, as they arrived only this week by mail. Market Data at 6 a.m. EDT: Upcoming elections worth keeping an eye on. Wisdom of the Crowd Just days away from Sunday’s vote and the crowd believes strongly that Orbán is poised to win a fifth term since 1998 with his contract currently trading at 92¢ compared to the oppositions’ Marki-Zay at 7¢. The Fidesz leader’s contract is up 22¢ from the start of the year and up almost 10¢ alone since Russia invaded Ukraine on Feb. 24. Meanwhile, Marki-Zay has seen his contract pricing more than halved — falling from 18¢ to 7¢ as the conflict has raged on over the past month plus. And the opposition leader’s current standing is a far cry from the 36¢ high-water mark hit in mid-January. Trader confidence in Orbán’s success is also seen in the market tracking which European leader will leave office next. Since hitting a 90-day high on Feb. 3 of 25¢, which put his contract only behind British Prime Minister Boris Johnson’s, Orbán has seen a clear downward trend in his pricing to the point that he is now at 8¢ and the fifth most likely leader to leave. Johnson continues to lead the market — albeit at a lower price than the heady days of early February when he hit 51¢ — at 24¢, which puts him 8¢ ahead of Italian Prime Minister Mario Draghi.