Opinion | Keep It Simple, Albany. This Is No Time for Budget Games.

Governor Cuomo and state lawmakers should pass a streamlined budget and fight their policy battles another day.

By The Editorial Board

The editorial board is a group of opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom.

Gov. Andrew Cuomo’s leadership during the coronavirus pandemic has been disciplined and deft. May he and the Legislature approach this week’s budget negotiations with the same steady focus.

State spending for the coming fiscal year, expected to be roughly $175 billion, must by law be approved by midnight on Tuesday. This year’s budget season comes as the spreading virus has hobbled the economy and devastated state revenues. New York has already spent over $1 billion to fight the pandemic and is expecting a revenue shortfall of as much as $15 billion.

Typically, the budget is an annual festival of pork and a chance to change state law without having to bother with the inconvenience of actual lawmaking, which, unlike the usually secretive budget wrangling, unfolds in full public view.

The responsible thing would be for Mr. Cuomo; the Assembly speaker, Carl Heastie; and the Senate majority leader, Andrea Stewart-Cousins, to resist the temptation to slip complex policy measures into the budget, and approve a no-frills budget that shores up the core workings of government instead.

Thorny issues like bail reform are best left for another day, not shoved into the budget under the cover of night. Landmark criminal justice reforms, which went into effect on Jan. 1, banned bail for defendants charged with most misdemeanors and nonviolent offenses. Critics, including the state’s powerful law enforcement lobby, have pushed to scale back the reforms.

Of particular concern is a proposal, supported by Mr. Cuomo, that would allow judges to consider the dangerousness of a defendant when setting bail. New York law didn’t allow such discretion before the reforms; it’s difficult to see the wisdom in giving such powers to judges, who for decades set bail that poor New Yorkers couldn’t afford. If changes are made to the bail reforms, the budget is not the place to make them.

There will also be a push to revise the state’s Medicaid program. Though there are plenty of improvements to be made and cost savings to be found, it is vital that the public hospitals, which serve the poorest patients, not be harmed, especially as they fight a pandemic.

In general, policymaking is best done by the State Legislature and Mr. Cuomo through the normal lawmaking process, where public hearings can be held and bills can be examined before they become law. New York’s legislature can get back to work by holding a virtual session, just as Pennsylvania has already done and other states are planning to do. New York’s elected officials have important work to do, including a major expansion of the absentee voting program ahead of the June 23 primary. They could then move on to allowing New Yorkers statewide to vote by mail. The state can also look for ways to help residential and commercial renters suffering from the economic fallout of the pandemic.

For now, the state budget needs to keep the government running and provide immediate relief to New Yorkers coping with the crisis. The budget should include, for example, emergency funding for food banks and food pantries. These nonprofits tend to be staffed by seniors and volunteers, most of whom are now confined to their homes. In addition, the high demand for groceries has sent the price of wholesale foods soaring, forcing dozens of food pantries to close at a time when people need them the most.

New York is facing a dark hour. Albany needs to step up by delivering good government to the people it serves.

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Thyssenkrupp CEO: Elevator sale on track despite coronavirus crisis

DUESSELDORF, Germany/FRANKFURT (Reuters) – The 17.2 billion euro ($18.4 billion) sale of Thyssenkrupp’s (TKAG.DE) prized elevator unit to a consortium led by Advent and Cinven [CINV.UL] is not under threat from the coronavirus crisis, the conglomerate’s CEO said in an internal staff letter.

“To be absolutely clear: the transaction is not in doubt. The buyers do not have the right to withdraw,” Martina Merz said in the letter that was seen by Reuters.

“The financing of the transaction stands on the buyers’ side and is secured contractually by the participating equity providers and lenders.”

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Commentary: Despite Brexit, I’m proud to be a Brit

This is a fine time to be British. Indeed, to be proud to be British. You would not, to be sure, think so from this past week in London – as the House of Commons humiliated Prime Minister Theresa May by throwing out her plan for Brexit in Tuesday by 432 votes to 202 – an unprecedented rejection. On Wednesday, the Labour Party moved that her government had lost the confidence of the House – a maneuver defeated only narrowly, by 325 votes to 306.

The British, and foreign, news media would guide you to seeing the events as pure, destructive chaos. In an article for CNN, Stephen Collinson writes of the United States and the UK that it’s “hard to believe that two such robust democracies, long seen by the rest of the world as beacons of stability, have dissolved into such bitter civic dysfunction.” Hard to believe only if you see democracy as the smooth management of affairs by an elite. This is what democracy looks like when a citizenry is grappling with fundamental issues – or should.

A nationwide debate is under way on the nature of British – and by extension European – governance, which has rumbled and grumbled under the surface for decades. The decision by then Conservative Prime Minister, David Cameron, to hold a referendum on European Union membership in 2016 – a decision he now says he does not regret – was one for which he believed he could win easy assent.

This was in part a question of internal party management, but it had support from influential voices in Labour too, and addressed a threat of widespread desertion from both major parties to the quickly growing United Kingdom Independence Party (UKIP). The politicians, especially those from the bulk of England outside of the rich, cosmopolitan south-east, heard the growing clamor of men and women whose living standards had stagnated, as well as from those who called for more democratic control from a political center they could understand and influence – the Westminster parliament.

Like any such wide and deep civic disruption, the vote for Brexit exacts the price of economic instability and likely future reduction in national GDP. Fear of this prompted me – and others – to vote to remain in the EU. That fear has spread: a poll this week showed that Remainers could outvote Brexiteers by as much as ten percent: a poll last month showed the gap at 18 percent. Indications like these encourage Remainers to call for a second referendum, a proposal which could cleave British politics into two warring camps, but may also be the only way out of a parliamentary logjam, where no single strategy commands a majority. Uncertainty attends every move: such is the nature of a popular surge seeking – peacefully – a different relationship with political power.

Democratic turmoil has also come to Europe – but not to the European Union. The two national leaders most committed to reviving a movement to greater EU integration – French President Emmanuel Macron and German Chancellor Angela Merkel – have themselves been drawn into democratic maelstroms, which have meant they are both much weakened at home.

The Brussels leadership of the EU – Commission President Jean-Claude Juncker and European Council President Donald Tusk – have not had the same popular drubbing. They seem not to have grasped that Brexit, and the surge of France’s “gilets jaunes” protesters, are hugely consequential movements not just for Britain and France, but for the Union as a whole. The EU presently faces its own, increasing strains and the strengthening possibility of recession – prompted by Italy’s rising debt and its reluctance to be bound by EU financial restraints, the end of a long period of quantitative easing which kept interest rates rock bottom – and Brexit itself.

Herein lies the central problem of the EU now. It has chosen to present itself as an adamantine front of 27 states wholly united against the renegade 28th, the UK. They have entrusted the EU’s chief Brexit negotiator, Michel Barnier, to set out the hard facts of a deal which lays down a two-year withdrawal period in which most EU rules would continue to apply, with a severance payment of £39bn ($50 billion). It’s a divorce agreement which may not rival that of Jeff and Mackenzie Bezos, since that could come out at $66bn. But it would take a sizable morsel out of the UK’s GDP (at $2.6 trillion in 2017.)

Yet the hard front is an illusion. The Central European states – Hungary, Poland, the Czech Republic and Slovakia – want continued EU subsidies but recoil from its policies, especially taking a share of the immigrants within Europe. Italy now has a populist government which defies the EU on its spending limits. The country’s rising debt and falling industrial output, together with that of the other main members, now helps to pull the Union towards recession. The “Hanseatic League” of small northern states, under Dutch leadership, explicitly defies any efforts to bring the Union “ever closer” – the strategy to which Juncker and Tusk, as well as Macron, are bound.

This is not a band of brotherly states marching towards a Federal Europe. It is a group of countries of differing political traditions and cultures, with enough in common to have a single market and a growing tradition of cooperation – but with only selective, and minority, appetite to create more than that.

The challenge which confronts the EU, which would include the UK, is that of recognizing the truth of its present condition and of working out how best to decouple the Union from its now counterproductive mission to federalize. Instead of that, there should arise a Union of differing speeds, where neither a desire to form a federal state, nor one to retain sovereignty within existing nations, should be penalized, but accommodated. An EU straitjacket now aggravates rather than solves problems, defeating its initial vision of the creation of a new world power dedicated to freedom.

The continent’s rulers need to grasp what the British establishment has been forced to understand: that politics, and economic decisions, can no longer be located at a distance in institutions citizens do not understand, commanded by figures they do not know. Britain can take real pride that a messy, fraught, passionate struggle over a fundamental principle of democratic and civic life is taking place within it. It should spread across the continent.

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Aon buys Willis for $30 billion in world's largest insurance deal

(Reuters) – Aon Plc (AON.N) said on Monday it would buy Willis Towers Watson (WLTW.O) for nearly $30 billion, in a deal which will make it the world’s biggest insurance broker and give it more pricing power but almost certainly spark regulatory ire.

The deal, the insurance sector’s largest ever, unifies the second and third largest brokers globally into a company worth almost $80 billion at a time when insurers are facing rising claims and new threats from the coronavirus and climate change.

First mooted a year ago, the deal creates a combined company that will overtake market leader Marsh & McLennan (MMC.N) in value. It follows a period of brutal competition that has driven down insurance premiums even as claims continue to rise.

Shares in Aon fell nearly 10% and those in Willis 6% in a market suffering its worst day of trading since 2008 after a collapse in oil prices.

When asked about the timing, Aon Chief Executive Officer Greg Case told analysts on a call: “It is not about today or next week, it’s about the long term.”

“We know each other well and this came together pretty quickly.”

UK-based Aon and Willis put together large insurance deals for clients that involve a number of insurers, for anything from airlines to large sporting events.

Brokers also play a key dealmaking role in the 330-year old Lloyd’s of London [SOLYD.UL] commercial insurance market, which carries out much of its business face-to-face and insures specialist risks like oil rigs and soccer stars’ legs.

Aon and Willis also provide investment and employee benefits advice, and broker deals for reinsurers, who share part of insurers’ exposure to potential large losses like hurricanes, in return for part of the premium.

The combined entity will work across risk, retirement and health businesses. The deal will also allow the “new” Aon to offer clients services in areas like cyber, intellectual property and climate risk, executives said.

(Graphic: Aon and Willis agree largest ever insurance merger – here)

Interactive graphic on insurance deals tmsnrt.rs/2IJODcx

SECOND TIME LUCKY?

The deal follows Marsh’s purchase last April of British rival Jardine Lloyd Thompson for $5.7 billion.

Aon confirmed last year in March that it was in early talks with Willis Towers before quickly scrapping the plans, without giving a reason. Analysts said Aon might have trouble clearing anti-trust hurdles.

“The insurers and re-insurers are unlikely to be happy about the deal given the scale of the two players coming together,” said analyst Ben Cohen at Investec.

The deal terms state Aon must pay $1 billion to Willis if the deal falls through.

Aon Chief Financial Officer Christa Davies said she was confident of getting all the “necessary approvals” for the deal.

“We have had great counsel on the topic of anti-trust, feel really good about it,” Case said.

TERMS

Willis shareholders would receive 1.08 Aon shares, or about $232 per share as of Aon’s Friday close. The offer represents a premium of 16% to Willis’ closing price on Friday.

Aon shareholders will own about 63% and Willis investors about 37% of the combined company. The deal is expected to add to Aon’s adjusted earnings per share in the first full year, with full savings of $800 million achieved in the third year, and to close in the first half of 2021.

Aon will keep headquarters in London and be led by Aon CEO Case and Aon CFO Davies. Willis CEO John Haley will become executive chairman.

Credit Suisse advised Aon, while Willis was advised by Goldman Sachs.

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Intesa Sanpaolo files UBI takeover offer document with market watchdog

MILAN (Reuters) – Italy’s top retail bank Intesa Sanpaolo (ISP.MI) said on Friday it had filed with market regulator Consob the offer prospectus for its unsolicited bid for smaller rival UBI Banca (UBI.MI).

Intesa last month unveiled a surprise all-paper takeover bid for UBI, offering 1.7 new Intesa share for each UBI share tendered to create the euro zone’s seventh-largest banking group with a focus on asset management and insurance.

Since then, Italy has been hit by Europe’s worst outbreak of coronavirus, which has killed almost 200 people in the past two weeks, wrecking havoc in financial markets and driving Italian banking shares down 25%.

When it was announced, just before midnight on Feb. 17, Intesa’s offer valued UBI shares at 4.254 euros each, a figure which the recent sell-off has lowered to 3.36 euros.

UBI shares closed down 5.3% on Friday at 3.159 euros.

The offer document filed on Friday will become public only after its approval, which is expected by mid-June after all the necessary green lights from relevant authorities, including Italy’s competition watchdog, which Intesa said it had also requested on Friday.

Intesa has said it expects to launch the exchange offer only towards the end of June.

Intesa Sanpaolo does not regard its offer as hostile but UBI’s board has given it the cold shoulder, saying the bank would assess also possible alternatives.

UBI, Italy’s fifth-biggest bank, is working with Credit Suisse and Goldman Sachs on possible defense moves, sources have said.

Two groups of local UBI shareholders holding roughly a combined 21% of bank’s capital have rejected the offer.

The main group, dubbed CAR, has said the bid is “hostile, unsolicited and not consistent with UBI Banca’s underlying values”.

A third group of Italian shareholders, holding 8.4% of UBI, has delayed its decision blaming the coronavirus emergency which is making it difficult to hold meetings.

A further rejection, which a source involved in the process said could not be ruled out, may complicate matters for Intesa.

Intesa has set a take-up threshold of two-thirds of UBI’s capital for the offer to be successful – though it reserves the right to lower it to 50% plus one share.

Intesa recently beefed up its team of advisers led by Mediobanca, hiring JP Morgan, Morgan Stanley, UBS and local broker Equita SIM.

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Brazilian credit bureau Boa Vista SCPC files for IPO

SAO PAULO (Reuters) – Brazilian credit bureau Boa Vista SCPC filed for an initial public offering with the country’s securities industry regulator CVM, according to documents on the regulator website.

Part of the proceeds will go to the company and part to shareholders willing to reduce their stakes, private equity fund TMG Capital and the Association of Retailers of Rio de Janeiro.

Among Boa Vista’s shareholders is analytics company Equifax (EFX.N), which also provides consumer credit scoring services.

According to the preliminary prospectus, the IPO will be managed by JPMorgan Chase & Co., Citigroup and Morgan Stanley.

Boa Vista had 661 million reais ($144 million) in net revenue and 74 million reais in net income last year.

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Commentary: Are China, Russia winning the AI arms race?

In October 31 Chinese teenagers reported to the Beijing Institute of Technology, one of the country’s premier military research establishments. Selected from more than 5000 applicants, Chinese authorities hope they will design a new generation of artificial intelligence weapons systems that could range from microscopic robots to computer worms, submarines, drones and tanks.

The program is a potent reminder of what could be the defining arms race of the century, as greater computing power and self-learning programs create new avenues for war and statecraft. It is an area in which technology may now be outstripping strategic, ethical and policy thinking – but also where the battle for raw human talent may be just as important as getting the computer hardware, software and programming right.

Consultancy PwC estimates that by 2030 artificial intelligence products and systems will contribute up to $15.7 trillion to the global economy, with China and the United States likely the two leading nations. But it is the potential military consequences that have governments most worried, fearful of falling behind – but also nervous that untested technology could bring new dangers.

In the United States, Pentagon chiefs have asked the Defense Innovation Board – a collection of senior Silicon Valley figures who provide the U.S. military with tech advice – to come up with a set of ethical principles for the use of artificial intelligence in war. Last month, France and Canada announced they were setting up an international panel to discuss broadly similar questions. So far, Western states have stuck to the belief that decisions of life and death in conflict should always be made by humans, with computers and algorithms simply supporting those decisions. Other nations – particularly Russia and China – are flirting with a different path.

Russia – which last year announced it was doubling AI investment – said this month it would publish a new AI national strategy “roadmap” by mid-2019. Russian officials say they see AI as a key to dominating cyberspace and information operations, with suspected Russian online “troll farms” thought to already be using automated social media feeds to push disinformation. Beijing is seen as even further ahead in developing AI, to the extent some experts believe it may already be beating the United States.

Experts say achieving mastery in AI comes down to having sufficient computer power, enough data to learn from, and the human talent to make those systems work. As the world’s most powerful autocratic states, Russia and China have that capability and intent, both to use AI to maintain government dominance at home and beat enemies beyond.

Already, Beijing is using mass automatic surveillance – including facial recognition software – to crack down on dissent, particularly in its ethnic Uighur Muslim northwest. Along with Russia, China has many fewer scruples and controls than Western states when it comes to monitoring its citizens’ communications. Such systems will likely become more powerful as technology improves.

Traditionally, Western democracies – particularly America – have proved more adept than dictatorships at tapping new technology and innovation. On AI, however, Washington’s efforts to build links between Silicon Valley and the military have been far from trouble-free. In June, employees at Google forced the firm to avoid renewing its contract with the Pentagon. Many tech researchers are reluctant to work on defense projects, nervous they will end up building out-of-control robots that kill.

The United States and its allies are still researching and building their own autonomous weapons. In October, Microsoft quietly announced it intended to sell the Pentagon whatever advanced AI systems it needed to “build a strong defense.” U.S. Air Force leaders say its highly classified future long-range strike aircraft, designed to replace the B-2 stealth bomber, will be able to operate both with and without crew. Western militaries are also plowing growing resources into unmanned trucks and other supply vehicles, hoping to perform many more “dirty, dull and dangerous” battlefield tasks without risking human personnel.

These dynamics will become much more complex with the growing use of drone swarms, in which multiple unmanned vehicles control themselves. When it comes to drones fighting drones, Western policymakers are generally happy to let unmanned systems make their own decisions. But when it comes to killing, Defense Department policy requires that a human must remain “in the loop.” That may become ever harder to manage, however – particularly if an enemy’s automated systems are making such judgments at much faster than human speed.

By the early 2020s, Chinese scientists expect to be operating large unmanned and potentially armed submarines in the world’s oceans, aimed at enemy forces in disputed areas such as the South China Sea. Such vessels could potentially travel vast distances and remain concealed for long periods of time – China says a prototype drone “underwater glider” completed a record 141-day, 3,619-km voyage last month. For now, Chinese researchers say any decision for such vessels to conduct attacks would still be made by human commanders – but that may not always remain the case.

In January last year, the Pentagon reported Russia was building and looking to operate its own large nuclear-powered unmanned submarines, likely capable of carrying nuclear weapons. Both Moscow and Beijing are also prioritizing unmanned robot tanks, with Russia testing its latest version on the ground in Syria. Such systems could dramatically complicate battlefield targeting decisions for Western commanders in any conflict, making it unclear whether individual vehicles or vessels contained human beings. Mistakes could start or dramatically escalate wars.

In recruiting their 31 teenagers for the Beijing Institute of Technology, those managing selection reportedly looked for “willingness to fight.” With technology this untested – and so potentially destructive – that may prove a very dangerous trait to prioritize.

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Commentary: Why a Republican won’t beat Trump in 2020

Two days before being sworn in to the U.S. Senate, Mitt Romney wrote an opinion piece in the Washington Post outlining his concerns about President Donald Trump “not rising to the mantle of the office.” Romney, the Republican presidential nominee in 2012, did not exactly break new ground. His column mostly rehashed concerns that many Republicans have long held about Trump’s temperament and international relationships while stopping short of an active commitment to addressing the many problems Romney sees in the Trump administration.

The op-ed also includes the kind of language that was standard from pre-Trump presidential candidates: “I remain optimistic about our future. In an innovation age, Americans excel. More importantly, noble instincts live in the hearts of Americans.” Romney has since said that he won’t run against Trump, but that he won’t necessarily support him either. It is difficult to read Romney’s column and not think that he won’t at least be part of any conversation about which Republican might be able to take on Trump for the Republican nomination.

The notion that a Republican will challenge Trump is not new. The idea of a primary against Trump is very appealing to many centrists, as well as whatever remaining conservative critics of the president still exist. A successful primary would also help bring an end to the Trump experiment while limiting lasting damage to America’s political system and perhaps even diverting the Republican Party from the direction it has taken under Trump. These are the developments that many in the political class, including many of the pundits and political analysts calling for a primary challenge to Trump, would like to see. 

The problem with this scenario is that it overlooks the extent to which the Republican Party has been remade to look like Trump, meaning that any primary challenger to Trump would likely get drubbed and therefore only strengthen Trump’s hold on the GOP. Trump himself has been extremely popular among his party. According to Gallup, his job approval rating among those who identified themselves as Republicans has not dropped below 77 percent at any point in his presidency. In 2018, that number never dipped below 81 percent and most weeks was much higher than that. (By contrast, his overall national approval rating has averaged 39 percent since he took office.)

Unseating an incumbent president in a primary is difficult enough – in recent decades the only candidate to do so was Senator Eugene McCarthy, who almost beat Democratic President Lyndon Johnson in the 1968 New Hampshire primary, spurring Johnson to drop out of the race. Beating a president who is beloved by the base in his own party in a primary challenge is almost impossible. Trump’s popularity among Republicans also demonstrates the gap between how Republican voters and some Republican elites think about the president. There are a lot of Republicans who are critical of Trump on television and popular political websites, but that is about the only place they can be found.

Beyond public opinion data, Republican primaries since 2016 have generally been won by pro-Trump Republicans while Republicans in Congress often have had to cater to their pro-Trump Republican electorates in order to stay in office. Even Jeff Flake, Trump’s most outspoken Senate Republican critic, conceded that if he had been running for reelection he would not have taken some positions that rankled the president. Policies around trade and foreign policy where Trump differs from Republican orthodoxy still polarize Republican leaders, but these are not the kinds of issues that will swing large number of voters in a Republican primary.

Last month, in the kind of move that does not draw headlines, the Trump reelection campaign and the Republican National Committee (RNC) began to create a structure that will essentially combine the two entities into one for the 2020 race. The plan, according to a report in Politico, is for the campaign and the RNC to merge their field and fundraising organizations into a single, more streamlined unit. That all but ensures Trump will control the RNC, making it even less plausible that anyone can mount a successful, or even relevant, primary against him. Given this, RNC Chair Ronna McDaniel’s Twitter response calling Romney’s opinion piece “disappointing and unproductive” is no surprise.

While it is perhaps possible that Trump will face a primary campaign to become the party’s nominee, whoever runs against Trump is likely not only to lose badly, but to fail in any attempt to move the party away from him. This is why the Republicans most frequently cited as potential challengers, like Arizona’s Flake and former Ohio Governor John Kasich, are in the later stages of their careers. Republicans with futures in the party, like Senators Ted Cruz of Texas or Marco Rubio of Florida, who disagree with Trump on many key issues and have previously indicated concern about his conduct and ethics, are not entertaining the idea of running against Trump and thus damaging their standing in the party. Over the last two years, the Republican Party has become Trump’s. Highfalutin opinion pieces in major media outlets are not going to change that.

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Commentary: The strange revisionism of Pompeo’s Cairo speech

Secretary of State Mike Pompeo’s much-marketed speech in Cairo was rich in straw man fallacies while short on substantive specifics, a speech bursting with contradictions that reminded me just how hard it must be to speak for a president who has, at best, an incoherent foreign policy. Pompeo’s speech appeared to have three intended audiences, none of which was actually present in the American University in Cairo auditorium: the Oval Office; the Saudi royal court; and President Trump’s political base, which hungers for ABO (“Anything but Obama”), however inaccurate.    

The strange revisionism of Pompeo’s Cairo speech was hard to miss. He began by excoriating Barack Obama for words the former president never spoke. Referring to Obama’s 2009 Cairo speech, Pompeo said that Obama had told Egypt that “radical Islamist terrorism does not stem from an ideology” and that “9/11 led my country to abandon its ideals.” Pompeo argued that Obama was guilty of seeing the United States “as a force for what ails the Middle East,” and that “the results of these misjudgments have been dire.”

Of course, Obama never said any of that. As his presidency began, in a Middle East still roiled by the American invasion of Iraq – a blunder opposed by most of the Arab world – Obama defended the United States: “America is not the crude stereotype of a self-interested empire. The United States has been one of the greatest sources of progress that the world has ever known.” He did make it clear that “I have unequivocally prohibited the use of torture by the United States,” and for good reason: President George W. Bush’s own administration had come to believe that Guantanamo and the fallout of the Abu Ghraib torture scandal had badly damaged America’s image, aided terrorist recruitment, and made it harder for the United States to bring Arab allies to its side. Obama never said that radical terrorism was devoid of ideology; in fact, like his predecessor, he argued that “America is not – and never will be – at war with Islam.” He separated the terrorists from the religion, in order to pull the Muslim world closer in isolating and fighting those very extremists who were bastardizing a religion.

It’s not a new phenomenon for the Trump administration to rewrite the history of the Obama administration. But this time it was particularly brazen. Pompeo argued that, after Syria’s 2013 poison gas attacks, “in our hesitation to wield power, we did nothing”; he neglected to mention that it was Republican Senate Leader Mitch McConnell who opposed granting Obama the authority he’d asked for to conduct airstrikes, or that then-private citizen Trump opposed U.S. intervention of any kind in Syria.

But the big question is why an American secretary of state would travel to the heart of the Arab world to deliver a speech largely intended for partisan political consumption at home?

One might argue that Pompeo had little choice but to engage in rhetorical broadsides, given the difficulty of explaining Trump’s vision. The secretary argued that “the age of self-inflicted American shame is over”; he might want to check with his commander in chief, who has famously defended autocrats who kill journalists and innocents and said, “our country does plenty of killing too.” It requires extraordinary rhetorical dexterity to attack his predecessors for “abandoning” the Middle East less than a month after Trump, without warning, announced a unilateral, precipitous withdrawal of U.S. special forces from Syria, prompting the resignation of Defense Secretary Jim Mattis in protest.

But my lasting worry about Pompeo’s speech is more than its contradictions; it’s the willful misunderstanding of what Obama sought to achieve in the region. Pompeo doesn’t need to agree with Obama’s policies to understand and be informed by their motivation.

Obama in 2009 sought a “reset” with the populations of the Middle East because he diagnosed the danger of America’s image being defined in the region to serve our adversaries’ agendas; the Arab Spring which followed two years later confirmed why the United States needs to tend to its image on Arab streets, not just with autocratic allies: there’s no guarantee their reigns will endure.

Pompeo should worry now that Trump, in mismanaging America’s image, has once again handed Iran and others a convenient weapon of mass distraction. He should certainly worry that Trump’s decision to put all his eggs in the basket of personal relationships with two or three leaders in the volatile region could prove short-sighted.

Pompeo should also remember that the Obama administration performed a delicate diplomatic dance: rather than plunge into a unilateral war with Iran, Obama won even grudging Gulf Arab support for an Iran nuclear weapons agreement that is still working in spite of the absence of the United States. By seemingly taking sides on ancient Sunni-Shia sectarian divisions between Riyadh and Tehran, Trump is exacerbating tensions instead of seeking an uneasy equilibrium that serves America’s interests.

And, of course, in decrying the Obama approach that successfully decimated Islamic State (which hasn’t changed in practice under Trump but has shifted in rhetoric) Pompeo forgets that Secretary of State John Kerry began his diplomacy to organize the coalition against Islamic State in Jeddah. Having the kingdom – home of Mecca and Medina – prominent in a coalition against Sunni extremists was pivotal in mounting an operation that couldn’t be mistaken as a war against Islam. It was Saudi Arabia that appreciated the ways the Obama administration bent over backwards to demonstrate that we were not at war with their religion.

Pompeo, like all secretaries of state, will ultimately be judged on substance, not speeches. But make no mistake, Thursday in Cairo, he made his own job a little harder. Some listening is in order – to the Arab Street, and to history.

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Virgin Galactic dealmaker seeks to raise $900 million for new blank check companies

(Reuters) – Chamath Palihapitiya, the dealmaker behind last year’s blockbuster Virgin Galactic deal, is looking to raise a combined $900 million through two new investment vehicles, according to regulatory filings.

The investment vehicles are blank check companies or special purpose acquisition companies (SPACs) and aim to raise $300 million and $600 million, respectively. (bit.ly/2PzNMP9) (bit.ly/32ArvWR)

A SPAC uses proceeds from an initial public offering (IPO), together with borrowed funds, to acquire companies that are usually privately held.

The companies, called Social Capital Hedosophia Holdings Corp II and III, are a result of a partnership between venture capital firm Social Capital, founded by Palihapitiya, and London-based VC firm Hedosophia.

The first iteration of Social Capital Hedosophia merged with Richard Branson-backed Virgin Galactic Holdings Inc (SPCE.N) in October last year allowing the space tourism company to go public by sidestepping an IPO.

Shares of Virgin Galactic have more than doubled since their market debut.

Through a SPAC deal, a company looking to go public can avoid the risk of struggling to sell shares to investors in a traditional IPO process.

Palihapitiya is doing simultaneous SPACs because he sees healthy deal flow in smaller companies that could not absorb the capital of the larger SPAC, according to a person familiar with the matter.

Credit Suisse advised Social Capital on the offering.

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