Europe Is Back in Business after the Holidays, and Trump Continues to Drain the Swamp

Europe has been quiet during the Christmas Holiday Season, but things are starting to warm up again. • • • ECONOMIST ERRORS IN BRITAIN. The Guardian reported on Saturday that the chief economist of the Bank of England admits that errors were made in Brexit forecasting. Andrew Haldane says his profession must adapt to regain the trust of the public, claiming that narrow models ignored ‘irrational behavior.’ Haldane admitted his profession is in crisis, having failed to foresee the 2008 financial crash and now having misjudged the impact of the Brexit vote. He said economists are often wrong and called criticism about lack of accuracy in forecasting “fair,” adding that the industry will have to do a better job. Blaming the failure of economic models to cope with “irrational behavior” in the modern era, the economist said the profession needed to adapt to regain the trust of the public and politicians. Before Brexit, the current head of the English central bank, Mark Carney, said that agreeing to Brexit would cause grave economic problems. So far, that hasn’t happened. Then there was Lehman Brothers, which was supposed to have little impact on England. Instead it had a lot. Haldane made his comments while speaking at the Institute for Government in London. But, despite his negative message, Haldane was upbeat, although he is bothered by criticism and is worried forecasts will not be taken seriously if they continue to be wrong -- how's that for undeniable English logic?? Former Conservative Party ministers, including former foreign secretary William Hague and justice secretary Michael Gove, last year attacked Bank of England governor Carney for predicting a dramatic slowdown in growth if the country voted to leave the EU. Some pro-Brexit Tories, such as Boris Johnson, suggested the statement regarding Brexit’s bad effects was a hoax, saying Carney was criticizing Brexit just to make it sound bad. Prime Minister Theresa May also criticised the bank for cutting rates and boosting stimulus after the Brexit vote. It later turned out the economy was doing well without the stimulus. Even though Haldane admitted the bank did not project such economic strength, he also believed that only the timing was off, not the underlying forecast : “I think, near-term, the data, the evidence we’ve been accumulating since the referendum, has surprised to the upside. [There’s been] greater resilience, in particular among consumers and among the housing market, than we had expected. Has that led us to fundamentally change our view on the fortunes of the economy looking forward over the next several years? Not really. This is more a question, I think, of timing than of a fundamental reassessment of the fortunes of the economy. So back in November we published a forecast for inflation which was the highest we’ve ever published. And the forecast for growth in the UK economy, that was the lowest we have ever published. We are still expecting this rather difficult balancing act for monetary policy with a slowing, not a huge slowing, but nonetheless a material slowing, during the course of next year as the effects of higher prices in the shops begin to chew away a little at the spending power of consumers and cause them to rein back a little in their spending.” • In a statement reminiscent of an Obama-ism, Haldane also blamed British citizens for a lack of economic literacy. But, when it comes to economics, especially central bank economic forecasting, Haldane is mostly if not entirely wrong. The Bank of England is a government monopoly and central bank economists will tend to take positions agreeing with the government -- in the case of Brexit, then prime minister David Cameron was opposed to leaving the EU, and the central bank's economic forecasts gave him support. The broader concern is that if central bank economists, for the sake of their jobs and promotions, continue to provide skewed forecasts, private sector economists who use central bank ecomomic data will become even more inaccurate. • • • 2017 IS ELECTION YEAR FOR MERKEL. German Vice Chancellor Sigmar Gabriel told Der Spiegel magazine that the break-up of the EU is no longer unthinkable. Gabriel believes that Germany's insistence on austerity in the Eurozone has left Europe more divided than ever and that it could lead to a break-up of the European Union. Gabriel, whose Social Democrats (SPD) are the junior partner of Chancellor Angela Merkel's conservatives in her ruling grand coalition, said strenuous efforts by countries like France and Italy to reduce their fiscal deficits came with political risks : "I once asked the chancellor, what would be more costly for Germany : for France to be allowed to have half a percentage point more deficit, or for Marine Le Pen to become president? Until today, she still owes me an answer." Gabriel and the SPD favor a greater focus on investment while Merkel's conservatives put more emphasis on fiscal discipline as a foundation for economic prosperity. And, in the run-up to the summer 2017 national elections in Germany, according to senior SPD sources cited by Der Spiegel, the SPD is expected to choose Gabriel, their long-standing chairman who is both vice chancellor and economy minister, to run against Merkel for chancellor in September's federal election. Asked if he believes he can win more votes by transferring more German money to other EU countries, Gabriel told Der Spiegel : "I know that this discussion is extremely unpopular. But I also know about the state of the EU. It is no longer unthinkable that it breaks apart. Should that happen, our children and grandchildren would curse us, because Germany is the biggest beneficiary of the European community -- economically and politically." • That last statement -- that Germany is the biggest economic and political beneficiary of the EU -- is amazingly frank for a German politician. Everyone in Europe knows that it's true, but it is the elephant in the room of EU politics. Nobody talks about it, but every EU decision reflects Germany's financial power in EU affairs. It is a source of both security and resentment all over the EU. The problem is that nobody has any solution for holding the EU together without Germany's leadership. • • • TRUMP AND THE US INTELLIGENCE COMMUNITY. While Europe wrestles with its angst around Germany's -- read that, Angela Merkel's -- leadership, America is wrestling with other political devils. On Saturday, President-Elect Donald Trump said that only "'stupid' people or fools" would think that having a good relationship with Russia is bad. Trump's Twitter messages came after his late Friday tweet criticizing the Democratic National Committee for its "gross negligence" that opened the way to allow Russia to hack into its computer servers during the presidential campaign. Trump began his Saturday tweets at 6 a.m., when he insisted there was "no evidence" that Russian hacking affected the election : "Intelligence stated very strongly there was absolutely no evidence that hacking affected the election results. Voting machines not touched!" That tweet came after Trump was briefed Friday by US intelligence community (IC) officials on a report that blamed Russian President Vladimir Putin for directing hacking operations of the DNC and other party operatives in hopes of swinging the election Trump's way. President Barack Obama had ordered the report, and received it on Thursday. A declassified version was released to the public after Trump was briefed. The report stated : "All three agencies agree with this judgment. CIA and FBI have a high confidence in this judgment; NSA has moderate confidence." • On the Sunday political talk shows, Trump's senior adsvisor Kellyanne Conway told CNN's State of the Union that the Trump-IC meeting was courteous and pleasant. She said the President-Elect and Intel leaders are on friendly terms. Conway, Trump's campaign manager and soon-to-be senior White House advisor, acknowledged that "Russia, China and others" have attempted to hack American government and political groups, but she didn't directly criticize Russia. Apparently, Trump's Friday briefing from top figures in the US IC laid out how Russian President Vladimir Putin ordered a comprehensive cyber campaign against Democrat Hillary Clinton. But, Conway repeatedly turned the conversation to whether the Russian hacks of emails that were then published by WikiLeaks affected the outcome of the race -- and said they did not : "Any attempt, any aspiration to influence our election failed. They were not successful in doing that," Conway added : "It had an effect on the Clinton campaign because it was quite embarrassing to watch a host of advisors question her judgment, question whether she would ever find her voice...why she was testing 84 slogans to find out who she was and what she'd run on -- this guy [Trump] had 'make America great again' and never changed." And, Kelly reminded CNN that : "The (Republican National Committee) -- apparently there was an attempted hack on the RNC, I'm informed but they had sufficient cybersecurity firewalls in place." She compared Trump citing WikiLeaks on the campaign trail to Clinton pointing to Republican senators and governors who were critical of Trump's campaign, saying Democrats and the Obama administration are only complaining about the Russian hacks now that Clinton has lost the election : "Everything changed when the election result was not what they had anticipated." • In a separate interview on "Fox News Sunday," Reince Priebus -- the RNC chairman and Trump's incoming chief of staff -- was more direct in acknowledging that Russia was behind the hacks of Democratic operatives. But he also blamed the Democratic National Committee for being hacked : "We have bad actors, including the Russians. But we also have a problem when we have a major political institution that allows foreign governments into their system without any defenses and training." • There are two aspects to Trump's reaction to the Intelligence report. First, Trump has continued to question the report's conclusions. The ongoing drumbeat of the Democrat establishment and its mainstream media followers is that because Trump rejects the conclusions in the Intel report, it means he rejects the Intelligence Community. Trump, as late as Saturday, said he has "tremendous respect" for the IC. While it is clear that the report "concludes" that Russia and Putin favored Trump and tried to disparage Hillary Clinton, it is also clear that in the report itself these conclusions are "assessments" -- that is, they are conclusions drawn by inference from other more factual information -- nothing revealed in the report shows either Putin or the Russian government saying that they wanted Trump to win and were waging their cyberattack to aid that goal. That is why Trump keeps rejecting the conclusions. He knows, and everyone who watches the MSM go after his legitimacy as President knows, that the Democrats are trying to undo the November election results. They lost -- they cannot accept that the American people rejected them and their Progressive programs -- and their revenge is to try to make Trump a lameduck President from Day 1. America is too savvy to buy that argument, but the MSM and the Democrat apparatus will keep pushing it until Trump slaps them down decisively with facts. And, my guess is that will happen soon after he is sworn in on January 20. • The second aspect of Trump's reaction to the Intelligence report is his continuing to say that maintaining a relationship with Russia would benefit the United States and the world. His Saturday tweets included this : "Having a good relationship with Russia is a good thing, not a bad thing. Only "stupid" people, or fools, would think that it is bad! We....have enough problems around the world without yet another one. When I am President, Russia will respect us far more than they do now and....both countries will, perhaps, work together to solve some of the many great and pressing problems and issues of the WORLD!" Nobody in his or her right mind would reject this Trump truism. It actually is a variation of the Obama-Clinton effort to bring Russia back in from the cold -- the famous Reset Button that Hillary gave to Putin. So, why do the Democrats reject a Russian Reset now? Because it doesn't fit into their spin -- the manipulation of facts to fit a biased conclusion -- that tries to create the false impression that Trump somehow prefers Russia to America -- a spin that de-legitimizes Trump. A moment's reflection about how Donald Trump singlehandedly took on the GOP elites, the Democrat stranglehold on the federal government and the illegally-gotten campaign war chest of Hillary and Bill Clinton has to lead to the conclusion that Trump is on the side of America. • • • THE DEMOCRATS MADE IT EASY FOR RUSSIA. The Democratic National Committee rejected requests from the FBI to examine its computer servers that were allegedly hacked by Russia during the 2016 election, according to a CNN report published before last week's IC report. A “senior law enforcement official” told CNN that the FBI “repeatedly stressed to DNC officials the necessity of obtaining direct access to servers and data, only to be rebuffed until well after the initial compromise had been mitigated.” The official said : “This left the FBI no choice but to rely upon a third party for information,” the source added. “These actions caused significant delays and inhibited the FBI from addressing the intrusion earlier.” • The stunning report -- never evaluated or criticized by the MSM -- rebutted the DNC telling Buzzfeed News that the FBI never even asked to review their hacked computer systems. Speculation over whether Russia was involved in hackings intended to influence the 2016 election has become a Democrat effort to sully President-elect Donald Trump’s relationship with the Intelligence Community and cast doubt on the legitimacy of his election. • But, last Thursday, Trump went on a tweet storm and asked directly : "How did NBC get "an exclusive look into the top secret report he (Obama) was presented?" Who gave them this report and why? Politics!....The Democratic National Committee would not allow the FBI to study or see its computer info after it was supposedly hacked by Russia....So how and why are they so sure about hacking if they never even requested an examination of the computer servers? What is going on?" • NBC News on Thursday reported that US intelligence found Russian officials celebrating Trump’s election win. NBC cited “a senior US intelligence official with direct knowledge” of the intel report that was delivered to President Obama on Thursday and delivered to Trump on Friday. The political spin was evident in the leaked conclusions in the IC report quoted by NBC : "Highly classified intercepts illustrate Russian government planning and direction of a multifaceted campaign by Moscow to undermine the integrity of the American political system. What you will see is that there were evolving goals over time. At the end, they were trying to elect Trump." So, Trump is asking a serious question. Leaking classified information is a crime -- a crime Hillary may have gotten away with so far, but it is still a crime and the IT leaker(s) clearly know that. So, who broke the law by giving in to MSM / NBC / CNN demands for anti-Trump leaks of 'sanitized' classified information?? That is what Trump wants to know. An angry Trump doubled down and tweeted that he is "asking the chairs of the House and Senate committees to investigate top secret intelligence shared with NBC prior to me seeing it." • • • DEAR READERS, as early as mid-December, Trump's top aide Kellyanne Conway said that Americans should be "concerned" by leaks to the media about intelligence agencies' findings on Russian interference with the election. When asked about an earlier December story in the Washington Post that reported that the CIA believes the Russian government attempted to help Trump win the election by hacking emails of numerous Democratic officials, Conway said that she was concerned about such press coverage of secret intel : "We should all be very concerned about that because you had a closed-door House Intelligence Committee briefing, and no sooner do people walk out apparently then some folks were talking to the media. That's unfortunate and at some level, maybe not in this instance, but at some point it could put all of us at risk. And for what purpose? To politicize or to curry favor with the mainstream media? None of that is worth leaking secrets." In the same December interview, with Fox News' Megyn Kelly, Conway said : "People who want this to be the permanent campaign, who are the election deniers...they are politicizing it," adding that the President-Elect has "great faith" in the intelligence community. • But, the Intelligence Community in December refused a request to brief the House Intelligence Committee on its latest findings about alleged Russian interference in the US presidential election, citing the larger investigation called for by President Obama. Director of National Intelligence James Clapper stated : "Once the review is complete in the coming weeks, the Intelligence Community stands ready to brief Congress -- and will make those findings available to the public consistent with protecting intelligence sources and methods." • And, who is the only national political figure calling for a pro-active approach to the hacking problems experienced for at least the past two years by the federal government and private US companies?? Trump. He insisted last Friday that he’ll take cybersecurity seriously, saying he’ll appoint a task force to come up with plans to stop online attacks from the country’s adversaries : “Whether it is our government, organizations, associations or businesses we need to aggressively combat and stop cyberattacks. I will appoint a team to give me a plan within 90 days of taking office." But he hinted he’ll keep the results secret, saying the “methods, tools and tactics we use to keep America safe should not be a public discussion that will benefit those who seek to do us harm.” • Sometimes, the solid common sense of Donald Trump is astonishing and encouraging in this era of spin and lies attempting to sell America a biased Progressive bill of goods. If Donald Trump fans have a Terrible Towel, they should be waving it right now. • As for Mrs. Merkel -- don't worry. Germans are the practical people of Europe and they will return her to the Chancellory for a fourth term -- if I had only one prediction to make for 2017, it would be this -- because German voters know how fast the EU would collapse without her.