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Democracy or dictatorship? Trump’s post-election moves spark outcry

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He fired his defence secretary, installed a conspiracy-minded loyalist as chief counsel at an intelligence agency, and tapped a retired army colonel who backed martial law on the Mexican border for a top Pentagon job.

And all this within days of being declared the loser of a presidential election — a result Donald Trump has declared fraudulent.

“If we saw this in any other country, a president refusing to accept the results and then firing the secretary of defence, you could imagine [journalists] writing that this is an attempted coup,” said Anne-Marie Slaughter, a former senior state department official.

Mr Trump’s decision to overhaul the senior ranks of the defence and parts of the intelligence establishment — including sacking defence secretary Mark Esper — in the immediate aftermath of his failed re-election campaign has gripped Washington’s political classes.

The reshuffle has sparked concern that the norm-bending president could well shatter the most sacred of democratic standards: the peaceful transfer of power. Yet many believe Mr Trump’s post-election skulduggery is for more pedestrian reasons, such as an eleventh-hour change in military posture overseas.

“The firing of Secretary Esper is most worrisome as it removes a man who has resisted the effort to misuse and abuse our military for political purposes,” said William Cohen, a former defence secretary under Bill Clinton. “Installing functionaries who are likely to be supplicants for the remainder of his term should be of concern to all who worry about national security issues.”

To be sure, Mr Trump has not violated any laws. The 18th-century US constitution and decades-old legal reforms make the formal certification of a new president a slow and complicated process, which means a sitting commander-in-chief has free rein to overhaul the government as they see fit for almost three months after election day.

“We do have to remember that the election is not certified,” Ms Slaughter told the FT Global Boardroom conference on Wednesday. “So when [Senate Republican majority leader] Mitch McConnell says Trump is completely within his rights, he is right.”

But there are also signs Mr Trump has targeted the process of confirming the election itself. Bill Barr, US attorney-general, a chief enforcer of Mr Trump’s more controversial legal forays, has authorised federal prosecutors to investigate possible election crimes before the results are certified.

And the president may not yet be done with his overhaul. Washington is awash with talk that the directors of the CIA and the Federal Bureau of Investigation — two of the few high-level positions that normally carry over from one administration to another — are next on the chopping block.

“There will be a smooth transition to a second Trump administration,” secretary of state Mike Pompeo said on Tuesday, a line delivered with a half smile that still sent shivers down the spine of many Democrats in Washington.

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Even Mr Trump’s harshest critics note, however, that there are significant safeguards to prevent any attempt by the president to subvert the constitutional order — most importantly the uniformed military, where officers have made clear their loyalty is to the nation rather than the current president.

General Mark Milley, the chairman of the joint chiefs of staff, has sent not-so-subtle messages to Congress that he is prepared to stand up to any extrajudicial measures taken by Mr Trump.

Gen Milley has made those protestations after coming under intense criticism over the summer for joining the US president while in uniform on a walk to a church near the White House after peaceful protesters had been dispersed with tear gas. The general apologised over the incident.

Other Pentagon analysts believe there are probably more mundane reasons for Mr Trump’s latest manoeuvres.

Some think the president is merely being vindictive against officials deemed insufficiently loyal. Others reckon Mr Trump wants to remove obstacles to ordering the withdrawal of troops from Afghanistan. That view has been bolstered by the hiring of Douglas Macgregor, a retired army colonel who backs withdrawing from the country, as a Pentagon adviser.

Other figures have privately raised concerns that the president might be considering military action, such as giving Israel the green light to attack Iran, and is seeking to remove officials likely to object.

James Stavridis, a retired US admiral who served as the Supreme Allied Commander at Nato and remains in regular contact with Pentagon officials, was doubtful the moves were related to Iran.

“I would say the firings at the Pentagon are a pretty good example of ‘Occam’s razor’, that the simple explanation is the best,” Mr Stavridis said. “He was frustrated with the senior leadership who he felt were insufficiently supportive in the months before the election and that led to an act of vengeance and petulance.”

For most of his tenure, Mr Esper was referred to as “Yesper”, reflecting the view that he was unwilling to stand up to Mr Trump. But he fell out of favour with the president over the summer when he opposed Mr Trump’s push to invoke the Insurrection Act to deploy active-duty soldiers in American streets to respond to anti-racism protests.

Ms Slaughter said many retired defence secretaries, including Jim Mattis, and former chairmen of the joint chiefs had sent the strongest message they could that officers’ loyalty lies with the constitution.

“If Donald Trump disobeys the constitution, or really subverts constitutional norms, they will not respond [to his orders],” Ms Slaughter added.

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Analysis

Rising inflation complicates Brazil’s Covid-19 crisis

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After seven months in lockdown, Michele Marques received some unwelcome news when she returned to work: while she was away the prices of almost all the products she uses as a hairdresser had soared.

“A box of gloves rose 200 per cent. Colouring products increased at least 100 per cent,” said the 37-year-old from São Paulo, underlining how costs were rising while her revenue had collapsed. “I had to raise the price of my services, too.”

It is a dynamic that is playing out across Brazil, adding an extra layer of complexity to the country’s coronavirus crisis, which has already claimed the lives of almost 350,000 individuals and pushed hospital services to the brink.

With much of Latin America’s largest economy being shuttered, inflation is surging to its highest level in years, fuelling a silent scourge of hunger among poorer citizens that has run in parallel to the Covid-19 pandemic.

“The high price of staple foods — rice and beans, for example — has led to the disappearance of these items from the table of millions of Brazilians,” said Ana Maria Segall, a researcher at the Brazilian Research Network on Food and Nutritional Sovereignty and Security. In the 12 months to the end of March, the price of rice increased 64 per cent and black beans 51 per cent.

“In Brazil currently food inflation has penalised the very poorest, preventing them from having adequate access to food and in many situations leading to hunger,” she said, adding that rising unemployment and the curtailment of social programmes were also contributing factors.

Volunteers hand out food in São Paulo © Alexandre Schneider/Getty Images

Less than half of Brazil’s population of 212m now has access to adequate food all the time, with 19m people, or 9 per cent of its inhabitants, facing hunger, according to a recent report by Segall’s group.

“I’m doing some odd jobs, but it’s not enough to keep us going,” said Jonathan, a 28-year-old who lost his job in the kitchen of a Chinese restaurant in São Paulo when the pandemic began. He said he now struggles to provide enough food for his three young children and pregnant wife.

On a 12-month basis, inflation in June is expected to surpass 8 per cent, far above earlier estimates. In the 12 months to March, food prices jumped 18.5 per cent, while the price of agricultural commodities in local currency surged 55 per cent and the cost of fuel increased almost 92 per cent.

Line chart of Percentage increase over past 12 months showing The price of rice in Brazil is soaring

The developments pose a fresh challenge to President Jair Bolsonaro, who is already under fire for his handling of the Covid-19 pandemic. Across Brazil’s biggest cities, graffiti has sprung up labelling the populist leader “Bolsocaro” — a portmanteau of his name and the Portuguese word for expensive.

The rising prices are also likely to provide useful ammunition to leftist former president Luiz Inácio Lula da Silva, who returned to the political fray last month and may challenge Bolsonaro in elections next year.

“Bolsonaro is to blame for the increase in food prices, he is to blame for everything. They have to remove this guy,” said Maria Izabel de Jesus, a retiree from São Paulo.

Armando Castelar, a researcher at the Brazilian Institute of Economics, said the government had underestimated inflation both in terms of the numbers and also “how much a concern it should be”.

He attributed the rising prices to the devaluation of the Brazilian currency, triggered in part by the stimulus packages passed by the US government — which helped to bolster the dollar and led to higher Treasury yields — and the brighter economic outlook outside Latin America.

“You have a situation where commodity prices are going up because the global economy is going to grow a lot this year. With the growth in the US, interest rates are going up and the dollar is strengthening. This puts a lot of pressure on the exchange rate in Brazil and emerging markets in general,” he said.

As the spectre of inflation loomed last month, the Brazilian central bank raised its key interest rate by 75 basis points, higher than the half-percentage point many economists had expected. A further rate rise is expected next month.

“The central bank acted correctly, but it cannot stop there. It is important not to be too lenient in dealing with this,” said Castelar.

Silvia Matos, a co-ordinator at the Brazilian Economy Institute, also pointed to Brazil’s weakening currency as a contributing factor to inflation. But she said the slide in the real was triggered by investor concerns over Brazil’s deteriorating public finances.

Following the creation of two separate stimulus packages to mitigate the impact of Covid-19, government debt has risen to about 90 per cent of gross domestic product, a high level for an emerging market economy.

The rollout of the second of these packages began this month, with 45m Brazilians set to receive $50 a month for four months.

Critics said, however, these stipends were not nearly enough to keep people both fed and at home in lockdown.

“It is essential that the emergency aid is of a greater value, so that people do not leave the house but no one also stays at home starving,” said Marcelo Freixo, a federal lawmaker with the leftwing PSOL party.

“We need to reduce the circulation of the disease. Brazil is already experiencing 4,000 deaths per day. We will reach 500,000 total deaths by the middle of the year.”

Matos says that inflation had hit poorer citizens much harder than middle-class and rich Brazilians because a larger portion of their income was dedicated to food, the price of which has increased substantially.

“The only thing that could help right now is to get out of this pandemic,” she said.

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Can CVC pull off a $20bn ‘deal of the century’ at Toshiba?

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Proposed management buyout looks like an improbable win for the Japanese conglomerate’s embattled CEO



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‘We’re running towards a cliff edge’: UK electric bus makers face survive-or-die moment

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The commute on the number 43 bus past the Bank of England between London Bridge and Friern Barnet highlights the critical challenge facing the UK bus industry.

The sleek double-decker is one of the capital’s 450 electric buses, but no more than a third of the seats are full during midweek rush hour as the industry struggles with the collapse in passenger numbers.

For the producers of electric and hydrogen vehicles, the coronavirus crisis came just at the wrong time as they prepared to overhaul Britain’s fleet of 38,200 buses and take advantage of diesel falling out of favour.

The ambition to transform the market to green powertrains remains — but now the primary concern is how it can stagger back to health after passenger numbers dived more than 80 per cent at one point during the crisis last year.

“We’re running towards a cliff edge, if we don’t start getting orders,” said Andy Palmer, chair of Leeds-based bus maker Switch Mobility and former Aston Martin chief executive. “The key point is speed. The industry needs to get back on its feet and manufacture at scale.”

To get those orders, manufacturers need government help, which ministers recognised with a promise of £5bn for buses and other transport in early 2020.

Boris Johnson
Boris Johnson’s national bus strategy is the biggest transformation of the sector since deregulation in 1986 © Steve Parsons/Pool/AFP/Getty

This was narrowed down in England’s national bus strategy — the biggest transformation since the sector was deregulated in 1986 — to £3bn in March, specifically for buses and the reaffirming of support for building 4,000 low-emission vehicles.

As part of this strategy, the government launched the tender for the first tranche to support 500 buses at the end of March.

Still, some operators worry government money may be as slow in arriving as some of the country’s buses, undermining their desire to pump money into the electric sector.

“It’s only through making profits that we can invest,” said David Brown, chief executive of Newcastle-based Go-Ahead. He points out that electric buses cost twice as much upfront as diesel.

It means the big operators, which include National Express, Stagecoach and FirstGroup as well as Go-Ahead, need the subsidies soon if they are going to invest in orders for battery-powered vehicles.

Paul Davies, president of the UK’s largest bus and coach manufacturer Alexander Dennis Limited, ADL, said orders were about 1,000 units lower than expected in 2020, almost half of pre-pandemic expectations.

Other groups needed intervention to survive. Northern Ireland-based Wrightbus was on the verge of collapse before being rescued by businessman Jo Bamford, the heir to JCB, Britain’s construction equipment manufacturer, known for its yellow diggers.

Bamford, however, is upbeat, saying orders for electric buses will come, helped by moves towards low-emission street regulations in cities and operators such as National Express committing to a zero-emission bus fleet by 2030.

But, even on optimistic forecasts, the UK’s three main electric bus manufacturers — ADL, Switch and Wrightbus — face big challenges from overseas rivals.

China’s Yutong Bus, the world’s largest producer, is way ahead of them, having sold 15,300 low-emission buses globally last year.

Its sights are also firmly set on exporting globally, selling 130 buses in the UK in the past 12 months and receiving an order in March for 55 more from Scotland’s McGill’s Buses.

ADL is attempting to meet this challenge by joining forces with Chinese battery maker BYD, while Bamford has turned to hydrogen as a way to get an edge. He owns Ryse, a hydrogen fuelling company.

A Yutong bus
Leicester’s E12 electric buses, built by China’s Yutong Bus

“When someone has 73 per cent market share [of the global automotive electric battery market], it’s difficult to knock them off their perch,” he said, explaining his bet on hydrogen.

That bet was given a boost in March with a £11.2m government subsidy to create a hydrogen technology centre in Northern Ireland, where Bamford’s Wrightbus is based.

Even with government backing, the challenges for UK producers remain great, with groups such as Yutong on its third-generation of fuel cell buses in China, according to its UK boss Ian Downie.

In contrast, Britain’s biggest producer ADL is still on its second-generation and, like Wrightbus, which says it is constantly updating its technology, is reliant on fuel cells from Canada’s Ballard.

The UK government could also run into trouble with the World Trade Organization if it explicitly advocates supporting local procurement, said a person familiar with Department for Transport discussions on the policy.

On top of this, the British groups face a challenge from Arrival, which listed in the US in March through a special purpose acquisition company and is backed by South Korea’s Hyundai. It aims to start producing buses from its “microfactory” by the end of the year.

In the view of Palmer at Switch, the UK groups will need to develop overseas markets to achieve the economies of scale to make profits.

“Can you survive on the basis of the UK alone? Our conclusion is you can’t,” said the chair of Switch, which is owned by Indian auto group Ashok Leyland. He pointed to India’s ambition to order 7,000 low-emissions buses by the end of its 2022 fiscal year that could benefit Switch.

However, before looking to expand overseas, the UK’s manufacturers need to get through the pandemic, which still hangs ominously over the sector, clouding its outlook.

The government must help UK groups “get us over this valley of death” to ensure their survival, said Nigel Base, commercial vehicle manager at lobby group the Society of Motor Manufacturers and Traders.



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