The Latest: Trumps open clubhouse amid big bet on golf

NEW YORK (AP) – The Latest on President Donald Trump’s new clubhouse and developments in his golf business (all times local):

3:50 p.m.

Eric Trump says his family’s golf operations are doing “spectacularly” as he cut the ribbon Monday on a new clubhouse at the course in the Bronx borough of New York City.

It is one of several Trump courses that available statistics show may be experiencing tough times. City data show revenue at the course fell 7 percent last year. Greens fees also fell last year at Trump’s Los Angeles course, and his two Scottish resorts and one in Ireland posted losses in 2016, the latest year available.

But it is difficult to determine exactly how well Trump’s golf business is faring because the company is private.

Trump and brother, Donald Jr., arrived by helicopter for the ribbon-cutting event, where they were joined by golf legend Jack Nicklaus.

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1:40 a.m.

The president’s company is hoping a new clubhouse opening at a Trump golf resort in New York City will revive its fortunes, one of several of his courses posting disappointing numbers recently.

Donald Trump’s two adult sons are cutting the ribbon on a clubhouse at the Trump Golf Links in the Bronx on Monday with hopes it will attract more visitors. Data from the city obtained in a freedom of information request by The Associated Press show revenue at the course fell 7 percent last year, echoing trouble at a few of Trump’s other 17 courses for which figures have been made public.

Greens fees fell last year at Trump’s Los Angeles course, and his two Scottish resorts and one in Ireland posted losses in 2016, the latest year available.

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No excuses: slump in UK manufacturing is dismal news | Larry Elliott | Business

There was a ready-made explanation when the March manufacturing figures were bad. Falling factory output was all down to the weather – the blizzards brought in by the “beast from the east”.

No such excuse is available this time. Manufacturing posted its biggest fall in production in more than five years. It was the third monthly decline running and nine of 13 industrial subsectors said they had cut output. The expected bounce-back in the construction sector was also a lot less vigorous than predicted, while order books for building firms look weak.

The manufacturing figures from the Office for National Statistics are troubling for three reasons. First, surveys had suggested a much better performance. Second, the 0.5% drop in production in the three months ending in April makes forecasts of a strong bounce-back from tepid growth in early 2018 look premature.

Third, even if signs are correct that consumer spending is picking up because of falling inflation, the UK will have reverted to its old pattern of growth after a short interlude in which activity was better balanced.

The travails of Britain’s manufacturing sector are part of a broader slowdown in industrial production since the end of 2017. Softer demand from other European countries and a stronger pound have been factors but UK firms have not exactly helped themselves by squandering the opportunity provided by the exchange rate depreciation that followed the EU referendum two years ago.

Given the choice between using a more competitive pound to sell more abroad or to boost their profit margins, companies chose the latter course. That helps explain why the improvement in Britain’s trade figures is a lot less impressive than it might have been and why productivity growth – which is easier to generate in manufacturing than in the services sector – has been so poor.

Manufacturing makes up 10% of the economy’s output and construction a further 6%, so it is a bit too early to rule out an increase in interest rates from the Bank of England at its August meeting. A lot will depend on news from services, which account for 80% of gross domestic product.

Even so, the dismal news from manufacturing and construction matters. The Bank’s optimism that a pick-up in growth in the second quarter will justify higher borrowing costs is based so far purely on survey evidence. This is the first hard data for the second quarter – and it is not good.

Why Draghi and ECB may be slow to let go of QE

It took the European Central Bank a long time to find the quantitative easing habit. While the US Federal Reserve and the Bank of England were printing electronic money like there was no tomorrow, the new form stimulus was all a bit too radical for the monetary conservatives at the ECB.

That, though, has all changed under the presidency of Mario Draghi, who finally overcame resistance to QE and announced a bond-buying programme in January 2015.

Although the eurozone has subsequently perked up, there are still some policymakers, the Bundesbank’s Jens Weidmann for one, who fear that too much QE will be inflationary. Weidmann is insisting that the ECB wind up its programme by the end of the year, and preliminary discussions will take place at the bank’s meeting in Latvia this Thursday.

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A report by Arend Kapteyn, the chief economist at the UBS investment bank, shows just how crucial QE has been to the eurozone. The ECB’s headline deposit rate stands at -0.4% but once QE is taken into account the effective policy rate is -5%.

Eurozone growth since 2015 has average 2.2% but of that 0.75 points are the result of the ECB’s stimulus. Kapteyn estimates that the eurozone’s trend rate of growth – the non-inflationary pace at which it can expand once unused capacity is used up – is around 1% and not the 1.5% the ECB and the International Monetary Fund are forecasting.

That means the eurozone looks extremely vulnerable to the next global slowdown, whenever that occurs. It also suggests the ECB may be as slow to dispense with QE as it was to embrace it.

Markets’ reaction to testy G7 summit has history on its side

Financial markets couldn’t care less that the G7 in Canada ended in failure and history suggests investors are right to dismiss the photo ops as empty pageantry. It is almost 500 years since what is regarded as the first international summit resulted in Henry VIII and Francis I of France seeking to outshine each other at the Field of the Cloth of Gold. Nothing earth-shattering happened there, either.

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Your internet use could change as ‘net neutrality’ ends

NEW YORK (AP) – Your ability to watch and use your favorite apps and services could start to change – though not right away – following the official demise Monday of Obama-era internet protections.

Any changes are likely to happen slowly, as companies assess how much consumers will tolerate.

The repeal of “net neutrality” took effect six months after the Federal Communications Commission voted to undo the rules, which had barred broadband and cellphone companies from favoring their own services and discriminating against rivals such as Netflix.

Internet providers such as AT&T;, Verizon and Comcast had to treat all traffic equally. They couldn’t slow down or block websites and apps of their choosing. Nor could they charge Netflix and other video services extra to reach viewers more smoothly. The rules also barred a broadband provider from, say, slowing down Amazon’s shopping site to extract business concessions.

Now, all that is legal as long as companies post their policies online.

The change comes as broadband and cellphone providers expand their efforts to deliver video and other content to consumers.

With net neutrality rules gone, AT&T; and Verizon can give priority to their own movies and TV shows, while hurting rivals such as Amazon, YouTube and startups yet to be born.

The battle isn’t entirely over, though. Some states are moving to restore net neutrality, and lawsuits are pending. Also, the Senate voted to save net neutrality, though that effort isn’t likely to become law.

For now, broadband providers insist they won’t do anything that would harm the “internet experience” for consumers. Most currently have service terms that specify they won’t give preferential treatment to certain websites and services, including their own.

However, companies are likely to drop these self-imposed restrictions; they will just wait until people aren’t paying a lot of attention, said Marc Martin, a former FCC staffer who is now chairman of communications practice at the law firm Perkins Coie. Any changes now, while the spotlight is on net neutrality, could lead to a public relations backlash.

Companies are likely to start testing the boundaries over the next six months to a year. Expect to see more offers like AT&T;’s exemption of its DirecTV Now streaming TV service from customers’ mobile data limits. Rival services like Sling TV and Netflix count video against data caps, essentially making them more expensive to watch.

Although the FCC issued a report in January 2017 saying such arrangements, known as “zero rating,” are probably anti-consumer, the agency did not require companies to change their practices right away. After President Donald Trump appointed a new chairman to the FCC, the agency reversed its stance on zero rating and proceeded to kill net neutrality.

Critics of net neutrality, including the Trump administration, say such rules impeded companies’ ability to adapt to a quickly evolving internet.

But consumer advocates say that the repeal is just pandering to big business and that cable and phone giants will now be free to block access to services they don’t like. They can also set up “fast lanes” for preferred services – in turn, relegating everyone else to “slow lanes.” Tech companies such as Netflix, Spotify and Snap echoed similar concerns in regulatory filings.

Martin said broadband providers probably won’t mess with existing services like Netflix, as that could alienate consumers.

But they could start charging extra for services not yet offered. For instance, they might charge more to view high-resolution “4K” video, while offering lower-quality video for free. The fees would be paid by the video services, such as Hulu, and could be passed along to consumers in higher subscription rates.

More than 20 states sued the government to stop the repeal, as did the public-interest group Free Press and the think tank Open Technology Institute and Firefox browser maker Mozilla.

Washington and Oregon now have their own net neutrality laws, and a bill is pending in California’s legislature.

That’s another reason companies are likely to move slowly, at least at first.

“They don’t want to add fuel to the fire,” Martin said.

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Schools with more poor students less likely to have qualified staff | Education

Schools with a higher proportion of disadvantaged students are less likely to have qualified teachers than schools with a more privileged intake, according to a report.

The international study found that in more than a third of countries, including the UK, teachers in “the most disadvantaged schools” are less qualified or less experienced than those in the most advantaged schools.

In the UK, 99% of science teachers in schools with a wealthier intake have a degree in their subject, compared with 92% of those with disadvantaged pupils, according to the report by the Organisation for Economic Cooperation and Development (OECD).

Many countries try to compensate for disadvantage in schools with smaller classes and improved pupil-teacher ratios, but the report argues that employing high-quality teachers– not just a greater number of teachers – is key to closing the gap between the most and least advantaged children.

The report also flags up the disadvantage faced by rural schools in the UK, where schools in cities urban areas employ a significantly larger share of qualified teachers.

“On average across OECD countries, there was no significant difference between rural and urban schools in the share of fully certified teachers,” the report says. “Yet in 13 countries and economies, urban schools employed larger shares of fully certified teachers than rural schools, with the largest differences observed in Indonesia, Kosovo, Turkey and the UK.”

Launching the report in Madrid, Andreas Schleicher, the OECD’s director for education and skills, said: “In most countries, a student’s or school’s postal code still remains one of the best predictors of education success.

“This evidence shows that countries can redress inequities in opportunities if they assign high-quality teachers, and not just more teachers, to the most challenging schools.”

The OECD report, Effective Teacher Policies, is based on analysis of the Pisa global education survey that compares educational performance across the world. It is based on international tests sat by 15-year-olds in participating countries.

The report says the current “decentralised” system of matching teachers to vacancies in the UK could be a factor behind the disparity between qualified teachers in advantaged and disadvantaged schools.

School leaders who took part in a survey for the study said the lack of qualified teachers was a major barrier to overcoming disadvantage and improving learning.

“Most countries and economies compensated disadvantaged schools with smaller classes and/or lower student/teacher ratios,” the report said. “However, in more than a third of countries and economies, teachers in the most disadvantaged schools were less qualified or less experienced than those in the most advantaged schools.”

Gaps in pupil performance between those from wealthier and poorer backgrounds were wider in countries where disadvantaged schools employed fewer qualified and experienced teachers than so-called advantaged schools.

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A look at what to expect from the Kim-Trump summit

SINGAPORE (AP) – After a sudden and welcome turn to diplomacy following last year’s threats, insults and fears of war – remember “fire and fury” and “dotard”? – Donald Trump and Kim Jong Un are ready to shake hands, sit down face-to-face and … do what exactly?

Some observers insist that it’s the beginning of the complete denuclearization of North Korea. No, no, say others, you need to manage your expectations. This is just an elaborate get-to-know-you session, albeit between the two most famous leaders in the world, and nuclear armed at that.

Actually, says another group, there will indeed be disarmament, a peace treaty ending the Korean War and North Korea’s emergence as a contributing member of the international community – but just not right now.

Whatever the results, it will be one of the more unusual summits in recent history as a flamboyant, often erratic U.S. president gets a close-up look at a hereditary socialist despot who sits on a nuclear weapons program.

Here’s a look at how Tuesday’s first-ever meeting between the leaders of North Korea and the United States might turn out:

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WHAT DOES SUCCESS LOOK LIKE?

Success in Singapore would see Kim making a bold decision to exchange his nukes for economic support and security assurances, according to Ryan Haas, an Asia expert at the John L. Thornton China Center. Both leaders would offer “clear, specific, unequivocal statements” outlining a dismantlement of North Korean weapons, an inventory and removal of all nuclear fuel and an opening up to U.N. nuclear inspectors.

Trump has faced intense pressure to win something similar to this.

A group of opposition Democratic lawmakers in the United States said in a statement that if Trump, a Republican, wants approval for a deal that allows an easing of sanctions on North Korea, he needs to get the permanent dismantlement and removal of “every single one of North Korea’s nuclear, chemical and biological weapons,” end all military nuclear fuel production and missile and nuclear tests, and persuade Pyongyang to “commit to robust compliance inspections including a verification regime for North Korea’s nuclear and ballistic missile programs.”

This is a very high bar and probably unrealistic after one meeting. Laboriously negotiated past nuclear deals, considered breakthroughs at the time, broke down on North Korea’s extreme sensitivity to allowing in outsiders to look at whether they’re dismantling their nuclear facilities, many of which are thought to be hidden.

“While a summit between Trump and Kim would be historic, it is unlikely to be decisive. This is not the fault of either Trump or Kim, but rather a reflection that intractable, decades-long strategic challenges rarely-if ever-get resolved in single encounters,” Haas writes.

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SHOULD WE LOWER OUR EXPECTATIONS?

Probably. In fact, Trump has been doing quite a bit of this lately.

What was initially portrayed by the White House as a summit meant to completely rid the North of its nuclear weapons is now being cast as a chance to “start a dialogue” and for Trump the dealmaker to look into the eyes and take the measure of his nuclear-armed antagonist.

Ferial Saeed, a former State Department official, writes that the summit will be a “getting to know you meeting, ‘plus.’ That means, lower your expectations, and that the president is likely to lean toward keeping his own counsel and eschew a script. The ‘plus’ refers to discussions on ending the Korean War.”

China, both Koreas and the United States would have to sign off on any legally binding treaty, so it is unlikely Kim and Trump will do more than express an intention to end the war.

Trump, after meeting recently with a North Korean envoy at the White House, said the summit will likely be part of “a process.”

“I told them today, take your time. We can go fast, we can go slowly,” Trump said.

“That is an extraordinary offer of flexibility, considering (North Korea) poses a direct security threat to the United States,” according to Saeed.

In part, these lowered expectations are a reflection of the extreme skepticism among many that the North can be persuaded to give up a nuclear program it has stubbornly built over the decades, often in secrecy and despite intense sanctions, international condemnation and widespread suffering among its people.

“There is no chance to make North Korean leaders … surrender their nuclear weapons,” Andrei Lankov, a Korea expert at Seoul’s Kookmin University, wrote recently on a Washington-based Asia newsletter. “They see denuclearization as a collective suicide (and they are probably right). However, now there are good chances to push North Korean nuclear/missile program back, for many years perhaps, and keep it that way for some time.”

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WHAT IF THE SUMMIT FAILS?

If things fall apart, it could be because “Trump presents Kim with a hard-and-fast binary choice: relinquish nuclear weapons and live in peace and prosperity, or cling to them and risk the impoverishment of your people and the safety of your regime,” Haas said.

But a failure Tuesday doesn’t necessarily mean a return to the animosity of 2017.

That’s in part because of South Korea’s diplomatic outreach to the North, which was highlighted by two summits this spring between the rivals’ leaders.

If Trump and Kim fail in Singapore, “the result may be to enhance North Korean dependency on Seoul and Beijing as safety valves against the prospect of renewal of U.S.-(North Korea) confrontation,” according to Scott Snyder, a Korea expert at the Council on Foreign Relations. “This circumstance in and of itself provides a new buffer against the prospect of military escalation in Korea that was not present at the end of 2017.”

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Germany and France close gap on UK for foreign investment | Business

The UK remains Europe’s top destination for inward investment, but its star is waning as Brexit uncertainty allows Germany and France to close the gap.

Last year the UK attracted 6% more foreign direct investment (FDI) projects that the previous year, according to figures compiled by EY in a survey of 450 global investors, but fell behind France, which grew by 31%, and the European average growth rate of 10%.

EY said the UK’s market share fell for the second successive year in 2017 and was likely to suffer a further decline as investors said they favoured Germany for the future. France was in second place, supported by the “Macron effect”, and the UK came third.

The UK attracted 1,205 FDI projects in 2017 compared with France’s 1,019.

Britain enjoyed a 22% boost in foreign investment into digital enterprises, but this compared with an average 33% rise across Europe.

Investor concerns over Brexit were felt most in financial services, business services and a decline in the number of firms opening headquarters in the UK.

EY said the figures contrasted with OECD and United Nations data for the UK that showed a collapse in FDI between 2016 and 2017 of more than 90%. However, the OECD and the 2018 UN Conference on Trade and Development (Unctad) report includes mergers and acquisitions, which soared ahead of the Brexit vote only to collapse in 2017.

EY’s chief economist, Mark Gregory, said his firm’s report focused on projects rather than the purchase of shares in UK businesses.

He said: “Once again we find evidence of an economy in transition with individual sectors behaving in different ways in response to changes in the business environment.”

Gregory said the services sector was the first to delay or switch investment plans while the manufacturing sector, which tends to operate over longer timescales, had proved slower to react to the referendum vote.

“In part this reflects the fact that it is easier to delay or shift investments [in the services sector], compared to capital-intensive activity in manufacturing for example,” he said.

While foreign investors have become reluctant to invest as much as they did in Britain, 2017 was a record year for the outflow of funds following a 35% increase in UK businesses investing into Europe.

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EY said UK firms were starting to “position themselves for Brexit” with financial services sector, business services and digital services firms leading the way.

The EY UK chairman, Steve Varley, said: “A swell of digital projects flowed into Europe changing the shape of FDI and bringing new dynamic businesses to the continent. Digital projects increased by 33% across Europe – three times the rate of overall market growth – and 34% in London, but only 22% across the UK as a whole.

“At a time when investor sentiment towards the UK as an attractive destination is weakening, opportunity arises in the shape of digital. An urgent digital drive is needed with a renewed focus on digital skills, infrastructure, and investment in research and development will help to shape the UK as an attractive environment, to maintain its competitiveness in a post-Brexit world,” he added.

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Kim Jong Un could give up ICBMs but keep some nuclear forces

SEOUL, South Korea (AP) – After years of effort to develop nuclear missiles that can target the U.S. mainland, is North Korean leader Kim Jong Un really ready to pack them away in a deal with President Donald Trump?

Perhaps, but that wouldn’t necessarily mean Pyongyang is abandoning its nuclear ambitions entirely.

Tuesday’s meeting in Singapore between Kim and Trump comes after a sharp turn in North Korea’s diplomacy, from rebuffing proposals for dialogue last year to embracing and even initiating them this year. The change may reflect a new thinking about its nuclear deterrence strategy – and how best to secure the ultimate goal of protecting Kim’s rule.

A look at how Kim’s appetite for talks swung amid the North’s ups and downs in weapons development and what that says about how he might approach his negotiations with Trump:

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TESTS AND TALKS

North Korea’s attitude toward dialogue in the past two years has seemed to shift with setbacks or progress in its weapons tests.

Even after starting a rapid process of weapons development following a nuclear test in January 2016, Pyongyang constantly invited rivals to talks that year.

It proposed military meetings with Seoul to reduce tensions and indicated it could suspend its nuclear and missile tests if the U.S.-South Korean military drills were dialed back. Washington and Seoul demurred, saying Pyongyang first must show genuine intent to denuclearize.

At the time, North Korea’s quest for a credible nuclear deterrent against the U.S. was troubled. The military conducted eight tests of its “Musudan” intermediate-range missile in 2016, but only one of those launches was seen as successful. The country’s path toward an intercontinental-range ballistic missile appeared cut off.

North Korea’s stance on dialogue changed dramatically, though, following the successful test of a new rocket engine in March 2017, which the country hailed as a significant breakthrough.

The engine, believed to be a variant of the Russian-designed RD-250, powered a successful May flight of a new intermediate-range missile, the Hwasong-12, reopening the path to an ICBM. That was followed in July by two successful tests of an ICBM, the Hwasong-14.

Pyongyang’s demands for talks disappeared. Proposals to meet from a new liberal government in Seoul were ignored. Determined to test its weapons in operational conditions, the North flew two Hwasong-12s over Japan and threatened to fire them toward Guam, a U.S. military hub.

The North’s state media brought up President Richard Nixon’s outreach to Beijing in the 1970s following a Chinese test of a thermonuclear bomb, saying it was likewise inevitable that Washington will accept North Korea as a nuclear power and take steps to normalize ties.

Kim talked of reaching a military “equilibrium” with the U.S. By all signs, he was fully committed to completing an ICBM program he intended to keep.

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THE DETERRENCE GAME

Kim’s turn toward diplomacy this year suggests he may have concluded the nuclear deterrence strategy was failing, some analysts say.

After a November test of a larger ICBM, the Hwasong-15, Kim proclaimed his nuclear force as complete, but his announcement may have been more politically motivated than an assessment of capability.

Although the Hwasong-15 displayed a greater range than the Hwasong-14, there was no clear sign the North had made meaningful progress in the technology needed to ensure that a warhead would survive the harsh conditions of atmospheric re-entry.

New U.S. National Security Strategy and National Defense Strategy reports released in December and January respectively also seemed to reduce the credibility of Kim’s deterrence plans, said Hwang Ildo, a professor at Seoul’s Korea National Diplomatic Academy.

In the documents, the U.S. assesses it could sufficiently defend against the small number of North Korean ICBMs – believed to be about 10 or fewer – with its 44 ground-based interceptors deployed in Alaska. Missiles fired from North Korea would have to pass Alaska to reach the U.S. mainland.

Experts are divided on whether the interceptors, which Washington plans to deploy in larger numbers soon, can be counted on to destroy incoming warheads. However, Hwang said, real capability doesn’t matter as much as Trump believing that the system works, which reduces the bargaining power of the ICBMs.

Kim can’t be the Mao Zedong to Trump’s Nixon if the U.S. sees his weapons as containable. With North Korea’s limited resources, as well as the threat of a pre-emptive U.S. attack, it’s difficult for the North to mass produce enough ICBMs to overwhelm the interceptors in Alaska.

Rather than prolonging his nation’s economic suffering, Kim may have concluded it would be better to deal away his ICBMs at the cusp of operational capability, especially when it was no longer clear the missiles would guarantee his survival.

North Korea always tries to maintain flexibility and increase its options from step to step,” Hwang said.

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A PAKISTANI MODEL?

What never changes for North Korea is that the survival of the Kim regime comes first.

Nam Sung-wook, a North Korea expert at Seoul’s Korea University, said Kim is probably modeling a nuclear future after Pakistan, which began building a nuclear arsenal in the 1990s to deter India. Pakistan is now estimated to have more than 100 warheads that are deliverable by short- and medium-range weapons and aircraft.

Kim may be seeking a deal where he gives up his ICBMs but keeps his shorter-range arsenal, which may satisfy Trump but drive a wedge between Washington and its Asian allies, Seoul and Tokyo. In drills with shorter-range weapons in 2016, the North demonstrated the potential to carry out nuclear attacks on South Korean ports and U.S. military facilities in Japan.

In negotiations, Kim may try to exclude submarine technologies from a freeze or verification process to leave open a path toward sub-launched ballistic missile systems, Hwang said.

Then, if diplomacy fails and Kim goes back to building nuclear weapons, the systems would expand their reach and provide a second-strike capability to retaliate if North Korea’s land-based launch sites are destroyed.

North Korea successfully tested a submarine-launched missile that flew about 500 kilometers (310 miles) in August 2016. Analysts believe the solid-fuel missile can hit targets as far as 2,500 kilometers (1,550 miles) away.

That said, it would take years for the North to develop a fleet of submarines that can quietly travel deep into the Pacific.

The immediate outcome of the summit in Singapore is likely to be a vague aspirational statement on the North’s denuclearization, Nam said. When it comes to details, Washington and Pyongyang are destined to “muddle through” a lengthy process, wrestling over the terms of monitoring and inspections, he said.

Still, such a process would halt the growth of the North’s nuclear program and prevent it from using its weapons to flex its diplomatic muscle, Nam said. It could take a decade or so for Kim to find his next move in nuclear deterrence if he’s eyeing a submarine-launched system. That could be enough time for Washington, Seoul and others to convince Kim he just can’t win the nuclear game.

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Follow Kim Tong-hyung on Twitter at @KimTongHyung.

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Are debt crises in Argentina and Turkey a global warning sign? | Business

Are brewing exchange rate and debt crises in Argentina and Turkey localised events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalise interest rates?

Rising interest rates could test stability in some advanced economies as well, especially in Italy, where voters, particularly in the less developed south, have opted decisively for a disruptive populist government. With an economy 10 times the size of Greece, a default in Italy would blow up the eurozone. Indeed, the populist coalition government that has now taken power has hinted that it wants write-offs for some of its under-the-table debts (not included in Italy’s official public debt of more than 130% of GDP) to the euro system through the European Central Bank.

The good news is that a full-blown global debt crisis is still relatively unlikely to erupt. Even with a recent softening of European performance, the overall global economic picture remains strong, with most regions of the world still growing briskly. Although it is true that several emerging market firms have piled up worrisome quantities of dollar-denominated external debt, many foreign central banks are brimming with dollar assets, especially in Asia.

The International Monetary Fund, moreover, has sufficient resources to handle a first wave of crises, even if it includes, say, Brazil. The main concern is not that the IMF will fail to deliver funds, but that it will make the same mistake it did in Greece, by not imposing a realistic deal on debtors and creditors. As for Italy, chances are that Europe will find a way to grant temporarily some of the extra budget slack the new government seeks, even if there is no way eurozone officials can allow high-debt Italy simply to destroy the common currency.

The most important reason for optimism, notwithstanding all the surrounding political noise, is that global long-term real interest rates are still extremely low. Even with all the drama surrounding Fed tightening, 30-year inflation-indexed Treasury bills are paying about 1% – far below long-term real returns, which have averaged closer to 3%. As long as the underlying global interest-rate picture is so benign, it is hard to see the big kahuna of bond default waves coming just yet.

It is notable how much the IMF, the world’s debt and financial crisis watchdog, has been ratcheting up its warnings. After years of saying advanced countries no longer need to worry about their near-record public debt levels – now averaging more than 100% for general government debt – the IMF has started to warn that many countries may find themselves squeezed for fiscal space if faced with a new recession any time soon. The challenges stem not only from debt that is on the books, but also from hidden liabilities, owing most notably to massively underfunded old-age pension and healthcare programmes – implicit debts that in many cases are far larger than the official figures.

The overwhelming evidence of recent research supports the IMF view. Countries with historically high debt levels have (on average) significantly poorer growth performance in the face of major shocks, and the long-term relation between high public debt and growth is distinctly negative. This, of course, says absolutely nothing about the economic consequences of actively reducing the burden of government debt, popularly known as “austerity”. Deep recessions are the time to use a country’s war chest, not the time to build it up.

Admittedly, there are those on both the left and the right who think “this time is different” for advanced economies. With no realistic danger (in their view) of a major war or financial crisis any time soon, it is folly to exercise too much restraint on public debt or pension promises. This is dangerous thinking even for the US, despite the greater fiscal scope it enjoys as the issuer of the global reserve currency.

Very bad shocks can happen to any economy, and their sources might not be the ones we normally consider. For example, risks stemming from cyberattacks (especially by state actors), pandemics and certainly financial crises are probably far higher than anyone would like to admit. It is certainly not difficult to imagine a temporary slowdown in fast-growing China that could roil world markets. And if the completely unexpected does happen, one thing we can anticipate is that governments with strong access to global credit markets will have much better options for responding.

Even if the best bet is that any emerging-market bond meltdown would remain contained, today’s jitters ought to be a wake-up call, even for advanced economies. After all, no country, however rich, should bet its future on the prospect that today’s ultra-benign interest rate environment will last forever.

Economists who assure us that advanced-economy debt is completely “safe” sound eerily like those who touted the “great moderation” – the supposedly permanent reduction in cyclical volatility – a generation ago. In many cases, they are the same people. But, as we saw a decade ago, and will inevitably see again, we are not at the “end of history” when it comes to global debt and financial crises.

Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the chief economist of the IMF from 2001 to 2003.

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Dallas attorney, 72, who survived polio lives in iron lung

DALLAS (AP) – The machine is what people see first. The submarine-like metal cylinder dominates the room, rhythmically humming and pulsating as it helps keep Paul Alexander alive.

The Dallas Morning News reports it is simple but effective: A big tube, a motor, a moving arm. As the paralyzed Dallas lawyer lies inside, his head protrudes from a velvety, airtight closure at one end, propped on a pillow on a height-adjusted table.

Alexander has spent much of his life in a can, a childhood victim of a once-epidemic disease that menaced the nation and now leaves him at the mercy of a mechanical respirator. Though unable to move from the neck down, he refused to be limited by his metal prison, finding success in both the classroom and the courtroom.

At the University of Texas at Austin, where he earned his bachelor’s and law degrees, students crowded his open dorm door and gawked. Later, clients visiting his home waited awhile before they ultimately asked: What is that thing you’re in? Is it a sauna?

No, he would say. It’s an iron lung. I had polio as a kid.

Then, some would ask: What’s polio?

No one makes iron lungs anymore. Barely a handful of people still use the hulking respirators, which apply negative pressure to enable breathing for those unable to do so on their own.

Alexander, 72, is among the few. The semi-retired bankruptcy lawyer has been using one since he was 6, his lungs and muscles ravaged by paralytic polio. He’s a living reminder of a time when fears of the crippling, infectious disease gripped the country and parents kept kids away from playmates, pools and birthday parties for so much as a sniffle.

“Polio was the horror of the day,” Alexander says, his speech punctuated with clicks, wheezes and silent breaks as he pauses to gulp in air. “It was like the Black Plague.”

The disease destroys nerve cells in the spinal cord. It spread silently, explained Steve Cochi, senior adviser at the global immunization division of the Centers for Disease Control and Prevention. For every one person who contracted paralytic polio, another 200 might display few or no symptoms.

“It was a disease that terrorized a community,” Cochi said. Its most famous victim was President Franklin D. Roosevelt.

Until 1955, when Jonas Salk became a hero by developing the vaccine that would largely eradicate the disease globally, polio reached pandemic levels. The worst year was 1952, according to PolioToday.org, with nearly 58,000 reported cases causing 3,100 deaths and leaving more than 21,000 in varying stages of paralysis.

That summer, on a hot and rainy day, 6-year-old Paul Alexander was playing outside his Pleasant Grove home, when he suddenly felt like going back inside.

As he walked in, dripping and muddy, he said, he let the screen door slam – an act that would normally draw scolding from his mom, who was mopping the kitchen.

Instead, she saw him and her face froze. “Oh, my God,” he remembers her saying.

She told Paul to run out and get his shoes. When he came back in, she cleaned him up and told him to go to bed.

“She knew instantly,” he says. He still wonders how.

He was pampered. His parents brought him crayons and coloring books featuring his beloved cowboys. It was pretty great, though he had the sense something wasn’t right. And so he colored, page after page, like there would be no tomorrow.

Inside his canary-yellow machine in his Love Field-area home, Alexander’s rigid body lies under a white sheet, fingernails long as talons and resting on his chest. He depends on a caregiver to help him eat, wash his face in the morning, brush his teeth and shave. He can be bathed, or his sheets adjusted, through portholes on the machine’s sides.

On the table, his head is ringed by technology linking him to the outside world – a computer, a pushbutton telephone, an Amazon Echo. What’s the Echo for? He grins. “Rock ‘n’ roll,” he says.

Closer to Alexander’s face, a straw pokes from a tall water cup; on his chin rests one end of a long, plastic T-square-like implement that he operates with his mouth, pecking out emails or answering and hanging up the phone.

It’s been about 30 years since his longtime caretaker, Kathryn Gaines, answered Alexander’s newspaper ad: “Disabled professional seeking part-time help.”

When other caretakers flaked, she stepped up. Eventually, she moved in.

For 15 years they lived together, then Gaines moved next door, and now she lives down the block. “We just kind of get along,” she says. “I haven’t killed him yet.”

One typical morning, she showed up at 7, Alexander’s human alarm clock, and gathered the implements of his morning routine, starting with a toothbrush, a metal bowl and a glass of water.

Gaines brushed his front teeth, then let Alexander take over as he worked the brush around his back teeth with practiced movements. She put the straw to his mouth; he took a swig from the glass and swirled before ejecting the wash back through the straw into the metal bowl.

Similar routines followed as she rubbed his face with a wet towel and lathered him up for a shave, the two reading each other’s body language.

Like an old married couple, they’ve had their moments, but Gaines has proved reliable where others haven’t.

“People need people,” she says.

As young Paul’s polio set in, his back and neck stiffened and pain shot through his limbs; by the next day, he said, he was hallucinating, with a high fever. By week’s end, he was too weak to sit on the toilet.

“My hands were gone,” he says. “I couldn’t color.”

The family had kept Paul home after their doctor suggested he’d be better off recovering there than at a hospital teeming with sick kids. But when the practically immobile boy had trouble breathing, it seemed he wouldn’t be among the lucky ones whose symptoms eventually passed.

He was rushed to the hospital, where he underwent a tracheotomy and woke up in a plastic, steam-filled tent. By then, he was already in an iron lung, with no idea what was happening. “I figured I’d gone to hell,” he says.

Doctors tried to get him to breathe on his own, but their sink-or-swim methods were terrifying to him and unsuccessful. It would be 18 months before he went home, paralyzed from the neck down.

With the help of a physical therapist, Paul gradually overcame fears of breathing on his own and learned to gulp for air – “kind of like a fish,” he says. “I was using my throat muscles and my tongue to gulp in breath and swallow it into my lungs.”

Motivated by the prospect of a puppy, he learned to breathe for three minutes at a time, and eventually for much of his waking day. “It’s exhausting,” he says. “People think I’m chewing gum. I’ve developed it into an art.”

But for a boy who wanted nothing more than to go to school, it was a turning point.

“I knew that was the road to a future,” he says. “To become something.”

Iron lungs haven’t been mass-produced for half a century, and insurance stopped covering Alexander’s repairs long ago. His chest muscles too damaged to use the portable ventilators that have become common for others with breathing issues, he’s dependent on a nearly obsolete machine.

When his iron lung began to leak air several years ago and he found it hard to breathe, he didn’t know whom to call.

Around the same time, Brady Richard, whose boyhood how-does-this-work curiosity led him to launch Environmental Testing Laboratory in northwest Dallas, was trying to cobble together a working iron lung from the shells of others abandoned in a nearby workshop.

“I like old stuff, so I read up on it,” he says, not knowing who might need it.

About a month later, a woman came into Richard’s business, which tests machinery and technology under simulated weather and seismic conditions, and asked if he had any iron lungs. A guy she knew named Paul Alexander really needed one.

Alexander’s existing machine was “flat worn out,” Richard says.

Using existing parts and a few he crafted himself, Richard eventually replaced it with another. The key was figuring out how the machine worked, its bellows moving back and forth to create a vacuum that makes the user’s chest expand.

He’s tried it himself. “It’s a weird feeling,” he says.

He’s fascinated by the machine’s beautiful simplicity.

“It’s basic and bulletproof,” he says. “There’s no chips, no electronics. It’s built to run forever.”

But for Alexander, its purpose is singularly crucial. Without it, he’d eventually run out of breath.

In 2008, a Tennessee woman who’d used an iron lung for 60 years died after a power failure deactivated her machine. Earlier this year, Alexander’s own electricity went out temporarily.

“That’s how close I walk the line between life and death,” he says.

One of the Dallas Independent School District’s first homeschooled students, Alexander learned to memorize instead of taking notes. He graduated second in his class from W.W. Samuell High in 1967 – “The only reason I didn’t get first,” he said, “is because I couldn’t do the biology lab.”

Next came Southern Methodist University, where he got around with the help of volunteers from Alpha Phi Omega fraternity before transferring to UT, along with his iron lung. There, he earned his bachelor’s degree in 1978, then his law degree in 1984.

He spent his career practicing family law and helping people filing for bankruptcy fight off creditors.

He was more flexible then. His 125-pound body has since stiffened, and he’s unable to use a wheelchair as he once did, a situation he hopes to correct with surgery so he can return to lawyering.

He admits to one great love, an SMU classmate whom he says he couldn’t allow himself to commit to because it didn’t feel fair. “You like to dance,” he says he told her. “But I can’t dance with you, and that makes me feel bad for you.”

To this day, the words he recalls her saying make him emotional: “When I’m dancing with others,” she said, “in my head I’m dancing with you.”

That’s among the tales he wants to share in a book he hopes to self-publish – an autobiography, but also a plea to Americans to make sure polio never returns.

In the two years before Salk’s vaccine was widely available, the average number of U.S. polio cases topped 45,000. By 1962, it had fallen to 910. Today, the CDC’s Cochi says, polio is nearly gone: Only eight cases, all thought to be connected, have been reported in 2018, in Afghanistan and neighboring Pakistan.

But until it’s fully wiped out, he says, “this disease can come back with a vengeance. As long as there’s polio virus circulating in the world, everyone is at risk.”

That’s a prospect that horrifies Alexander as growing numbers of U.S. parents refrain from vaccinating their kids. What if just one affected person were to make it into the country?

When he was younger, some tried to discourage Alexander from imagining he could accomplish what he’s done, and occasionally, he’s faced those demons himself.

“Why did God let this happen to me?” he’s wondered. “I would get so angry with him. I won’t accept for a single moment that Paul Alexander is not good enough to stand before God and ask, ‘Why? What’d you do this for?’ “

Faith powers him onward, and he credits his motivation to succeed to a spirit of defiance and, most of all, to his late parents, whom he describes as “extraordinary souls. Magical.”

“They just loved me,” he says. “They said, ‘You can do anything.’ And I believed it.”

___

Information from: The Dallas Morning News, http://www.dallasnews.com

Copyright © 2018 The Washington Times, LLC.

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Justin Trudeau’s remarks rile Donald Trump’s aides

President Trump stirred up a hornet’s nest during last week’s summit of major world leaders, suggesting they agree to embrace a full free trade world with no tariffs or barriers — and then withdrawing from the summit’s joint communique after he felt insulted.

White House officials unloaded on Canadian Prime Minister Justin Trudeau in unusually stark terms Sunday, saying he stabbed the president in the back with amateurish attacks over trade. They also said the young leader, who hosted the Group of Seven summit, made Mr. Trump look weak as he jetted from Canada to Singapore to face North Korean dictator Kim Jong-un.

“There’s a special place in hell for any foreign leader that engages in bad-faith diplomacy with Donald J. Trump and then tries to stab him in the back on the way out the door,” Trump adviser Peter Navarro told “Fox News Sunday.”

Mr. Trump went into the G-7 summit somewhat of a pariah just weeks after he slapped tariffs on aluminum and steel imports from much of the world, including Canada and the European Union.

At the summit, Mr. Trump said, he told the leaders that the U.S. had been maltreated for decades by lopsided trade deals, which he was rebalancing. But he also delivered a tantalizing vision: a world where the big economies agreed to tear down all barriers, including tariffs and subsidies, and embrace full free trade.

“That’s the way you learned at the Wharton School of Finance,” said Mr. Trump, a graduate of the University of Pennsylvania’s famed business school.

The president reiterated Saturday that he also is considering scrapping the North American Free Trade Agreement in favor of bilateral trade deals with Canada and Mexico individually.

In a post-summit press conference, Mr. Trump insisted that his relationships with other leaders were “very good” despite disagreement on the issues.

Soon afterward, Mr. Trudeau held his own post-summit press conference and said Mr. Trump’s move to justify the aluminum and steel tariffs by citing U.S. national security was “kind of insulting.”

“Canadians, we’re polite, we’re reasonable, but we also will not be pushed around,” Mr. Trudeau said.

The remarks clearly rankled Mr. Trump, who accused Mr. Trudeau of being two-faced. He tweeted that the prime minister acted “mild and meek” toward him at the G-7 but engaged in “very dishonest & weak” behavior after his departure.

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” the president tweeted from the presidential aircraft.

White House Chief Economic Adviser Larry Kudlow said Mr. Trudeau “really kind of stabbed us in the back.”

“He did a great disservice to the whole G-7,” he told CNN’s “State of the Union.”

Other world leaders seemed to side with Mr. Trudeau.

“International cooperation cannot be dictated by fits of anger and throwaway remarks,” French President Emmanuel Macron’s office said Sunday. “We spend two days working out a [joint] statement and commitments. We are sticking to them and whoever reneges on them is showing incoherence and inconsistency.”

Canadian Foreign Affairs Minister Chrystia Freeland said Canada “does not believe that ad hominem attacks are a particularly appropriate or useful way to conduct our relations with other countries.”

Sen. Dianne Feinstein, California Democrat, said Sunday that Mr. Trump was making a big mistake by pulling out of the largely symbolic statement of unity at the G-7.

“This wasn’t just with Trudeau,” she said on CNN’s “State of the Union.” “This is with our best allies, seven best allies. I understand the president was upset. The president could have said that. But to walk away from our allies in this way, I think, is a mistake.”

The president has been a disruptive force for the international trading order. He has insisted that other countries move to reduce barriers, which he said have left the U.S. with a trade deficit of more than $800 billion.

Mr. Kudlow, however, insisted it was Mr. Trudeau who “busted up” the G-7 with his remarks — even if they were designed for domestic consumption in Canada and though Mr. Trump is known for making strident comments in other settings.

“I personally negotiated with Prime Minister Trudeau, who, by the way, I basically liked working with, but not until this sophomoric play,” he told CNN.

He said optics were a key part of the problem because Mr. Trudeau’s comments landed as Mr. Trump flew to Singapore for his high-stakes meeting with Mr. Kim.

“It is a historic negotiation, and there is no way this president is not going to stand strong — No. 1,” Mr. Kudlow told ABC’s “This Week.” “He’s not going to let other people suddenly take potshots at him hours before that summit.”

Michael McFaul, a former U.S. ambassador to Russia, said the president was damaging himself. “If Trump can’t negotiate a deal on milk with one of our closest allies, how is he going to get a deal on nuclear disarmament with one of our greatest foes?” he tweeted.

Stephen Dinan contributed to this report.

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