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Investment Symposium Series – A regime change for US inflation

Disrupted supply chains, lower participation rates in the labour market, supply and demand thrown out of kilter. These are among the critical factors that have brought about a sea change in the outlook for US inflation. This regime change will be a critic

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Disrupted supply chains, lower participation rates in the labour market, supply and demand thrown out of kilter. These are among the critical factors that have brought about a sea change in the outlook for US inflation. This regime change will be a critical element in shaping the investment environment in 2022.  


This article is part of our Investment Symposium Series, in which we present thinking on the big issues. For this series, we draw on the annual Investment Symposium, a core event where investment professionals at BNP Paribas Asset Management zoom in on the themes shaping the future. It is also a venue for high-level external speakers to cast a new light on the challenges of our time, testing our convictions and diversifying our thinking.  


The outlook for US inflation and the appropriateness of US monetary policy were a major focus of our Investment Symposium. Professor Olivier Blanchard explained why, in his view, a secular rise in inflation is underway that will require policymakers at the US Federal Reserve to implement a more severe and more rapid tightening of monetary policy.

In this article, we review events so far before providing an outlook based on forecasts from our fixed income team.

Autumn 2021, US inflation takes off…

US inflation as measured by the consumer price index (CPI) hit a headline-grabbing 6.2% in October – its highest in three decades. The Fed’s preferred measure, the core personal consumption expenditure index, rose by 4.1% compared with a year earlier.

Data for November showed the CPI rose by 6.8 % compared to 12 months ago — the fastest annual pace since 1982 and a significant pick-up from October (see Exhibit 1).

Prices between October and November jumped by 0.8 %, slightly down from the previous month-on-month increase of 0.9 %.

According to the Bureau of Labor Statistics (BLS), ‘broad increases in most component indices’ fuelled the rise with petrol, shelter, food, and used and new vehicles ‘among the larger contributors’. Stripping out volatile prices for items such as food and energy, core CPI climbed by 0.5 % from October. That pushed the annual pace up to 4.9% from 4.6% in October.

The factors pushing US inflation higher

Faced with solid demand, US businesses had clearly been raising prices for consumer goods and services steadily, while supply bottlenecks and a shortage of qualified workers were driving up costs. 

Our view is that US inflation is being driven primarily by the response to Covid-19. During the pandemic, there has been a huge rebalancing of demand from face-to-face consumer services towards goods, with spending on durables such as cars, appliances and computers increasing particularly steeply. More than three-quarters of Americans made at least one improvement to their home in the first three months of the pandemic, according to Statista.

That demand has encountered supply chain problems in various parts of the world, resulting in widespread shortages and significant upward pressure on the prices of goods and materials, from computer chips to rubber and from coal to medicines. Global freight rates have surged as a result of soaring demand, factors such as Covid outbreaks in ports and the Suez Canal blockage.

Labour markets remain tight

At the same time, Covid has caused extensive disruption in the labour markets – and Americans have been reluctant to return to work.

As well as worries over the risk of contracting the virus, the extremely generous unemployment benefits that helped to support the economy through the crisis have kept workers at home, as have the excess savings households have built up during the pandemic.

US policymakers come under pressure

The rise in inflation in the last quarter of 2021 created an ugly economic situation of weaker growth and higher prices.

The damage inflation does to household purchasing power was stressed by Jay Powell when he spoke, for the first time after his re-nomination as chair of the Federal Reserve before the US Senate on 30/11/2021. Incoming Fed Vice-Chair Lael Brainard echoed that message.

So the Fed changes course

In the face of the continued upward pressure on prices in the final months of 2021, the Fed clearly became uncomfortable with its current extremely accommodative policy stance.

At the FOMC meeting in early November, it took the first step towards tighter policy, scaling back its asset purchases by USD 15 billion a month. On 30/11/2021, chair Powell said he thought the reduction in the pace of monthly bond purchases could move more quickly than the schedule announced at the start of November.

Up until this point, Fed officials had maintained that inflation would be ‘transitory’, a phenomenon Powell defined as not leaving a lasting mark on the economy. The word appeared in the post-meeting statement at the start of November, but by the end of the month, the chairman said it was probably not useful anymore: 

The word transitory has different meanings for different people. To many it carries a sense of short-lived. We tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation. I think it’s probably a good time to retire that word and try to explain more clearly what we mean.” 

A hawkish pivot, drip-fed to investors?

The Fed’s Federal Open Market Committee last met to consider monetary policy on 15 December and delivered what financial markets interpreted at that time as a benign set of measures (see our post here for a full account of their decisions).

However, the publication on 5 January of the minutes of that meeting changed the markets’ perception of the Fed’s stance.

In the view of our fixed income team, the minutes highlight the fact that most FOMC committee members think it appropriate to begin rolling off the balance sheet shortly after commencing interest rate rises.

The market was taken aback to learn that ‘almost all’ FOMC participants believed that the Fed should reduce the size of its balance sheet (that is, start to sell off the bond holdings acquired through quantitative easing) once there has been an increase in its main policy rate.

Overall, we see these minutes as signalling a hawkish shift. The fact that the notion of a simultaneous balance sheet roll-off and rate rises was not evoked by Powell during the question & answer session after December’s FOMC suggests to us that the Fed is seeking to ‘drip-feed’ a hawkish pivot to investors.

Markets reacted by further extending their expectations of forthcoming US rate rises (see Exhibit 2).

Transitory or regime change?

One of the biggest questions for investors in 2022 is whether the low-flation regime in place since the Great Financial Crisis of 2008/09 is now over. During this period, a number of factors combined to keep US inflation unusually low. These factors included: 

  • Debt – High debt loads discouraged private sector consumption
  • Demographics – Aging populations consumed less and saved more
  • Globalisation – Offshoring allowed cheaper supply chains to replace expensive onshore labour and production
  • Technology – Automation substituted capital for labour; the rise of superstar-companies suppressed labour’s bargaining power. 

Today, there are signs of a regime change arising partly from the pandemic. This has accelerated trends already underway. Among the catalysts are: 

  • Demographics – The falling age of the working population is now reducing labour supply (the baby boom generation is retiring), while demand from older cohorts for services is increasing
  • Protectionism – A rise in populism has resulted in rising protectionism; the focus of supply chains is shifting from efficiency to resilience and reliability, which encourages onshoring
  • Politics – There is increasing political pressure to address income and wealth inequality, likely through redistributive fiscal policies and higher wages
  • Inflation tax on debt – Elevated public debt loads incentivise higher inflation and financial repression
  • Fiscal dominance Central banks may have to accommodate fiscal deficits to deliver on their full employment targets
  • Green transition – A rush to build renewable energy production with limited storage capacity and a lack of investment in traditional energy could lead to higher and unstable energy prices. 

Watch this space as we chart developments in 2022.


Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. The views expressed in this podcast do not in any way constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

Writen by Andrew Craig. The post Investment Symposium Series – A regime change for US inflation appeared first on Investors' Corner - The official blog of BNP Paribas Asset Management, the sustainable investor for a changing world.

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International

Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Authored by Brad Jones via The Epoch Times (emphasis ours),

A California woman…

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Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Authored by Brad Jones via The Epoch Times (emphasis ours),

A California woman sobbed as she learned her friend’s 19-year-old son was kidnapped by the Hamas terrorist group in Israel.

Protesters wave Palestinian flags in support of Palestinians and socialism in Los Angeles, Calif., on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The next day, on Oct. 12, as news of pro-Palestinian “Day of Resistance” rallies spread across the United States, the woman, who is of Jewish heritage and asked not to be named for fear of reprisal, broke the tragic news: Her friend’s son had been murdered by the terrorists.

The same evening, a group of activists in south Los Angeles staged a protest in solidarity with Palestinians. Two days later, demonstrators again rallied—this time thousands gathering near the Israeli Consulate, at one point shutting down the on- and off-ramps to Wilshire Boulevard from the 405 Freeway.

At the Thursday protest, activists equated the plight of Palestinians to those of “indigenous peoples.” They called the Israeli settlements in the Gaza Strip an “occupation” steeped in racism. They blamed the “capitalist” Jews and white Europeans for the loss of their “indigenous lands” and called for a socialist revolution.

All resistance to colonial occupation is justified!” shouted one speaker at the event.

Protesters chanted, “From Palestine to Mexico, border walls have got to go,” and “From the river to the sea, Palestine will be free,” among other slogans. They blamed Israeli Prime Minister Benjamin Netanyahu for children killed in retaliatory attacks on Palestine and condemned Zionism, equating it with South African apartheid, fascism, and Nazism.

Thousands of demonstrators waving Palestinian flags and signs denouncing “Israeli apartheid” march in Los Angeles on Oct. 14, 2023. (David Swanson/AFP via Getty Images)
Julia Wallace of Service Employees International Union speaks in support of Palestinians in Los Angeles on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The protest, at Martin Luther King Boulevard and Figueroa Street, was organized by Unión del Barrio and the Association of La Raza Educators and other left-wing activist groups known for their support of critical race theory, or CRT, and the state-imposed ethnic studies program.

Julia Wallace of the Service Employees International Union (SEIU) spoke out against Zionism. She called for defunding police as “enforcers of capitalism,” saying they should be ousted from the labor union.

Another speaker called for a protest outside the south Los Angeles Police Department station on Oct. 22.

“Let’s take over the police station,” he told the crowd of about 30 supporters.

Meanwhile, an Oct. 16 Reuters/Ipsos poll shows most Americans see Hamas as a terrorist organization, while they view Israel favorably. An Oct. 13 Rasmussen poll found most U.S. voters blame Palestinians for the conflict and agree with calls for the “eradication” of Hamas.

On Oct. 15, thousands of people showing support for Israel rallied in Los Angeles, walking down Pico Boulevard to the Museum of Tolerance.

Demonstrators attend a rally in solidarity with Israel in Los Angeles on Oct. 10, 2023. (Ethan Swope/Getty Images)

Support for Israel

Ric Grenell, a Californian and former U.S. Ambassador to Germany who also served as Acting Director of National Intelligence in the Trump administration, condemned the recent attacks on Israeli civilians.

He stated on Twitter on Oct. 13, the Democratic Socialists of America and student groups that support Hamas “are a real threat to America.”

“Voting for Democrats who support Socialists like @DemSocialists and ‘Sanctuary Cities’ policies will absolutely lead to people entering our country freely who haven’t been vetted by U.S. immigration services. ... We must have laws that protect us against people entering the U.S. who support terrorists like Hamas.

Michael Shellenberger, an author and San-Francisco-based political activist who co-founded the California Peace Coalition and other groups, condemned the terrorist attacks on the Israeli people.

“We unreservedly condemn the atrocities carried out by Hamas and support the right of Israel to defend itself and protect its citizens,” he wrote. “The stories and images of the attack shock the conscience. Nothing on earth could justify such crimes. We condemn those on the radical left who have defended the actions of Hamas terrorists.

“We are pro-Israel, by which we mean we defend its right to exist and its right to defend itself,” he continued. “At the same time, we urge Israel and its supporters, including the United States, to, in their response, abide by international law in general and the Geneva Convention in particular. That means doing everything possible to avoid killing or injuring civilians in the Gaza Strip.”

Kelly Schenkoske, an independent researcher and education advocate, and a critic of critical race theory being taught in California classrooms, denounced the protests pushing critical ideologies.

“We’re seeing protests at college campuses nationwide in support of Palestine, but this issue does not just reside on our college campuses, it resides in the K-12 sector, especially within ethnic studies,” Ms. Schenkoske said.

A Palestinian flag is waved at a rally in support of Palestinians, in Los Angeles on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The state-imposed ethnic studies curriculum in California is “filled with radical ideology,” she said.

“The same activists demanding safe schools promote antisemitic ethnic studies content aimed at decolonizing education [and] promoting critical consciousness and training in neo-Marxism. We need to defund antisemitism in schools entirely,” she said.

Deborah Fillman, a former teacher and education analyst based in North Carolina, told The Epoch Times that California schools are teaching “lies” as historical information through its ethnic studies programs.

They’re doing it under the guise of social justice, which is false. There’s no justice that can come from murder. There is no legitimate resistance that comes from the wanton slaughter of innocent civilians,” she said.

“From the river to the sea, Palestine will be free,” is a Hamas slogan that means “all the Jews have to go—the eradication of Israel,” said Ms. Fillman, who is Jewish.

The pro-Palestinian protestors aren’t calling for a two-state solution but are instead supporting Hamas when they chant those words, she said.

“It is literally a war crime—every single thing [Hamas] did—including using their own people as human shields,” Ms. Fillman said.

Colonizer Versus Oppressed

Tammi Rossman-Benjamin, a co-founder and director of the AMCHA Initiative, a non-profit organization that combats antisemitism, told The Epoch Times that proponents of ethnic studies have used the Israeli-Palestinian conflict “as a way to essentially beat up their political enemies.”

The pro-Palestinian protestors are using the tenets of critical race theory to frame the Israeli-Palestinian conflict in terms of the colonizer and the oppressed, she said.

 

“It’s the whole binary oppressed-oppressor [concept] at the heart of ethnic studies that they’ve expanded to talk about politics and international politics,” she said. “In this case, their political agenda aligns up with Hamas’s political agenda which is to destroy Israel.”

Hamas doesn’t talk about colonialism, she said.

“It talks about Holy War, it talks about jihad,” and it calls for the ethnic cleansing of Jews from what it considers Muslim lands, Ms. Rossman-Benjamin said.

The recent “beheading of babies, rape, kidnapping, and massacres” represent the worst and largest number of atrocities committed against Jews since the World War II Holocaust, she said.

For Jews, this is really unprecedented in two generations,” she said.

The AMCHA Initiative issued a statement saying it is “shocked and horrified at the gruesome massacre of over 900 Israelis—children, mothers, grandmothers, fathers, entire families—hundreds of them gunned downed at a music festival ... reports of rape and torture, and an estimated over 100 Israelis kidnapped, including children, the elderly, a Holocaust survivor, young women, teenagers, and families.”

The Jewish community in the U.S. is now bracing for more pro-Palestinian protestors across dozens of university campuses expressing support for “this genocidal campaign,” AMCHA stated.

The Harvard Undergraduate Palestine Solidarity Committee and more than 30 other student groups recently signed a statement arguing that Israel’s “apartheid regime” is entirely to blame for the attacks. However, following public backlash, at least five organizations that initially signed the letter withdrew their support.

“We will work hard to expose and combat on-campus supporters and apologists for terror, especially the faculty and departments who provide academic legitimacy for the murder of Jews while disingenuously wrapping themselves in the mantle of academic freedom,” AMCHA stated. “Our hearts are broken, but our resolve is not. We stand united with the Jewish people in Israel and around the world.”

 

At the University of California—Santa Cruz (UCSC), the Critical Race and Ethnic Studies (CRES) department, which studies “race intersectionality in the context of power,” put out a statement Oct. 11 in support of the Palestinian people.

“In this moment—when we are grieving lives lost, fearing the many more to come, and witnessing Israel once again retaliate against a trapped Palestinian population in Gaza—we want to underscore the need for study,” CRES stated. “What we are witnessing needs to be understood in the context of 75 years of settler colonial displacement, military occupation, and enclosure. As in the past, racialized media coverage dehumanizes Palestinians, delegitimizing their aspirations for freedom from militarism, colonial rule, and incarceration.”

The department claims the world is witnessing “the circulation of technologies that are weaponized against Palestinians first, and, subsequently, our most vulnerable populations in the United States, on our borders and globally,” and cites this as the reason why it supports “the critical study of Zionism.”

The university has received pushback from at least seven members of the faculty, including Ms. Rossman-Benjamin’s husband, Ilan Benjamin, a chemistry professor. On Oct. 4, the group sent a letter to UCSC Chancellor Cynthia Larive expressing “grave concerns” ahead of the inaugural conference of the Institute for the Critical Study of Zionism, held on Oct. 13–14.

Although the conference has been condemned in the Jewish community “for its deeply offensive, antisemitic content and goals,” the letter focuses on the fact the conference is co-sponsored by three academic units at UCSC: the CRES department, the Center for Racial Justice, and the Center for Creative Ecologies, the faculty members wrote.

“While these three units may justify their co-sponsorship as a legitimate expression of academic freedom, we vehemently disagree,” they wrote. “It is an outrage that three departments at a publicly funded university are not only sponsoring a politically motivated and directed conference that limits participation to those who agree with the conference’s antisemitic goals, they are committing their department to embracing these goals, thereby threatening their own faculty and students, and members of the entire campus community. This is not a legitimate expression of academic freedom, but rather an egregious abuse of it.”

Tyler Durden Tue, 10/17/2023 - 20:45

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Top Japanese Energy Trader Warns ‘World Running Short Of LNG For Energy Transition’ 

Top Japanese Energy Trader Warns ‘World Running Short Of LNG For Energy Transition’ 

Liquefied natural gas (LNG) plays a pivotal role in…

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Top Japanese Energy Trader Warns 'World Running Short Of LNG For Energy Transition' 

Liquefied natural gas (LNG) plays a pivotal role in the world's changing energy landscape. By substituting dirtier fuels, LNG curtails carbon dioxide emissions and enhances air quality. This underscores its vital importance in the energy transition. 

Bloomberg recently spoke with Kenichi Hori, president of Japanese trading house Mitsui & Co., who said global LNG demand will likely be much higher than forecasted and the current "pipeline of projects" won't be enough. 

"Announced projects in the world still won't make up for the supply needed when considering the energy transition that will take several decades," Hori said. 

Hori is one of Japan's top traders of LNG and believes, just like Chevron Corp. and Shell Plc, that the fuel will play a crucial long-term role in the energy transition. His comments follow a fracturing of the global LNG market as Europe no longer sources a majority of the fuel from Moscow but instead relies on the US and other countries abroad.  

According to BloombergNEF data, global LNG demand is set to rise 3.4% annually over 2022-26, reaching about 444 million metric tons. This comes as countries and companies view LNG as one of the cleanest fossil fuels that can lower emissions. Bloomberg noted supply will be tight until 2026 - after that, new projects are forecasted to come online. 

Hori pointed out his firm has "projects in the US, Middle East, and Africa" to ensure a diverse supply chain. 

He added his firm is interested in signing a contract with Qatar. He stated the Middle Eastern country is an "important source of LNG" as Japan strives for further diversification. 

Besides LNG, Hori invested $6.4 billion in an offshore wind project off Taiwan and exploring opportunities in e-methanol.  

"All these projects are going to shape the future of our portfolio that is transitioning from a traditional energy business to a low-carbon-intensive era," he said.

Last month, Lorenzo Simonelli, chairman and CEO of service company Baker Hughes, was quoted by Reuters at Gastech, the industry's largest conference in Singapore, as saying, "Natural gas will continue to play a critical role as a bridging and destination fuel for the energy transition."

The biggest takeaway is that LNG has a bright future as it becomes the 'transition fuel' as the world progresses to net-zero emissions by 2050. 

 

Tyler Durden Tue, 10/17/2023 - 20:25

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DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

Authored by Philip Wegmann via RealClear Politics,

Just…

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DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

Authored by Philip Wegmann via RealClear Politics,

Just three days: That’s how long it took for Republicans to adopt a new orthodoxy on how the Biden administration should respond to Palestinian refugees fleeing the violence in Gaza.

Florida Gov. Ron DeSantis went first.

“I don’t know what Biden’s going to do, but we cannot accept people from Gaza into this country as refugees,” DeSantis said in Iowa on Saturday, establishing a red line that the other frontrunners for the Republican presidential nomination would soon adopt.

As many as 2 million civilians are without food, water, and shelter in Gaza as Israel prepares to invade the densely populated region in response to a deadly Hamas terrorist attack earlier this month. While the White House has backed Israel from the start, the administration has also pressed powers in the region to open a humanitarian corridor to escape the bloodshed.

The final destination of those refugees, Republicans now say, should not be the United States. But they did not slam the door in unison. In a split screen on Sunday, DeSantis and former U.S. Ambassador to the United Nations Nikki Haley seemed to differ sharply on how the United States ought to respond.

Former President Trump, meanwhile, remained silent.

DeSantis reiterated his red line on refugees during an interview with “Face the Nation,” telling Margaret Brennan of CBS that “those Gaza refugees, Palestinian Arabs, should go to Arab countries. The U.S. should not be absorbing any of those.” And he reiterated his warning that, while “not everyone is a member of Hamas,” the culture in Gaza is so “toxic” that welcoming large numbers of refugees “would increase antisemitism” and “anti-Americanism” in the United States.

Haley rejected that broad characterization during a CNN interview Sunday, telling Jake Tapper that a large portion of Palestinians bristle under Hamas in Gaza.

“There are so many of these people who want to be free from this terrorist rule. They want to be free from all of that,” she said before adding that Americans have always been sympathetic to the idea “that you can separate civilians from terrorists.”

The former ambassador also called on Middle Eastern countries to step up and provide for Palestinians desperate to avoid the crossfire.

“Where are the Arab countries? Where are they?” Haley asked.

“Where is Qatar? Where is Lebanon? Where is Jordan? Where is Egypt? Do you know we give Egypt over a billion dollars a year? Why aren’t they opening the gates? Why aren’t they taking the Palestinians?”

When asked specifically if Haley believed that the United States should welcome refugees fleeing the crisis, a spokesman for Haley told RealClearPolitics on Monday that the ambassador “opposes the U.S. taking in Gazans” and that Haley believes “Hamas-supporting countries like Iran, Qatar, and Turkey should take any refugees.”

As poll numbers tighten in the race to be positioned as Trump’s possible, supporters of the Florida governor seized on that statement as evidence Haley had flip-flopped on the question. Hours later, when Trump said in Iowa that “we aren’t bringing in anyone from Gaza,” the DeSantis campaign suggested that the former president was plagiarizing DeSantis.

“Trump literally needs a teleprompter in order to finally catch up with a position DeSantis took three days ago on Gaza refugees,” DeSantis spokesman Andrew Romeo told RCP.

During a campaign stop in Iowa, Trump promised to update and enforce his travel ban to include anyone from Gaza. He went further, vowing to deny entry into the United States to anyone who adhered to “anti-American” ideologies. “If you empathize with radical Islamic terrorists and extremists, you’re disqualified,” he said. “If you want to abolish the state of Israel, you’re disqualified.”

Trump allies are fond of accusing DeSantis of copying and pasting the former president whenever the governor espouses policies adopted during the previous administration. This time, DeSantis supporters argue it is the other way around.

Ken Cuccinelli, who served as Trump’s deputy Homeland Security secretary, told RCP that DeSantis had become “the standard-bearer for standing with Israel and protecting American citizens.”

An immigration hawk and chairman of the pro-DeSantis super PAC, Never Back Down, Cuccinelli said that DeSantis “took the position to ban importing Gaza’s population without hesitation while everyone else is now following his lead.”

First-time candidate Vivek Ramaswamy, who is mired in fourth place in the polls, also added his voice to the emerging chorus of GOP voices. “Vivek would not allow refugees from Gaza into the U.S.,” a Ramaswamy spokeswoman told RCP. Instead, the businessman would look to help facilitate “their emigration to other countries, but this is not an issue where we should risk U.S. security or trade off the well-being of Americans here in the homeland.”

Support for Israel in the wake of the Hamas attack has been bipartisan and immediate. Conservative consensus on the refugee question took time to evolve.

Writing in the Wall Street Journal on Sunday, Jonathan Schanzer, a former terrorism analyst for the Treasury Department and a senior vice president at the Foundation for the Defense for Democracies, argued that the responsibility for sheltering refugees should fall on “Hamas’ enablers,” such as Iran, Turkey, and Qatar.

Some Democrats, like New York Rep. Jamaal Bowman, have called on the Biden administration to welcome refugees. “Fifty percent of the population in Gaza are children. The international community as well as the United States should be prepared to welcome refugees from Palestine while being very careful to vet and not allow members of Hamas,” the progressive “Squad” member said.

Populist conservatives such as political operative Ryan James Girdusky condemned that idea over the weekend and see the Republican rejection of those calls as part of a larger GOP evolution.

For decades, Republicans have been begging politicians to pump the breaks on immigration, but refugees especially,” Girdusky told RCP before arguing that welcoming refugees from Gaza would be tantamount to “importing antisemitism and intolerance.”

“Their ideology does not change because they cross national borders. That’s not to mention the genuine fear that terrorists can enter as refugees, which has happened a few times in the past,” the author of the National Populist Newsletter added. “Republican candidates who want to expand refugee status to Palestinians are out of touch with their voters.”

The conflict in the Middle East comes at a moment when Republicans are increasingly divided on the role the United States ought to take on the world stage. And while there is widespread support for Israel among the GOP, many in the 2024 field have grown critical of military aid for Ukraine. Former Vice President Mike Pence said over the weekend that when you have “leaders in the Republican Party signaling retreat on the world stage,” enemies are more likely to attack U.S. allies.

He pointed specifically at “voices of appeasement like Donald Trump, Vivek Ramaswamy, and Ron DeSantis that I believe have run contrary to the tradition in our party that America is the leader of the free world.”

For his part, DeSantis ended the weekend at Tampa International Airport. The governor signed an executive order earlier last week directing Florida’s Department of Emergency Management to begin logistical and evacuation efforts of Floridians stuck in Israel after commercial airlines began canceling flights, leaving U.S. citizens stranded in the region. On Sunday evening, nearly 300 Americans returned stateside on a jetliner chartered by the state of Florida with more scheduled in the coming days.

I am proud of how quickly we have been able to activate resources and do what the federal government could not – get Floridians and other Americans back home,” the governor said in a statement.

Tyler Durden Tue, 10/17/2023 - 20:05

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