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    Elimination of IS Leader Is a Positive, But Not a Final, Step

    On January 3, the United States announced the elimination of Ibrahim al-Hashimi al-Qurayshi, the leader of the so-called Islamic State (IS) during a counterterrorism raid in Atmeh, a town in Syria’s Idlib province close to the Turkish border. In an address to the nation, US President Joe Biden said that the operation had taken “a major terrorist leader off the battlefield,” adding that special forces were used in the operation in an attempt to reduce civilian casualties.

    Why Now?

    The raid comes after IS conducted an attack on al-Sinaa prison in the northeastern city of Hasakah in January in an attempt to break free its fighters. In the assault, several Syrian Democratic Forces (SDF) fighters were killed. According to SDF officials, IS was planning the attack for six months. Nevertheless, the US-backed SDF recaptured the prison about a week later. 

    Lieutenant Colonel Rick Francona suspects that the attack on the prison “was the catalyst that led to the decision to act on what was obviously already known location intelligence on … al-Qurayshi.” Francona, who served as the US military attaché in Syria from 1992 to 1995, notes that “Over the past few months, there has been an increase in ISIS activity — more widespread and bolder in nature. This also comes at a time when Iranian-backed militias have also stepped up attacks on US forces in Syria and Iraq.”

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    Both Qurayshi and his predecessor, Abu Bakr al-Baghdadi, were eliminated in Idlib province, in areas under the control of Hayat Tahrir al-Sham (HTS). Previously, HTS was known as Jabhat al-Nusra, affiliated with al-Qaeda and initially aligned with IS. In 2013, however, it split from IS and has been at war with the group since 2014. In 2016, it also broke relations with al-Qaeda and rebranded itself as Jabhat Fatah al-Sham (JFS). The following year, JFS assumed its current iteration as it merged with other groups. 

    During much of the past decade, Idlib served as a hideout for extremists. In 2017, then-US envoy to the coalition fighting the Islamic State, Brett McGurk, stated that “Idlib Province is the largest Al Qaeda safe haven since 9/11.” Following Baghdadi’s elimination in 2019, former US President Donald Trump suggested Baghdadi was in Idlib as part of a plan to rebuild IS. Indeed, it was surprising to see Qurayshi hiding in Idlib as well. 

    According to David Lesch, professor of Middle East History at Trinity University in Texas and author of “Syria: A Modern History,” “it seems strange that al-Baghdadi and al-Qurayshi were killed in [a] province largely controlled by its rival HTS and overseen by Turkey, but on the other hand it is the only area not under the control of the Syrian government and its allies or the US-supported SDF, all of whom are opposed to ISIS.”

    “Idlib is now home to thousands of IDPs, therefore it was easier for the two to blend in, live secretively, and not be identified as outsiders since most everyone in certain areas of the province are outsiders,” Lesch explains. “Yet they were still found because despite all this they lived in an area still teaming with enemies who were obviously directly or indirectly assets to US intelligence.”

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    The recent US operation in Idlib, which was reportedly planned over several months, has been the largest of its kind in the country since the 2019 raid that eliminated Baghdadi. Although Qurayshi was less charismatic than Baghdadi, the fact that he was targeted in the US raid confirms his importance.

    It is worth noting that Qurayshi was named as the leader of IS in 2019, following the death of Baghdadi. While IS called on all Muslims to pledge allegiance to Qurayshi as the new “caliph,” it did not provide much information about his bona fides. The use of the name “Qurayshi” seemed to be an attempt to trace his lineage to the Prophet Muhammad. This is a tactic that was also used vis-à-vis Baghdadi with the aim of legitimizing his leadership role. Qurayshi’s real name is Amir Muhammad Said Abdal-Rahman al-Mawla but he is also known as Hajji Abdullah and Abdullah Qaradash.  

    As the US continues to create an impression that it is minimizing its presence in the region, especially following its withdrawal from Afghanistan last year, the raid seems to have been used to demonstrate US reliability to reassure Washington’s partners. It also comes as a needed win for Biden at a time when the Ukraine crisis remains unsolved. 

    However, while Qurayshi’s elimination is a positive development, it may simply be a “symbolic victory,” as Sean Carberry suggests in The Hill. While the operation against Qurayshi may create internal chaos within IS, ultimately, the terror group is likely to name a new leader and move on, which is what took place following Baghdadi’s assassination. Although IS was militarily defeated, the group has not been eliminated and remains a threat. In fact, there have been increased indications, such as the attack on al-Sinaa prison, suggesting that the group is in a state of resurgence. The militants might also seek to use the recent US raid to encourage revenge attacks. 

    US Policy in Syria

    The Biden administration’s policy vis-à-vis Syria seems to indicate that the official approach will be “markedly timid,” as Abdulrahman al-Masri and Reem Salahi suggest. It should not be surprising to learn that Syria does not constitute a top diplomatic priority for President Biden. Yet while the US does not want to remain engaged in endless regional wars, it seems to believe that a political settlement in war-torn Syria would only empower President Bashar al-Assad, whom Washington would never back. 

    Moreover, the US and the Kurds are partners, and Washington would not want to portray an image that it has abandoned those who have shouldered the fight against the Islamic State. This was the overall perception when Trump announced the withdrawal of US forces from Syria in 2019, and Biden seems keen to remedy that controversial decision. 

    Unique Insights from 2,500+ Contributors in 90+ Countries

    It is worth noting that during President Barack Obama’s tenure, Vice President Biden was one of the skeptics when it came to what the US could achieve in Syria. Nevertheless, it should not be taken as a given that as president, Biden may be in favor of removing all US forces from the country. For instance, he criticized Trump’s decision to withdraw forces from Syria, saying it granted IS “a new lease on life.” In the same year, Biden also said he supports keeping some forces in eastern Syria for the foreseeable future. 

    Middle East expert and former US State Department analyst, Gregory Aftandilian doesn’t see the US leaving Syria anytime soon. Aftandilian, who is also a non-resident fellow at Arab Center Washington DC, thinks “It is doubtful [Biden] will do more than the anti-ISIS campaign and humanitarian aid. In light of the attempted prison break in northeastern Syria he may put pressure on some countries to take back ISIS prisoners.”

    For the US to play a role in stabilizing Syria, there needs to be a clear strategy. Unfortunately, at the moment, that strategy is largely lacking. While the elimination of Qurayshi is a positive step, much more work needs to be done to stabilize the country.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    How Qatar Manages Economic Growth and CO2 Emissions

    The linkage between economic growth and environmental degradation is a well-known topic. The burning question has become whether there is a trade-off between sustaining economic activities and maintaining the conditions of natural resources, or whether economic growth can go in harmony along with environmental protection measures. The direct interconnected relationship between fossil fuel consumption and environmental degradation has posed an interesting policy challenge.

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    Burning fossil fuels releases carbon dioxide and other greenhouse gases that trap heat in the atmosphere, making them major contributors to climate change. On the other hand, high industrial activities, alongside rapidly increasing populations, put growing pressure on energy demand.

    The Example of Qatar

    Qatar has made remarkable economic achievements over the past few decades. Yet Qatar is facing a trade-off between boosting its economic growth and lowering its carbon dioxide emissions. Its strategic mandate to boost economic development, along with other areas related to sustainability, makes Qatar an interesting country to analyze.

    The World Bank defines Qatar as one of the richest countries in the world in terms of GDP per capita. Its economy is highly dependent on oil and gas production, which accounts for more than 50% of GDP, 85% of export earnings and 70% of government revenues. The country is also a major player in liquefied natural gas. Nonetheless, Qatar’s high dependence on fossil fuels has resulted in an increase in the CO2 emissions level when compared to global averages.

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    To combat the rising carbon emission percentages and lower environmental pressures, Qatar is introducing strict policy measures to achieve sustainable development through four central pillars: economic, social, human and environmental development. While many disruptions have occurred over the past few years, including fluctuations in oil and gas prices, economic downturns and a deadly pandemic, nobody expected an economic blockade.

    The Diplomatic Rift

    In June 2017, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic relations with Qatar. They prohibited Qatar-registered planes and ships from utilizing their airspace and sea routes, and the Saudis also blocked Qatar’s only land border.

    This point is of particular importance as the deterioration in relations among the Gulf neighbors urged Qatar to rethink its sustainable development goals while meeting local demand. At the beginning of the blockade, the country relied heavily on importing several commodities, especially food items. Later, it accelerated initiatives and programs to diversify the economy and reduce reliance on imports.

    Achieving carbon neutrality is also factored into all Qatar’s initiatives. For example, by the end of 2022, Qatar aims to deliver the first carbon-neutral FIFA World Cup in the history of the event. All stadiums and infrastructure are subjected to rigorous sustainability standards. Several air quality monitoring stations and extensive recycling programs are being introduced, along with the construction of the eight stadiums that will be used during the football tournament.

    Qatar has since become much more independent across several sectors, including food production and transport, making it a case study on how to transform challenges into opportunities for growth.

    Unique Insights from 2,500+ Contributors in 90+ Countries

    This was also evident with total carbon emissions. According to my own analysis, carbon emission per capita fell by 13% as of 2018 from a historical record in 2000. Since then, total carbon emissions have increased as the economy has grown but at a slower rate, meaning that Qatar is undergoing expanding relative decoupling. In the 2008 to 2018 period, a 1% change in GDP resulted in a fall of CO2 emissions, from 0.65% to 0.44%. This drop is very relevant to Qatar as several measures have been applied, particularly over the last 10 years, to reduce emissions.

    A Reduction in Emissions

    While Qatar’s total emissions have declined over recent years, policies to increase energy efficiency, diversify the energy mix by introducing more renewables, support technological development to improve energy efficiency in a desert climate, and implement energy demand management programs to maintain the same trend of decline and achieve climate change objectives have been increasingly crucial.  

    The heightened pressure caused by the blockade on Qatar is now over, but what is needed are more synergies and collective efforts across the Gulf Cooperation Council (GCC) to stimulate economic diversification and minimize carbon emissions. Member states of the GCC are sharing multiple environmental, social and economic factors that should incentivize them to cooperate to meet their climate change objectives and economic development goals.

    *[Saad Shannak is a scientist at Qatar Environment and Energy Research Institute, part of Hamad Bin Khalifa University (HBKU) in Qatar. The views expressed are the author’s own and do not necessarily reflect the university’s official stance.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    How the G7 and UN Can Make Multilateralism Sustainable

    “Progress towards an equitable world” is Germany’s goal for its G7 presidency program, which frames the G7 states as “leading industrialised countries and value-based partners” with a particular responsibility to “shape a positive future… in the spirit of sustainable economic recovery.”

    Clubs such as the G7 itself and the “climate club” envisaged by the German presidency are often able to make quicker decisions and act faster than more inclusive multilateral organizations such as the United Nations. Despite this, a speedboat, for all its pace and maneuverability, cannot cross the ocean on its own. So, too, the G7 cannot tackle any global challenges alone.

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    The German G7 presidency has thus announced in its program that it intends to forge close links with the UN and the G20 in particular, with the goal of achieving a “fair and rules-based multilateralism.” UN Secretary-General Antonio Guterres also underscored the importance of pioneering initiatives and partnerships within the framework of an “inclusive and networked multilateralism.”

    In his report, “Our Common Agenda,” building on the commitments in the declaration adopted by the member states on the occasion of the UN’s 75th  anniversary, Guterres develops numerous ideas for how to strengthen international cooperation. He calls for progress to be made wherever there are common interests.

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    So, is what belongs together growing together? Unfortunately not (yet), as the G7 program is rather abstract and dutiful in its references to the UN. However, the German G7 presidency has an opportunity to change this and implement shared priorities on a collective basis.

    Tether “Strong Alliances for a Sustainable Planet” to the UN

    Both the G7 and the UN are opting for pioneer projects and partnerships with non-governmental stakeholders, such as the COVAX vaccination drive and the G7 initiative for infrastructure projects in poor countries. It is positive to see the UN secretary-general not shying away from dealing with these formats and advocating for their greater use in order to implement global goals, most notably those of the 2030 Agenda for Sustainable Development and the 2015 Paris climate agreement. While many UN member states may support such partnerships, there is no agreement on this kind of multilateralism beyond mere inter-governmental relations.

    In order to achieve the greatest possible impact, it is important for the G7 that as many states as possible consider its initiatives to be beneficial and legitimate. To this end, it would be worthwhile to tether these initiatives institutionally to the UN system, which would ensure that partnerships meet human rights standards, are transparent in their design, monitored on an ongoing basis and further developed in line with the needs of the target groups.

    The UN secretary-general has proposed strengthening the existing UN Office for Partnerships, which is not currently in a position to carry out the aforementioned tasks. After the failure of earlier reform attempts, due not least to financing issues, digital solutions are now to be employed. The G7 should support the development of an effective UN hub and link its own initiatives through this hub. This could help the G7 generate acceptance and, at the same time, galvanize other partners. By subjecting partnerships to this kind of quality control, the UN could strengthen its central role in global governance.

    “Investing in a Better Future” — With the UN

    Like the German G7 presidency, the UN secretary-general places a particular focus in his report on future issues in conjunction with matters of justice. The world organization needs to become far better at avoiding shipwreck — that is the UN must respond more inclusively and justly to acute and future transnational crises. Developing greater strategic foresight, taking increased account of the interests of young people and future generations, and bringing key players together quickly in the event of the outbreak of new crises — these are the ambitious proposals for placing the UN further into the center of global problem-solving.

    Unique Insights from 2,500+ Contributors in 90+ Countries

    Here, too, the member states are divided when it comes to the increase in authority and knowledge for the UN that would go hand in hand with these measures. The issue of upgrading the UN is also contested within the G7 due to concerns about effectiveness and sovereignty and given the influence of states such as China and Russia.

    In view of overlapping interests with regard to major concerns for the future, the G7 should, nonetheless, insist upon pooling the existing capabilities of the UN system more effectively, while at the same time supporting the targeted development of the UN’s strategic capacities politically and financially. This can be done via voluntary contributions or, beneficially in some cases, the expansion of the regular budget. In 2021, the G7 committed in the Cornwall Consensus to make crisis management more effective and fair in the future. This year, the G7 should discuss the role of the United Nations in this.

    Currently, member states are discussing in the UN General Assembly which of the secretary-general’s proposals they intend to support, while preparation processes for the G7 summit are also underway. It is time to consider processes as one whole and bring them together for a future-proof multilateralism.

    *[This article was originally published by the German Institute for International and Security Affairs (SWP), which advises the German government and Bundestag on all questions relating to foreign and security policy.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Trump Truth Social app will be fully operational by end of March, Nunes says

    Trump Truth Social app will be fully operational by end of March, Nunes saysApple App Store lists rightwing Twitter alternative but ex-congressman tapped to lead company indicates slow rollout Donald Trump’s rightwing riposte to Twitter – his new social media app Truth Social – is supposed to launch on Monday. But the rollout of what the former president hopes will be the start of a new media empire continues to be shrouded in confusion and secrecy.Tim Scott, only Black Senate Republican, hints he could be Trump running mateRead moreDevin Nunes, the former Republican congressman and Trump loyalist who heads Trump Media & Technology Group (TMTG), told Fox News on Sunday Truth Social would make its debut on the Apple App Store this week. The app is featured on the store, with the notice “Expected Feb 21”.But the launch has been beset with delays. On the Fox News show Sunday Morning Futures, Nunes indicated that a full service was still weeks away.“Our goal is, I think we’re going to hit it, I think by the end of March we’re going to be fully operational at least within the United States,” he said.Truth Social is Trump’s answer to having been permanently thrown off Twitter after the company ruled that the then president’s tweets leading up to the US Capitol attack on January 6 2021 violated its policy against glorification of violence. The decision cut Trump off from direct contact with almost 90m followers.Facebook has also suspended Trump for comments inciting violence at the Capitol, but has left open the possibility of a return.Glimpses of what Truth Social will look like have been given in the past few days, prompting the observation that it looks remarkably similar to Twitter. Instead of blue ticks to denote verified accounts, it will use red ticks.Trump’s eldest son, Donald Jr, tweeted a screenshot of his father’s first post on Truth Social, which said: “Get ready! Your favorite President will see you soon!”The remark was much less memorable than the fact that the Truth Social screenshot and Donald Jr’s actual tweet looked virtually identical.Truth Social describes itself as a “big tent” social media platform “that encourages an open, free, and honest global conversation without discriminating against political ideology”.But given the initial teething problems of the launch, the former president could find it difficult to fill the hole in his public profile left by his banishment from established social media.Twitter records more than 200 million daily active users and Facebook almost 2 billion. By contrast Gettr, a social media outlet set up by Jason Miller, a former Trump adviser, claims 4 million users on average per month.Gettr is part of a growing number of social media start-ups vying to take on tech giants they accuse of censoring rightwing ideology. Gettr, Parler and Gab all present as rightwing alternatives to Twitter.Rumble is a video platform that sets itself up as conservative competition to YouTube. The company has said it will be providing video on the Truth Social app.The proliferation of rightwing social media sites, despite their relatively small reach compared with Silicon Valley giants, is prompting concern about their political impact.Observers have questioned whether the start-ups, which present themselves as forums for open untrammeled discussion, will act as breeding grounds for misinformation on subjects such as vaccinations, the climate crisis and election integrity.Truth Social has promised to ensure that its contents is “family friendly” and has reportedly entered a partnership with a San Francisco company, Hive, which will moderate posts using cloud-based artificial intelligence.Even the new app’s name is likely to be controversial, given Trump’s legendary struggles with veracity. The Washington Post calculated that in the four years of his presidency, the man now behind Truth Social made 30,573 false or misleading claims.TopicsDonald TrumpSocial mediaDigital mediaInternetUS politicsRepublicansnewsReuse this content More

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    US embassy in Russia urges Americans to have evacuation plans

    US embassy in Russia urges Americans to have evacuation plans
    Threat of attacks in Moscow cited as Ukraine crisis deepens
    Ukraine crisis – live coverage
    The US embassy in Russia has cautioned Americans to have evacuation plans as the crisis over Ukraine deepens, citing the threat of attacks in Moscow and along the border with the neighbour Russia seems likely to invade.Blinken: US still believes Putin has decided to invade UkraineRead moreThe move drew a rebuke from the Russian foreign ministry.In a message to Americans in Russia on Sunday, the US embassy said: “There have been threats of attacks against shopping centres, railway and metro stations, and other public gathering places in major urban areas, including Moscow and St Petersburg as well as in areas of heightened tension along the Russian border with Ukraine.“Review your personal security plans. Have evacuation plans that do not rely on US government assistance.”A spokeswoman for the Russian foreign ministry, Maria Zakharova, questioned if the US had passed on the information about possible attacks to Russia.“And if not, how is one to understand all of this?” Zakharova said.TopicsRussiaEuropeUkraineUS foreign policyUS politicsnewsReuse this content More

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    Tim Scott, only Black Senate Republican, hints he could be Trump running mate

    Tim Scott, only Black Senate Republican, hints he could be Trump running mateSouth Carolinian tells Fox News ‘Everybody wants to be on President Trump’s bandwagon, without any question’

    Opposition to Trump stirs among Republicans
    The only Black Republican in the Senate, Tim Scott of South Carolina, has indicated a willingness to be Donald Trump’s running mate should the former president mount another White House campaign.Florida governor: school districts that defied no-mask mandate to lose $200m Read moreAsked by Fox News if he would consider joining a Trump ticket in 2024, Scott said: “Everybody wants to be on President Trump’s bandwagon, without any question.”The remark prompted criticism, in light of Trump’s long history of incendiary rhetoric on race.Mehdi Hasan, an MSNBC host, listed some examples when he wrote: “Shithole countries, go back to where you came from, very fine people, white people don’t get vaccines, stand back and stand by … none of it matters to Tim Scott.”Scott, 56, is widely seen as a contender for the Republican nomination itself, though most observers think it remains Trump’s for the taking.The former president is free to run after Republicans, including Scott, voted to acquit in his second impeachment trial, for inciting the deadly Capitol attack.Tensions between the party establishment and Trump supporters have increased, particularly after the Republican National Committee called Trump’s lie about election fraud and the attack on Congress it fueled “legitimate political discourse”.On Sunday, Scott told Fox News: “One of the things that I said to the president is he gets to decide the future of our party and our country because he is still the loudest voice.”On Saturday, the Washington Post ranked its top 10 contenders for the Republican nomination. Trump was first, Scott sixth.Pointing to the South Carolinian’s aggressive fundraising, the paper said Scott was “raising huge money – $7m last quarter – for something which should, by all accounts, be a pretty sleepy re-election race. He’s also doing something lots of presidential candidates do before running: release a book.”Cruz: Biden promise to put Black woman on supreme court is racial discriminationRead moreThe paper made the Florida governor, Ron DeSantis, second-favourite. The former South Carolina governor and UN ambassador Nikki Haley was third, former vice-president Mike Pence fourth and Donald Trump Jr fifth.Senator Ted Cruz of Texas was seventh, Virginia governor Glenn Youngkin eighth, New Hampshire governor Chris Sununu ninth and former secretary of state Mike Pompeo 10th.Scott said: “What I hope happens is that we rally around the principles that lead to our greatest success. I am not looking for a seat on a ticket at this point. I am however looking to be re-elected in South Carolina.“So my hope is that you win next Friday’s football game before thinking about any other one. So that’s my primary responsibility.”TopicsUS elections 2024Donald TrumpRepublicansUS politicsRaceSouth CarolinanewsReuse this content More

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    San Francisco mayor: recalled school board members were distracted by politics

    San Francisco mayor: recalled school board members were distracted by politicsCovid closures and attempt to rename schools deemed named for figures linked to injustice, including Abraham Lincoln, fueled vote San Francisco school board members recalled from their posts this week allowed themselves to become distracted by politics, the city’s mayor said on Sunday.Florida governor: school districts that defied no-mask mandate to lose $200m Read moreVoters overwhelmingly approved the recall of board president Gabriela López, vice-president Faauuga Moliga and commissioner Alison Collins.The board was enveloped in controversy over Covid regulations and closures; an attempt to rename 44 schools deemed to be named for figures linked to racism, sexism and other injustices, among them Abraham Lincoln; and remarks by Collins about Asian Americans.The mayor of San Francisco, London Breed, spoke to NBC’s Meet the Press. Discussing her obligation to name replacements, she said: “I’m going to be looking for people that are going to focus on the priorities of the school district and not on politics, and not on what it means to run for office, and stepping stones, and so on and so forth. “We need people who want to be on the school board to make a difference, and who meet those qualifications to do the job.”Breed sidestepped suggestions the recall showed voters rejecting progressive policies.“My take is that it was really about the frustration of the board of education [not] doing their fundamental job,” she said. “And that is to make sure that our children are getting educated, that they get back into the classroom. And that did not occur. They were focusing on other things that were clearly a distraction.“Not to say that those other things around renaming schools and conversations around changes to our school district weren’t important, but what was most important is the fact that our kids were not in the classroom. “And San Francisco … we’ve been a leader during this Covid pandemic. In some cases, we have put forth the most conservative policies to ensure the safety of all San Franciscans. And our vaccination rates, and our death rates and other numbers demonstrate that we are a clear leader. “But we failed our children. Parents were upset. The city as a whole was upset, and the decision to recall school board members was a result of that.”School boards have become battlegrounds across the US, often as conservative parents and activists look to control what children are taught and how schools deal with Covid.Breed said: “This is not a Democratic/Republican issue. This is an issue about the education of our children.”She also said parents wanted “someone who is going to focus on … making sure that children get the education that they need in our schools, dealing with the challenges of learning loss, dealing with the mental health challenges that exist”.López, the board president, said her recall was the “consequence” of her “fight for racial justice”, and added: “White supremacists are enjoying this, and the support of the recall is aligned with this.”Breed said: “Well, of course [that’s] not the right kind of reaction. And the fact that we’re still even listening to any of the recalled school board members is definitely a problem. Bills to ban US schools’ discussion of LGBTQ+ issues are threat to free speech – reportRead more“… This person is making it about them when it really should be about our kids who have suffered, not just in San Francisco but all over this country as a result of this pandemic.”Her host, Chuck Todd, asked: “How much of this was about renaming the schools of George Washington, and Abraham Lincoln, and [Senator] Dianne Feinstein [and] how much of it was also parents upset that the rules were changed at how you got into some specific magnet schools?”Breed said it “was probably both. But at the end of the day, our kids were not in school. And they should’ve been.”“… And yes, of course there were people who were probably upset about some of the proposed changes. But those are discussions that are important to have, but not at the expense of making sure that the priority of what the school district is there to do is met.”TopicsSan FranciscoCaliforniaUS educationRaceCoronavirusUS politicsnewsReuse this content More

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    Why the White House stopped telling the truth about inflation and corporate power | Robert Reich

    Why the White House stopped telling the truth about inflation and corporate powerRobert ReichStarbucks, McDonald’s, Chipotle, Amazon – all protect profits by making customers pay more. We need the political courage to say they can and should cover rising costs themselves The Biden White House has decided to stop tying inflation to corporate power. That’s a big mistake. I’ll get to the reason for the shift in a moment. First, I want to be clear about the relationship between inflation and corporate power.Share the Profits! Why US business must return to rewarding workers properly | Robert ReichRead moreWhile most of the price increases now affecting the US and global economies have been the result of global supply chain problems, this doesn’t explain why big and hugely profitable corporations are passing these cost increases on to their customers in the form of higher prices.They don’t need to do so. With corporate profits at near record levels, they could easily absorb the cost increases. They’re raising prices because they can – and they can because they don’t face meaningful competition.As the White House National Economic Council put it in a December report: “Businesses that face meaningful competition can’t do that, because they would lose business to a competitor that did not hike its margins.”Starbucks is raising its prices to consumers, blaming the rising costs of supplies. But Starbucks is so profitable it could easily absorb these costs – it just reported a 31% increase in yearly profits. Why didn’t it just swallow the cost increases?Ditto for McDonald’s and Chipotle, whose revenues have soared but who are nonetheless raising prices. And for Procter & Gamble, which continues to rake in record profits but is raising prices. Also for Amazon, Kroger, Costco and Target.All are able to pass cost increases on to consumers in the form of higher prices because they face so little competition. As Chipotle’s chief financial officer said, “Our ultimate goal … is to fully protect our margins.”Worse yet, inflation has given some big corporations cover to increase their prices well above their rising costs.In a recent survey, almost 60% of large retailers say inflation has given them the ability to raise prices beyond what’s required to offset higher costs.Meat prices are soaring because the four giant meat processing corporations that dominate the industry are “using their market power to extract bigger and bigger profit margins for themselves”, according to a recent report from the White House National Economic Council (emphasis added).Not incidentally, that report was dated 10 December. Now, the White House is pulling its punches. Why has the White House stopped explaining this to the public?The Washington Post reports that when the prepared congressional testimony of a senior administration official (Janet Yellen?) was recently circulated inside the White House, it included a passage tying inflation to corporate consolidation and monopoly power. But that language was deleted from the remarks before they were delivered.Apparently, members of the White House Council of Economic Advisers raised objections. I don’t know what their objections were, but some economists argue that since corporations with market power wouldn’t need to wait until the current inflation to raise prices, corporate power can’t be contributing to inflation.This argument ignores the ease by which powerful corporations can pass on their own cost increases to customers in higher prices or use inflation to disguise even higher price increases.It seems likely that the Council of Economic Advisers is being influenced by two Democratic economists from a previous administration. According to the Post, the former Democratic treasury secretary Larry Summers and Jason Furman, a top economist in the Obama administration, have been critical of attempts to link corporate market power to inflation.“Business-bashing is terrible economics and not very good politics in my view,” Summers said in an interview.Wrong. Showing the connections between corporate power and inflation is not “business-bashing”. It’s holding powerful corporations accountable.Whether through antitrust enforcement (or the threat of it), a windfall profits tax or price controls, or all three, it’s important for the administration and Congress to do what they can to prevent hugely profitable monopolistic corporations from raising their prices.Otherwise, responsibility for controlling inflation falls entirely to the Federal Reserve, which has only one weapon at its disposal – higher interest rates. Higher interest rates will slow the economy and likely cause millions of lower-wage workers to lose their jobs and forfeit long-overdue wage increases.
    Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
    TopicsBiden administrationOpinionUS domestic policyUS economyUS politicsEconomicsInflationAmazoncommentReuse this content More