Playing to The Parochial and Sentimental Malay Gallery: The Israeli visit


February 20, 2018

Playing to The Parochial and Sentimental Malay Gallery: The Israeli visit

by Dato’ Dennis Ignatius

Image result for Najib at the UN with Bibi of Israel

Why not use of our soft power to improve our relations with Israel and help the Palestinians in the process? One way to promote better understanding is to allow Malaysians to visit Israel where they will learn about technology and innovation. The Jewish state will not disappear from the face of the Earth. Din Merican

…the world is changing and changing rapidly and no more so than in the Middle East. We must find new ways to accomplish long-held objectives. Rigid positions and knee-jerk reactions might make for good domestic politics but they do little to advance our interests or help the Palestinian people. Instead of making a big issue about their presence here, we should have seized the opportunity to informally engage the Israelis about Palestine.–Ambassador Dennis Ignatius

COMMENT | Israel’s recent participation in the World Urban Forum (WUF) in Kuala Lumpur from 7-13 February has predictably aroused controversy.

Given our myopic views and anti-Semitism, anything Israeli or Jewish always makes for great political drama and is quickly exploited by political parties to score cheap points and burnish their Islamic credentials.

Playing to the gallery

Pro-government groups routinely accuse the DAP, for example, of collaborating with the Jewish state as when they infamously accused the DAP of secretly plotting to set up an Israeli military base in Malaysia.

And who can forget how skilfully the government manipulated and exploited Trump’s decision to move the US embassy from Tel Aviv to Jerusalem with mammoth rallies and stirring speeches about their commitment to Palestine?

Playing to the gallery, Prime Minister Najib Abdul Razak (photo) pompously declared: “We will not budge in our defence for the plight of the Palestinians… even if it means cutting me up into pieces, leaving behind only one piece of ‘meat’, we will not budge.”

The trouble with this approach is that it encourages others to play the same game as Amanah and PKR are now doing.

When news broke that Israeli officials participated in the WUF, one Harapan MP demanded to know whether Malaysia was softening its stance on Israel by allowing the aforementioned Israeli officials to enter the country.

Saying that the “move had caused shock and sadness among many Muslims in the country,” he asked whether the government had “pawned the pride of Muslims in matters concerning Israel just for the sake of money and trade?”

Even, PAS, notwithstanding its own ongoing scheming and connivance with UMNO, couldn’t resist taking a dig at the government by suggesting that the decision to admit Israeli diplomats proved that UMNO was “untrustworthy”.

And, of course, there is no shortage of Muslim NGOs ready to be outraged at the drop of a hat. “The decision by the Malaysian government to issue visas to senior-level [Israeli] delegates to enter [Malaysia] is shocking and most regretful,” a coalition of NGOs griped

Just another UN meeting

In reality, it’s all much ado about nothing.The simple fact, as Foreign Minister Anifah Aman (photo) rightly clarified, is that the Israelis were here to attend a UN conference, nothing more.

As a UN member and host, Malaysia has certain obligations including allowing all UN members to attend. It is for the same reason that the US permits North Korea and Iran, both of which it cannot abide and does not have diplomatic relations with, to travel to New York to attend UN meetings.

Israel’s attendance at the WUF does not, therefore, imply recognition or a change in policy. There is nothing sinister about it and those who have chosen to make an issue of it are doing so for purely political reasons.

Keeping Israel out

Of course, there are those who will argue that under such circumstances it is better not to host international conferences, but that is both irrational and illogical and does not serve our interests.

Why should we cut ourselves off from the rest of the world just to keep Israel out?

Those who demand that trade relations between Malaysia and Israel be banned are also ignorant about how interconnected the world economy has become.

Goods, services, technology and investments cross borders in many different ways irrespective of whether or not there are direct linkages. Waze, the popular app used by millions of Malaysians to navigate our increasingly complicated highways, for example, is an Israeli invention. It hasn’t stopped us from using it no matter what our views about Israel are.

Engaging Israel

The fact is, the world is changing and changing rapidly and no more so than in the Middle East. We must find new ways to accomplish long-held objectives. Rigid positions and knee-jerk reactions might make for good domestic politics but they do little to advance our interests or help the Palestinian people.

Instead of making a big issue about their presence here, we should have seized the opportunity to informally engage the Israelis about Palestine.

It would have certainly done more to help the Palestinians than the noisy demonstrations and empty rhetoric that have become a substitute for meaningful policy these days. But, of course, that requires courage and real leadership.

DENNIS IGNATIUS is a former Malaysian Ambassador.

Read more at https://www.malaysiakini.com/columns/412580#alhtcqtJjUoOHVMd.99

“Don’t slander Rosmah over jet ride, Dr M told.”


February 20, 2018

Comments of an UMNO serf in a resurgent feudal society-“Don’t slander Rosmah over jet ride, Dr M told.

https://www.malaysiakini.com/news/412260

The UMNO Serf- Rizal Mansor

The Special Officer to the Prime Minister’s wife, Rizal Mansor, said it was regretful that a statesperson such as Dr Mahathir Mohamad would resort to slander Rosmah Mansor.

“How can a statesperson (like Mahathir) listen to and believe in such hearsay? As a statesperson, he should check and research facts before making accusations. “Don’t put political interests above laws and adab (civility) until you create slander,” Rizal said in a statement uploaded onto Umno Online today.

He was referring to a video clip that depicted Mahathir’s speech, where he criticised Rosmah for boarding a private jet, unaccompanied by her husband.

Is her conduct and extravagant lifestyle  not subject to public scrutiny? If she wants to avoid negative comment, she should stay as an ordinary housewife and  not be the First Lady of Malaysia.

Rizal reiterated his previous explanation that Rosmah’s tight schedule necessitated the government having to rent a private jet for her to receive an award in Istanbul on May 25, 2016, and return to Malaysia the next day.

Also used by King and Queen

Rizal also rubbished the claim that the Airbus ACJ319 A6-CJE corporate jet was hired for Rosmah’s use alone, explaining that it is also used by other dignitaries, such as the Yang di-Pertuan Agong and the Raja Permaisuri Agong.

“The jet was rented by the Malaysian government temporarily for the two-month period (May and June 2016) as a replacement for the ACJ320 9M-NAB jet that was being serviced at the time.”

Rizal also slammed Mahathir’s apparent attempt to paint the PM’s wife as “wasteful”, by countering the RM86 million jet rental figure, first brought up by PKR vice-president Rafizi Ramli based on his own calculations.

“The calculation for the RM86.4 million cost is not true at all and is intended to deceive the public. The calculation does not make any sense because Rafizi is taking the flight cost of RM60,000 an hour and multiplying it by 24 hours and 60 days.

“Of course the plane cannot fly 24 hours a day for two months,” he said.

Excess baggage

In his statement, Rizal also repeated his claim that the cargo hold of the government-chartered jet used was full of the Permata Seni group’s performance paraphernalia, and not Rosmah’s own luggage.

Rafizi had disputed this claim at the time, pointing out that Permata Seni’s performance at Istanbul’s Sabiha Gokcen International Airport took place before the jet touched down in the Turkish capital that day.

After using the “Plane Finder” application in 2016, Rafizi had revealed that Rosmah used a private jet for her trip to Istanbul. He took issue with the use of the private jet chartered from the Emirates airline, since she was accepting an award on behalf of the public-funded Permata.

“She has to answer this since she was the one who took the flight, and (Prime Minister) Najib Abdul Razak too has to answer because he has to be responsible for this,” he said at the time.

Rafizi had also questioned the need for the government to charter another private jet when it already has three existing aircraft. He had explained that the government has another ACJ319, the 9M-NAA, which was bought several years earlier, besides the ACJ320 9M-NAB under service that the chartered jet was supposed to replace.

Rafizi also highlighted that the government had announced that the ACJ320 9M-NAB was purchased to replace the BBJ737-700 M53-01 – which he found was still in active use, despite being advertised as being on sale in August 2015.

“I urge Najib, as Minister responsible in managing all of the government’s jets, to explain why BBJ737-700 has yet to be sold and why it is still being used, as this involves the rakyat’s money,” he had said.

Trump’s Son-in-Law Jared Kushner’s gargantuan debt matters


February 20, 2018

Note: Sorry guys, for being silent for most of last week as I was outstation. Since I am the master of this blog and do not employ an assistant, my silence is understandable (health wise at 79 this May, I am fine both mentally and physically), and also a relief to some in my country, Malaysia.

I am, of course, being presumptuous here to believe what I think, say and write matters.  I am just one person no different from you who are  caring and proud Malaysians,  and good friends of my country who believe  people in positions of power and public trust in government and the private sector must be held fully accountable.

That’s why I say the Sword of Damocles awaits our Prime Minister Najib Razak too. It may not be in GE-14. But look at recent examples like Robert Mugabe (Zimbabwe) and Jacob Zuma (South Africa). Change will come when it comes.–Din Merican

Politico reports:

Commentary by Jennifer Rubin

http://www.chicagotribune.com/news/opinion/commentary/ct-perspec-rubin-kushner-trump-ivanka-russians-debt-loans-national-security-0220-story.html

Trump’s Son-in-Law Jared Kushner’s gargantuan debt matters 

“Perhaps those Trump lawyers were right — the President would have been much better off without the Russian-entangled Kushner in his administration”.–Jennifer Rubin

Image result for jared kushner

A  President is known for the character, integrity, experience and competency of his team since he will be known by the company of the advisors he keeps. President Donald Trump should not be judged differently from his predecessors. The beauty of the American system is that it makes no exceptions. Change comes fast and the transition is smooth and orderly.

So far President Trump’s appointments to his Cabinet and The White House are of dubious quality, and that could eventually lead to his fall from grace. Of course, he cannot see this happening since he is obsessed with his larger than life ego and consumed by the power that comes from being President of the United States. The “Sword of Damocles” hangs over his head.  –Din Merican

Jeniffer Rubin writes:

Jared Kushner, a White House aide and President Donald Trump‘s son-in-law, appears to have drawn more money out of three separate lines of credit in the months after he joined the White House last year, a newly released document shows.

“Recent revisions to the financial disclosure form filed by Kushner’s wife, Ivanka Trump, bumped up each of those debts to a range of $5 million to $25 million.

“Versions of the couple’s disclosures made public in July valued those debts at $1 million to $5 million apiece. The loans were extended by three banks: Bank of America, New York Community Bank and Signature Bank. … One debt did drop in value as Ivanka’s form was revised: The amount owed on a Visa account went down to a range of $50,001 to $100,000, from $100,001 to $250,000.”

(As an aside, who carries that much credit-card debt? Are the Kushners’ liquid assets so low that their lifestyle has to be paid for by borrowing at presumably outrageous rates?)

Kushner’s financial problems relating to his 2007 purchase of the 666 Fifth Ave. building for $1.8 billion have come up in the context of the Russia investigation. Last September, The Wall Street Journal reported:

“Some of President Donald Trump’s lawyers earlier this summer concluded that Jared Kushner should step down as senior White House adviser because of possible legal complications related to a probe of Russia’s involvement in the 2016 presidential election and aired concerns about him to the president, people familiar with the matter said.

“Among their concerns was that Mr. Kushner was the adviser closest to the president who had the most dealings with Russian officials and businesspeople during the campaign and transition, some of which are currently being examined by federal investigators and congressional oversight panels. Mr. Kushner, Mr. Trump’s son-in-law and confidant, has said he had four such meetings or interactions.

“Another issue was Mr. Kushner’s initial omission of any contacts with foreign officials from the form required to obtain a security clearance. He later updated the form several times to include what he has said were more than 100 contacts with foreign officials.”

Kushner met with Sergey Kislyak, the Russian Ambassador, to discuss a secret back channel and with the head of a sanctioned Russian bank, VneshEconomBank (VEB). (“The conversation is curious not only because it represents a top Trump official secretly meeting with an arm of the Russian government, but also because accounts of the meeting differ in important ways,” The Atlantic’s David Graham noted at the time. “Kushner says he attended the meeting in his capacity as an adviser to President-elect Trump. But VEB says that the meeting concerned Kushner’s family real-estate business.”) And he was present at the now-infamous June 2016 meeting at Trump Tower attended by a Kremlin-connected lawyer.

Kushner’s financial problems make these contacts all the more troubling. As he was racking up debt, Fordham Law School professor Jed Shugerman tells me, Kushner “also just coincidentally was setting up secret lines to the Kremlin and was meeting with (Russian President Vladmir) Putin’s banker a month after the election. And he just coincidentally was meeting with Russians offering dirt in Trump Tower during the election.” He explains, “Kushner’s massive debts are an important piece of the entire Russia conspiracy on some of the parties’ motives (Kushner, former national security adviser Michael Flynn and Trump) for such inexplicable behavior and such risk-taking.”

Image result for could shoot someone and not lose voters

This sheer arrogance of the 45 Potus, HE Donald J. Trump

In addition to the Russia investigation, prosecutors in Brooklyn have subpoenaed records from Deutsche Bank, which has lent “hundreds of millions to the Kushner family real estate business.” (As The New York Times noted, “there is no indication that the subpoena is related to the investigation being conducted by Robert S. Mueller III.”) The Washington Post has reported that a month before Election Day 2016, “Kushner’s real estate company finalized a $285 million loan as part of a refinancing package for its property near Times Square in Manhattan. The loan came at a critical moment. Kushner was playing a key role in the presidential campaign of his father-in-law, Donald Trump. The lender, Deutsche Bank, was negotiating to settle a federal mortgage fraud case and charges from New York state regulators that it aided a possible Russian money-laundering scheme. The cases were settled in December and January.”

In sum, Kushner has huge and growing debt, many suspicious Russian contacts and a close relationship (perhaps second only to Ivanka’s) with Trump. “The more money Kushner owes, especially to lenders or guarantors who do not have America’s best interests at heart, the more he and his father-in-law the President are subject to compromising pressures at best and outright blackmail at worst,” constitutional lawyer Larry Tribe tells me. “The fact that Kushner, without full security clearance, is permitted to peruse the president’s daily briefing, containing the most secret information that exists, makes all of Kushner’s financial obligations and debts urgent threats to our national security. This situation is unconscionable.”

Perhaps those Trump lawyers were right — the President would have been much better off without the Russian-entangled Kushner in his administration.

The Washington Post

Jennifer Rubin writes the Right Turn blog for The Washington Post, offering reported opinion from a conservative perspective.

A new model of great-power relations?


February 14, 2018

A new model of great-power relations?

Author: Editorial Board, East Asia Forum

http://www.eastasiaforum.org/2018/02/12/a-new-model-of-great-power-relations/

Image result for Xi and Trump

Asia’s economic ascendancy over the past half century has depended on a period of remarkable regional peace and stability. This is not the natural order of the world: international relations theorist Hedley Bull reckoned that the natural order is prone not to stability but to chaos. The current international order was a product of political choice, framed fundamentally by the post-war choice to put in place the institutions agreed at Bretton Woods that guaranteed the evolution of an open, multilateral regimeThis regime fostered both economic prosperity and international political stability among those who chose to sign on to it.

Asia will continue to prosper and be secure if that framework can be sustained, but for that to happen, the order must evolve. We have with little thought simply taken the current order for granted. The advent of Donald Trump, the potential disintegration of Europe and how these two events interact with the rise of China and other powers mean that taking this framework for granted is no longer tenable.

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The ‘peace’ in Asia resulted from the situation that emerged in the early 1970s when China decided to follow Japan in accepting the United States as the primary strategic power in Asia and in emulating the West’s modern economic development. That choice eliminated major-power rivalry as a source of tension and conflict in the region.

China’s President Xi Jinping perhaps prematurely heralded a successor to the old model of great-power relations in his famous summit with America’s then president Barack Obama at Sunnylands in June 2013. There the focus turned to China-US relations. Xi proposed to inject ‘new momentum’, not satisfied with short-term gains but rather striving for long-term mutual benefit and the achievement of a grand geopolitical win-win. The new model, Xi urged, would promote world peace and the stable development of the Asia Pacific.

The Obama leadership did not reject this notion outright, but never embraced it. Obama himself gave it no traction at all. The model appeared to give Beijing too much space in defining its own core geopolitical interests. Policymakers and analysts in Washington remained in denial about the seriousness of China’s claim to more geopolitical space — a claim that had already become a reality because of China’s new economic and political power.

The Trump administration’s National Security Strategy has discarded all pretence at defining the Sino-American relationship in cooperative terms: it has now cast it in terms of the contest for global geopolitical supremacy in all theatres.

China may no longer accept American leadership as the foundation of the regional or global strategic order, but Beijing is now confronted with explicit rebuff of its new model of great power relations, which stresses cooperation among the major powers. Few, if any, in Asia or around the world want China to get all it wants: US leadership has served the region well and no one wants to live exclusively under China’s shadow. But China is deeply embedded in the current global order both economically and politically, and it has accepted and incorporated into policies and institutions many tenets of the formerly US-led established international order.

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John Kelly is now White House Chief of Staff

Image result for Kirstjen Nielsen is sworn in before testifying to the Senate Homeland Security and Governmental Affairs Committee on her nomination to be secretary of the Department of Homeland Security (DHS) in Washington, U.S. on November 8, 2017. REUTERS/Joshua Roberts/File Photo

Kelly’s successor Kirstjen Nielsen 

Not many would see China’s engagement in the global system as an all-or-nothing game. The zealots in Mr Trump’s team and a deep current in the political security community that are innocent of the connection between economic openness and political security would do well to calculate the costs to global prosperity of trying to extricate China’s mutual engagement from the United States, it allies and partners.

The idea that Asia could be transformed economically by the biggest shift in the distribution of wealth in history without its also being transformed politically and strategically is a delusion. It would have been remarkable if China had not sought a bigger global role as its power has grown in the same way that every rising power before it has done. That it has sought such a small role relative to its weight and importance thus far has been remarkable and to the benefit of the international system (which has proven stubborn to change).

Given the stand-off, one might think that there is no future for a new era of great-power relations. Perhaps that will turn out to be so.

This week’s lead essay by Zha Daojiong at Peking University reminds us that short of military conflict — which even the hawks in the Pentagon and a few fledglings in Ichigaya and Russell Hill baulk at openly advocating — the choice will not be entirely Washington’s.

‘It is not difficult to understand the United States’ characterisation of China as “disruptive”’, says Zha. ‘It repeats US insistence on maintaining its own continuous primacy in the regional and global order’.

‘US security elites across the ideological spectrum have for decades argued that the pillars of recent Chinese success are made in the United States’, Zha notes. ‘They argue that Washington carved out this path by letting China into the World Trade Organization and that it continues to facilitate China’s success by providing their navies to help keep the Indian and Pacific oceans open for shipping in and out of Chinese ports’. But China had to deliver on the opportunity from its own starting point. And it has to find its own way through.

China has a right to choose its own path of development, given its own set of historical assets and liabilities, Zha insists. He concedes that some in Beijing are too enthusiastic about associating its ‘unique path’ with ‘superiority’ but notes that China rejects imposing its system of governance as a precondition for engagement through trade, investment or aid upon others around the world.

Zha’s message is this: China should not be tempted to the take up the competition on the terms that Mr Trump and (more tentatively) some of America’s partners appear to be spoiling for. It should stand back from the bully pit.

China would have the most to lose if it foolishly failed to put the new American security strategy rhetoric into proper perspective and to work hard at alleviating feelings of uncertainty about its intentions in Washington and elsewhere.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

When Criminals like M01 and his cohorts go free, and good men are going to jail, we Malaysians are doomed


February 13, 2018

Malaysia: When Criminals like M01 and his cohorts go free, and good men are going to jail, we  Malaysians are doomed

by Dato’ Dennis Ignatius

When good men go to jail & scoundrels go free

“When exposing a crime is treated as committing a crime, you are ruled by criminals.” ~ Anonymous

It was a rude reminder of the times we live in: Rafizi Ramli, Member of Parliament and PKR Vice-President together with bank clerk Johari Mohammad were sentenced last week to 30 months in prison for leaking details relating to the National Feedlot Corporation (NFC) scandal. They are now out on bail pending appeal.

Improper conduct

NFC, a poorly conceived government-funded initiative to help the nation attain self-sufficiency in beef-production, became mired in allegations of nepotism, mismanagement and misappropriation of funds. In his 2010 report, the Auditor-General drew attention to “improper conduct” at the NFC which was funded by a RM250 million soft loan from the government.

Rafizi followed up with further startling allegations based on leaked bank records.

In March 2012, the CEO of NFC, Dr Mohammad Salleh Ismail (husband of then UMNO minister Shahrizat Abdul Jalil) was charged with four counts of misappropriating RM49.7 million from NFC. He was later acquitted of all charges.

The end result: millions in public funds remain unaccounted for and no one has been held liable. Pretty much par for the course these days.

Following the outcry over the scandal, Shahrizat resigned her ministerial post. With the support of Prime Minister Najib Tun Razak, she continues to thrive in politics as head of Wanita UMNO. In 2016 she was bestowed one of the nation’s highest honours (PSM) which carries the tittle ‘Tan Sri.’ She is expected to contest a safe seat in the upcoming general election and might well return to cabinet.

Adding insult to injury

When all is said and done about this case, when you cut through the legalities and political spin, what is left is simply the inescapable conclusion that the justice system has failed us once again. They can finesse the facts and garnish the truth but the stench of it will long endure.

Image result for shahrizat abdul jalil

Dare you accuse me of being corrupt. That’s insulting. I am thoroughly corrupt mind and body. I learned the art of making  money effortlessly from UMNO leaders. NFC project came in my dreams. Fleece the cows and make huge amounts of money.–Anon

Shahrizat (photo above) now insists that she and her family were the real victims of the whole affair because they were subjected to “half-baked stories [that were used] to manipulate the people regarding the case.” She and her husband also claim, rather disingenuously, that it was all the negative publicity surrounding NFC that caused the project to fail. The lady doth protest too much, methinks.

It is also laughable that she blames Rafizi for all her problems and makes it out to be a political attack against her and her family when it was in fact the Auditor-General who first drew attention to irregularities in NFC. And it was the police who filed criminal charges against her husband, presumably because they had reason to believe that a crime had been committed.

Standing with Rafizi

Rafizi may well end up in prison and his days as a member of parliament may be over but he will always remain a hero to the public. He modelled for the nation what a member of parliament ought to be – selfless, courageous and principled. If only more of our public officials were like him….

We may not be able to do anything about the sentence but there is much that we can do to ensure that both Rafizi and Johari are not abandoned or forgotten. They stood for us; we must now stand for them and let them know that we value their sacrifice and service. If they go to jail, we must do our part to help their families.

Image result for Rosmah MansorShahrizat’s Mentor  FLOM Rosmah Mansor

 

And we must use the power of our citizenship to vote against those who abuse our trust. Make no mistake, when those who expose abuse are jailed and scoundrels go free (as so many have over the years), our democracy is diminished and tyranny empowered.

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To stay silent, to do nothing in the face of such injustice, is to become accomplices to our own oppression.

The Lessons of Black Monday


February 13, 2018

The Lessons of Black Monday

by Barry Eichengreen

https://www.project-syndicate.org/commentary/stock-market-lessons-of-black-monday-by-barry-eichengreen-2018-02

“Will Trump respond like FDR in 1933, reassuring the public that the only thing we have to fear is fear itself? Or will he look for someone to blame for the collapse in his favorite economic indicator and lash out at the Democrats, foreign governments, and the Fed? A president who plays the blame game would only further aggravate the problem.”-Barry Eichengreen
Image result for Donald Trump and Wall Street
 

When interpreting sharp drops  in stock prices and their impact, many will think back to 2008 and the market turbulence surrounding Lehman Brothers’ bankruptcy filing. But a better historical precedent for current conditions is the huge one-day drop on October 19, 1987.

 

BERKELEY – US President Donald Trump has regularly pointed to the stock market as a source of validation of his administration’s economic program. But, while the Dow Jones Industrial Average (DJIA) has risen by roughly 30% since Trump’s inauguration, the extent to which the market’s rise was due to the president’s policies is uncertain. What is certain, as we have recently been reminded, is that what goes up can come down.

When interpreting sharp drops in stock prices and their impact, many will think back to 2008 and the market turbulence surrounding Lehman Brothers’ bankruptcy filing. But a better historical precedent for current conditions is Black Monday: October 19, 1987.

Black Monday was a big deal: the 22.6% price collapse is still the largest one-day percentage drop in the DJIA on record. The equivalent today would be – wait for it – 6,000 points on the Dow.

In addition, the 1987 crash occurred against the backdrop of monetary-policy tightening by the US Federal Reserve. Between January and October 1987, the Fed pushed up the effective federal funds rate by nearly 100 basis points, making it more expensive to borrow and purchase shares. In the run-up to October 2008, by contrast, interest rates fell sharply, reflecting a deteriorating economy. That is hardly the case now, of course, which makes 1987 the better analogy.

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Treasury Secretary Steven Mnuchin

The 1987 crash also occurred in a period of dollar weakness. Late in the preceding week, Treasury Secretary James Baker made some remarks that were interpreted as a threat to devalue the dollar. Like current Treasury Secretary Steven Mnuchin at Davos this year, Baker could complain that his comments were taken out of context. But it is revealing that the sell-off on Black Monday began overseas, in countries likely to be adversely affected by a weak dollar, before spreading to the US.

Finally, algorithmic trading played a role. The algorithms in question, developed at the University of California, Berkeley, were known as “portfolio insurance.” Using computer modeling to optimize stock-to-cash ratios, portfolio insurance told investors to reduce the weight on stocks in falling markets as a way of limiting downside risk. These models thus encouraged investors to sell into a weak market, amplifying price swings.

Although the role of portfolio insurance is disputed, it’s hard to see how the market could have fallen by such a large amount without its influence. Twenty-first-century algorithmic trading may be more complex, but it, too, has unintended consequences, and it, too, can amplify volatility.

Despite all the drama on Wall Street in 1987, the impact on economic activity was muted. Consumer spending dropped sharply in October, owing to negative wealth effects and heightened uncertainty, but it quickly stabilized and recovered, while investment spending remained essentially unchanged.

What accounted for the limited fallout? First, the Fed, under its brand-new chairman, Alan Greenspan, loosened monetary policy, reassuring investors that the crash would not create serious liquidity problems. Market volatility declined, as did the associated uncertainty, buttressing consumer confidence.

Second, the crash did not destabilize systemically important financial institutions. The big money-center banks had used the five years since the outbreak of the Latin American debt crisis to strengthen their balance sheets. Although the Savings & Loan crisis continued to simmer, S&Ls were too small, even as a group, for their troubles to impact the economy significantly.

What, then, would be the effects of an analogous crash today? Currently, the US banking system looks sufficiently robust to absorb the strain. But we know that banks that are healthy when the market is rising can quickly fall sick when it reverses. Congressional moves to weaken the Dodd-Frank Act, relieving many banks of the requirement to undergo regular stress testing, suggest that this robust health shouldn’t be taken for granted.

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Donald Trump’s cameo in the new movie Wall Street: Money Never Sleeps

Moreover, there is less room to cut interest rates today than in 1987, when the fed funds rate exceeded 6% and the prime rate charged by big banks was above 9%. To be sure, if the market fell sharply, the Fed would activate the “Greenspan-Bernanke Put,” providing large amounts of liquidity to distressed intermediaries. But whether Jay Powell’s Fed would respond as creatively as Bernanke’s in 2008 – providing “back-to-back” loans to non-member banks in distress, for example – is an open question.

Much will hinge, finally, on the president’s reaction. Will Trump respond like FDR in 1933, reassuring the public that the only thing we have to fear is fear itself? Or will he look for someone to blame for the collapse in his favorite economic indicator and lash out at the Democrats, foreign governments, and the Fed? A president who plays the blame game would only further aggravate the problem.