Our thoughts, prayers, and reflections on the anti-Semitic attacks in Pittsburgh, some intensive thoughts on the next recession... and MORE!
American Opportunity
A/O Global Intelligence Weekly: Pittsburgh and the War on Terrorism

First and foremost, the entire staff and fellows of American Opportunity/Free Congress Foundation express our anger toward the anti-Semitic attack on worshipers at the Tree of Life Synagogue this past Saturday.  We express our deepest sympathy and solidarity to the families of the victims -- good people, true to their faith, and totally innocent of any affront to anyone anywhere.  

Beyond the loss to this community and the families of the victims, this was truly an attack on all of us -- on every American.   By its nonsensical motives and the randomness of the attack, this is truly an act of terrorism, having the effect of making danger all too real in a country of laws and threatening the safety and security of all Americans. 

​In a free society, it is hard to prevent the irrational actions of bad or deranged people.  Sometimes, the temptation towards total security leads us to forget our civil liberties. Yet it was our police and first responders went in harm’s way to protect our citizens and to arrest and disable the attacker.  They did so as representatives of our our values as a civilized nation and raced to the aid of this congregation, and did so specifically to protect our liberties against a transgressor.

Liberty is the right to do as we ought.  If our liberties are the balance between tyranny and license, we are reminded in instances such as Pittsburgh of our commitment to living in a free society protected by laws and the protection of every American life under those laws.   To fail to acknowledge this core truth as we fight against domestic and international terrorism is to assert that we live in a jungle without righteousness.  This would be a dreadful falsehood.

Observe the recent case of the Florida man who mailed makeshift bombs to prominent political figures.  None of the explosive devices detonated, and might not have been able to be detonated.  Yet the bombs sent a message of terror that must be stopped in our free society.  It was representatives of our states and country that flew to the defense and safety of our citizens.  

The far left political voices in our country immediately blamed President Trump for these attacks.  Mayor Bill Peduto went so far as to cynically suggest that President Trump was not welcome in Pittsburgh to express his condolences. 

This is all outright nonsense.  There is enough hot rhetoric to go around.  Let us not forget that it was Congresswoman Maxine Waters who urges her fellow Americans to assault and insult those fellow Americans not of her own political outlook, or Hillary Clinton who said civility was something we could discuss after Trump, or Eric Holder who suggested physically attacking political opponents "when they go low".

Instead let us look at murders plotted and perpetuated by government authority.  Embassies and consulates are supposed to be safe havens where citizens can secure the protection of their own country while living or visiting another country. While Khashoggi was residing in the United States, he was a Saudi citizen, and the murder took place in a foreign country, namely Turkey.  We certainly don't want to be manipulated by Turkey, nor can we protect every citizen of every country in the world.  Nevertheless, the recent murders of Jamal Khashoggi in the Saudi consulate in Istanbul are by most accounts were conducted as a matter of official policy.   This violent murder was an intended act of terror against all Saudi citizens, and really all citizens everywhere in the world.  If this murder stands without consequences, how can any citizen feel safe anywhere in the world? 

Unfortunately for policy makers, this puts the United States in a difficult geopolitical position.  Newsmax points out how essential Saudi Arabia is to us in the global conflict we are in right now.  He asserts that Saudi Arabia as an ally of the United States helped bring down the authoritarian Soviet Union to the benefit of all persons everywhere in the world.  This much is surely true.  Yet we as Americans are confronted with breaking with an ally, or condoning official murder. 

Another case of apparent official murder by a state is the recent attack on Sergei Skripal, a Russian national living in the United Kingdom.  Skripal and his daughter, Yulia were victims of a poison attack, apparently by members of the GRU, Russia’ military intelligence organization.  British Prime Minister, Theresa May stated that the attack must have been approved at “a senior level of the Russian state”.   Dawn Sturgess, an innocent bystander in fact was also affected by the poison and was killed. 

The terror message here sent by the Russian government is clear.  No matter that you live in a Western country despite the rule of law, we will find you and kill you -- so don’t become our adversary.

This harkens back to the attack on Alexander Litvinenko in 2006, an ex-KGB agent who was likewise living in London.  He was exposed to polonium-210, presumably by a Russian agent, and died from radiation poisoning.  A terrible and painful death.  The message was the same:  “We will find you and murder you.”   These are acts of official terror by states. 

All of these acts, Pittsburgh, the nationwide bomb mailings, Saudi Arabia and London are all part of the same war on terror on which we are all engaged.   We can just say “these victims are just individuals, and we should just let it go”.  I say these attacks are intended to terrorize us all.  We are all victims, because the purpose of political terrorism is to enact or threaten violence in service to political outcomes -- be those domestic or international. 

In the case of the American attacks, our justice system will reaffirm right from wrong.  But we cannot be unmindful of the foreign attacks and the government policies they seek to advance, because in many respects they follow the very same pathways.

Incidents such as these remind us that we live in an uncivilized world, or perhaps more accurately, that we are always one generation away from a descent into darkness.

But our American righteousness -- a sense that we are indeed exceptional in this brutal world -- is a national asset more precious than guns or military resources.  Admiration for American values is an essential element of our national power.  It is what draws people to us, sets us apart, and makes us unique. 

Those values are what in the end will make us victors in the global conflict.    

More after the jump. . .

Joim American Opportunity

As part of American Opportunity's focus on economic growth, I wanted to offer some in-depth thoughts about the current state of the American economy, which to date is enjoying tremendous growth under Republican leadership.  

With fluctuations in the stock market and a thousand darts being thrown at the Trump tax cuts — much of which was modeled from the American Opportunity/Free Congress Foundation Growth Code — the looming cloud of recession seems to be floating over the American economy.  More than a handful of prognosticators seem to indicate that we are headed for some sort of downturn over the next 12-18 months, with the recent volatility in the market being the first tremors of an economic shakeout.

Investors should put this in a proper context.  Virtually every president has had to endure an economic downturn of their own making during their presidency.  Clinton did so during the late 1990s.  Bush most certainly did so during the 2007 financial crisis.  Yet the Obama administration — while being dealt a terrible hand initially — chose to create what hypothetically was supposed to be a multi-year slow growth recovery period.

In effect, the American consumer never had to endure a recession incurred by Obama policies, and such were the pressures on the American economy that by the time Trump was elected president, the ensuing tax cuts had the net effect of releasing pent up American growth, propelling the US economy forward in a big way with several quarters of consecutive GDP growth at 4-5%.  With a growing economy, things are hot enough for the Federal Reserve to start increasing the interest rate.

The good news here is that the Federal Reserve is in a position to start raising the interest rate to historic levels.  Investors may not like this short term, but the long term benefits are self-evident so long as it is self-imposed.  The additional good news is that of the $16 trillion in offshore capital, approximately $5 trillion of it has come back to American firms, but much of it is still sitting as liquid capital rather than being invested as infrastructure or manufacturing strength — which creates the sort of ‘volatility’ that you have seen in recent weeks.

The catch will be putting this offshore capital to work by building infrastructure and investment firms right here in the United States: manufacturing, tech, and automation being three key areas of emphasis.  To this end, the Trump administration wisely included about $180 billion of credits designed to attract offshore capital.  Build a business here, employ Americans, and the United States government will hold you tax-free until 2040 — in effect, turning the United States into the Ireland of offshore capital.

This presents other unique (and good) problems for American policy makers.  First and foremost, an influx of $5 trillion and then $11 trillion more of investment capital is bound to create both inflationary and deflationary pressures; a potential replay of the “Dutch Disease” of the 1970s where large natural gas deposits produced an explosion of wealth that strengthened the kroner/dollar and made Dutch/American manufacturers and agricultural products less competitive.  

The grand solution?  Leverage the capital into massive infrastructure and/or educational growth — manufacturing, tech, and automation. This is precisely what the $180bn in credits are designed to inspire.  Other options available to the Trump administration will be to ask the Federal Reserve to lower the interest rate (not desirable) or slowing down the influx of investment capital (not desirable).  

The grand question?  Will this $16T in offshore capital rushing in kick off a recession by virtue of depressing American manufacturing and agriculture markets, and then make it hurt even more when the capital offloads to Europe or China?

There are two answers to this, and both are worth exploring in some minor detail.  

First, bear in mind that the “Obama recession” has not hit us yet.  Because of the broad based and agonizingly slow nature of the recovery, it is highly unlikely that American markets will touch off a recession in the same way that the housing bubble did in 2007.  

Second, the question about this massive influx of capital isn’t a game of whether or not we can make it stay but rather whether or not we can put it to work building advanced factories, Googleplexes, and high-tech research facilities. 

Can we create the environment that permits this offshore capital to stay for the next 20 years? If we can, not only will American markets be able to weather the next recession, but more than this, they will be able to take advantage of it when — not if — the next recession occurs, be that a pop in the Chinese housing market, the collapse of a BRIC economy (Brazil, Russia, India, China) or one of the corresponding PIIGS (Portugal, Ireland, Italy, Greece, or Spain) that would put France into a tailspin, or the worst case scenario being a general military engagement in Eastern Europe over the next five years. 

If it is far more likely that the old “Obama economy” is due for a correction over the next 12-18 months.  Paradigms that worked 10 or 20 years ago deserve a little shake up every now and then.  But we should expect such tremors to be mild and wisely prepared for as the economy continues to enjoy 4-5% GDP growth each quarter.  In this, both the Trump administration and the Republican Congress have wisely plotted an extremely ambitious plan forward, one that our grandchildren will thank us for provided we can keep our forward momentum.

Some news and articles we recommend for information and discussion purposes, none of which necessarily represent the position of A/O:

As always, American Opportunity is always looking for new resources and topics we can address in detail.  Please feel free to stay in contact! 


Jim Gilmore
901 N. Washington, Suite 206 Alexandria, VA 22314
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