The Risk of Trump Abandoning Sanctions Against Putin

This article first appeared on the American Enterprise Institute site.

President-elect Donald Trump’s choices for top national security positions suggest he intends a broad shake-up of U.S. foreign policy.

One of the first action items could be abandoning U.S. and EU sanctions implemented on Russia following Vladimir Putin’s 2014 seizure of Crimea and invasion of Ukraine.

Trump said he would “look into” it. His pick for secretary of state, Exxon Mobil CEO Rex Tillerson, opposes sanctions in general. And Lieutenant General Mike Flynn, who will serve as national security adviser, has called for the U.S. and Russia to “combine” national security strategies.

The immediate concern is what message this will send. Does Trump accept Putin’s illegal annexation of Crimea? Will he recognize the Russian protectorates in Donetsk and Luhansk taken from Ukraine?

Does he know and care that Russia is currently supporting extremist political parties in Europe, engaging in dozens of reckless military air and sea maneuvers across the continent and launching cyberattacks against its neighbors and now, possibly, against the U.S.?

If the answer is no, then the days of U.S. support for sanctions are numbered.

Related: Trump’s Russia dilemma

But are sanctions really an effective response to Putin’s revisionist foreign policy? After all, sanctions alone will not fundamentally change the regime’s behavior. They aren’t even a “Russian policy” on their own, but an inadequate stand-in for one.

Even this stand-in is a message to U.S. allies that Washington sees, understands and condemns Russian action. Sanctions against Russia are not just about Russia. They are also an essential element of Europe’s response to wide-ranging challenges to unity and security.

The Continent is reeling from anti-EU referendums and bracing for critical elections in France and Germany. To regularly punish Russian attacks on sovereignty and democracy is an important—and increasingly necessary—act of unity on the Continent.

In requiring regular unanimous reapproval, the EU’s sanctions are an exercise in European consensus, which necessitates U.S. leadership and engagement. Sanctions are not a strategy unto themselves. But in the face of an increasingly shaky EU and an antagonistic Russia, they are a critical statement recognizing common values—and threats.

Finally, lifting the sanctions is neither low risk nor de-escalatory. To do so would condone Putin’s foreign policy and worldview that perceived national interest and spurious territorial claims supersede international treaties and norms. It risks alienating nearly every European ally and disregards the democratic foundation of the Continent.

Furthermore, this move would not reduce tensions but rather send a clear message: The price of violating long-standing treaties and norms by invading another country unprovoked is just a couple of years of sanctions. Putin has willingly paid this price before.

The U.S. needs a broader response to Russian aggression than simply sanctions, but that should be an additive process that reflects the importance of our European partnerships and our views of the international order as a whole.

If Trump does indeed want the U.S. to be respected, he cannot reward Putin’s behavior abroad by lifting the sanctions.

Read more from 

- Putin is trying to bully Europe into dropping sanctions- To free Ukraine, increase sanctions against Putin- Rex Tillerson’s warm relationship with Putin chills

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The Muslim Ban Could Cost America $66 Billion a Year

This article first appeared on the Council on Foreign Relations site.

For all the human disruption and confusion associated with President Trump’s executive order on immigration released on Friday, it is also worth noting the potential for substantial negative macroeconomic dislocation from increased barriers to travel to the United States.  

In October of last year, I along with my colleagues Ted Alden and Heidi Crebo-Rediker published a note looking at the economic effects of a Muslim travel ban.

While the title highlighted a prospect of full ban, the central historical experience we drew on for our analysis was the use of intensified security measures after the 9/11 attacks. These measures can tell us a lot about what to expect from the current extreme vetting measures, particularly if the president’s order is expanded to include more countries over time.

Related: Tel Aviv Diary: Muslim Ban Rattles Jewish Community

In sum, our report highlighted the following:

The effects of extreme vetting on U.S. economic activity are immediate and far-reaching.

In addition to those directly affected, there is a chilling effect on travel to the United States more broadly. After the 9/11 attacks, the enhanced visa requirements instituted under the National Security Entry-Exit Screening System (NSEERS) had an immediate and substantial impact on international travel, including importantly travel from countries not affected by the new measures. In part this reflected a general chilling effect from the new procedures.

This negative effect was persistent.

As we show in our note, the rebound in travel after 2001 was gradual and arrivals did not return to their pre-9/11 level until the end of the decade. Tourism remain depressed, supply chains were disrupted and U.S. firms that relied on foreign know-how were disadvantaged.

We looked at a number of scenarios, estimated their immediate (impact) effects, and tried to quantify the broader spillover (multiplier) effects on the U.S. economy taking into account the knock-on spending that tourism and other foreign visits cause. What we found was startling.

If widespread, the direct loss of spending due to restrictions on travel from Muslim countries could range from $14 billion to $30 billion per annum. Adding in indirect (multiplier) effects that take into account the broader spillover effects on the economy increases this range to $31 billion to $66 billion.

The loss of jobs could range from 50,600 to 132,000.

Economic Impact Scenarios and MultiplierScenario 1        Base Spending Direct ($billion)    Multiplier – Indirect ($ billion) 

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Toyota to Recall 6.5 Million Cars to Fix Power Window Switch

Toyota Motor Corp said on Wednesday it would recall 6.5 million vehicles globally to fix a defect in the power window switch in models including the Yaris/Vitz subcompact, Corolla and Camry.

About 2.7 million of the recalled cars are in North America, 1.2 million in Europe, and 600,000 in Japan, the company said. It said it was not aware of any crashes caused by the glitch.

Toyota said modules in the power window master switch may have been lubricated inconsistently during the manufacturing process. Debris caused by wear from the electrical contact points can accumulate and cause a short circuit. That in turn could cause the switch assembly to overheat and melt, and potentially lead to a fire, it said.

Among other models subject to the recall are the Matrix, RAV4, Highlander, Tundra, Sequoia and Scion xB. The vehicles were produced between January 2005 and December 2010, Toyota said.

Toyota also issued a separate recall in Japan of about 140,000 Crown and Crown Majesta models for a glitch that could cause the hood to open inadvertently.

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The World Bill Gates Predicted Has Come True

In Business @ the Speed of Thought: Succeeding in the Digital Economy, published in 1999, Bill Gates outlined how information systems, the Internet and technology in general would change the way that businesses function.

Along the way, he made some incredibly accurate predictions, most of which have since become huge industries: smart phones, smart homes, social networks and an array of other uses for the Internet—a few of which have yet to be developed.

When we consider the state of the computer industry back then, many of these are amazing.

  1. Price comparison sites.

Automated price comparison services will be developed, allowing people to see prices across multiple websites, making it effortless to find the cheapest product for all industries.

  1. Mobile devices.

People will carry around small devices that allow them to constantly stay in touch and do electronic business from wherever they are. They will be able to check the news, see flights they have booked, get information from financial markets and do just about anything else on these devices.

  1. Instant payments and financing online, better health care through the Web.

People will pay their bills, take care of their finances and communicate with their doctors over the Internet.

  1. Personal assistants and the Internet of Things.

“Personal companions” will be developed. They will connect and sync all your devices in a smart way, whether they are at home or in the office, and allow them to exchange data. The device will check your email or notifications, and present the information that you need. When you go to the store, you can tell it what recipes you want to prepare, and it will generate a list of ingredients that you need to pick up. It will inform all the devices that you use of your purchases and schedule, allowing them to automatically adjust to what you’re doing.

  1. Online home-monitoring.

Constant video feeds of your house will become common, which inform you when somebody visits while you are not home.

  1. Social media.

Private websites for your friends and family will be common, allowing you to chat and plan for events.

  1. Automated promotional offers.

Software that knows when you’ve booked a trip and uses that information to suggest activities at the local destination. It suggests activities, discounts, offers and cheaper prices for all the things that you want to take part in.

  1. Live sports discussion sites.

While watching a sports competition on television, services will allow you to discuss what is going on live and enter contest where you vote on who you think will win.

  1. Smart advertising.

Devices will have smart advertising. They will know your purchasing trends and will display advertisements that are tailored toward your preferences.

  1. Links to sites during live TV.

Television broadcast will include links to relevant websites and content that complement what you are watching.

  1. Online discussion boards.

Residents of cities and countries will be able to have Internet-based discussions concerning issues that affect them, such as local politics, city planning or safety.

  1. Interest-based online sites.

Online communities will not be influenced by your location but, rather, your interest.

  1. Project-management software.

Project managers looking to put a team together will be able to go online, describe the project and receive recommendations for available people who would fit their requirements.

  1. Online recruiting.

Similarly, people looking for work will be able to find employment opportunities online by declaring their interest, needs and specialized skills.

  1. Business community software.

Companies will be able to bid on jobs, whether they are looking for a construction project, a movie production or an advertising campaign. This will be efficient for both big companies that want to outsource work they don’t usually face, businesses looking for new clients and corporations that don’t have a go-to provider for the said service.

You can probably come up with services that were developed years later, doing almost exactly what one of these points predicted. Facebook, smart phones, Twitter and freelance websites are all examples of technologies that fit into these predictions. Siri and Google Now are perfect examples of the personal companion concept, and haven’t reached the predicted potential yet.

Markus Kirjonen studies business at Aalto University, Finland. This article first appeared on his website. Follow Kirjonen on Twitter @MarkusKirjonen.

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Why Facebook Traffic to Major Websites Has Plummeted in 2015

Bad news for websites that rely on Facebook for user traffic (which include most of the viral Internet): Facebook doesn't actually care about you.

Referral traffic to those publishers biggest on Facebook has plummeted in 2015, according to a report in Digiday, which draws on data from the analytic services SimpleReach and SimilarWeb. The Huffington Post's Facebook traffic, for instance, fell a whopping 60 percent during the first three quarters of the year. Facebook-based traffic to Fox News and BuzzFeed both dropped more than 40 percent in that same period, with the steepest declines taking place at the beginning of the year. (The social media behemoth, in a statement to Digiday, "denied it's sending less traffic to publishers overall" without disputing the specific figures.)

What does it all mean? For one, it's another sign of the stranglehold Facebook maintains on much of Web publishing in 2015. Minor tweaks in the newsfeed algorithm can mess with an entire publication's business model, precarious as it may be. In January, for instance, the social media site intentionally sought to crack down on hoaxes and fake news sites dominating your feed.

A previous generation of digital publishers could rely on readers visiting via their home page. But in 2015, Facebook—or Twitter or Tumblr or Pinterest—is a home page for millions of potential readers. Facebook relies on users and user-generated content—a cute dog video, a rant about Hillary Clinton—but has less use for links to content that take users away from Facebook to, say, Fox News.

In this instance, the drop could be a sign that Facebook wants to pressure outlets to publish directly on the site—particularly in the form of Instant Articles, which debuted on Facebook's iPhone app in October. Publications like The New York Times and BuzzFeed have signed up for the feature, allowing their stories to load directly on Facebook instead of via an external link.

It's a radically new model of publishing in which Facebook sells ads on the Instant Articles and gives publications the revenue. But as Digiday notes, "Facebook can change the rules at any time."

Writing for Nieman Lab in 2014, Felix Salmon predicted that 2015 would mark the beginning of the end of Facebook's supply stream of readers. "The winners of the Facebook attention lottery are going to be more videos, as well as genuinely native, in-app content from advertisers," Salmon wrote. "The losers are going to be external websites who have become reliant on the Facebook traffic firehose."

That prediction is starting to hold up.

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Solar Power Brightens Corporate America's Balance Sheet

This article originally appeared on the Motley Fool.

The decision to install solar panels can be driven by factors like a desire to use clean energy or an interest in becoming more self-sufficient when it comes to electricity. But when large companies choose to go solar, they're doing so based on the dollars and cents of the investment. You may not know if the  Target or Walmart  store you're shopping at has solar, but if it does, it's saving the company money. And today, U.S. corporations are installing solar energy rapidly as a way to save millions of dollars. 

The Solar Energy Industries Association recently released its Solar Means Business 2016 report, and it showed a big increase in the amount of solar energy on corporate rooftops. There's now more than 1 GW of solar for corporate customers, enough to power 193,000 homes. Target led the way with 147.5 MW, with 70 MW installed so far in 2016, while Walmart is using 145.0 MW. Apple 's 93.9 MW and Costco 's 50.7 MW means those companies are also among the top five installers. 

Seven out of the top 10 corporate customers have installed SunPower solar panels, reflecting the company's corporate focus. SolarCity, meanwhile, has Walmart as a major customer. 

One incredible stat from the report is that more than three quarters of the commercial solar installations and half of the capacity are at data centers. Large data centers are often buildings with flat roofs, perfect for solar energy, and they're energy hogs. So offsetting some, or all, of the energy consumption with solar on a roof or a nearby field is an attractive option. 

How big is commercial solar today? 

In the first three quarters of 2016 there was 142 MW of solar installed at corporate sites. Compared to a total of 13.9 GW expected to be installed in 2016, this is a fairly small market. But it's becoming increasingly important. 

Utility-scale solar, which will be around 7.8 GW this year, is the largest segment of the solar market in general. But it's highly volatile, and 2017 will see only a small number of new projects signed and built. Commercial solar is improving in viability, and will likely be a growth market in the future. 

One reason that corporate solar customers haven't traditionally been a big customer base is that it's hard to finance their installation. It may sound crazy, but it's easier to finance a residential solar project that's backed by a customer with a reliable FICO score than it is a corporate customer with anything but a stellar credit rating. Companies come and go, leaving creditors in their wake, and solar companies—and their financers—don't want to take the loss for companies that go out of business. Today, solar is cheap enough that companies can put systems on their balance sheets, or even take out loans to finance projects. This means the financing barrier is breaking down, opening up the market. 

The two companies that have put a lot of attention on commercial solar are SunPower and SolarCity. Both have installation designs built to make commercial rooftop installations cost effective and efficient. 

SunPower's pitch is based more around a higher efficiency product that's able to squeeze more energy out of each square foot. In small installations, a higher efficiency can lead to lower cost per watt—that's a big reason the company is serving so many of these customers. 

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