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Boeing 737 Max On Track to Fly in Europe Again

The European Union’s civil aviation regulator is prepared to recertify the Boeing Co. (NYSE: BA) 737 Max passenger jet to return to service in January, according to the agency’s director.

In an interview with a French newspaper on Saturday, European Aviation Safety Agency (EASA) head Patrick Ky said the agency’s studies “show us that the plane can return to service” and that it is “likely” that the agency will decide in January to put the plane back into service.

Ky’s statement follows last Wednesday’s announcement from the U.S. Federal Aviation Administration (FAA) that the grounding order on the 737 Max issued in March of 2019 had been rescinded and that the planes could begin flying again after meeting certain other guidelines.

The major change to recertification in both the United States and Europe is that the two civil authorities will conduct their own safety assessments of Boeing airplanes and that those assessments will occur earlier in the certification process.

The FAA will require that each airplane be certified by the agency rather than by Boeing, as had been past practice. The agency took a lot of heat from congressional investigations for allowing Boeing personnel to conduct final inspections of the planes before they were delivered to customers.

The EASA recertification means that Boeing can once again begin to deliver planes to European airlines and, critically for Boeing, get paid. Ireland-based Ryanair, for example, has unfilled orders for 135 of the planes, and leasing firm AerCap has 71 unfilled orders.

Boeing still faces some headwinds. Transport Canada, that country’s airline regulator, has not yet approved the 737 Max for recertification. In the past, the Canadian agency generally followed FAA certification decisions, but Transport Minister Marc Garneau said last week that there will be differences this time between FAA and Canadian requirements. Three Canadian airlines have unfilled orders for a total of 69 737 Max aircraft.

Another major market for Boeing, China, has remained silent on lifting its grounding order on the 737 Max. China was the first country to ground the 737 in 2019, and the country’s Civil Aviation Administration (CAAC) already has said that Boeing will have to meet the CAAC requirements before the planes can fly again. Boeing’s most recent orders and deliveries report indicates that Chinese airlines have unfilled orders for 104 new planes.

Boeing’s problems with China go beyond the safety of the 737 Max. Teal Group analyst Richard Aboulafia told CNN recently that Boeing is not in control of its fate in China: “In China, Boeing is prisoner to forces beyond mere aviation market dynamics. It would be impossible for Boeing to not be wrapped up in this giant mess, involving trade barriers, [intellectual property] disputes, and tariffs.”

Because China plays such a large role in the growth of the passenger plane market, Boeing has got to come up with a way to regain a solid foothold in the country.

Boeing stock traded up about 2% shortly after the opening bell Monday, at $203.37 in a 52-week range of $89.00 to $374.77. The price target on the stock is $200.55.

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Europe’s Decade of Clean-Air Rules Led to 60,000 Fewer Deaths

In this article

The decrease in Europe’s pollution due to stricter environmental regulations over the decade to 2018 helped lower deaths caused by heart and lung disease, according to the European Environment Agency. 

Around 60,000 fewer people died prematurely due to fine particulate matter pollution in 2018, compared with 2009, the agency’s annual Air quality in Europe report showed on Monday. During that decade, emissions decoupled from economic activity, meaning there are now fewer emissions for each unit of gross domestic product generated each year. 

Kabul, AfghanistanMost polluted air today, in sensor range +0.​85° C Oct. 2020 increase in global temperature vs. 1900s average 0 4 3 2 1 0 ,0 4 3 2 1 0 0 1 0 9 8 7 0 5 4 3 2 1 Soccer pitches of forest lost this hour, most recent data 42% Carbon-free net power in the U.K., most recent data

$69.​9B Renewable power investment worldwide in Q2 2020 -15.​94% Today’s arctic ice area vs. historic average 0 6 5 4 3 2 0 3 2 1 0 9 0 5 4 3 2 1 .0 0 9 8 7 6 0 9 8 7 6 5 0 5 4 3 2 1 0 3 2 1 0 9 0 4 3 2 1 0 0 5 4 3 2 1 Parts per million CO2 in the atmosphere

50,​820 Million metric tons of greenhouse emissions, most recent annual data

“Better air quality is an investment for better health and productivity for all Europeans,” said Hans Bruyninckx, executive director at the EEA. “Policies and actions that are consistent with Europe’s zero pollution ambition lead to longer and healthier lives and more resilient societies.”

Air pollutants emitted by the transport, manufacturing or energy sectors were associated with cardiovascular and respiratory diseases that caused about 417,000 premature deaths in 41 European countries in 2018, according to the agency. Gas emissions from transport declined even as mobility demand rose, while progress in reducing building and agriculture emissions has been slow. 

In 2018, only Estonia, Finland, Iceland and Ireland had fine particulate matter concentrations below the World Health Organization’s stricter guideline values. Eight countries including Italy and Poland exceeded the European Union’s limit value for fine particulate matter.

Lockdowns implemented this year by several European nations to contain the spread of the coronavirus pandemic led to significant drops in pollution. Traffic stations in Spain and Italy, which implemented some of the most strict lockdowns, detected some of the sharpest reductions, with nitrogen dioxide emissions down as much as 70% in some places. A more comprehensive statistical model used by EEA estimated an average reduction of pollution of about 40% in Spain and about 35% in Italy.  

Several scientific studies over the past few months have pointed to the links between coronavirus and air pollution. Poor air quality can cause heart and lung diseases which are risk factors for death in Covid-19 patients. Therefore, long-term exposure to air pollution is expected to increase vulnerability to the virus, in the same way that previous studies indicated exposure to particulate matter worsens the impact of respiratory illnesses, the report said.

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Govt to decriminalise provisions of LLP Act

One of the changes being proposed is allowing LLPs to issue non-convertible debentures.

After amending the Companies Act, the ministry of corporate affairs is now looking to decriminalise provisions of the Limited Liability Partnership (LLP) Act in the upcoming Winter Session of Parliament.

One of the changes being proposed is allowing LLPs to issue non-convertible debentures (NCDs), a senior government official told Business Standard.

“Many provisions in the Companies Act are also linked to the LLP Act.

“We want to ensure both are compatible and also do away with criminality when it comes to procedural offences,” the official said.

Around 20 clauses in the Act relating to procedural violations will be revised.

“There are various legal provisions that are harsh and judicial custody in those cases will not serve any purpose.

“Both the government and the industry have been working together to decriminalise various statutory provisions,” said Abhishek A Rastogi, partner at Khaitan & Co.

The amendments will also address certain grey areas in the laws, such as whether LLPs can issue NCDs.

According to the Companies Act 2013, while LLPs are considered body corporates, they cannot issue debentures to raise funds.

Experts say only partners can contribute funds as LLPs have no rights to issue debt.

NCDs are debt instruments, generally long term, and acknowledge an obligation towards the issuing company.

Such instruments allow a company to raise funds from the public.

Since NCDs cannot be converted into shares or equities, these instruments always remain debts.

This ensures that there is no dilution in ownership.

“Instruments are much more secure than normal debt… It will increase the avenues for raising funds. It will also earn an investor much more interest,” said Ankit Singhi, partner at Corporate Professionals.

Debentures earn fixed rates of interest and have less risk — they are rated by credit agencies.

“Hypothetically, in case LLPs are statutorily allowed to issue NCDs, they will be able to raise funds from the market at a cheaper rate as debenture rates are always less than the borrowing rate from the bank,” Rastogi added.

The recommendations for these amendments have been sent to the Company Law Committee by the MCA.

“In case of criminal provisions there are a range of minimum and maximum penalties. We go for the middle so as to ensure there is no discretion allowed,” the official said.

For instance, according to experts of the LLP Act, any false statement in returns or other documents is punishable with imprisonment for a term that may extend to two years, and a fine up to Rs 5 lakh and not less than Rs 1 lakh.

The MCA is also working towards setting up an e-adjudication platform next year.

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Two retail stocks to watch ahead of their earnings reports this week

Retail earnings are ramping up this week.

Urban Outfitters reports on Monday, a day before Best Buy, Dick's Sporting Goods, Abercrombie and Fitch, Dollar Tree, Nordstrom, Gap and American Eagle Outfitters.

All of their stocks are in the green year to date except for Nordstrom, which is down almost 48%. Gap has been this group's biggest gainer, up over 41%.

With October retail sales missing expectations and a somewhat unpredictable holiday season around the corner, traders are on the lookout for anything that might indicate how the end-of-year spending story might play out for retailers.

"The first name I'm going to be watching is Best Buy and the second name we're going to be watching is Dollar Tree," Craig Johnson, senior technical research analyst at Piper Sandler, told CNBC's "Trading Nation" on Friday.

He pointed out that October's same-store sales numbers showed notable weakness in the clothing, food and drink and gasoline station categories.

"When you look at this chart of Best Buy, it's in a very nicely established upper-trending price channel and all we've seen as of late is just a nice little sideways consolidation, but the primary trend is still higher," Johnson said.

Zoom In IconArrows pointing outwards

"I'd still be buying that stock heading into the earnings print here and I see a nice sort of implied option move in this name, too, about 7%," he said. "So, I think that's one that should be bought."

Dollar Tree, however, looked to be in a more precarious position, he said.

"Dollar Tree doesn't have a real meaningful online presence, and they also are going to have some challenges importing goods from China and Asia given the fact that they've got a lot of imported goods coming in and shipping rates are going dramatically higher," he said, pointing to the chart.

Zoom In IconArrows pointing outwards

"We've been making this kind of broadening pattern — higher highs and lower lows — here, and when I see that kind of price action, I get a little bit more cautious," Johnson said. "I think you could probably get a decent move to the downside in that stock, down toward, perhaps, the low 80s as I look at the chart on that."

Dollar Tree shares closed less than half of 1% higher on Friday at $94.97. Best Buy was also up a fraction of a percent at $119.14 a share.

Consumer spending will likely take "longer than the market thinks" to come back in earnest, Boris Schlossberg, managing director of FX strategy at BK Asset Management, said in the same "Trading Nation" interview.

"The market at this point has kind of priced in the perfect scenario, but as far as retail goes, we now have this very, very unfortunate circumstance of peak Covid cases right at the time of peak shopping holiday season," Schlossberg said.

"It's going to be much more challenging for a lot of the bricks-and-mortar retailers, a lot of whom still depend on that shopping experience — the idea of … basically being able to just do impulsive buying when you're in a physical store, which is where a lot of their additional sales come in," he said.

With new lockdowns taking effect across the country, retail's near-term prospects look bleak, Schlossberg said.

"I think a huge amount of shoppers are going to stay away from brick and mortar," he said. "To me, the picture is much … grimmer in the immediate future than the market thinks, and I think that's the problem. I think a lot of these big names are kind of overbought at this point. I would not be buying them and chasing them at this level."

Disclosure: Piper Sandler is a registered market maker for Best Buy.

Disclaimer

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Less COVID-19 Cases, Deaths Reported At Weekend In US

After hitting record high levels in the previous days, coronavirus infections and deaths due to the pandemic in the United States showed a downward trend in the weekend.

For the first time, daily COVID-19 cases crossed the 180000 threshold Thursday, raising fears that the numbers are rapidly moving close to the 2,00,000 mark. But the trend reversed in the following days.

With 1,58,047 new cases reporting in the last 24 hours, the country’s total number of COVID-19 infections increased to 12247488, as per latest data from the Johns Hopkins University Center for Systems Science and Engineering.

Simultaneously, a proportionate fall in COVID casualties was being reported across the country in the past few days. From the 2000-plus daily deaths, death rate fell below 1000.

883 deaths in the last 24 hours took the total casualties to 256783.

The U.S. recorded more than 3 million Covid-19 infections in the first three weeks of November, accounting for more than a quarter of the country’s total cases since the pandemic began, according to Johns Hopkins.

Nevada governor announced new restrictions in the state for three weeks. Cases are spreading at “wildfire level,” Governor Steve Sisolak told reporters. Since the start of the pandemic, a quarter of all Covid-19 cases in Nevada were identified in the month of November, according to him.

White House vaccine chief Moncef Slaoui said a vaccine against Covid-19 is expected to be available to the public by the second week of December.

British Prime Minister Boris Johnson said that the results from AstraZeneca/Oxford’s experimental vaccine trials were “incredibly exciting.”

“Incredibly exciting news the Oxford vaccine has proved so effective in trials. There are still further safety checks ahead, but these are fantastic results. Well done to our brilliant scientists at @UniofOxford &@AstraZeneca, and all who volunteered in these trials,” he tweeted on Monday.

He was responding to an announcement the University of Oxford made on Twitter earlier in the day. “Today marks an important milestone in the fight against #COVID19. Interim data show the #OxfordVaccine is 70.4% effective, & tests on two dose regimens show that it could be 90%, moving us one step closer to supplying it at low cost around the world.”

Drug maker AstraZeneca said in a press release that its vaccine, developed with the University of Oxford, was “highly effective in preventing COVID-19, the primary endpoint, and no hospitalizations or severe cases of the disease were reported in participants receiving the vaccine.”

Chinese President Xi Jinping called for developing a global Covid-19 tracking system using QR codes, while German Chancellor Angela Merkel expressed concern if poor countries will have access to Covid-19 vaccines.

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Global stocks rise as the US plans first COVID-19 vaccinations by mid-December

Thomson Reuters

  • Global stocks rose on Monday as the head of the White House’s Operation Warp Speed said some Americans would be able to receive coronavirus vaccinations by mid-December.
  • Investors are betting that positive developments in trials of COVID-19 vaccines might mean swift regulatory approval and a quick rollout.
  • The greatest potential is in the sectors with scope to “catch up” as the vaccine rollout and policy support facilitate economic recovery, said UBS’ Mark Haefele.
  • AstraZeneca said on Monday that its vaccine candidate is 70% effective.
  • Visit Business Insider’s homepage for more stories.

Global stocks rose on Monday as investors bet on a swift approval and distribution of multiple vaccines, which could help bring the pandemic under control.

Futures on the Dow Jones, S&P 500, and the Nasdaq rose between 0.4% and 0.7%, pointing to a modestly higher start to trade later in the day. The major indices closed lower on Friday.

Moncef Slaoui, the head of the White House’s Operation Warp Speed, said on Sunday some Americans would be able to receive vaccinations as soon as December 11, meaning that there could be a 70% immunization rate across the US by May.

A nascent rotation from technology stocks to value sectors in equity markets and an ongoing rally in industrial metals and oil suggest these asset classes are focused on the reflationary possibilities of a vaccine rollout, said Stephen Innes, chief global market strategist at Axi.

“An emerging risk for investors is an untimely withdrawal of support for the US’ real economy, just as social-mobility restrictions undermine activity for the second time this year,” he said. 

Read More: GOLDMAN SACHS: Buy these 14 stocks well-positioned to see surging cash flow as the recovering economy upends the market

AstraZeneca’s shares slid after it announced its COVID-19 vaccine shot is 70% effective, compared to Pfizer and Moderna’s success rates of above 90%.

London’s FTSE 100 rose 0.3%, the Euro Stoxx 50 rose 0.6%, and Germany’s DAX rose 0.8%.

The greatest potential is in the sectors with scope to “catch up” as the vaccine rollout and policy support facilitate an economic recovery over the coming year, said Mark Haefele, chief investment officer, UBS Global Wealth Management.

US Treasury Secretary Steve Mnuchin last week suggested unspent stimulus money could be used to extend unemployment benefits and assist hard-hit small businesses in the travel, entertainment, and hospitality sectors. 

Continuation of US fiscal stimulus talks, hopes that the first COVID-19 vaccine will get rapid FDA approval lifted Asian stock markets as well.

China’s Shanghai Composite rose 1% and Hong Kong’s Hang Seng rose 0.2%. Japan markets were closed for a holiday.

Read More: A Wall Street strategist breaks down why bitcoin’s latest surge past $18,000 is sniffing out a major downward spiral in the stock market’s hottest trade

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Amazon’s Offers "Spoiler Free" Ways For Holiday Gift Deliveries

Amazon is offering new “Spoiler Free” ways to keep gifts a surprise, as well as to track, receive and pick up orders this holiday season.

According to the company, the new features would help customers to face the challenge of keeping those special gifts under wraps as many families are opting to stay home amid the coronavirus pandemic.

In the U.S., Amazon’s Map Tracking, Share Tracking, Photo-On-Delivery, and Estimated Delivery Window features are available for packages delivered by Amazon.

Alexa will hide the names of items that might be gifts – even if a customer asks, “Where’s my stuff?” or checks their delivery update notifications. This would prevent a friend, family member or loved one from spoiling their surprise.

Amazon Map Tracking lets customers view the progress of their delivery on a map in real-time when the driver is close. With the feature, customers can see
the remaining number of stops a driver has before their delivery arrives.

With Share Tracking, customers have the option to send tracking information to friends or family, so they know when to expect their package and bring their delivery indoors.

Amazon Photo-On-Delivery provides visual delivery confirmation, showing customers that their package was delivered and where it was placed by the driver.

Further, Estimated Delivery Window provides customers with a 2-4 hour estimated delivery window, with which they can plan their day and, if desired, ensure they will be home to receive their delivery.

With Amazon Day, a free and convenient delivery option available to Prime members in the U.S., customers can choose to receive all of their orders on
one day of the week, often in fewer boxes.

Key In-Garage Delivery option lets eligible Prime members with a myQ smart garage door opener receive packages securely inside their garage.

John Felton, Vice President of Amazon Global Delivery Services, said, “We’re helping customers keep their orders a surprise this year and have a number of ways we’re providing them more flexibility, control and convenience over their deliveries-whether that’s ordering to an alternative pickup location, tracking their package en route to their home, or consolidating their deliveries to a single day so they can plan ahead.”

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Online banks are just as safe as brick-and-mortar banks, and you may like them if you're comfortable banking digitally

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • An online bank is an institution that operates mostly or solely online.
  • Your money is safe at an online bank as long as the company is federally insured by the FDIC.
  • Online banks don't have as many overhead expenses as traditional banks, so they can afford to pay higher rates and charge lower fees.
  • Depositing cash at online banks can be tricky, but most institutions do let you deposit paper checks digitally.
  • See Business Insider's picks for the best online banks »

What is online banking?

Online banks are institutions that work mostly or exclusively online.

Many brick-and-mortar banks (meaning banks with physical branches you can visit) allow you to access your accounts through their websites or mobile apps — but with an online bank, everything happens online. Some online banks do have a few physical locations, but they still operate digitally for the most part.

Are online banks safe?

In short, yes, online banks are safe.

The most important part of shopping for a bank is choosing one that is insured by the FDIC, or Federal Deposit Insurance Corporation. (If you're using a credit union, it should be insured by the NCUA, or National Credit Union Administration.) A bank should publicize that it's FDIC insured on its website, or you can search for an institution on the FDIC site.

FDIC insurance works similarly to other types of insurance. If you have renters insurance and your home is damaged in a natural disaster, your insurance will cover the costs of damages up to a certain dollar amount. If your bank has FDIC insurance and shuts down, the FDIC will give you the money you stored in the account, up to $250,000 for an individual account and $500,000 for a joint account.

Maybe you're considering using an online banking platform, such as Wealthfront or Chime. These companies aren't technically banks, but they're backed by banks that provide FDIC insurance, so your money is still safe.

As far as security goes, online banks are just as safe as brick-and-mortar banks. But you should practice the same safety measures you would use with any other sensitive information you access online. Here are some tips:

  • Don't log into your bank account on a public Wi-Fi network
  • Change your password on a regular basis
  • Consider using a VPN when you check your bank information online

The pros and cons of online banking

The pros of opening an online bank account

  • Higher interest rates. Online banks save money by not having brick-and-mortar locations. As a result, they can afford to pay higher interest rates than traditional banks on your savings, CDs, and money market accounts. 
  • Lower fees. Brick-and-mortar banks can offset some of their costs by charging you service fees. Most online banks don't charge monthly fees, though, and other fees tend to be lower, too. For example, some traditional banks offer overdraft protection in case you take too much money out of your account, but they still charge you a fee for using overdraft protection. It's rare for online banks to impose these sorts of fees.
  • Large ATM networks. Few online banks have their own ATMs like Chase and Wells Fargo do. Instead, they use a network, such as Allpoint or MoneyPass, which gives you free access to tens of thousands more ATMs around the US than if you used a traditional bank.

The cons of opening an online bank account

  • No in-person banking. With the exception of a couple banks, such as Capital One, most online banks don't have any physical locations. If you like speaking to a banker face-to-face, you might not like online banking.
  • Difficulty depositing cash. Most online banks let you deposit paper checks using their mobile apps, but online banking probably isn't for you if you need to regularly put cash in the bank. Some online banks don't accept cash deposits at all. Others let you deposit cash through Green Dot locations, which you can find at places like Kroger and CVS, but you'll pay a fee each time.

If you want to earn higher rates and pay lower fees, you might like online banking. But if you like the comfort of walking into a physical branch location or need to deposit cash, you may be better off with a brick-and-mortar bank.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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Why reporters at Voice of America are worried it may turn into 'Voice of Trump'

(CNN)The chief executive of the agency that oversees Voice of America and his team must stop investigating and interfering with the journalists employed there, a federal judge ruled Friday.

In a 76-page ruling, US District Judge Beryl Howell found that Michael Pack, CEO of the US Agency for Global Media, and his team violated the First Amendment rights of its journalists. She also found that Pack and his team showed an “extensive pattern of penalizing those USAGM and network employees whom defendants regard as insufficiently supportive of President Trump.”
Howell’s ruling bars Pack and others from continuing any actions that would curb VOA’s editorial independence, including taking personnel actions against journalists or editors, attempting to influence content by communicating with individual journalists or editors, and investigating “purported breaches of journalistic ethics.”

    Watchdogs open probes into alleged misconduct and retaliation at US Agency for Global Media
    The ruling is in response to a lawsuit filed by five senior executives at USAGM whom Pack had fired or suspended in August. The senior executives alleged that Pack and other top employees’ sought to interfere with their work because it didn’t align with the political interests of the President. They asked for a preliminary injunction to stop the interference.
    “Defendants’ extensive pattern of penalizing those USAGM and network employees whom defendants regard as insufficiently supportive of President Trump has resulted in the termination, discipline, and investigation of multiple employees and journalists,” the judge wrote in her ruling.

    Shawn Powers, USAGM’s chief strategy officer and a plaintiff in the case, said that “Judge Howell’s injunction against Mr. Pack affirms a central tenet of USAGM’s mission: that the protection and exportation of First Amendment rights and values directly support America’s national interests.”
    CNN has reached out to USAGM for comments from the defendants.
    Acting VOA Director Elez Biberaj told CNN in a statement that editorial independence free of political interference are what make the VOA “America’s voice.”
    “A steady 83% of VOA’s audience finds our journalism trustworthy,” Biberaj said. “There are few, if any, media organizations that can claim such trust. I am proud of our journalists who continue to uphold VOA’s traditions of providing our audience with accurate, objective and comprehensive reporting.”
    In her ruling, Judge Howell described Pack and his co-defendants as “individuals with no discernible journalism or broadcasting experience.” She added that Pack has tried to interfere in the agency’s newsrooms “in violation of their eighty-year practice, enshrined in law, of journalistic autonomy.”
    US global media agency seeks to kick out international journalists
    The VOA is one of multiple US government-funded broadcast outlets that brings news to people across the world. It was created in 1942 to combat Nazi propaganda, according to its website.
    In July, a bipartisan group of senators pledged to review USAGM’s funding over concerns over Pack’s mass firings. In October, the State Department’s inspector general and the US Office of Special Counsel opened inquiries into alleged misconduct and retaliation after six senior USAGM officials filed a complaint alleging that Pack engaged in abuse of authority and gross mismanagement, according to Mark Zaid, the lawyer representing the whistleblowers.

      Shortly after Pack took the helm of the agency in June, VOA’s top officials resigned en masse. Later that month, Pack fired the heads of four organizations overseen by the agency, in what was called the “Wednesday night massacre.”
      Before joining the agency, Pack was best known for making documentary films with a conservative bent and is an ally of former White House strategist Steve Bannon. He was president of the conservative Claremont Institute from 2015 to 2017.
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      Covid’s full cost to the UK economy is still being counted

      This has been a stinker of a year. More than 54,000 people have died from Covid-19, and the latest forecasts, due out on Wednesday, will show the economy on course to shrink by a tenth or more.

      The grim news on growth and unemployment will provide the backdrop to Rishi Sunak’s announcement of the Treasury’s spending plans for 2021-22 – and a warning from the chancellor that he will need to take action to bring down the government’s budget deficit next year.

      When the pandemic led to the first lockdown in the spring, the thinking was that the UK would have a classic V-shaped recession and activity would be back to its pre-crisis levels by the turn of the year. In the end, the recession has been less deep, but more protracted.

      Economic historians don’t compile lists of the 10 worst years for the economy in the way that rock critics list their top Bob Marley songs (No Woman, No Cry, according to our own Alex Petridis) but if they did, 2020 would be right up there.

      To be sure, there would be competition for the No 1 spot. Few alive can remember 1919, but in that year, a Britain still shaken by the losses in the first world war suffered more than 200,000 deaths from Spanish flu. The benefit cuts row that broke the minority Labour government and forced the UK off the gold standard meant 1931 was not exactly pleasant either. Life for the poor was even tougher in the days when welfare payments were nugatory and there was no NHS.

      Up until now, 1981 would be the choice of many for the worst year of the postwar era, because while the contraction in the economy was much smaller than in 2020 it was concentrated among the towns and cities of Scotland, Wales and northern England. Whole communities were ripped apart, and the scars still show.

      The last time the economy collapsed on anything like the scale likely to be seen in 2020 was in 1921, when the inflationary boom that followed the first world war came to grief. It is not possible to shut down whole chunks of the economy without serious consequences, and predictably enough, businesses have gone bust and unemployment has risen sharply. Yet for most people, the reason 2020 has been so miserable has not been the lack of growth; rather it has been not being able to see their elderly parents, being separated from their children, being deprived of the opportunity to go to see their favourite football team or band.

      That’s because most of the economic hit has been taken by the government, which has borrowed like never before in peacetime to fight the pandemic and to support the incomes of those furloughed. The willingness of the Treasury to pick up the tab explains why, despite a fall in its approval ratings, the Conservative party still nurtures hopes of winning the next election.

      All governments want to get the bad news out of the way early in the electoral cycle, and that has certainly been the case with this one. Politically, there is no good time for a pandemic and a monster recession, but the least bad time is in the first year after an election. There are more than four years to go before the next polling day and plenty can happen in that time.

      Once restrictions are lifted, the economy is likely to grow at a rapid pace. Individuals will run down the savings they have accumulated but been unable to spend; businesses will decide to go ahead with investment plans mothballed during the crisis.

      Even after growing by 15.5% in the third quarter, the level of gross domestic product was still almost 10% below where it was in the final three months of 2019. The second lockdown in England, combined with tougher restrictions in the rest of the UK, mean there will be an even bigger mountain to climb by the end of 2020.

      What that means is that the economy can grow faster than its normal pace for some time before there is any risk of it overheating. It may be two or three years before all the ground lost during 2020 is made up.

      Governments do recover from early setbacks. Clement Attlee had a terrible 1947 but clung on to office in 1950. In 1981, there would have been few takers for the proposition that Margaret Thatcher would win a second term with a landslide majority two years later. For the Conservatives, a lot depends on what happens in the next six to nine months, and in part that will be determined by Covid-19 and the response to it.

      Were there to be a third and perhaps a fourth wave of Covid-19 that led to the reimposition of restrictions, the economic damage would mount despite any mitigating action the Treasury might take.

      But the chancellor also has a big role to play. If he slams the brakes on too early and sucks demand out of the economy by cutting spending, he will delay and slow the recovery. Throughout the crisis, Sunak has made noises about how the borrowing will have to stop, with the latest declaration of future fiscal restraint coming in a Sunday Times interview in which he joked that he wanted to take the prime minister’s credit card away.

      He may have real trouble doing so. The prime minister’s strategy – as witnessed by the big increase in the defence budget announced last week – is to carry on spending big in the hope of a strong economic recovery that will persuade voters that 2020 was an aberration. And there are plenty of economists who think Johnson is right.

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