The 100 Most Sustainable U.S. Companies

By Leslie P. Norton

     Illustration by Tyler Comrie 

How much of a company’s journey toward sustainability is driven by the personal passions of its CEO? Based on the conversations Barron’s had recently with several corporate chieftains, quite a lot. That’s one of the insights from our second annual sustainability ranking of public companies.

Consider Voya Financial(ticker: VOYA), the insurer and retirement-savings company that vaulted to No. 6 this year from No. 46 last year. Even before Voya separated from Dutch parent ING and went public in 2013, its CEO was already planning something fairly radical: diversity in its management ranks and gender parity on the board. “We very consciously wanted to send a message that diversity and inclusion were very high on our list,” Rod Martin, Voya’s chief executive, told Barron’s. To Martin, it was the right thing to do—“there’s so much evidence that companies that have done this perform better.” By 2018, Voya had diversified its board; half of the executive committee members were women, and the stock had beaten the S&P 500 index twofold.

Or consider Hubert Joly of No. 1–ranked Best Buy(BBY). He dates his sustainability commitment to when he was a child in France and saw the environmental damage being done to the Alps. He traces it through early adulthood as he developed a spiritual practice, and then to an encounter with a worldly client when he was a young McKinsey consultant.

For investors, it has paid off. In a tough 2018, in which the S&P 500 lost 4.2% and the Russell 1000 fell 4.6%, the 100 most sustainable companies on our list lost 3.2%. Calvert Research and Management, the sustainability powerhouse owned by Eaton Vance(EV), compiled Barron’s list, basing the rankings on hundreds of metrics that address environmental, social, and corporate governance, or ESG, factors. “We’re beginning to get more and more recognition from the markets,” says Calvert CEO John Streur. “Companies can be differentiated based on how well they manage their environmental and social impact, and the strength of their governance. The list shows who’s creating a better company, long term, for long-term investors.”


There are significant changes in the top 10 from last year, including the entry of Voya, and Best Buy’s ascent to No. 1 from third last year. You might notice that some of the top companies are headquartered in California. That makes sense: The state is home to tough environmental regulations and governance initiatives. “You can’t say it’s causal, but it’s explanatory,” Streur says.

To create the rankings, Calvert analyzed the 1,000 largest publicly held U.S. companies (by stock market value) and scored them on more than 200 key indicators and 28 issues. Calvert then sorted the data into five key categories: shareholders, employees, customers, planet, and community. (The shareholders category might include executive compensation, for example, and the customers category might include data security or product safety.) Each corporation received a rating from zero to 100 in each category.

Finally, Calvert produced a single rating for all of the companies, weighted according to how material each category is for their industry: Emissions are less critical for a bank’s score than they are for a trucking company’s, for example. It also excluded companies that didn’t meet the Calvert Principles for Responsible Investment.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

The lowest overall score in the universe was 27; the median was 55. The average score for the best 100 was 66.6, leaving room for improvement. What’s more, the best 100 scored marginally worse than the previous year’s, which averaged 68.7. While scores rose as companies boosted diversity, says Calvert analyst Chris Madden, Calvert also increased penalties for companies with late filings, restatements, or other actions that could concern shareholders.

Separately, we asked Calvert for a list of the most sustainable publicly traded companies outside the U.S. You can see it in the nearby table.

Across the U.S., sustainability has become a priority in many areas. This year, California’s new law mandating that companies based there have at least one woman board member takes effect. Other states, such as New Jersey, are considering similar legislation, on the theory that diverse boards perform better and are less susceptible to groupthink. Institutional Shareholder Services predicts that the number of all-male boards, now at an all-time low, will continue to decline. Boards, once somnolent, are being asked to address a variety of risks, such as those from climate change, or other ESG concerns and behavior that can influence corporate performance. Technology companies, for example, are increasingly scrutinized over their protection of user data. The pressure isn’t coming just from progressive states: Much of it is being driven by professional money managers, who are adding ESG factors to their investment strategies.

No. 1-ranked Best Buy, headquartered outside Minneapolis, moved up from third last year. Its shares fell 20% last year amid concerns that its multiyear makeover may have peaked, but are still up more than 200% since Joly took over as CEO in 2012. Further gains aren’t out of the question: Best Buy is the last man standing in consumer-electronics retailing. It has even joined with to sell Alexa-enabled Fire TVs in stores. Best Buy has done all of this while practicing sustainability: It helps customers recycle old appliances and electronics, to recover rare earths, gold, copper, and plastic. Its Geek Squad helps extend the lives of old devices and appliances. Geek Squad members now drive to clients in a Prius, cutting the firm’s emissions footprint. The retailer scored 100 on the Human Rights Campaign Foundation’s corporate equality index. It’s on the climate A list of the CDP, formerly known as the Carbon Disclosure Project, and made it onto the Dow Jones Sustainability Index for the eighth year in a row.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

“Sustainability is embedded in everything we do,” Joly says. He grew up in Nancy, France; his parents took him skiing in the Alps, where the glaciers were already receding. In business school, he became friendly with two Jesuit monks. The future CEO began to meditate, and wrote articles about the purpose of work. In the early ’90s, when Joly was a young McKinsey consultant, a client told him, “If you believe the only thing for a company to do is generate shareholder value, you’re going to be in trouble. You need to 1) have a great team, 2) have happy customers, and 3) generate returns. But it’s the first priority that generates the second, which generates the third. Making money is the outcome.”

Today, Joly says, “sustainability is integral to each element of our strategy. It starts with the purpose of the company—not to make money, but to contribute to the common good, and, specifically, to enrich lives through technology by addressing key human needs—and not burning the place to make a profit.”

No. 2 is networking giant Cisco Systems(CSCO), down from No. 1 last year. Cisco shares jumped 17% in 2018, as the company beat expectations every quarter. Its weighted average score is just under Best Buy’s: Calvert praised the San Jose, Calif., company for “best-in-class data security and privacy controls, including recognizing data privacy and security as a human right, external certification on privacy controls, and incorporating privacy by design principles into product development.” By 2022, Cisco plans to reduce greenhouse-gas emissions by 60% from 2007 levels. Renewable energy now accounts for 80% of its electricity consumption, and it has widespread waste-reduction programs.

CEO Chuck Robbins tells Barron’s that “I’ve been really focused on more of the social issues” recently. In March, Cisco made a commitment to spend $50 million to fight homelessness in Silicon Valley, part of a wider initiative with the Kaiser Permanente health-care system. To ensure a workforce that will need Cisco products, it created Cisco Network Academies, which boasts 9.2 million graduates and has 1.9 million students enrolled today. The tech giant has committed to educating another 10 million students globally over the next five years. Says Robbins: “If you can connect someone and educate someone, you provide them opportunity to participate in this global economy.”

No. 3–ranked Agilent Technologies(A) vaulted up from 17; shares of the laboratory instrument and software maker gained 2% in 2018. Agilent, a former unit of Hewlett-Packard ,has a dense, detailed corporate social-responsibility report that includes information such as the organization’s direct and indirect greenhouse-gas emissions, by weight.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

CEO Mike McMullen joined Hewlett-Packard in 1984 as a freshly minted Wharton M.B.A. “I said I want to be with a company that makes a difference in the world,” he recalls. Customers of Santa Clara, Calif.–based Agilent include labs that test for environmental and water safety: 85% have their own sustainability goals. Many are fans of new Agilent products like Intuvo, a gas chromatography system that uses 50% less electricity. Agilent has increased energy efficiency by 40% and cut its carbon footprint by 25%. The firm doubled its maternity leave last year, to 13 weeks. Next month, a third of its independent directors will be female. The firm also gives employees a paid week off for volunteer work. Says McMullen: “This is a performance-driven culture. Having an energized, aligned workforce is how you get great results.”

HP Inc.(HPQ) itself is No. 4, up from No. 5. Silicon Valley’s original garage startup, founded 80 years ago, has benefited from robust sales of personal computers and printers, thanks to increased demand from corporate buyers and popular demand for gaming devices. Among other things, Calvert praises HP Inc. for robust corporate governance, a thorough e-waste recycling program (45% to 70% of its ink cartridges are made of recycled plastic), and a commitment to develop skills and improve the well-being of a half-million factory workers by 2025, via initiatives including leadership and career-development programs focused on women. The compensation plan of every member of HP Inc.’s leadership team has sustainability-related objectives.

Last year, HP Inc. received $700 million of additional business—“specifically, all things being equal, because our sustainability programs were stronger” than rivals’, says Stuart Pann, head of the company’s supply chain. “The line that connects this to shareholder value is our customers—they are asking for what we’re doing in this area, and [they] value it.”

Rounding out the top 5 is Dallas-based chip maker Texas Instruments(TXN), up from No. 6. TI has reduced water consumption by 5%—significant because it already recycles 30% of the water it uses in manufacturing. In sixth place, as mentioned, is Voya Financial. No. 7 is Oakland, Calif.–headquartered Clorox(CLX), the ninth-place finisher in 2018. Under CEO Benno Dorer, Clorox has produced strong transparency around the ingredients in its products, has robust product-safety assessments, and already has exceeded its goal of cutting greenhouse-gas emissions 20% by 2020.

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty 

Vaulting to No. 8 from No. 75 is Chicago industrial-supplies company W.W. Grainger(GWW), which has reduced greenhouse-gas emissions by 20% on its way to 33% by 2020, and is the only industrial supplier to participate in an Environmental Protection Agency initiative to trim emissions from freight transportation. No. 9 is Chicago-based Motorola Solutions(MSI), up from the 13th spot last year. At No. 10 is Milwaukee-based staffing outfit ManpowerGroup(MAN).

Among the companies that fell in the rankings is Microsoft(MSFT), which slipped to No. 43 from a top-10 ranking as it faced discrimination and harassment lawsuits. One case alleges discrimination toward about 8,630 female employees. Microsoft didn’t return requests for comment. Also edged out of the top 10 was Oshkosh(OSK), now No. 17 amid concerns about the trucking company’s pay policies. Oshkosh did not reply to a request for comment.

When Dutch insurer ING flirted with bankruptcy after the financial crisis, it began shedding assets, including Voya. Preparing for the initial public offering allowed Voya CEO Martin and his colleagues to rethink the company. Martin was committed to diversity and gender parity on the theory that it improves decision-making and profitability. “We could no longer dial the Netherlands and ask them to send another billion dollars,” he says. “We tried to think through the outcomes and characteristics if we started a new company.”

The 100 Most Sustainable U.S. Companies
Illustration by Lynne Carty

Worried about being branded politically correct, he and fellow executives talked about the initiatives less candidly in the early days. As the program gained traction, they grew more confident. Today, 40% of the independent directors are women. Voya has received a number of plaudits for sustainability. Management reports regularly to the board on the issue, and creates an annual report card that it shares with the board and with customers. The company is moving fast, completing several of 23 corporate social-responsibility goals it has set for 2020. “In 2½ years, we went from no women and diversity to coequal,” he observes. “It has reflected itself in our ability to recruit and retain talent.”

Today, Martin is routinely asked by executives and directors from other firms how Voya did it. Sometimes, they tell him that their fellow leaders are opposed. “That’s a bunch of excuses,” Martin tells them. “You’re going to be in the crosshairs of these things. Lead. It’s a great outcome.”

Ocean Shipping Rates Plunge: Just A Blip Or The End Of Globalization?

by John Rubino

The Baltic Dry Index represents the cost of renting an ocean-going container ship to move goods from, say, Chinese factories to the Port of Los Angeles. The more stuff being made and sold, the higher the demand for such ships, and thus the higher the price to rent one. And vice versa.

This is definitely one of the vice versa times. After rising to robust levels in mid-2018 the Baltic Dry Index has since plunged by about two-thirds.

Baltic Dry Index ocean shipping rates

Here’s a brief article on the subject from today’s Wall Street Journal:

Free-Falling Freight Rates Spell Trouble For Shipping  
Dry bulk shipowners face a long period of uncertainty as spot prices collapse and China shipments shrink. 
A slowing global economy, coupled with weak demand from China over the Lunar New Year and from Brazil after Vale SA’s iron ore disaster, is dragging shipping rates to near record lows, and few in the industry expect things to improve any time soon. 
Brokers in Singapore and London said capesize vessels, the largest ships that move bulk commodities like iron ore, coal and aluminum, were chartered in the spot market for as low as $8,200 a day on Thursday, a $500 decline from Wednesday. Break-even costs for carriers can be as high as $15,000 a day, and daily rates in the capesize market hovered above $20,000 last year. 
“Everyone is looking for a catalyst to push the market up, but it’s not there,” said a Singapore bróker. 
The Baltic Dry Index, which tracks the cost of moving bulk commodities and is considered a leading indicator of global trade, is down more than 50% since the start of the year. 
The long Lunar New Year holiday in early February is one of the slowest periods in commodities trading as factories in China, the world’s biggest importer of raw materials, shut down. But ship executives say the bulk seaborne freight business is more broadly suffering from the lowest demand in two years, while China’s trade tussle with the U.S. is making the market more volatile. 
“A long slowdown in the Chinese economy will hurt commodity demand and send shipping rates sharply lower,” Bloomberg Intelligence industry analyst Rahul Kapoor said. 
The Vale iron ore disaster in Brazil in January, in which a mining dam burst, triggering a flood that killed at least 150 people and left close to 200 more missing and feared dead, created a new source of uncertainty. 

Vale has suspended production at a number of sites, removing 40 million tons of annual output, or 11% of the giant miner’s total production in 2017. 
The reduced sailings could affect dry bulk owners, including China Cosco Bulk Shipping Co. Ltd, Norway’s Golden Ocean Group and Greece’s Diana Shipping Inc. 
“The Vale void will be largely covered by iron ore shipments out of Australia,” the Singapore broker said, “but Brazil generally commands higher freight rates so there is no good news.” 
China has resumed importing soybeans from the U.S., a sign of progress in talks between Washington and Beijing. But the 540,000 metric tons of shipments from the U.S. in January were less than half the monthly average last year. 
“If you are a bulk owner, you can no longer depend solely on China to make money, and that’s a seismic shift,” said a London broker.

So there are some specific, possibly temporary things going on here. The US/China trade war is slowing shipments between those countries while a Brazilian iron ore mine disaster is cutting shipments of that commodity for the time being.

Assuming the trade war ends and Vale’s Brazilian mine recovers, it’s reasonable to see this as the bottom for shipping rates – a forecast that shippers who need to double current prices just to break even fervently hope is true.

But there are also broader forces at work. The trade war isn’t just a piece of political theater for the US. We really do need factories to come back home if we want to avoid a populist and/or socialist revolution. And next generation manufacturing tech like 3D printers will in any event move production closer to end users, lowering the need for at least some of today’s shipping.

It’s possible, in other words, that the whole free trade/mobile capital/cheap labor/long supply chain Age of Globalization, with its assumption of unlimited rich-country demand and plentiful cheap energy for transport was just an artifact of a very specific time. It was so cheap and easy to move things around that building toys or TVs wherever labor was cheapest and shipping them to wherever the money resided made financial sense. 

That might not be a permanent state of affairs, and if it’s not, those giant ships won’t be the only stranded capital out there.

The Global Slowdown Could Soon Hit Home

By Randall W. Forsyth

The Global Slowdown Could Soon Hit Home Photograph by Sean Gallup/Getty Images

No man is an island, as John Donne famously wrote, but the U.S. increasingly seems to be surrounded by slowing economies nearly everywhere else. That divide, which began to open in 2018, is becoming more acute this year.

From the euro zone to Oceania, estimates of gross domestic product were ratcheted down this week, sending interest rates lower around the globe. Rather than being bullish for risky assets like stocks and corporate bonds, the retreat in borrowing costs ought to serve as a warning about sputtering global growth.

As of last week, nearly $9 trillion of global debt securities had negative yields, half again as much as late last year, according to Bloomberg data charted by Deutsche Bank. The yield on the 10-year German Bund, the European benchmark, sank below nine basis points, or 0.09%, from over 50 basis points last October. The 10-year Japanese government bond yield sank a couple of basis points below zero last week.

Such yields indicate an extreme desire by investors to stash their cash in havens (it helps that global government bond markets have greater capacity than mattresses) amid increased signs of deceleration abroad. The European Commission lowered its estimate of 2019 GDP growth for the euro zone by nearly a third, to 1.3% from 1.9%. Italy is already in recession, while German growth is faltering as its export-dependent economy is being hampered by a slowing China, which in turn is a result of increased trade frictions and its domestic deceleration.

Elsewhere, Australia’s central bank lowered its outlook for growth, while India’s central bank cut interest rates in a surprise move.

Amid these signs of sputtering growth, the U.S. Treasury 10-year yield dropped to a 13-month low of 2.63% while short-term borrowing costs eased, in effect undoing half of the Federal Reserve’s December 25-basis-point interest-rate hike. And while the major U.S. stock market gauges extended their advance over the past seven weeks, last week saw a trivial gain of less than 1%, reflecting a midweek swoon over global growth worries.

The equity market’s rise over that span can be viewed as a relief rally following December’s swoon, as the Fed shifted last month to a “patient” stance regarding future rate increases and greater potential flexibility about shrinking its balance sheet. While that attitude adjustment bolstered bullishness in the equity markets, Peter Boockvar, chief investment officer at Bleakley Advisory Group, observed that the decline in global bond yields in reaction to slower growth should remind investors why the Fed altered its stance in the first place.

Politics continue to hang over the markets as well, with another possible federal government shutdown looming on Friday. There’s little expectation of a replay of the previous shutdown fiasco, given that nobody gained anything from it. Markets were also upset by President Donald Trump’s admission that he won’t be getting together with President Xi Jinping of China before the March 1 deadline for the increase in tariffs on $250 billion of Chinese goods to 25% from 10%. While the timing of the eventual meeting of the leaders of the world’s two biggest economies may be uncertain, Cowen’s Washington watcher Chris Krueger predicts a “huge victory for Trump.”

The most recent monthly U.S. trade data show why further curbs are in nobody’s interest. The U.S. deficit shrank to $49.3 billion in November from $55.7 billion in October, which would mathematically boost fourth-quarter GDP (currently estimated to have grown at a 2.4% annual rate). But the smaller shortfall was due to a 2.9% drop in imports, a sign of slower U.S. demand, while exports fell 0.6%, reflecting sluggish demand abroad.

“The U.S. economy still appears to be sailing on serenely while the rest of the world economy sinks like a stone,” write the forecasters at Capital Economics. America remains a relatively closed and service-oriented economy, but the advisory firm suggests that eventually what’s happening overseas won’t stay there. That suggests the Fed’s patience is prudent, it concludes.

But that may not be sufficient to spur gains in risky assets beyond the rebound seen since December’s debacle.

Michael Cohen tells Congress that Trump is a ‘conman’

On Capitol Hill, ex-lawyer testifies that president misled on Russia business links

Demetri Sevastopulo in Hanoi and Courtney Weaver in Washington

© AP

Michael Cohen, the longtime lawyer and fixer for Donald Trump, on Wednesday told Congress his former boss is a “conman” who indirectly told him to lie about business his real estate empire was seeking in Russia during the presidential race.

In an opening statement Mr Cohen delivered to the House oversight committee, he also accused the former New York property mogul of being a “racist” and a “cheat”.

Mr Cohen’s voice cracked as he talked about his family: “To my Laura, my Sami, and my Jake, there is nothing I wouldn’t do to protect you.” But he gathered momentum as he levied some of his worst accusations against Mr Trump.

“Since taking office, he has become the worst version of himself. He is capable of behaving kindly, but he is not kind. He is capable of committing acts of generosity, but he is not generous. He is capable of being loyal, but he is fundamentally disloyal.”

Mr Cohen provided the committee with a series of evidence of alleged wrongdoings by Mr Trump.

Among the documents were a copy of the $35,000 cheque Mr Trump sent from his personal bank account that Mr Cohen said was to reimburse him for hush money payments to cover up an affair with an adult film actress, and copies of letters Mr Cohen says he sent at Mr Trump’s behest to the president’s high school, colleges and the College Board threatening them not to release his grades or SAT scores.

He claimed that Mr Trump had skirted the Vietnam draft by falsely claiming he received deferment due to a bone spur, while telling Mr Cohen in private that he “did not got to Vietnam” because he “was not stupid”.

“I find it ironic, President Trump, that you are in Vietnam right now,” Mr Cohen quipped.

Some Republicans tried to portray Mr Cohen as an unreliable witness who is seeking revenge against the president for not coming to his defence. Mr Cohen, who was known as “Fido” because of his fierce loyalty, once said he would “take a bullet” to protect his former boss.

At the hearing’s outset, Jim Jordan, the committee’s ranking Republican member, used his opening remarks to mock the committee’s chairman, Elijah Cummings, for choosing to invite Mr Cohen to appear before the committee despite the fact that Mr Cohen is set to begin a three-year prison sentence in May for charges, including providing false testimony to Congress.

“This is the first time a convicted perjurer has been brought back to be a star witness in a hearing,” Mr Jordan said.

Mr Cummings, meanwhile, accused Republicans of attempting to block the American people from hearing Mr Cohen’s testimony.

“They have a right to hear Mr Cohen,” he said. He pledged Mr Cohen’s hearing was the beginning of the committee’s fresh investigation into potential wrongdoings by Mr Trump and his associates, particularly with regards to Russia and the 2016 election.

“Mr Cohen’s testimony is the beginning of the process — not the end,” he said.

Alexandria Ocasio-Cortez arrived at the House oversight committee to hear testimony from Michael Cohen © AFP

The testimony comes as Mr Trump meets North Korean leader Kim Jong Un in Hanoi for a second summit to discuss denuclearisation on the Korean peninsula. The president responded on Twitter, insisting Mr Cohen was “lying in order to reduce his prison time”.

Mr Cohen, who pleaded guilty to lying to Congress when he told lawmakers Mr Trump was no longer seeking to build a Trump Tower in Moscow during the 2016 race, told the committee that he wanted to correct the record.

“The last time I appeared before Congress, I came to protect Mr Trump. Today, I’m here to tell the truth about Mr Trump,” he said, adding that negotiations about the Moscow project continued “for months during the [presidential] campaign”.

“Mr Trump did not directly tell me to lie to Congress. That’s not how he operates,” Mr Cohen said. “In conversations we had during the campaign, at the same time I was actively negotiating in Russia for him, he would look me in the eye and tell me there’s no business in Russia and then go out and lie to the American people by saying the same thing. In his way, he was telling me to lie.”

Mr Cohen added Mr Trump asked him about the status of the Moscow Tower project six times during the first half of 2016, when the Republican presidential primary was in full swing.“Mr Trump knew of and directed the Trump Moscow negotiations throughout the campaign and lied about it. He lied about it because he never expected to win the election. He also lied about it because he stood to make hundreds of millions of dollars on the Moscow real estate project.”

Mr Cohen appeared on Capitol Hill shortly after Mr Trump had dinner with Mr Kim on Wednesday in Hanoi.

Mr Trump responded shortly before the dinner, attempting to undermine Mr Cohen’s credibility as a witness. “Michael Cohen was one of many lawyers who represented me (unfortunately). He had other clients also. He was just disbarred by the State Supreme Court for lying & fraud,” Mr Trump wrote. “He did bad things unrelated to Trump. He is lying in order to reduce his prison time.”

Earlier, Sarah Sanders, the White House press secretary, responded to suggestions Mr Cohen would accuse Mr Trump of criminal conduct by saying: “It’s laughable that anyone would take a convicted liar like Cohen at his word, and pathetic to see him given yet another opportunity to spread his lies.”

Mr Cohen will begin a three-year prison sentence in early May after pleading guilty to eight criminal counts. One of those charges related to his involvement in a scheme to pay two women, including adult film actress Stormy Daniels, not to make public claims that Mr Trump had affairs with them after his marriage to his current wife Melania.

Federal prosecutors have alleged Mr Cohen made the payments “at the direction” of Mr Trump.

The congressional testimony comes amid reports that Robert Mueller, the special prosecutor investigating the role that Russia played in the 2016 election, is preparing to wrap up his investigation.

Mr Cohen said he had spoken to the special counsel’s office on seven occasions.

He described Mr Trump taking a call over speakerphone from Roger Stone, the political operative and longtime friend of Mr Trump, shortly before the Democratic convention in July 2016. Mr Mueller has charged Mr Stone with seven counts related to congressional testimony he gave about his efforts to contact WikiLeaks during the 2016 race.

The probe has also looked at possible contacts between the Trump presidential campaign and the Kremlin, and also whether Mr Trump attempted to obstruct justice when he fired James Comey as director of the FBI.

Asked during the hearing whether Mr Trump could have colluded with Moscow, Mr Cohen stated that Mr Trump was a person who “will do what is necessary” to win, and said he did not rule out the possibility that Mr Trump or members of his campaign had co-ordinated Russia.

“I wouldn’t use the word colluding. Was there something odd about the back-and-forth praise with President Putin? Yes . . . There are just so many dots that all seem to lead to the same direction.

“Mr Stone told Mr Trump that he had just gotten off the phone with [WikiLeaks founder] Julian Assange and that Mr Assange told Mr Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign,” Mr Cohen said. “Mr Trump responded by stating to the effect of ‘wouldn’t that be great’.”

At times, the hearing turned contentious with Republican and Democratic members shouting over one another and interrupting, as some Republicans on the committee attempted to discredit their Democratic colleagues as well as the star witness.

In his statement, Mr Cohen accused Mr Trump of being a “cheat” and said he was providing the committee with Mr Trump’s financial statements from 2011-2013. He said Mr Trump gave the documents to Deutsche Bank as part of an effort to seek a loan to buy the Buffalo Bills, an American football team.

“It was my experience that Mr Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes,” he said.

Mr Cohen also alleged that Mr Trump knew in advance about the release of hacked emails from the Democratic National Committee that were seen as damaging to Hillary Clinton and her presidential campaign.

Mr Cohen also accused his former boss of being a “racist” who once asserted that black people would never vote for him “because they were too stupid”. He said the country had seen Mr Trump court white supremacists but that he was “even worse” in private.

“He once asked me if I could name a country run by a black person that wasn’t a ‘shithole’,” Mr Cohen said. “This was when Barack Obama was president of the United States.”

In the 20-page opening statement, Mr Cohen claimed Mr Trump ran for president not because he believed he could win — which Mr Cohen said the then New York mogul did not — but to enhance his brand.

“Mr Trump would often say, this campaign was going to be the ‘greatest infomercial in political history’.”

How to Avoid a War in Venezuela

When the United States chose to recognize Juan Guaidó as Venezuela’s president – along with a group of Latin American countries – and ban oil trade with the Maduro government, it was betting that the pressure would be sufficient to topple the regime quickly. So, now what?

Jeffrey D. Sachs , Francisco Rodríguez

 venezuelan security forces

NEW YORK – One month after Juan Guaidó, the speaker of Venezuela’s National Assembly, said he was assuming the powers of the Venezuelan presidency, currently held by Nicolás Maduro, the country’s political crisis remains far from over. Tensions have escalated to the point that a full-blown civil war – a seemingly implausible scenario just weeks ago – is now becoming increasingly possible. At least four people died and hundreds were injured in violent clashes at Venezuela’s borders last weekend as government forces opened fire on an attempt by the opposition to bring aid convoys into the country.

The Maduro regime is authoritarian, militarized, and ready to kill civilians to maintain power. The society is bitterly divided between the revolutionaries inspired by Hugo Chávez, Maduro’s predecessor, and a large and aggrieved opposition. Each side despises the other. The question is therefore a complex and practical one: what to do to help guide Venezuela away from civil war and toward a peaceful and democratic future?

On this great challenge, US President Donald Trump’s administration has gravely miscalculated. When the United States chose to recognize Guaidó as Venezuela’s president – along with a group of Latin American countries – and ban oil trade with the Maduro government, it was betting that the pressure would be sufficient to topple the regime. As a former senior US official told the Wall Street Journal, “they thought it was a 24-hour operation.”

This type of miscalculation predates the Trump administration. In mid-2011, President Barack Obama and Secretary of State Hillary Clinton announced that Syrian President Bashar al-Assad must “step aside.” Similarly, in 2003, George W. Bush declared “Mission Accomplished” shortly after the US invasion of Iraq. All of these cases reflect the arrogance of a superpower that repeatedly overlooks local realities.

Maduro’s ability to withstand intense US pressure is not a surprise to close observers of Venezuela’s military. The centralized structures of command and control of military intelligence, as well as the personal interests of senior officers who control major chunks of the economy, make it highly unlikely that the army will turn on Maduro. US provocation might create a schism between military commanders and more junior officers, but that would only make the plunge into a bloody civil war more likely. To date, there have been no defections among high-ranking officers with direct control of troops.

Faced with the prospect that regime change will not come quickly, the Trump administration and some parts of Venezuela’s opposition have begun seriously considering military action. Echoing language recently used in a speech by Trump, Guaidó wrote on Saturday that he would formally request the international community to “keep all options open.” Similarly, Republican Senator Marco Rubio, who has acted as a self-appointed guru for Trump on Venezuela, warned on Twitter that Maduro’s actions had opened the door to “multilateral actions not on the table just 24 hours ago.”

Actually, these ideas appear to have been on Trump’s mind for some time. As former acting FBI director Andrew G. McCabe revealed recently in his book The Threat, Trump said in a 2017 meeting that he thought the US should be going to war with Venezuela. McCabe quotes Trump as saying: “They have all that oil and they’re right on our back door.” The comments echo Trump’s 2011 statement that Obama let himself get “ripped off” by not demanding half of Libya’s oil in exchange for US help in overthrowing dictator Muammar el-Qaddafi.

US military interventions are not driven only by economic and business interests. Being tough on Maduro is also highly popular with many Cuban-American and Venezuelan-American voters in Rubio’s home state of Florida, which will be a key battleground in the 2020 presidential election.

Advocates of US military intervention regularly cite the cases of Panama and Grenada as precedents for rapid US-led regime change. Yet, in contrast to those two countries, Venezuela has a well-armed military of more than 100,000 soldiers. Of course, the US could defeat the Venezuelan army, but one need not be blind to the atrocities of authoritarian regimes to understand that, as has happened repeatedly in US wars in the Middle East, attempts to overthrow such regimes often end in catastrophe.

Even without military intervention, US sanctions policies, if sustained, are bound to create a famine. By cutting off Venezuela’s oil trade with the US and threatening to sanction non-US firms that do business with Venezuela’s state-owned oil company, the Trump administration has created one of the most punitive economic sanctions regimes in recent history. But rather than provoking a coup, economically isolating a country that essentially feeds itself with its oil export revenues could lead to mass hunger instead.

Venezuela’s neighbors and world leaders must put aside the US military option. Venezuela needs mediation leading to new elections, not war. It also needs an urgent, interim period of political truce in 2019 to end the devastating hyperinflation, restore flows of foodstuffs and medicines, and reconstitute the electoral rolls and institutions for a peaceful and credible election in 2020.

A pragmatic approach might involve the current government continuing to control the army, while technocrats backed by the opposition take control over finances, the central bank, planning, humanitarian relief, health services, and foreign affairs. Both sides would agree to a timeline for a national election in 2020, and to an internationally supervised demilitarization of daily life, with a restoration of civil and political rights and physical security in the country.

The United Nations Security Council should oversee such a solution. Chapter VII of the UN Charter gives the Security Council the mandate to “determine the existence of any threat to the peace, breach of the peace, or act of aggression” and to take actions to “restore international peace and security.” The Security Council is also the right venue pragmatically, as the US, China, and Russia all have financial and political interests in finding a peaceful solution in Venezuela. All three countries could readily agree to a path to elections in 2020. Encouragingly, Pope Francis and the governments of Mexico and Uruguay have also offered to help facilitate mediation to find a peaceful way forward.

Trump and other US leaders say that the time for negotiation has passed. They believe in a short, quick war if necessary. World leaders – and those in Latin American countries first and foremost – should open their eyes to the risks of a devastating war, one that could last for years and spread widely.

Jeffrey D. Sachs, Professor of Sustainable Development andProfessor of Health Policy and Management at Columbia University,is Director of Columbia’s Center for Sustainable Development andof the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.
Francisco Rodríguez, Chief Economist at Torino Economics, served as adviser to former Venezuelan presidential candidate Henri Falcón.

Niall Ferguson joins blockchain project Ampleforth

By: Jemima Kelly

Ampleforth: not just an ideal school to send your kids if you're Catholic and can afford it, but also, "an ideal money". More specifically (and perplexingly):

A decentralised store of value protocol that is volatile in price and supply at launch, but is strictly better than Bitcoin at steady state because it converges on a stable unit of account.

And Niall Ferguson, the rightwing British historian and who once called himself a "fully paid-up member of the neo-imperialist gang", has joined its advisory board. A bit late to the crypto party? Maybe. But this isn't the first time Ferguson has dipped his toes into the world of crypto. He suggested last year in a Bank of England seminar that cryptocurrencies were "the financial system of the future". He also said he felt it's "only a matter of time before the next financial crisis".

A potential answer, apparently, is stablecoins. These are digital currencies that run on blockchains, but that don't float freely. Instead, they are pegged to fiat currencies like the dollar, or currency baskets like the IMF's Special Drawing Rights, either via the (supposed) backing of those currencies, or via the magic of an algorithmic central bank that expands and contracts the money supply to keep the price stable. Ampleforth is trying the latter.

Here's Ferguson, quoted in the press release:

The idea of reinventing money excites me. Bitcoin, currently, is incapable of being ‘money’ that can be a means of payment. But at the same time, I am doubtful of fiat-pegged stablecoins. As someone who is deeply interested in financial innovation, I’m attracted by Ampleforth's mission to reinvent money in a way that protects individual freedom and to create a payments system that treats everyone equally.

But how does this free and equal system work, we hear you ask? Well, it's quite simple really:

Ampleforth is a digital asset protocol that moves volatility from unit price to unit count and achieves price stability by algorithmically expanding and contracting supply among holders based on demand... Ampleforth employs an algorithmic supply policy to democratise the issuance of money and create assets with independent value.

Capiche? Good. Essentially, the idea is that Ampleforth -- named after the character in George Orwell's 1984 who is responsible for translating poetry into Newspeak -- would be pegged to the dollar by means of a "smart contract" that would pump "Amples" into the system when its price topped a dollar, and withdraw them when the exchange rate fell below $1 per Ample.

It’s easy to see why Ferguson might have been attracted to such a project. In his 2008 book The Ascent of Money, he writes:

If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.

If any of the Ampleforth stuff is sounding familiar to you, it might be because we wrote about a similar algorithmic stablecoin with academic backing last year: Basis, which was had John Taylor on its board. (Basis is now bygone, having returned what was left of the $133m it had raised from investors.)

Ampleforth is a little different from Basis, but not very. It is cleverly not pushing the idea of "bond tokens" or "share tokens" which, as Basis found, might make the SEC nervous. Also, it acknowledges that it will be "volatile in price and supply at launch" (though it doesn't acknowledge that volatility might extend beyond the launch).

We asked Nicholas Weaver, computer science lecturer at Berkeley, for his thoughts, who told us:

The Basis concept, recapitulated here, is fundamentally flawed. This is a dumb central bank currency peg, which only lasts until someone figures out how to make money destroying the peg.

We're not sure how much time this advisory role requires, nor the nature or scale of the compensation (we have asked). But Ferguson probably has some time on his hands since resigning from a senior leadership role at a Stanford University free speech programme, Cardinal Conversations, last year. We wonder whether he has commissioned any "opposition research" on the host of stablecoin rivals that Ampleforth must try to compete with.