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17 March 2020   1 comment

Research published in the journal Nature Energy (the article is paywalled–for those who wish to buy it, the link it here) which provides data which confirms what is intuitively obvious: the rich are the primary contributors to the process of climate change. The BBC reports:

“The rich are primarily to blame for the global climate crisis, a study by the University of Leeds of 86 countries claims.

“The wealthiest tenth of people consume about 20 times more energy overall than the bottom ten, wherever they live.

“The gulf is greatest in transport, where the top tenth gobble 187 times more fuel than the poorest tenth, the research says.

“That’s because people on the lowest incomes can rarely afford to drive.

“The researchers found that the richer people became, the more energy they typically use. And it was replicated across all countries.

“And they warn that, unless there’s a significant policy change, household energy consumption could double from 2011 levels by 2050. That’s even if energy efficiency improves.”

The rich travel more often and disproportionately take longer airline flights. They also have larger homes which require more energy to heat. The breakdown by countries is illustrative:

“It shows that a fifth of UK citizens are in the top 5% of global energy consumers, along with 40% of German citizens, and Luxembourg’s entire population.

“Only 2% of Chinese people are in the top global 5% of users, and just 0.02% of people in India.

“Even the poorest fifth of Britons consumes over five times as much energy per person as the bottom billion in India.”

The information provides a very compelling case for reducing income and wealth inequality, as well as targeting the most energy-intensive activities as the ones that should be discouraged, primarily through higher taxes on things such as air transportation. The Center for Biological Diversity quantifies the role of airplane emissions: “Airplanes could generate 43 gigatonnes of planet-warming pollution through 2050, consuming almost 5 percent of the world’s remaining carbon budget, according to a new Center report…..Aircraft emit staggering amounts of CO2, the most prevalent manmade greenhouse gas. In fact they currently account for some 11 percent of CO2 emissions from U.S. transportation sources and 3 percent of the United States’ total CO2 emissions. All told, the United States is responsible for nearly half of worldwide CO2 emissions from aircraft.” Needless to say, the rich would likely try to block their activities, but the planet can ill-afford their selfishness.

The European Union (EU) has announced that it will close all Schengen borders for 30 days. The Schengen agreement, adopted in 1985, allowed the free movement of people and goods throughout the EU and is applied by 26 members (although Great Britain will end its participation when the final Brexit Agreement is signed). The move is in response to efforts to contain the spread of COVID-19 and it will undoubtedly create difficulties for the Union (imagine the chaos if all fifty US states placed border controls on each other). Europe is emerging as the center of the COVID-19 crisis:

“Italy, the worst-hit country outside of China, has recorded a total of 23,073 positive cases and 2,158 deaths, in figures released by its health ministry on Monday. Some 2,749 have recovered.

“Spain, the next most affected, posted an extra 1,438 cases today, bringing its total to 9,191, while Germany has 6,012 – up 1,174 from yesterday – and suffered 13 deaths.

The move is a symbolic blow to the idea of European unity. We should all hope that the action slows down the spread of the virus, but it may already be too late to make much of a difference.

Posted March 17, 2020 by vferraro1971 in World Politics

16 March 2020   Leave a comment

Once again, I need a break from the news. Something to ease the sense of Kierkegaardian dread.

Posted March 16, 2020 by vferraro1971 in World Politics

15 March 2020   Leave a comment

The German newspaper, Die Welt, is reporting that the Trump Administration has tried to buy the German pharmaceutical company, CureVac, for exclusive rights to a promising COVID-19 vaccine. The Guardian reports:

“The US president had offered the Tübingen-based biopharmaceutical company CureVac “large sums of money” to gain exclusive access to their work, wrote Die Welt.

“According to an anonymous source quoted in the newspaper, Trump was doing everything to secure a vaccine against the coronavirus for the US, ‘but for the US only’.

“The German government was reportedly offering its own financial incentives for the vaccine to stay in the country.

“The German health minister Jens Spahn said that a takeover of the CureVac company by the Trump administration was ‘off the table’. CureVac would only develop vaccine ‘for the whole world’, Spahn said, ‘not for individual countries’.

Daniel Menichella, an American citizen, was the CEO of CureVac and he attended the recent meeting at the White House of biopharmaceutical companies discussing strategies for addressing the COVID-19 crisis. But he abruptly left the position, and the founder of the company, Ingmar Hoerr took his place. CureVac has been working on a potential vaccine against COVID-19 and some reports about its efforts are promising.

It is hard to assess the report since there is only one source so far (but I suspect that there will be more information forthcoming). The report, however, is deeply troubling for two reasons. First, the idea that the US would exploit a vaccine against the interests of non-Americans is reprehensible. Second, the attempt by the US government to buy a private company smacks of the dreaded “socialism” that Mr. Trump has railed against recently. We will continue to monitor the situation.

After a third inconclusive election, there has been an interesting development in Israeli politics. The leader of the Blue and White Party, Benny Gantz, announced that he had secured a one-vote majority in the Knesset. That majority, however, would include the members of the Joint List, a coalition of four Israeli Arab parties which now commands the third largest number of seats in the Knesset. No Israeli governing majority has ever included Arab Israeli parties, largely because many Israelis question the loyalty of Israeli Arabs–who comprise 20% of the population–on the issue of Israel as a Jewish state. Gantz also received support from Avigdor Liberman, the leader of the fiercely nationalist, but secular, Yisrael Beiteinu Party. It remains to be seen if Gantz can form a governing majority, but the possibility of Arab Israelis in the government is an astonishing development. In the meantime, current Prime Minister Netanyahu has gotten a two month reprieve from his upcoming corruption trial due to the exigencies of the coronavirus.

Posted March 15, 2020 by vferraro1971 in World Politics

14 March 2020   Leave a comment

Iranian-backed militias in Iraq have launched a series of attacks on US military bases in Iraq. The attacks are part of a series of attacks and counterattacks between the US and Iran after the US assassination of Iranian General Qassem Soleimani. On Thursday, the US attacked a military base which it considered a base of operations for Kataib Hezbollah, an Iranian militia group in Iraq. In the attack, the US killed “three Iraqi army soldiers, two policemen and a civilian worker”, placing the Iraqi government in a very difficult position. The Iranian objective in these attacks is clear: it wishes to put the Iraqi government in a position where it has no choice but to ask the US to leave Iraq. Up to this point, the US has managed to deflect such demands by threatening to withhold vital military assistance and cash payments. But these attacks on Iraqi sovereignty cannot be ignored much longer: Iran is very close and the US is very far away. The Irish Times describes the tension:

“Around 5,000 US troops remain in Iraq, most in an advisory capacity, as part of a wider international coalition formed to help Iraq drive back and defeat Islamic State militants.

“But the Iraqi military said the new US air attack went against ‘any partnership’ under the coalition. ‘It will have consequences that subject everyone to the most serious dangers.’

“Iran’s foreign ministry said on Friday that the ‘presence and behavior’ of US and allied forces in Iraq was to blame for attacks against them.

“Iranian-backed paramilitary groups have regularly rocketed and shelled bases in Iraq that host US forces and the area around the US embassy in Baghdad.

“The United States, which believes Iran wants to drive it from the region, has conducted several strikes inside Iraq, killing top Iranian general Qassem Suleimani and Kataib Hizbullah founder Abu Mahdi al-Muhandis in January.

“Many Iraqis say it is they who stand to suffer most from US-Iranian tensions and some, including caretaker prime minister Adel Abdul Mahdi, have called for US troops to withdraw.”

Iraq does not wish to be the battlefield in a war between the US and Iran. There is no likelihood that Iran will attack the US, nor does it need to to fulfill its strategic objectives. The question is whether the US will decide that the only effective course of action to deter future Iranian attacks is an attack on Iran itself. There seems to be no viable alternative given US objectives.

Posted March 14, 2020 by vferraro1971 in World Politics

13 March 2020   Leave a comment

I rely heavily on news feeds that are sent to my email for collecting news about events around the world. Unfortunately, 95% of all the feeds that I have received for the last few days have been on the COVID-19 pandemic. It is an issue of unquestionable importance, but one about which I do not feel comfortable. I have no expertise on viruses and as far as I can tell there is actually little hard evidence about the pandemic that I deem reliable. The problem is that some states, such as China, do not have a good track record on providing information. Other states, such as the US, have not been testing so there is no way to assess the spread in the US. But we have hard evidence from Italy that the virus is truly deadly and that it spreads very quickly.

What became clear today is that perceptions about COVID-19 are driving many decisions about how to respond to the pandemic. Professional and collegiate sports have cancelled their activities. Colleges and elementary and secondary schools are closing. And global stock markets are declining precipitously. And all these decisions were made the day after US President Trump made a speech designed to reassure citizens. In my lifetime, I have never seen a presidential speech fail so abjectly. Today, the President declared a national emergency because of COVID-19 and the US stock market responded with a 2,000 point increase in the Dow Jones Index. The volatility is a measure of how uncertainty affects decision-making.

It is impossible for me to predict how this particular pandemic will play out. We have historical records of previous pandemics, but they all occurred at times when medical techniques were significantly inferior to those available today (we should keep in mind that two centuries from now, people will remark at how primitive medicine was in 2020). The most catastrophic pandemic was the Black Death which peaked in Europe between 1347-1351. The Economist notes:

“The Black Death carried off an astounding one-third to two-thirds of the population of Europe, leaving lasting scars. But in the wake of the plague there was far more arable acreage than workers to farm it. The sudden scarcity of workers raised labourers’ bargaining power relative to landlords and contributed to the breakdown of the feudal economy.

“It seems also to have ushered parts of north-west Europe onto a more promising growth path. Real incomes of European workers rose sharply following the pandemic, which struck the continent from 1347 to 1351. In pre-industrial times, higher incomes usually enabled faster population growth, which eventually squeezed incomes back to subsistence levels (as observed by Thomas Malthus). But in parts of Europe, Malthusian rules did not reassert themselves after the pandemic receded. Nico Voigtländer, of the University of California, Los Angeles, and Hans-Joachim Voth, now of the University of Zurich, argue that the high incomes induced by plague led to more spending on manufactured goods produced in cities, and thus to higher rates of urbanisation. The plague effectively shoved parts of Europe from a low-wage, less urbanised equilibrium on a path more congenial to the development of a commercial, and then an industrial, economy.”

The Economist article continues on a less optimistic note:

“More often, though, a pandemic’s economic consequences are unambiguously negative. Trade links which spread a pathogen can themselves be undone by its effects. During the Roman Empire, a high degree of specialisation and trade lifted incomes to levels that would not be reached again for more than a millennium. Alas, the same links facilitated the spread of disease. The Roman economy was dealt a blow in the late second century ad, when an outbreak of what is thought to have been smallpox ravaged the empire. A century later, the Plague of Cyprian, which may have been a haemorrhagic fever, emptied many Roman cities and coincided with a sharp and permanent decline in economic activity, as measured by numbers of shipwrecks (a proxy for trade volumes) and levels of lead pollution (generated by mining activity). Reduced trade fed a cycle of falling incomes and weakened state capacity from which the western empire never recovered.”

How COVID-19 will ultimately affect today’s societies really depends on how those societies respond to the challenges. It is likely that the pandemic will significantly retard the process of globalization as companies realize how fragile the supply chains they have assiduously constructed actually are. But that process of deceleration was already coming into play because of the economic inequities created by the reliance on low wage workers. We will also have to see how the pandemic affects international travel and the movement of people across national borders.

Posted March 13, 2020 by vferraro1971 in World Politics

10 March 2020   Leave a comment

Saudi Arabian Crown Prince Mohammed bin Salman (often referred to as MbS) is consolidating his control over the Saudi government by arresting other royals he suspects of disloyalty. The Crown Prince is a close friend of Jared Kushner, US President Trump’s son-in-law, and when he became Crown Prince he was hailed as a reforming modernizer. But The Guardian has published an editorial by Madawi al-Rasheed casting doubts on that characterization:

“Though the prince built his reputation as a young moderniser, garnering favour among the western media as a monarch who could free Saudi Arabia from the shackles of religious conservatism, economic stagnation and a state-controlled economy, his idea of progress was always two-faced. Prince Mohammed allowed women to drive while presiding over the arrests of women’s rights activists and the criminalisation of feminism. He promised religious reforms and social liberalisation while detaining hundreds of religious scholars, activists and intellectuals.

“The young prince silenced debates inside the kingdom and pursued his critics abroad. The brutal murder of journalist Jamal Khashoggi was the final stroke in shattering his international reputation, while his decision to pursue a disastrous war in Yemen has embarrassed his western allies, which continue to sell arms to Saudi Arabia.”

bin Salman does not have a lot to brag about. His boycott of Qatar its close relationship to Iran has not led to any change of policy by Qatar. The war in Yemen, which he initiated, has been an unmitigated disaster, both politically and morally. The murder of Jamal Khashoggi has left an indelible stain on his regime. And his most recent move, initiating an oil price war with Russia and the US shale oil producers, will place incredible strains on the Saudi government budget. The purge in many respects reflects the weakness of his regime.

Posted March 10, 2020 by vferraro1971 in World Politics

8 March 2020   Leave a comment

For the last three years, Russia has been working with the Organization of Petroleum Exporting Countries (OPEC) on production schedules that served to stabilize oil prices. But the advent of the COVID-19 virus has led to a dramatic decrease in petroleum consumption globally. OPEC, led by Saudi Arabia, proposed some dramatic production cuts in order to prevent a further decline in prices. But Russia refused to go along with the production cuts, and Saudi Arabia has retaliated with an unprecedented increase in oil production from 10 million to 12 million barrels a day. The act was the opening salvo in what we call a price war, where Saudi Arabia intends to undercut other producers and draw their customers away. It is a risky strategy because Saudi Arabia is betting that it can weather the loss of revenues better than other producers. At some point, producing oil for export will become unprofitable for some producers. The Middle East Eye reports:

“The break in a three-year alliance between the Saudi-led oil cartel and Russia to support prices may be temporary. The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise. But if the collapse is lasting, oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years, the New York Times reported on Sunday.

“’If a true price war ensues, there will be plenty of pain in the oil markets,’ Badr Jafar, president of Crescent Petroleum, a United Arab Emirates oil company, told the Times. ‘Many will be bracing for the economic and geopolitical shocks of a low-price environment.’

“The production increase and deep discounts mark a dramatic escalation by the Saudis after Russia rejected an ultimatum on Friday in Vienna at the Opec+ meeting to join in a collective production cut. After the talks collapsed, Russia indicated countries were free to pump-at-will from the end of March.

“With jet fuel, gasoline and diesel consumption rapidly decreasing amid the economic impact of the coronavirus outbreak, the energy market now faces a simultaneous supply-and-demand shock.

“After the failure in Vienna, Riyadh responded within hours by cutting its so-called official selling prices, offering record discounts for some of the crude it sells worldwide, according to a copy of the prices seen by Bloomberg News. Aramco has set the prices, but the official communication to clients is likely to come on Monday, a person familiar with the matter said.”

Brian Sullivan of CNBC assesses the economic impact of the price war on American producers:

“Many industry people I spoke with over the weekend expect oil to open trading in the $30 dollar range, if not worse by week’s end.  That’s very bad news for Texas, North Dakota and anyone still left invested in oil and gas stocks. Shares of Chevron are down 20% in 2020, making it the best performing energy stock in America.  Most are down 30%, 40% or even 50% since January 1st.  The S&P Oil & Gas ETF (XOP) is down 33% this month.

“The industry is facing a three-sided attack: falling prices, a move of institutional investors to divest from fossil fuel companies, and crushing debt loads.

“Debt is the problem. The U.S. oil and gas industry has about $86 billion of rated debt due in the next four years, according to Moody’s.  Nearly all of that debt is either junk rated, or rated just above junk. Fifty-seven percent of that is due in just the next two years.  As oil prices fall and credit markets tighten, many companies won’t be able to refinance their debts or extend maturities.”

Both Saudi Arabia and Russia fear the productivity of the US fracking potential which has propelled the US into the spot of being the top oil producer in the world. Their objective is to throttle the fracking industry to eliminate the competition. But they also wish to slow down the transition to renewable energies and an oil price of $20 a barrel would make many of those alternatives unprofitable. Consumers all over the world will benefit from the lower prices and that result will mitigate some of the costs of containing COVID-19. The actual winners and losers will not be fully known until the process plays out completely.

Posted March 8, 2020 by vferraro1971 in World Politics

7 March 2020   Leave a comment

Lebanon has announced that it will attempt to restructure a $1.2 billion bond due on 9 March, putting the country in default for the first time. Lebanon has been on the brink of default for some time and the situation aggravates the serious political crisis the country has been going through for some months. The political crisis stems from the archaic political system the country has used to balance its competing political sects–the constitution allocates important political positions to different religious communities. The Guardian reports:

“Lebanon’s sovereign debt rating slid into junk territory long ago, but investor confidence has fallen further since the mass protests erupted. Credit rating agencies have warned of further downgrades in the event of a default, but economists have stressed the need to protect Lebanon’s foreign currency reserves.

“Jad Chaaban, an economics professor at the American University of Beirut, blamed the political class for Lebanon’s predicament, accusing it of decades of corruption. The crisis ‘is the creation of a failed and criminal political class that has lied and robbed for more than 30 years,’ he said on Facebook.”

Lebanon’s debt burden is about 155% of gross domestic product, one of the highest debt burdens in the world. But Hezbollah, which is one of the most powerful domestic actors in Lebanon, has opposed taking the necessary steps to ease the burden because those reforms would fall most heavily on the poor. The living conditions in Lebanon have deteriorated to the point where water and electricity are frequently unavailable and where rubbish piles up in the streets. The default will likely lead to belt-tightening which will only lead to greater political unrest.

NBC is reporting that US officials have serious doubts about whether the Taliban will uphold its obligations under the recent agreement it signed with the US. According to the report:

“‘They have no intention of abiding by their agreement,’ said one official briefed on the intelligence, which two others described as explicit evidence shedding light on the Taliban’s intentions.

“Trump himself acknowledged that reality in extraordinary comments Friday, saying the Taliban could ‘possibly’ overrun the Afghan government after U.S. troops withdraw.

“‘Countries have to take care of themselves,’ Trump told reporters at the White House. ‘You can only hold someone’s hand for so long.’ Asked if the Taliban could eventually seize power, Trump said it’s ‘not supposed to happen that way, but it possibly will.'”

The report confirms what many analysts have suspected: that the US is really not interested in the way the war in Afghanistan ends as long as the US is able to withdraw its troops. The Taliban have carried out 70 attacks on Afghan government forces since the peace agreement was signed on 29 February. Many in Afghanistan view the agreement as a betrayal, as reported by the Washington Post:

“Many Afghans who see themselves most closely allied with American values — and most dependent on U.S. support — fear they have the most to lose from the peace deal. Supporters of women’s rights, civil society and some sectors of the country’s political and security establishment described reading the deal with a mix of disbelief and anger.

“’I want peace. All Afghans want peace. But I don’t think this deal will bring us peace,’ the Afghan official said, describing it as a step in the wrong direction that will further destabilize the country.”

The US withdrawal from Afghanistan will end the war for the US, but it will most likely lead to greater turmoil in the country. Other powers, such as Iran and Pakistan, will view the power vacuum as an opportunity to advance their own interests. And the peace agreement does little to protect human rights, particularly the rights of women. The withdrawal is a classic example of the priority of interests over values in a realpolitik world.

Posted March 7, 2020 by vferraro1971 in World Politics

6 March 2020   Leave a comment

The International Criminal Court (ICC) announced yesterday that it would begin an investigation into alleged war crimes committed in the Afghanistan war by the Afghanistan government, the US, and the Taliban. The ICC was created by the Rome Statute in 1998 which went into effect in 2002. It was charged with the responsibility to address crimes of concern to the international community: genocide, war crimes, crimes against humanity and the crime of aggression. Since its creation:

  • There have thus far been 27 cases before the Court, with some cases having more than one suspect.  
  • ICC judges have issued 34 arrest warrants. Thanks to cooperation from States, 16 people have been detained in the ICC detention centre and have appeared before the Court. 15 people remain at large. Charges have been dropped against 3 people due to their deaths.
  • ICC judges have also issued 9 summonses to appear.
  • The judges have issued 8 convictions and 4 acquittals. ​

The US never signed the Rome Statute. The ICC Charter defers to national systems of justice to first investigate and prosecute war crime. Only if national authorities do not conduct such investigations and prosecutions will the ICC intervene. The US claims that its national systems of justice are more than adequate and that it therefore does not need the oversight of an international body. But the US rejected the ICC’s authority to investigate possible war crimes in Afghanistan and the rejection sought also to undermine the authority of the ICC:

“Today, the International Criminal Court (ICC) Appeals Chamber authorized an investigation into the alleged activities of the Taliban and U.S. and Afghan personnel related to Afghanistan.  This is a truly breathtaking action by an unaccountable political institution, masquerading as a legal body.

“It is all the more reckless for this ruling to come just days after the United States signed a historic peace deal on Afghanistan – the best chance for peace in a generation.  Indeed, the Afghan government, itself, pleaded with the ICC to not take this course.  But the ICC politicians had other goals.

“The United States is not a party to the ICC, and we will take all necessary measures to protect our citizens from this renegade, so-called court.

“This is yet another reminder of what happens when multilateral bodies lack oversight and responsible leadership, and become instead a vehicle for political vendettas.  The ICC has today stumbled into a sorry affirmation of every denunciation made by its harshest critics over the past three decades.

In the past, the US has barred representatives of the ICC from entering the US by denying them visas. Human Rights groups such as Amnesty International have condemned the US decision and many celebrated the ICC’s decision as a step forward in the defense of human rights.

Turkey and Russia have agreed upon cease-fire lines in the Syrian province of Idlib which consolidates Syrian gains at the expense of Turkish interests. But it seems clear that Turkish President Erdogan had little choice but to accept the losses:

“Sinan Ulgen, visiting scholar at Carnegie Europe and a former Turkish diplomat, said Erdogan had to make concessions to Putin because the alternative – a return to military conflict – would be ‘a lose-lose scenario for Turkey’.

“Russia’s air control over Idlib, although challenged by Ankara when it carried out waves of drone assaults on Syrian forces and shot down three Syrian warplanes, would have left Turkish troops exposed to lethal firepower.

“At least 34 Turkish soldiers were killed in an air strike in Idlib last week, the deadliest attack suffered by the Turkish military in nearly three decades.

“’Turkey sat at the negotiating table with this military vulnerability,’ Ulgen told Reuters. ‘Achieving a ceasefire was important from that aspect, but this ceasefire had a cost.’”

It is likely that President Erdogan now regrets his decision to demand the removal of US troops from Syria. There is no likelihood that US troops would have engaged Russian troops, but Syrian President Assad could not have afforded to take such a risk. Erdogan was playing checkers but President Putin, as always, was playing chess.

Posted March 6, 2020 by vferraro1971 in World Politics

5 March 2020   Leave a comment

Freedom House is a non-partisan organization that publishes an annual report on the state of personal freedoms in the world. It is an organization that is committed to a liberal ideology that is primarily concerned with the institutions protecting representative democracy, market capitalism, and human rights. It has just published its report for 2020 and, not surprisingly, it found that individual freedoms have been increasingly constrained globally:

“Freedom House found that 2019 was the 14th consecutive year of decline in global freedom. The gap between setbacks and gains widened compared with 2018, as individuals in 64 countries experienced deterioration in their political rights and civil liberties while those in just 37 experienced improvements. The negative pattern affected all regime types, but the impact was most visible near the top and the bottom of the scale. More than half of the countries that were rated Free or Not Free in 2009 have suffered a net decline in the past decade.

“Ethnic, religious, and other minority groups have borne the brunt of government abuses in both democracies and authoritarian states. The Indian government has taken its Hindu nationalist agenda to a new level with a succession of policies that abrogate the rights of different segments of its Muslim population, threatening the democratic future of a country long seen as a potential bulwark of freedom in Asia and the world. Attacks on the rights of immigrants continue in other democratic states, contributing to a permissive international environment for further violations. China pressed ahead with one of the world’s most extreme programs of ethnic and religious persecution, and increasingly applied techniques that were first tested on minorities to the general population, and even to foreign countries. The progression illustrated how violations of minority rights erode the institutional and conventional barriers that protect freedom for all individuals in a given society.”

Many societies do not share the same emphasis on personal freedoms and even within liberal societies there are many who place a higher priority on values other than personal freedom, such as justice, equality, or social stability. The Freedom House report uses India as a revealing case study, but supporters of Prime Minister Narendra Modi would argue that India should take further steps to protect India’s identity as a Hindu nation, despite its liberal constitution. Michael Carpenter has written an essay for Foreign Affairs that looks more generally at the growth of illiberal politics in the world today.

Posted March 5, 2020 by vferraro1971 in World Politics