New US strategy foresees sensors in space to track missiles
By DEB RIECHMANN and LOLITA C. BALDOR
Thursday, January 17
WASHINGTON (AP) — The Trump administration will roll out a new strategy for a more aggressive space-based missile defense system to protect against existing threats from North Korea and Iran and counter advanced weapon systems being developed by Russia and China.
Details about the administration’s Missile Defense Review — the first compiled since 2010 — are expected to be released during President Donald Trump’s visit Thursday to the Pentagon with top members of his administration.
The new review concludes that in order to adequately protect America, the Pentagon must expand defense technologies in space and use those systems to more quickly detect, track and ultimately defeat incoming missiles.
Recognizing the potential concerns surrounding any perceived weaponization of space, the strategy pushes for studies. No testing is mandated, and no final decisions have been made.
Specifically, the U.S. is looking at putting a layer of sensors in space to more quickly detect enemy missiles when they are launched, according to a senior administration official, who briefed reporters Wednesday. The U.S. sees space as a critical area for advanced, next-generation capabilities to stay ahead of the threats, said the official, who spoke on condition of anonymity to disclose details of the review before it was released.
The administration also plans to study the idea of basing interceptors in space, so the U.S. can strike incoming enemy missiles during the first minutes of flight when the booster engines are still burning.
Congress, which ordered this review, already has directed the Pentagon to push harder on this “boost-phase” approach, but officials want to study the feasibility of the idea and explore ways it could be done.
The new strategy is aimed at better defending the U.S. against potential adversaries, such as Russia and China, who have been developing and fielding a much more expansive range of advanced offensive missiles that could threaten America and its allies. The threat is not only coming from traditional cruise and ballistic missiles, but also from hypersonic weapons.
For example, Russian President Vladimir Putin unveiled new strategic weapons he claims can’t be intercepted. One is a hypersonic glide vehicle, which could fly 20 times faster than the speed of sound and make sharp maneuvers to avoid being detected by missile defense systems.
“Developments in hypersonic propulsion will revolutionize warfare by providing the ability to strike targets more quickly, at greater distances, and with greater firepower,” Lt. Gen. Robert Ashley, director of the Defense Intelligence Agency, told Congress last year. “China is also developing increasingly sophisticated ballistic missile warheads and hypersonic glide vehicles in an attempt to counter ballistic missile defense systems.”
Current U.S. missile defense weapons are based on land and aboard ships. Trump and Vice President Mike Pence have both emphasized space-based capabilities as the next step of missile defense.
Senior administration officials earlier signaled their interest in developing and deploying more effective means of detecting and tracking missiles with a constellation of satellites in space that can, for example, use advanced sensors to follow the full path of a hostile missile so that an anti-missile weapon can be directed into its flight path.
Any expansion of the scope and cost of missile defenses would compete with other defense priorities, including the billions of extra dollars the Trump administration has committed to spending on a new generation of nuclear weapons. An expansion also would have important implications for American diplomacy, given long-standing Russian hostility to even the most rudimentary U.S. missile defenses and China’s worry that longer-range U.S. missile defenses in Asia could undermine Chinese national security.
Asked about the implications for Trump’s efforts to improve relations with Russia and strike better trade relations with China, the administration official said that the U.S. defense capabilities are purely defensive and that the U.S. has been very upfront with Moscow and Beijing about its missile defense posture.
The release of the strategy was postponed last year for unexplained reasons, though it came as Trump was trying to persuade North Korea to give up its nuclear weapons.
While the U.S. continues to pursue peace with North Korea, Pyongyang has made threats of nuclear missile attacks against the U.S. and its allies in the past and has worked to improve its ballistic missile technology. It is still considered a serious threat to America. Iran, meanwhile, has continued to develop more sophisticated ballistic missiles, increasing their numbers and their capabilities.
Associated Press writer Robert Burns in Washington contributed to this report.
2020 Democrats face a choice: Fight Trump or ignore him?
By ELANA SCHOR and THOMAS BEAUMONT
Thursday, January 17
SIOUX CITY, Iowa (AP) — When Sen. Elizabeth Warren took the stage earlier this month at this city’s ornate Orpheum Theatre, Tricia Currans-Sheehan posed a pointed question to the expected presidential contender.
“Why did you undergo the DNA testing and give Donald Trump more fodder to be a bully?” the Iowa college professor asked, referring to a genetic analysis the Massachusetts Democrat released last fall to rebut President Donald Trump’s repeated jabs about her Native American ancestry.
Warren had a simple response: “I can’t stop Donald Trump from doing what he’s going to do.” After another woman in the crowd retorted, “Yes, you can,” Warren gently reiterated that “I can’t stop him from hurling racial insults. I don’t have the power to do that.”
The scene demonstrates the challenge Warren, who has launched a presidential exploratory committee, and dozens of other White House hopefuls will face as the Democratic primary gets underway. They must decide how — and whether — to respond to Trump’s pugnacious and insensitive attacks on his political opponents. If they punch back too hard, they could be accused of playing Trump’s game. If they ignore him entirely, they risk appearing unprepared to take on a president who knows few boundaries.
Warren was tested again late Sunday when Trump seized on one of her social media videos to issue a tweet that made light of two massacres of Native Americans. South Dakota’s two Republican senators distanced themselves from Trump’s comment, which drew condemnation from Native American officials. But Warren herself didn’t immediately engage.
In an interview this week, Warren called the tweet “disgusting” for mocking “one of the darkest moments in American history,” the deadly assault on hundreds of Native American women and children at Wounded Knee, South Dakota. Yet she also hinted at a bigger reason for not responding right away.
“He needs to focus on getting the government open, on doing his job,” she said. “He hopes that he can draw attention elsewhere, but it’s not working.”
Others considering 2020 campaigns also indicate that, whenever possible, they plan to ignore Trump’s personal needling and focus on issues.
“I don’t want to waste my time on negativity” when voters “want to hear positive,” Sen. Cory Booker of New Jersey said in an interview in which he also commended Warren, his likely rival for the Democratic nomination.
“What’s more important is what Sen. Warren is talking about, and she’s putting great ideas out there,” Booker said. “Why let anybody distract from the compelling things she’s saying and how she’s presenting herself?”
But Sen. Amy Klobuchar of Minnesota, another potential 2020 candidate, suggested Democrats face a tricky challenge.
“You have to stand your ground” in response to Trump, she said in an interview, but also take care about “how you do it, because he wants you to go down in the rabbit hole. He wants to define the agenda every single day.”
While “everyone makes their own decision” on replying to a Trump taunt, she added, “I think it is very important to put it in its place and, while you respond, you do not spend weeks talking about him. Because that is exactly what he wants.”
Other possible Democratic candidates haven’t hesitated to tangle with Trump. Sen. Sherrod Brown recalled that when Trump slammed him over the closure of a General Motors plant in his home state, he poked the president for seeking “an Ohio Democrat to blame” while the GOP held power in the state.
Asked how he would respond if Trump got more personal, Brown didn’t shrink. The president “talks like an idiot,” Brown said. “And I don’t think that serves anybody well to answer every time he says something stupid, or something that’s a lie.” Democrats, he added, should “talk about the issues that matter to the public.”
Former Vice President Joe Biden, who is mulling another presidential campaign, said last March that he would have “beat the hell out of” Trump if they were in high school together, citing Trump’s now-infamous 2005 comments about assaulting women with impunity.
Inside the White House, Trump’s Sunday tweets mocking Warren were widely joked about by staff weary from the government shutdown, according to two aides, and the president repeatedly mocked Warren’s video in private conversations with aides and outside advisers. White House officials and Trump allies said the president is already an active participant in the Democratic race.
The aides spoke on the condition of anonymity to discuss internal White House dynamics.
Attention from Trump can drive up fundraising and elevate a candidate above a crowded field. But responding to attacks also distracts from a candidate’s message, as Trump’s rivals in the 2016 GOP primary learned as he bedeviled them with name-calling. Trump goaded Sen. Marco Rubio of Florida into making a thinly veiled insult of his manhood that quickly backfired, and weeks later sucked Texas Sen. Ted Cruz into a brutal back-and-forth about an insult he leveled at Cruz’s wife.
Beyond Warren, Trump has hurled insults at other Democrats, labeling Sen. Bernie Sanders as “crazy.” Trump once asked a crowd to choose between two demeaning names for Biden and deployed innuendo when saying Sen. Kirsten Gillibrand of New York “would do anything for campaign contributions.”
In 2016, Democratic nominee Hillary Clinton was the subject of a near-daily barrage of personal attacks from Trump. Her team decided she would ignore personal insults and criticisms of her husband and of the Clinton Foundation, according to her 2016 communications director Jennifer Palmieri.
However, Clinton publicly defended parents of a Muslim U.S. Army captain killed in Iraq and former Miss Universe Alicia Machado after Trump criticized them. Those instances were aimed at standing up for others, Palmieri said, while a candidate who responds to a personal taunt risks appearing small and distracted from the more important issues facing the nation.
“It comes across as very self-absorbed. Then the campaign ends up in this tit-for-tat with Donald Trump, and not about the voters,” Palmieri said.
Responding to an attack on someone else in “defense of inclusivity or some larger truth” is a good idea, Palmieri said, but “don’t do it in defense of yourself. Then you’re sinking to Trump’s level.”
Warren’s release of the DNA test remains a concern for some voters as she hits the trail. Tricia Currans-Sheehan, the Iowa teacher who asked Warren about it in Sioux City, drew a contrast between what she described as Warren playing “into Trump’s hand” and the “poise” that House Speaker Nancy Pelosi displayed in another showdown with the president in December.
Retired Sioux City teacher Colleen Sernett-Shadle said after Warren’s event ended that “I worry” the Democratic candidate might “give in” to Trump on other attacks.
Other Iowa activists shared the call for discretion.
“We’re wrong if we’re going to go out and be as visceral as Trump is,” said Nancy Bobo, a Des Moines Democrat and early 2008 backer of former President Barack Obama. “It’s going to come down to soft skills to pull off a win. By that, I mean style, someone who can show real strength to be a counter to all the divisiveness.”
Schor reported from Washington. Associated Press writer Zeke Miller in Washington contributed to this report.
John Bogle dies at 89; fought for lower fees for investors
Thursday, January 17
VALLEY FORGE, Pa. (AP) — When he lost his job running a mutual fund company after stocks tanked in the early 70’s, John C. Bogle decided that money managers knew very little about predicting the market — and charged way too much for that lack of knowledge.
He founded a new fund company, Vanguard, in 1974. Two years later, Vanguard introduced the first index fund for individual investors — a vehicle that simply tracks the performance of an index like the S&P 500. It was no frills and enabled investors to avoid the higher fees assessed by professional fund managers who frequently failed to beat the market.
The fund, called First Index Investment Trust, was derided for years as “Bogle’s folly.” Critics maintained that it aimed only for mediocrity and missed moneymaking opportunities outside the index’s narrow focus.
Bogle, who died Wednesday at the age of 89, and Vanguard eventually won investors over. That initial fund is now the Vanguard 500 Index fund with $400 billion in assets. It is no longer Vanguard’s biggest fund, but remains among the company’s lowest-cost offerings. Shareholders are charged annual operating expenses of $4 for every $10,000 invested — a fraction of the $100 and up that actively managed mutual funds may charge.
And although his name wasn’t as widely known as Warren Buffett’s, Bogle won followers who dubbed themselves “Bogleheads” and who invested in index funds for the long haul.
Bogle served as Vanguard’s chairman and CEO from its founding until 1996. He stepped down as senior chairman in 2000, but remained a critic of the fund industry and Wall Street, writing books, delivering speeches and running the Bogle Financial Markets Research Center.
In a statement Wednesday, the investor advocate group Better Markets called Bogle “a tireless advocate for the small investor and the conscience of the financial industry.”
The advent of index funds accelerated a long-term decline in fund fees and fostered greater competition in the industry. Investors paid 40 percent less in fees for each dollar invested in stock mutual funds during 2017 than they did at the start of the millennium, for example. But Bogle continued to maintain that many funds were overcharging investors, and once called the industry “the poster-boy for one of the most baneful chapters in the modern history of capitalism.”
Bogle also believed that the corporate structure of most fund companies poses an inherent conflict of interest, because a public fund company could put the interests of investors in its stock ahead of those owning shares of its mutual funds. Vanguard has a unique corporate structure in which its mutual funds and fund shareholders are the corporation’s “owners.” Profits are plowed back into the company’s operations, and used to reduce fees.
“In effect, Vanguard rebates to its owners the enormous profits that other investment managers sock away for themselves,” Bogle said in a 2005 speech.
Index funds gradually chipped away at the once-dominant market position of actively managed funds, a trend fueled by performance data that consistently shows index funds produce better returns than a majority of managed funds, after costs are factored in. Actively managed funds still control more in total dollars than index funds, but the trend is clear. In 2017, investors plugged $691.6 billion into index funds while pulling $7 billion out of actively managed funds, according to Morningstar.
The best approach, Bogle maintained, is to inexpensively invest in lots of stocks through diversified index mutual funds, and hold them for decades, rather than trading in and out as the market shifts.
In a 2008 interview with The Associated Press, Bogle said that index investing “is the ultimate buy-and-hold, all-American business strategy. It is the gold standard; there is no way around it. Mathematically, indexing wins. And if the data don’t show indexing wins, well then, the data are wrong.”
More investors have bought in, and Vanguard, based in Valley Forge, Pennsylvania, managed $4.9 trillion globally at the end of 2018.
“Jack Bogle made an impact on not only the entire investment industry, but more importantly, on the lives of countless individuals saving for their futures or their children’s futures,” said Vanguard CEO Tim Buckley in the statement announcing Bogle’s death.
Bogle spent the first part of his career at Wellington Management Co., a mutual fund company then based in Philadelphia. He rose through the ranks and, in his mid-30s, was tapped to run Wellington.
He engineered a merger with a boutique firm that was making huge sums, but was ousted after the stock market tanked in the early 1970s, wiping out millions in Wellington’s assets. He said he learned an important lesson in how little money managers really know about what the market will do.
“I got wrapped up in the excitement of the go-go era, and the go-go era ended,” Bogle told Fortune magazine in 2007. “As a result of that stupid decision, I got fired. The great thing about that mistake … was that I learned a lot. And if I had not been fired then, there would not have been a Vanguard.”
He chose the name in honor of the HMS Vanguard, Lord Nelson’s ship in the British victory over the French in 1798.
During his tenure at Vanguard, Bogle suffered several heart attacks and underwent a heart transplant in 1996, the year he stepped down as CEO. He reached the mandatory retirement age of 70 for Vanguard directors in 1999 and left as senior chairman the next year following a dispute with then-CEO John Brennan and the board over whether he could stay on.
Bogle became president of the Bogle Financial Markets Research Center in 2000, which served as his bully pulpit. He spent his days answering fan mail, preparing speeches, writing books and appearing as a commentator on television.
In 2004, Time magazine named Bogle as one of the world’s 100 most powerful and influential people. Five years later, he personally filed a friend-of-the-court brief in a fund fee case that came before the U.S. Supreme Court.
John Clifton Bogle was born in May 1929 in Montclair, New Jersey, to a well-off family; his grandfather founded a brick company and was co-founder of the American Can Co. in which his father worked. The stock market crash five months after his birth and the ensuing Great Depression, however, shuttered the family business and forced the family to sell its home.
Bogle attended Manasquan High School in Manasquan, New Jersey, for a time, then got a scholarship to the prestigious all-boys Blair Academy in Blairstown, New Jersey. It was at Blair that Bogle discovered his knack for math. He graduated from Blair in 1947 and was voted most likely to succeed.
Bogle graduated from Princeton with a degree in economics in 1951. His thesis was on the fund industry, which was then still in its infancy.
Vanguard did not provide a cause of death. Philly.com is reporting he died of cancer, citing Bogle’s family. Bogle is survived by his wife, Eve, six children, 12 grandchildren and six great-grandchildren.
AP Business Writer Marcy Gordon contributed to this report from Washington.