Saturday, September 24, 2016

Natural Weekends - Sunsets

We've had some beautiful sunsets this week so you all will get to enjoy the views too!

Friday, September 23, 2016

Self-Driving Cars Don't Exist But They Still Need Subsidies

The Daily News has an opinion piece that discusses the shutdown of the L train in New York City for eighteen months in order to repair damage to the tunnel and the line that resulted from Hurricane Sandy. The writers, Levi Tillman and Colleen McCormick, think this is a perfect opportunity for New York to once again become a "pioneer in transportation technology" by offering an "autonomous vehicle-based taxi system in the tract of Brooklyn served by the L". They somehow believe that these vehicles "could dramatically reduce traffic and pollution by means of electrification, carpooling, and superior routing". Maybe I'm wrong, but I'm pretty sure adding a bunch of taxis on the road will not reduce traffic and I'm not sure they cut pollution any more than the current buses in New York, even if all the taxis were electric. And there is nothing to stop people from car-pooling right now - an autonomous vehicle does nothing to improve that. According to their proposal, the vehicles will simply be delivering passengers to existing transit hubs. In addition, they admit that the city would need to update the roads to be "clearly signed and demarcated". But, as Atrios over at Eschaton notes there is one other critical element to this proposal. According to the plan, "Here’s how a rollout would work. New York City would invite one or more companies planning to test autonomous vehicles to deploy a fleet of autonomous taxis in Brooklyn — soon. The city could offer heavily subsidized rides to anyone wanting to cross to and from Manhattan." As Atrios says, "And people wonder why I obsess about this stuff. Let technology that doesn't even exist solve a problem it wouldn't be capable of solving even if it did! With subsidies!" That's right, the plan requires the city to improve signage and then give subsidies in order to create an opportunity for a technology that has yet to be proven. And all because Tesla, Google, Apple, Uber, Lyft and others need to get some return on their investment on an unproven technology.

Is Foundation Self-Dealing Tax Evasion By Trump?

Could someone with more familiarity with tax law than I please answer this question:  If I get someone else to pay off my $250,000 mortgage, I believe I have to list that as a gift and pay taxes on it. If that is true, then wouldn't Donald Trump have to list the $258,000 in legal expenses his foundation paid for Trump or his businesses as a gift on those tax returns and also pay tax on that money?

Yes, the use of the Trump Foundation to pay these expenses is illegal but that is a Foundation issue. Trump can just reimburse the Foundation and pay the excise tax which in the Bondi incident was 10%, unless, of course, the IRS determines that the self-dealing was "willful and flagrant" and actually terminates the Foundation.

However, to me, the more important issue is the one of potential tax evasion by Trump or Trump entities by using the Foundation money. In fact, Lynne Patton, the vice president of Eric Trump's foundation pretty much described that pattern as business as usual. "A lot of times Mr. Trump will give a speech somewhere or he'll raise money in some way and he asks that entity, rather than cutting a personal check to him, cut it to his charity. That's money that would have been in his personal account, right? So when he cuts a check from his foundation for, let's say, St Jude, it is his money. No ifs, ands, or ways about it." Well, no, that's not how it works. By cutting the check to the foundation, Trump avoids paying income tax on that and the person giving the money also gets a tax deduction. If Trump can then use that money as his own to pay legal expenses and such, it seems to me to be a clear case of tax evasion. Which is probably just another reason why he refuses to release his taxes.

If I am wrong about this, please let me know. But, if not, why is the press not all over this aspect of the Trump Foundation scandal?

Update: A reliable tax attorney has informed that Trump would not be responsible for reporting this on his tax returns and that even I do not have to list the mortgage that someone paid off for me as a gift. Thanks for the responses.

The Coming Separation Of Conservatives And The GOP

Martin Longman over at Washington Monthly points to an interesting interview with Samuel Goldman, a professor of political theory at George Washington University. In it Goldman puts forth an idea that, I think, does a wonderful job explaining Trump's popularity as well understanding at least part of the reason for the total Republican obstruction in Congress over the last eight years. But it also makes clear why there is such anger at the Republican party among its own base.

In essence, Goldman says, there is around 30-40% of the country, "whites, generally older, generally less educated, although of course with exemptions for all of those generalization" that is large enough to think of itself as a majority but in actuality is just small enough to be a minority. To quote Goldman, "That’s a very uncomfortable place to be, politically, because smaller groups I think come to appreciate, not immediately but eventually, that they have to compromise and form coalitions. Larger groups can just win. But this group doesn’t seem small enough to compromise or big enough to win. That makes people very angry. I think some of that anger is reflected not just in Trump’s campaign but in the sort of rhetoric you see around the rallies. And everyone has seen footage of people who are just hopping mad in a way that I suspect is alien not just to the journalists who cover them but also to movement conservatives who have claimed to speak for them in the past." That inability to compromise and the resulting anger from the Republican party's inability to deliver on its promises because of that unwillingness to compromise in addition to the failure of its economic message is how the party ended up with Trump as its nominee. As Goldman points out, " [I]t appeared not just to conservatives but to virtually everybody that a program of deregulation and free trade really did benefit almost everyone. For the last 10 or 15 years, that hasn't seemed to have been the case. George W. Bush, as we all know, brought the country into two inconclusive and at least one unnecessary war. The economic package that was associated with conservatism stopped delivering the goods. Since conservative politicians and policies have stopped delivering peace and prosperity, I think it’s more or less inevitable that voters have become dissatisfied. It took a while, as these things always do, but that dissatisfaction has found a focus in Trump."

Goldman is conservative and as a conservative he believes that the conservative movement may be dead, at least within the Republican party. He thinks that both conservatives and the party got complacent about believing each represented the other's interests. Eventually, the voters in the party essentially took movement conservatives for granted. Says Goldman, "I think the great message of Trump is that there really are not that many movement conservatives. There is an infrastructure of journalists, intellectuals who are vested in a conventional combination of limited government, a relatively hawkish foreign policy, and a sort of religiously inflected public morality. There are a few hundred such people, and they all know each other. But it turned out that there aren't that many voters who actually care about these things — or at least cared about them in quite that combination." And what made the situation even more untenable is the direction the Republican party took over the last decade and a half. "The answer has to do with the adoption of a fairly exclusive vision of American nationalism — which sees America not only as a predominantly white country but also as a white Christian country and also as a white Christian provincial country. This is a conception of America that finds its home outside the cities, exurbs and rural areas, in what Sarah Palin called the real America. If you project yourself as a white Christian provincial party, you're not going to get very many votes among people who are none of those things. That's what's happened over the last 10 or 15 years."

The combination of becoming a white, Christian party that felt like it was a majority when it wasn't is what led the Romney campaign to go searching for those "missing white voters" and delude itself into thinking the polls were skewed and that Romney would win the election. In addition, the belief that GOP voters have that they really are a majority makes it incredibly difficult for GOP politicians to make the necessary compromises. This manifests itself in the eternal complaint the their nominee was never really a "true conservative". If Trump loses the election - it would be the third in a row for Republicans - you will probably see a major realignment of conservatives and the Republican party. What that will look like is anyone's guess right now. Please read the whole interview here as I think it provides great insight into how the Republican party has ended up where it is right now.

NY Times Fails Two Days In A Row

Sometimes you have to wonder whether the New York Times prints articles simply to fill space rather than educate the reader. There are two prime examples in both yesterday's and today's paper that are just striking.

Yesterday, the Times had an article entitled "Who Hates Free Trade Treaties? Surprisingly, Not Voters".  Despite the headline of the article, the third paragraph of the article states, "National polls continue to show that Americans either narrowly favor international trade generally, and the so-called T.P.P. specifically, or are split." This total mess of an article keeps on providing statistics about "trade" and the "TPP" as though they were almost interchangeable. The article seems to be surprised by the fact that most "Americans by 50 to 42 percent said trade agreements had been 'a good thing' for the United States" and "even 55 percent of Sanders supporters said trade agreements had been good for the country", as though that is supposed to be meaningful. I don't think anyone has suggested that the US should simply stop trading with everyone - that's just ridiculous on its face. The argument is whether certain aspects of trade agreements have hurt American workers and overly benefited big corporations. The article then goes on to cite a poll that shows Americans support TPP by a 40-35% margin, hardly an overwhelming margin and I would guess probably nearly within the margin of error for the poll. But even that number is misleading because, as the Times also notes, another poll showed that "56 percent of voters were either unfamiliar with it [TPP] or neutral." It is hard to say a poll is meaningful when a majority of the population doesn't even know what the question is about. And I have to say that even I, someone who pays pretty close attention to the news, does not really understand all the particulars of TPP, although it is clear that there are commercial protections that once again simply benefit big corporations and patent owners. Perhaps that indicates a failure by the media to properly inform the public of the details of the pact. This article certainly does nothing to address that failure.

Today, the Times is apparently shocked to learn that Democrats use social media to support Hillary Clinton and pressure the media on its coverage of the election. In an article entitled, "Inside Hillary Clinton’s Outrage Machine, Allies Push the Buttons", the Times focuses on two media monitors and now Clinton supporters, David Brock and Peter Daou. Despite the implication in the headline, none of the people mentioned as being responsible for this "outrage machine" works directly for the Clinton campaign. The article seems shocked to think that organizations supporting Hillary would be out there on social media repeating the memes of the Clinton campaign and pushing their readers and followers to do the same. Of course, right-wing media outlets have been doing this for years, but apparently it's news if Democrats do the same. And, maybe it's just me, but there is an underlying tone in the piece that implies that what Brock and Daou are doing is just not "kosher", for want of a better word. The article describes one of Brock's publications defending Hillary after her near-collapse at the WTC memorial by saying that her holding a national security meeting, a press conference, and attending the memorial while having pneumonia shows just how strong she really is. Despite Liz Spayd's claims that the Times does not and should not editorialize within its reporting, the next line in the article is, "It [Brock's story] was roundly mocked as a blatant example of Pravda-esque spin." But even more ironic was the article's example of the "outrage machine" going into action over the illegal Trump Foundation donation to Pam Bondi. The article states "Mr. Daou and his website incessantly demanded coverage of the Trump Foundation story. 'We just have to start the fire,' Mr. Daou said in an interview last week. Many liberal columnists, Democratic operatives and members of the Media Matters family reached the same conclusion, excoriating news outlets and individuals for grading Mr. Trump 'on a curve.'" Not only was the Times one of the last papers to actually focus on that scandal, it has still only run just one story, on page A18 at that, on the latest Trump Foundation scandal that involves using Foundation money to pay legal expenses and buy paintings for Trump himself. Maybe, if the Times spent a little more time actually reporting the news, they wouldn't have to write fluff stories about how people are outraged about how they are covering, or not covering, the news.

Thursday, September 22, 2016

New Study Details Extent Of Corporate Tax Avoidance

I just wanted to quickly follow up on yesterday's post that showed even investors are getting worried about corporations extreme tax avoidance strategies.  On Monday, the Economic Policy Institute released a study on corporate taxes and the results are fascinating. Here are a few highlights:

  • Corporate profits are way up, and corporate taxes are way down. In 1952, corporate profits were 5.5 percent of the economy, and corporate taxes were 5.9 percent. Today, corporate profits are 8.5 percent of the economy, and corporate taxes are just 1.9 percent of GDP.

  • Corporations used to contribute $1 out of every $3 in federal revenue. Today, despite very high corporate profitability, it is $1 out of every $9.

  • Many corporations pay an effective tax rate that is one-half (or less) of the official 35 percent tax rate.

  • As of 2015, U.S. corporations had $2.4 trillion in untaxed profits offshore. Another study, looking at S&P 500 companies, found they held $2.1 trillion as of 2014. This roughly five-fold increase from $434 billion in 2005 stems largely from anticipation of a tax holiday.

  • Just two industries—high-tech and pharmaceutical/health care—hold half the untaxed offshore profits.

  • Just 50 companies hold over 75 percent of untaxed offshore profits. Ten companies hold 39 percent of these profits. Just four companies—Apple, Pfizer, Microsoft, and General Electric—hold one-quarter of all untaxed offshore profits.

  • About 55 percent of U.S. corporate offshore profits are in tax-haven countries. Corporations pay an average tax rate of between just 3.0 percent and 6.6 percent on profits in tax havens.

  • U.S. corporations pay very low tax rates—6 percent to 10 percent, mainly to foreign governments—on all their offshore profits. A tax break known as “deferral” allows them to delay paying U.S. taxes until the profits are repatriated to the parent corporation in the United States.

  • The U.S. Treasury will lose $1.3 trillion over 10 years—about $126 billion a year—due to the deferral of taxes on offshore profits.

  • Income shifting—making profits earned in the United States look as if they were earned offshore—erodes our corporate tax base by over $100 billion a year. U.S. corporations increasingly manipulate transfer pricing and bilateral tax agreements to make their U.S. profits appear to be earned in tax havens.

  • Corporations owe up to $695 billion in U.S. taxes on their $2.4 trillion in offshore profits. Having paid just 6 percent to 10 percent in taxes to foreign governments, they owe between 29 percent and 25 percent in U.S. taxes, based on a 35 percent tax rate with foreign tax credits.

  • As a point of reference, that $695 billion would have completely eliminated the annual deficit for 2015 and we would have had enough left over to cut 2016's deficit in half. Or we could have used the entire $695 billion to eliminate 3.5% of our national debt. Of course, these big tax cheating companies are complaining that the reason they are deferring all this income is because US corporate tax rates are too high. Even President Obama has fallen in line with this myth and is offering to cut corporate taxes to 14% which would result in a huge tax giveaway to just these dozens of companies. Hopefully, progressive Democrats will stand firm and not let these companies off the hook for the money they owe.

    Trump Deflects Foundation Problems By Offering Unconstitutional Policy

    I guess Donald Trump needed to somehow deflect attention away from his illegal use of foundation funds to not only pay for his own private legal settlements but also buy himself portraits of himself. So the obvious answer was to do something even more outrageous that the media can glom onto for the next few days. And that outrage is to offer the unconstitutional "stop and frisk" policy of policing. The controversial practice was used extensively in New York City for years before a federal judge ruled it an unconstitutional "policy of indirect racial profiling." An analysis of the policy showed that it was largely ineffective in reducing crime, finding that only 3% of the stops resulted in a conviction or plea bargain and only 0.1% were for violent crimes. On the other hand, the hundreds of thousands of stops each year merely antagonized the community against the police. What is more disgusting about Trump's proposal is that was offered as a solution to violence in the black community and the implication in Trump's answer is that this policy would only be applicable in those areas. I can imagine the press will have to spend a lot of time analyzing this brand new Trump policy proposal and have no time to keep on pressing Trump on his taxes and his foundation.

    Update: As predicted, the NY Times has a front page story on Trump's "stop and frisk" proposal. This is after relegating the story about using his foundation's money to pay his own legal expenses to page A18 yesterday. Simply incredible but entirely predictable.

    Dems Hijack IRS Head Impeachment Hearing To Go After Trump

    The Freedom Caucus in the House has spent most of the summer trying to get IRS Commissioner John Koskinen impeached. Unfortunately for them, that attempt was derailed last week but they did get a hearing on the possibility of his impeachment as a consolation prize. I'm not sure it was worth it. Democrats essentially hijacked the hearing by asking pointed questions about taxes and foundations that were clearly aimed at Donald Trump. Jerry Nadler asked if there was anything that would prohibit someone from releasing their taxes even if they were under audit. The answer was no. Ted Deutch wanted to know if there was anything that prohibit someone from releasing the audit letter they received from the IRS in order to prove they were under audit. The answer was no. He followed that up by asking whether releasing taxes during an audit would in any way impact the audit. The answer was no, but Koskinen added, "The release itself wouldn't. The concern sometimes by taxpayers is that when the information is public there may be more information that will be discovered or provided." Yes, that would be a concern wouldn't it. But the star of the day was Luis Gutierrez who wanted to know whether using foundation money to pay legal expenses and buy portraits for private use was legal and he did this while munching on some Skittles. Koskinen responded by saying that "any tax-exempt organization cannot use its money to benefit someone who is closely associated with that organization."

    So there you have it. One presidential candidate was cleared by the FBI Director and the other has just been virtually indicted by the IRS Commissioner. I wonder which one gets the most press?

    Fed Holds Rates Steady But Again Signals Hike Ahead

    Well another Fed meeting goes by without the earlier signaled rate hike. That is not really a surprise based on the latest data and the most recent statements by Fed Governors.  The statement released yesterday afternoon by the Fed clearly indicates a desire to raise rates by the end of the year, saying, "the Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of further progress toward its objectives." So the consensus now is a December rate hike, although November is still an outside possibility. But we have been here at least two times before already this year - the Fed signals its intention to raise rates but the data is never really there to support that decision when the time comes. And, even now, the Fed's own predictions of future GDP growth and inflation hardly warrant raising rates. We'll see if that pattern repeats itself come the end of the year.

    Wednesday, September 21, 2016

    Tweet Of The Day

    Hat tip to Nancy Letourneau over at Washington Monthly for the tweet of the day:

    Even Investors Are Worried About Corporate Tax Avoidance

    You know things might have really gotten out of hand when an investor and shareholder writes an op-ed that worries about "egregious tax practices" by multinational corporations. Morris Pearl, a former managing director at Blackrock, is not really worried about the loss of tax revenue but is concerned that all of a sudden a big corporation will be hit with a huge retroactive tax bill as has happened to Apple. According to Pearl, "Apple will now be embroiled for years in lawsuits relating to a ruling by Europe’s antitrust enforcer, which ordered the company to pay $14.5 billion in back taxes." Pearl is upset because it was almost impossible to have figured out what risky tax avoidance strategies Apple had taken and therefore there was no way to evaluate those risks. According to Pearl,"[N]o reasonable investor could have known the full scope of Apple’s overseas tax shelters, which were not detailed in the company’s financial releases. That took multiple investigators with subpoena power working for a United States Senate subcommittee nearly a year. And there was no obvious way for investors to know the particulars of Apple’s Irish deal or how risky it might prove to be."

    Incredibly, the SEC is worried about providing too much information. According to Chairwoman Mary Jo White, that there might be an "information overload" that would make it hard for investors "to wade through the volume of information she receives to ferret out the information that is most relevant." Pearl is correctly appalled and is calling for more transparency. He specifically proposes that "Investors should, at a minimum, be given a list of all countries in which a company operates, the revenue and earnings attributed to each country, and the amount of taxes paid in each. There might still be disputes but at least investors would be working from the same numbers. Nothing in the current S.E.C. rules requires even that simple statement from companies." That sounds admirable and I'm sure even progressives would applaud that move. Because, once people see how little tax these multinational corporations actually pay, the outrage will be immense and the pressure to crack down on these tax cheats will continue to grow.

    Lyft's Vision Of Future Looks Exactly Like A Taxi Service

    Joshua Gans listened to Lyft co-founder John Zimmer's vision for the future of the company and has a very pertinent question. Zimmer seems fully committed to the idea of autonomous vehicles despite the ongoing problems with the technology. More interestingly, Zimmer believes "It will be both more practical and appealing to access autonomous vehicles when they are part of Lyft’s networked fleet...Why? For starters, our fleet will provide significantly more consistency and availability than a patchwork of privately owned cars. That kind of program will have a hard time scaling because individual car owners won’t want to rent their cars to strangers. And most importantly, passengers expect clean and well-maintained vehicles, which can be best achieved through Lyft’s fleet operations." Gans' question is why is a large fleet of vehicles that is available for hire any different than a traditional taxi service. For Gans, there is disappointment in the company seemingly abandoning a ride-sharing future for corporate ownership. My question is why are Uber and Lyft getting special treatment rather than being regulated just like taxi services if that's exactly what they are.

    Illegal Immigration Declines Again Despite What Trump Says

    The Pew Research Center released a report on the unauthorized immigrant population in the United States and it shows once again that illegal immigration is...declining. The illegal population dropped from 11.2 to 11.1 million from 2013 to 2014 and it is over 1.1 million below its 2007 peak. In fact, a significant portion of the rise of illegal immigrants from 1990 occurred under the George W. Bush presidency and it has actually dropped under the Obama administration. Of course, if you listen to Donald Trump and the Republicans, the immigrant hordes are pouring over the border unchecked.

    I know the media is hard to generalize - some try to bring real news, some are merely propaganda vehicles for a particular party, and most are just trying to make money any way they can. Their response to criticism is usually to say they only report the news but do not interpret it. But do they ever wonder why they are so bad at that, why so many Americans are completely misinformed about simple facts. Americans believe violent crime is rising in the face of continued statistics that show we are in the midst of an historic drop in crime.  A majority of Republicans believe that unemployment has actually increased during President Obama's tenure. I could go on with even more examples. When it comes to reporting simple facts about our country and the world, it certainly looks like the media is failing.

    Where Is The Outrage Over Trump's Illegal Use Of Foundation Money

    I'm wondering where the calls for Donald Trump to withdraw from the race or for him to be indicted are coming from with regard to the Washington Post article yesterday that detailed how Trump used his foundation to pay over $250,000 in legal obligations that were his or his for-profit businesses. So far I have seen or heard very little. The NY Times managed to put this story on page A18 while at the same time devoting front page space to Donald Trump, Jr.'s Skittles controversy. As the Huffington Post points out, other elected officials have been indicted and even sent to prison for far less. And there is a clear possibility that Trump may have engaged in tax evasion if all this was improperly reported.

    The Huffington Post article states, "If Trump were a normal candidate, these allegations would be devastating...Normal candidates have resigned from office and pleaded guilty to charges stemming from similar games with charities that Trump has played. Some have gone to prison. If recent campaign history holds, Trump will move on from this to his next momentary scandal." Perhaps the reason that Trump gets away with his continual lies and scandals is that the press seems to be incapable of calling a lie and a potential crime exactly what they are. They merely use some euphemism to describe the event and then wait for the next Trump scandal. They never press him on a repeated basis to answer for any of his lies or apparent illegal activity. It is interesting to note that the only event that drove the press to actually start using the word "lie" about Trump was when they felt he had misled them by turning what was supposed to be an announcement on the birther issue into a PR event for Trump's new hotel. The press was up in arms when they felt Trump lied to them. But when Trump lies to the American people, the press just merely writes it down and moves on.

    Tuesday, September 20, 2016

    New Gun Study Has Some Surprising Stats

    Preliminary results of a study by Harvard and Northeastern Universities that looked into the current state of gun ownership in the United States were released today by the Trace and the Guardian. As of 2015, 55 million Americans own 265 million guns, which is an increase of about 70 million guns and 11 million owners since 1995. Of those new guns, 40 to 50 million are handguns and most of those have been bought by Americans who are fearful for their personal safety. This comes despite an unprecedented decline in the nation's violent crime rate in the last 20 years.

    There are a couple of shocking statistics in this report. First, the study shows between 300,000 and 600,000 are stolen every year. That is nearly 1,000 per day if you just take the low end of the estimate and, at the high end, it is enough to provide a firearm for every instance of gun violence each day for an entire year. The study also found that 3% of American adults own half of the guns. That equates to nearly 8 million people owning over 130 million guns, or an average of over 16 guns for each one of those 8 million.

    GOP Admits Voting Restrictions Designed To Suppress Democratic Votes

    The NY Times has an article that documents all the Republican officials around the country who have admitted that restricting early voting and requiring photo IDs is purely designed to suppress Democratic votes. Of course, despite virtually zero evidence that voter fraud exists, the GOP continues to outwardly insist that these new restrictions are necessary to reduce fraud while inwardly admitting the partisan nature of their actions.

    In Wisconsin, Republican Glenn Grothman predicted the state's voter ID law would reduce Hillary Clinton's chances of winning the election. Earlier Todd Albaugh, a staff member to a GOP state legislator, resigned when he saw other legislators celebrating the idea that the law would suppress minority and younger voters. In Pennsylvania, the GOP leader in the state's House of Representatives predicted (incorrectly) that the voter ID law would help Romney carry the state while the state GOP chairman believed that the state's ID law had, in fact, lowered Obama's margin of victory in the state in 2012. In North Carolina, a GOP county chair told the Daily Show that the voter ID law would "kick Democrats in the butt." In Florida, the state GOP party chairman and former GOP Governor Charlie Crist both admit that the voter ID law was designed to suppress Democratic votes. The party chairman also stated that consultants had told him to cut down on early voting "because early voting is not good for us [Republicans]."

    Earlier this week, the Guardian released a bunch of leaked documents that show just how blatantly campaign finance laws are being subverted. But also included in those documents was a disturbing twist to Republicans bogus claims of voter fraud. As a close race for the state Supreme Court was being contested, a Republican former speaker of the State Assembly openly advocated starting rumors of widespread voter fraud so that the election could be contested if the preferred GOP candidate did not win. So you have to wonder when Trump insists that the election will be "rigged" whether this is just another Republican strategy to challenge the results should he lose.

    Todd Albaugh summed it up perfectly when he said, "Think about that for a minute. Elected officials planning and happy to help deny a fellow American’s constitutional right to vote in order to increase their own chances to hang onto power." This is what the Republican party has become - suppressing voters, subverting democracy, disregarding their constitutional duties, and destroying the norms of governance simply to maintain their grip on power.

    Wells Fargo CEO Still Can't Accept Responsibility For Fraud

    Wells Fargo CEO John Stumpf is getting hammered by both Republicans and Democrats in the Senate Banking Committee hearing today. Elizabeth Warren led the way, criticizing Stumpf for mercilessly squeezing employees to cross-sell products in order increase fees, drive up the stock price, and, correspondingly, Stumpf's compensation. She then ripped him for blaming low-level employees for the fraud that involved opening up millions of bogus accounts, saying, "It’s gutless leadership." Stumpf still almost seems incapable of admitting any executive responsibility for the problem. He was finally forced to admit that no senior executive has been held accountable in any way for what happened. But he still insisted that it was only about 1% of the Wells Fargo workforce that committed the fraud. But as both Democrat John Tester and Republican David Vitter both pointed out that all that does is raise the question of  "Why isn’t this crystal clear proof that an entity as big as Wells is too big to fail, too big to manage, too big to regulate?" as Vitter put it.

    Let's just run down a list of Wells Fargo's recent abuses. In 2012, they had to pay $184 million in restitution to compensate qualified African-American and Hispanic mortgage borrowers that the bank had charged higher fees simply due to racial discrimination by the bank from 2004 to 2009. In 2014, the bank agreed to a $62.5 million settlement in a case brought by retirement funds who were misled about the risks the bank was taking in what was called a "conservative" investment plan. In this year alone, the bank has paid a $1.2 billion settlement related to misclassifying loans in order to get them approved by the FHA; the SEC charged a unit at the bank with fraud involving not releasing vital information on a bond offering that subsequently went south; the American Seminoles filed a suit accusing the bank of fraudulently milking their trust with $100 million in secret fees; the bank reached a $4.1 million settlement to resolve a complaint that it charged illegal fees to some student loan borrowers.

    The real question is why Stumpf still has a job. As Warren pointed out, "The only way Wall Street will change will be if executives face jail time” for criminal behavior.

    Trump Foundation Is A Cesspool Of Violations

    Now that the media is finally beginning to focus on the Trump Foundation, it is becoming clear that the non-profit continually flouts the laws relating to charities. Today the Times reports that the Trump Foundation did not register in states where the Foundation was raising money. The violations relate to the January fundraiser held for veterans which Trump used as an excuse to skip a Fox News debate. In that same fundraiser, Trump also promised to donate $1 million of his own money which he never did until he was shamed into it when media reports in May showed that no money from the fundraiser had been distributed at all. The violation the Times documents occurred because the Trump Foundation was soliciting funds from across the country. Forty states require a foundation to register with the state if you are soliciting donations from within that state. The Trump Foundation is not registered in 38 of those states. Yes, this is hardly a major violation, but it also shows the lack of attention to detail and the disregard for the law that permeates everything about Trump.

    A more serious violation comes the Washington Post today which reports that Trump used over $250,000 of Trump Foundation money to settle suits against Trump's for-profit businesses. In 2006, Trump got into a dispute when he installed an 80-foot flag pole at his Mar-a-Lago estate in Florida. Town law restricted flagpole height to 42 feet. Needless to say, Trump ignored the town's request to conform to its law and the town began to fine Trump $1,250 per day for the violation. Trump then sued the town in federal court and eventually the two side came to an agreement in which Trump would donate $100,000 to a veteran's charity. Trump then fulfilled his part of the agreement by writing a check from the Trump Foundation. In 2010, a man thought he had won $1 million when he carded a hole-in-one at a charity event at a Trump golf course. But, in typical Trump fashion, the prize was not awarded because the rules stated the shot had to be over 150 yards. The hole that Trump was advertising the hole-in-one reward on was set up to be under 150 yards, providing Trump with a way to avoid the payout. The golfer sued and eventually settled with Trump for a $158,000 donation to the charity of his choice. Trump once again paid that with a check from the Trump Foundation.

    Both of these cases are clear examples of self-dealing where Trump used foundation money to pay for settlements that were, in fact, Trump's personal liability. This is clearly illegal and it will probably interest NY Attorney General Eric Schneiderman in his ongoing inquiry into the foundation. Another important point is that since 2008 the Trump Foundation has been entirely funded by people other than Trump - he has given no money to his own foundation since then. So the settlement that Trump made with the golfer that was his own personal liability was actually paid by using other people's money.  I would also think that the Foundation's payment would be considered a kind of "gift" to Trump in that it relieved him of his own personal obligation. That might also create a case for income tax evasion if he did not report that on his taxes which he refuses to release. Do I need to say how berserk the press would go if any of this had happened with Hillary Clinton and the Clinton Foundation.

    Both Prosecution And Defense Agree Christie Lied About Bridgegate

    I guess we know why Chris Christie aligned himself so early in the campaign with Donald Trump - compulsive liars like to stick together. Yesterday was the opening day of the trial of Bridget Anne Kelly and Bill Baroni in the Bridgegate scandal that closed lanes for four days on the George Washington Bridge and clogged traffic in Fort Lee, New Jersey in retaliation for that city's mayor refusing to endorse Christie in his gubernatorial re-election campaign. Christie has consistently denied that he knew anything about the lane closures as they were occurring but only subsequently found out about them via media reports. The prosecution and the defense both stipulated in their opening statements that what Christie said was not true. Assistant U.S. Attorney Vikas Khanna stated that Bill Baroni and David Wildstein bragged to Christie at a 9/11 memorial service that "there were traffic problems in Fort Lee and that Mayor Sokolich was not getting his calls returned." That was on the third day of the lane closures.  The defense has already indicated that they will show Governor Christie and his top advisers were well aware of the lane closure plan and threw Kelly and Baroni under the bus in order to protect themselves. The star witness will be Wildstein who apparently was Christie's hatchet man in the Port Authority and will testify for the prosecution against Kelly and Baroni. Wildstein has already pled guilty for his role in orchestrating the closures and the defense will try probably try to show that Wildstein was doing so under orders from Christie. That should make for interesting testimony and will probably increase questions about why Christie was not charged as well.

    Monday, September 19, 2016

    Weekend Attacks Look Like Lone Wolves

    Obviously, the big story yesterday and today is the bombings in the New York area and the stabbings in Minnesota. Thankfully, it appears that neither incident resulted in any fatalities. And both incidents have the look of lone actors rather than an organized conspiracy. In the case of the New York bombings, the mistakes that led police to the suspect indicate it was not a very well thought-out attack. The bombs were placed in relatively lightly trafficked areas and the bomber used his own cell phones as a detonator. When one of the bombs did not detonate, police were able to get his personal information off the phone. Needless to say, law enforcement has done an incredible job in finding and capturing the suspected bomber so quickly. But they were helped tremendously by the mistakes the bomber made. And those mistakes are not indicative of a well-trained terrorist cell.

    College Football Recap

    There were easily a half-dozen big games this weekend in college football and a couple of them decisively ended some teams' national championships hopes. The two perennially overrated teams, Oklahoma and Notre Dame, were both virtually eliminated with their second loss of the season. Oklahoma looked pretty poor once again in getting decisively beaten by Ohio State, who looks like a real contender this year (again). The Oklahoma loss also almost eliminates any hope of a Big 12 team making it to the BCS. Notre Dame lost to its nemesis, Michigan State, 36-28, as its defense once again had trouble stopping either the run or the pass.

    Mississippi blew its second three touchdown lead in consecutive weeks in its 48-43 loss to Alabama. It's hard to blow 3 touchdown leads but the speed with which Mississippi can do it is pretty staggering. It only took under two minutes of play for Alabama to reduce a 24-3 deficit to a one-possession game.

    Louisville completely dismantled #2 ranked Florida State 63-20 and its quarterback Lamar Jackson was once again spectacular as he makes a real case for the Heisman Trophy. And #13 Iowa was upset by FCS powerhouse North Dakota State 23-21 on a last second field goal. This is the Bisons sixth FBS victim in recent years, just showing the incredible depth in college football. And it also points up the ridiculousness of the dominance of the Power 5 conferences in bowl selections.

    Cliff Kingsbury has always been known for incredibly creative offenses and his Texas Tech team showed a whole new wrinkle against Louisiana Tech with an end-around reverse with a flip to the QB who then throws a screen to the original ball carrier for a 41 yard touchdown. Take a look at the play at 1:16 in tot he highlights.

    Lyft Accused of Overcharging New Yorkers On Tolls

    I've been pretty critical of Uber on this blog, but it looks like Lyft has learned a thing or two from its rival about how to just flaunt the law. A lawsuit in New York contends that Lyft has overcharged it customers by as much as $60 million by using the "cash" rate as opposed to the lower "EZ Pass" rate as mandated by the New York Taxi and Limousine Commission when going through tolls. In New York, that differential is, on average, about $2.46 per toll. At least, Lyft was helping its drivers more than lining its own pocket with this policy - 80% of that money went to the drivers while the company pocketed the remainder. The suit does not indicate whether these toll overcharges were an intentional policy, but I think we all have a pretty good guess whether it was or not.

    Merkel's Party Humiliated Again In Berlin

    The electoral humiliations for Angela Merkel and her CDU party continue. Once again, the AfD, an anti-immigrant party, dealt the humiliation, capturing almost 14% of the vote in local Berlin elections. Unlike the most recent election in Mecklenburg-Western Pomerania, the CDU managed to hold on to second place with about 17.5% of the vote. The SPD once again won the plurality of the votes as they did in Mecklenburg-Western Pomerania as well. It is looking increasingly likely that the SPD will try to jettison the CDU as its partner in the governing coalition after next year's elections and try to form a government with other left wing parties such as Die Linke and the Green Party.

    After another disastrous defeat like this, speculation about whether Merkel will actually run in next year's election is bound to grow. But the problem that her CDU party has is not that different from the problem the Conservative party had after it dethroned Margaret Thatcher - there are just not any good prospects on the bench to lead the party forward. The two most likely candidates, Ursula Von Der Leyen and Thomas de Maziere are long-time Merkel loyalists who would have to make a significant break with Merkel's policies if they want to distance themselves from being tarnished by Merkel's sinking popularity. The most popular choice, Wolfgang Schauble, is already 73 years old and has not shown a lot of interest in taking on the job. That almost forces Merkel to run, simply by default.

    The incredible irony is that Merkel's career may end for taking a principled stand in support of refugees. She never stood up to the German banks and forced them to take a haircut on loans to Greece, Italy, Portugal, and Spain. And she never fought to increase German inflation which would have helped those southern European countries recover more quickly from the financial crises. Either of those actions would have benefitted Europe and the EU as a whole. Yet she is in danger of losing her chancellorship on behalf of refugees who are not even EU citizens.

    Sunday, September 18, 2016

    Natural Weekends - More Winged Creatures By The Sea

    Here are some more winged creatures I managed to photograph on my walk. Below is a dragonfly.

    This guy was certainly giving me a very stern look. A couple of Canadian geese in formation below.