Saturday, March 25, 2017

Wasn't Mnuchin Supposed To Be Part Of The Reality-Based Community

Treasury Secretary Steve Mnuchin may be an offspring of the Goldman Sachs "vampire squid". He may be a heartless criminal whose bank engaged in massive foreclosure fraud. He may be an inveterate liar, denying both the foreclosure fraud and lying to Congress about his investments and net worth. But he was supposed to be one of the members of the reality based community inside the Trump administration.

Yet you would find that hard to believe when you look at his wide-ranging interview with Axios the other day. Here are some of his comments on Donald Trump: "He's got perfect genes. He has incredible energy and he's unbelievably healthy...I think we should look at putting President Trump on the thousand dollar bill."

More importantly, this is what Mnuchin said about the threat of Artificial Intelligence on jobs in the future, "[I]t's not even on our radar screen.... 50-100 more years...I'm not worried at all...In fact I'm optimistic." Apparently, Mnuchin has not been on a factory floor in a decade or so and he clearly doesn't understand how many jobs have been lost to technology over the last 20 years. Just take a look at steel companies that re-emerged in the US after losing most of their jobs overseas. A mill that employed 4,000 decades ago now produces more steel with 400 workers and lots and lots of robots. Even in Mnuchin's own financial industry, technology has replaced thousands of workers. To not even have AI on your radar screen borders on willful ignorance.

Mnuchin ended his interview by hawking a movie of which he was executive producer, saying, "Well, I’m not allowed to promote anything that I’m involved in. So I just want to have the legal disclosure that you’ve asked me the question and I am not promoting any product. But you should send all your kids to ‘Lego Batman.'" It is a particular criminal mindset of the financial industry and elsewhere that saying you are not intending to break the law somehow absolves you when you do break the law. And despite Mnuchin's "legal disclosure", he was clearly violating ethics laws by promoting a product that he will benefit from.

And this is the guy who is going to be leading on tax reform.

Failure Of Trumpcare Provides Opportunity For Democrats

Now that Trumpcare has failed, it is feared that Trump and Price will do everything in their power to make their statements that "Obamcare will implode" come true. And Trump and Ryan made very clear they will try to blame Democrats if and when that happens. Trump specifically said that "Democrats own" Obamacare and that Pelosi and Schumer were the big losers in the failure of Trumpcare, despite the GOP making no effort to include Democrats. This does not even pass the Trump laugh test. But the chances that the GOP could severely damage Obamacare even without a successful repeal vote has been a possibility ever since Trump was elected and I hope the Democrats are prepared.

Incredibly, Trump and Ryan both stressed that Obamacare would implode and that it would prove to the Democrats just how flawed the program is. Trump and Ryan seemed content to let that happen and will desperately be trying to ensure that Democrats take the blame for that failure. Then, theoretically, Democrats will be forced to negotiate a new health care bill with Republicans in order to respond to Obamacare's collapse. Trump laid out that strategy in a tweet this morning, "ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!"

Frankly, I have to believe this stance is untenable. First of all, if you believe the CBO, which apparently many Republicans don't, Obamacare is not going to collapse. But, if you are Trump and Ryan and you control Congress and the White House, it's seems inconceivable that you can simply let Obamacare fail, especially after you see the resistance just displayed when the GOP tried to take that health insurance away. And if that really is their plan, the attacks on their approach to leadership and governing are ready-made. It is the equivalent of letting a bomb explode and saying that things will be better when we rebuild. Even Democrats should be able to make Trump and the GOP pay for that approach to governing.

It is nice to see that Democrats are already running ads targeting 14 vulnerable Republicans who voted for Trumpcare while it moved through various House committees, tying them to especially horrible aspects of the bill. And Trump himself left an opening for Democrats when he almost begged the Democrats to come to the table and help craft another health care bill.

One way to insulate Democrats from the blame for a possible Obamacare collapse and actually call Trump's bluff is to offer a specific bill to solve some of the issues with Obamacare. That plan should include the Medicare opt-in for those 55-64. This would reduce the number of older, sicker enrollees and improve the risk pool of the insured pool that remains, reducing premiums and deductibles. In those counties where there is only one provider, offer Medicare as a second alternative insurer. To reduce the cost of prescription drugs, allow Medicare/Medicaid to negotiate prices with pharmaceutical companies. Use the savings from that prescription drug change to increase subsidies and extend those subsidies farther up the income ladder. Vox has listed some other progressive ideas that would shore up Obamacare and actually save federal money. Some of these are even proposals that Trump has mentioned in the past. Democrats should also stress that time is of the essence as insurers will have to decide on their exchange participation for 2018 late next month. If Trump and the GOP refuses to confront the issue before then, Democrats should lay the groundwork for blaming them for whatever happens in 2018.

In addition, Democrats need to pressure Trump on fighting a case brought Republicans in Congress over the funding for subsidies for low-income earners. Congress believed that money was improperly authorized and the Obama administration had fought that in court. When Republicans actually thought they could repeal Obamacare after the election, they asked for a delay in the court proceedings. When the case restarts, Trump will have to decide whether he will fight the case or let the funding for those subsidies lapse. That would be a major blow to health insurers and could really damage some exchanges. Democrats need to make their energized base aware of this and pressure Trump to not only continue to fight this case but adopt the sensible solutions that Democrats have offered.

While congressional Republicans will dismiss all these items out of hand, Trump might actually buy in. If he doesn't, then Democrats can attack Trump and the GOP for not only "knowing" that Obamacare will implode but also triggering that implosion and, despite paying lip service to a bipartisan solution, show that Trump and the GOP are still unwilling to work with Democrats.

Democrats should also again release their plan for infrastructure spending, again harping on Trump to take advantage of a chance to gain bipartisan support for one of his campaign promises. Democrats could position this as an easy win for Trump, showing he does have the capacity to actually get things done.

Democratic proposals on health care with constant support from its leaders will drive a wedge between Trump and Republicans. Republicans in Congress have no interest in getting anywhere near healthcare again anytime soon. And they also have no interest in infrastructure spending, simply because it's government spending. Trump, however, may actually be interested in working with Democrats on these issues. If he is, it will pit Trump against the far-right Republicans in Congress. If he isn't, it puts lie to his stated desire for bipartisan solutions and provides an easy avenue for Democrats to attack. Either way, Democrats get some traction. In addition, any time that Democrats can get Trump or Republicans to spend revisiting healthcare or considering infrastructure is time not spent moving forward on tax reform, meaning cuts, and other items on the GOP agenda.

There is one final point to make on Obamacare. Kansas, yes Kansas, that tax-cutting, supply-side loving disaster of a state, voted to opt-in to Medicaid expansion. A newly elected bloc of moderate Republicans have joined with Democrats in the state to help pass Medicaid expansion in the Kansas House and the Kansas Senate is expected to take up the issue on Monday, having passed the bill out of committee just yesterday. If the Senate passes the bill, it will probably be vetoed by the departing, intransigent, and incredibly unpopular Governor Sam Brownback and it remains to be seen whether the Senate will be able to muster enough votes to override that veto or what Brownback's successor will do.

Now that Obamacare repeal is definitely off the table, I would expect that those states that resisted Medicaid expansion will quickly begin to finally adopt it. As Paul Ryan bluntly said, Obamacare is here "for the foreseeable future". That being the case, states that refuse to adopt Medicaid are simply leaving billions of federal dollars on the table for no good reason. There is simply no longer even a political advantage to refusing to expand Medicaid anymore. And further Medicaid expansion will effect red states overwhelmingly. That makes the plan of Trump, Ryan, and Price to "help" destroy Obamacare actually even more risky, as it will be their constituents who will stand to lose the most.

Natural Weekends

Friday, March 24, 2017

Winners, Losers, And Big Losers In Failure Of Trumpcare

Let's just give a quick rundown of the winners, losers, and the really big losers in the fallout of the failure of Trumpcare.

Biggest Loser - Donald Trump. He was the outsider who was going to come in and shake up Washington and get things done. And one of his biggest campaign promises and his first big legislative action ended in failure. Worse, it was sabotaged by his own party. He was the self-proclaimed guy who could "close the deal" and make things happen. He didn't. In addition, he presented the Republicans with a real threat, demanding that they vote up or down on Trumpcare. He called off negotiations and told House Republicans he would hold them accountable for not giving him a "win". In the end, he backed off that threat and agreed to pull the bill and not have the vote, essentially caving in entirely. Now, Republicans, Democrats, and other foreign leaders know that he is a bluffer. And now he is even asking for Democrats to come forward to help craft a new health care bill. That does not bode well for his arm-twisting and deal-making abilities in the future. This loss just makes Trump even weaker and threatens his ability to move on other parts of his agenda.

Biggest Loser - Paul Ryan. This was Paul Ryan's bill and he could not push it through his own caucus. And Trump, Bannon, and their surrogates will be putting the blame squarely on Ryan. Whether it is true or not, Ryan is being blamed for convincing Trump to lead with healthcare which has turned into a fiasco. Once again, he was not able to provide the leadership needed to unite the Republican caucus, which already has severe doubts about his Speakership. In addition, this will hopefully end his unearned reputation as a policy wonk. With a totally free hand and the knowledge that Republicans had total control of Congress and the presidency, he managed to craft a bill that garnered support of just 17% of the people, created more uninsured than simply repealing Obamacare, and ended up doing nothing for deficit reduction. He managed to craft a bill that alienated both the conservative wing and moderate members of his own party. And he had seven years to prepare this bill. I addition, the one healthcare reform that might have been within easier reach for the GOP was to block grant Medicaid and now that is certainly off the table for the foreseeable future.  It takes a real talent to do that.

Loser - The Republican agenda. A failure of this magnitude may jeopardize the rest of the GOP agenda. Trump has announced that the next step will be to go for tax reform but, while they may not be as great as with health care, the divisions within the Republican caucus will still exist on that front. With a weakened President and House Speaker, leadership to move the agenda forward may be less effective and somewhat lacking. And it is hard to measure how much support the party has lost within its own rank and file. The hard line conservatives will be furious that the ACA will not be repealed. Moderates will be furious at how cruel and tone-deaf Trumpcare was. And no one likes a loser.

Pence and Priebus - Pence and Priebus apparently agreed with Ryan on pushing the idea to go with healthcare first. That turned out to be a disastrous calculation.

Loser - The Republican Party. Most Republican legislators ran for seven years on repealing the ACA and only lately added replacing as an option. They promised that if they won power, repealing Obamacare would be the day one accomplishment. Having gained that power, the GOP could not even get this bill through the House. It remains to be seen how badly this will hurt the Republicans with their base.

Winner - The millions of Americans who will not lose their health insurance.

The Resistance - The fully energized resistance and the outpouring of constant and relentless resistance to the Obamacare repeal has shown how effective it can be. Hopefully, the people who became engaged in the last few months will continue to stay energized and focused because there will be plenty of other fights ahead. But the power of the people who swayed their representatives against this bill can not be overstated.

Nancy Pelosi - Once again, although it was far easier than normal for her, she kept her caucus unified and did a masterful job of letting the GOP hang itself with its own rope.

Mitch McConnell - McConnell was awfully quiet as Ryan struggled to pass the bill. He did nothing to help Ryan such as saying there might be changes the Senate would be willing to accept or even forcefully supporting the bill. As Ryan's star fades, McConnell will be the legislative voice that will be heard in the White House going forward.

Steve Bannon - As Pence and Priebus get blamed along with Ryan for the fateful decision to lead with healthcare, Bannon will gain even more influence.

Obama and Democrats - The ACA will survive for the time being relatively intact. Obama and Democrats paid a heavy price for passing Obamacare but, as Nancy Pelosi said, they passed the bill so that the American people would know what was in it. And when they found out, the people turned out to actually like what was in it. Sure there are issues that need tweaking but the people like the protections they have and do not want to lose them.

Feel free to add others that I might have missed.

Senate Rolls Back Obama Rules On Workplace Safety And Internet Privacy

With all the hoopla about the Russia investigation and the drama over whether or not House Republicans will possibly commit political suicide by just voting on Trumpcare, the Republicans in the Senate have been quietly rolling back Obama regulations under the little used Congressional Review Act.

On Wednesday, the Senate, in a party line vote, repealed an Obama rule that had extended the time period that business were required to keep records of workplace accidents by the Occupational Safety and Health Administration (OSHA). Senator Al Franken pointed out how heartless and really stupid the rollback of this rule is. Franken cited a warehouse and trucking company that had failed to report at least half of the injuries that actually occurred. When workers eventually protested to OSHA, the investigation showed that the company had illegally hired foreign students on temporary visas as well as stiffing those workers' wages. Needless to say, the company got off with simply a fine. But, as Franken pointed out, over 60% of the injuries for which the company was fined occurred outside the time window that this repeal currently puts in place. Says Franken, "The OSHA reporting rule does not kill jobs; it creates no new obligations that are different from what they were required to uphold for nearly 45 years. And the rule does not cover small businesses. What the rule does is save employers from killing and maiming workers."

Yesterday, by that same party line vote, rolled back the important internet privacy rules that Obama implemented and were supposed to be put in place later this year. The Obama privacy rules would have restricted internet providers like Comcast, Charter Communications, AT&T, Cablevision, and Verizon from tracking users' browsing activity and use of apps and then "sharing", that is selling, that information to other entities. The rules were hardly punishing but simply required the companies get users' permission before being able to collect and sell the information. As Ed Markey says, "Senate Republicans just made it easier for Americans’ sensitive information about their health, finances and families to be used, shared and sold to the highest bidder without their permission."

More importantly, the Senate's actions also rolled back the requirement that these providers ensure there are reasonable measures in place to protect users' data from being hacked. Basically, the Senate's actions open up a virtual free-for-all over users' internet activity. With big data able to do even more targeted selling, you can expect to be barraged with advertisements based on not only your browsing history but also on the elements of your lifestyle that can be gleaned from that data, such as when you wake up or where you eat. As Democrats also point out, if the ACA is repealed, health insurers could buy your internet history and possibly determine if you have a pre-existing condition. But at least those are theoretically legitimate organizations. Imagine this kind of data in the hands of hackers. Thieves can determine when you normally leave for work and come home. Your financial data will be less secure making it easier to have your identity stolen.

It is also probably no coincidence that the day after this vote, the CEO of Charter Communications was at the White House helping Trump deflect attention from the failure of Trumpcare by announcing 20,000 new jobs and a substantial monetary investment in the US economy. The fact that these jobs and investment had been announced by the company last April was not important. What was important was that Charter got what it wanted and gave Trump what he needed, although that cost the company nothing.

This is what putting America first really means - screw the workers and the public and cater to the class that the GOP really represents, big business and the rich elites.

Will Trump Force Ryan To Take Trumpcare Vote Knowing It Will Go Down

It appears that Trumpcare is dead. Representative Freylinghausen who is a member of the leadership as chairman of the House Appropriations Committee has come out as a no vote. The leadership is virtually required to vote the party line unless there is an overriding issue for his/her district and the party already has enough votes to pass. Now Barbara Comstock, one of those GOP members from a district that Clinton carried, has also taken her fist position on the bill and it is a no.

Paul Ryan is currently meeting with Trump. My guess is that he is informing Trump that the votes are not there. The question is whether Trump will continue to demand a vote, simply to put Republicans on the record. That has been his approach since he cut off negotiations last night. Ryan would be in a difficult position if Trump demands the vote be taken. Whichever way his members vote, it will potentially be a vote that could hurt them next year, especially when it is clear the bill isn't going anywhere. The easiest way out for Republicans in the House is not have a vote at all. That way they could spin the failure whatever way works best for them without having taken a real position.

The prudent thing for Trump, would be to pull the vote. But we can't account for the irrationality of Trump and his inability to deal with failure. He campaigned on repeal and replace. He claimed he was the closer. Forcing the House to take a vote will give him an easy target for blame.

Schiff Accuses Nunes Of Inhibiting Probe, Calls For Independent Commission

Adam Schiff has just given a press conference that should effectively kill the investigation into whether the Trump campaign, transition, and administration has colluded with the Russians in the House Intelligence Committee and will probably be the first step to moving this investigation out of Congress to an independent commission or other separate investigation.

Schiff was responding to the news that committee chairman Devin Nunes has unilaterally cancelled an open hearing of the committee scheduled for Tuesday with Clapper, Brennan, and Sally Yates. This follows on Nunes' claim earlier this week that Trump associates and perhaps even Trump himself were incidentally picked up in legal foreign surveillance and "unmasked", to use Nunes' own words, with the clear suggestion that the unmasking was improper. And, although Nunes agreed that Obama did not wiretap Trump, he again implied that the Trump campaign was "monitored", a statement that Trump took as vindication of his claim.

Nunes did not share the alleged information that he had received that prompted his claims with other members of the Intelligence Committee as is customary. Instead, he took this information to Speaker Paul Ryan who apparently advised him to take the information to the White House, which he dutifully did, holding a press conference in front of the White House after his meeting. This created the incredible scenario where the head of an investigation was actually briefing a potential target of that investigation on information about the investigation.

Nunes was supposed to share the information he had received that prompted his claim with the Committee today. Not only has he apparently not done so, but now he has cancelled the open hearing scheduled for Tuesday. In addition, there are now questions whether Nunes actually received the information from the White House itself, specifically because Trump indicated he knew what Nunes was going to brief him in an interview with Time before Nunes actually came to the White House.

This was not the first time that Nunes has displayed rank partisanship in his role as Committee Chairman. Last month, the White House recruited Nunes and his counterpart in the Senate to debunk the rumors of Trump associates ties to Russia to news agencies in calls orchestrated by the White House. It is also worth noting that Nunes himself was on the Trump transition team, supposedly focusing on national security.

In addition, Schiff specifically charged Nunes and, by implication if not by name, the White House, of attempting to "choke off public information" about the possible collusion of Trump associates with Russia. In addition, he also said that it may be time to move the investigation to an independent commission.

This press conference shows a complete breakdown between Nunes and Schiff which virtually makes moving the investigation forward impossible. It is also important to note that no one, not even Paul Ryan at whose discretion Nunes serves, is coming to Nunes' defense. With the potential devastating loss on health care and the partisan unraveling of the Intelligence Committee, Paul Ryan's leadership will again be seriously questioned. He is already not a very popular Speaker even within his own caucus and now it appears the White House is already sharpening the daggers to blame Ryan if health care fails. And remember that Steve Bannon has in the past vowed to remove Ryan as Speaker.

But by far the biggest takeaway from Schiff's press conference is the end of bipartisanship on the House Intelligence Committee. This is yet another norm of our democracy that the GOP has now effectively destroyed. The Intelligence Committee originates no legislation and is solely tasked with overseeing our national security apparatus, both of which are designed to maintain and protect its non-partisanship. Trump, Ryan, and Nunes have effectively destroyed that. Someday, Republicans are going to have to learn to govern rather than act in a perpetual hyper-partisan fashion. Destroying the bipartisan nature of an intelligence committee only puts the country at risk.

Thursday, March 23, 2017

Trump Demands Vote Tomorrow And Plans To Blame Democrats

I'll have more on this tomorrow, but apparently Trump is demanding an up-or-down vote on Trumpcare tomorrow and right now it looks like the result will be down. More importantly, House Republicans emerged from a meeting with their entire caucus tonight and began to stress the need for Democrats to step up and help come up with a bipartisan solution for the failures of Obamacare.

The plan seems to be to go ahead with the vote tomorrow, have it fail, and then try to blame Democrats going forward. Republicans will blame Democrats for their total intransigence on this vote, causing it to fail. Tom Price will do his best to screw up the exchanges for 2018 via regulation and any resulting rate increases or further losses in exchange coverage will be blamed on the Democrats. Perhaps they will take health care up again next year and try to once again run on repeal and replace. Democrats has better be prepared to push back on this ridiculous blame game. In the meantime, Republicans will move on to tax cuts, I mean reform, and the rest of their horrid agenda.

Delay Of Trumpcare Vote A Big Blow For Ryan And Trump

Republicans may still pass the AHCA bill out of the House at some point but the damage is, in many ways, already done. Even if Trump and Ryan manage to put something together that will get the votes of both the Freedom Caucus, which is hell-bent on total ACA repeal, and moderates who know they will be punished if the bill, even in its present form and without the draconian measures the Freedom Caucus demands, passes, there is no way the resulting bill will go anywhere in the Senate.

In fact, the longer it takes the GOP to hash out a bill in the House that will go nowhere in the Senate, the longer it delays other aspects of the Republican agenda from getting worked on. With that knowledge and the withdrawal of the vote tonight, the pressure to simply move on to other issues will start to grow. Starting again from scratch or even in the Senate will chew up another month of legislative time at minimum. Before they could complete the job, insurers will have to decide whether or not they are going to participate in the exchanges next year and I'm sure they are interested in a little more certainty for next year rather than being in the middle of another GOP run at repeal and replace. Certainly, Mitch McConnell seems to feel it is time to move on.

This is also a big defeat for Paul Ryan. The idea to tackle repeal and replace right out of the gate was at Ryan's insistence and this bill was his baby. The fact that he not only could not get this over the line at all or with even a reasonable shot at passage in the Senate means that the blame for this collapse will probably be lain at his feet. Ryan already has enough problems herding the cats that are the House Republican caucus and this failure will make that job even more difficult. Right now, neither the moderates or the conservatives have any fear of Ryan and sometimes that is what a Speaker needs to get things done. He is also hamstrung by the fact that a majority of his caucus has never been in a position where the votes they take will actually become law and the fact is this responsibility may petrify them, especially when they are asked to give Ryan and Trump a win by voting for a bill that is tremendously unpopular.

Lastly, this is a huge defeat for Trump. His voters largely put him in office because he was an outsider who was going to get things done. In his first big test, he was not able to "close the deal", to use his own words. Combine that with the Russian allegations and his continual inability to not only tell the truth but admit when he is wrong, and it would be no wonder some of his supporters will begin to question his ability to get things done. His problems with Congress may be even worse, as it is clear that no Republican in the House went into those meetings with Trump with any real fear that he would make them pay a price for not voting for the bill. Moreover, Republican representatives were negotiating policy differences but it was clear that Trump did not have enough understanding of the policy details to make those negotiations fruitful. Instead, Trump was engaged in a political negotiation, saying that Republicans needed to give him a "win" and, in doing so, would be winners themselves. But Trump will not be the one who has to defend this terrible bill next year. And, even though he was making a political argument, it was also clear that Trump did not have enough details to even make a persuasive political argument to individual members. LBJ, the master at arm-twisting, knew all the power points in each member's district and was able to use that knowledge to horse trade. Trump does not command such detail and clearly has no interest to do so. Congressional Republicans know Trump will sign virtually whatever they put in front of him, but they now realize that he will be very little help in crafting legislation or bridging the divide between the warring factions within the party. And Trump is finding out that legislating is not like real estate. When the deal or the market goes south, he can usually leave the hotel half-built and look to find someone to bail out his investment. In politics, you just lose and the failure of the bill remains as a reminder of that loss. I'm pretty sure Trump will not be happy when this realization hits home.

Today's Roster Of Corporate Criminals

While we wait to see whether the Republicans in the House are going to commit what would normally be political suicide, (but these are not normal times), lets' take a spin round the annals of corporate criminality.

In France, UBS has rejected a settlement in a case in which French authorities accuse the bank of aiding French clients to avoid French tax. UBS had settled similar cases in the US and in Germany, but will now be heading to trial in France. A similar case is also being brought against the bank in Belgium.

The whole unraveling of the secretive Swiss banking laws that allowed wealthy individuals to engage in tax evasion began with just one man, Bradley Birkenfeld. In 2005, Birkenfeld, through his work at the bank, became aware that UBS was blatantly ignoring a prior agreement between the bank and the IRS. Specifically, UBS sent a memorandum that outlined the prohibitions on overseas banking in the US. Birkenfeld felt that the memo was merely designed to provide cover for the bank to blame employees should the violation of the agreement become known. After reporting the bank's illegal activity up the chain to UBS compliance and then the General Counsel and not receiving any feedback, he resigned from the firm and later decided to inform the DOJ of the violations by UBS in the hopes of receiving a 30% fee on recoveries in the newly passed "whistleblower act".

Birkenfeld's revelations led to a $780 million fine for UBS and a deferred prosecution agreement with the DOJ and another $200 million fine with the SEC. Notably, UBS was not prosecuted for these violations nor for any of the subsequent illegal activity associated with the collapse of the financial system in 2008. Birkenfeld did eventually receive a reward of just over $100 million, but that was after having to serve a 40 month sentence for not being forthcoming with the government, despite having provided the information that he was accused of withholding to multiple government agencies. So, UBS simply pays a fine and continues to commit more crimes while Birkenfeld actually serves time. Birkenfeld summed up his opinion of UBS, describing it as "a global criminal enterprise".

Meanwhile, the NY Times reports today that a jury has convicted the owner and head pharmacist at a place called the New England Compounding Center (NECC) of over 50 counts of mail fraud and racketeering. The owner was acquitted of the more serious charge of 25 counts of murder. The case sprang from a surprising outbreak of fungal meningitis in 2012 that sickened 732 people across the country and killed 64. NECC was engaging in a pretty significant fraud, pretending it was a pharmacy while actually acting as a drug manufacturer. According to the Times, "Officials looking into the New England Compounding Center case said investigators had found dirty mats and hoods, a leaky boiler, dark debris floating in vials of medicine, and evidence that the laboratory was not leaving enough time to properly sterilize some products. They also said that a supposedly clean room was infested with insects and mice." Prosecutors allege that the owner purposefully neglected regulations in search of higher profits. The bar for conviction on the murder charges was high, needing to show that the owner absolutely knew that people would get sick or die when they shipped the medications. Again, I'm not a lawyer, but this surely looks like manslaughter to me. The 50 counts on which the owner was convicted bring a maximum of 20 years for each count so this man will probably spend quite a while in jail.

Latest Terror Attacks Show Weakening Of ISIS

With the horrific attack in London, a similar attack today in Antwerp, and the announcement of the computer and tablet ban on carry-on luggage by the US and the UK due to a specific ISIS bomb capability, it is pretty clear that the terrorism threat is higher these days. Although the cases in the UK and Belgium probably represent lone-wolves inspire by ISIS, it is apparent that the terrorist group is mounting another campaign even as its control of territory in Iraq and Syria shrinks.

I guess this was to be expected as its defeat in Mosul and the increasing pressure on Raqqa, the last two major cities controlled by ISIS, leaves the group with terrorism as its only way to remain viable. A recent report by King's College in London suggests that ISIS is already admitting that the "Caliphate" is doomed and it will shortly lose control over most, if not all, of the areas it used to control. Instead the group is intent on maintaining its internet presence as a propaganda machine.

While I'm not discounting the ability of ISIS to launch a serious and coordinated terrorist attack, it does appear that it is increasingly relying on the inspired lone-wolf to spread its terror. That, more than anything, is a sign of just how weak the organization has become.

This is not meant to minimize the deaths and tragedy in London yesterday. But, to bring some context, it is worth noting that an average of over 30 people per day die from gun homicides in the United States. In the past 24 hours, more than seven times the number killed in London have died a violent death in this country. The media's obsession with terrorism hides the real tragedies in this country that are in plain sight.

Gorsuch And The Future Of The Democratic Party

UPDATE: Obviously Chuck Schumer took my advice to filibuster Gorsuch!

Neil Gorsuch effectively bobbed and weaved and smarmed his way through his Judiciary Committee hearings in what has become a pretty dreary replay of Supreme Court confirmation hearings. Most nominees essentially refuse to answer any tough question by immediately retreating behind the fa├žade that they can't really comment because that issue may well come before the Court. So, aside from an explosive personal revelation or criminal history, it is hard to see these hearings as anything but a rubber stamp for any nominee whose party controls the Senate.

That does not mean that Democrats did not get some good shots in. And some of the cases they highlighted showed just how rigid and outside the mainstream Gorsuch can sometimes be with his strict "originalism", a term that has replaced "conservative" but means much of the same thing. Al Franken nailed Gorsuch on his ruling in what's known as the "frozen trucker" case. In that case, a truck driver whose brakes had failed pulled over and called his company for help. His employer instructed the driver to wait with the truck until that help arrived. That proved to be a long time coming and with temperatures at about 15 below zero, the trucker began to suffer from hypothermia. Again instructed to stay with the truck, the driver was left with a choice of freezing to death or continue to drive his truck with failed brakes, thereby endangering other on the road. He decided to compromise, unhitching the cab from the trailer and slowly driving to safety. His company fired him and the driver sued. Gorsuch ruled for the company, saying the law provided no right for employees to operate company vehicles in a way the company forbids. To take Gorsuch's ruling to its ultimate conclusion, the law required the trucker to freeze to death, whereupon the law would step in and presumably charge the company with some kind of crime which we all know would probably result in a fine. Franken noted the absurd situation that Gorsuch's reading of the law put the trucker in, but that did not seem to bother Gorsuch one bit.

One of the positives for Gorsuch was how infrequently his decisions had been overturned on appeal. But that image suffered a pretty big blow when, at the same time he was testifying, the Supreme Court ruled unanimously, 8-0, that his decision in a case involving the Individuals with Disabilities Education Act (IDEA) was wrong and is now overturned. The case involved an autistic student whose parents were seeking reimbursement for tuition at a school specializing in autistic children under IDEA. The IDEA law requires that public schools provide free and appropriate education for disabled students using federal monies allocated for that purpose. The specifics of the law say "The instruction offered must be ‘specially designed’ to meet a child’s ‘unique needs’ through an
‘[i]ndividualized education program'", as Chief Justice Roberts said in support of the decision. Gorsuch, on the other hand, had taken the view that the education provided the disabled student was lawful in that it only needed to "merely be ‘more than de minimis’", and denied the parents' suit. That was an unusual reading of the law, especially as an earlier ruling from Gorsuch's own Tenth Circuit appeals court had ruled that education needed to be "more than de minimus." That ruling set a baseline for the minimum that could be done to potentially comply with the law. Gorsuch completely turned that ruling on its head and, by adding the word "merely", making it the ceiling for what would comply with IDEA. Justice Roberts' ruling was brutal in its rebuttal of Gorsuch, saying, "When all is said and done, a student offered an educational program providing “merely more than de minimis” progress from year to year can hardly be said to have been offered an education at all. For children with disabilities, receiving instruction that aims so low would be tantamount to “sitting idly . . . awaiting the time when they were old enough to ‘drop out.’" An 8-0 reversal is a pretty stunning reversal, especially coming from the Roberts' Court and the way Gorsuch turned the meaning of the law's minimal requirement on its head again shows how out of the mainstream some of his opinions really are.

Sheldon Whitehouse landed a glancing blow in his questioning over Citizens United and "dark money". Specifically Whitehouse wanted to know whether Gorsuch agreed with Clarence Thomas that forcing disclosure of monies spent on political speech actually chills speech and would be a violation of the First Amendment. It is a bizarre theory that simply having to identify yourself as a speaker chills free speech, while remaining anonymous is perfectly fine. And Gorsuch did admit that he believed that disclosure may "chill expression" at certain times. Again, this is a position that is pretty well out of the mainstream. But Whitehouse had more, which highlighted the absurdity of Gorsuch's response. Specifically, Whitehouse asked why certain unknown groups were spending millions to support his nomination. Gorsuch dutifully answered, "You’d have to ask them." Whitehouse himself responded, "I can’t because I don’t know who they are. It’s just a front group." Yes, it was kind of a cheap shot but it only highlighted Gorsuch's ridiculous position.

Democrats in the Senate have to make up their mind about whether or not to filibuster this nomination. With the unethical and hyper-partisan treatment of Merrick Garland, will they allow Republicans to steal control of the Supreme Court for another generation. If they do filibuster Gorsuch, it is assumed that McConnell will change the filibuster rule for the Supreme Court and ram Gorsuch through anyway. Now there are reports that Democrats may be willing to make a deal with Republicans on Gorsuch. One deal would be to allow an up-or-down vote on Gorsuch but restore the filibuster for lower and district court nominees that Democrats and Harry Reid did away with after years of Republican filibusters. It is hard to see McConnell going along with that one, especially now Republicans have power. Another deal would be that Democrats may be willing to accede to Gorsuch in return for a promise to not break the filibuster rule when the next nominee comes up. This is designed to protect the spots of Ginsburg and Kennedy if they die or retire.  But McConnell has broken his word before with Harry Reid. And the Democratic base will be furious if Senate Democrats allow Gorsuch through without a fight. One of the Democrats' biggest concern with McConnell breaking the filibuster rule for Supreme Court nominees would be that the only filibuster left would for legislation and soon that would also be under attack.

My advice, which is worth less than a copper penny, would be to go ahead and filibuster Gorsuch and see if McConnell is really willing to break the filibuster for Supreme Court nominees. My guess is that he would. Republicans have been destroying the democratic norms in this country for decades now and they aren't about to stop. Just look at the entire Presidency of Donald Trump, with his blatant violation of the Emoluments Clause and the refusal to release his taxes. Meanwhile, Democrats continue to hamstring themselves by trying to uphold and adhere to the rules. If the refs aren't going to call the foul, don't call it on yourself. And if the legislative filibuster goes down too, so be it. As the Trumpcare bill has shown, Republican rhetoric is a great way to win elections. But when Republican policies actually get made into law, they are incredibly unpopular. Democrats need to have the courage of their principles. Demographics in this country are in our favor. At some point, Democrats will again, sooner rather than later, have total control like Republicans do now. At that point, I would consider packing the Court, telling the GOP to remember Merrick Garland, and dare the Republicans to stop us. Without the legislative filibuster, Democrats could pass their legislative agenda that would actually benefit the people that mostly vote against us. And once they have what Democrats provide, it will be hard to take it away. Just look at the ACA. Without the filibuster, we would not have ended up with the kluge that is Obamacare. But even that is more popular than what the Republicans are offering. The damage in the interim will indeed be great but that will only hasten our return to power. For decades, Republicans have made hay by voting for terrible legislation that sounds great on the campaign trail with the full knowledge that it would never become law. Why should Democrats provide them cover anymore. Let the GOP take the heat for the horrible policies they want to implement. When Democrats stand up for their principles, although it may take a while, in the end we will win.

Wednesday, March 22, 2017

The Noose Gets Tighter For Trump

Adam Schiff went on MTP Daily and dropped another bombshell on the heels of Devin Nunes' admission today that Trump transition and administration officials' communications, possibly including Trump himself, had been picked up in normal foreign intelligence surveillance. Specifically, Schiff said, "There is more than circumstantial evidence...There is evidence that is not circumstantial and is very much worthy of investigation."

And now CNN is reporting that "The FBI has information that indicates associates of President Donald Trump communicated with suspected Russian operatives to possibly coordinate the release of information damaging to Hillary Clinton's campaign...The FBI cannot yet prove that collusion took place, but the information suggesting collusion is now a large focus of the investigation". In addition, the information cited by the sources for this report say it does not come from the "Russian dossier" but other, multiple sources.

It also looks like Nunes' accusations this afternoon were solely intended to deflect from this story when it came out. I am not a lawyer, but it certainly seems that Nunes is getting close to obstruction of justice by briefing the President on the classified information he has. And, as John Dean, says repeatedly in his MSNBC appearances, the White House's every action these days screams "cover-up".

Devin Nunes Just Showed Why Investigation Needs To Move Out Of Congress

Devin Nunes, chairman of the House Intelligence Committee, had a press conference today where he claims that he has information that Trump transition and administration officials' communications were "incidentally collected" in the process of what he termed a legal "normal foreign surveillance" activity. Nunes went on to assert that the individuals were identified and that information was "widely disseminated" among intelligence agencies. In addition, Nunes at first confirmed and then hedged that some communications from Trump himself were also collected.

There is, at present, nothing illegal about the incidental collection of US citizens' communications in a typical foreign surveillance activity. But those communications are supposed to remain confidential and are not to be used unless the citizen himself becomes the target of an investigation. Nunes is saying that the "unmasking" of these administration officials is a crime. Of course, Nunes himself is releasing potentially classified information with this announcement, an act that Nunes condemned of others yesterday as illegally leaking, although he claims that he was alerted to this information "by sources who thought we ought to know it".

But by far the most disturbing detail that Nunes provided was that he was heading to the White House this afternoon to brief Trump because "they need to see it". This is frankly incredible. The head of an investigation into possible criminal collusion with a foreign power is taking classified information to a potential target of that investigation and briefing him about that information. And he knows Trump will pass on that information to the other targets in the probe. This is borderline obstruction of justice in my non-legal opinion. And it shows, once and for all, that this investigation needs to move from Congress to some independent entity. An investigation where the lead investigator is briefing the potential target on details of the investigation is not investigation at all. It is a sham and a cover-up.

McConnell Is Bailing On Trumpcare Even If It Passes The House

Mitch McConnell's attitude toward Trumpcare will actually make it even more difficult for the bill to pass the House. As Jonathan Chait notes, McConnell's publicly stated plan is to get Trumpcare off the table as fast as possible. Whether it passes or not does not seem to be his primary concern. If that is the case, there are a lot of House Republicans who are being strong-armed by Trump and Ryan to pass an incredibly unpopular bill when they know it will only die in the Senate.

According to McConnell, "We’re not slowing down. We will reach a conclusion on health care next week. We’ll either pass something that will achieve a goal that we’ve been working on. Or not." His intent is to simply take the House bill and put it up for a vote, at this point knowing it will fail. The gap between the hard liners who think the bill is too generous and those who think it is far too punitive is enormous and will not be bridged in just one week, especially in the Senate.

McConnell is a realist and he knows this bill is incredibly unpopular. That doesn't mean he won't take up an Obamacare repeal next year and once again try to make it an election issue, especially after another round of premium increases and potentially more counties with just one provider. But even that might be risky as the GOP now at least "owns" Obamacare now by not being able to fix or repeal it.

Right now, as Chait says, "A long bleed-out on health care will make Trump and his party even less popular, and chew up precious months during which the Republicans could instead be making use of their full control of government. The plan being pursued by McConnell is that of a man who wants to cut his losses fast." And that should make his colleagues in the House even more nervous about their vote tomorrow.

Five Graphs Show Just How Bad Trumpcare Is

Incredible as it may seem, Trumpcare actually insures less people than simply repealing Obamacare in its entirety outright. That's right, it is actually worse than status quo ante the Affordable Care Act.

On average, out of pocket costs from premiums will rise, in some place by over 100%.

The over $600 million in tax cuts in Trumpcare all, yes, every single cent, goes to those making over $180,000.

While Trumpcare may lower out of pocket premium costs for some younger, healthy people, much of that savings will be offset by skimpier coverage and higher deductibles.

When you consider the net effect of the benefit cuts under Trumpcare combined with the massive tax cuts, you find that lower income people will pay more so that rich people can get richer and very rich people benefit the most.

There are 23 Republicans in the House who represent districts that Hillary Clinton carried in the last election or were virtual dead heats. If all 23 of those vote against this bill, it will not pass. If you live in one of these districts, now is the time to make your feelings and resistance known. Call your representative TODAY!

Tuesday, March 21, 2017

New Trumpcare Bill May Be Worse Than Last With More Uninsured And Less Deficit Reduction

The revised American Health Care Act was released last night and despite Paul Ryan's promises to fix some elements of the plan, it has actually probably gotten worse. Kevin Drum gives us the rundown on the significant changes:
  • Adds $75 billion to reduce premiums for old people. But in an awesome display of legislative farce, the amendment doesn't actually set up the tax credits. It just tells the Senate to do it. So House Republicans have to vote for a pig in a poke.
  • Repeals Obamacare taxes a year earlier.
  • Increases Medicaid reimbursements for the elderly and disabled.
  • Deletes a provision that allows people to transfer unused tax credits into a Health Savings Account. Apparently some activists were afraid this might indirectly allow tax credits to be used for abortions.
  • Allows states to establish work requirements for Medicaid.
  • Allows states to take Medicaid as a block grant, presumably so they have more flexibility to use Medicaid money any way they want and more authority to tighten requirements for the poor.
In addition, in particular language designed to win over upstate New York Republicans, about $2.3 billion in Medicaid spending will shift from those upstate counties to the state, blowing a hole in the state budget. Elements that Paul Ryan indicated might be changed such as the late enrollment penalty and the age rating ratio remain unchanged, and premium relief for older workers is allocated as a tax deduction, thereby increasing deficit reduction, in order to hopefully win House conservatives, with the knowledge that the Senate will turn that into a tax credit in their version of the bill, if there is one.I'm not sure the deficit hawks in the party will fall for that one.

The GOP has promised that CBO will be able to score this bill before the vote on Thursday but it is doubtful that it will change its previous results in any significant way. In fact, with the block grant option and work requirement for Medicaid, it may actually increase the number of uninsured. The shift of costs from counties to the state will also probably add to the uninsured as New York may not be able to fully fill that new budget gap.

With the rollback of the Obamacare taxes a year earlier and the recognition that there will be another $75 billion or more in tax credits, it is also hard to see how much deficit reduction will remain. The original proposal came to a savings of $337 billion over 10 years. This new bill will be far less than that now. And the $600 billion in tax cuts for the top 1% will actually increase. As Larry Levitt from the Kaiser Family Foundation says, "This ACA repeal bill is looking more and more like a tax cut and Medicaid bill." Considering that Paul Ryan has been dreaming about gutting Medicaid since he first starting drinking beer, that's hardly a surprise.

Already, the House Freedom Caucus is saying they have enough votes to kill this bill and Trump headed to Congress this morning in order to twist some arms.  He held a meeting that lasted maybe 30 minutes and apparently threatened Republicans in his usual manner saying, "I honestly think many of you will lose your seats in 2018 if you don't get this done". Of course, some of those listening fear they will lose their seats if they do get this done. And I'm not sure that is the kind of deal-making that is going to get this bill across the finish line. Ryan and Trump will be in some ways fighting for their legislative lives. For Ryan, failure to shepherd this bill through the Republican-controlled House could very well mean the end of his stint as Speaker. For Trump, the inability of his ACA replacement, no matter how flawed and at odds with his prior promises, could be a mortal blow to his legislative agenda almost before it begins. Both will be pleading with recalcitrant House members to at least clear this hurdle with the promise there will be another vote if and when the Senate passes their own bill and the two bills get merged into one in conference.

But the resistance to this bill is enormous and Republicans around the country are feeling the heat. Trump himself is a damaged President, already under investigation for collusion with the Russians during the campaign. On the other hand, Trump is still enormously popular with his Republican base and that still means a lot to the Republicans who represent those districts. Right now, it does not look like Ryan has enough votes to pass the bill but if he and Trump can make the vote close, they will be able to exert enormous pressure on the remaining holdouts to cave. But if there is a block of Republican dissenters that can remain solidly together, Trump and Ryan will have difficulty. GOP House members in a pack are safe but individual strays will get picked off one by one.

For Democrats around the country, the next two days of relentless resistance will be crucial. According to this handy NY Times interactive feed, you can track where the vote stands. There are 23 Republican House members who represent districts that were won by Hillary Clinton. Those members need to hear from Democrats every second for the next two days. With those votes alone, this bill will go down to defeat. Stephen Wolf at Daily Kos provided the list of those representatives below:
Time to get working and kill this horrendous bill right now and, at the same time, damage Trump further and complicate the GOP legislative agenda going forward.

Evidence Of Trump's Collusion Is Strong And Trump Is Acting Guilty

Have you noticed that Donald Trump was more focused on the Intelligence Committee hearings yesterday than about anything else in his presidency and maintained that focus for longer than anytime since he became a candidate. He managed to tweet about virtually every revelation coming out of the hearings. And it makes you wonder why this issue is capturing so much of Trump's attention.

Adam Schiff laid out the circumstantial evidence that supports the belief that the Trump campaign was coordinating or colluding with the Russians. Schiff pulled all his evidence from public sources and put together a compelling story:
  • Trump advisor Carter Page's trip to Moscow in July where he gave a speech criticizing Western nations for  hypocritically focusing on democratization and fighting corruption.
  • Citing the "Russian dossier", Page is offered the brokerage fee on the sale of Rosneft.
  • Again citing the dossier, the Russians offered the Trump campaign damaging information on Hillary Clinton in return for going easy on Russia's invasion of Ukraine and highlighting NATO countries who were not fulfilling their full obligations.
  • Russian ambassador attends the GOP convention and meets with Flynn, Sessions, and Page, whom the dossier claims was hand-picked by campaign manager Manafort to be the go-between with the Russians.
  • The Republican platform is changed to remove the provision that offered "lethal defensive weapons" to Ukraine in its war with Russia. After months of denial, members of the Trump campaign admit that they pressed for that change.
  • After the convention, WikiLeaks starts releasing emails harming the Clinton campaign that cybersecurity firms unanimously agree were stolen by the Russians.
  • Trump himself appeals to the Russians to hack Hillary and praises the WikiLeaks disclosures.
  • Trump advisor and confidante Roger Stone accurately predicts the timing of WikiLeaks dumps and the release of John Podesta's emails. Stone also admits he has been in contact with both WikiLeaks and Guccifer 2.0 who is the "front" name for Russian intelligence.
  • Flynn was paid by Kremlin entities like RT and discussed Obama's sanctions with the Russian ambassador. Flynn lied about those discussions and the Trump White House was informed of those lies and did nothing until reports appeared in the press.
  • Trump has criticized virtually all of our allies in the course of the campaign and the election but has spoken nary a bad word about Putin and even offered praise.
Schiff summed it all up, saying, "Now, is it possible that the removal of the Ukraine provision from the GOP platform was a coincidence? Is it a coincidence that Jeff Sessions failed to tell the Senate about his meetings with the Russian Ambassador, not only at the convention, but a more private meeting in his office and at a time when the U.S. election was under attack by the Russians? Is it a coincidence that Michael Flynn would lie about a conversation he had with the same Russian Ambassador Kislyak about the most pressing issue facing both countries at the time they spoke – the U.S. imposition of sanctions over Russian hacking of our election designed to help Donald Trump? Is it a coincidence that the Russian gas company Rosneft sold a 19 percent share after former British Intelligence Officer Steele was told by Russian sources that Carter Page was offered fees on a deal of just that size? Is it a coincidence that Steele’s Russian sources also affirmed that Russia had stolen documents hurtful to Secretary Clinton that it would utilize in exchange for pro-Russian policies that would later come to pass? Is it a coincidence that Roger Stone predicted that John Podesta would be the victim of a Russian hack and have his private emails published, and did so even before Mr. Podesta himself was fully aware that his private emails would be exposed? Is it possible that all of these events and reports are completely unrelated, and nothing more than an entirely unhappy coincidence? Yes, it is possible. But it is also possible, maybe more than possible, that they are not coincidental, not disconnected and not unrelated, and that the Russians used the same techniques to corrupt U.S. persons that they have employed in Europe and elsewhere. We simply don’t know, not yet, and we owe it to the country to find out."

Comey's opening statement confirmed what everyone already suspected, that an investigation into possible Trump campaign cooperation or collusion is ongoing. It later emerged that the investigation into Russian hacking and possible Trump campaign collusion has been going on since July of last year, which makes you wonder where all those reports that denied there was any investigation of the Trump campaign came from just before and after the election. Comey prefaced his announcement by saying the the Justice Department had agreed with him acknowledging the ongoing investigation into collusion but reports indicate that it was an agreement between Comey and NSA Admiral Mike Rogers that led to that decision., indicating that Comey does not even trust the DOJ anymore. Comey and Rogers both thoroughly debunked Trump's claim that Obama had him wiretapped.

Needless to say, this brought a hurricane of tweets from our fearless leader. He started off the day with this, "James Clapper and others stated that there is no evidence Potus colluded with Russia. This story is FAKE NEWS and everyone knows it!" This is interesting in that he already seems to be throwing his aides overboard as he only mentions POTUS. "The Democrats made up and pushed the Russian story as an excuse for running a terrible campaign. Big advantage in Electoral College & lost"...The real story that Congress, the FBI and all others should be looking into is the leaking of Classified information. Must find leaker now!" Later, he added, "What about all of the contact with the Clinton campaign and the Russians? Also, is it true that the DNC would not let the FBI in to look?"

And he apparently took to his POTUS twitter account to comment on the hearings: "FBI Director Comey refuses to deny he briefed President Obama on calls made by Michael Flynn to Russia." Of course, Comey also refused to confirm that, as he refused to comment on so many aspects of the ongoing investigation. "The NSA and FBI tell Congress that Russia did not influence electoral process." This is misleading as those comments were directed at actually hacking votes. It is universally acknowledged, except within the White House, that the Russians attempted to influence the election. "NSA Director Rogers tells Congress unmasking individuals endangers national security" and "FBI Director Comey says classified leaks to the media have been 'unusually active' recently". Usually, an increasing number of leaks usually indicates an increasing number of questionable activities. "FBI Director Comey: fmr. DNI Clapper 'right' to say no evidence of collusion between Russia and Trump Campaign." Of course, Comey already had announced that an investigation of collusion was ongoing which, by definition, means that there is evidence of that.

Sean Spicer had a surreal press conference where he described disgraced former National Security Advisor Flynn as a "volunteer" on the Trump campaign and claimed Paul Manafort played a minor role in the campaign. Manafort was the campaign manager until just after the GOP convention when his questionable transactions with pro-Russian elements in Ukraine forced him to resign. He resumed an important role during the transition. Spicer again continued to push the lie about the Obama wiretap and repeatedly denied links to the Russians.

For their part, the Republicans on the committee solely focused on pursuing the leakers and really had no interest in pursuing the collusion investigation. This alone indicates that this investigation needs to move outside of Congress and into an independent inquiry of some kind, possibly an independent commission. Trump will oppose that every step of the way, but it may come to that for Republicans.

The biggest takeaway from the day was simply just how guilty the White House is acting as this investigation moves along. They continually lie about Russian contacts between Trump associates and the Russians and continually get caught in those lies. They refuse to admit Russia hacked the election when that has been evident for months. They continue to deny Russian contacts even when individuals like Page, Flynn, and Sessions admit to meeting with the Russian ambassador and Stone admits to communicating with Wikileaks. Trump himself continues with the Obama accusation in the face of denials from every government agency. And Trump's focus on the hearings today only add to the impression of his guilt.

My theory is that Trump has dealt with the Russians for years and has probably relied on the funding of its oligarchs for over a decade. At some point, Trump or his associates made a deal to do everything in their power to denigrate the US electoral system and our NATO allies and weaken Hillary Clinton in return for continued or, more probably, increased investment. That accounts for Trump's claims that NATO is obsolete and that the election was "rigged." The Russians probably didn't expect him to win and probably neither did Trump. And now Trump knows that he will be exposed and is lashing out in the only way he knows how, with lies, threats, and obfuscation. He continues with the accusation that he was surveilled by Obama which indicates to me that there is definitely intelligence, either tapes or transcripts, that show collusion between the Trump campaign and the Russians. Turning this evidence into a partisan issue by calling it an illegal surveillance by Obama is Trump's only defense. This will not end well.

Uber Suffers More Bad News, Company Could Potentially Collapse

Things seem to get worse and worse for Uber these days and it looks like the company is in the beginning stages of a significant freefall, if not collapse.

In Seattle, a Washington state judge has denied Uber's attempt to block a city ordnance that would allow Uber drivers there to unionize. Uber had been joined in the suit by the US Chamber of Commerce who opposes unionization pretty much on principle. The ordnance passed in December of 2015 and has been under litigation since then.

Uber's only hope for viability is to keep the costs associated with its drivers low and treat those drivers as contractors, not employees. Unionization is a clear threat to that strategy. Even so, Uber is subsidizing its fares to the tune of nearly 40% and hemorrhaging billions each year in order to build a monopoly position in as many markets as possible. Uber's typical reaction in the past to cities that attempt to regulate them or their business practices has been to threaten and then pull out of those cities. I have a feeling Seattle will get the same treatment.

Yestereday, Uber President Jeff Jones resigned after being on the job for just six months. The rumored reason for Jones' departure is that the problems at Uber were far deeper than he had been led to believe when he joined the company. In addition, the head of the mapping group at Uber, Brian McClendon, also resigned to go back to his home in Kansas and get into politics. Mapping technology is key to Uber's strategy to become a dominant force in the autonomous vehicle market so it is probably not a good sign that he is leaving.

These departures follow on other key resignations from the company over the past year. Another executive in the autonomous vehicle program left earlier this month. The vice president of engineering was forced to resign after he was accused of sexual harassment at his former place of employment. The head of Uber's AI lab also resigned in December and another engineering guru left last week and the vice president of product and growth resigned earlier this month.

For the first time ever, it is not beyond the realm of possibility that Uber will actually collapse. The Google suit over the theft of its autonomous vehicle technology by Uber threatens the viability of that program. And that ignores the question of whether autonomous vehicle technology is itself viable. Meanwhile, Uber is hemorrhaging huge amounts of money keeping its ride-sharing business afloat. If the ship keeps sinking at its present rate, we will surely see even more executives abandon the Uber ship.

Trump Foreign Policy Favors Russia, China At Expense Of Our Old Allies

The Trump/Bannon administration seems to simply be following a foreign policy strategy of cozying up to Russia and China and telling the rest of the world to get lost. Trump's authoritarian words and deeds are being echoed by tin-pot dictators around the country while our allies in Asia and Europe get the cold shoulder. At the same time, Secretary of State Tillerson is aligning US interests with China and now reportedly skipping a NATO foreign minister meeting and instead going to Russia.

The Guardian had a great opinion piece the other day illustrating just how Trump's anti-democratic language is being regurgitated by authoritarian leaders around the world. In the same way that the G.W. Bush slogan of the "war on terror" was used by governments around the world to brand any internal dissent as "terrorism", so too is Trump's attacks on the free press.

Last month, CNN was pulled from the airwaves in Venezuela because, according to the government, its reports "defame and distort the truth". In Cambodia, several media outlets including those from the US were barred from a press briefing and basically told to toe the government's party line or be expelled from the country. But the biggest beneficiaries of Trump's war on the media are, of course, China and Russia. Russia already brands independent press reports that challenge the government as "fake news" and China has followed the same pattern. A foreign correspondent in China commented, "I now feel more vulnerable because the moral gravitas of the Obama administration, and its discourse on press rights, has been wiped out".

China, on the other hand, has every reason to celebrate. Trump quickly backed down on his challenge to the "one China" policy, abandoned other Asian allies with his withdrawal from TPP, and antagonized our Australian allies, perhaps driving them into the arms of the Chinese, essentially opening the door to Chinese dominance in Asia and inviting them in. And Tillerson went to China and repeated verbatim the diplomatic-speak that recognized the pre-eminence of China's self-interest. In the arcane language of diplomacy, China uses the words "mutual respect" to indicate that the core interests of each country will not be challenged. For China, those core interests involve Taiwan, Tibet, Hong Kong, and presumably military dominance in the South China Sea. When Tillerson said the US and China need to build a relationship based on "mutual respect", the Chinese were ecstatic. What was even more disturbing is it is unclear whether Tillerson actually understood the hidden meaning of that phrase or not. Whether he did or not, it certainly provided no reassurance for our other Asian allies. A former national security official described Tillerson's statement thusly, "China’s characterization of the U.S.-China relationship, as exemplified by those phrases, portends U.S. decline and accommodation. Tillerson using these phrases buys into this dangerous narrative, which will only encourage Chinese assertiveness and raise doubts in the region about the future of U.S. commitment and leadership in Asia." You seriously have to wonder whether those investments in Trump-related real estate ventures are paying off big-time for the Chinese.

Last night, it was reported that Tillerson will skip a meeting with NATO allies in early April and attend the "summit" between President Trump and Chinese President Xi Jinping instead. The actual meeting do not, in fact totally overlap as the NATO meeting runs from April 5-6 while the meeting with the Chinese leader is scheduled for April 6-7. Certainly, Tillerson could go to the NATO meeting on the 5th and be back in time for the meeting on the 6th but he might be too fatigued to do that. In fact, NATO reportedly offered to change the dates of the meeting to accommodate Tillerson but were rebuffed. Later in April, Tillerson will head off to meet with Putin in Russia, again another slap in the face of our European allies.

Lastly, this morning DHS announced that it would not allow laptops and tablets to be carried on planes that come to the United States from 10 Middle Eastern airports in eight countries, including three of the most important airline hubs in the region. Those items will now have to included in the checked luggage where, I'm sure, thousands of devices will be stolen or illegally accessed. The Trump administration announced no imminent national security threat that prompted this restriction, although, interestingly, Adam Schiff, the ranking Democratic member on the House Intelligence Committee put out a statement in support of this move, suggesting there might be a specific threat. But without any statement for the Trump administration, it seems like just another gratuitous step in the Muslim ban, making it as difficult and annoying as possible for Muslims to come to this country. I'm not sure how well this will go over with US businessmen who travel to the region or American tourists. It will, however, give a significant advantage to US airlines over those Mideast based airlines like Emirates and Qatar Airways. It might be worth checking on who bought large shares of US airline stock recently. And you really have to wonder how long other countries will take this kind of abuse from Trump before they begin to retaliate against Americans traveling to their countries.

Based on these and other actions, it seems clear that Trump and Bannon envision an authoritarian triumvirate of the US, China, and Russia with basically world dominance. If they can pick off other Western democracies like France to join their little club, all the better.

Monday, March 20, 2017

Two Simple Questions Democrats Don't Ask Is Why We Lose Elections

I haven't been able to follow that much of either the Intelligence Committee hearings or the Gorsuch confirmation hearings and, of course, that was part of the Republican plan for having both occur at the same time. But there are two things that I haven't heard from either hearing which show why Democrats continue to have problems confronting the anti-democratic nature of the current Republican party and winning elections.

There are only two questions I would like to see at least one Democrat ask, one for Comey and one for their fellow GOP members on the Judiciary Committee at the Gorsuch hearings. Comey opened his remarks by finally confirming that "I have been authorized by the Department of Justice to confirm that the FBI, as part of our counter-intelligence mission, is investigating the Russian government’s efforts to interfere in the 2016 presidential election. And that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia’s efforts." He only confirmed this investigation because, "in unusual circumstances, where it is in the public interest, it may be appropriate to do so, as Justice Department policies recognize." Subsequent questioning also revealed that the FBI had been investigating links between the Trump campaign and Russia for three months prior to the election. The obvious question for some Democrat, any Democrat, to ask is why the investigation of the Trump campaign's links to Russia was not worthy of confirmation before the election while the discovery of a new batch of emails which Comey had no idea whether or not they were relevant to his Clinton email investigation was worthy of public confirmation. And a follow-up question should obviously be why he ignored Justice Department guidelines about announcements during the election for Clinton but stayed silent on the investigation of the Trump campaign. Lastly, who decides what guidelines to follow at the DOJ. Let's see Comey squirm his way around those question.

Over in the Senate, I would like to see just one Democratic Senator simply ask the question of "why are we here?". The answer, of course, is the unconstitutional denial of a sitting President's right to have his Supreme Court nominee actually considered by the Republican controlled Senate. Gorsuch is the physical embodiment of the theft of a Supreme Court seat and, as such, he should and will be held to a higher standard than usual.

Yes, all this may be water under the bridge and nothing can be done to change it. But at least feed a little meat to the base rather than just moving on in a pragmatic way. Letting Comey's outrageous actions before the election just pass without at least some constant rebuke just shows weakness. It shouldn't matter that we now need Comey to be vigorously investigating Trump. Letting Gorsuch hearings go by without at least some rebuke to Republicans for their unconstitutional power grab just shows weakness. It shouldn't matter that Democrats want to save the SCOTUS filibuster in case a liberal Court member retires or dies. At some point you have to stand up for you principles and your party. And it is this kind of weakness that turns off Democratic voters, makes independents question what you really stand for, and makes it harder to win elections.

Sunday, March 19, 2017

Monopolies, Gorsuch, And Building A Narrative For The 2018 Elections

Last summer, Elizabeth Warren gave a wonderful speech decrying the oligopolies that control America's business. There are whole books devoted to trying to explain why, over the last 40 years, productivity has increased, albeit at a slower pace, while worker's wages have remained stagnant. But the increased level of concentration and proliferation of small oligopolies that control large sectors of the American economy is certainly one of the primary reasons.

Oligopolies may provide huge economies of scale that drive up profits but that is clearly at the expense of both workers and, in fact, consumers. Perhaps one of the clearest examples of this is Wells Fargo, one of the five big financial firms in the US. For over a decade, Wells Fargo employees opened up bogus accounts in their customers' names and without their customer's authority. They did so in order to boost account fees charged by the bank and under immense pressure from management to reach absurd sales goals. Whistleblowers who brought these abuses to light within the firm were ignored or even fired. Management clearly knew what was going on but had no interest in cracking down on the problem because the firm and the executives were all making too much money to stop.

When the scandal finally broke last year, Wells Fargo at first blamed it on overly-aggressive employees, a bunch of "bad apples". That particular excuse fell apart when whistleblowers who had been fired came forward and told of their informing the firm of the abuses as they occurred. The firm then tried to minimize the time frame of the illegal activity, but that was also soon proven to be a lie. In the end, the CEO, John Stumpf, was finally forced to resign but that didn't stop Wells Fargo from still trying to avoid responsibility for their illegal activity as they tried to force customers who had their money stolen into arbitration in order to get their money back.

You would think that the executive management in the company might pay a heavy price for this kind of illegal behavior. But, under present law, they are virtually untouchable criminally and, as part of the oligarchy, will never face any real punishment. Sure, they might be fined, but, as Stumpf said, that is "just the cost of doing business" for stealing from your customers. The New York Times reports that Stumpf presciently converted 1.5 million stock options as the scandal unfolded and was able to walk away from Wells Fargo with an $83 million payout from those options. In addition, Stumpf already held other shares of Wells Fargo stock, leaving him with a total package of nearly $150 million. His successor, Timothy Sloan, despite promising to forego salary and a bonus, actually saw his compensation rise by about $2 million simply to take the job. That's a pretty nice racket for stealing your customers' money - one guy gets a huge payout to leave and the next guy gets a big raise to take over. Meanwhile, workers haven't seen pay raises in over a decade and customers have to fight tooth and nail to get their money back.

This is an area that is ripe for progressive attacks. The failure of government to even provide minimal antitrust enforcement to stop the formation of these oligopolies has gone on for decades and, while Democrats have been slightly better than Republicans, both parties are really at fault. Now is the time for the Democratic party to take a firm stand on increased antitrust enforcement. The current oligopolies are harmful to consumers, to workers, and to real competition that drives capitalism. The barriers to entry are so high, competition is stifled. Without that real competition, there are fewer jobs and those that remain are easier to outsource. The oligopolies can keep wages for workers depressed in either silent or active collusion while keeping prices higher for consumers, only lowering them temporarily to drive a competitor out of business. And these companies have no fear of being called to account for their illegal behavior - they are simply too big to fail, as the failure to break up or prosecute firms on Wall Street has shown.

And there is no better time to start that attack than on Monday when the hearings to confirm Neil Gorsuch to the Supreme Court begin. Democrats have every right to filibuster Gorsuch simply because of the way Merrick Garland was treated and they should do so. But the hearings give Democrats an opportunity to show that Gorsuch is both outside of the mainstream in jurisprudence while setting up a narrative for a political attack in the 2018 election. Martin Longman points to insightful article by Sandeep Vaheesan that describes just how extreme Gorsuch's views are when it comes to antitrust enforcement.

Vaheesan cites two opinions that highlight Gorsuch's actually flipping the intent of antitrust laws on its head. In Four Corners Nephrology Associates v. Mercy Medical, a hospital contracted with one set of doctors in order to kick-start its nephrology practice. It was an exclusive contract and it was challenged by another doctor who also wanted to practice nephrology at the hospital. He was denied that opportunity by the hospital and sued the hospital, alleging that is was creating an unfair monopoly by doing excluding him. Gorsuch ruled for the hospital and said this in his opinion, "Without some confidence that they can control access to their own property real or intellectual, how many firms would be deterred from undertaking the risks associated with, say, a significant new endeavor or facility?" And he went on to quote another ruling by Antonin Scalia, saying, "The opportunity to charge monopoly prices—at least for a short period—is what attracts ‘business acumen’ in the first place."

The second case involved Novell's suit against Microsoft over Microsoft's breaking its promise to share the technology to allow Novell to develop a word-processing program for Windows 95, thereby unfairly favoring Microsoft Word. Again, Gorsuch rule in favor of Microsoft and his opinions set up an absurd precedent that, since Microsft did not lose any short-term profits by favoring Word, it was not unfairly competing with Novell.

Both these rulings are actually in direct contradiction of what antitrust laws actually state. the whole point of antitrust law is to prevent monopoly power, period, not simply restrict it to a "short period". Gorsuch also seems to believe that business will ONLY invest in new products when success is guaranteed. And it is ridiculous to think that anti-competitive practices have to rely on losing money in order to drive your competition out of business in order to be in violation of antitrust law. By making sure Novell could not provide a word-processing program while offering its onw product, by definition Microsoft would not lose money.

Vaheesan summarizes, "Gorsuch’s record on antitrust law is limited but discouraging. Thus far, he has displayed no awareness of how concentrated economic power concentrates political power. He ignores the effects of monopoly on competitors and open markets. If a monopolist uses its muscle to exclude smaller rivals, this marginalization concerns the courts only if consumers are hurt in the short term by, for instance, higher prices—and even then under only very limited circumstances."

The Gorsuch hearings will give the opportunity to Democrats to create a basis for opposing Gorsuch simply beyond the unconstitutional treatment of Merrick Garland. And there is plenty of ammunition to oppose him based on his position on torture, and his opinions on Hobby Lobby, reproductive rights, and voter suppression, all of which are important issues. But it also gives Democrats the opportunity to attack Gorsuch and Republicans for supporting monopoly power that hurts workers and consumers and actually inhibits the creation of new jobs. Can you imagine how many jobs would have been created if the big banks had been broker up in the wake of the financial crisis? Along with Republicans' desire to deny healthcare to 24 million people and Trump's vindictive and draconian budget, breaking up the oligopolies will be an effective theme to run on in 2018. Let's hope Democrats can take advantage of this opportunity and start the narrative to win the 2018 elections.

Ryan Calls Trumpcare Vote For Thursday; What's The Rush?

Well, it looks like the Paul Ryan is intent on getting the House to vote on Trumpcare this Thursday. That means sometime between now and Wednesday night, Ryan will unveil whatever tweaks he has made to the bill and then ask the House to vote on the measure just days or even hours later. Apparently Ryan believes these changes will bring enough conservatives on board to allow the bill to squeak through to passage and that wavering House members will be too afraid to vote against "repeal", having campaigned on that theme for the last seven years.

Reports indicate that, after a meeting at the White House with Trump, Ryan, and the Republican Study Committee, whose membership somewhat overlaps the Freedom Caucus, it was agreed that a work requirement for Medicaid recipients would be added to the bill and that states would have the option to receive a fixed sum or a per-capita amount when applying for their Medicaid block grant. Depending on when Ryan announces the changes to the AHCA, it may not be possible for the CBO to score the new plan. But if these are the only changes to the plan, it is hard to see how the CBO numbers will change significantly and, in fact, the number of newly uninsured under Medicaid might even climb even higher than the original estimate with the work requirement in place.

As Chris Hayes noted last week, if the House goes forward and votes on the bill on Thursday, it will only have been 17 days since the original proposal was released. There will be no hearings or testimony from experts before the vote and the number of amendments will be limited or non-existent. 17 days to reorganize 20% of the US economy. At this point it looks like Ryan is taking a huge gamble on just ramming this through as quickly as possible. I'm pretty sure not even he knows whether he has the votes to pass it at this time and a failure in the House would imperil his position as Speaker. I do believe that he thinks he can get the vote close enough to where he can twist the few remaining arms to get the bill passed, even if it means keeping the vote open for as long as that takes.

If the bill passes the House, it is not going anywhere in the Senate as it is currently written. The Senate has its own issues on getting a bill passed, especially as the change allowing the ratio of rates for insurers to charge older versus younger enrollees to move from 3:1 to 5:1 will probably not be eligible to be passed under reconciliation and will need 60 votes, allowing Democrats to filibuster that provision. But eventually the Senate will probably be able to craft a bill of its own that will only lose one or two Republicans and get passed. At that point, the two bills will go to conference to hash out a final bill that both houses of Congress will again then have to pass. It is hard to see how the two bills could actually be reconciled in a way that could pass the House and the Senate but, at this point, Republican leaders would simply be happy to just get to that point. But that scenario actually works in Ryan's favor with the vote on Thursday as most House members will believe that there will be a second vote on the AHCA which "frees" them somewhat on this vote.

Meanwhile, the April deadline for insurance companies to make their decisions about participating in the ACA exchanges next year is fast approaching. As I have written before, if we get to mid-to-late April and the GOP is still bickering about the details of the AHCA, with no agreement between the House and the Senate, it could spell disaster for the exchanges in 2018 and Democrats had better be prepared to make sure Republicans get blamed for that.

It is an open question why Ryan feels the need to move this bill through the House with such haste. Is it because he knows the longer people have to look at the details, the harder it will be to pass? But it is hard to see how much worse it can get after the CBO score came out. Is it because the GOP is feeling the pressure of that April deadline for insurers? But Republicans have been saying Obamacare is imploding for years and the collapse of the exchanges would actually give them "proof" of that, even though the GOP would have actually caused the 2018 collapse. Or is it because the GOP leadership realizes that the repeal and replace of Obamacare has now become a political loser for the party and it would be better to simply have a vote and see the bill go down to defeat? Sure, they would take some heat from the base but they tried and they failed. With healthcare out of the way, they could move on with the rest of their agenda like tax reform.

The next four days are critical. If Republicans can not get this bill to pass the House, it will partially derail the rest of their legislative agenda, as the tax cuts that are the real driver for the GOP in the AHCA are key to tax reform and other Republican plans going forward. Intense pressure on GOP House members such as what happened to Pete Sessions yesterday will make them think long and hard about this vote. Not only do they have to take into account their constituents in revolt at home, but they also have to consider the fact that the bill may die in the Senate or that Trump will realize how bad this bill is for his base and not sign it, as he threatened to do in his Fox interview last week. Do they really want to be left hanging out there as potentially the only votes for ripping healthcare away from 24 million Americans, especially when they know full well that Trump will not provide them any cover if the bill fails. For Democrats and progressives, it is time for a full court press between now and Thursday.