Needless to say, much of the reasoning in my previous post applies to healthcare as well. Why are Republican so determine to pass a wildly unpopular bill that strips 20 million (or so) people of their health insurance; raises premiums for older consumers (a highly Republican constituency); allows insurance companies to offer skimpier plans, possibly pricing essential services out of the reach of people with pre-existing conditions; and allows the return of lifetime limits? People on my side assume that it is so they can repeal the taxes that fund Obamacare and that stripping so many of their insurance is purely incidental. I am not so sure. I can see many motives similar to the ones I proposed for repealing measures that would allow regulators to keep a failed bank from setting off a general financial crisis. So here we go again.
Economic royalism. Republicans are convinced that the unregulated free market is perfect and that if we just get government out of healthcare (including regulating insurers) all will be well.
Ideological principle. This is much the same thing. Someone I read (don't remember who) commented that Republicans have opposed government paying for healthcare long before they became committed to tax cuts at the top. They blocked Truman from creating a national health service along the British model. They resisted Lyndon Johnson's creation of Medicare and Medicaid. They spiked the Clinton plan (Hillarycare, they called it). It is not exactly a secret that Republicans see entitlements in general (Medicare, Medicaid, Social Security) as constitutionally and morally illegitimate and would like to get rid of them. Up till now, any sort of rollback has not been politically feasible. Republican, having excited so much outrage against Obamacare, now finally see the opportunity to roll part of the welfare state back. They are taking it. Not only does the plan take away insurance from people who gained it under Obamacare, it puts a serious squeeze on Medicaid. If they succeed and don't pay too high an electoral price, Medicare and Social Security just might be next.
Pure partisanship. Obama was responsible for a program that extended health insurance to 20 million people. That program must die because Obama originated it. Real world consequences take a back seat to partisan spite and "winning." (I am pretty sure this is Trump's motive).
A warning to future Democrats. I always thought that part of the goal for Republicans in fighting Obamacare was to make the subject so toxic that Democrats would never touch it again. Actually repealing it and stripping 20 million of their health insurance serves the same purpose even more strongly, and in at least three ways. First of all, it may leave the Democrats too exhausted to go through the whole process of creating a healthcare system all over. Second, it may create such a mess as to make such attempts futile. And finally, it makes that point that even if Democrats are successful in cleaning up the mess Republicans make, it will be an exercise in futility, since Republicans will just take a wrecking ball to whatever Democrats create. I confess to not being clear why having a large uninsured population is such an important principle to Republicans, but it is time to acknowledge that it is.
Winning future elections. Finally, making total hash out of the healthcare system may cost Republicans the election in 2020, but fear not. It seems most unlikely the Democrats will be able to clean up whatever mess the Republicans leave by 2022. And then Republicans can make Democrats' failure to clean up their mess a big campaign issue.
Maybe this last is overly cynical, but just look how Republicans managed to crash the economy in 2008 and then run against the Democrats for not having fixed it yet in 2010.
Saturday, June 24, 2017
Possible Reasons
So, let us return to Kevin Drum's question. Why are Republican so determined, not just to loosen banking regulations, but to destroy the mechanism set up to ensure that a future bank failure does not set off a general financial crisis and tank the economy? Do they want another financial crisis?
I can offer a number of possibilities, ranging from the least to the most cynical. Here we go.
The Orderly Liquidation Authority hits a lot of red button issues for Republicans. It gives vast power to regulatory agencies, encourages international cooperation with financial management, and was supported by the hated Obama. This is the perfect combination of things Republicans most hate. They oppose the OLA for that reason.
Republicans are economic royalists. By that I mean that they believe the unregulated workings of the free market are sacred and infallible and always (by definition) produce the optimum outcome, not only for society as a whole, but for all individual actors. Capitalist, as agents of the free market, are answerable to the free market alone and no lesser mortal may ever question their actions.* Regulations on banks are bad because they restrict lending. Restrictions on credit are holding back the economy. And, in fairness to the Republicans, restricting lending probably is slowing growth somewhat. On the other hand, when banks are allowed to lend without restrictions, the result is invariably overlending, a bunch of bad debts, and an financial crisis. Republicans complain that financial regulations are inhibiting a potential boom, but it is only by inhibiting the booms that you can prevent the busts. Which leads to the next possibility.
Republicans are "liquidationists." The phrase comes from the alleged advice of Herbert Hoover's Secretary of the Treasury in response to the crash, "[L]iquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system." This was then and is now the conservative response to the bust that follows the boom. During the boom, economic royalists inveigh against financial restrictions that inhibit it. If financial restrictions are lifted and the boom grows greater, they tout it as success. When the bust invariably follows, they see it as deserved punishment for all the excesses of the boom and warn against doing anything about it. Such thinking takes several forms. The simplest is that the sacred and infallible free market will quickly correct itself if you sit back and do nothing, and that any inference will necessarily make things worse. Another is that the bust is necessary to shake out all the distortions of the boom and purge "rottenness," generally defined as debt and moral hazard. Many also believe that there is an inevitable bottom to be reached, and that the faster the economy hits the inevitable bottom, the sooner it will recover. Thus encouraging the failure of large portions of the economy is healthy because it anything that fails is obviously weak and something better will inevitably arise to take its place.
Of course, this raises a slightly awkward question. If the unregulated workings of the free market are so great, why to they lead to a boom-and-bust cycle in the first place? The usual answer, so far as I can tell, is that the real reason for booms and busts is that government protects people from the consequences of their mistakes, which introduces moral hazard into the system and allows for booms and busts. Each disaster averted only adds more moral hazard to the system and sets us up for an even worst bust down the line. If only government would stop interfering and allow the crash to proceed, no matter how bad, it would finally shake the moral hazard out of the system, scare banks into their senses, and end the boom-and-bust cycle once and for all.**
We certainly see evidence of that in how outraged Republicans were following the 2008 crash at any attempt to save the economy, not only by the elective branches of government, but also by the Federal Reserve. Of course, many people might suspect that Republicans' anger over attempts to save the economy has less to do with ideological dogma than with the party that controlled the White House. Which leads to my next theory.
The OLA allows regulators to wipe out shareholders and claw back bonuses to executives. I assume this is why banks hate the OLA so much. If it is why Republicans hate the OLA too, I suppose that might be considers a form of economic royalism -- just a particularly corrupt and cynical one.
Republicans are determined to destroy anything the Democrats may do, regardless of the consequences. Republicans have worked themselves up into such a lather of hate toward Obama and the Democratic Congress that they have taken a root-and-branch approach to destroying everything they do, regardless of the consequences. If repealing Obamacare strips 20 million people of their health insurance, if repealing Frank-Dodd leads to a new financial crisis, if tearing up the agreement with Iran leads to them getting a nuclear bomb, those are trivial concerns compared to obliterating the Obama legacy. And another, closely related, but more cynical possibility.
The harm is intentional, as a warning to future Democrats. Seen this way, the damage is meant as a clear warning, both to voters who may be tempted to vote for the Democrats and to Democrats who may be tempted to pass legislation if they win. It will be in vain. Republicans will destroy whatever you did, They don't care how much disruption they cause or how much harm they do. If you care, if you want to spare the country the disruption caused by ripping out well-established policies, then never pass any legislation of consequence because as soon as Republicans return to power, the WILL destroy it. If Democrats extend health insurance to 20 million people, Republicans will take it back. If Democrats end lifetime caps, Republicans will restore them and cut of vital, life-saving treatment in mid-course. If Democrats develop a plan to prevent financial crisis from spreading and crashing the economy, Republicans will make sure the next crisis does just that. If Democrats put limits on Iran's nuclear program, Republicans will take those limits off. And, I suppose, if the next time Democrats win the triple crown, they build a major infrastructure program, Republicans will take jackhammers to it when they return to power.
And then the most cynical explanation of all.
It is a clever bit of insurance if Republicans are relegated to the wilderness. Republicans are doing the best to conceal the nature of the healthcare bill in order to get it passed. But if it strips 10 to 20 million people of their health insurance, that just won't be possible to conceal. Nor will it be possible to conceal older customers seeing their premiums skyrocket, or people with pre-existing conditions find themselves unable to afford insurance to cover the care they need, or people abruptly cut off life-saving care when their lifetime limits run out. All of this could lead to a major backlash against Republicans and may lead to Democrats regaining at least one house of Congress in 2018 and the triple crown in 2020. It may even lead to an extended time in the wilderness for Republicans, just as did the Great Depression.*** If so (and it is by no means certain), what better way could there be for Republicans to stage a comeback than to set the economy up for another financial crisis and make sure that this time there would be no way to save the economy from the full force of the crash. Republicans would then blame the Democrats and ride a huge wave election to power.
Just for the record, I actually don't believe this last one. I don't think Republicans are looking that far ahead. And I do think they are economically royalist enough not to expect such an outcome. But when I am feeling very cynical, sometimes I think such thoughts.
____________________________________________
*This doesn't quite mean claiming that no capitalist has ever made a mistake, but sometimes it can look a lot like it. For instance, during the 2008 crisis, economic royalists showed a marked reluctance to acknowledge that the financial industry or auto industry could be facing crisis because of mistakes by management. Instead, they blamed the financial crisis on loose monetary policy, Government Sponsored Entities (i.e, Fannie and Freddie), and the Community Reinvestment Act. Problems in the auto industry were blamed on unions.
**Objection to any attempt by government to save the economy includes the view of tight money as a universal and timeless moral imperative to be maintained regardless of economic conditions. I should add here the Austrian School of economists, who believe that central banking and paper money cause the boom-and-bust cycle and that it could be avoided by abolishing central banks and going on the gold standard. Somewhat inconvenient to this viewpoint is that the US did, indeed, go without a central bank from 1836 to 1913 and was on a precious metal standard all that time -- gold and silver from 1836 to 1873 and gold only from 1873 to 1913. And the boom-and-bust cycle persisted the whole time. They are right, nonetheless, that a strict gold standard would prevent a boom-and-bust cycle. It would do that by so constraining the money supply as to cause an endless bust.
***Then again, to judge from the results of special elections, many Republicans may rejoice in seeing so many of those people lose their insurance, or regard the loss of their own as preferable to letting liberals get the last laugh.
I can offer a number of possibilities, ranging from the least to the most cynical. Here we go.
The Orderly Liquidation Authority hits a lot of red button issues for Republicans. It gives vast power to regulatory agencies, encourages international cooperation with financial management, and was supported by the hated Obama. This is the perfect combination of things Republicans most hate. They oppose the OLA for that reason.
Republicans are economic royalists. By that I mean that they believe the unregulated workings of the free market are sacred and infallible and always (by definition) produce the optimum outcome, not only for society as a whole, but for all individual actors. Capitalist, as agents of the free market, are answerable to the free market alone and no lesser mortal may ever question their actions.* Regulations on banks are bad because they restrict lending. Restrictions on credit are holding back the economy. And, in fairness to the Republicans, restricting lending probably is slowing growth somewhat. On the other hand, when banks are allowed to lend without restrictions, the result is invariably overlending, a bunch of bad debts, and an financial crisis. Republicans complain that financial regulations are inhibiting a potential boom, but it is only by inhibiting the booms that you can prevent the busts. Which leads to the next possibility.
Republicans are "liquidationists." The phrase comes from the alleged advice of Herbert Hoover's Secretary of the Treasury in response to the crash, "[L]iquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system." This was then and is now the conservative response to the bust that follows the boom. During the boom, economic royalists inveigh against financial restrictions that inhibit it. If financial restrictions are lifted and the boom grows greater, they tout it as success. When the bust invariably follows, they see it as deserved punishment for all the excesses of the boom and warn against doing anything about it. Such thinking takes several forms. The simplest is that the sacred and infallible free market will quickly correct itself if you sit back and do nothing, and that any inference will necessarily make things worse. Another is that the bust is necessary to shake out all the distortions of the boom and purge "rottenness," generally defined as debt and moral hazard. Many also believe that there is an inevitable bottom to be reached, and that the faster the economy hits the inevitable bottom, the sooner it will recover. Thus encouraging the failure of large portions of the economy is healthy because it anything that fails is obviously weak and something better will inevitably arise to take its place.
Of course, this raises a slightly awkward question. If the unregulated workings of the free market are so great, why to they lead to a boom-and-bust cycle in the first place? The usual answer, so far as I can tell, is that the real reason for booms and busts is that government protects people from the consequences of their mistakes, which introduces moral hazard into the system and allows for booms and busts. Each disaster averted only adds more moral hazard to the system and sets us up for an even worst bust down the line. If only government would stop interfering and allow the crash to proceed, no matter how bad, it would finally shake the moral hazard out of the system, scare banks into their senses, and end the boom-and-bust cycle once and for all.**
We certainly see evidence of that in how outraged Republicans were following the 2008 crash at any attempt to save the economy, not only by the elective branches of government, but also by the Federal Reserve. Of course, many people might suspect that Republicans' anger over attempts to save the economy has less to do with ideological dogma than with the party that controlled the White House. Which leads to my next theory.
The OLA allows regulators to wipe out shareholders and claw back bonuses to executives. I assume this is why banks hate the OLA so much. If it is why Republicans hate the OLA too, I suppose that might be considers a form of economic royalism -- just a particularly corrupt and cynical one.
Republicans are determined to destroy anything the Democrats may do, regardless of the consequences. Republicans have worked themselves up into such a lather of hate toward Obama and the Democratic Congress that they have taken a root-and-branch approach to destroying everything they do, regardless of the consequences. If repealing Obamacare strips 20 million people of their health insurance, if repealing Frank-Dodd leads to a new financial crisis, if tearing up the agreement with Iran leads to them getting a nuclear bomb, those are trivial concerns compared to obliterating the Obama legacy. And another, closely related, but more cynical possibility.
The harm is intentional, as a warning to future Democrats. Seen this way, the damage is meant as a clear warning, both to voters who may be tempted to vote for the Democrats and to Democrats who may be tempted to pass legislation if they win. It will be in vain. Republicans will destroy whatever you did, They don't care how much disruption they cause or how much harm they do. If you care, if you want to spare the country the disruption caused by ripping out well-established policies, then never pass any legislation of consequence because as soon as Republicans return to power, the WILL destroy it. If Democrats extend health insurance to 20 million people, Republicans will take it back. If Democrats end lifetime caps, Republicans will restore them and cut of vital, life-saving treatment in mid-course. If Democrats develop a plan to prevent financial crisis from spreading and crashing the economy, Republicans will make sure the next crisis does just that. If Democrats put limits on Iran's nuclear program, Republicans will take those limits off. And, I suppose, if the next time Democrats win the triple crown, they build a major infrastructure program, Republicans will take jackhammers to it when they return to power.
And then the most cynical explanation of all.
It is a clever bit of insurance if Republicans are relegated to the wilderness. Republicans are doing the best to conceal the nature of the healthcare bill in order to get it passed. But if it strips 10 to 20 million people of their health insurance, that just won't be possible to conceal. Nor will it be possible to conceal older customers seeing their premiums skyrocket, or people with pre-existing conditions find themselves unable to afford insurance to cover the care they need, or people abruptly cut off life-saving care when their lifetime limits run out. All of this could lead to a major backlash against Republicans and may lead to Democrats regaining at least one house of Congress in 2018 and the triple crown in 2020. It may even lead to an extended time in the wilderness for Republicans, just as did the Great Depression.*** If so (and it is by no means certain), what better way could there be for Republicans to stage a comeback than to set the economy up for another financial crisis and make sure that this time there would be no way to save the economy from the full force of the crash. Republicans would then blame the Democrats and ride a huge wave election to power.
Just for the record, I actually don't believe this last one. I don't think Republicans are looking that far ahead. And I do think they are economically royalist enough not to expect such an outcome. But when I am feeling very cynical, sometimes I think such thoughts.
____________________________________________
*This doesn't quite mean claiming that no capitalist has ever made a mistake, but sometimes it can look a lot like it. For instance, during the 2008 crisis, economic royalists showed a marked reluctance to acknowledge that the financial industry or auto industry could be facing crisis because of mistakes by management. Instead, they blamed the financial crisis on loose monetary policy, Government Sponsored Entities (i.e, Fannie and Freddie), and the Community Reinvestment Act. Problems in the auto industry were blamed on unions.
**Objection to any attempt by government to save the economy includes the view of tight money as a universal and timeless moral imperative to be maintained regardless of economic conditions. I should add here the Austrian School of economists, who believe that central banking and paper money cause the boom-and-bust cycle and that it could be avoided by abolishing central banks and going on the gold standard. Somewhat inconvenient to this viewpoint is that the US did, indeed, go without a central bank from 1836 to 1913 and was on a precious metal standard all that time -- gold and silver from 1836 to 1873 and gold only from 1873 to 1913. And the boom-and-bust cycle persisted the whole time. They are right, nonetheless, that a strict gold standard would prevent a boom-and-bust cycle. It would do that by so constraining the money supply as to cause an endless bust.
***Then again, to judge from the results of special elections, many Republicans may rejoice in seeing so many of those people lose their insurance, or regard the loss of their own as preferable to letting liberals get the last laugh.
Tuesday, June 20, 2017
Republicans and the Orderly Liquidation Authority
Trump scandals are not an altogether bad thing for Congressional Republicans. They do create a suitable distraction to allow Republicans to pass their legislative agenda, which would create a lot more resistance if anyone was actually paying attention. Health care has attracted the most attention but just recently the House also voted on strict party lines to repeal the Frank-Dodd financial regulations enacted in the wake of the financial crisis. Because this is a regulatory, rather than a budgetary, matter, Democrats will filibuster it in the Senate and it will not become law.
Kevin Drum, in frustration, has asked why this is so important to Republicans. Do they want another financial crisis? What gives? Reading their comments, the stated reason is clear enough. They disapproval of all economic regulation as a matter of general principle and in particular see the regulations of Frank-Dodd as a burden on the general economy and in particular as giving the advantage to large banks that can better afford the costs of compliance than community banks. But if that is the case, why not just pass a narrower bill giving financial relief to community banks and leave the regulations in place on big banks?
Republicans' other argument is that regulations amount to "micromanagement" and that all that is really needed is adequate capital ratios for banks and regulations will no longer be necessary. There may be something to their reasoning. The trouble with financial safety regulations is the constant danger of fighting the last war -- safeguarding against the specific investment vehicle that caused the last crisis, only to miss the one that causes the next crisis. But the underlying all financial crises is the matter of leverage -- the debt to equity ratio. Keep banks from overleveraging, and there will be no need to keep them from making bad investments.
But no system is fool-proof. The repeal is called the CHOICE Act because it purports to give banks the choice between maintaining high capital ratios and complying with complex regulations. What if banks choose the complex regulations, confident that a Republican administration won't enforce them anyhow? What if they choose the regulations and the regulators do, indeed, miss the next upcoming bubble? What if banks choose the higher capital ratios but there is no enforcement mechanism? In short, what if, despite the rules, there is a new financial crisis, or at least the failure of a major bank that could threaten a financial crisis? (Recall that the last crisis occurred with the failure of Lehman Brothers). Frank-Dodd has mechanisms in place to deal with such an eventuality. Naturally the Republicans want to destroy those, too.
First, the Republican legislation weakens the "stress tests" that banks are subject to that allow us to catch problems early. Next, it ends the Orderly Liquidation Authority (OLA), which allows regulators to shut down a failing bank in such a way as to minimize damage to the financial system as a whole. The OLA was created as an alternative to bankruptcy because when Lehman Brothers declared bankruptcy, it set off a general financial panic. The goal is to keep that from happening again. The OLA required banks to have advance plans for how they will be dismantled in such a case. The Republican bill provides for failing banks to be disassembled in bankruptcy, but bankruptcy has problems.
The goal is to act quickly, so as to prevent a panic. Bankruptcy can freeze the bank's creditors for 48 hours to prevent a run, but an orderly restructuring must be in place within that time. Hence the OLA's requirement that all such institutions plan ahead for such an event. The Republican bill does not end such plans as they exist now, but prevents the regulators from requiring any new banks from drawing up such plans, even if they get big enough to endanger the financial system. Bankruptcy courts cannot coordinate if multiple firms are failing at once (as happened in 2008). They cannot coordinate with international regulators to prevent an international panic (as happened in 2008). And bankruptcy courts can't lend money if needed to temporarily stabilize the financial system. It is this last that Republicans seize on, calling all such lending a "bailout," to be avoided at all costs (such as, say, the crash of the financial system).
Oh, yes, and the Republicans also split the monetary policy and financial regulation portions of the Federal Reserve to prevent it as far as possible from saving the economy in case of crisis.
So, does this thing stand a chance of getting past a Democratic filibuster in the Senate? Since it is a regulatory, rather than a budgetary, matter, the basic answer is no. But since the OLA could potentially spend money, that part can be killed by reconciliation, i.e., by a simple majority. Already Donald Trump has signed an executive order forbidding use of the OLA in case of crisis.
So why the feud with the OLA, which could prevent a single failed bank from escalating into a general panic? Stay tuned for the next installment.
Sunday, June 18, 2017
In Which I Shamelessly Use the Shooting of Scalise to Score Political Points
First of call, kudos to our nation's leaders for their statesmanlike reaction to the baseball park shooting of Congressman Steve Scalise and others. All have behaved commendably. Democrats condemned violence absolutely and without reservation and expressing support for their Republican colleagues. Republicans made clear that they blamed the shooter only and not their opponents. The shooter was a Bernie Sanders volunteers, so Sanders made clear:
Of course, plenty of people who were not our nation's leaders started finger-pointing right away, and it didn't take long for plenty of people at the top to follow. And, although it may be in bad taste, I can't resist doing a little finger pointing of my own -- in both directions.
Plenty of people on my side have gloated at the prospect of Rand Paul, a strong advocate of the Second Amendment as giving people the right to own guns to shoot at oppressive government hiding behind a pole from someone who took this advice a little too literally. Bet you never thought that you'd be the target!
But in all seriousness yes, this is one of the reasons what is wrong with the whole insurrectionary theory of the Second Amendment. The argument is that gun ownership is protected as an individual right so as to protect the collective right of revolution against unjust government. There is an obvious mismatch here. Insurrectionists insist that we have the Second Amendment to ensure that We, the People can engage in violent revolution against the government but give very little thought to when that right vests. Well, they say, it is extremely remote and mostly hypothetical. And yet plenty of people keep insinuating that it just might vest if Democrats win the next election.
And they never bother to figure out the mechanism of (1) how we will know the time for violent revolution is at and and (2) when that time comes, how it will be planned and coordinated. The assumption appears to be that We, the People will all magically agree when the time is at hand and will all spontaneously turn out at the same time, just like we did in the battle of Lexington-Concord. Here I think insurrectionists seriously underestimate the role of existing colonial government in directing the American Revolution or the role the Founding Fathers believed state governments would play in any hypothetical revolution against the U.S. government. It also assumes that We, the People are much more unanimous in our views than the evidence shows, and will not (1) have isolated individuals and small groups deciding it is time for violent revolution at unpredictable intervals, or (2) end up shooting at each other if a critical mass ever does decide that the time for revolution is at hand.
I am not suggesting that people like Rand Paul condone terrorism when it is directed at the other side. But I do think they tend to downplay the threat of the militia movement, or the Bundy Ranch standoff because they have some sympathy with the members' complaints, though not their methods. So yes, I will admit to a certain satisfaction in seeing people who defend the Second Amendment as promoting political violence maybe having second thoughts when they are the targets.
At the same time, I think it is time for our side to acknowledge that we have a serious problem here. Yes, the shooter is an extreme and aberrant example and in no way typical. But our side really does have a violent fringe that needs to be acknowledged and dealt with. First of all are the mask-wearing black-clad "antifascist" ("antifa") anarchists looking for any opportunity to riot, smash things, and beat people.
Well, you may say, they aren't very numerous. No, indeed they aren't. But the rioting anarchists are the tip of the iceberg. The iceberg are the people who condone their goals, if not their methods. And by their "goals," I mean shutting down opposing viewpoints. I mean the people who try to block entrance to Trump rallies, speeches by Alt-Right speakers etc., and forcibly prevent others from attending. So you don't like their views. Deal with it. They have the complete constitutional right to express them, to hold rallies and speeches, and to attend. But what about our rights? We have exactly the same rights. That means the right to hold our own events, or to hold counter-demonstrations and protests. But not to shut down theirs.
I think the leadership of our side has been reasonably clear in condemning political violence. Bernie Sanders condemned the shooting. Hillary Clinton and LaRaza condemned anti-Trump riots. But we haven't been clear enough in emphasizing that the place to draw the line in political action is not just with the use of violence. It is with the attempt to shut down opposing viewpoints. It means making absolutely clear to our side that blocking entrances and trying to physically prevent people from attending events by speakers they don't like, even if not done "violently," is resorting to force and therefore out of line. It means making clear that opposing viewpoints, no matter how odious, are constitutionally protected, and that that protesting a safe distance away, not forcible attempts to shut them down, are the proper response. We need to make clear to the hard core that extreme measures just make enemies. This should belong to the department of "Duh!" but apparently it needs to be said.
And frankly, we need to move beyond mere exhortation to the more extreme elements on our side and start to support any Republicans, conservatives, police and prosecutors who throw the book and violent rioters (without condoning the prosecution of peaceful protesters who just happen to be there). Given the threat that violent riots pose who our whole system of government, I think a ten-year sentence is entirely appropriate. My guess is, it would also give a lot of these black-clad, mask-wearing anarchists second thoughts. I personally also favor increasing penalties for demonstrators who do not follow reasonable "time, place and manner" restrictions on demonstrations and do things like blocking traffic. It is perfectly possible to draw attention to your cause while keeping to the terms of your permit. (It certainly worked for the Tea Party).
So here is what I propose. To the other side: Stop emphasizing stockpiling guns, showing up armed at rallies, and the threat of political violence and the best safeguards of liberty. Don't forget that you, too, can be targets. To our side: Make clear that going too far includes a lot more than outright violence and includes any attempt to shut down opposing viewpoints. And stop blocking traffic.
Political violence is not simply liberty at its most exuberant. It is a mortal threat to liberty. Let's all start dialing back on anything that might be taken as condoning it.
I am sickened by this despicable act. Let me be as clear as I can be: Violence of any kind is unacceptable in our society and I condemn this action in the strongest possible terms. Real change can only come about through nonviolent action, and anything else runs against our most deeply held American values.Paul Ryan made as lofty and statesmanlike speech as anyone ask for:
[B]efore this House returns to its business, I want us to slow down and reflect, to think about how we are being tested right now. Because we are. I ask each of you to join me in resolving to come together...to lift each other up...and to show the country—show the world—that we are one House. The people's House—united in our humanity.Even Donald Trump made a fine, statesmanlike speech that expressed solidarity and refrained from finger-pointing.
Of course, plenty of people who were not our nation's leaders started finger-pointing right away, and it didn't take long for plenty of people at the top to follow. And, although it may be in bad taste, I can't resist doing a little finger pointing of my own -- in both directions.
Plenty of people on my side have gloated at the prospect of Rand Paul, a strong advocate of the Second Amendment as giving people the right to own guns to shoot at oppressive government hiding behind a pole from someone who took this advice a little too literally. Bet you never thought that you'd be the target!
But in all seriousness yes, this is one of the reasons what is wrong with the whole insurrectionary theory of the Second Amendment. The argument is that gun ownership is protected as an individual right so as to protect the collective right of revolution against unjust government. There is an obvious mismatch here. Insurrectionists insist that we have the Second Amendment to ensure that We, the People can engage in violent revolution against the government but give very little thought to when that right vests. Well, they say, it is extremely remote and mostly hypothetical. And yet plenty of people keep insinuating that it just might vest if Democrats win the next election.
And they never bother to figure out the mechanism of (1) how we will know the time for violent revolution is at and and (2) when that time comes, how it will be planned and coordinated. The assumption appears to be that We, the People will all magically agree when the time is at hand and will all spontaneously turn out at the same time, just like we did in the battle of Lexington-Concord. Here I think insurrectionists seriously underestimate the role of existing colonial government in directing the American Revolution or the role the Founding Fathers believed state governments would play in any hypothetical revolution against the U.S. government. It also assumes that We, the People are much more unanimous in our views than the evidence shows, and will not (1) have isolated individuals and small groups deciding it is time for violent revolution at unpredictable intervals, or (2) end up shooting at each other if a critical mass ever does decide that the time for revolution is at hand.
I am not suggesting that people like Rand Paul condone terrorism when it is directed at the other side. But I do think they tend to downplay the threat of the militia movement, or the Bundy Ranch standoff because they have some sympathy with the members' complaints, though not their methods. So yes, I will admit to a certain satisfaction in seeing people who defend the Second Amendment as promoting political violence maybe having second thoughts when they are the targets.
At the same time, I think it is time for our side to acknowledge that we have a serious problem here. Yes, the shooter is an extreme and aberrant example and in no way typical. But our side really does have a violent fringe that needs to be acknowledged and dealt with. First of all are the mask-wearing black-clad "antifascist" ("antifa") anarchists looking for any opportunity to riot, smash things, and beat people.
Well, you may say, they aren't very numerous. No, indeed they aren't. But the rioting anarchists are the tip of the iceberg. The iceberg are the people who condone their goals, if not their methods. And by their "goals," I mean shutting down opposing viewpoints. I mean the people who try to block entrance to Trump rallies, speeches by Alt-Right speakers etc., and forcibly prevent others from attending. So you don't like their views. Deal with it. They have the complete constitutional right to express them, to hold rallies and speeches, and to attend. But what about our rights? We have exactly the same rights. That means the right to hold our own events, or to hold counter-demonstrations and protests. But not to shut down theirs.
I think the leadership of our side has been reasonably clear in condemning political violence. Bernie Sanders condemned the shooting. Hillary Clinton and LaRaza condemned anti-Trump riots. But we haven't been clear enough in emphasizing that the place to draw the line in political action is not just with the use of violence. It is with the attempt to shut down opposing viewpoints. It means making absolutely clear to our side that blocking entrances and trying to physically prevent people from attending events by speakers they don't like, even if not done "violently," is resorting to force and therefore out of line. It means making clear that opposing viewpoints, no matter how odious, are constitutionally protected, and that that protesting a safe distance away, not forcible attempts to shut them down, are the proper response. We need to make clear to the hard core that extreme measures just make enemies. This should belong to the department of "Duh!" but apparently it needs to be said.
And frankly, we need to move beyond mere exhortation to the more extreme elements on our side and start to support any Republicans, conservatives, police and prosecutors who throw the book and violent rioters (without condoning the prosecution of peaceful protesters who just happen to be there). Given the threat that violent riots pose who our whole system of government, I think a ten-year sentence is entirely appropriate. My guess is, it would also give a lot of these black-clad, mask-wearing anarchists second thoughts. I personally also favor increasing penalties for demonstrators who do not follow reasonable "time, place and manner" restrictions on demonstrations and do things like blocking traffic. It is perfectly possible to draw attention to your cause while keeping to the terms of your permit. (It certainly worked for the Tea Party).
So here is what I propose. To the other side: Stop emphasizing stockpiling guns, showing up armed at rallies, and the threat of political violence and the best safeguards of liberty. Don't forget that you, too, can be targets. To our side: Make clear that going too far includes a lot more than outright violence and includes any attempt to shut down opposing viewpoints. And stop blocking traffic.
Political violence is not simply liberty at its most exuberant. It is a mortal threat to liberty. Let's all start dialing back on anything that might be taken as condoning it.
Saturday, June 17, 2017
Returning to the Kushner Meeting (If Anyone Remembers)
But there are some pretty educated guesses out there. The main one is that it focused on what the Russians clearly want the most -- sanctions relief. That combines with another data point. About two weeks after the meeting, Kushner met with Sergey Gorkov, a Russian banker who fairly clearly operates as an unofficial arm of the Russian state and is at least a former spy. The Russians claimed the meeting was not political at all but strictly about Kushner's real estate business, while the Trump Administration said it the meeting was not about business at all, but a general diplomatic meeting. The suspicion, then, is that the meeting was about both -- about getting finance for Kushner's troubled real estate empire in exchange for sanctions relief.
The discussions need not be expressed as quite so crude a bribe. They may have discussed sanctions, the difficulties the sanctions were causing, potential sources of funding for Kushner, obstacles to such funding, the problems the sanctions were causing the bank, etc. No quid pro quo need have been mentioned. A quid pro quo could clearly have been implied.
Another straw in the wind. All those reports that Trump's campaign was a garbage fire were false. Granted, Trump himself was an utterly incompetent manager. But quietly behind the scenes Jared Kushner was running the most sophisticated data analysis every used by any campaign in history. While Trump and his visible campaign were flailing about, Kushner was quietly analyzing date, micro-targeting messages, and manipulating the electorate with a hitherto unimagined skill. His utterly un-tech father-in-law presumably knew nothing about it other than that Jared was running some sort fancy computer work for his campaign. Hedge fund billionaire Robert Mercer is known to fund both the program and Breitbart News.
The current assumption is that if there was any collusion (a matter that remains speculation), it was probably there. If there was collusion, it would have consisted of Kushner's data analysis operation making use of materials provided by Russian hacks. Such use could have been either knowing or unknowing.
Consider the implications here. If this is true, then the Big Four -- Paul Manfort, Carter Page, Roger Stone and Michael Flynn -- were all secondary players. The real, player all along was really Jared Kushner. The Big Four are all now out of the Trump Administration, but Kushner is the one person (other than Pence or Ivanka) that there is no way to get rid of.*
This is still speculation, but a number of things make a lot more sense now than they did.
First of all, it never seemed plausible that Trump was part of any sort of conspiracy. The man couldn't keep his mouth shut if you sutured it!** On the other hand, his often shady objectives and lax management style are a virtual invitation to his subordinates to engage in criminal activity and a promise to look the other way. If Kushner was engaged in collusion, Flynn or one of the other Four might have served as a go-between. And Trump may have been unaware of such collusion and be unaware to this day. But his subordinates would presumably make him aware if they were in trouble.
It also explains his eagerness to protect Flynn. Up till now, I have heard three possible explanations floated. One was that Trump was being loyal to a friend. That was what got Nixon into trouble covering up Watergate, but it seemed unlikely in the case of Trump. Trump no doubt sees loyalty as the supreme virtue, but he also sees it as a one-way street -- something other people owe him, but that he does not owe anyone else. So it seemed unlikely that he was protecting Flynn out of loyalty. Another was fear that Flynn would spill the beans on him. Most people on my side believed that explanation, but I was always skeptical. I knew of nothing to indicate that Trump ever had the concept that he might do anything wrong, or that anything at all could get him into trouble. So, applying Trump's Razor (the stupidest explanation is usually the right one), I could only assume that Trump had just taken an inexplicable liking for Flynn and was willing to stick out his neck for him.
But if Kushner and Flynn were co-conspirators, that would explain it much better. Trump was afraid of Flynn spilling the beans, not on him, but on Jared. Because Trump is not absolutely devoid of loyalty -- he has it toward his children. Whether he thinks of Kushner as an honorary son, a cherished belonging of his beloved Ivanka, or simply an indispensable right-hand man, his zeal to protect Flynn makes sense if it is really a zeal to protect Jared.
Has Jared done anything that could expose him to prosecution? I am not an expert in that field of law.
Congress is pushing for legislation forbidding the President from unilaterally lifting sanctions against Russia. But such legislation is not in force yet and certainly was not in force at the time of the meetings. As such, the President had/has considerable discretion to lift sanctions. And there are virtually no restrictions on the President's (or his surrogates') authority to conduct diplomacy, short of entering into an actual treaty. And I honestly don't know the law on foreign bribery. Is it a bribe if you stand to benefit from something perfectly legal? It should at least violate conflict of interest law. But conflict of interest applies to actual government employees, and Kushner did not work for the government at the time. And if Jared did use hacked Russian data in his analysis, I do not know whether the use of purloined data is a crime. And if it is, the Russians could easily have laundered it in such a way as to give Kushner plausible deniability.
However, there is at least one crime that Kushner can clearly be charged with. Failure to disclose foreign contacts on an application for security clearance is a federal crime carrying a sentence up to five years. Kushner failed to disclose his Russian contacts. He claims that it was an innocent oversight. If it can be proven there was serious conspiring that the meetings, even if the conspiring was not technically a crime, then the claim that it was an innocent oversight becomes really hard to maintain.
Granted, if these suspicions about Kushner are true, prosecuting him for non-disclosure is sort of like prosecuting Al Capone for tax evasion. But hey, it worked.
And at least we can rest assured that whatever else Kushner may have done, at least he never sent State Department e-mails on a private server.
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*Honestly, this is starting to feel like one of those whodunnit mysteries, or something like The Godfather. In all the treachery and intrigue swirling around the patriarch, who is colluding with a hostile power? Manfort, Page, Stone and Flynn all seem to be involved, but the sinister going's on continue even after all are purged. Bannon looks like the sinister genius while Ivanka and Jared seem to be the stabilizing and moderating influence. But in the end -- tum tum tah! -- Bannon turns out to be an abrasive but innocent party warning of the danger, while Jared is unveiled at the end as the true villain.
**Now, maybe if you also handcuffed him. . . .
Wednesday, June 7, 2017
The Horrible Reality Starts to Come Into Focus
Before that date we had some stray data points, but nothing solid. We knew that Michael Flynn had been under investigation by the FBI for undisclosed Russian contacts during the transition. We knew that Flynn urged the Russians not to retaliate for Obama measures and discussed sanctions relief. We knew that other Trump officials, had failed to disclose contacts with Russian ambassador Sergey Kislyak. We knew that Congressional Republicans were up in arms that the Obama Administration had unmasked U.S. persons, and that without further details there was no way of knowing whether the unmasking was proper or not. We knew that Kilsyak sneaked through the back door to hold a secret meeting in Trump Tower. We knew that Acting Attorney General Andrea Yates darkly hinted that Flynn had done something worse than merely fail to disclose contacts with Ambassador Kislyak. We knew that even after Trump was forced to fire Flynn as National Security Adviser, he seemed very solicitous toward him, encouraging him to "stay strong" and doing his best to stop the investigation. We knew that Trump fired Comey to stop the Russia investigation. And we knew that Jared Kushner was one of the prime movers behind the firing. Oh, yes, and we knew that even after Flynn was fired there was talk of current White House occupant who was still the target of investigation. That person turned out to be Jared Kushner.
A person looking at these various facts could piece together a pattern here. The problem is that there is lots of information out there and it is way too easy to impose a pattern where none exists. That way lies paranoia, an occupational hazard for anyone who works finding patterns in seemingly disparate data. (Flynn succumbed in a big way).
But with the big story (is it really almost two weeks ago?) everything is starting to take shape. It had already been vaguely intimated that the secret meeting in Trump Tower took place between Kislyak, Kushner and Flynn and its purpose was to “establish a line of communication,” which is not necessarily improper. What was utterly new was the Washington Post's revelation that Kushner and Flynn actually proposed to send messages from the Russian embassy, over their secure channel, to keep it out of US hands!*
Suddenly, everything falls into place. The meeting apparently took place December 1 or 2, 2016, or less than a month after Trump won the election and over a month before his inauguration. We can see why the parties were at such pains to keep it secret! We can also see why the Obama Administration, learning that two US Persons had met in secret with the Russian ambassador asking to send messages from the Russian embassy over a secure channel would want their names unmasked, and appropriately so. We now know what Andrea Yates was darkly hinting at when she said Flynn's "underlying conduct" was alarming. And we know why any further communications between Flynn and the Russians would be of great interest to the intelligence community. We also know what Flynn had on Trump, or at least his son-in-law, that would make both men very eager to halt the investigation and why the intelligence community is still keeping an eye on Kushner.
Since Kislyak presumably relayed this message back home on the same secure channel that Kushner wanted to use, this story also revealed the most sensitive of sensitive information -- that the secure channel was not longer secure, which naturally means that the Russians will no longer use it. The unknown officials who leaked this story considered it more important than even concealing this super-sensitive information.**
Of course, one little detail remains unknown. What were Kushner and Flynn up to that was so alarming they were ready to send it over a secure Russian channel to hide it from U.S. intelligence?
You know, we are way, WAY past Hillary e-mails jokes by now.
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*How shocking is this? Well, I am a follower of John Schindler, a former NSA employee and ardent Trump hater, whose contacts in the intelligence community are firmly convinced that Trump is in cahoots with the Russians and will ultimately be impeached. Schindler had a Twitter account in which he drops constant dark hints that the truth about Trump is much worse than anyone suspects. But on hearing this revelation he was stunned and outraged. He called it "quite literally, the most shocking #natsec story I've ever heard. If this were wartime, summary executions for ALL involved = SOP" and added, "If you tried this on Putin, he'd have everyone involved die horrible deaths. Can't say he'd be wrong on this one." He ended up ranting, "Americans do not deal gently with traitors. Not in 1776, not in 1861. We will kill you all. This is our way. This is the glorious Republic," which alarmed many who supported him up till then.
**Or else the Russians figured out on their own that their secure channel had been compromised and stopped using it, in which case it would be safe to leak.
Sunday, June 4, 2017
Depressing Thoughts on the Future of NATO
I share the generalized dismay at seeing Donald Trump in Europe going out of his way to alienate our allies and break up our alliance.
That said, I can't say I am too thrilled with the Europeans, either.
Angela Merkel is supposed to be one of the good guys, but she probably has more to do with the breakup of Europe than anyone else, first by insisting on dealing with the economic crisis by mindless austerity and demanding that Southern Europe bear the entire burden of adjustment, and then by failing to recognize that the refugee crisis was leading to a political crisis as well. And now she is trashing not only the U.S., but Britain, and all (presumably) to score political points against the perfectly respectable Social Democratic Party, whose commitment to liberal democracy and to Europe is no less than hers.
Likewise, in Britain, people are understandably upset that Theresa May, a mainstream Conservative whose commitment to liberal democracy and to NATO commitments is not in question, is being treated as equivalent to Trump simply because she is carrying out the popular referendum mandating a withdrawal from the EU.
Emmanuel Macron is supposedly another of the good guys. He started off with a knuckle-buster handshake with Trump and then boasted, "One must show that we won't make little concessions, even symbolic ones." That doesn't exactly sound like a promising start to his views on international cooperation. It sounds more like a neocon calling for more war and always more war. And sure enough, he is urging more war in Syria. Fun times!
Certainly I am no nationalist. But just as I am appalled to see Trump seeming to put loyalty to Russia ahead of US interests, I am appalled at the hint that that we on the liberal side should put our commitment to European leaders like Merkel and Macron ahead of commitment to the U.S. The European Union is coming apart at the seams for a reason, having everything to do with poor leadership. Many of the people pushing breakup do not have Europe's best interests in mind. But I refuse to be told that I may not criticize the European Union lest it play in to the hands of Russia. It there had been more responsible critics earlier on demanding more realistic reforms, Europe might have been spared the illiberal and often Moscow-aligned critics who are challenging it now.
I fully agree with Business Insider's Josh Barro:
That said, I can't say I am too thrilled with the Europeans, either.
Angela Merkel is supposed to be one of the good guys, but she probably has more to do with the breakup of Europe than anyone else, first by insisting on dealing with the economic crisis by mindless austerity and demanding that Southern Europe bear the entire burden of adjustment, and then by failing to recognize that the refugee crisis was leading to a political crisis as well. And now she is trashing not only the U.S., but Britain, and all (presumably) to score political points against the perfectly respectable Social Democratic Party, whose commitment to liberal democracy and to Europe is no less than hers.
Likewise, in Britain, people are understandably upset that Theresa May, a mainstream Conservative whose commitment to liberal democracy and to NATO commitments is not in question, is being treated as equivalent to Trump simply because she is carrying out the popular referendum mandating a withdrawal from the EU.
Emmanuel Macron is supposedly another of the good guys. He started off with a knuckle-buster handshake with Trump and then boasted, "One must show that we won't make little concessions, even symbolic ones." That doesn't exactly sound like a promising start to his views on international cooperation. It sounds more like a neocon calling for more war and always more war. And sure enough, he is urging more war in Syria. Fun times!
Certainly I am no nationalist. But just as I am appalled to see Trump seeming to put loyalty to Russia ahead of US interests, I am appalled at the hint that that we on the liberal side should put our commitment to European leaders like Merkel and Macron ahead of commitment to the U.S. The European Union is coming apart at the seams for a reason, having everything to do with poor leadership. Many of the people pushing breakup do not have Europe's best interests in mind. But I refuse to be told that I may not criticize the European Union lest it play in to the hands of Russia. It there had been more responsible critics earlier on demanding more realistic reforms, Europe might have been spared the illiberal and often Moscow-aligned critics who are challenging it now.
I fully agree with Business Insider's Josh Barro:
Establishment political parties have been playing a dangerous game — contriving situations in which the only acceptable choice happens to be one favored by elites, and hoping that voters will choose it under duress.
Voters have been revolting against no-choice politics by choosing the unthinkable: Brexit, fringe political parties, rejecting the Italian reform referendum, Trump.
You should be mad at voters for the alarming choices they are making. I certainly am. But you should also be mad at the establishment leaders and political parties who put voters in the position of choosing between the unpalatable and the absurd.
. . . . . . .
Voters have repeatedly insisted that they do, in fact, have a choice in these supposed no-choice matters. They have called the establishment's bluff.
I think we are about to learn the establishment was not bluffing about how unacceptable some of these options were, especially Trump. Voters may be about to learn a painful lesson.
But establishment politicians should learn a painful lesson, too: If you want to be sure to beat a terrible option, offer people something they actually like. Don't tell them they have no choice but to do what you want.It is my firm and settled opinion that our ruling elite is stupid. I have also lost confidence in the common people, all the more so since they elected Donald Trump. So where does that leave me? I don't know. But one place I refuse to go is to applaud Eurocrats like Merkel and Macron, who did so much to get us into this mess, when they trash the U.S. and Britain and resolve to go it on their own. If there are any good guys out there, then I, for one, am not seeing them.
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