Sunday, January 6, 2019

So, on to Cohen

So, we finally some to the third major allegation in the Steele Dossier -- the Prague meeting between Michael Cohen and Russian representatives.

Memo 134 (pages 30-31, October 18, 2016), after discussing Carter Page's alleged meeting with Russian officials says that "a key role in the secret TRUMP campaign/Kremlin relationship was being played by the Republican candidate's personal lawyer, Michael COHEN."  The remainder of the paragraph is blacked out.

Memo 135, dated October 19, 2016, pages 32-33 picks up where the last one left off, saying that Cohen had taken over as the Trump campaign's Russia contact after Manafort was fired as campaign manager in August, 2016.  (Given the similarity to the earlier paragraph, could that be the blacked out section?).  It says that Cohen and Russian officials met in August, 2016 in "an EU [European Union] country" to discuss how to cover up the extent of contacts, particularly Manafort's business ties to Russia and Carter Page's conversations during his trip to Russia in July.  Since then things had only gotten "hotter," and the Russians were limiting themselves to unofficial contacts (i.e., not formal employees of the executive branch of the Russian government) to allow plausible deniability.  Steele's contact did not know who Cohen met with, or the date or place of the meeting but was working on it.

Memo 136, dated October 20, 2016 but for some reason pages 18-19, dates the meeting to August, 2016 and says it took place in Prague, and identifies the Russians involved as representatives of the parastatal firm Rossotrudnichestvo and and Konstantin Kosachev, a pro-Putin member of the Duma (Russian parliament).  The purpose of the meeting was damage control following revelations about Manafort and Page.  The meeting was originally scheduled for Moscow, but moved to Prague lest Cohen traveling to Moscow attract attention and suspicion.

Finally, Memo 166, dated December 13, 2016 (i.e., after Trump was elected) contains some extremely explosive revelations.  It dates the meeting to the last week in August or the first week in September.  It says that Cohen was accompanied by three colleagues and identified the Rossotrudnichestvo contact as Oleg Solodukhin.  It also appears from context to contain identifying information about Steele's source, blacked out.  More shocking are the details of the alleged conversation.  Plans were allegedly made on how to arrange deniable cash payments to the hackers.  The source says that a company (name deleted) had been using botnets and porn traffic to "transmit viruses, plant bugs, steal data and conduct 'altering operations' against the Democratic Party leadership."  Other names in the operation are named, but blacked out.  Cohen and the Russians discussed how to protect the operatives, particularly in the case of a Clinton victory, by making untraceable cash payments and allowing them to go into hiding.  (This was in addition to covering Manafort and Page's tracks).  Various Romanian hackers were to stand down, and others were to head for a "bolt hole" in Plovdiv, Bulgaria.  Finally, the memo says that the "operatives involved" were paid by both the Trump team and the Kremlin.

This last memo is particularly explosive.  It is the only one to indicate that the Trump campaign had advance knowledge of, or participated in, the hackings.  We can very well imagine that Mueller would consider proof of this allegation to be the gold standard -- proof of direct Trump involvement in the hacks.

Cohen's response was to deny having been in Prague and produce the passport to show it.  The general consensus appears to be that absence of Prague on the passport is not by itself conclusive.  EU countries have an arrangement allowing travel among members without having to go through customs, so any travel to Europe at the time of the alleged crime could have included slipping across the border into the Czech Republic.  Cohen did say he visited Italy in July, and his passport would presumably reflect the dates.  And he proved a definite alibi for August 29, 2016 -- the University of Southern California confirmed that Cohen was present with his son and met with the baseball coach.  Cohen said the USC visit lasted from August 23 to 29.  I do not know if those dates are confirmed.  He said that he was in New York for the first week of September, although it is not clear whether he has witnesses to support that.  Czech intelligence established he did not arrive by plane.  There was also evidence that he had been confused with a different (presumably innocent) Michael Cohen.

And there it seemed to lie -- until now. McClatchy now reports that one of Cohen's phones briefly sent a signal "in the Prague area in late summer 2016," apparently momentarily activated to download information.  McClatchy attributes this information to four anonymous sources, each obtaining the information independently "from foreign intelligence connections."  The report also quotes two anonymous sources at saying that an East European intelligence service picked up a conversation among "Russians" during the end of August or beginning of September, saying that Cohen was in Prague.  Later in the article, the two Russians are referred to as "officials" and the two sources appear to be two of the four sources that knew of Cohen's cell phone service.

Is this true?  Thus far no other outlet has confirmed this story, although they have been able to confirm most other such scoops.  And the McClatchy sources are apparently reporting second-hand information.

John Schindler, former NSA but with continued connections, says that someone else could have borrowed one of Cohen's many phones, or that signals of this kind can be forged.  However, he also confirms the report from a friendly spy service about two Russians mentioning Cohen's presence in Prague.  He also says that the NSA picked up a conversation between Kremlin bigwigs "in the late summer of 2016" saying that Cohen was in Prague, although not what he was doing.  He does not say whether this was the same conversation that a friendly service picked up.  Schindler is emphatic that the Western intelligence services did not spy on the meeting.  But that does not disprove its existence.  After all, our intelligence services appear to have learned about the Trump Tower Meeting when they read about it in the New York Times.  So they are not infallible.

Prague architecture
Cohen's first impulse upon being accused of meeting with the Russians in Prague was to deny having been in Prague at the time.  I suppose it is possible that he was in Prague on an innocent errand and simply thought that denying having been there would be more convincing than attempting to prove that the visit was innocent.  But it seems more likely that if he was in Prague and lied about it, he was up to no good.  And certainly if his visit attracted the attention of Kremlin bigwigs, it seems unlikely that he was there to admire the beautiful architecture.

So it would appear that what Mueller (and, presumably, the intelligence services) has is Steele's highly inflammatory allegations about Cohen's activities in Prague, supported by a conversation between two Kremlin bigwigs mentioning his presence in Prague at about the time of the alleged crime (either picked up by two intelligence services, or two such conversations), and a possible signal from Cohen's cell phone in Prague at about the time of the crime.  We have about a two-week window to work with, and Cohen claims to have an alibi for the first week and definitely has one for at least August 29.  We are not told whether the cell phone signal and the discussion of Cohen's presence are at within the time frame Cohen does not have an alibi for, or how close in time they are.  (We do apparently know that there is no record of Cohen staying at any Prague hotel, so his visit was presumably a short one).

More Prague architecture
What they do not have is hard evidence of what Cohen was doing in Prague that caught the attention of the Kremlin.  There are things that can be done.  Steele appears to have included the names of his sources of this information.  Mueller and the intelligence community can assess their reliability.  They can investigate Kosachev and Solodukhin to see if there is any evidence they were in Prague at the time of the alleged crimes.  Steele also appears to have named an internet company and individual hacker that can be investigated.  They can investigate possible Romanian hackers involved in the DNC hacks who went silent about this time, or hacker havens in Plovdiv, Bulgaria.  And, of course, they can look for suspicious money flows of the type described in the memo. 

But it seems unlikely that any of these participants will cooperate, and unlikely that there will be sufficient evidence without a cooperating witness.  Which means, in short, that if Michael Cohen really was up to no good in Prague, it can be extremely difficult to make charges stick.  But if the Mueller investigation can prove that he was in Prague and lied about it (either to Congress or the FBI), they will have a case of perjury, serving as a cover to much more serious charges of espionage that are harder to prove. 

Hence the popularity of prosecutions for perjury, as well as income tax evasion.

Saturday, January 5, 2019

The Steele Dossier Revisited: Why it May Matter

All of which is a sort of a lead-up to the real issue -- evidence that Michael Cohen really did visit Prague in August or September of 2016.

To recap:  We don't know what evidence the intelligence community has obtained through wiretaps, friendly intelligence services and the like about Trump and Russia.  The most damaging information against the Trump campaign that has gone public is the notorious Steele Dossier, which alleges extensive coordination between the Trump campaign and the Russian intelligence hacking the Democrats and releasing their information through Wikileaks.  The Steele Dossier is the product of milking the rumor mill in Russia.  The rumor mill produces material of mixed reliability, possibly including some deliberate deceptions.  It should therefore not be believed without further verification. No open source, whether Steele, his employers, the Clinton campaign, or the news media have been able to verify the contents.  What the intelligence community may have verified is unlikely to see the light of day for fear of giving away vital sources and methods.

Of the many allegations in the Steele Dossier, three stand out as most sensational.
  1. That when Trump was in Moscow for the 2013 Miss Universe competition, he was filmed hiring Russian prostitutes to urinate on the Obamas' bed, and that the tape was used to blackmail him.  
  2. That when Carter Page traveled to Moscow in early July, 2016 to deliver an address to the Higher Economic School in Moscow he secretly met with two Russian officials.  Igor Sechin, chairman of Rosneft, a Russian oil company, offered the Trump gang "the brokerage of up to a 19 percent (privatised) stake in Rosneft" in exchange for relief on sanctions.  Page expressed an interest but did not commit.  Page also met with Igor Divekin, a Kremlin official of some sort, and mentioned that the Kremlin had damaging information on Hillary Clinton and discussed the possibility of sharing this information, while also broadly hinting that the Kremlin had damaging information on Trump if he did not cooperate.  
  3. That Michael Cohen met with Russian officials in late August or early September, 2016 in Prague and arranged for the Trump organization to help pay and conceal the hackers that Russia had employed.
Of these three allegations, the first is the most publicized, but the least significant.  If Trump did, in fact, hire Russian prostitutes to pee on the Obamas' bed, that would be embarrassing but, at worst, a petty misdemeanor, and well outside of US jurisdiction.  It seems unlikely that mere fear of embarrassment could induce the sort of compliance that Trump seems to be showing.  It is, however, widely believed in intelligence circles that there may be some kind of sex tape used for blackmail, and perhaps more than one, and possibly showing something a good deal worse.

The second allegation is both the only one to appear in the press before the existence of the dossier was revealed by Mother Jones on October 31, 2016 and the basis of the FISA warrant on Carter Page.  The sequence of events here is interesting.  Page's trip to Russia is undisputed. 

On July 7-8, 2016 he appeared in Moscow and gave a public speech to the Higher Economic School in which he said that the US should mind its own business and not meddle in Russia's internal affairs. 

On July 19, 2016, Report 94 said that Page had met with Igor Sechin, the head of Rosneft to discuss lifting sanctions and "possible future bilateral energy cooperation."  Page reacted positively but made no promises.  It also alleges that Page met with Kremlin official Igor Divyekin, who told Page that the Kremlin had compromising material on Hillary Clinton and discussed possibly releasing it to the Trump campaign.  Divyekin also hinted that the Kremlin might also have damaging materials on Trump and that he should keep that in mind.  No mention is made of the possible Rosneft bribe, merely "bilateral energy cooperation."

On September 23, 2016, national security reporter Michael Isikoff ran an article in Yahoo News.  Much of the article dealt with public information, such as Page's background, his (somewhat nebulous) rule in the Trump campaign, and his July visit to Moscow.  However, the article also alleges that Page met with Sechin, an individual under sanctions, to discuss possible lifting of sanctions, and with Divyekin.  No mention is made of Divyekin either offering damaging information on Hillary or threatening Trump with release of other damaging material.  Isikoff's primary source for his article was, in fact, Michael Steele and the material he had gathered to date.  He takes care to disguise his sources, making the article sound as though it originated with members of the Congressional intelligence committee.  He does drop a few hints here and there, saying that "a well-placed Western intelligence source" says that Congress has been briefed on Page's meeting with Sechin, and that "U.S. intelligence agencies have also received reports" of the meeting with Divyekin. The disguise was apparently good enough to fool the FBI, which stated in its FISA application that, despite startling similarities, it did not believe that Steele was the source of Isikoff's information. 

On October 18, 2016, Report 134 gave further details about the meeting.  It confirmed that the date was July 7 or 8, during Page's trip to Moscow to address the Higher Economic School (no surprise there).  This memo also says that Sechin promised "the brokerage of up to a 19 percent (privatised) stake in Rosneft" in return for sanctions relief, that Page promised sanctions relief, and that Page did not expressly say that he had Trump's authority to promise, but he implied it.  The memo goes on to say that Sechin no longer believed Trump could be elected and that Michael Cohen was playing an important role in communications with the Kremlin, further details blacked out.

Some time in October, 2016 (the date is blacked out), the FBI applied for a FISA warrant on Page, using Steele's report as its primary source.  We do not know whether the application was made before or after Steele's second report on the meeting, or how long it took from the time Steele prepared the report until the FBI received it.  However, the second report does not appear to have influenced the application.  The report makes no mention of the Rosneft deal, but only of "future bilateral energy cooperation" and lifting sanctions.  It also mentions Divyekin and his proposal to give the Trump campaign damaging information on Hillary Clinton.  (Pages 15-18).  Significant portions of the footnotes confirming Steele as reliable are blacked out.  This information is followed by two pages that are blacked out and my contain corroboration. 

The FBI reviewed the application in January, 2017; April, 2017; and June, 2017.  (FISA warrants automatically expire after 90 days unless renewed).  These new applications contain further information, much of it blacked out.  None mentions anything about bribery with Rosneft stock.  All mention that after James Comey announced that the FBI was re-opening its investigation of the Clinton e-mails and her political fortunes tanked, Steele expressed frustration and made an unauthorized leak of his materials, and that the FBI severed relations as a result.  All continue to say they do not believe Steele was the source of the Yahoo article, long after it should have been apparent that he was.

Oh, yes and a 19% share of Rosneft really was privatized (though not sold to Trump and associates).  And Sechin's chief of staff (a possible source) really did turn up dead under mysterious circumstances.

So what are we to make of all this?  First of all, the Steele Dossier is not despite the impression sometimes given, the origin of the government's investigation of Trump's Russia ties, nor is it the central hub of their investigation.  Certainly Steele was not the source of information on the Russian hacks of the Democrats.  Nor was the the first or only source of information about Trump's ties to Russia.  Apparently the investigation began when Trump adviser George Papadopoulos made some drunken and offhand comments to the Australian ambassador about getting information from Russia.  People in the know also say that there was plenty of signals intelligence from allies indicating suspicious contacts between Trump and the Russians.  One claims that the investigation began when a Baltic intelligence service overheard a conversation about money going from the Kremlin to the Trump campaign.  Certainly Mueller's indictments make clear that we know a great deal about Russia's activities on behalf of the Trump campaign that have nothing to do with the Steele Dossier.

But there is evidence that the Steele Dossier was important as well.  It was important enough to be the primary source of information for a warrant to wiretap Page.  Based on the foregoing, I would guess that the intelligence community had enough information to know that Page really did meet with Sechin and Divyekin during his visit to Moscow and was lying when he denied it.  It may have known that Page and Sechin discussed lifting sanctions, or that may simply have been an educated guess given the context.  But it did not know the details of the conversation, including the Rosneft bribe and Divyekin's discussion of compromising materials.  Presumably Sechin and Divyekin know enough to be careful what they say over any sort of electronic communications because someone might be listening in.  Thus Steele's milking of the rumor mill may have been the best source available for what happened in those meetings.

But this is the mere speculation of an Enlightened Layperson.  In my next post I intend to discuss the Steele Dossier and Michael Cohen.  Spoiler alert:  My conclusions with Cohen are similar to the ones about Page.

Tuesday, January 1, 2019

When Does it Become Prosecutorial Abuse?

So, granted that prosecutors regularly charge people with minor matters like perjury or income tax evasion when the real, underlying crime is too hard to prove, when does it become an abuse to do so.

When is it an abuse to charge a suspect with something other than the real, underlying offense, either because the real underlying offense is, though morally offensive, is not actually a crime, or because the real offense is too hard to prove?  And some Trump supporters are currently saying any time it is done:
They’re trying to Al Capone the president. I mean, you remember. Capone didn’t go down for murder. Elliot Ness didn’t put him in for murder. He went in for tax fraud. Prosecutors didn’t care how he went down as long as he went down. The same goes for Democrats. Whatever avenue is needed to bring down the president, they’ll take it.
The clear implication here is that if there was not sufficient admissible evidence to charge Capone with murder, then charging him with a lesser but more provable crime was dirty pool.  A critic caustically comments:
You might wonder why Trump’s supporters believe his legal defense is aided by analogizing him to a murderous criminal. Perhaps the answer is that Capone had several qualities that recommend him to the Republican grassroots base. He was a business owner — or, in modern Republican lingo, a Job Creator. He was an avid Second Amendment enthusiast. And, most importantly, Capone, like Trump, was a victim of the deep state.
Most people, I think, would agree that stopping Al Capone was a worthy goal and if a little legal trickery was called for, then it was well worth doing.  Capone was, after all, guilty of sin of tax evasion.  Should he be given immunity from prosecution for tax evasion simply because he was guilty of much worse as well?   That doesn't seem logical.

More realistically, there are some things that are technically crimes but almost never charged as such.  A charge under a technical crime usually means that there is something else afoot, more serious but harder to prove.

Hillary Clinton's e-mail server has been used as an example.  Sending State Department e-mails on a private server does meet the technical requirements of mishandling of classified information.  People have been prosecuted for mishandling classified information.  But usually there is something more than just mishandling.  James Comey explained:
All the cases prosecuted involved some combination of: clearly intentional and willful mishandling of classified information; or vast quantities of materials exposed in such a way as to support an inference of intentional misconduct; or indications of disloyalty to the United States; or efforts to obstruct justice.
If you want a classic case of prosecutorial misconduct (and under a Democratic administration no less) the classic case would be the case of Wen Ho Lee, who was prosecuted on simple charges of mishandling classified information.  Wen Ho Lee was a Taiwanese-American scientist as Los Alamos Labs, suspected of spying for the Chinese.  In fairness to the "Justice" Department, the Chinese really did obtain classified information, Lee really did have access to such information, and he really did mishandle classified information, i.e., he stored it on an unclassified, though secure system.  However, the investigation found clear evidence before even bringing charges that Lee could not have been the spy for China, since the information provided include materials that lee did not have access too.  Lee was nonetheless indicted on 59 counts and held in solitary confinement for nine months.  He ultimately pleaded guilty to one count and was released, with apologies from the judge.

So, the obvious difference between the case of Wen Ho Lee and the others was that in Lee's case, although his actions were technical crimes, there was no other, more serious crime that the government lacked evidence to prove.  Or rather, there was such a crime (spying for China), but the evidence was overwhelming that Lee was not the guilty party. 

So, the short version is, if there is a serious underlying crime that is difficult to prove, prosecuting on a less serious, but easier to prove crime is not an abuse of power.  Prosecuting on a technical crime out of resentment, or just to throw one's weight around is an abuse of power.  Admittedly, there are gray areas, when the government believes there is a serious crime, but the obstacles to prosecution are not just strict rules on admissibility, but genuine weakness in the evidence.  Such cases exist.  But Al Capone was not one of them.  Neither were Spiro Agnew or Paul Manafort.  As for Flynn and Cohen -- I suppose we will see.

Why is it Always Tax Evasion or Perjury?

So, what do Al Capone, Spiro Agnew and Paul Manafort have in common?  Among other things, all were brought down for tax evasion when tax evasion was the least of their crimes. 

The reason for it should be obvious.  All made their fortunes by illegal means.  In Capone's case, that mean bootleg whiskey, as illegal in his day as drug dealing is in ours.  Agnew made is money by taking bribes, some of them while he was Vice President.  And Paul Manafort by influence peddling and shady overseas business.  But standards of proof for such things can be stringent. 

Not only must the crime be proven beyond reasonable doubt, it must be proven beyond reasonable doubt with admissible evidence.  Everyone out on the street might know that Capone was a bootlegger, that Agnew took bribes, and that Manafort did business with Russian gangsters.  But what everyone on the street knows is not admissible evidence.  It is hearsay.  What is needed is specific witnesses to specific acts on specific dates.  This can be difficult to do when the witnesses fear for their lives if they testify.  Evidence such as financial records are also hearsay and must have specific witnesses who can testify to the authenticity of the record and what they mean.  Criminals do their best not to create a paper trail.  And decent money laundering can make it extremely difficult to prove the illicit origins of of the suspect's fortune, even if no one doubts that it is so.

But what is really easy to prove is that (1) the suspect has a fortune and (2) he never paid taxes on it. 

Much the same applies to perjury.  If a suspect lies to cover up some shady behavior, it may be difficult to prove exactly what the suspect really did, which would be necessary to convict the suspect of any underlying crime.  The underlying conduct, though shady, may not be an actual crime.  Or the suspect may actually have been tried for the underlying crime and acquitted based on his own testimony, which means that a second prosecution is barred by double jeopardy.  But if you can prove that any aspect of the suspect's sworn testimony was false, you do not need to prove what actually happened to support a conviction for perjury.

Thus Alger Hiss was convicted of perjury on the grounds that he had lied to a grand jury about being a Soviet spy.  He could not be charged with espionage because the statute of limitations had expired.

Michael Flynn pleaded guilty to lying to the FBI (not actually under oath, but also a crime) about the contents of his conversation with Russian Ambassador Sergey Kislyak.  Flynn said the conversations were a mere exchange of pleasantries.  In fact, he was asking the Russians not to escalate tensions in response to then-President Obama's actions in expelling Russian diplomats.  To do so may have been a technical violation of the Logan Act, which forbids private citizens from interfering in the government's foreign policy.  But then again, no one has ever actually been prosecuted under the Logan Act.  And, as much to the point, someone who is about to become National Security Adviser in a matter of days in an incoming administration is not just any private citizen.  It is not unreasonable for an incoming administration to talk to foreign diplomats about what sort of foreign policy to expect once the changeover occurs.  Now, if those conversations were part of quid pro quo in which Trump agreed to pursue a pro-Russian policy in exchange for Russian help being elected, that would be a crime.  But nothing in the Flynn-Kislyak conversations can support such a charge.*

Michael Cohen has pleaded guilty to lying to Congress (presumably under oath) about Donald Trump being in negotiations to build a Trump Tower in Moscow while he was running for President.  Building a Trump Tower in Moscow is not a crime.  At some point, if the candidate involved wins the election, it can become a form of bribery, which is a crime, but the lines between bribing a politician and engaging in legitimate business with him can become hazy.  And there was talk of greasing the deal by offering Vladimir Putin a free $50 million penthouse in the tower, which violates the Foreign Corrupt Practices Act, but probably did not get far enough to be an actual crime.  (He has also been charged with bank fraud and tax evasion on matters unrelated to the Russia investigation).

And if anyone wants to put the squeeze on Jared Kushner, he has told enough lies on his security application about foreign contacts, debts, and who knows what else to put him away for about 1,000 years.

Next:  Is this an abuse of prosecution?

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*That being said, there is more going on with Flynn than we know.  The Addendum to the Flynn Sentencing Memorandum says that Flynn has provided substantial assistance to the Special Counsel's Office (SCO), both regarding contacts between the transition team and Russia and on something else that is blacked out, but takes up a little more than a page.  Flynn has also assisted in a criminal investigation unrelated to the SCO and blacked out, taking up approximately one page.

Monday, December 31, 2018

Definite Signs that Trump's Power is Waning

When I say that Donald Trump's power is waning, I don't just mean that he has lost control of the House of Representatives, and that Democrats may begin investigating him.

I mean that Republicans in Congress are becoming increasingly bold in disagreeing with him.  I mean that I am beginning to think that maybe, just maybe, if he shot someone in the middle of Fifth Avenue the Republican Establishment would not let him off the hook after all.

The signs are everywhere.  Losing the House is one, of course.  The possibility that our economy may be hitting a soft spot, and that Trump's popularity would suffer as a result is another.  But most significant is that Trump seems to be doing things that the Republican Establishment simply can't tolerate.  They seem to be breaking with him over at least three issues.

Saudi Arabia:  Trump hasn't shot anyone in the middle of Fifth Avenue yet, but his friends, the Saudis, have murdered a US legal resident in their consulate in Turkey and Trump seems determined to cover up for them.  Murder in a consulate is, in some ways, even less deniable than murder in the middle of Fifth Avenue.  If the murder had taken place in the middle of Fifth Avenue, the Saudis might have made at least some half-hearted attempt to disassociate themselves from it.  But when a murder takes place in a diplomatic facility under the sole control of a government, attempts to blame rogue operatives just don't pass the laugh test.  Senators who have seen the evidence have unanimously, across party lines, blamed the Saudis in general and the Crown Prince in particular.  Nor does it end with the murder of Khashoggi.  The murder of Khashoggi has made a lot of people sit up and notice that the Saudis are waging a very nasty war on Yemen, blockading the nation in an attempt to starve it into submission, bombing civilian targets, and so forth.  Yes, it may be hypocrisy not to notice this until after the Saudis killed someone more relatable, but better late than never.  There is a growing, bipartisan revolt in Congress against our support for Saudi Arabia in its Yemeni war.

Payoffs to mistresses:  Look, I agree it's ridiculous that of all the scandals surrounding Trump, the one that Republicans are finally taking seriously is payoffs to an ex-mistress, but there you have it.  I'm honestly not sure why.  Is it because with Cohen's testimony the evidence is so overwhelming that no denial is possible?  That Republicans are just touchy about sexual impropriety?  That after making attempts to conceal an affair a big deal for Bill Clinton and John Edwards, they are caught on their own hook?  Or because this is bad enough to dissociate yourself from Trump but not so bad as to be impeachable, which makes it the sort of scandal you can acknowledge.

Withdrawal from Syria:  The Blob is furious about Trump's decision to withdraw troops from Syria.  Washington Republicans, as members in good standing of the Blob, are outraged.  First the withdrawal of our 2000 troops in Syria meant that the entire Mideast would explode into all-out war and be taken over by Russia and/or Iran and/or ISIS.  Calming down a little, the story changed to okay, maybe not the entire Middle East, but our Kurdish friends would be slaughtered by the Turks.  And now it is beginning to look as though maybe the Kurds won't be slaughtered, but will cut a deal with Assad, which will hand the Middle East over to Russia/Iran.  Well, maybe not all the Middle East, maybe just one country in the Middle East, but still. 

Look, I'm sure there are good arguments to be made, pro and con, about withdrawing from Syria.  The Blob is opting for hysteria instead.  The best arguments for withdrawal ought to acknowledge that a better-managed, less precipitous withdrawal would be much better. And the best arguments for staying ought to acknowledge that really, 2,000 troops are not all that is holding back the forces of Armageddon. 

One final thought.  Clearly the issue that Republicans are most willing to break with Trump about is over foreign policy.*  On the bright side, that means that stories about Republicans being blackmailed by Russia seem most unlikely.  Republicans are most likely to confront Trump for being insufficiently confrontational toward Russia and its allies.  On the not-so-bright side, that means Republicans' biggest problem with Trump is that he isn't starting enough wars.  A lot of Democrats agree.  Such is the Blob.  Sigh!

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*That applies especially to Lindsey Graham, who has gone from one of Trump's fiercest critics to one of his leading defenders.

Sunday, December 30, 2018

Some Very Unoriginal Comments on the Fed and Conservatives

I don't have anything very original to add on the subject of the Fed, but let me echo others.

Throughout the Obama Presidency, right wingers, Trump included, denounced Federal Reserve for its monetary expansion, which they claimed was solely intended to boost Obama's fortunes, and urged tightening.  Despite a depressed economy, they were certain that the Fed must tighten immediately or there would be out of control inflation.  They held up as their role model Paul Volcker, who tightened in 1981 to break an inflationary spiral (as high as 14%).  The applauded him for inducing a severe recession, bankrupting farmers, and sparking an economic crisis in Latin America.  That was the kind of Federal Reserve we needed!  Or else they applauded the 1920 Fed that slammed on the brakes when prices began to rise after price controls were lifted and induced a steeper decline and worse deflation (though shorter lived) than in any single year 1929-1932.  Why wouldn't the Fed today do that?  They seemed to take an outright prurient delight in the pain the Fed was inflicting and asked why the Fed was too chicken to do it now.

During his campaign for President, Trump argued that if the stock market was rising, it was a bubble, and that we were experiencing a false prosperity, buoyed up by artificially low interest rates and headed for disaster.  His campaign was characterized by near-apocalyptic warnings about the disaster that lay ahead when the whole house of cards came crashing down.

Of course, the minute Trump was elected, things changed altogether.  You know that bubble in the stock market?  It immediately filled in and all future gains became real.  And the false prosperity from artificially low interest rates?  When as soon as he was elected it became real.  He was even cynical enough to comment that he considered official unemployment figures fake so long as Obama was President and real for him.

And I was notably cynical about what to expect from Republicans on the subject of interest rates and tight money:
Once Trump is inaugurated, Republicans will regard tight money as a universal and timeless imperative that must be continued in good times and bad, in all economic circumstances. To propose any deviation from this moral imperative would show a lack of principle. No amount of human suffering can ever justify deviation from this universal and timeless imperative and, indeed, the more pain the Fed inflicts with tight money the better, since it will mean a richer reward down the road. So money must always be kept tight, without exceptions -- unless a Republican is in the White House and tightening might hurt his political fortunes, in which case we must be reasonable.
And sure enough, the economy is showing possible signs of softening, the stock market has fallen, and Republicans in general and Trump in particular are calling on the Fed to lower rates.  And an excellent case can be made that they are right.  It's just hard to have any interpretation but a cynical one in light of what they have said in the past.

Trump, I should add, is understandable.  He has no concept of the public good aside from his personal fortunes anyhow.  And looking at developments in the Russia investigation, he must be wondering if he will be indicted as soon as he leaves the White House.  So re-election has gained an imperative for him that it lacks for other incumbents.  (And what about when his second term expires?  I doubt very much that he thinks that far ahead).

But what excuse do the others have?

Tuesday, December 25, 2018

Trump in a Not-Even-a-Crisis

One of the biggest reasons I dreaded having Donald Trump as President (and one that liberals and conservatives should dread equally) was the thought of him in a crisis.  It was obvious that the best way to deal with Trump in a crisis would be to handcuff him, stuff something in his mouth, and lock him in the closet until it blew over.

And just to be clear, the latest stock market slide is NOT a crisis.  September 2008 was a crisis -- Fannie and Freddie nationalized, Lehman Brothers failing, Merrill Lynch surviving only by merger, AIG being nationalized, Morgan Stanley and Goldman Sachs becoming bank holding companies to survive, and Washington Mutual Bank failing all in one month -- now that was a crisis!  And naturally the stock tanked, but falling stocks were a symptom, rather than a cause, of the crisis.

What we are seeing now is nothing like that.  It is, at worst, some softening of the economy, a reminder that the business cycle is still with us.  And, if we are lucky, it might just turn  out to be a needless panic.  A normal President would either keep quiet or  give some vague platitude that so long as all is well on Main Street, Wall Street will calm down.

And yes, I will admit it is unsettling to watch the stock market fall by triple digits day after day after day.  To see the stock market fall by 500 points in one day is familiar enough.  But it is usually followed by 200-300 point rebound the next day.  Even a general slide usually has interruptions.  So to see it fall by triple digits day after day with no relief is genuinely disturbing.

But there is nothing in the overall economy, nothing at all, to justify such a drop.  If our Tweeter-in-Chief would just SHUT UP, I'm sure the market would settle down and figure out that its freakout was unnecessary. 

A crisis is, to a considerable extent, a choice.  Presidents can decide, to a considerably extent, whether to respond to a development, like missiles in Cuba, or not.  Some leaders create foreign crises on purpose to boost their sagging domestic popularity.  But creating an economic crisis is generally not recommended.

And, just for the record, I don't think you can tweet your way into a crisis.  If all is well on Main Street, then I really do expect Wall Street to figure it out sooner or later and calm down.  I expect the slide to stop soon and a recovery to begin.  It will probably take some time to get back to the old high.  Stocks were becoming irrationally exuberant and needed some sobering up.  We may slip into a recession, but there is no reason to believe it will be a bad one.  So I fully expect the slide to stop soon, despite Trump's best efforts.  But it would have stopped a lot sooner without them.

UPDATE:  And right on cue, our President and Secretary of the Treasury shut up for one day and, sure enough, the stock market promptly recovers.