Fusion GPS Testimony

I’ve stored this here at the bottom of the page so people can refer to it at leisure and not have to scroll through the Facebook page to find it. Along about page 62 the talk turns to Don the Con. Skipping ahead to pg. 138 to talk about the Russian connection and it starts to get interesting:

Q. So after Mr. Steele had found out the information that he put in the very first of these memos, the one dated June 20, 2016, he approached you about taking this information to specifically the FBI, the Federal Bureau of Investigation?
A. That’s my recollection.
Q. So to the best of your recollection, that request or idea came directly from Mr. Steele, not anyone else?
A. That’s right. (p. 161)

. . .

Q. You said you had asked for some time to think it over. What in particular did he articulate to you was of significant national security concern to indicate that it should be taken to the FBI?
A. His concern, which is something that counterintelligence people deal with a lot, is whether or not there was blackmail going on, whether a political candidate was being blackmailed or had been compromised. And the whole problem of compromise of western businessmen and politicians by the Russians is an essential part of — it’s like disinformation, it’s something they worry about a lot and deal with a lot and are trained to respond to. So, you know, a trained intelligence officer can spot disinformation that you or I might not recognize, certainly that was Chris’s skill, and he honed in on this issue of blackmail as being a significant national security issue.

Later on:

You know, my understanding was that they would have gotten into who his sources were, how he knew certain things, and, you know, other details based on their own intelligence. Essentially what he told me was they had other intelligence about this matter from an internal Trump campaign source and that — that they — my understanding was that they believed Chris at this point — that they believed Chris’s information might be credible because they had other intelligence that indicated the same thing and one of those pieces of intelligence was a human source from inside the Trump organization. (p. 175)

Chris Steele disengages from the FBI after Comey reopens Hillary investigation:

Q. Now, with regard to — just to finish up on the interactions with FBI, do you know were there any additional interactions between Mr. Steele and the FBI?
A. There was some sort of interaction, I think it was probably telephonic that occurred after Director Comey sent his letter to Congress reopening the investigation into Hillary Clinton’s e-mails. That episode, you know, obviously created some concern that the FBI was intervening in a political campaign in contravention of long-standing Justice Department regulation. So it made a lot of people, including us, concerned about what the heck was going on at the FBI. So, you know, we began getting questions from the press about, you know, whether they were also investigating Trump and, you know, we encouraged them to ask the FBI that question. You know, I think — I’m not sure we’ve covered this fully, but, you know, we just encouraged them to ask the FBI that question. On October 31st the New York Times posed a story saying that the FBI is investigating Trump and found no connections to Russia and, you know, it was a real Halloween special. Sometime thereafter the FBI — I understand Chris severed his relationship with the FBI out of concern that he didn’t know what was happening inside the FBI and there was a concern that the FBI was being manipulated for political ends by the Trump people and that we didn’t really understand what was going on. So he stopped dealing with them. (p. 178)

After the election (p. 219):

So after the election obviously we were as surprised as everyone else and Chris and I were mutually concerned about whether the United States had just elected someone who was compromised by a hostile foreign power, more in my case whether the election had been tainted by an intervention by the Russian intelligence services, and we were, you know, unsure what to do. Initially we didn’t do anything other than to discuss our concerns, but we were gravely concerned.
At some point a few weeks after the election Chris called me and said that he had received an inquiry from David Kramer, who was a long-time advisor to Senator McCain, and that according to — Kramer told Chris that he had run into Sir Andrew Wood at a security conference in Halifax, Nova Scotia, and that Kramer was accompanying Senator McCain to this conference and that the three of them had had an unscheduled or unplanned encounter where the issue of this research was discussed and the essence of it, I guess, was conveyed to Senator McCain and to David Kramer from Andrew Wood. I don’t remember whether Andrew Wood’s name was specifically given to me by Christopher Steele at that time. It was later given to me. It later became an accepted fact that Chris had mentioned him to me. I believe he probably mentioned it.
But anyway, he did say someone that he worked with in the past who was a former UK government official with experience in Russia had had this conversation with David Kramer and John McCain and that Senator McCain had followed up on it as to what more there was to know about these allegations, this information.
So Chris asked me do you know David Kramer, and I said yes, I’ve known David Kramer for a long time. David Kramer is part of a small group of people that I’m sort of loosely affiliated with. We’ve all worked on Russia and are very concerned about kleptocracy and human rights and the police state that Russia has become, in particular the efforts of the Russians to corrupt and mess with our political system. So we shared this concern going back to when I was at the Wall Street Journal and that’s how I met David. He was working at the State Department as assistant secretary for human rights, and I was reporting on human rights and corruption in Russia. So I told Chris he’s legit. David is someone I’ve known for a long time and he knows a lot about these issues and he’s very concerned about Putin and the Kremlin and the rise of the new Russia and criminality and kleptocracy.
So he said, well, can we trust him? And I said yes, I think we can trust him. He says he wants information to give to Senator McCain so that Senator McCain can ask questions about it at the FBI, with the leadership of the FBI. That was essentially — all we sort of wanted was for the government to do its job and we were concerned about whether the information that we provided previously had ever, you know, risen to the leadership level of the FBI. We simply just didn’t know. It was our belief that Director Comey if he was aware — if he was made aware of this information would treat it seriously.

Fusion GPS

 

Naked Capitalism: Why Repugs Struggled With Obamacare

 

Bill Black: Why the Republicans Cannot “Replace” Obamacare

Posted on January 30, 2017 by Yves Smith

Yves here. One possibility discussed elsewhere is the Republicans making changes that appear to preserve Obamacare features while actually degrading them. For instance, one proposal is to link the coverage of pre-existing conditions to maintaining “continuous coverage”. Without going into details, that is made difficult enough for many patients to achieve, for reasons of bureaucratic difficulty and rigidity. Many are sure to be unable to comply and be forced to obtain insurance at the applicable rates for individuals with that ailment or go uninsured because there is no policy available.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives

I have just listened to Lawrence O’Donnell’s program on Friday, January 27, 2017. It was a strong program, but I offer these friendly amendments on his discussion of the Washington Post story titled “Behind closed doors, Republican lawmakers fret about how to repeal Obamacare.” O’Donnell and his guests spoke exclusively of how difficult it was for the Republicans to come up with a plan to replace Obamacare and making the point that the leaked transcript of the closed Republican meeting proved that the Republicans had no plan. The thrust of the comments was that the explanation for the difficulty was the technical complexity of the issues and differences of policy views among congressional Republicans. Neither explanation is accurate. The problem is much more basic, and explains why Republicans did not use their exceptional leverage to amend the draft Affordable Care Act that would have improved it, why they have not come up with a replacement plan in seven years, and why they will not be able to come up with a replacement plan in the future.

People have forgotten that President Obama and Democratic Senators made extraordinary efforts to get Republican support for the bill in the Senate. The “gang of six” (three Democratic and three Republican Senators) deliberations stalled the bill for months. Had even a single Republican Senator been willing to support a superior health insurance plan, Obama would have leaped at the opportunity to support his or her amendment improving the bill. Senators knew that Obama was desperate to attract even a token Republican Senator to support an Affordable Care Act bill. Senators knew that this meant that every Republican Senator had unprecedented political power to amend the bill by adding superior provisions – in return for supporting the amended bill. No Republican Senator took advantage of that power because any change to the health insurance bill that would have improved it was anathema to Republicans.

The problem is not that Obamacare is such an excellent program that it has no superior replacement. The problem is that the superior programs are unacceptable to the Republicans on ideological grounds. Indeed, the Congressional Republicans detest the superior alternatives because they are superior. The superior programs would have a far broader governmental role than does Obamacare. The Republicans do not want effective domestic governmental programs because it would discredit their claims that the government programs invariably fail.

Obamacare’s model is a far-right Heritage Foundation plan that Mitt Romney convinced Massachusetts to adopt when he was governor. Heritage’s design deliberately, for ideological reasons, minimized the governmental role and cost containment. The price of President Obama’s deal with the health insurance companies not to use their lobbying power to kill his Obamacare proposal was his willingness to minimize the role of the government and not include effective cost controls in the bill. The Republicans will not increase the role of government for political and ideological reasons. The Republicans will not impose effective cost controls on insurers and medical providers for the same reasons that Obama refused to do so. They fear the insurers and medical providers’ lobbying power and fear the loss of campaign contributions.

Experts anticipated the problems Obamacare is experiencing. The weak cost controls, limited competition, and the small numbers of participating insurers will continue to lead to premium increases and high deductibles that will make coverage illusory for many working class Americans. Cost increases under Obamacare are smaller than anticipated. The Great Recession’s severity led to many years of minimal inflation.

The Republicans could create a superior system by offering a public option that would create competitive pressures to contain cost, extending Medicare to all citizens to reduce the cost of providing care through private insurance, or providing a national health system. Each of those options, however, is unacceptable to them on ideological grounds. That self-inflicted restraint means that there is no superior alternative to Obamacare. That is why the Republicans have not developed, much less proposed, much less enacted a “substitute” plan for Obamacare over the last seven years. That is why the Republicans cannot develop a superior plan even though they control totally the federal government. It has nothing to do with the fact that medicine and private insurance are “complicated” or that Republican legislators differ in the degree to which they are willing to return millions of Americans to uninsured status. There are, of course, limitless ways to replace Obamacare with inferior plans. The leaks of the closed-door Republican meeting prove what we knew – the Republicans fear the political cost of replacing Obamacare with an inferior private insurance plan.

My prediction is that the Trump administration and the congressional Republicans will continue to take steps to exacerbate Obamacare’s difficulties in order to produce the breakdown of the existing system in several states. Then they will repeal it as a failure and blame it on Obama. They will add a fig leaf that purports to forbid insurers from denying “access” due to the applicant’s preexisting medical condition, but that access will be illusory due to the combination of cost and very high deductibles. Trump’s representative at the Republican meeting indicated this strategy (in the administration’s characteristic dishonest manner).

Even as Bremberg [who heads Trump’s domestic policy office] offered few details about what the president plans to do, he emphasized that last week’s executive order “repeatedly” used phrases “such as ‘to the maximum extent permitted by law’ ” to enable his political appointees to start dismantling the ACA [the Affordable Care Act, a/k/a Obamacare] by executive authority.

“The president has now officially given direction [not only] to HHS, but to all of these agencies that have responsibility . . . to exercise all available discretion to begin helping the American people and to begin fixing our health-care system.”

The dishonesty, of course, is characterizing “dismantling” Obamacare as “helping the American people” by “fixing our health-care system.” The strategy is to “dismantle” key provisions of Obamacare without replacement. The administration designed the dismantling to degrade Obamacare to the point that it breaks down in multiple states and provides a pretext for its repeal.

When Trump and Republicans state that they “have” a “superior” plan to replace Obamacare they are lying. They are lying because they refuse for ideological reasons to replace Obamacare with a superior plan. There is too much emphasis on Trump’s daily lies as if they were an unprecedented departure from the consistent practice of the Republican Party for over a decade. Congressional Republicans have been lying constantly for over seven years about their claim that they have a “plan” to enact a superior replacement for Obamacare.

Charles D. Hayes: The Arrogance of Power

 

Watching snippets of Trump on his Thank You Tour, I keep wondering why someone doesn’t tell the con man he won. He is still in campaign mode. He is like a dog who has finally caught the car he was chasing and doesn’t know what the hell to do now. He is about to get slammed into the pavement by a job he is unfit and totally unprepared for, although, it is the country that will suffer the impact.

People keep attributing Trump with having a high IQ and this is total bullshit. They are projecting their hopes on Trump with the assumption that if he’s rich he must be smart. Trump speaks at a third to fifth grade level at best and his biographer claims his vocabulary is around 200 words, but it appears that 75 of them are taken up by “great.”

The troubling thing though, is that medical professionals have pointed out that Trump clearly shows he has all nine symptoms of NPD, Narcissistic Personality Disorder.

NPD must be why Trump is engaged in serial gloating and trolling for adoration instead of trying to bring the country together, which any sane President-elect would be doing now.

But then, getting attention is what makes him tick. The only thing I can come up with that might be positive providing we survive Trump’s presidency is that we are in for one hell of a civics lesson.

*  *  *  *

The great irony that I can never get my mind around is that the GOP’s policies undermine the very things in life they claim to value most. That conservatism is unconcerned about clean air and water and global warming makes no sense.

An ethos that glorifies obedience, and yet, is not adamant that people who work hard should be afforded a living wage and that this should takes precedence over an entrepreneur’s right to exploit people, undermines itself. Hard work as a virtue is the bedrock of conservatism, at least it used to be.

A political ideology built around reifying families, and yet, whose policies are overtly oppressive to families, is an anathema to the notion of being a “family values party.”

Both of our political parties need to reexamine their reasons for being. Liberals need to cut to the bone of what liberalism stands for and conservatives need to rethink what’s worth conserving.

I’m old enough to recall a time when Democrats were all about being for the working class and Republicans used to do the right things for the right reasons.

But, continuously cutting taxes while our deficit soars, our infrastructure crumbles, and digital app technology threatens employment, is not conservativism, it is instead, an expression of contempt, arrogance, political immaturity and greed.

The strangest thing of all, however, is the decision of working class America to reward the political party that is most responsible for today’s growing inequality with the expectation that these people, led by Donald Trump will fix the problem.

This is neither liberal, or conservative, this is naiveté bordering on lunacy. The sad reality, though, that I keep pointing out is that every time people start getting close to figuring out that they have been conned, someone is going to burn a flag.

 

Naked Capitalism on the Government Money Has Bought

Stark New Evidence on How Money Shapes America’s Elections

Posted on August 9, 2016 by Yves Smith

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

Outrage over how big money influences American politics has been boiling over this political season, energizing the campaigns of GOP nominee Donald Trump and former Democratic candidate Sen. Bernie Sanders alike. Citizens have long suspected that “We the People” increasingly means “We the Rich” at election time.

Yet surprisingly, two generations of social scientists have insisted that wallets don’t matter that much in American politics. Elections are really about giving the people what they want. Money, they claim, has negligible impact on elections.

That was a good line for Cold War propaganda, and good for tenure, too. Corporate titans seized upon it to argue that their money should be freer to flow into political campaigns. Not only billionaires, but academics, too, argued that more money in elections meant more democracy.

Even today, many academics and pundits still insist that money matters less to political outcomes than ordinary citizens think, even as business executives throw down mind-boggling sums to dine with politicians and Super Pacs spring up like mushrooms. The few dissenters from this consensus, like Noam Chomsky, are ignored in the U.S. as “unpersons,” though they are enormously respected abroad.

This is a scandal. It has stymied efforts at campaign finance reform and weakened American democracy.

Political scientist Thomas Ferguson, Director of Research at the Institute for New Economic Thinking (INET), has spent a career setting the record straight with clear empirical evidence in a field where such research has been shockingly rare. Ever since his 1995 book Golden Rule: The Investment Theory of Party Competition blasted through received academic wisdom by showing how wealthy individuals and businesses strategically invest in political parties for the biggest pay off, Ferguson has been the man to seek when you really wanted to know how elections work and who controls them.

White collar criminologist William K. Black and others still recall Ferguson’s famous warning, issued long before the nominating convention in 2008, that the contributions from big finance piling up in Barack Obama’s campaign war chest meant that his promises of sweeping reforms of finance were not to be believed. In 2014, he foresaw the unraveling of America’s two major political parties and predicted that voters feeling betrayed would increasingly abandon both.

“Want a happy ending?” he quips. “See a Disney movie.”

In recent years, Ferguson has often worked with two other talented researchers, Paul Jorgensen and Jie Chen. The three have tracked the generous funding of Obama by high tech businesses engaged in spying on the American public and the waves of money from polluters into the Republican Party.

Spend Money, Win Votes

Now the researchers have turned their attention on political money in Congressional elections in a new paper for (INET).

They begin with a simple question: What are the facts about total campaign spending and election outcomes? As they write: “We can pool all spending by and on behalf of candidates and then examine whether relative, not absolute, differences in total outlays are related” to the differences in votes received by the major political parties.

Their answer is stunning: there is strong, direct link between what the major political parties spend and the percentage of votes they win – far stronger than all the airy dismissals of the role of money in elections would ever lead you to think, and certainly stronger than anything you read in your poli sci class.

They show the strength of this relationship through a simple graph. The line going out to the right in the graph shows the Democratic percentage of the total money flowing into the race for the major parties and runs from 0 to 100 percent. The vertical line shows the percentage of the major party vote that the Democrats won. Dots represent individual House races in 2012.

As Ferguson, Jorgensen, and Chen sum up:

At the bottom left Democrats spend almost no money and get virtually no votes; at the top right, they spend nearly all the money and garner virtually all the ballots, calculated as proportions of totals for the major parties.

If money and voting outcomes were unrelated, then the dots representing individual House races in 2012 would be scattered all over the square. If they were perfectly related, the dots would all cluster tightly on a line.

Not only in 2012, but in every election for which the data exists (from 1980 to 2012), Ferguson, Jorgensen, and Chen found that the graphs came out with neat, straight lines, with minimal scattering of dots. The link is clear: when the Democrats spend more than Republicans, their candidates win. When Republicans spend more than Democrats, they win.

There was but one exception, the Senate races of 1982, when Senator William Proxmire, whose disdain for fundraising was legendary but who still won elections, brought down the average. Otherwise, with alarming regularity, Democrats and Republicans candidates’ share of the vote was correlated, to an astonishing degree, with the amount money spent in the campaign.

Nothing like this graph has ever made its way into a political science textbook. That it now exists sure should change what Ferguson, Jorgensen, and Chen call the “optics” of the campaign finance discussion. But will it?

Does Money Just Follow Popular Candidates?

Political scientists have long had way out of admitting the implications for democracy of such a direct a relationship between politics and money: the idea that the wealthy tend to spend on the most popular Congressional candidates. Their “influence,” the thinking goes, is thus nothing more than a reflection the will of the people. They don’t force any outcome other than the one that voters would choose. Political scientists call this idea “reciprocal causality.”

Ferguson, Jorgensen, and Chen tackle this issue head on. They use a cutting-edge method invented by Dutch statistician Peter Ebbes and recently studied by Irene Hueter in another new INET paper. The researchers find that while reciprocal causation happens, its extent is not large: money’s effect is direct and powerful.

They confirm their conclusion by using another method now widely employed in finance and economics: they look at published gambling odds on the chances of a Republican takeover of the House in 1994. These are relevant because a huge wave of money swept the Republicans to victory in that election, but the odds never moved very much. The relative lack of change rules out the idea that soaring expectations of victory drove the wave. But the wave, when it came, nevertheless produced a big change in the electoral outcome, just as a money-driven “investment theory” of political parties would predict.

Eccentric Gazillionaires or Big Corporations Driving Elections?

Their paper closes by examining the notion that right wing politics in America has been driven by donations piling up from eccentric entrepreneurs like investor and conservative mega-donor Foster Friess — the sort of people who are widely imagined to populate the Forbes 400 list of wealthiest Americans – rather than mainline big business corporations, such as those on the Fortune 500 list.

On the contrary, the researchers find that “a simple count of firms and investors on Forbes show that the largest American corporations support Tea Party Congressional candidates and organizations supporting the movement, such as Freedom Works, at much higher rates than Forbes 400 members. Even making due allowances for Dark Money, the difference is substantial.”

Evidently American big business firms are not centrist, as many pundits would have it. As Ferguson and his colleagues put it:

Stories that the steady rightward drift of the American political universe is somehow the work of exceptionally ideological individual entrepreneurs are huge over-simplifications. If the center is not holding in American society – and it rather plainly is not – America’s largest companies are as implicated as anyone else; indeed, perhaps more so.

This state of affairs explains why economic inequality has grown into a crisis, with social unrest amplified by economic distress. Because of this money-driven system — which has been getting worse since 1970s up to the current dysfunctional mess — when the rich don’t feel like paying taxes, we all suffer. Infrastructure collapses, schoolchildren and sick people suffer, and hard-working citizens are robbed of their fair share of the country’s prosperity and end their lives struggling keep body and soul together.

Ferguson, Jorgensen, and Chen conclude:

It goes without saying that this news is not reassuring; particularly in elections below the federal level – in states and local elections, we suspect, money has come to dominate outcomes to a frightening degree, not least because it is unlikely that the Republican advantage is offset there to the degree that it has been in recent federal elections. If it turns out that the U.S. has entered a Post-Democratic age, the situation will not be improved by social scientists behaving like ostriches. It is time economics, political science, and history recognize the reality of industrial and financial blocs within parties and acknowledge money’s powerful effects on elections.

If mainstream social scientists are not pursuing the truth, what exactly are they pursuing? Whatever it is, it does not appear to be good for democracy.

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Naked Capitalism: Corporations Ducking Taxes

Wolf Richter: Which US Companies Stockpile the Most Profit “Overseas?” But Where the Heck is the Money?

Posted on May 14, 2016 by Yves Smith

Yves here. As we’ve written before, the idea that US companies’ profits booked offshore means actual cash is sequestered is a complete canard. Most of the time, the funds are in the US. Yet it seems this point needs to be made repeatedly to penetrate the corporate spin otherwise.

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street

There is a misconception about the uncanny ability of very profitable US companies, like Microsoft and Apple, to park their profits overseas in order to dodge US taxes: the money from these profits that are parked “overseas” isn’t actually overseas.

It is registered in accounts overseas, for example in Ireland, but is then invested in whatever assets the company chooses to invest it in, including in US Treasuries, US corporate bonds, US stocks, and other US-based investments. This was revealed to the public during the Senate subcommittee investigation and hearings in March 2013 that exposed where Apple’s profits that were officially parked “overseas” actually end up.

“Tim Cook emerged smelling like a rose, the triumphant CEO of America’s most iconic welfare queen,” I wrote at the time. And so the practice continues in all its glory.

These funds cannot even be “repatriated” because they’re already here — or wherever the company wanted to invest them.

According to a recent report by the Government Accountability Office (GOA), this and other practices give large corporations a big advantage over small businesses and individuals. Some key findings:

In each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability.

Among large corporations (generally those with at least $10 million in assets), 42.3% paid no federal income tax in 2012.

Of those large corporations whose financial statements reported a profit, 19.5% paid no federal income tax that year.

For tax years 2008 to 2012, profitable large U.S. corporations paid, on average, U.S. federal income taxes amounting to about 14% of the pretax net income that they reported in their financial statements (for those entities included in their tax returns).

Federal Tax collections from corporate income taxes are now around 2% of GDP while those from individual income taxes are over 8% of GDP and rising. I added the red arrow and label to indicate where we stand:

 

The report points out the vast difference between the much bemoaned statutory corporate income tax rate of 35%, one of the highest in the world, and the Effective Tax Rate, which is zero for some of the most profitable companies.

But how much of their profits are registered overseas? The interactive chart below shows the 50 US companies with the most profits stockpiled “overseas” to avoid taxes in the US, while the actual money is wherever, including in US-based assets (hover over the blue bars to get the amounts):

https://www.graphiq.com/wlp/3yFuHAb7Xz7

Total Profit Stockpiled Overseas by Company | FindTheCompany

OK, disclosure, I’m envious. I wish I could legally do that. As American, my worldwide income is taxed in the US (plus in other jurisdictions) even during the times I lived overseas — which makes American expats the laughing stock of much of the rest of the world. And we have no one else to blame but us; we voted these geniuses in Congress into office.

Apple shares have plunged 32% from June last year, and $282 billion in shareholder wealth has evaporated, on swooning sales and crummy data from suppliers. But still, Apple’s market capitalization is over $500 billion. And Alphabet’s is nearly $500 billion. Along with Facebook, Amazon, and LinkedIn, they constitute the Big Five in Silicon Valley, with a giant footprint on commercial real estate. And this could get very ugly! Read…  Silicon Valley Commercial Property Boom Ends, Totally Exposed to Big-5: Apple, Google, Facebook, Amazon, LinkedIn

Food Stamps in Manufacturing

A graphic saved for posterity from the International Business Times website:

Saved Graphics: The Cost of College

The figure I’d heard was that the cost of college had increased eleven-fold since 1979. This goes back even further. The cost for our out-of-state son at the University of Arizona is about $40,ooo a year. Fortunately, he has a National Merit Scholarship, and UA is one of the few state colleges that honor it, covering a major portion. He was accepted also at Berkeley, among others, where he really wanted to go, but even with some decent out-of-state scholarships, it would’ve cost us upwards of $50,000 a year—$200,000 for an undergraduate degree.

Rich black kids are more likely to go to prison than poor white kids