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August 2018

Trump v Mueller: Round 15

   The August 21, conviction of Paul Manafort and the simultaneous guilty plea of Michael Cohen deserve some sorting out as the Mueller investigation grinds endlessly on and, at least for the moment, they seem to represent the beginning of the end. Two questions arise:

   1. What are the new learnings from these two cases, after a year of breathless Washington Post headlines about smoking guns?

       - The Cohen case provides clarity for those in denial that Trump made blackmail payments to two bimbos with whom he had affairs shortly after the time of his son Barron's birth. The Stormy Daniels payment came through Cohen, probably at Trump's request; the McDougal payment came through the the National Enquirer, and apparently originated with the Trump Organization. 

       - Cohen had a problem with taxi licenses going back several years. Manafort had a problem with tax avoidance on fees from lobbying on behalf of pro-Russia Ukranian politicians several years ago. Neither had anything to do with Trump, much less collusion between the Trump campaign and any Russians. Rather, Mueller used their offenses to squeeze out incriminating evidence on Trump - but none (except for the bimbo payments) was presented in either case. 

      - Lanny Davis, Cohen's lawyer who had a long relationship with the Clinton machine, falsely claimed - as an anonymous CNN source, and later directly - that he knew from Cohen that Trump had prior knowledge of the June 9, 2016 meeting in Trump Tower between Donald Trump Junior, Jared Kushner, Paul Manafort, and Russian lawyer Natalia Veselnitskaya. (E-mails released by Donald Junior shortly after the meeting revealed that Veselnitskaya had promised dirt on Hillary, but none was offered and her real purpose was to lobby on behalf of adoption policies. President Trump had denied knowing of the meeting in advance.) Davis also lied when he claimed that Trump was involved in the Russian theft of Democratic National committee e-mails. Even the Washington Post criticized Davis and CNN for the falsehoods and shoddy reporting, but to the extent that public attitudes were affected, "fake news" placed another brick in the anti-Trump wall. 

   2. What might come next?

    - Mueller's team and the Democratic New York attorney general will examine the mechanics of the bimbo payments, interviewing National Enquirer executives and the Chief Financial Officer of the Trump Organization. Since Cohen pled guilty to making an illegal campaign contribution there will be an attempt to hang Trump on a similar charge; however, Trump's team will argue that he was just spending his own money to protect his wife and son from embarrasment. The option of Trump volunteering to testify under oath is in the rear view mirror, as the possibility of mis-speaking and being charged with perjury is obvious. 

     - Within a week or two Mueller needs to conclude or pause his investigation, lest he be guilty of Comey's sin of appearing to influence elections. All of the apparent avenues of inquiry have been exhausted, except for the role of Hillary's campaign in the Russia-related Steele dossier, and the anti-Trump behavior of the FBI leadership before and after the election - but there is no evidence that Mueller will go there. Mueller can claim vindication in indicting or getting guilty pleas from two batches of Russians for election interference, identity theft, and money laundering; Manafort for unregistered lobbying and tax evasion; Cohen for improper use of taxi medallions and illegal bimbo payments; Michael Flynn and George Papadopoulos for lying to the FBI; and a few assorted lawyers and hangers on for helping Manafort and the Russians. That Mueller hasn't found a whiff of Russian collusion or obstruction of justice on the part of the Trump team will be a disappointment to many. 

     CBS kept As the World Turns on air for 54 years, proving that there is a market for soap operas. Fifteen months is enough for Mueller v Trump. The overhang on the Trump presidency has been significant, but the Energizer bunny has kept on going.                                                                 


   This week's video is a brief discussion of California gubernatorial candidate Gavin Newsom's commitment to include illegal immigrants in his free healthcare for all plan. For those keepng track, the state Senate passed a similar program this year, but the Assembly refused to consider it because there was no plan to cover the $400 billion cost. (For perspective the current state budget is about $185 billion.) Support Republican John Cox for governor. 

bill bowen - 8/31/2018




In Defense of Trade Skirmishes

     Of all the things that Donald Trump should be good at, negotiation of trade agreements is at the top of the list. This is clearly an Executive Branch function, as the world's largest market the United States posesses immense leverage, and he has lots of experience dealing with unsavory commercial partners. 

     The Issue:

          The United States has a growing unsustainable trade deficit - $810 billion in goods partially offset by a surplus of $244 billion in services in 2017. The big three problems are with China (a net deficit of $375 billion),Mexico (a net deficit of $71 billion, Japan (a net deficit of $69 billion), and Germany (a net deficit of $65 billion.) Over time we lose control of our economy if we import three to four per cent more of our Gross Domestic Product than we export. The question is not really "free trade" or "fair trade", it is "balanced trade". Apologists claim that "comparative advantage" principles make bilateral balances irrelevant, but our decisions as a country are less under our control when foreign governments, companies, and individuals own our real estate and companies, and hold our debt. We cannot significantly diminish the overall problem without addressing the largest national deficits. 

     The MAGA Trade Advocates:

          - The industries such as consumer electronics and apparell which have gone are no longer able to advocate for themselves.  A few industries, like dairy which faces closed Canadian markets, steel which has long faced unequal foreign barriers, and energy companies are openly supportive, but most do not want to be vocal, lest they offend their potential customers and draw the attention of the #Resisters.  

           - Blue collar workers are advocates for strong trade policies, but not the company owners who are looking for the lowest cost option, nor the State Department consular officials who are often more interested in helping foreign companies establish exports to the United States. 

           - The Trump team makes the case domestically and internationally, led by  Commerce Secretary Wilbur Ross, who made a fortune restructuring bankrupt manufacturng companies, Trade Representative and Washington lawyer Robert Lighthizer,  and Director of the White House Trade Council Peter Navarro, an academic outlier from the University of California, Irvine, and ardent critic of China, Germany, and NAFTA trade policies. Some ivory tower; some Washington insider; some street fighter.  

     The MAGA Trade Opponents:

           - The Wall Street Journal editors reflect the interests of capital rather than workers or any broader national good. Ditto the rest of the financial press. 

           - Walmart, which began as Sam Walton's heartland America retailer, brought scale to Asian manufacturers and became the largest champion of cheap stuff for American consumers at the expense of American workers. Ditto all of the other peddlers of cheap stuff.  

           - Export industries do not want to offend their customers - Information Technology; aircraft; vehicle components; soybeans.

           - The #Resisters and Never Trumpers from both sides of the aisle see an avenue to attack what is otherwise a successful economic performance.  

     The status:

           - The imbalance spiked in January, and has since returned to the 2017 level of about $45 billion per month. 

           - Ironically, the first major breakthrough will apparently be with Mexico where the incoming leftist president Andres Lopez Manuel Obrador, wants to take NAFTA off of the table so that he can focus on his agenda of fighting corruption and improving internal security after an election in which over 130 politicians were murdered.  Four weeks of bilateral negotiations have reached agreement on automotive wage rates in Mexico and the portion of products that must originate within North America. Canada will object to being brought in late in the discussions, but will not be asked for major concessions. Trump will be able to declare victory (even if partial) before the November 6 election - while demonstrating that he can work with leaders even when there are significant disagreements. 

           - In late July, European Commission President Jean-Claude Juncker and President Trump agreed to withhold US tariff increases on steel, aluminum, and automobiles while the EU would lower tariffs for U.S. industrial goods, provide outlets for U.S. gas and soybeans, and potentially back the US in trade rows with China.The shared goal is trade without any tariffs. A European delegation is working on details in Washington this week. The European politics have to be worked out, but it would seem that German interest in protecting the export of Mercedeses, BMWs, and Volkswagons has overcome the historic French opposition to agricultural imports. Trump also catches a break as Junker would like to avoid a trade war with the United States as he tries to negotiate Brexit terms with Theresa May.  

          - China will be more difficult - and important. Talks between dovish Treasury  Secretary Steve Mnuchin and Chinese Vice Premier Liu He broke down in May, followed by mutual 25% tariffs on $50 billion of goods. With the Trump administeration examining 10 to 25% tariffs on another $200 billion, lower lever talks have resumed this week in Washington. (The US side is led by an Undersecretary of the Treasury rather than Lighthizer, Ross, or Navarro, a clear signal that Trump is not ready to deal.)  With a greater dependence on exports, a slowing domestic economy, and a stock market down 20% on the year, Xi Jinping is under greater pressure than Trump, but he has a firm grasp on broad political power, while Trump may appear to be on the ropes. Little real progress is likely before November. 

       The trade deficit with China is a bit like North Korea's nuclear program - an unacceptable problem which has been growing for more than a decade without being confronted by American presidents - Democratic or Republican. Both problems call for bipartisan support - a commodity which is has just moved from rare to virtually impossible before the November elections.  


  This week's bonus video is an expert legal opinion by Harmeet Dhillon, Republican National Committeewoman from California (and former chair of the San Francisco GOP), explaining that it is not a crime for a candidate to use his own resources to pay hush money, regardless of whether Mueller's team got Michael Cohen to plead guilty to that offense in exchange for leniency on other unrelated charges. 

bill bowen - 8/24/18 


The New Republican Senate

    For conservatives concerned about President Trump's latest tweet, the rantings of the socialist Left, and the New York Times latest editorial, there is one secure refuge.  By all accounts, the November election will see the Republican Senate majority expand slightly, but importantly. 

The Setting:

    - The current 51 to 49 majority is apparently adequate to approve routine legislation and Supreme Court justices who pass the screen of the Federalist Society and exhibit no discernable blemishes. Even realistic liberals agree that Brett Kavanaugh will be on the Supreme Court when the next term begins in October.  

    - The Democrats (and their independent allies) will need to defend 26 Senate seats to the Republicns 9.  (This will reverse in the 2020 and 2022 elections, but that is a worry for another day.)  Some 10 Democratic seats are in states carried by Trump in 2016; one Republican seat is in a state carried by Hillary Clinton. 

The Projections:

    - The two most widely followed prognosticators, Charlie Cook and Larry Sabato, project that only six of the Democratic seats and three of the Republican seats are seriously in play (Toss up, or Lean one way.) In approximate order of risk for the Democrats, that is Joe Donnelly of Indiana, Bill Nelson of Florida, Heidi Heitkamp of North Dakota, Clair McCaskill of Missouri, Joe Manchin of West Virginia, and Sherrod Brown of Ohio. On the Republican side it is Dean Heller of Nevada, Jeff Flake's open seat in Arizona, and Tom Corker's open seat in Tennessee. Cook, who leans slightly Left, projects no way that the Democrats gain two net seats, estimating a loss of two or three. Apologies to the believers in an invisible Blue Wave and the tooth fairy. 

    - The "big picture" of the 2018 Senate elections rests in the upper Midwest where the move from Democrat to Republican in recent years - governors; state legislatures; House members - represents the majority of the shift of national political alignment. (The Northeast and the West Coast remain Democrat; the South and the Mountain West remain Republican.)  Democratic Incumbents Debbie Stabenow of Michigan, Tina Smith of Minnesota, and Tammy Baldwin of Wisconsin are projected as "Likely Democrat". The broader erosion of Democratic strength extends to Montana (Jon Tester Leans Democrat), North Dakota (Heidi Heitkamp Toss-up), Missouri (Clair McCaskill Tossup).  Most of this is Trump Country,and he is free with his endorsements, but in Democratic positioning every year is "The Year of the Woman." 

    - A few specific contests worth watching:

         -- Some Democrats think that their day has arrived in Texas with Beto O'Rourke  outraising Ted Cruz in a significantly Hispanic state where Democrats haven't held state-wide office for decades. Maybe next cycle when John Cornyn is the Republican incumbent. 

          -- The Trump-endorsed winner of the Michigan Republican primary, John James, is an African American, Iraq War veteran, and small business owner with degrees from West Point, Penn State, and the University of Michigan. Don't expect much liberal media coverage, but he could join Senator Tim Scott of South Carolina as attractive, reliable conservatives who demonstrate the falacy of Democratic efforts to stereotype Republicans. 

 The implications:

     - Mitch McConnell should sleep better without needing to worry about one or two defections - Susan Collins; Lisa Murkowski; Jeff Flake; Bob Corker; Rand Paul; John McCain (who will eventually be replaced by the selection of Arizona's Republican governor, Doug Ducey.)  Under current Senate rules, budget items which originate in the House and are not amended in the Senate can be passed with a simple majority, but other bills require a 60 vote majority, which McConnell will not have. He will have to legislate from the center. 

    - McConnell and Trump will have a clear path to re-make the judiciary. Building on Harry Reid's decision to allow confirmation of lower court and appeals court judges by a simple majority, McConnell has also cut back on the nicety of home state Senator approvals, focused on appeals court judges, and held the Senate in session for most of August to partially offset the Democrats' demand for up to 30 hours of debate on each appointee. With a total of 860 lifetime judiciary positions, McConnell's  Senate has approved over 40 Trump appointees, but has almost 100 in process, and looks to another 50 vacancies beyond that. 

    - Impeachment remains a Left wing dream; even if the Democrats were to win the House, they would need 67 votes in the Senate. 

    - If the Republican Establishment wishes to challenge President Trump in 2020, the Senate would be the most likely perch for a candidate. Mitt Romney sat out the 2016 election cycle in deference to Jeb Bush; on January 4,  he will become the junior Senator from Utah. 

    With so much political noise in the House and presidency, a Republican Senate looks to remain a relative bastion of conservative calm. Jinx!


  This week's bonus video is the first step in the utterly logical revocation of security clearances for former Obama officials who have aggressively attacked the president before and after the election.  In typical disruptive style, Trump asks the common sense question as to why people no longer in the public service retain top secret security clearances. 

bill bowen - 8/17/18

The Mid-Terms: A Pelosi Perspective

    With apologies to  readers who are enthralled by House Democratic Minority Leader Nancy Pelosi's increasing inability to speak, she remains the most astute political operative of our time. (Trump is more of a headliner than an operative.) Her ability to deliver a 100% caucus vote against the 2017 tax cut bill should cement the title, even among her most ardent adversaries. It is worth reflecting on how she would see the 2018 election landscape, and the positioning that she advocates. Let's use a Rumsfeldian construct.  

  The know knowns:

        1. The economy is strong, and as James Carville famously said about what matters in elections, "it's the economy, stupid".  Priority one is to cast doubt on what everybody knows to be true. This isn't Trump's economy, it is a continuation of Obama's economic recovery from the Republican crash of 2008; while wages are rising, so is inflation; this is a short term bump from irresponsible budget imbalances. Overall, downplaying prosperity is a hard sell when employment is at all time highs for minorities and blue collar workers are finally seeing progress after decades of stagnation. It is best for the Democratic friendly media to focus elsewhere. 

        2.  Candidates must look like the voters in their districts. Alexandria Ocasio Cortez won in a Brooklyn district because she was an attractive socialist Latina.  Democratic National Committee Chair Tom Perez is an idiot if he thinks that she is the future of the party writ large. Conor Lamb won a March election in a suburban Pittsburg district running as a former Marine and a federal prosecutor. Danny O'Connor came close in a suburban Columbus, Ohio running as a local boy made good whle helping others.  All candidates should be encouraged to say whatever appeals to their constituents. 

        3. Opposition to Donald Trump is the Democrats greatest asset - the gift which keeps giving. Trump gives voice to a segment of the electorate long since abandoned by the Democratic party in their quest for identity politics, but at the expense of putting in play moderate Republicans and Republican-leaning independents. Like few before him, he controls the global agenda, and can manage events to the benefit of Republican candidates - if he so chooses. Democrats need to remain in the constant attack mode. 

        4. Democrats can turn out huge majorities in ethnic central cities, but Congressional districts - drawn in part to conform to the 1964 Voting Rights Act which "guaranteed" minority representation in Congress - under-represent liberals in suburban districts. Also because younger Democrats tend not to vote at the rate of older Republicans, a "generic ballot preference" of 6 to 7 per cent for the Democrats portends a break-even in Congressional seats. National polling is meaningless; local polling is often biased and not relaible.

        5.  Brett Kavanaugh will become the 9th Supreme Court justice well before the election, probably before the fall session begins on October 1. This is a problem for a few key Senate races, but nobody cares what House members think. 

    The known unknowns:

        1. Robert Mueller's Russia probe. Comey violated Justice Department practices of avoiding potentially political actions close to an election by exonerating Hillary in July, 2016, then renewing the e-mail question in late October. Most likely, Mueller will fire his cannon by mid-September, or decomission it. And there will be nothing timely about what caused the Obama administration to begin the Russia inquiry in the first place. 

        2. Establishment Republicans hate Trump's threatened and actual trade wars. Agreements appear possible with Mexico (and Canada), and potentially at least a framework with Europe before November. If either of these resolutionss appears to be solid, Trump can then claim proof that his style works, and turn attention to China where the need for a significant rebalancing is more broadly understood. 

        3. North Korea. While Secretary of State Mike Pompeo continues to accentuate the positive - return of American soldiers remains; dismantiling of a missile engine test site - production of nuclear material continues, Russia is providing financial aid by hiring North Korean workers, and the United Nations is talking of resuming humanitarian aid. There will probably be no US action until after November, but force may eventually be needed. Likely an issue for 2020, but not 2018.  

    The unknown unknowns

        1. Unknown. 

    The Pelosi strategy:

        1. The target audience is the portion of the Establishment Republican and moderate to conservative-leaning electorate which is offended by Trump. Geographically, that is suburbia. Ethnically, that is white. Attitudinally that is pro decorum and traditional rules of behavior. It doesn't help to double the inner city vote by talking of socialism, guns, or abortion; what is needed is Democratic candidates and spokespeople talking about fiscal responsibility and patriotism to moderates in swing districts.  

        2. Let Democratic candidates repudiate her as leader. O'Connor's waffling on whether he would support Pelosi for leader may have swung enough votes to cost him the election. Put first priorities first, and that is winning the House; a managed number of new House members can have a change of heart later. 

       3. Forget impeachment. Billionaire Tom Steyer and the fringe left threaten chaos, which is never popular. 

    At this point the November outcome looks nothing like the balyhooed  "blue wave". With 218 seats needed for a majority, Democrat-leaning sage Charlie Cook has Democrats 192 sure, likely, or lean; Republicans 206 sure, likely, or lean, and  37 toss-ups.  Many of the 37 are traditionally Republican suburbs where the Pelosi approach reflects well, and socialism remains a dirty word.  In Mazlov's heirarchy low unemployment is great, but in suburbia where people have had jobs, the Republicans failure to solve immigratiion, to reform Social Security to a sustainable path, or to control burgeoning deficits are much more appealing subjects for Democrats. 

     Republicans can only wish that Tom Perez, Chuck Schumer, or Bernie Sanders were steering the Democratic ship. 


    This week's video is an interview with long-time San Francisco supervisor and new mayor, London Breed, demonstrting that she doesn't have any intention to take the difficult steps to clean up what has become the filthiest city in the country. 

bill bowen - 8/10/18



A Socialism Primer

   Rasmusssen's polling tells us that 51% of Democrats, 26% of independents, and even 21 % of Republicans have a favorable impression of socialism. Let's assume that there is something out there beyond the desire for open borders and free stuff; something beyond a charismatic candidate from an anomylous Congressional district; something more than an antipathy for President Trump. After all, surveys of millenials frequently show greater support for socialism than for capitalism. It is worth a primer. 

    Formal definitions don't always catch what is really in people's heads, but they represent a good place to start: 

        Capitalism: An economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, voluntary wage labor, voluntary exchange of goods and services, a price system, and competitive markets. Versions include pure free market where supply and demand set prices without government, monopolies, or other interference; welfare capitalism which includes welfare services provided by the government or employers; and state capitalism where some of the economic activity is directly managed by the government, as in China.   

         Socialism: Collective or governmental ownership and administration of the means of production and distribution of goods in which there is no private property and the means of production are owned and controlled by the state. Versions include different scopes of what is owned by the state (factories; farms; small stores) and the amount of central planning. Wages are based on work performed.  

        Communism: The highest form of socialism. A society without class divisions or government, in which the production and distribution of goods would be based upon the principle “From each according to his ability, to each according to his needs.” 

    In the early stages of the 2016 presidential election, Independent Senator Bernie Sanders of Vermont brought the far left wing of the Democratic Party to life, ranting against millionaires and billionaires while promising free healthcare, free college, and free child care; he certainly had the crowd energy, and might have won the Democratic nomination had not the party machinery put a heavy thumb (in the form of super delegates and debate management) on the scales for the more mainstream Hillary Clinton.  Over his career Sanders, once a member of the Young People's Socialist League and an admirer of Socialist presidential candidate Eugene Debs, has advocated for just about every liberal cause possible, but has, in truth, not focused on government takeover of private enterprise. While frequently enjoying being called a socialist by his supporters, he has tried to identify more with welfare capitalist Scandinavia than with communist Russia - with a few forays into praise for Castro's Cuba and the Sandinistas in Nicaragua.  

    The next iteration of leftist activism is younger and less circumspect about identification as socialists. Brooklyn Congresswoman-in-waiting Alexandria Ocasio-Cortez is the current star of the Democratic Socialists of America, but she is a beneficiary of the organization  rather than its leader. Founded in 1982 as an amalgum of aging socialist and communist organizations, the DSA left the Socialist International in 2017 because it was endorsing mainstream liberal economic policies such as deregulation and free trade. The largest socialist organization in the United States in over a century, membership in the DSA has risen to 47,000 by mid-2017 - sparked largely by the Trump election - with 181 chapters and a median member age of 33 as compared to an age of 68 in 2013. 

    It is worth digesting a few pearls from the  Democratic Socialists of America web site:  

       -  We are socialists because we reject an economic order based on private profit.

        - We are socialists because we are developing a concrete strategy for achieving that vision, for building a majority movement that will make democratic socialism a reality in America. We believe that such a strategy must acknowledge the class structure of American society and that this class structure means that there is a basic conflict of interest between those sectors with enormous economic power and the vast majority of the population.

     - We believe that working people should run both the economy and society democratically to meet human needs, not to make profits for a few.

    - Like most political organization websites there is also a store selling swag - "Medicare for all" cups; "Abolish ICE" tee shirts; "Karl Marx 200th Birthday" tote bags. 

    In some regards it is good to have Ocasio-Cortez as the poster child of this race to the Left. Despite her degree from Boston University with emphasis in economics and international relations, she cannot get beyond DSA talking points, even when interviewed on sympathetic programs like the Daily Show. Unemployment is low because everyone has two jobs; last year we gave the military a $700 billion increase (actually the total military budget); she favors a two state solution for Israel and Palestine - until liberal activists get her to talk about the "massacre" in Gaza and the Israeli occupation.  A couple of generations ago an international relations degree would have implied understanding that tens of millions were killed by Stalin, Mao, and Castro for their opposition to the imposition of socialism; today one would expect students would be taking the same lessons from Venezuela: not everyone is willing to give their posessions to the state, not everyone is willing to let the state determine where they work and live, and few central government bureaucrats are willing to really give "power to the people". 

    Conservatives expect that a clarion call from the Left will fall flat as it did with candidates such as George McGovern (who carried Massachusetts and the District of Columbia against incumbent Richard Nixon in 1972). They should not be so confident. The pendulum swings - Donald Trump reflects to some extent a reaction to the globalism and smooth-talking liberalism of Barack Obama. Ocasio-Cortez will have a platform, and the mob crying "socialism" will have a voice in the Congress in 2019, potentially as an unruly part of the majority. To make it through the primaries and caucuses in 2020 the successful Democratic presidential candidate will need to sound like the Bernie Sanders version of socialism; to be elected they will need to convince the public that they believe in capitalism.  


    This week's video is a New York Times story designed to promote the recent campaign visit of Alexandria Ocasio-Cortez and Bernie Sanders to Wichita, Kansas, as evidence that the whole country is turning left.  

bill bowen - 8/3/18