The astounding decision by the Trump administration to refuse to defend the Affordable Care Act against a spurious lawsuit by a bunch of conservative states has congressional Republicans in a pickle. The suit—and Trump’s position—would do what they’ve been promising their rabid base would happen for eight years: It would spell the end of Obamacare. The problem is: it would spell the end of Obamacare. Specifically, it would toss all the protections that more than one-quarter of the population with pre-existing conditions rely upon to continue their healthcare coverage.
The Trump administration has explicitly argued that those protections for people with pre-existing conditions should be struck down by the courts. Never mind that the legal argument is “pretty bad” in the summation of libertarian law professor Jonathan Adler, and “reflects poor understanding of severability doctrine, you see that in the state’s brief, and you see it implicitly in the DOJ brief insofar as they accept those arguments.” That means that the administration’s contention that because the individual mandate isn’t enforceable since the new tax law zeroed out the penalty, the rest of the law is unconstitutional is pretty much bullshit. Any court that hasn’t been completely taken over by Trump isn’t likely to advance the administration’s desire that these protections be declared unconstitutional.
But that doesn’t mean that the administration’s latest sabotage isn’t going to cause real harm in the meantime, while this case works its way through the courts. The statement from America’s Health Insurance Plans in response to the administration’s brief spells it out. The “renewed uncertainty in the individual market,” AHIP says, will “create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019.”
Back to congressional Republicans. When they were writing their so-called Obamacare replacement bill, they insisted that “Americans should never be denied coverage or charged more because of a pre-existing condition,” and that their legislation would “preserve vital patient protections, such as (1) prohibiting health insurers from denying coverage to patients based on pre-existing conditions, and (2) lifting lifetime caps on medical care.” Never mind that the legislation actually did undermine those protections, which is one of the reasons it ultimately failed in the Senate.
If they really meant it, that bit about protecting their constituents with pre-existing conditions, they should say so now. They should be filing briefs with the court in support of the law. They could pass another bill, making it crystal clear that these protections need to stand. They could stand up to Trump.
But they won’t. Which tells you everything you need to know about Trump’s GOP.
The United States is currently in the process of separating families who have come across its southern border without the appropriate documentation, which has meant hundreds if not thousands of young children are now being detained all alone in a strange land where they likely don’t speak the language. The act of separating families is a scare tactic by the U.S. government, meant not just to terrorize infants and toddlers, but to terrorize their parents, with the aim of deterring future undocumented immigrants, as well as, presumably, asylum seekers. We know it’s a scare tactic, first, because White House Chief of Staff John Kelly and others have said so, but also because it is more expensive and more onerous to be responsible for thousands of terrified small children separated from their parents.
To be clear, the policy is a moral abomination. It is one we would decry if it were done to American citizens anywhere else in the world. Attorney General Jeff Sessions, however, sees it quite differently. He sees moral outrage not in snatching young children from parents, who have come to U.S. out of desperation, but in the fact that they have broken the law. Not just his law, or U.S. law, but God’s law.
Here’s what Sessions had to say about the situation during a speech Thursday to law enforcement officers in Fort Wayne, Indiana.
I thought I would take a little digression here to discuss some concerns raised by our church friends about separation of families… I would cite you to the Apostle Paul and his clear and wise command in Romans 13, to obey the laws of the government because God has ordained the government for his purposes. Orderly and lawful processes are good in themselves. Consistent and fair application of the law is in itself a good and moral thing, and that protects the weak and protects the lawful.
Romans 13 has a shaky track record of moral relativism in American history, the Washington Post reports.
“Our government has the discretion in our laws to ensure that young children are not separated from their parents and exposed to irreparable harm and trauma. Families are the foundational element of our society and they must be able to stay together,” Cardinal Daniel DiNardo, the president of the United States Conference of Catholic Bishops, said in a statement. “While protecting our borders is important, we can and must do better as a government, and as a society, to find other ways to ensure that safety. Separating babies from their mothers is not the answer and is immoral.”
His shamelessness is almost mythical in its duration and scope.
While most people raised in a social culture exercise high levels of shame-driven behavior, disguising their dark side behaviors while projecting a persona that is always Facebook pure, the Donald has never demonstrated anything that would qualify as shame.
He never apologizes. This week, when an aide made a comment about the impending death of John McCain, he has prevented any public apology. He never apologized to the disabled reporter whose speech impediments he mimicked; he has never apologized for things he said about political opponents or everybody from Meryl Streep to Maggy Haberman.
He is the master of the fine art of doubling down. His whole campaign to nullify very achievement of the Obama presidency is just a protracted double-down exercise.
He shamelessly insults his allies and supports dictators likely to violate human rights like Rodrigo Duterte. He has bromances with Putin, Xi Jin-Ping, and makes a point of demonstrating limited regard for Angel Merkel.
While Richard M. Nixon and Bill Clinton both demonstrated well-developed levels of shamelessness, Donald J. Trump has mastered the subject through a life of utter consistency, whether it was taking away the healthcare of a nephew or allegedly bedding down a porn star and a playmate during the early stages of his marriage to his third wife. You have to love a guy who is so convinced of his abilities that he lives in a gold-plated world of shamelessness, even through six episodes of bankruptcy
blogger’s note: ACLU SUING TRUMP OVER BORDER SEPARATIONS OF YOUNG CHILDREN FROM PARENTS
Target: U.S. Attorney General Jeff Sessions
Immigrant and civil rights groups have never seen anything like this. Infants and children are being ripped from their mother’s arms as they enter the United States.
In one case in Arizona, a 53 week old infant was recently in court without a parent. These are children and families seeking asylum from Central America and Africa―from violence in their home countries.
In a recent interview with NPR, White House Chief of Staff John Kelly called this policy a “tough deterrent.” But the motives of the White House are clear: To punish immigrant families.
Now, the ACLU is suing the U.S. government to reunite these families.
DEMOCRAT CANDIDATE FOR CONGRESS RASHIDA CALLS THIS TO OUR ATTENTION.
Tell U.S. Attorney General Jeff Sessions:
Stop the atrocious policy of ripping children from their parents arms as they cross into the United States. This policy is unprecedented and is causing permanent harm to children and their families. We demand that you stop your assault on immigrant families and immediately reunite children with their parents.
We have long known of Donald Trump’s atrocious rhetoric and actions toward immigrants. But now we are learning of his administration’s unprecedented policy of ripping children from the arms of their parents at the border.
In one case in Arizona, a 53 week old infant was recently in court without a parent. These are children and families seeking asylum in the U.S. from Central America and Africa―people fleeing violence in their home countries.
ICE agents are putting children into government detention centers, where children are abused and traumatized.
The motives of the White House are clear: To punish immigrant families.
In a recent interview with NPR, White House Chief of Staff John Kelly called this policy a “tough deterrent.” But now, the ACLU is suing the U.S. government to reunite these families.
In past administrations, the Office of Refugee Resettlement had been used to assist children who crossed the border on their own. These were children who were often 13 or 14 years old, fleeing violence and poverty. But this new U.S. government policy is unnecessarily turning children―often as young as 6 or 7―into unaccompanied minors.
Immigrant and civil rights groups have said that they have never seen anything like this. This type of policy is causing permanent harm to children and families, in the name of our government.
In the recent days, outrage about treatment of children taken into U.S. custody at the Southwest border has reached a fever pitch, exploding in a barrage of tweets and calls to action with the hashtags #WhereAreTheChildren and #MissingChildren.
How accurate are certain claims circulating online? Are these children really missing? What do those children have to do with the Trump administration’s new immigration enforcement policies? How many families are being separated? And why is there so much outrage about it now? We take a look at how the story has snowballed.
Did the United States really lose track of 1,475 immigrant kids?
In short, yes. During a Senate committee hearing late last month, Steven Wagner, an official with the Department of Health and Human Services, testified that the federal agency had lost track of 1,475 children who had crossed the U.S.-Mexico border on their own (that is, unaccompanied by adults) and subsequently were placed with adult sponsors in the United States. As the Associated Press reported, the number was based on a survey of more than 7,000 children:
From October to December 2017, HHS called 7,635 children the agency had placed with sponsors, and found 6,075 of the children were still living with their sponsors, 28 had run away, five had been deported and 52 were living with someone else. The rest were missing, said Steven Wagner, acting assistant secretary at HHS.
Health and Human Services officials have argued it is not the department’s legal responsibility to find those children after they are released from the care of the Office of Refugee Resettlement, which falls under HHS‘s Administration for Children and Families. And some have pointed out that adult sponsors are sometimes relatives who already were living in the United States and who intentionally may not be responding to contact attempts by HHS.
PRESIDENT DONALD TRUMP chose Gina Haspel, who supervised torture during the George W. Bush administration, to run the Central Intelligence Agency. He violated and withdrew from the Iran nuclear deal. He bombed Syria. He moved America’s embassy in Israel from Tel Aviv to Jerusalem. He’s continued the United States collaboration with Saudi Arabia on waging brutal war on Yemen. He first threatened to “totally destroy” North Korea with “fire and fury,” and then, last Thursday, spoke of North Korea being “totally decimated” by the U.S.
Trump’s frightening and erratic approach to foreign policy has galvanized grassroots opposition, so Democrats desperately need a prominent leader who can both fuel and channel that energy, while motivating the Democratic Party’s base for the 2018 midterms with a vision of a starkly different foreign policy.
Instead, Democrats have Chuck Schumer.
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Schumer, a New Yorker who was first elected to the House of Representatives in 1980 and then the Senate in 1998, is the upper chamber’s minority leader. He is thus, since both houses of Congress and the White House are held by Republicans, formally the highest ranking Democratic official in America.
Schumer’s positions on domestic policy leave much to be desired, but not on every issue. By contrast, his views on foreign policy are largely indistinguishable from the Republican Party in general and Trump specifically.
A look back at Schumer’s history demonstrates just why it has been so difficult for Democrats to “resist” Trump with him at the helm.
In the end, Schumer did vote against Haspel’s nomination. However, he did not publicly commit to doing so during the weeks leading up to the vote, which lessened pressure against other Democrats in the Senate who were tempted to support her. Schumer also did not whip the Democratic Caucus to oppose Haspel. In the end, her nomination cruised 54-45, with six Democrats voting yes — meaning that enough Republicans voted no that if Schumer had held his caucus together, Haspel would not have been sworn in at the CIA on Monday. Of course, it would have been difficult for Schumer to lead any effort to stop Haspel with a straight face. During a 2004 hearing, Schumer sympathetically told then-Attorney General John Ashcroft, “There are probably very few people in this room or in America who would say that torture should never, ever be used. … It’s easy to sit back in the armchair and say that torture can never be used. But when you’re in the foxhole, it’s a very different deal.” (Schumer did say he was concerned about torture being used “willy-nilly.”)
At the beginning of the Trump administration, Schumer voted for Mike Pompeo’s nomination to head the CIA. Pompeo is a member of the Christian far right who’s said that terrorism will continue “until we make sure that we pray and stand and fight and make sure that we know that Jesus Christ is our savior, is truly the only solution for our world.” While Schumer did vote against Pompeo’s nomination to be Secretary of State, he similarly did not whip against it and kept his decision to himself until it would have no impact. The Senate foreign relations committee barely approved Pompeo, who was then confirmed by the full Senate with the support of seven members of the Democratic Caucus.
Even as Israel was slaughtering protesters in Gaza, Schumer released a statement in which he said, “I applaud President Trump” for moving the U.S. Embassy in Israel to Jerusalem, calling the move “long overdue.” He also proudly noted that he had been a co-sponsor of the Jerusalem Embassy Act of 1995. Schumer has almost always moved in lockstep with the Israeli right, and on several occasions he’s learnedly explained that there cannot be peace between Israel and Palestinians, because Palestinians “don’t believe in the Tora,” and so “you have to force them to say, Israel is here to stay.” Thus, Schumer says, it makes sense for Israel “to strangle [Gaza] economically.” The United Nations has found that the Israeli blockade of Gaza will render it “uninhabitable” for humans by 2020.
Schumer was one of only four Senate Democrats who voted against the Iran nuclear deal that was negotiated by the Obama administration. The U.S., Schumer said, “would be better off without it.” In 2015, when Republicans invited Israeli Prime Minister Benjamin Netanyahu to address the U.S. Congress in an effort to derail the Iran deal, Schumer praised Netanyahu’s speech as “powerful.”
Schumer supported Trump’s bombing of Syria, both in 2017 (it was “the right thing to do”) and in 2018 (it was “appropriate”).
Earlier this year, the Trump administration successfully pushed to increase the Defense Department’s budget by 10 percent, to $700 billion, or more than one-third of all federal non-entitlement spending. Schumer announced, “We fully support President Trump’s Defense Department’s request.”
When Sens. Bernie Sanders, I-Vt., Mike Lee, R-Utah, and Chris Murphy, D-Conn., introduced a bill to halt U.S. support for the Saudi war against Yemen, Schumer voted for it, but, as with Haspel and Pompeo, did not use his power in the Democratic Caucus to whip recalcitrant senators. Ten Democrats voted against it. The vote took place even as Schumer (and other top lawmakers) were meeting with the war’s architect, Saudi Crown Prince Mohammed bin Salman.
Schumer was a vociferous supporter of John Bolton’s 2005 nomination to be the U.S. ambassador to the U.N. “A vote against Bolton,” Schumer proclaimed, “was a vote against Israel.” But Bolton was correctly perceived as so dangerously belligerent that even a Republican-led Senate rejected him. Bolton has since called for the U.S. to attack both Iran and North Korea. (More recently, when Trump chose Bolton as his national security adviser, Schumer mildly stated that Bolton’s positions were “troubling.”)
Schumer has attacked Trump’s policy on North Korea — from the right. Meanwhile, when Democratic senators have made attempts to rein in Trump’s terrifying instinct to consider a gigantic war with North Korea, Schumer has been nowhere to be found.
Schumer voted in 2002 for the Iraq War, citing Saddam Hussein’s imaginary but “vigorous pursuit of biological, chemical, and nuclear weapons.” His statement was later cited frequently by Republicans as evidence that Bush had just made an honest mistake about Iraq and weapons of mass destruction.
Schumer voted for the Patriot Act in 2001, and was the House sponsor of its antecedent, the Omnibus Counterterrorism Act of 1995.
So, taken together, it’s obvious that Schumer does not, and never will, offer voters an alternative to Trump and Republicans in general on the most important questions of national security. That’s because Schumer truly, deeply, and sincerely agrees with them.
Trump is doing something good for the American global hegemony. Remember his slogan is “make America great again”, but you can complete the next half of this sentence as “at the expense of…” This is the reality of international politics. It is no difference from Lord of the Flies-jungle laws, prey and predators.
To analyze his action we must temporarily forget about the miscellaneous things, such as WMD, human rights, democracy, nukes or treaties… because these are the tools but not the motives. For those who are still discussing how evil Iran is, you should go home and suck the popsicles passed from media. Evil does not apply to international politics. Meanwhile, we must realize the complexity of such issue stretches into domestic politics as well.
The American mid-east policy evolves around clear motives:
Petrodollar stability, the right to control global oil trade, and the dominance of US dollar.
Protect Israel as US representative in the region.
Control the choke point of international trade.
To meet the goals, US’s priority is to build puppet governments throughout mid-east and Eastern Europe. The tactics include war and colour revolution. In Syria, US manipulates different anti-government forces to fight a proxy war against the Russia and China backed Syrian government. Russia is in the war to defend its influence from the Black Sea to the Mediterranean region and its oil business with Europe. China is in the war to protect its oil trade and its economy from America’s financial war machine.
The US’s representatives in Syria are already losing, and with a nuclear agreement Iran’s Shiah Muslim government is becoming too powerful. It is a threat to US that Russia and China will infiltrate the middle-east with the fist of Iran. If Iran as the regional power overtakes leadership and creates a united and peaceful ME, Israel and US will be kicked out and US global hegemony is doomed, and US dollar is doomed, and US as a country will face severe internal issues.
The US is not letting that happen! The Republicans don’t want that either; they need the support from Jewish communities in the swinging states. Giving Iran the opportunity to take over power vacuum in Iraq and Syria is nothing more than a nightmare. The US is basically applying its contingency plan: stir up the peaceful countries, even risk to trigger a major regional war. Don’t be surprised, to the US government, lives of the civilians in ME mean no more than numbers on a piece of paper. The least US anticipates is to see a united Muslim world not under the US control.
Americans. You must acknowledge the fact Trump is protecting your interest, although this could be a gamble. International politics is dynamic, stucking in ME means more time for East Asia to form a new partnership, one that is not good for the US. It could mean splits between Europe and US. If ME is screwed by war, Europe takes direct hit both economically and socially. The US doesn’t mind that at all.
Let their blood shed, let them burn to the ground, because they are not servile democracies and they can’t make America great again.
For the noble Persians to counter the challenge, they must sustain Israeli provocations in the coming month but they should hold still and avoid a direct war. Slowly digest the fruits in Syria and claim as must interest as possible while ignoring the distraction from US, because US doesn’t mind spill some Israeli blood for the Americans.
Congress has released all of the more than 3,000 Facebook ads purchased by Russian-linked agents ahead of the 2016 presidential contest, seeking to illuminate a massive election disruption effort.
Democrats on the House Intelligence Committee moved to release the full stash of posts paid for by the Internet Research Agency, which is described by intelligence agencies as a Kremlin-linked troll farm, saying the American people deserved to understand the extent of Russian meddling.
“There’s no question that Russia sought to weaponise social media platforms to drive a wedge between Americans, and in an attempt to sway the 2016 election”, California Democrat Adam Schiff said in a statement.
They offered a fuller picture of tactics already detailed in congressional hearings and in an indictment of alleged Internet Research Agency personnel from special counsel Robert Mueller, who is investigating Russian election meddling and potential links to the Trump campaign.
Seeking to inflame social tensions, advertisements took provocative stances on issues like immigration and gun control – often releasing content that took both multiple sides of the same issue.
The biggest names involved in the Trump-Russia investigation
Russian-backed posts praising Donald Trump and assailing his Democratic opponent Hillary Clinton proliferated, bearing out what Mr Mueller’s indictment and intelligence agencies call Russia’s clear preference for Mr Trump. Other posts favoured Ms Clinton’s Democratic rival Bernie Sanders.
The posts also harnessed Facebook’s tools for targeting specific voter demographics. A page sponsored by an apocryphal “Army of Jesus” group that likened Ms Clinton to Satan was geared towards people whose interests included “stop illegal immigration” and a range of Fox News personalities.
Amid a backlash over its role as a conduit for disinformation, Facebook pledged to begin releasing more information about political advertising and has unveiled a feature letting users see if they interacted with Russian-generated content.
Mr Mueller’s inquiry has attracted the unflagging wrath of the president, who regularly denounces the investigation as a meritless “witch hunt” manufactured by partisan law enforcement officials.
Warning: What you are about to read is not about Russia, the 2016 election, or the latest person to depart from the White House in a storm of tweets. It’s the Beltway story hiding in plain sight with trillions of dollars in play and an economy to commandeer.
While we’ve been bombarded with a litany of scandals from the Oval Office and the Trump family, there’s a crucial institution in Washington that few in the media seem to be paying attention to, even as President Trump quietly makes it his own. More obscure than the chambers of the Supreme Court, it’s a place where he has already made substantial changes. I’m talking about the Federal Reserve.
As the central bank of the United States, the “Fed” sets the financial tone for the global economy by manipulating interest rate levels. This affects everyone, yet very few grasp the scope of its influence.
During times of relative economic calm, the Fed is regularly forgotten. But what history shows us is that having leaders who are primed to neglect Wall Street’s misdoings often sets the scene for economic dangers to come. That’s why nominees to the Fed are so crucial.
We have entered a landmark moment: No president since Woodrow Wilson (during whose administration the Federal Reserve was established) will have appointed as many board members to the Fed as Donald Trump. His fingerprints will, in other words, not just be on Supreme Court decisions, but no less significantly Fed policymaking for years to come—even though, like that court, it occupies a mandated position of political independence.
The president’s latest two nominees to the Fed’s Board of Governors exemplify this. He has nominated Richard Clarida—a former Treasury official from the days of President George W. Bush who later became a strategic adviser to investment goliath Pimco—to the Fed’s second most important slot, while giving the nod to Michelle Bowman, a Kansas bank commissioner, to represent community banks on the same board.
Like many other entities in Washington, the Board of Governors has been operating with less than a full staff. If Clarida is approved, he will join Trump-appointed Fed Chairman Jerome Powell and incoming New York Federal Reserve Bank head John C. Williams—the New York Fed generally exists in a mind meld with Wall Street—as part of the most powerful trio at that institution.
Williams served as president of the San Francisco Fed. Under his watch, the third largest US bank, Wells Fargo, created about 3.5 million fake accounts, gave its CEO a whopping raise, and copped to a $1 billion fine for bilking customers on auto and mortgage insurance contracts.
Not surprisingly, Wall Street has embraced Trump’s new Fed line-up because its members are so favorably disposed to loosening restrictions on financial institutions of every sort. Initially, the financial markets reflected concern that Powell might turn out to be a hawk on interest rates, meaning he’d raise them too quickly, but he’s proved to be anything but.
As Trump stacks the deck in his favor, count on an economic impact that will be felt for years to come and could leave the world devastated. But rest assured, if the Fed can help Trump keep the stock market buoyant for a while by letting money stay cheap for Wall Street speculation, and the dollar competitive for a trade war, it will.
At a time when inequality, economic hardship, and household and personal debtlevels are escalating while wages are not, why should any of this matter to the rest of us? The answer is simple enough: because the Fed sets interest rates and therefore the cost of money. This, in turn, indirectly affects the value of the dollar, which means everything you buy.
Since the financial crisis of a decade ago, the Fed has kept the cost of borrowing for banks at near zero. This allowed banks to borrow money to buy their own stock (as did many corporations) to inflate their own value but not, of course, the value of their service to Main Street.
When money is cheap because interest rates are low or near zero, the beneficiaries are those with the most direct access to it. Which means that the biggest banks, members of the Fed since its inception, get the largest chunks of fabricated money and pay the least interest on it.
Although Trump chastised the Fed during his campaign for its cheap-money policies, he’s evidently changed his mind (how Trumpian of him). That’s because he knows that the cheaper money is, the easier it is for major companies to borrow. Easy money means easy speculation for Wall Street and its main corporate clients, and sooner or later, that will be a threat to the rest of us.
The era of trade wars, soaring stock markets, and Trump gaffes may feel like it’s gone on forever. But don’t forget that there was a moment not so long ago when the same banking policies still reigning caused turmoil, ripping through the country and devouring the finances of so many. It’s worth recalling what happened during the Great Meltdown of 2008, when unrestrained megabanks ravaged the economy before being bailed out. In the midst of the current market ecstasy, it’s an easy past to ignore. That’s why Trump’s takeover of the Fed and its impact on the financial system matters so much.
Let’s recall that, on September 15, 2008, Lehman Brothers crashed. Lehman, like my former employer Goldman Sachs, had been around more than 150 years. Its collapse was a key catalyst in a spiral of disaster that nearly decimated the world financial system. It wasn’t the bankruptcy that did it, however, but the massive amount of money the surviving banks had already lent Lehman so it could buy the toxic assets they created.
Around the same time, Merrill Lynch, a competitor of Lehman’s, was sold to Bank of America for $50 billion and American International Group (AIG) received $182 billionin government assistance. JPMorgan Chase had already bought Bear Stearns, which had crashed six months earlier, utilizing a $29 billion government and Federal Reserve security blanket in the process.
In the wake of Lehman’s bankruptcy, $16 trillion in bailouts and other subsidies from the Federal Reserve and Congress were offered mostly to Wall Street’s biggest banks. That flow of money allowed them to return from the edge of financial disaster. It also fueled the stock and bond markets, as untethered from economic realities as the hot air balloon in The Wizard of Oz.
After nearly tripling since the post-financial crisis spring of 2009, the Dow Jones Industrial Average rose magically again last year by nearly percent. Why? Because despite all of his swamp-draining campaign talk, Trump embraced the exact same bank-coddling behavior as his predecessor. He advocated the Fed’s cheap-money policy and hired Steve Mnuchin, an ex-Goldman Sachs partner and Wall Street’s special friend, as Treasury secretary. He doubled down on rewarding malfeasance and fraud by promoting the deregulation of the banks, as if Wall Street’s greed and high appetite for risk had vanished.
A quarter of the way into 2018, shadows of 2008 are already emerging. Only two months ago, the Dow logged its worst single-day point decline in history before bouncing back with vigor. In the meantime, the country whose banks caused the last crisis faces record consumer and corporate debt levels and a vulnerable geopolitical landscape.
True, the unemployment rate is significantly lower than it was at the height of the financial crisis, but for Main Street, growth hasn’t been quite so apparent. About one in five American jobs still pays a median income below the federal poverty line. Median household income is only up 5.3 percent since 2008 and remains well below where it was in 1998, if you adjust for inflation. Workforce participation remains nearly as low as it’s ever been. Meanwhile, the top 1 percent of American earners saw their median income rise by leaps and bounds since the Fed started manufacturing money—to more than 40 times that of the bottom 90 percent.
Just as before the crisis, there’s a scary level of confidence among politicians and regulators that neither the economy nor the banking sector could possibly go bust. Even the new Federal Reserve chair views bailouts as a relic of a bygone time. As Ben Bernanke said at his confirmation hearing, “Generally speaking I think the financial system is quite strong.” When asked if there are any US banks that are still too big to fail, he responded, “I would say no to that.”
That’s a pretty decisive statement, and not strikingly different from one outgoing Fed Chair Janet Yellen made last year. By extension, it means that Trump’s new chairman supports laxer structures for the big banks and more cheap money, if needed, to help them. So watch out.
When a crisis hits, liquidity dies, and banks close their doors to the public. Ultimately, the same formula for crisis will surely send Wall Street executives crawling back to the government for aid and then Donald Trump will find out what financial negligence truly is.
As signs of crisis emerge, few in Washington have delved into how we can ensure that a systemic crash does not happen again. That’s why I’ll never forget the strange message I got one day. It was in the middle of May 2015, about a year after my book, All the Presidents’ Bankers, had been published, when I received an email from the Federal Reserve. Every year, the Fed, the International Monetary Fund, and the World Bank hold an annual conference where the most elite central bankers from around the globe assemble. To my shock, since I hadn’t exactly written in a kindly fashion about the Fed, I was being invited to speak at the opening session about why Wall Street wasn’t helping Main Street.
Two months later, I found myself sitting in front of a room filled with central bankers from around the world, listening to Fed Chair Janet Yellen proclaim that the worst of the crisis and its causes were behind us. In response, the first thing I asked that distinguished crowd was this: “Do you want to know why big Wall Street banks aren’t helping Main Street as much as they could?” The room was silent. I paused before answering, “Because you never required them to.”
I added, “The biggest six US banks have been rewarded with an endless supply of cheap money in bailouts and loans for their dangerous behavior. They have been given open access to these funds with no major consequences, and no rules on how they should utilize the Fed’s largess to them to help the real economy. Why should you expect their benevolence?”
After I returned home, I became obsessed with uncovering just how the bailouts and loans of that moment were only the tip of an iceberg, the sort of berg that had once taken down the Titanic—how that cheap money fabricated for Wall Street had been no isolated American incident.
What my research for my new book, Collusion: How Central Bankers Rigged the World, revealed was how central bankers and massive financial institutions have worked together to manipulate global markets for the past decade. Major central banks gave themselves a blank check with which to resurrect problematic banks; purchase government, mortgage, and corporate bonds; and in some cases—as in Japan and Switzerland—stocks, too. They have not had to explain to the public where those funds were going or why. Instead, their policies have inflated asset bubbles, while coddling private banks and corporations under the guise of helping the real economy.
The zero-interest-rate and bond-buying central bank policies prevailing in the US, Europe, and Japan have been part of a coordinated effort that has plastered over potential financial instability in the largest countries and in private banks. It has, in turn, created asset bubbles that could explode into an even greater crisis the next time around.
So, today, we stand near—how near we don’t yet know—the edge of a dangerous financial precipice. The risks posed by the largest of the private banks still exist, only now they’re even bigger than they were in 2007-2008 and operating in an arena of even more debt. In Donald Trump’s America, what this means is that the same dangerous policies are still being promoted today. The difference now is that the president is appointing members to the Fed who will only increase the danger of those risks for years to come.
A crash could prove to be President Trump’s worst legacy. Not only is he—and the Fed he’s helping to create—not paying attention to the alarm bells (ignored by the last iteration of the Fed as well), but he’s ensured that none of his appointees will either. After campaigning hard against the ills of global finance in the 2016 election campaign and promising a modern era Glass-Steagall Act to separate bank deposits from the more speculative activities on Wall Street, Trump’s policy reversals and appointees leave our economy more exposed than ever.
When politicians and regulators are asleep at the wheel, it’s the rest of us who will suffer sooner or later. Because of the collusion that’s gone on and continues to go on among the world’s main central banks, that problem is now an international one.
Progressivefuture editor: “We really, Really do not need this boneheaded guy in the position he occupies.If we can avoid bloodshed in Korea with him next to Trump we’ll be lucky. If we are thus lucky someone ike Bolton will hasten the demise of the clusterf**k that is the Trump Administration and perhaps remake or replace the desert that is the REPUBLICAN PARTY. It’s leaders and legislators, not its poor, confused voters.
John Bolton said Sunday that the United States will follow the “Libya model” as it prepares for talks on denuclearizing North Korea.
That will probably be less than reassuring to Pyongyang’s leader Kim Jong Un, who likely is only too aware that Washington launched a military operation that led to the overthrow of the North African nation’s president, Moammar Gadhafi, in 2011.
“I think we’re looking at the Libya model of 2003, 2004,” Bolton, President Donald Trump’s national security adviser, said on CBS’s Face the Nation program.
“We’re also looking at what North Korea itself has committed to previously and most importantly, I think, going back over a quarter of a century to the 1992 joint North-South denuclearization agreement where North Korea committed to give up nuclear weapons and committed to give up uranium enrichment and plutonium reprocessing,” Bolton said.
North Korean leader Kim Jong Un is likely keenly aware of the meaning behind such comparisons. That may be why Kim told South Korean president Moon Jae-in during their meeting earlier this weekend that he would abandon the country’s nuclear aspirations if the United States promised not to invade the country, as The New York Times reported on Sunday.
“[T]hink of message this sends to Kim Jong-un: US ended up attacking Libya leading to Qaddafi’s slaying!” Shibley Telhami, professor of government and politics at the University of Maryland Department, said on Twitter.
Bolton says on @FaceTheNation “we are looking at the Libya model” for nuclear disarmament for North Korea. Libya had a very rudimentary program (little leverage). More relevant, think of message this sends to Kim Jong-un: US ended up attacking Libya leading to Qaddafi’s slaying!
Other experts agree. Speaking to CNBC last July, Guo Yu, principal Asia analyst at global risk consultancy firm Verisk Maplecroft, said Kim is “watching what’s been happening in the Middle East, and the external military interventions — mostly led by the U.S. — which are interested in regime change and just reinforce the mindset for pursuing independent credible nuclear deterrence.”