Why Obama’s Big Cash-In Matters

One of my little online entertainments this year has been to ask my social media network a question: “So, what’s Obama up to lately?”

I want to know, but I haven’t had the stomach to follow the man once he left the White House.

Truth be told, I burned out on Obama years ago.

I called him out as a corporate, neoliberal imperialist and a de facto white supremacist (as ironic as that might sound given his technical blackness) from the beginning of the nationwide “Obamas” phenomenon in the summer of 2004.

Empire’s New Clothes

From 2006 through 2011, I dedicated inordinate research and writing to the “BaRockstar.” Prior to his 2009 inauguration (an event I found likely once George W. Bush defeated John F. Kerry in 2004), I tried to warn progressives (and anyone else who would listen) about Obama’s coming presidential service to the rich and powerful, their global empire and the white majority’s desire to deny the continuing power of anti-black racism in the United States. I collected my warnings in a 2008 book that bore the deceptively neutral title “Barack Obama and the Future of American Politics.”

I continued to follow Obama closely. In 2010, my next book, “The Empire’s New Clothes: Barack Obama in the Real World of Power,” detailed his dutiful fealty to the nation’s “deep state” masters of capital and empire (and to white majority opinion on race) during his first year in the White House. This volume exhaustively refuted partisan Democrats who insisted that Obama really wanted to do progressive things but was prevented from that by a Republican Congress. It was a nonsensical claim. Year One Obama had just won the presidency with a great voter mandate for progressive change and had a Democratic Congress. He could have steered well to the wide left of his corporate-center-right trajectory if he’d wanted. But he didn’t want to, consistent with Adolph Reed Jr.’s dead-on description of Obama after the future president first won elected office in Illinois:

In Chicago, for instance, we’ve gotten a foretaste of the new breed of foundation-hatched black communitarian voices; one of them, a smooth Harvard lawyer with impeccable do-good credentials and vacuous-to-repressive neoliberal politics, has won a state senate seat on a base mainly in the liberal foundation and development worlds. His fundamentally bootstrap line was softened by a patina of the rhetoric of authentic community, talk about meeting in kitchens, small-scale solutions to social problems, and the predictable elevation of process over program—the point where identity politics converges with old-fashioned middle-class reform in favoring form over substance.

By acting in accord with Reed’s retrospectively haunting early description, the “deeply conservative” President Obama ironically helped create the very Republican “Tea Party” Congress his loyal liberal defenders were then able to cite as the excuse for his right-wing policymaking. Governing progressively in 2009 and 2010 would have been good politics for the Democrats. It might well have pre-empted the “Teapublican” victories of 2010.

You’ve Got to Meet Real Socialists

But that’s not what “Wall Street Barry” was about. He was a Hamilton Project, Robert Rubin-sponsored actor who never would have gotten the elite backing he needed to prevail had he been the peoples’ champion so many voters dreamed him to be.

Obama set new Wall Street election fundraising records for a reason in 2008. “It’s not always clear what Obama’s financial backers want,” Ken Silverstein noted in a fall 2006 Harper’s Magazine report titled “Obama, Inc.,” “but it seems safe to conclude that his campaign contributors are not interested merely in clean government and political reform. … On condition of anonymity, one Washington lobbyist I spoke with was willing to point out the obvious: that big donors would not be helping out Obama if they didn’t see him as a ‘player.’ The lobbyist added: ‘What’s the dollar value of a starry-eyed idealist?’ ”

After his 2012 re-election, Obama spoke at The Wall Street Journal CEO Council. “When you go to other countries,” Obama told the corporate chieftains, “the political divisions are so much more stark and wider. Here in America, the difference between Democrats and Republicans—we’re fighting inside the 40-yard lines. … People call me a socialist sometimes. But no, you’ve got to meet real socialists. [Laughter.] I’m talking about lowering the corporate tax rate. My health care reform is based on the private marketplace.”

It was what the socialist writer and activist Danny Katch called “a touching ruling class moment.”

The warm feelings made good capitalist sense. Fully 95 percent of the nation’s new income went to the top 1 percent during Obama’s first term. Obama won his second term partly by appropriating populist rhetoric from an Occupy Wall Street movement he’d helped dismantle with infiltration and force in the fall and winter of 2011. He did this after keeping Wall Street so comfortably bailed out and restored that plutocracy could reach the point where the top U.S. thousandth owned more wealth than the bottom U.S. 90 percent.

Obama Burnout

Documenting Obama’s predictable and predicted (by me and others on the officially marginalized left) betrayal of his “progressive base” was unpleasant and tiring work. The 44th president was an Energizer Bunny when it came to advancing the wolfish agenda of the rich, white and imperial in fake progressive sheep’s clothing.

The Nobel Peace Prize winner was way into wielding the American empire’s maiming and killing machine in Africa and the Middle East. His not-so-precisely targeted assassination drone program became what Noam Chomsky would aptly describe as “the most extreme terrorist campaign of modern times.”

“Turns out I’m pretty good at killing people,” Obama once joked to his White House staff.

Funny guy.

It became nauseating history to closely track. I started to feel like the Martin Sheen character (Capt. Willard) after too much exposure to the sociopath Col. Kurtz (Marlon Brando) in the movie “Apocalypse Now.” I had to step back.

Lifestyles of the Rich and Famous

So it is with a certain unmistakable tone of bemused cynicism that I ask my online correspondents: “What’s Obama up to now?”

The answers have been darkly amusing.

Post-presidential “O” has been spotted kiteboarding in the Caribbean with Richard Branson, the British billionaire airline mogul, who is leading the charge for the privatization of the United Kingdom’s National Health Service.

Ex-prez “O” has been seen boating in the Pacific with Oprah Winfrey, Tom Hanks and Bruce Springsteen on a $300 million luxury yacht owned by recording mogul billionaire David Geffen.

Before that we learned that the Obamas reached an eight-figure publishing deal ($65 million) for his-and-her memoirs on their years in the White House.

And then we learned that Obama will speak for $400,000 at a Wall Street health care conference in September, hosted by Cantor Fitzgerald, L.P.

Nothing says “show me the money” like POTUS on your resume. Dr. Martin Luther King Jr., whose bust sat behind Obama in the Oval Office, would not be pleased. The great civil rights leader and democratic socialist sternly refused to cash in on his fame.

The Times Disheartened, Bernie Disappointed

The New York Times editorial board felt compelled to criticize the coming Wall Street speech. On Monday, the Times’ editors opined:

It is disheartening that a man whose historic candidacy was premised on a moral examination of politics now joins almost every modern president in cashing in. And it shows surprising tone deafness, more likely to be expected from the billionaires the Obamas have vacationed with these past months than from a president keenly attuned to the worries and resentments of the 99 percent. … It’s the example he set that makes it jarring to see him conform to a lamentable post-presidential model created fairly recently, in historical terms.

The editors offer a limited and naïve critique. They are happy with the Obamas’ book deal, which dwarfs the speaking fee. They overlook the fact that Obama’s candidacy was premised on a quiet, behind-the-scenes promise to serve wealthy benefactors.

Obama was/is “keenly attuned to the worries and resentments of the 99 percent.” Really? He was so attuned that he:

● Bailed out the 1 percent with no questions asked, with no financial transactions tax advanced, after they crashed the national and global economy with their reckless selfishness.

● Made zero efforts to re-legalize union organizing (his campaign promise to push the Employee Free Choice Act was kicked to the curb from Day One).

● Passed a Republican health insurance reform (minus even a limited public option) that only the big insurance companies could love.

● Advanced a Grand Bargain that went beyond what the Republicans asked for when it came to assaulting Social Security and Medicare during the 2011 debt-ceiling crisis.

● Failed to prevent his Department of Homeland Security from joining with Democratic-run cities across the U.S. to in crushing the Occupy Movement (which coined the slogan “We are the 99 percent”) through brute force.

● Spent much of his second term trumpeting the darkly authoritarian and secretive, arch-global corporatist Trans-Pacific Partnership.

Do the Times’ editors recall presidential candidate Obama’s April 2008 description of Midwestern rural and working-class people as folks who “cling to guns or religion or antipathy toward people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations”?

Bernie Sanders felt also compelled to speak out against Obama’s coming high-priced speaking date. He probably didn’t have much choice given that he built much of his primary campaign around criticism of Hillary Clinton’s big-money Wall Street speeches. “I think at a time when people are so frustrated with the power of Wall Street and the big-money interests,” Sanders told “CBS This Morning” on Friday, “it is unfortunate that President Obama is doing this. Wall Street has incredible power, and I would have hoped that the president would not have given a speech like this.”

That was a silly thing for which to hope, given Obama’s track record. Obama’s big cash-in is more evidence that he is precisely who some of us on the left said he was from the beginning.

The Ultimate Owner of the Deep State

None of Obama’s post-White House indulgence in the means and culture of hyper-affluence is surprising or shocking to anyone who has followed his history and career—or, more importantly, to anyone who has paid attention to the many methods by which the moneyed elite controls U.S. politics and policy. Offering politicos big paydays after they’ve spent years working at moderate taxpayer-ceilinged salaries in not-so “public service” is a significant way in which the finance-led corporate sector get what it wants from government.

As Mike Lofgren noted in his widely read book “The Deep State: The Fall of the Constitution and the Rise of a Shadow Government”: “Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than it has the money to reward government operatives with a second career beyond what is lucrative beyond the dreams of avarice—certainly beyond the dreams of a government salaryman” [emphasis added].

Smart “public” officials who want to live super-comfortably after stints on the government side of the great state-capitalist revolving door know better than to antagonize the ruling class that lives behind the marionette theater of electoral and parliamentary politics in the “visible state.”

Make That Money, Obama

What is just as troubling, if not more disturbing, is the readiness of many “liberal” Democrats to defend Obama’s right to cash in on his eight years serving the nation’s unelected and interrelated dictatorships of money and empire. “Who cares if Obama gets really rich now?” the line goes. “He worked his butt off. They all do it. Why shouldn’t he? Why should a black former president not cash in? White ones all do. You’re just jealous, and maybe a little racist, too. There’s lots of rich people, including lots of rich former elected officials. If Bill Clinton and Republican pigs like Newt Gingrich can do it, then why shouldn’t Barack Obama?”

The New York Times’ editors are right, of course, to note that “since Gerald Ford enriched himself with speaking fees and board memberships after leaving office, every former president but Jimmy Carter has supped often at the corporate table.”

These sorts of rationales for the Great Obama Cash-In are ubiquitous on “social media” and the comments sections attached to news reports on Obama’s forthcoming speaking fee. You can find them in the published and broadcast commentaries of established media pundits and talking heads. Check out this rant by Trevor Noah on “The Daily Show,” in which Noah elicits liberal laughter with these snarky and venal reflections:

“I agree the system must change, but it doesn’t change with Obama, all right? People are, like, why doesn’t he not accept the money? No, f—k that! No. No. [Cheers.] I’m sorry. The first black president must be the first one to not take money off us? No, no, no, my friend. He can’t be the first of everything. F—k [bleep] that and f—k [bleep] you. Yeah, I said it.” [Cheers and applause.]

“No! Make that money, Obama. Make that money. ‘But Obama should know better!’ What about the Clintons? ‘Yeah, well, the Clintons, it’s already done.’ Well, let him already ‘done it’ as well and you guys can start [bleep] the first white president to not take the money. [Bleep] you. Obama, make that money. Make that money.” [Applause.]

No Racial Double Standard

Where to begin in responding to such excuse-making? It is futile, I suppose, to deny that one wants to live a life of fabulous wealth. If you are a lefty, you probably don’t aspire to opulence, but good luck trying to tell many Americans otherwise. They’ve been indoctrinated to believe that the pursuit of riches is “human nature” (something that raises the question of what species we should assign to such historical persons as Gandhi, King and Marx).

The racism charge falsely assumes that one only opposes cashing in when it comes to a black politician. Any decent progressive is concerned about corporate and financial corruption as a problem in and of itself. The relevant color here is green, green as in money. I don’t care what color a “democratically elected” president is. I want him “working his butt off” for we the people, not the already super-rich and powerful.

I do not support the killing of unarmed inner-city youth by white police officers if I oppose the killing of unarmed inner-city youth by black police officers. I do not support a white congressman’s call for confrontation with Russia if I oppose a black congresswoman’s concurrence with that call. I do not support the paying of outrageous speaking fees by financial institutions to the technically white Bill and/or Hillary Clinton if I happen to oppose the paying of outrageous speaking fees to the technically black Barack Obama by the same institutions.

I oppose police killings of unarmed youth, OK? I oppose the corruption of politics and policy by the promise of obscene payouts to politicians and policymakers after they leave the public sector, all right? I oppose imperialism, get it?

Big money subversion of what’s left of American democracy is why it should matter to any decent liberal or progressive that a former president of any color is cashing in.

Bad Politics

It should matter on practical as well as moral grounds. Like the Clintons’ sellout, the Obamas’ big cash-in adventure is ammunition for the right-wing monsters in and atop the Republican Party these days. It adds dark empirical substance to the all-too-accurate charge that they, too, are an elitist, corporate-captive party. The story of Obama cashing in and playing around with the rich and famous is the perfect clickbait for right-wing, white nationalists at Breitbart News. It’s the perfect story for Fox News and right-wing talk radio in their efforts to keep the white working class on board with the arch-plutocratic GOP. This is what concerns the New York Times’ honchos the most. As the paper’s editors put it:

As the presidential election clarified so painfully, the traditional party of working people has lost touch with them. In a poll released last week, more than two-thirds of voters, including nearly half of Democrats themselves, said the Democratic Party is out of touch with the concerns of the American people. For the first time in memory, Democrats are seen as more out of touch with ordinary Americans than the party’s political opponents. There’s little doubt that Democratic leaders’ unseemly attachment to the party’s wealthiest donors contributed to that indictment.

Not that I’m in the business of advising the dismal Democrats, but getting behind Obama’s post-presidential book bonanza and Wall Street speaking windfalls is just dumb in partisan and electoral terms. That kind of selfish indulgence is no small part of why the radically regressive Republicans control all three branches of the federal government and most of the state governments in a nation that understandably hates the Republican Party.

Liberals are free to retort that Trump’s regressive tax plan is yet more proof that he is not the pro-working-class populist he claimed to be on the campaign trail but is instead the arch-plutocrat we on the left said he was.

Nobody with a clue on the left side of the spectrum thought that Trump’s populism wasn’t hypocritical. The problem is that so many liberals and progressives who should know better can’t see through the game as well when charismatic and silver-tongued Democrats like Bill Clinton and Barack Obama play it.

— source truthdig.com by Paul Street

Income directly affects children’s outcomes

Poorer children have worse cognitive, social-behavioural and health outcomes because they are poor, and not just because poverty is correlated with other household and parental characteristics, according to a new report from the London School of Economics and Political Science (LSE).

Looking to explain why income matters, they found evidence in support of two central theories, one relating to parents’ ability to invest in goods and services that further child development, and the other relating to the stress and anxiety parents suffer caused by low income. There is particularly strong evidence that increasing income is likely to reduce maternal depression, which is known to be important for children’s outcomes.

— source lse.ac.uk

How Much Does a Politician Cost?

A Groundbreaking Study Reveals the Influence of Money in Politics.

An ingenious new Roosevelt Institute study on the influence of money on politics begins with an incredible story about how the world actually works:

In the spring of 1987, Paul Volcker’s second term as chair of the Federal Reserve was running out. Volcker had first been appointed by Jimmy Carter in 1979, and was willing to stay for another four years if President Reagan asked. While Volcker had used high interest rates to engineer a crushing recession at the start of Reagan’s first term, he then allowed the economy to expand rapidly just in time to carry Reagan to a landslide reelection in 1984.

Yet Reagan wanted to replace him. Why?

The study’s authors, Thomas Ferguson, Paul Jorgensen, and Jie Chen, report that they learned the answer from a participant in the key White House meeting on Volcker’s fate.

The main opposition to reappointing Volcker came from Reagan’s treasury secretary James Baker. As the study puts it, Baker did not like Volcker’s “skepticism about financial deregulation,” specifically his opposition to attempts to repeal the Glass-Steagall Act.

Glass-Steagall, passed at the beginning of Franklin D. Roosevelt’s presidency in the depths of the Great Depression, separated commercial and investment banking. Allowing banks to combine the two activities had created enormous conflicts of interests and incentivized manic recklessness that helped cause 1929’s financial Armageddon.

But banks had loathed Glass-Steagall ever since, because the fewer economy-destroying risks they could take, the lower their profits. By 1987 they were making progress in their long war to push Congress to repeal it. And while Fed chairs of course can’t vote themselves, many politicians take their cues from them on complex financial issues.

According to the Roosevelt study, that was why Volcker had to go:

Baker’s

was startlingly direct: Possible repeal of Glass-Steagall was the signature issue used by investment bankers, led by then-Goldman Sachs executive Robert Rubin, to raise money for the Democratic Party from their cohorts on Wall Street. Getting rid of Glass-Steagall, Baker explained, would alter the balance of power between the two major parties by depriving the Democrats of a central revenue stream.

So Volcker was replaced by Alan Greenspan, who gleefully supported the elimination of Glass-Steagall in 1999 — as did Robert Rubin, who became treasury secretary under Bill Clinton. Coincidentally or not, within a decade Wall Street had inflated the biggest bubble in world history in an attempt at mass suicide, saved only by trillions of dollars of government support. They were too big to fail, while millions of regular Americans turned out to be just the right size to fail.

As horrifying as this tale is, few normal people would be surprised by any of it. A 2015 New York Times poll found that 87 percent of Americans believe the campaign finance system either needs “fundamental changes” or should be “completely rebuilt.” Politicians themselves will tell you that their world is ruled by money. And the super-wealthy obviously believe money translates into power, since they continue pouring it into politics.

Strangely, almost the only human beings who think that money doesn’t warp politics are academic political scientists who study it. The Roosevelt study quotes a previous paper summarizing the “scholarly consensus” as being that “candidate spending has very modest to negligible causal effects on candidate vote shares.”

The Roosevelt authors go to extraordinary lengths to demonstrate to their colleagues that the sky is, in fact, blue. The study uses all the tools of academic scholarship in impressively creative ways, and will convince anyone who can be convinced by rationality and evidence.

First of all, the study explains, “exceptions, additions, and loopholes have proliferated around the rules governing legal contributions and expenditures. Congress has many times enacted rules that appeared to close off gushing torrents of money while in fact opening new ones.” The system is now “worthy of Gogol: a maze of bureaucratic spending and expenditures” that are exceedingly difficult to track.

The Roosevelt authors went to the effort of capturing as much of it as possible — and found that academic examinations of this subject miss as much as 50 percent of the money being spent on elections.

It’s also tough to legitimately measure how money could translate into congressional votes. Legislation often is thwarted by small numbers of politicians in committees, too few to create a good data set. In the Senate, few votes are ever taken, with most of the action going on beneath the surface. And there’s a continuous churn of elected officials, making it hard to find an inflection point in the decisions of any one individual.

The Roosevelt study therefore focuses on an issue where politicians were repeatedly forced to go on the record — House votes on the Dodd-Frank financial reform bill — and Democratic representatives who were representing the same district over several terms and would seemingly have little reason to change their minds.

Dodd-Frank was passed in 2010. After the GOP took control of the House in the midterm elections that year, representatives voted five times from 2013 to 2015 to weaken key provisions of the law in ways that big banks desperately desired.

There would be no discernible legitimate reason for Democratic representatives who’d supported Dodd-Frank to begin with to later defect from their party and vote along with Wall Street. Many did, however.

Why? Well, no one can say what was in their hearts, at least until we hear from someone like James Baker. But what the Roosevelt study demonstrates is that “for every $100,000 that Democratic representatives received from finance, the odds they would break with their party’s majority support for the Dodd-Frank legislation increased by 13.9 percent. Democratic representatives who voted in favor of finance often received $200,000-$300,000 from that sector, which raised the odds of switching by 25-40 percent.”

Intriguingly, Democratic representatives leaving the House after the 2014 elections were particularly likely to support Wall Street against Dodd-Frank. In an interview, Ferguson characterized their votes as “applications for employment.”

The study also looks at any connections between money from the telecom industry and a crucial 2006 House vote on net neutrality. For every $1,000 a representative received from corporations supporting net neutrality, like Google or Netflix, they were 24 percent more likely to vote for it. For every $1,000 from companies opposing it, they were 2.6 percent more likely to vote against.

For most people, the Roosevelt study — which is genuinely fascinating and, unusually for an academic paper, worth reading just for the quality of its writing — will confirm what they already sensed. Ferguson said he hopes it will also help “end the discussion” in academia on whether money matters in politics.

But while it should do that in a rational world, this is likely over-optimistic. Consider the fact that, no matter what the real world evidence has shown, academic economists continue pumping out studies about the desperate importance of cutting the taxes of billionaires. H.L. Menken explained that phenomenon almost 100 years ago:

To what extent is political economy, as professors expound and practice it, a free science, in the sense that mathematics and physiology are free sciences?

… When one comes to the faculty of political economy one finds that freedom as plainly conditioned, though perhaps not as openly, as in the faculty of theology. And for a plain reason. Political economy, so to speak, hits the employers of the professors where they live. It deals, not with ideas that affect those employers only occasionally or only indirectly or only as ideas, but with ideas that have an imminent and continuous influence upon their personal welfare and security, and that affect profoundly the very foundations of that social and economic structure upon which their whole existence is based. It is, in brief, the science of the ways and means whereby they have come to such estate, and maintain themselves in such estate, that they are able to hire and boss professors.

Likewise, those who hire and boss professors of political science love to hear that money makes no difference in politics. And no matter how hard academics like Ferguson, Jorgensen, and Chen work, and how much real world evidence they pile up, many other professors will likely continue making that case indefinitely.

— source theintercept.com by Jon Schwarz

The Empire Expands

Not the American One, But Trump’s

President Trump, his children and their spouses, aren’t just using the Oval Office to augment their political legacy or secure future riches. Okay, they certainly are doing that, but that’s not the most useful way to think about what’s happening at the moment. Everything will make more sense if you reimagine the White House as simply the newest branch of the Trump family business empire, its latest outpost.

It turns out that the voters who cast their ballots for Donald Trump, the patriarch, got a package deal for his whole clan. That would include, of course, first daughter Ivanka who, along with her husband, Jared Kushner, is now a key political adviser to the president of the United States. Both now have offices in the White House close to him. They have multiple security clearances, access to high-level leaders whenever they visit the Oval Office or Mar-a-Lago, and the perfect formula for the sort of brand-enhancement that now seems to come with such eminence. President Trump may have an exceedingly “flexible” attitude toward policymaking generally, but in one area count on him to be stalwart and immobile: his urge to run the White House like a business, a family business.

The ways that Jared, “senior adviser to the president,” and Ivanka, “assistant to the president,” have already benefited from their links to “Dad” in the first 100 days of his presidency stagger the imagination. Ivanka’s company, for instance, won three new trademarks for its products from China on the very day she dined with President Xi Jinping at her father’s Palm Beach club.

In a similar fashion, thanks to her chance to socialize with Japanese Prime Minister Shinzo Abe, her company could be better positioned for deal negotiations in his country. One of those perks of family power includes nearing a licensing agreement with Japanese apparel giant Sanei International, whose parent company’s largest stakeholder is the Development Bank of Japan — an entity owned by the Japanese government. We are supposed to buy the notion that the concurrent private viewing of Ivanka’s products in Tokyo was a coincidence of the scheduling fairy. Yet since her father became president, you won’t be surprised to learn that global sales of her merchandise have more or less gone through the roof.

Here’s where things get tricky. We can’t pinpoint the exact gains generated from any one meeting of the next generation Trump. They rely on the idea that, because their brand was so huge to begin with, profits and deals would have come anyway. That’s why we won’t ever see their books or tax returns.

Conflicts of interest? They now permeate the halls of 1600 Pennsylvania Avenue, but none of this will affect or change one thing President Trump holds dear — and believe it or not, it’s not the wishes of his base in the American heartland. It’s advancing his flesh and blood, and their flesh-and-blood-once-removed spouses and relatives.

Federal Regulations and Trump Family Interpretations

The Trumps and Kushners will behave in ways that will benefit their global businesses. There’s just one catch. They have to get away with it, legally speaking. So the first law of family business in the Oval Office turns out to be: get stellar legal counsel. And they’ve done that. Their lawyers have by now successfully created trusts that theoretically — but only theoretically — separate Ivanka from her businesses and deflect any accusations over activities that may, now or in the future, violate federal rules. And there are two of those in particular to consider.

The Code of Federal Regulations is a set of rules published by the executive departments and agencies of the government. Title 18 section 208 of that code deals with “acts affecting a personal financial interest.” This criminal conflict of interest statute states “an officer or employee of the executive branch of the United States Government” can’t have a “financial interest” in the result of their duties. What that should mean, legally speaking, for a family occupying the executive office is: Ivanka could not have dinner with the president of China while her business was applying for and receiving provisional approval of pending trademarks from his country, if one of those acts might impact the other. To an outsider, the connection between those acts seems obvious enough and it’s bound to be typical of what’s to come.

Meanwhile, there are real penalties for being convicted of violating this rule. These include fines or imprisonment or both as set forth in section 216 of Title 18.

Certain lawyers have argued that Ivanka’s and Jared’s appointments don’t violate Rule 208 or other nepotism statutes because they are not paid advisers to the president. In other words, because Ivanka doesn’t get a salary for her service to her… uh, country… conflicts automatically vanish. She’s already done her Trumptilian best to demonstrate her affinity for ethical behavior by cordoning herself off from her business responsibilities (sort of). According to the New York Times, “Ivanka has transferred her brand’s assets into a trust overseen by her brother-in-law, Josh Kushner, and sister-in-law, Nicole Meyer.” Phew, no family connections there! Or maybe she just doesn’t care for her siblings-in-law.

But not all assets, it turns out, are created equal. So the daughter-in-chief will, it seems, keep her stake in the Trump International Hotel, a 15-minute stroll from the White House, which just happens to boast “the Ivanka Trump Suite” and “The Spa by Ivanka Trump.” (“The Spa by Ivanka Trump™ and Fitness Center transitions guests from the Technogym setting of the Fitness Center to the tranquil spa haven that is calming, balancing, purifying, revitalizing, and healing…”) There, many a foreign diplomat or special interest mogul can “calm, energize, [and] restore” himself or herself, while angling for an “in” with the family. We don’t know precisely the nature of what the Trump family stands to gain from the hotel because its books aren’t made public, but it’s reasonable to assume that we’re not talking losses. Besides this other D.C. domain, Ivanka and Jared will remain the beneficiaries of their mutual business empires now valued at about three quarters of a billion dollars, according to White House ethics filings.

But wait. There’s an even more explicit rule against using public office (like, say, the White House) for private gain: Title 5 section 2635.702. On that subject, the section states that “an employee shall not use his public office for his own private gain, for the endorsement of any product, service, or enterprise, or for the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity.”

Okay, that’s wordy. And though the rule doesn’t apply to the president or vice president — we have Nelson Rockefeller to thank for that, but more on him later — for any other executive office position, the rule explains that “status as an employee is unaffected by pay or leave status.” That means that you can’t say someone is not an employee just because she isn’t drawing a paycheck, which means she isn’t, in fact, exempt just because she can’t show a W-2 form.

The second rule of family business is undoubtedly: control the means of enforcement. And President Trump just got his man onto the Supreme Court, so even if ethical charges rose to the highest court in the land, the family has at least a little insurance.

Bankers and Presidents: A Walk Through History

The idea of powerful bloodlines collaborating is nothing new in either business or politics. At the turn of the twentieth century, mogul families routinely intermarried to spawn yet more powerful and profitable business empires. And when it comes to Oval Office politics, American history is littered with multi-generational public servants with blood ties to presidents. Abraham Lincoln’s oldest son, Robert, a Republican, served as secretary of war in the administrations of Presidents James Garfield and Chester Arthur, and finally as U.S. minister to Great Britain during President Benjamin Harrison’s administration. Dwight D. Eisenhower’s son, John, became a decorated brigadier-general, served as assistant staff secretary in the White House while his father was in office and was later appointed ambassador to Belgium under President Richard Nixon (once his father’s vice-president). But neither of them inflated the coffers of the family business in the process.

Whether family business connections might influence prominent figures in the White House isn’t a subject new to the Trump era either. In 1974, when Gerald Ford, who took over the presidency after Richard Nixon’s impeachment, nominated Nelson Rockefeller to be his vice president, Nelson’s brother David ran the Chase Manhattan Bank (now JPMorgan Chase). Questions naturally arose about the notorious wealth and political reach of the Rockefeller family. Nelson, the grandson of oil magnate John D. Rockefeller, had even worked at the bank and had been on the boards of multiple oil companies.

That same year, the Department of Justice conveniently concluded that conflict of interest laws did not apply to the office of the vice president — but not before Democratic Senator Robert Byrd asked, “Can’t we at least agree… that the influence is there, that it is a tremendous influence, that it is more influence than any president or vice president ever had?” And yet, as fabulously wealthy and linked in as Nelson Rockefeller was, his situation doesn’t even compare to the family business tangle in the Trump White House.

There have been other family members than the Trumps and Jared Kushner in positions of significance in the White House. When, for instance, Woodrow Wilson fell gravely ill in 1919, his second wife, Edith, stepped in to act on his behalf, essentially running the government in a blanket of secrecy from his bedside. Her intention, however, was never to make hay with a family business, but to ensure that her husband’s policies prevailed. The two Bush presidents, with a business and banking legacy that snaked back a century, were elected, not handed power. And though Bill Clinton’s reign in the Oval Office enabled wife Hillary to garner enough public recognition (and banking connections) to successfully run for senator in New York State, become secretary of state under President Obama, and launch two ultimately unsuccessful presidential bids, the Clintons only became super-wealthy after Bill’s time in office. Though their charity foundation’s ties to foreign governments remain suspect, they never had a private business while Bill was in the White House.

What can’t be found in the historical record is someone’s child, wife, or relations holding court in the West Wing while expanding a family business, no less a network of them. The present situation, in other words, is unique in the annals of American history. Only 100 days into Donald Trump’s presidency, he already has something of the look of the authoritarian kleptocrats elsewhere on the planet who siphon state wealth into their own bank accounts and businesses.

And remember, the Trump empire is also the Kushner empire. Jared’s family business depends on global investors hailing from countries that just happen to be in his White House portfolio. He, for example, led the efforts to prepare for the state visit to Mar-a-Lago of the Chinese president (while the Kushner business was engaged in high-level talks with a major Chinese financial conglomerate). A Russian state-owned bank under U.S. sanctions whose chairman met with Jared in December referred to him as the head of Kushner Companies, though he was already visibly if not yet officially a Trump adviser.

He is similarly the administration’s point man for Middle East “peace,” even though his family has financial relationships with Israel. Meanwhile, in his role as head of the newly formed White House Office of American Innovation, the potential opportunities to fuse government and private business opportunities are likely to prove endless.

Nepotism on Parade

Faced with the dynasty-crushing possibility of selling his business or even placing it in a blind trust, Donald Trump chose instead to let his two older sons, Eric and Donald Jr., manage it. Talk about smoke and mirrors. While speaking with Forbes in March, Eric indicated that he would provide his father with updates on the Trump Organization “quarterly” — but who truly believes that father and sons won’t discuss the family empire far more frequently than that?

The family has already racked up a laundry list of global conflicts of interest that suggest ways in which the White House is likely to become a moneymaking vehicle for the Trump line. There’s Turkey, for instance, where the Trump Organization already has a substantial investment, and where President Trump recently called President Recip Tayyip Erdogan to congratulate him on his power-grabbing, anti-democratic victory in a disputed election to change the country’s constitution. Given Trump business interests globally, you could multiply that call by the world.

Meanwhile, Ivanka’s brand isn’t just doing business as usual, it’s killing it. Since 2017, according to the Associated Press, “global sales of Ivanka Trump merchandise have surged.” As a sign of that, the brand’s imports, mostly from China, have more than doubled over the previous year. As for her husband, he remained the CEO of Kushner Companies through January, only then abdicating his management role in that real-estate outfit and 58 other businesses, though remaining the sole primary beneficiary of most of the associated family trusts. His and Ivanka’s children are secondary beneficiaries. That means any policy decision he promotes could, for better or worse, affect the family business and it doesn’t take a genius to know which of those options he’s likely to choose.

Kleptocrats, Inc.

Despite an already mind-boggling set of existing conflicts of interest, ranging from business affiliations with oligarchs connected to the Iranian Revolutionary Guard to the Secret Service and the Pentagon leasing space in Trump Tower (for at least $3 million per year), the Trump family business is now looking to the glorious, long haul. The family is already scouting for a second hotel in Washington. Trump has reportedly used nearly $500,000 from early campaign money raised for his own 2020 presidential bid to bolster the biz. It’s evidently been poured into “Trump-owned restaurants, hotels and golf clubs,” as well as rent at Trump Tower in New York City.

According to the latest polls, the majority of registered voters believe that the installation of Ivanka and Jared in the White House is inappropriate. But that could matter less to Donald Trump. Ask Stephen Bannon or Chris Christie what happens when Ivanka or Jared don’t like you. That’s the family version of mob-style power.

Ivanka noted in her book, The Trump Card: Playing to Win in Work and Life, that “in business, as in life, nothing is ever handed to you.” Except, of course, when your father is president and he hands you the keys to grow the family business on a silver platter.

Four decades ago, at a Senate hearing on his potential conflicts of interest, Vice President Rockefeller was asked, “Can you separate the interests of big business from the national interest when they differ?” It’s a question some senator should pose to Ivanka and Jared, replacing “big business” with “big family business.”

Making the future yet murkier, the family may be on the precipice of major problems. The most striking of them: Kushner’s marquee building, 666 Fifth Ave (an 80-story, ultra-luxury Manhattan skyscraper) has a greater than 25% vacancy rate. It hasn’t made enough money to even cover its interest payments for several years, and in two years it will have to pay principal as well on its $1.2 billion mortgage. That’s going to hurt if foreign companies don’t step in to staunch the flow of dollars out of the firm and that, undoubtedly, could require a quid pro quo or two.

In our era, it’s no secret that presidents leave office with the promise of quickly growing exponentially wealthier. But for the first family to gain such wealth while still in the White House would be a first. Yet the process that could make that possible already seems to be well underway. All this, as Donald Trump, his children, and his son-in-law continue to carve out an unprecedented role for themselves as America’s business-managers-in-chief, presiding not so much over the country as over their own expanding imperial domains.

— source tomdispatch.com by Nomi Prins

Robots are the Great Equalizer

Apple will invest in and promote “advanced manufacturing” in the US, CEO Tim Cook told CNBC’s Jim Cramer on Wednesday after the somewhat uninspiring earnings report. It was one of the ways Apple would create jobs in America, he said. To do that, Apple would put $1 billion in a fund that would invest in “advanced manufacturing” companies.

Apple has already “created two million jobs in America,” he said in the interview. This includes 80,000 jobs at Apple in the US; plus jobs at US suppliers, such as Corning, which makes the glass for the iPhone and iPad, and 3M, which makes adhesives that Apple uses in its devices; plus the “developer community” of almost 1.5 million people who write apps that, as he said, “change the world.”

So to “get more people to do advanced manufacturing in the US,” he said, Apple is setting up a fund, “initially” putting in $1 billion. “We’re announcing it today,” he said. “We’ve talked to a company that we’re going to invest in already.”

This $1 billion would have to be “our US money which we have to borrow to get, which is another whole topic….” Most of Apple’s cash is registered overseas, the result of profits that have not been taxed in the US. Apple’s overseas cash can be and is already invested in the US, such as in Treasury securities, but it cannot be used for capital expenditures or share buybacks in the US without being “repatriated” under the US tax code and thus triggering an income-tax event.

That’s why “comprehensive tax reform is so important to this economy,” he said. Practically everyone agrees on that. Practically no one agrees on how to do it.

By promoting advanced manufacturing in the US, “we can be the ripple in the pond,” he said. “Because if we can create many manufacturing jobs, those manufacturing jobs create more jobs around them because you have a service industry that builds up around them.”

Apple has made mention of this before – that it would bring some manufacturing back to the US. Other companies have already been doing this. For now, it’s happening on a small scale, but it’s a great thing for the US economy. Every little bit helps. Every little bit is needed. And if President Trump can add some fuel to the fire, that much the better.

But the seven million manufacturing jobs that were lost since the manufacturing employment peak in 1979 won’t come back. They’ll stay in China or Mexico, and eventually, they’ll even disappear there. Automation or robots, or to use Cook’s term, “advanced manufacturing,” which all mean the same thing, will wipe them out.

This chart shows the impact over the past 30 years of “advanced manufacturing” in terms of manufacturing jobs (red line, left scale in millions of jobs) versus manufacturing output adjusted for inflation (black line, right scale, index):

This is the impact of automation: Since Q1 1989, the manufacturing industry has cut 5.7 million jobs, or 32%, yet “real” production (adjusted for inflation) soared by 71%.

The jobs Apple and other manufacturers are creating in their drives for “advanced manufacturing” are highly skilled jobs. They range from highly skilled blue-collar jobs to very specialized robotics and software engineering jobs. Most of these jobs will be well-paid and difficult to fill. And there will only be a relatively small number of them, not millions, and they will replace more and more of what remains of the classic blue-collar jobs.

Companies are not doing it to make America great again. They’re doing it because it makes business sense.

Once automation takes off in “cheap labor” countries like China, these countries lose their cost advantage: robots cost the same anywhere. China has been on the global forefront of investing in robots. Producing in China via “advanced manufacturing” isn’t a lot cheaper than in the US. But by manufacturing in the US, Apple will have a lot more control over its intellectual property. Transportation costs will be smaller. Lead times might shrink. And other risks can be mitigated more easily.

Automation is the great equalizer. China is aggressively converting its manufacturing base to robots. Other “cheap labor” countries are following. Robots will eventually rule manufacturing globally. The typical manufacturing jobs of yore will mostly disappear everywhere. But the fact that manufacturing in America, when robots do most of the work, is becoming competitive with “cheap labor” countries is the silver lining in the long-running tragedy of the disappearing American manufacturing jobs. That’s really what Tim Cook was saying.

But this isn’t the Industrial Revolution.

— source wolfstreet.com

Selling User Data

For months, Uber has paid a public price for some of the questionable tactics it has used to conquer the transportation industry. Now another company is experiencing some of the fallout for working with Uber.

Slice Intelligence, a data firm that uses an email management program called Unroll.me to scan people’s inboxes for information, faced an outcry that began on Sunday after The New York Times reported that Uber had used Slice’s data to keep tabs on its ride-hailing rival Lyft.

Unroll.me, a free service to unsubscribe from email lists, can scour people’s inboxes for receipts from services like Lyft and then sell the information to companies like Uber. The data is anonymized, meaning individuals’ names are not attached to the information, and can be used as a proxy for the health of a rival.

After the revelation, angry users demanded that Unroll.me explain why the company had gone into their inboxes and betrayed their trust. Late on Sunday, Jojo Hedaya, the chief executive of Unroll.me, apologized in response to the surprised reaction to a practice that he said the company had been open about in the past.

“It was heartbreaking to see that some of our users were upset,” Mr. Hedaya said in a blog post. “Recent customer feedback tells me we weren’t explicit enough.”

What Unroll.me does is far from an anomaly — it is part of an expansive and largely unregulated world of selling personal data collected by online consumer services. As long as a service like Unroll.me has a privacy policy, adheres to it and does not sell personally identifiable information, like someone’s name, it is fairly free to package and sell the data it collects.

Yet privacy advocates said the modern technology of data analytics allowed such fine-grained measurement of a person’s online behavior that the concept of personally identifiable information was all but obsolete.

“Many of the services or apps we use for ‘free’ are monetizing data about us,” said Lee Tien, a lawyer at the Electronic Frontier Foundation, an organization focused on digital rights.

Companies like Unroll.me have long acted as intelligence services offering insights to businesses seeking to gain a competitive edge. Both Uber and Lyft pay for information from Slice as well as other data services, according to two people familiar with the companies’ competitive intelligence programs, who asked to remain anonymous because the programs were confidential. Uber and Lyft declined to comment.

Unroll.me, which was bought by Slice in 2014, is a tiny player in the personal data market. The larger data brokers — with names like Acxiom, CoreLogic, Datalogix and ID Analytics — have been the subject of inquiries by a congressional committee and the Federal Trade Commission.

In 2014, after concluding its investigation, the F.T.C. called on Congress to protect consumers against the unchecked collection and marketing of their digital data. The F.T.C. report detailed how some of the companies classify consumers in data-driven social and demographic groups for marketing purposes with labels like “financially challenged,” “diabetes interest” and “smoker in the household.” The concern is that such classifications could be used to limit fair access to financial services or health insurance.

The F.T.C. recommendation, which was endorsed in a separate report by the Obama administration, was not taken up in Congress.

Unroll.me bills itself as offering an easy way to “clean up your inbox.” After someone grants the service access to his or her email account, Unroll.me serves up a list of all the subscriptions they are a part of, with the option to quickly opt out of the ones they no longer want to receive. The company also organizes subscription emails and delivers a newsletter-style digest of some subscriptions.

The service, which began as a test in 2011, quickly took off with users, attracting the attention of Rakuten, the Japanese e-commerce giant that now owns Slice. Rakuten invested in Unroll.me before Slice ultimately bought it.

Unroll.me discloses its freewheeling use of personal data in its privacy policy, which says that “we may collect, use, transfer, sell and disclose nonpersonal information for any purpose” and that the data can be used “to build anonymous market research products and services.”

Yet few people read such policies closely, privacy advocates said. Katharina Kopp, director of policy at the Center for Digital Democracy, said of Unroll.me, “Under the disguise of being customer friendly and helping their customers to get rid of ‘email junk,’ they allow the profiling and targeting of their unwitting customers by third parties.”

Ms. Kopp called the Unroll.me tactic a “particularly misleading practice,” despite the disclosure in its privacy policy.

In its blog post on Sunday, Unroll.me said it had underestimated how many people would be surprised at the methods it used to build its business. The company said it was working on making its business model more transparent to users, with clearer messaging on its website, on its app and in its frequently asked questions section.

In several posts on Twitter, Unroll.me pointed fingers at Google’s Gmail and at Facebook as having more personal data on people. “Just know, Gmail has more data on you than we ever would,” Unroll.me posted.

Some of those who were upset with the practices of Unroll.me chalked it up to a learning experience.

“If it is on the internet and is free, then you are not the client or the user,” wrote Craig, a commenter on the Unroll.me blog post. “You are the product.”

— source nytimes.com by MIKE ISAAC and STEVE LOHR

The economy depends on them, but they’re cracking

American consumers are holding $1 trillion in revolving credit, mostly in credit card debt. So how well is this segment of consumer debt holding up?

Synchrony Financial – GE’s spin-off that issues credit cards for Walmart and Amazon – disclosed on Friday that, despite assurances to the contrary just three months ago, net charge-off would rise to at least 5% this year. Its shares plunged 16% and are down 27% year-to-date.

Credit-card specialist Capital One disclosed in its Q1 earnings report last week that provisions for credit losses rose to $2 billion, with net charge-offs jumping 28% year-over-year to $1.5 billion.

Synchrony, Capital One, and Discover – a gauge of how well over-indebted consumers are managing to hang on – have together increased their Q1 provisions for bad loans by 36% year-over-year. So this is happening.

Other worries about consumer debt in the US are piling up. The $1.4 trillion in student loans are already in crisis, though the government backs them, and they cannot be charged off in bankruptcy. Mortgage debt is still hanging in there, given the surge in home prices that make defaults unlikely. But of the $1.1 trillion in auto loans, subprime loans packaged into asset backed securities are getting crushed by net charge-off rates that are worse than during the Financial Crisis.

The US economy is fueled by credit. Americans turning themselves into debt slaves makes it tick. Take it away, and what little growth there is – nearly zero in the first quarter – will dissipate into ambient air altogether. So it’s time to take the pulse of our American debt slaves

In a new study, life insurer and financial services provider Northwestern Mutual found that 45% of Americans that have debt spend “up to half of their monthly income on debt repayment.” Those are the true debt slaves.

Excluding mortgage debt, American carry an average debt of $37,000. Of them, 47% carry $25,000 or more, and more than 10% carry $100,000 or more in debt, excluding mortgage debt.

Most of them expect to get out of debt before they die, but 14% expect to be in debt “for the rest of their lives.”

This debt adds stress. About 40% said that debt has a “substantial” or “moderate” impact on their financial security; and about as many consider debt a “high” or “moderate” source of anxiety. Given the rising defaults, this is likely to get worse.

And what changes would most positively affect their financial situations? The top two: earning more money (29%) and getting rid of debt (26%). Alas, those two, for many people, are precisely the most elusive factors in the current economy.

But there is a lot of irony in how Americans look at debt. The study asked them what they would do with a $2,000 windfall: 40% said they’d pay down debt. And this is the irony: they’d pay down their maxed out credit cards, but a few months later, their credit cards would be maxed out again, and thus that $2,000 would be consumed. Because the money always has to get spent.

It’s not like consumers don’t know this. According to the study, one quarter of Americans flagged “excessive/frivolous” spending as the financial pitfall they are prone to. And how are these debt slaves keeping the plates spinning? According to the study:

35% said they pay as much as they can on each of their debts each month.
19% said they pay off debts with the highest interest first and make minimum payments to others.”
18% (and 25% of Millennials) said they pay what I can when they can.
17% make minimum monthly payments to each creditor.

The study didn’t say how many of them are beginning to fall behind on their debts. But that number is growing, as the soaring net charge-offs at Capital One, Synchrony, and Discover show.

“One of the hardest challenges is resisting the urge to splurge on items that are beyond our budget,” explained Rebekah Barsch, VP of planning, Northwestern Mutual. “While giving into temptation can feel good in the short-term, it often contributes to an ongoing cycle of buy and borrow that can become hard to escape.”

All the more so because buy-and-borrow has become the replacement American dream for a large number of people – with the corollary: if you can borrow more, you can buy more. But these debt slaves are a crucial driver of the economy. Spending money they don’t have on goods and services they cannot afford and may not need keeps the economy from sinking. If they ever started living within their means and paying off debt as they go, the economy would quickly reveal its true colors.

— source wolfstreet.com