The Schizophrenic Economy

Is the American economy doing well?  The answer seems to depend on what one looks at as an indicator.  In 2014 GDP which is a measure of the entire economy grew at a paltry amount of just over 2%.  During the first quarter of 2015, the first indication is that growth was negligible.  Median household income is still significantly lower than it was when president Obama took office.  The current economic "recovery" is unique in modern American history in that incomes have not risen for the average person; only the wealthy have done well while the middle class has suffered.  The massive fall in oil prices should have caused a big increase in consumer spending as billions and billions of dollars have been put into the pockets of the average American, but that has not happened.  On the other hand, job growth has been steady although certainly not spectacular.  We have more jobs but stagnant wages.  Millions of middle class people who planned to use income from their savings during retirement are getting next to nothing on their CDs and other savings accounts.  This is squeezing large numbers of people.

None of these conditions ought to be a surprise at this point.  We have seen the government follow policies for the last six years that are designed to help the rich get richer.  It is a strange thing to watch the Democrats denounce income inequality and then push policies that keep the poor and middle class down while enriching the wealthy.  I keep waiting for the media to wake up and point this out, but it seems like it's going to be a long, long wait.

Think about what has happened on Obama watch:

1.  Millions of illegal aliens have come into the USA and they are now being allowed easy access to jobs.  This flood of low cost labor has kept wages from rising.  The people who are hurt most by this are the least skilled; in other words, those with just high school diplomas or who dropped out of school are losing the ability to ever get higher wages because more and more illegal immigrants are competing for their jobs.

2.  Interest rates have been kept as close to zero as possible.  Those in the middle class who saved for the future have lost all their interest income.  Because the interest rate is so low, wealthy investors are forced to seek higher returns in the stock market.  All that extra cash invested in the markets have driven the price of stock much higher.  Those rises in the stock market means big profits for investors, but it is only the Americans with the top incomes who have substantial investments in the stock market.

3.  The Fed has pumped massive amounts of cash into the economy by using "quantitative easing".  Literally trillions of dollars of cash has been pushed into the economy.  Still, because interest rates are so low, that cash is getting invested in stock and commodities, the only places that look like they could provide a sizeable return.  Once again, this pushes prices higher and who benefits?  The rich, that's who.

4.  Measures that might help gain good paying jobs for the middle class have been abandoned or opposed by the Democrats.  The Keyston Pipeline would have meant 60,000 good paying construction jobs for a few years.  Obama vetoed it.  Obama has spoken again and again about the need for a big investment in infrastructure, but he has never even proposed a real program that would accomplish that goal.  Even during the stimulus era, all those "shovel ready jobs" about which the Democrats spoke were never found. 

5.  The USA has the highest corporate tax rates in the world.  Lowering those rates would encourage investment and new jobs here.  At the same time, getting rid of the thousands of special tax breaks in the code would let the rate be cut by 40% with government revenue actually increasing.  Obama keeps saying that he is in favor of changing the tax code, but he never has come up with any proposals.  Indeed, he won't even sit down to discuss the proposals of others. 

 

Using the State Department as an ATM

One of the latest bits of news about Hillary Clinton's time as Secretary of State is just about the worst so far.  It centers on a donation by a company called Pacific Rubiales that has extensive operations in Colombia.   The story is reported by Powerline.   Here's the background:

1.  In 2007 and 2008, there was extensive labor unrest in Colombia.  The workers were often arrested or otherwise intimidated by government troops who acted as strike breakers.

2.  Candidate Hillary Clinton opposed the free trade deal with Colombia on the express basis that Colombia did not recognize workers' rights.

3.  Once candidate Hillary Clinton became secretary of state, she switched sides in the free trade agreement debate and supported the treaty.  There was a new side agreement added to the deal, however, which required Colombia to recognize workers' rights and to treat labor better than it had done previously.

4.  After the agreement was signed, there was a large strike at the facilities of Pacific Rubiales in Colombia.  During the strike, the government sent in troops who rounded up the strikers at gun point and intimidated them into ending the strike.  This was a major strike breaking event and was well known throughout Colombia.

5.  The State Department, which was charged with monitoring the adherence of Colombia to the agreement regarding the rights of labor ignored the events at Pacific Rubiales.  There was not even a protest by the State Department made to the Colombians.

6.  Pacific Rubiales contributed almost $4 million to a subsidiary of the Clinton Foundation at roughly the same time as the strike.

7.  The multi-million dollar contribution by Pacific Rubiales is one of the 1100 or so major contributions that the Clinton Foundation failed to disclose despite the agreement that it would do so.

The truth is that the facts set forth above would be enough in my opinion to bring and indictment against Hillary Clinton on corruption charges.  A reasonable jury could conclude from these facts that Mrs. Clinton refrained from enforcing US policy in exchange for the "donation" from Pacific Rubiales.  The hiding of the contribution from disclosure increases the chances that a jury would convict.  To be clear, this is not a slam dunk kind of case; the jury could acquit.  But ability to avoid conviction is not the test.  The amazing thing is that we now have a major presidential candidate who at least looks like a crook, and it keeps getting worse for her as more information comes out.

 

Words I Never Considered Saying In The Past

The number of declared candidates for the Democrat nomination for president in 2016 is now 2.  Vermont senator Bernie Sanders announced his candidacy tonight.  Given that Sanders' opponent is Hillary Clinton, I have to say something that I never thought I would ever say:  Bernie Sanders is the best choice for president (at least among the Democrats.)  Sanders starts out with the handicap that no one knows who he is.  In fact, most people probably think he is related to Colonel Sanders of Kentucky Fried Chicken fame.  Sanders ran for the senate in Vermont as a self proclaimed "socialist independent".  The last thing that America needs is a socialist in office after president Obama.  Still, perhaps the most important quality that a president needs is the ability to speak to the people and have them believe what the president says.  With Hillary, any chance for trust has been destroyed.  No one with any common sense could ever believe her.

Hard To Believe -- More Bad News For Hillary Clinton

When Hillary Clinton was nominated to be secretary of state by president Obama, she signed an agreement that dealt with the activities of the Clinton Foundation, among other things.  The simplest obligation undertaken by the foundation in that agreement was that it would disclose the names of all its contributors.  We've known for a while that the Clintons violated that agreement; the tens of millions of "contributions" that were received from people involved in the Uranium One deal under which Russia bought 50% of America's uranium production was only found by the author of Clinton Cash when he researched Canadian tax filings; the foundation website had no record of the "gift".  Today, we know that this practice of hiding donations was not just an error; it was the standard operating practice by the Clinton Foundation.  Bloomberg is reporting that the Clinton Foundation had 1100 contributions totaling a huge amount that were not reported.

The amazing thing about this latest revelation is the claim that Canadian law prohibited disclosure of these donations.  You see, the Clinton Foundation set up a Canadian subsidiary charity which took in all sorts of questionable contributions and then failed to disclose them.  Now, the claim is that Canada's laws bar such disclosure.  Bloomberg destroys that claim in just a few paragraphs.  They interview government officials, prominent attorneys and others in Canada who all say that there is no such prohibition of disclosure in Canada.  The law being cited by the Clinton spokesperson only bars a Canadian charity from selling its donor lists to other fundraisers.

This mess raises two basic questions:

1.  Why did the Clintons set up a Canadian subsidiary in the first place?  There was no need to move part of the Clinton Foundation's activities.  After all, adding another level of administration to the foundation would just impose costs that would eat up cash that could otherwise go to help those in need.  So what was the need to have this Canadian subsidiary?  The simplest answer is that the Clintons wanted a mechanism to accept big donations from foreign sources that they could keep hidden from view in the USA.  This Canadian subsidiary of the Foundation is the rough equivalent of an individual setting up bank accounts in the Cayman Islands; you know, a way to hide the cash from the authorities.

2.  Why would the Clinton Foundation raise such an obviously incorrect explanation for its failure to disclose these donations?  On nearly every issue regarding Hillary that has come up to date, the Clintons have just stonewalled.  Hillary won't speak to the media.  Hillary won't even take questions from voters.  The only response has been the silly one that this is a rightwing conspiracy and that there is no evidence of wrongdoing.  So why are the Clintons telling the world on this point that they are just following Canadian law (even though that's wrong?)  The answer is that the Clintons realize just how explosive the discovery of this latest bit of wrongdoing is.  Failing to disclose over a thousand donors as required by the agreement with the White House can't be blamed on a rightwing conspiracy; after all, the requirement for disclosure was set up by president Obama.  Hillary has to have some excuse she can offer to Obama in the hope that Obama won't take some sort of action against her.  She knows that one thing that Obama hates is being made to look foolish, and this latest stuff does just that.  Think about it:  the president has his secretary of state agree that all contributions are to be made public and then that agreement is avoided by the foundation setting up a subsidiary in Canada and using it to hide contributions.  It's the kind of thing that could easily infuriate Obama.  The Clintons have to try to come up with an excuse for the president; they have chosen this phony claim about Canadian law.

So will Obama accept this lame excuse?  Most likely, he will not want to upset the Democrat's 2016 plans, but one never knows.  Just imagine Obama telling the media in the next few days that he learned about the Clinton Foundation's failure to disclose its donors from the news reports and his is "mad as hell" about it.  As a result, Obama announces that the Department of Justice will undertake a full investigation of the charges against the foundation.  Stranger things have happened.

 

More Right Wing Attacks on Hillary Clinton

Today's contribution to the story about the Clinton Foundation contributions while Hillary Clinton was Secretary of State comes from Vox.com, an extremely liberal site set up by Ezra Klein.  Klein has been a frequent guest on MSNBC, and he was, for a time, the replacement host for Rachel Maddow when she was on vacation or unavailable.  To put it mildly, Klein and Vox are not right wing or conservative sources.  That is what makes the independent research done by Vox so important.  Vox reports that there are almost 200 companies which gave big donations to the Clinton foundation at the same time that they were lobbying the State Department when it was headed by Hillary Clinton.  Check out the list at the linked report.  No more can the Clintons call this a product of a right wing conspiracy (although to be fair, that charge was ridiculous given the involvement of the New York Times, the Washington Post, Newsweek and other members in good standing of the liberal mainstream media.)  No more can the Clintons or their representatives call this "small" or "sporadic".  Having 181 companies that gave massive amounts of cash to Hillary Clinton while simultaneously lobbying the State Department is not a small or sporadic thing.  This is no mere coincidence.  It is a pattern and practice of impropriety.

It's too bad that we don't have all of Hillary's emails.  I can see them now:  one comes from drug maker AstraZeneca which gave millions to the Foundation; it reads, "Dear Hillary, If you can't afford you life style and your future political campaigns, Astra Zeneca may be able to help."

 

Iran Issues a Warning To the Saudis

The Iranian naval forces today forced a cargo ship, the MV Maersk Tigris to leave international waters in the Straits of Hormuz and to sail into an Iranian port.  The ship was flying the flag of the Marshall Islands.  Despite earlier reports to the contrary, there were no American personnel on the ship.  The container ship was traveling from the Saudi port of Jeddah, bound for the United Arab Emirates port of Jebel Ali.  [UPDATE -- While this is a ship sailing under the flag of the Marshall Islands, the USA is bound by treaty to handle the defense and foreign affairs of that country.]

The most important question regarding this incident is why did it happen.  It could just be that the Iranians thought the ship had strayed into Iranian waters, but that is unlikely.  GPS systems make very clear the exact location of ships of this sort; the Iranians almost certainly knew that they were taking a ship in international waters.  By far the most likely explanation is that this seizure of the vessel is a warning to the Saudis by the Iranians.  Saudi Arabia has been bombing the Houthi rebels in Yemen; the Houthis are supported by Iran.  Saudi Arabia has been helping those who are fighting the Assad regime in Syria; Iran supports Assad.  Saudi Arabia has been opposed to the American deal with Iran regarding nuclear weapons; the Iranians really want that deal to go through so that the remaining sanctions on their economy will be lifted.  The ship seizure is Iran's way of pointing out to the Saudis just how vulnerable their country is to military action by Iran.  All those tankers that sail through the straits of Hormuz carrying Saudi oil could be stopped by the Iranians.  All the commercial vessels that deliver all sorts of goods to the Saudis could be stopped or, at least, throttled back by Iranian threats.  Indeed, if the Iranian action today leads to big rises in insurance rates for maritime traffic in the region (which is most likely), it will be Saudi consumers who will pay the biggest price.

The Iranians seem to have carefully chosen their target.  Had an oil tanker been taken, the world would have paid attention.  Such an action might have scuttled the talks with the USA, so Iran chose a container ship.  The Tigris is also registered to a nation which has no navy and no way to protect its ships.  The Iranians are, most likely, counting on president Obama's known preferences for not getting involved with conflicts of this sort despite the threat that Iran's move creates.  Also, since the ship is not Saudi (although it had sailed from a Saudi port), any move by the Saudis to free the vessel would seem unlikely.

It is going to be very interesting to see how the Saudis react to this latest move by Iran.  There really are not many good outcomes for this mess.

 

The Baltimore Riots

What is the cause of the riots in Baltimore?  I know of the death of a young man while in police custody.  Why is it, though, that this event results in a riot?  If your answer is that this is caused by race issues, think again.  Baltimore is about two thirds African American.  The mayor and most officials are black.  The police department which is the target of the protests that preceded the riot has a majority of black officers.  Remember this as you watch the media coverage that explains everything in terms of race.  So why is there rioting?

For some people, the answer has to be that the riots are a chance to go looting.  There is no way to tell, however, what percentage of the rioters are just out for personal gain.

For other people, the answer, strangely, may be that the riots are exciting and fun.  They are a way to spice up daily life.  These are the people who need help.

Then there are those who view the riots as a chance to get revenge on the police for real or imagined slights.  This is a view that is intolerable in a free society.  Rioting can never be the answer.

Finally, there are those who want to destroy the system.  They seek chaos so as to get the chance to change things.  They are a combination of revolutionary and gang member.  It is gaining power through destruction.

The truth is that riots never succeed in achieving anything but more misery.  It really does not matter why the rioting began.  It only matters that it is stopped.