Nel's New Day

January 5, 2019

DDT: Week 102 – Shutdown Stalemates, Idiocy Continues

Day 15 of government shutdown: Not much progress was made in shutdown talks between White House officials and congressional aides today although acting chief of staff Mick Mulvaney suggested that Democrats would not view a steel wall as a wall. House Speaker Nancy Pelosi (D-CA) said that the House will start with bills to open departments, beginning with the Treasury so that people can get IRS tax refunds. A meeting is scheduled for tomorrow.

Former Interior Secretary Ryan Zinke, gone this week in a cloud of ethics investigations, transferred public records to a political appointee who had advised the Koch brothers and proposed limiting new Freedom of Information requests by refusing these if they are “burdensome.” He also shortened the public opinion to 30 days, in spite of the shutdown. In that way, no one can determine damage caused by the government shutdown and uncover Zinke’s ethics violations. Even the conservative Heritage Foundation agrees that Zinke’s proposal violates the FOIA because it says nothing about the “vast quantity of material” requested. DOJ is also investigating whether Zinke committed the criminal offence of lying to the Inspector General.

Despite the shutdown, Robert Mueller’s investigation is still funded, and the federal grand jury has been extended for another six months.

Almost 400,000 federal workers are “furloughed” because they aren’t “essential,” and some of them won’t get paychecks when they go back to work because they are employed by a private contractor. Zach Fuentes, one of the lucky ones who keeps getting paid, needs six more months of work to qualify for a Coast Guard early retirement program that expired at the end of 2018. DHS pushed to have the program renewed, but reporters’ questions led legislation for the program to be removed from the House appropriations bill. John Kelly saved the 36-year-old with under 15 years of service by making him his deputy chief of staff. Acting chief of staff Mick Mulvaney wanted another deputy but said that Fuentes will stick around. Mulvaney said, “Zach’s a good man; we’ll find something for him to do productive.” His new title is assistant to the president and senior adviser to the chief of staff. Rep. Peter DeFazio (D-OR), chair of the committee with oversight over the White House, has promised an investigation into the Fuentes affair.

The stock of Goldman Sachs, former employer of several DDT appointments, went down 35 percent because Malaysian filed criminal charges against Goldman after country’s Prime Minster Najib Razak, DDT’s friend, took huge amounts of cash from a state investment fund. Malaysia has filed criminal charges against Goldman Sachs, demanding $7.5 billion in reparations, and at least ten countries have probes into Goldman Sachs’ business. Before the 2008 recession, Goldman profited in the collapse in subprime mortgage bonds by short-selling subprime mortgage-backed securities. DDT’s White House is known for having employed a large number of Goldman Sachs alumni.

DDT’s rambling comments in a press conference yesterday followed his disastrous 90-minute meeting Wednesday when he offended India by accusing them of only building a small library in Afghanistan. India, which didn’t attack and destroy Afghanistan as the U.S. did, gave $3 billion to Afghanistan which included building the Parliament. DDT also parroted Vladimir Putin’s propaganda in his revisionist history that the USSR collapsed after declaring bankruptcy fighting in Afghanistan in retaliation for its terrorists going into Russia. The statement that “Russia used to be the Soviet Union” ignored the 14 other republics in the USSR, and DDT’s statement that the USSR was “right to be there” conflicted with U.S. foreign policy. The U.S. opposed the USSR in that conflict, the USSR went into Afghanistan to keep communism in the country, the Soviet economy didn’t go bankrupt, and its financial problems came from declining oil prices. DDT’s comments come directly from Vladimir Putin, and he went farther than Putin when he excused Russian aggression.

National Security adviser John Bolton assured Israel that DDT had no timeline for a military pullout from Syria two weeks after DDT declared it eminent. Mulvaney had said that DDT wouldn’t change his mind about the immediate pullout, but Sen. Lindsey Graham (R-SC) is taking credit for talking DDT into a “pause situation.” DDT decided to slow down the withdrawal of troops in Syria after tweeting that retired U.S. commander in Afghanistan, retired Army Gen. Stanley McChrystal, has “big, dumb mouth” in accord with Fox’s Laura Ingraham’s criticism of McChrystal caution against the pullout.

After George W. Bush’s judge’s ruling that the Affordable Care Act is unconstitutional because the Supreme Court ruled that the individual mandate is unconstitutional, the media addressed the possibility of “Medicare for All” (aka universal health care like every other industrialized nation). The judge has now decided that the ACA would stay in effect until the issue moves through the courts because “many everyday Americans would… face great uncertainty during the pendency of appeal”—an obvious conclusion from his first ruling. A coalition of 17 states has appealed the decision, and the House plans to direct its Office of General Counsel to represent lawmakers in any litigation involving the act and authorize hiring of outside counsel.

DDT has starting to chip away at Medicare Part D by cutting some medications provided by Part D of Medicare—specifically those for HIV, depression, schizophrenia, cancer, epilepsy, and immunosuppressant drugs to prevent rejection of organ transplants. Despite DDT’s bragging that he had lowered costs of drugs, pharmaceutical companies raised prices at the beginning of 2019 for hundreds of prescription medications this week. The increases, as high as 133.4 percent, averaged 6.3 percent and included drugs for high blood pressure, pain relievers, and anesthetics.

Facing at least seven major investigations—campaign, transition, inaugural committee, presidency, business, charity, emoluments, and personal finances—DDT is looking at an eighth one about the employment of undocumented immigrants at his Bedminster (NJ) golf resort in New Jersey. Federal and state investigators are looking into the employment records of immigrants after several undocumented immigrants said they were recruited to work at the facility. An employer told Victorina Morales, assured that her immigration status didn’t matter, that she couldn’t do anything about abuse at work because she wasn’t documented and worked for the president. Employers at the club deliberately removed names of undocumented workers so that the Secret Service would not vet them, but the undocumented immigrants kept working.

Video from a privatized government Southwest Key facility for migrant children shows the staff physically dragging, pulling, and slapping children in their care, but Arizona authorities have determined that this abuse is not criminal. Maricopa County closed three cases of child abuse without interviewing staff or minors involved. The place, along with another operated by Southwest Key, had its license canceled two months ago because of faulty employee background checks. Taxpayers gave the company, holding more migrant children than any other corporation, $1.7 billion in the last decade, $620 million just last year. Salary for the owner, Juan Sanchez, was $1.5 million last year.

The IRS has more serious problems than the inability to refund taxes as the GOP guarantees that it fails to collect revenue. Its 9,510 IRS auditors are one third fewer than 2010 and fewer than the 10,000 revenue agents in 1953 when the economy was one-seventh of the present day. Over one-third of IRS employees is eligible for retirement next year. Corporations and billionaires are the biggest beneficiaries of these cuts because their audits require specialized personnel. Instead, the IRS audits the working poor who receive the earned income tax credit the highest priority. GOP policies are losing the United States tens of billions of dollars. Budget Director Mick Mulvaney, also acting chief of staff, failed to pay over $15,000 in taxes for his nanny from 2000 through 2004.

Former Defense Secretary James Mattis left his office on New Year’s Eve with his message for U.S. troops: “Hold Fast.”  With Mattis gone, US Strategic Command (StratCom) tweeted, “We are ready to drop something much, much bigger [than the ball in New York].” StratCom waited three hours to decide that a threat from the “guardians of several thousand nuclear missiles” about “raining death and destruction from above is some kind of joke,” as Derek Johnson, executive director of the anti-nuclear weapons group Global Zero, pointed out. Walter Schaub, former head of the Office of Government Ethics, asked, “What kind of maniacs are running this country?” We’ll learn in the coming months. [visual]

DDT’s ICE celebrated New Year’s Day by teargassing migrants on the Mexico side of the border. They were seeking asylum according to law, lifting toddlers over the fence, but ICE claimed that they were throwing rocks. AP reported that no one threw rocks until after they were teargassed, and Mexico is investigating.

Over two decades ago, then House Speaker Newt Gingrich took money from staff for committees and outsourced policy making to right-wing think tanks and lobbyists. Last summer, DDT believed in a “red wave” and budgeted $129 million for staff “handy for investigating Hillary Clinton’s emails.” On January 3, the new House Speaker, likely Rep. Nancy Pelosi (D-CA), took control over that $129 million to hire more personnel for investigations—maybe into DDT’s administration. Welcome to the U.S. House of 2019!

December 22, 2016

Trump’s Cabinet: Follow the Money

Remember when Donald Trump (DT) accused of Hillary Clinton being owned by Wall Street? When he told his audiences that he would stop control by special interests? The election is over, he’s won, and he can do whatever he wants. The populists who voted for him can now watch him fill his Cabinet with “gazillionaires,” and the money guys are all from Wall Street—mostly from the failed Goldman Sachs, the “architect” of George W. Bush’s recession. Goldman Sachs is taking over the White House with political czar Steve Bannon, transition advisor Anthony Scarmucci, Treasury Secretary Steve Mnuchin, and Gary Cohn.

Running against Ted Cruz, DT said, “I know the guys at Goldman Sachs. They have total, total control over (Cruz). Just like they have total control over Hillary Clinton.” A DT campaign ad showed images of Goldman Sachs CEO Lloyd Blankfein, and the narrator calls about “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.” As Sarah Palin said, DT is now surrounding himself with “crony capitalists,” whose goals are greater income inequality, poverty, offshoring, and—in the case of Ben Carson—homelessness.

Con man DT used his voters for marks so he can give the government to the top 0.01 percent, people born into wealth and privilege.

steve-mnuchinSteve Mnuchin’s self-serving policy priorities include more leniency for hedge funds through financial deregulation, greater tax cuts for the wealthiest people though tax reform, and reviews of trade agreements. He has no support for reinstating the Glass-Steagall Act of 1933, separating commercial banks from speculative investment banks, after the law’s repeal in the 1990s led to the Great Recession of George W. Bush. The nominee for Secretary of Treasury was known for his “foreclosure machine” specialized in dispossessing the elderly and people of color, including a 90-year-old woman over a 27-cent error.

Mnuchin’s company, OneWest, foreclosed on 36,000 homes using robo-signing, a process of employees’ signing foreclosure documents without reviewing them. After the bank became mired in lawsuits, Mnuchin sold it for $3.4 billion in August 2015.  He made another $50 million by resigning from a media company two months before it filed for bankruptcy and then getting preferential payouts. Another $3.2 million came from the Bernie Madoff Ponzi scheme; he avoided repaying victims because his lawyers convinced a judge that too much time had passed before he got caught.

Steve Mnuchin was chief fundraiser for DT, raising millions of dollars for his campaign.

Goldman Sachs COO Gary Cohn talks on the phone as he waits for the start of a meeting with President-elect Donald Trump at Trump Tower, Tuesday, Nov. 29, 2016, in New York. (AP Photo/Evan Vucci)

 (AP Photo/Evan Vucci)

Gary Cohn, Goldman Sachs president/COO and key architect of the 2008 financial crisis, has been named to head the National Economic Council which advises the president on economic policy. As the U.S. economy began to crash from mis-selling of banks’ risky assets and the excessive distribution of sub-prime mortgages leading to massive foreclosures, banks crashed because of consumer defaults. Cohn’s Goldman Sachs lost billions of dollars during the crisis that President Obama had to clean up, and the residential mortgage business, expanded by Gary Cohn, lost $1.2 billion of those losses. He apologized to Congress in 2010 for bad planning, but he personally earned over $60 million, not including shares, stock options, etc., between 2012 and 2015. DT has openly supported the housing crisis because he made money picking over the wreckage. Cohn laments the regulations created since 2008; this is his chance to give DT a gift of huge profits in a housing crisis that he could cause—again. Cohn’s position doesn’t require Congressional confirmation.

wilbur-rossWilbur Ross, another billionaire private equity investor, is DT’s nominee for Secretary of Commerce. He opposes regulations for businesses although 12 miners lost their lives in his coal mine after his company ignored repeated federal safety citations. When DT called his administration “the last shot for the miners,” he may have meant that literally.

Known as “the king of bankruptcy,” Ross specializes in flipping bankrupt companies for profit and selling them to overseas investors, often offshoring jobs and factories. After he purchased these companies, he moved $6.4 billion of their employee pension benefits to the rescue fund of the government’s Pension Benefit Guaranty Corporation so he could make company financials look better. He made $267 million for his involvement in the steel industry during the early 2000s; retired steelworkers lost their pensions and health care. In 2010, the China Investment Corporation, one of the country’s state-owned enterprises, put $500 million in Ross’ private equity fund. Ross’ part in foreclosures came from buying the second-largest servicer of subprime loans in the United States, American Home Mortgage Servicing.

mike-mulvaneyRep. Mick Mulvaney (SC), nominated as Secretary for the Office of Management and Budget, may be one of the scariest picks—and that’s saying a great deal! As the White House budget chief, the man who came to the House in the Tea Party wave of 2010 and helped create their Freedom Caucus, claims that the new administration will “restore budgetary and fiscal sanity back in Washington.”

Mulvaney’s definition of “sanity” is debatable. He helped lead the charge to close down the government in October 2013 and celebrated the event as “good policy.” Two years earlier, he championed the conservatives’ goal to push the nation into default during the debt-ceiling extortion. He argues that default and undermining the full faith and credit of the nation aren’t a problem. The next debt-ceiling crisis is March 2017, less than two months after DT’s inauguration and the same time as the budget deadline, postponed from last month. Congressional members seem to equate the two, but they are opposite: budgets are future spending whereas debts (including the raising the ceiling) means making payments on loans, not new spending. Mulvaney may not have read Section 4 of the 14th Amendment of the U.S. Constitution that reads that the “validity of the public debt of the United States . . . shall not be questioned.”

A strong supporter of a constitutional amendment that would force the federal government to maintain a balanced budget, Mulvaney’s priorities are defense first, followed by cuts in Social Security and Medicare. Mulvaney doesn’t believe in spending money for infrastructure or scientific research. That may be why DT has now said that he won’t enact his big plans for massive infrastructure projects “for a few years.” His excuse is that he didn’t know that the GOP is a party of small government.

In budget negotiations, Mulvaney makes the assumption that responsible Democrats want to protect people, and he’s doesn’t care about people. He said:

“I’ll play chicken with you every time. You think I am crazy, and I know you are not.”

His preference for currency is the bitcoin, digital currency easily erased and stolen, that is “not manipulatable by any government.” In a speech to the John Birch Society, he attacked the Federal Reserve because its actions have “effectively devalued the dollar” and “choke[d] off economic growth.” A reminder of the craziness of the John Birch Society is its claim that President Dwight Eisenhower was “a conscious agent of the communist conspiracy.” The Society believes that the Federal Reserve should be abolished because it’s unconstitutional and that “the only constitutional money is gold and silver coin.” For almost half a century, Republicans avoided the John Birch Society. Now it’s moving into the White House with the white supremacists.

ben-carsonBen Carson, nominated for Secretary of the Department of Housing and Urban Development, follows the policy of wiping out the mission of the agency he might head. Despite HUD’s goal of “affirmatively furthering fair housing” from the 1968 Fair Housing Act, Carson said that “government-engineered attempts to legislate racial equality create consequences that often make matters worse.” He compared the regulations to Communism and says that “poverty is a choice.” Public housing could be made unavailable to LGBTQ people because of Carson’s hatred for them. He blamed “mass killings” on same-gender marriage and compared same-gender couples to child molesters and people who practice bestiality.

Unlike his predecessors, Carson has no experience in housing or urban development and will resegregate neighborhoods. Despite proof that minorities are charged higher fees and rates than white borrowers with the same qualifications, Carson wants to weaken the Fair Housing Act because he considers it as “socialist experiments.” Carson’s confirmation would be a great financial boon to banks. What Carson could do to poor people with the help of a GOP Congress: put unfair requirements on assistance recipients; privatize public housing; abandon Obama’s anti-discrimination and housing integration efforts; slash spending; drop climate resiliency efforts; and neglect smart growth.

Businessman and investor Carl Icahn at a news conference where Lyft announced a partnership with the Chinese ride-hailing company Didi Kuaidi, in New York, Sept. 16, 2015. The partnership with China?s preeminent ride-hailing company will allow San-Francisco-based Lyft to operate in China for the first time. (Stephen Yang/The New York Times)

(Stephen Yang/The New York Times)

Carl Icahn, DT’s latest billionaire, will be acting in an “individual” capacity as “Special Advisor to the President on Regulatory Reform” instead of as a federal employee. That means Icahn has no reporting or confirmation requirements, answering only to Trump, and can keep all his money, achieving an unheard-of level of conflict of interest. Worth $20 billion, he can enhance his personal investments by picking the next chair for the Securities and Exchange Commission and help his oil refinery company by picking the next EPA administrator. Icahn has never seen a regulation that he didn’t want to get rid of, but he says that he has no conflict of interest because he won’t be “making any policy.”

DT’s picks for the Cabinet have already made billions by the loose regulation of the federal government. If confirmed, they will be able to enact more deregulation and enjoy far more private gain. After all, the GOP is a part of small government. Only the bottom 99.99 of people in the nation—60+ million of them DT voters—will suffer.

May 24, 2012

Investors Upset about Facebook IPOs

Almost everyone I know seems to belong to Facebook; worldwide the number of members is up to 900 million. I belong only because I had to join in order for a conference get-together four years ago and I can’t get off after losing my password. Occasionally the desire from someone to “friend me” wanders into my email, and I just delete it with the resolution to get rid of my Facebook relationship.

There’s also been lots of discussion within the past year about whether teachers and students can be “friends” and whether employers can demand applicants and employees’ restricted Facebook passwords. Some schools are even asking students for their passwords. (They can look at my Facebook page if they’ll only take me off!)

Last week, however, media attention surrounding Facebook ratcheted up after the company decided to go public. As many people know, it began with the company belonging to the 28-year-old CEO Mark Zuckerberg providing something called “initial public offering” (IPO) and continued with the brouhaha surrounding the Brazilian co-founder Eduardo Saverin giving up his U.S. citizenship to take his $67 million—tax free—to Singapore where he maintains residency. Singapore doesn’t tax capital gains.

Initially Facebook stock soared from $38 per share to $45, before shooting down to $31, losing $2.9 billion for investors. Meanwhile, Zuckerberg walked off with over $1 billion dollars in his pocket before he got married last weekend.

The investment loss resulted in lots of finger-pointing. Facebook’s CFO David Ebersman decided to increase the number of shares offered to investors by 25 percent just days before the IPO. NASDAQ’s computer systems failed on the morning of the deal; investors couldn’t place orders or cancel orders or find out if their orders had been placed or canceled. A modest stock “pop” probably caused some institutional investors to immediately dump their shares, causing a greater price decline.

The biggest problem, however, may be that estimates developed by the underwriters to determine a fair price were cut partway through the debacle. Facebook told the underwriters, but not the investors, that its business outlook had deteriorated. Institutional investors were okay; individual investors weren’t.

Investors are not happy about the loss, but they’re really not happy about finding out that underwriter Morgan Stanley had cut revenue forecasts before the offering, an action that investors didn’t know until after the stock was listed. Underwriters JPMorgan Chase (of the famous multibillion-dollar losses this spring) and Gold Sachs also “selectively” changed their estimates early on, letting special clients know earlier than the others.

Yesterday, riled investors filed a proposed class-action suit in federal court against not only Zuckerberg but also Morgan Stanley, JPMorgan, Goldman Sachs, and other underwriters of the IPO, arguing that they were not informed of the trim in revenue expectations. The state of Massachusetts issued a subpoena to Morgan Stanley for documents related to the IPO. Investors also sued the Nasdaq OMX Group because the exchange struggled to process orders during the first half hour of trading.

SEC is trying to figure out what to do: Chairwoman Mary Schapiro said that regulators are “looking into” the “issues.” Congressional lawmakers have raised questions about the deal. Chairs of both the Senate Banking and the House Financial Services committees are getting information about what happened  to see if they should have hearings.

Morgan Stanley has a history and a culture of tricking their own clients into making lousy investments. CNBC reports, “Morgan Stanley may have spent billions of dollars to support the [Facebook] stock price by buying shares in the market.”

Before losing up to $4 billion—so far—in its botched derivatives scam, JPMorgan Chase gave up billions more to settle charges stemming from its rampant foreclosure fraud, which involves mass perjury and forgery, and its bribing of public officials.

Goldman Sachs lied to prospective investors about mortgage-backed securities and illegally shared confidential information with its preferred clients.

Conservatives like to talk about the virtues of a “free market,” but the lack of regulations gives the entire game to the financial corporations. Investors can’t know until it’s too late what the banks are doing to take all their money. In summary, the Facebook IPO demonstrates how shady traders make money by hyping stock while secretly betting against it.

These huge financial corporations can break any law that they want. When they get caught, they just pay a fine that they can afford because they have stolen so much money that it isn’t a problem for them. Maybe losing money will teach Republican investors that their party doesn’t benefit them as individuals.

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