Tuesday, April 17, 2018

Cruising the Web

The tawdriness of the whole Michael Cohen continues. The news broke today that Michael Cohen said in a court hearing that he has three clients: Donald Trump; Elliott Broidy, the sleazy GOP fundraiser who had hired Cohen to organize the payoff to his former mistress, and a third person. When pressed by the judge (who just happens to be Kimba Wood, the one-time nominee for Attorney General for Bill Clinton - how many echoes of the past are there in this whole thing?) to name the third person - he said that it was Sean Hannity. Cue joyful exclamations all over the internet. Everyone was imagining that Hannity had used Cohen for his particular specialty - paying off inconvenient women. Allahpundit has a good summary accompanied by tweets and clips from Fox News reporting on this. Besides all the questions about what Hannity could have used him for, there are also the journalistic ethics questions. Why didn't Hannity announce, during all the times he interviewed and defended Cohen, that they had a professional relationship? You can imagine how Republicans would howl if there were a similar relationship between a CNN host and a prominent figure in all these scandals. Republicans still complain, and rightfully so, when George Stephanopolous is the guy chosen to interview someone involved in a political scandal involving the Clintons or Trump such as James Comey.

Hannity is now saying that he "never retained him, received an invoice, or paid legal ffeels." He says that, basically, their legal contacts had to do with real estate. The purpose of this hearing is Cohen's request that he could look through the documents seized in the search last week to take out the documents that deal with clients other than Trump. If there were truly no documents dealing with Hannity, then there wouldn't be a reason for Cohen to sift those documents out. Allahpundit links to this thread from the lawyer known on Twitter as Popehat.

Popehat and Allahpundit ask the question that I was thinking - why would someone with the money that Hannity has use this hack for anything related to legal matters?
The fact that they’d be talking real estate seems plausible as Cohen did some of that work for Trump, of course. And it’s the sort of thing you might bring up idly in friendly conversation with a lawyer friend: “Oh, that reminds me, I’m looking at this property down south and…” yadda yadda yadda. And yet the fact remains: For whatever reason, Michael Cohen regards Sean Hannity as a client. It wasn’t Bob Mueller or the U.S. Attorney or Kimba Wood who claimed in court that attorney/client privilege applies to their conversations, it was Cohen himself. Is Cohen exaggerating their relationship?

....Cohen and Hannity are at cross-purposes in characterizing their relationship. Cohen wants the court to think the feds have an enormous amount of privileged material in their hands, risking exposure of all sorts of client confidences to federal prosecutors. Hannity wants the public to think there’s no attorney/client relationship in the first place, as he never formally retained Cohen and would be in hot water ethically for not disclosing their consultations for reasons described above. Prosecutors could cite his comments today to argue, though, that because Hannity never believed they were attorney and client, their communications can’t be privileged. Prosecutors can read them.
Geesh! Think of the characters that have been introduced onto the public stage by Donald Trump: Corey Lewandowski, Steve Bannon, Anthony Scaramucci, and Michael Cohen. It's all so repellent.

Think of all the serious issues facing the country today from Syria and Russia to the economy, but the President is spending his time tweeting attacks on James Comey and now the media will concentrate on Comey's book and Cohen's sleaziness.

Here's a CLinton associate who is willing to point out double standards in the investigations on Trump - Mark Penn, the Bill Clinton pollster and adviser.
Moreover, the double standards being applied here are undermining the rule of law. The payments to Fusion GPS and Christopher Steele, the former British spy hired to compile the Trump dossier, were concealed as payments to their attorneys, Perkins Coie, in what experts believe is a clear violation of campaign reporting rules on the use of “cut-outs.”

While the Federal Election Commission complaint over millions of dollars of these concealed payments is making its way through administrative channels, the $130,000 payment to a porn star by Trump’s lawyer, Michael Cohen, prompted very public search-and-seizure raids. Either both instances should be administrative matters or both should receive raids on their attorneys.

The bank fraud and wire fraud charges being tossed around on Cohen are just prosecutor’s tricks. We are talking about Cohen’s home equity loan, not the laundering of Panamanian drug money. By the same logic, the undisclosed Perkins Coie payments to Fusion GPS would be money laundering and wire fraud since the payments became illegal when not reported properly.

Perhaps the last straw was the report in the New York Times that Mueller is investigating a $150,000 contribution to the Trump Foundation in exchange for a private video speech given by Trump in 2015, showing just how grasping this investigation has become. This is the same Ukrainian businessman who gave the Clinton Foundation $13 million. Nope, no double standard here....

The first report from the inspector general of the Justice Department came out Friday and it documents in meticulous detail how the FBI’s former deputy director, Andrew McCabe, lied — on audio tape and under oath — denying a role in a self-serving leak that he, in fact, personally managed. His response? He may sue Trump for defamation.

As these deep staters turn into paid talking heads profiting through books, speeches and clicks, they undermine any notion that they acted professionally instead of politically while in office, and the evidence continues to mount that the foundation for turning the country upside down for the last year was most likely two parts politically tinged hubris and one part sketchy evidence.

IBD notes this heartening tidbit
from the CBO's recent report on the budget.
When the CongreHeressional Budget Office released its updated budget forecast, everyone focused on the deficit number. But buried in the report was the CBO's tacit admission that it vastly overestimated the cost of the Trump tax cuts, because it didn't account for the strong economic growth they would generate.

Among the many details in the report, the one reporters focused on was the CBO's forecast that the federal deficit would top $1 trillion in 2020, two years earlier than the CBO had previously said.

And, naturally, most news accounts blamed the tax cuts. "U.S. budget deficit to balloon on Republican tax cuts" is how Reuters put it in a headline.

But there's more to the story that the media overlooked.

First, the CBO revised its economic forecast sharply upward this year and next.

Last June, the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3% — a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.

"Underlying economic conditions have improved in some unexpected ways since June," the CBO says. Unexpected to the CBO, perhaps, but not to those of us who understood that Trump's tax cuts and deregulatory efforts would boosts growth.

In any case, the CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.

The CBO report also makes clear that this faster-growing economy will offset most of the costs of the Trump tax cuts.

In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027.

But it goes on to say that higher rate of GDP growth will produce $1.1 trillion in new revenues. In other words, 65% of the tax cuts are paid for by extra economic growth.

That faster growth will also reduce federal entitlement spending keyed to the economy — unemployment insurance, food stamps, welfare and the like — by $150 billion, the CBO says.

If you subtract that from the cost of the tax cuts, the net cost drops to $440 billion.

This is what we and other backers of the tax cuts had insisted all along. Not that tax cuts would entirely pay for themselves. But that the economic growth they generate would offset much of the costs.
The real problem is spending, particularly mandatory spending on entitlements and interest payments on the debt. And, sadly, our nation's leaders are simply sticking their fingers in their ears and pretending that there is no looming debt crisis. Robert Samuelson, who has been warning about this crisis for years, jumps once more into the fray to remind us of the future problems we'll be facing.
No one knows the consequences of these unprecedented peacetime deficits, but the CBO has listed some possibilities:

● They may further raise interest rates, which would increase deficits, squeeze other federal programs and crowd out borrowing by businesses for factories, machinery, computers and buildings. This last effect could imperil living standards.

● Government might find it difficult to respond to national emergencies, whether war, natural disaster or a financial crisis, because more borrowing on top of today’s deficits would be harder.

● We could face a full-blown debt crisis. As CBO Director Keith Hall recently testified, “Investors would become unwilling to finance the government’s borrowing unless they were compensated with very high interest rates.” That could trigger draconian spending cuts or tax increases — and a stiff recession.

There can no longer be any pretense that the deficits reflect the aftermath of the Great Recession or other temporary forces. The main cause is political expediency: It’s more popular to increase spending and cut taxes than the opposite. Combined with an aging population, which automatically raises Social Security and Medicare spending, the profligacy becomes self-fulfilling.
If only both parties would get serious and face up to what needs to be done with entitlements. But that's unpopular so they just keep pushing off the problem. Just as people asked in 2008 why nothing had been done to forestall the recession, one day people will be asking why nothing was done to forestall the debt crisis. And the answer will be the same - it's a lot easier to pass policies that give people money than to cut money going to people.

The Chicago Tribune explains why it makes sense for people to be living their state.
As part of a series on the accelerating exodus from Illinois, we’re tracking down expatriates (and potential expats) and telling their stories. From millennials to retirees, their narratives follow the same thread: Illinois is losing its promise as a land of opportunity. Government debt and dysfunction contribute to a weak housing market and a stagnant jobs climate. State and local governments face enormous pension and other obligations. Taxes have risen sharply; many Illinois politicians say they must rise more.

People are fleeing. Last year’s net loss: 33,703.
It sounds like there are a whole lot of reasons to leave the state and very few reasons to move there.

John Tierney has a very good essay in City Journal about Scott Pruitt's new policy on the scientific research that the EPA will use and why liberals are so outraged about these common sense changes.
Imagine if the head of a federal agency announced a new policy for its scientific research: from now on, the agency would no longer allow its studies to be reviewed and challenged by independent scientists, and its researchers would not share the data on which their conclusions were based. The response from scientists and journalists would be outrage. By refusing peer review from outsiders, the agency would be rejecting a fundamental scientific tradition. By not sharing data with other researchers, it would be violating a standard transparency requirement at leading scientific journals. If a Republican official did such a thing, you’d expect to hear denunciations of this latest offensive in the “Republican war on science.”

That’s the accusation being hurled at Scott Pruitt, the Republican who heads the Environmental Protection Agency. But Pruitt hasn’t done anything to discourage peer review. In fact, he’s done the opposite: he has called for the use of more independent experts to review the EPA’s research and has just announced that the agency would rely only on studies for which data are available to be shared. Yet Democratic officials and liberal journalists have denounced these moves as an “attack on science,” and Democrats have cited them (along with accusations of ethical violations) in their campaign to force Pruitt out of his job.

How could “the party of science,” as Democrats like to call themselves, be opposed to transparency and peer review? Because better scientific oversight would make it tougher for the EPA to justify its costly regulations. To environmentalists, rigorous scientific protocols are fine in theory, but not in practice if they interfere with the green political agenda. As usual, the real war on science is the one waged from the left.
Tierney goes through several notable examples from the EPA's history of ignoring science in order to do what environmentalists demand. I bet some of these examples will surprise people who just accept whatever the EPA pronounces.
The EPA has been plagued by politicized science since its inception in 1970. One of its first tasks was to evaluate the claim, popularized in Rachel Carson’s Silent Spring, that the use of DDT pesticide was causing an epidemic of cancer. The agency held extensive hearings that led to the conclusion that DDT was not a carcinogen, a finding that subsequent research would confirm. Yet the EPA administrator, William Ruckelshaus, reportedly never even bothered to read the scientific testimony. Ignoring the thousands of pages of evidence, he declared DDT a potential carcinogen and banned most uses of it.

Since then, the agency has repeatedly been criticized for relying on weak or cherry-picked evidence to promote needless alarms justifying the expansion of its authority (and budget). Its warnings about BPA, a chemical used in plastics, were called unscientific by leading researchers in the field. Its conclusion that secondhand smoke was killing thousands of people annually was ruled by a judge to be in violation of “scientific procedure and norms”—and was firmly debunked by later research.

To justify the costs of the Obama administration’s Clean Power Plan restricting coal-burning power plants, the EPA relied on a controversial claim that a particular form of air pollution (from small particulates) was responsible for large numbers of premature deaths. To reach that conclusion, the agency ignored contradictory evidence and chose to rely on 1990s research whose methodology and conclusions were open to question. The EPA’s advisory committee on air pollution, a group of outside scientists, was sufficiently concerned at the time to ask to see the supporting data. But the researchers and the EPA refused to share the data, citing the confidentiality of the medical records involved, and they have continued refusing demands from Congress and other researchers to share it, as Steve Milloy recounts in his book, Scare Pollution: Why and How to Fix the EPA.
Pruitt is just establishing that the EPA will apply the scientific principles that are standard operating procedures in science.
Pruitt’s critics have also excoriated him for insisting that the EPA’s advisory boards consist of independent scientists, ending the practice of including researchers who receive grants from the agency—exactly the sort of conflict of interest that progressives object to when researchers receive money from private industry....

Given the high stakes and the many uncertainties related to climate change—the dozens of computer climate models, the widely varying estimates of costs and benefits of mitigation strategies—who could object to studying the problem carefully? Yet Pruitt’s proposal has been denounced by Democrats as well as liberal Republicans like Christine Whitman, the former New Jersey governor, who argued that the facts are so well-established that further examination is unnecessary. As a former head of the EPA, Whitman no doubt appreciates how much easier it is to make regulations without the nuisance of debate. But what’s good for bureaucrats is not good for science.

The WSJ looks at how the new sanctions against Russian oligarchs is having a real impact by examining one tycoon, Oleg Deripaska, a billionaire whose fortune comes from his control over Russia's aluminum industry. He's very close to Putin.
The measures hammered Russian assets; Mr. Deripaska, who was sanctioned along with eight of his companies, bore the brunt. His Hong Kong-listed United Co. Rusal PLC, one of the world’s largest aluminum companies, has lost more than half its value. His En+ Group PLC, which owns a 48% stake in Rusal and major Russian electricity and coal assets, has seen a significant drop in the value of shares that it listed in London months ago for some $1.5 billion.

After the sanctions, Mr. Deripaska warned investors of technical defaults and asked customers to halt payments. Commodities trading giant Glencore PLC swiftly canceled a planned deal with Mr. Deripaska.

“If I were a Russian oligarch, I would not be sleeping easily,” said a former senior U.S. official

The Trump administration’s strategy could draw Russian elites closer to Mr. Putin, making them more dependent on state funding, said Sam Greene, head of Russian studies at King’s College London.

“This creates its own risk for the Kremlin,” he said. “When people have nowhere else to go, they also have no one else to blame. It makes the system more brittle.”

....The U.S. sanctions against Mr. Deripaska and others underline Russia’s growing isolation. Mr. Deripaska, who is 50 years old, emerged from the violent “aluminum wars” of the 1990s in control of Rusal, the world’s largest aluminum producer at the time. By the peak of the commodities boom in the mid-2000s, Mr. Deripaska was the wealthiest person in Russia.

His rise was underpinned by a tacit understanding that Mr. Putin forged with Russia’s industrialists as he consolidated power in the early 2000s to leave their assets untouched as long as they supported national priorities and buried personal political ambitions.

Tycoons helped with flagship national projects, like Mr. Deripaska’s refurbishment of Moscow’s Bolshoi Theater and his $1.38 billion contribution to building facilities for Sochi’s Olympic Winter Games in 2014.

Mr. Putin sometimes demonstrated where the power lay. After workers at Mr. Deripaska’s cement plant protested during an economic crunch in 2009, the president, in a televised exchange, ordered him to sign a contract to get the plant working again.

“Give me back my pen, please,” Mr. Putin told the tycoon after he finished signing.
I'm all for making it a liability for these tycoons to be so close to Putin.

WHile some states have been roiled by teacher strikes and complaints that teachers are not earning enough, the WSJ explains how public pensions and Medicaid spending are the real culprit for state spending that has crowded out money for education.
Following the nationwide trend, Medicaid has taken a growing toll on Oklahoma’s budget. In 2017 the health-care program that is supposedly for the poor consumed nearly 25% of the state’s general fund, up from 14% in 2008, as nearly 200,000 more people enrolled. Lawmakers are left with less money for everything else, not least education.

The shortfall has created grievances, some legitimate. Per-student funding declined by nearly 16% between 2008 and 2017. Class sizes have grown, particularly in rural districts. Ninety-six of the state’s 513 school districts hold class only four days a week.

Oklahoma teachers went a decade without a significant raise, and only three states pay less on average, according to the National Education Association. Depending on which grade they teach, Oklahoma educators’ mean annual pay lags around $1,000 to $3,000 behind the overall state mean of $43,340, according to the Bureau of Labor Statistics.

Yet Sooner State teachers received a big pay hike before their recent strike began. In March Oklahoma raised taxes on oil and gas, cigarettes and fuel. The new taxes pay for a raise of about $6,100 per teacher and more school funding. But union leaders sense an opportunity to press for more, especially with Republicans on edge about the midterm elections.

In Kentucky the protests have been about pensions, not pay, but the same Medicaid crowding out is taking place. The Bluegrass State was one of the first Medicaid expansion states under ObamaCare. Some 22% of residents—more than two million people—are enrolled. In 2008 Medicaid spending in Kentucky was $4.9 billion, but by 2017 it was $9.9 billion. The federal government paid $7.7 billion of that sum last year, but the burden has already begun shifting to states.

As for education, Kentucky’s public pension woes place it on par with New Jersey and Illinois, and teachers’ pensions are only 56% funded. Participants can draw full benefits as early as age 49, and some collect longer for more years than they’ve worked.

The Republicans who gained control of the Kentucky government in 2017 have made pension reform a priority. Legislation that passed in March leaves benefits untouched for retirees and current employees.

But it stops teachers from cashing in on accrued sick days at the end of their careers, a common strategy to game the system. And it shifts new hires to a hybrid retirement plan that operates more like a 401(k). The most optimistic estimates have the teachers’ pension running a $14 billion liability, and the changes make a dent of around $500 million to $800 million over 20 years.

The strikes in Kentucky were an effort to lobby Gov. Matt Bevin to veto even this modest reform, never mind that strikes are illegal in the state. Mr. Bevin signed the bill last week and slammed Kentucky Education Association leaders for “looking out for the best interests of themselves.”

He has a point. Teachers unions saw an opening after West Virginia teachers got a raise after nine days on strike, but other concessions they won benefit labor at the expense of students. One casualty was a plan to open the state’s first charter—a science, technology, engineering and math school that would have operated with Marshall University and West Virginia University. Union leaders also killed a reform to let school districts consider teacher performance as they determine which employees to lay off from shrinking schools.
THink about striking so that they could kill a charter school. What they should really be concerned about his how state spending on expanded Medicaid and teacher pensions is crowding out money in state budgets for education. Expect more and more of this as both Medicaid and public pensions increase.