Rick Snyder

Emergency Manager Kevyn Orr’s Nanny Factory

When I wrote this post, describing Detroit Emergency Manager Kevyn Orr’s significant (and serial) tax lien in Maryland, I noted that the lien was very very high for just one nanny (which is the excuse Orr offered for the lien).

Using the numbers from the original Detroit News article, the average tax due from 2011 per delinquent Detroit property owner is about $1,790. Orr has been underpaying MD several times that every year, effectively asking the state to float his unemployment insurance obligations for two years until he gets around to paying them.

[snip]

Here’s another neat detail: The median household income in Detroit is $27,862. Orr consistently owes about $7,000 just in unemployment insurance for his nanny. It seems like most Detroit residents could get themselves a raise if only they tended Orr’s kids.

Scribe even did the math to show how high that lien was.

That’s a hell of a big paycheck to a nanny, to create UI liabilities in the $6500-9500/year range.

Calculating the actual tax rate can be a bit of a challenge, but this snip from a 10/14/2011 article (http://articles.baltimoresun.com/2011-10-14/business/bs-bz-unemployment-insurance-tax-rate-20111014_1_unemployment-insurance-maryland-employers-trust-fund ) says a lot: “Maryland has been stuck at “Table F” — rates ranging from 2.2 percent to 13.5 percent of the first $8,500 in wages paid, depending on an employer’s layoff history — since last year.”

Even assuming the worst layoff history, he’s paying a lot:
13.5 percent of 8500 is 850 + 255 + 42.50 = 1147.50
2.2 percent of 8500 is 170 + 17 = 187.00

It takes a lot more salary to get those liabilities up to where he’s finding himself. And I’m betting that, for the happiness of the kid(s) and parents who have to interview nannies, there is not much turnover and thus a lower layoff history, so his percentage is most likely toward the bottom of the scale.

Turns out Scribe was right.

Some, though, question how a baby sitter alone could be responsible for such a debt. The outstanding liens for unemployment taxes were for $6,595 for the 2010 tax year and another for $9,409 for the 2010-11 tax years.

“That’s an awful lot of taxes for a baby sitter. Are you sure he’s not running a day care?” joked Maryland tax attorney Jeffrey Katz.

He said the numbers don’t add up. In Maryland, unemployment taxes are capped at about $1,150 a year per employee, Katz said, so Orr would have to go through more than five baby sitters in one year to reach $6,500 in back taxes for one year.

[snip]

Orr said he doesn’t know why the tax bills were so high. The same baby sitter has watched his two children for a couple of years, arriving in the morning and leaving in the afternoon. No former employee has filed for jobless benefits, Orr said.

There is no way this lien is about Orr’s single nanny, who has never filed for jobless benefits.

Either Orr has far more staff members than he let on–more even than five, given that he hasn’t been laying them off. Which would itself be notable for a guy who is about to lay off a bunch of Detroit workers.

Or the lien is for something else entirely, and Orr just invented the nanny story because it’s the convenient excuse rich people always use for being tax deadbeats.

Governor Snyder is begging the press to move on now, so I’m guessing he has a pretty good sense that the nanny is just a cover story and that, at a minimum, Orr will soon have to admit he’s not just a tax deadbeat but also a fibber.

But the underlying excuse for the lien sure seems like it might be relevant to Orr’s fitness to fire a bunch of Detroit workers.

The Dictator Taking on Detroit’s So-Called Deadbeats Is One Himself

In the weeks before Rick Snyder disenfranchised the city of Detroit, the Detroit News suggested the problem was the city was a bunch of deadbeats.

Nearly half of the owners of Detroit’s 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records.

The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city’s taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.

Delinquency is so pervasive that 77 blocks had only one owner who paid taxes last year, The News found. Many of those who don’t pay question why they should in a city that struggles to light its streets or keep police on them.

“Why pay taxes?” asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. “Why should I send them taxes when they aren’t supplying services?

Nevermind that — as DDay pointed out this week — the real deadbeats are the banks which have preyed on the city.

Detroit has been ravaged by an unending foreclosure crisis. Predatory loans trapped borrowers into monthly mortgage rates they couldn’t pay, with lenders particularly targeting lower-income minority areas like Detroit. Many of those homeowners are gone now, evicted from their properties. It is a pattern that has sunk property values, making the high property tax rates in Detroit even more unsustainable. But it also has turned banks into the real deadbeats, depriving the city of revenue.

In a foreclosure, the property reverts back to the bank, which then becomes responsible for all maintenance and upkeep, as well as any fees. Some banks simply ignore these responsibilities and refuse to pay taxes or keep the vacant property in good order. The more clever banks stick evicted homeowners with the bill.

Across the country and particularly in Detroit, banks have engaged in “walkaways,” where they start foreclosure proceedings but then find them too costly to complete. They choose not to finish the legal steps to foreclosure, leaving the properties vacant.  Banks that walk away from homes do not have to notify the city, or even the borrower, that they have abandoned the foreclosure process. Borrowers kicked out of their homes then find themselves still responsible for property tax payments.

We know this kind of behavior has occurred all over the country, leaving foreclosure victims stuck with the “zombie title” to an old property for years. And Detroit is ground zero for the phenomenon. A 2010 report of the Government Accountability Office found 500 bank walkaways in just four Detroit zip codes.

Meanwhile, some of the very same banks that have gutted the tax base of the city have profited off schemes to keep it afloat, including $350 million in derivatives gone bad.

Today we learn that Kevyn Orr, the bankruptcy lawyer Rick Snyder has appointed to cure Detroit of its so-called deadbeat problem is himself a deadbeat. A far bigger deadbeat that the Detroit residents he has been made dictator of.

State records show Kevyn D. Orr, who was appointed emergency manager on Thursday, has two outstanding liens on his $1 million home in Chevy Chase, Md., for $16,000 in unemployment taxes in 2010 and 2011. Two other liens of more than $16,000 in unemployment and income taxes were satisfied in 2010 and 2011, records show.

[snip]

The Washington, D.C., bankruptcy attorney blamed the problems on an outside accountant hired to file his tax returns, said Sara Wurfel, a Snyder spokeswoman.

“There was apparently an oversight related to a childcare provider unemployment insurance payment,”

[snip]

A lien for $7,022 in unemployment taxes for the 2008 tax year was entered on July 17, 2009, and satisfied on Aug. 20, 2010. Another for $9,409 in income taxes for the 2008 tax year against Orr and his wife, Dr. Donna Neale, was entered on Aug. 11, 2010, and satisfied on Oct. 3, 2011.

Two other liens over unemployment taxes — $6,985 for the 2010 tax year and $9,201 for the 2010-11 tax years — are outstanding, said Frost, who reviewed the records.

Using the numbers from the original Detroit News article, the average tax due from 2011 per delinquent Detroit property owner is about $1,790. Orr has been underpaying MD several times that every year, effectively asking the state to float his unemployment insurance obligations for two years until he gets around to paying them.

And this is the guy Snyder thinks will rescue Detroit.

You know what might have vetted Orr well enough to discover he himself is a deadbeat and therefore probably not the one to convince Detroit residents to pay their taxes? An election.

Here’s another neat detail: The median household income in Detroit is $27,862. Orr consistently owes about $7,000 just in unemployment insurance for his nanny. It seems like most Detroit residents could get themselves a raise if only they tended Orr’s kids.

Shorter Rick Snyder: Black People Can Be Customers, Not Citizens

As Rick Snyder was announcing the takeover of Detroit’s government, paving the way for an Emergency Manager for the city, his staff tweeted out this:

“Citizens of #Detroit are the customers of the city, not just the citizens. We need to figure out how to provide them great service.”

It might be a nice sentiment (if many public services under Rick Snyder, especially education and services helping the poor, hadn’t already been cut to make way for tax cuts for businesses, and if the entire point of an EM weren’t to make further huge cuts to services).

Except that if and when Detroit officially gets an EM (there is an appeal process that will roll out over the next couple of weeks), the people of Detroit will, temporarily at least, lose their ability to elect representatives to run their city. Down the road, after Detroit has continued to disintegrate for 18 months (EMs have never turned around a city), elected representatives will be able to get rid of the EM. But until then, local democracy in Detroit will be dead.

And so at precisely the moment when Snyder moved to locally disenfranchise 40% of Michigan’s African Americans — leaving half of Michigan’s African Americans locally disenfranchised — he relabeled those African Americans (and Latinos, and remarkably few whites) “customers.”

Black people, Rick Snyder seems to be saying, can be customers, but they can’t be citizens.

We have spent the week talking about whether or not we still need a Voting Rights Act. Given the cynical new ways politicians are using to disenfranchise people of color, I say it’s time to expand it, not end it.

Rick Snyder: One Unpopular Nerd

Public Policy Polling decided to see what Michiganders thought of the radical measures the ALEC Ducks passed last week.

They’re none too happy with it.

In addition to supporting unions 52-33 and opposing the so-called Right to Work law passed last week 41-51, Michiganders’ view of Rick Snyder has soured considerably.

ust last month when we took a first look at the 2014 landscape we talked about how much Rick Snyder had improved his popularity during his second year in office and how he led a generic Democrat for reelection by 6 points, even as Barack Obama won the state comfortably.

Last week he threw all that out the window.

We now find Snyder as one of the most unpopular Governors in the country. Only 38% of voters approve of him to 56% who disapprove. There are only 2 other sitting Governors we’ve polled on who have a worse net approval rating than Snyder’s -18. He’s dropped a net 28 points from our last poll on him, the weekend before the election, when he was at a +10 spread (47/37).

[snip]

Snyder trails every Democrat we tested against him in a hypothetical match up. He’s down 49/38 to 2010 opponent Virg Bernero, 47/39 to Congressman Gary Peters, 46/38 to State Senator Gretchen Whitmer, and 44/39 to former Congressman Mark Schauer. The Bernero numbers are what’s most striking there. Snyder defeated Bernero by 18 points in 2010, so Bernero’s 11 point advantage represents a 29 point reversal. The Democrats all lead Snyder despite having very little name recognition- only 44% of voters are familiar with Bernero, 36% with Peters, 28% with Schauer, and 27% with Whitmer.

And the Republican crazies in the legislature are even more unpopular.

The Republicans in the legislature are even more unpopular than Snyder after their spate of last minute legislation.

Only 31% of voters have a favorable opinion of them to 58% with an unfavorable one. Democrats lead the generic legislative ballot in the state by an amazing 56/32 margin, one of the most lopsided generic ballots we’ve ever seen in any state.

Which makes now the time to turn this radical agenda to an anvil on this party, even as they try to consolidate their power.

Unfortunately, PPP polled neither voters’ understanding about this legislation, measuring whether it has been influenced by Dick DeVos’ campaign to brand low wages as “freedom,” nor the gun bill, from which Snyder is (thankfully) backing away from.

So we don’t yet have a complete picture of how to best pile on this unpopular group of radicals.

But pile on we must.

Update: A number of hours after PPP released this poll, Snyder vetoed the guns-in-schools bill, citing concerns that schools could not opt out. While I’m sure that’s partly because of Newtown, I suspect he also noted his tumbling approval ratings.

Levin Brothers: Rick Snyder Doesn’t Understand How Unions Work

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Michigan’s Democratic Senators and Congressmen met with Governor Snyder this morning to urge him either to veto the so-called Right to Work bill, defer its passage until next term, or take the appropriations out that would make the law referendum-proof.

On a conference call describing their meeting, their chief message served to rebut Snyder’s claimed reasons to pass RtW–that he wanted to “get beyond” this issue and that RtW would help jobs. Discussing this bill as a “right to work cliff,” Carl Levin said that if this passed, the Governor “will allow us to plunge into endless strife.” And it would do so, Senator Levin noted, after labor and corporations have achieved more cooperative relations of late (presumably a reference to the auto industry).

But the most interesting point that Senator Levin made–which his brother, Congressman Sander Levin elaborated on–is that Snyder doesn’t understand how unions work. “The Governor in his statement [last week] said it incorrectly” Sandy said, when he suggested workers would lose their job if they didn’t join a union. “And today I still don’t think he understands.” Sandy continued. Congressman Levin went on to remind that the principle that workers could not be forced to join a union has been enshrined since he and then-Governor George Romney negotiated collective bargaining law back in 1965.

Now, in accusing Snyder of not understanding how unions work, I guess the Democrats wanted to do two things: treat his obviously false excuse for passing this as a good faith statement, and then to correct the lies that false excuse was based on. But also to shift the blame for the labor unrest that will come as a result of this law onto the Governor; because he went along with what Carl Levin called a “parliamentary gimmick” that will push this through as referendum-proof, Snyder will be responsible for the negative effect this will have on Michigan’s economy.

I don’t know whether that will work or not. But one thing I didn’t hear is a criticism of Snyder’s vision for Michigan. Making MI a RtW state effectively embraces a vision of the state as Indiana or Mississippi or Bangladesh. Making MI a RtW state embraces the idea that we should be dumb labor, not innovative technology, just another entry in the race to be the cheapest, most desperate state.

I’m glad such key participants as Sandy Levin schooled Snyder on the last 50 years of MI history and what that history means for Snyder’s decision tomorrow. But ultimately we need to be calling Snyder out for his terrible vision for the future of MI.

Update: I’ve added an MSNBC appearance by State Rep Tim Greimel (from Auburn Hills, where Chrysler is located). It’s one of the better descriptions of what what RtW does I’ve seen.

Republican “Freedom:” Pepper Spray, Locked Doors, and Legalistic Gaming

Yesterday, both MI’s House and Senate passed so-called “right to work” bills.

The measure will be unpopular enough in this state–particularly if Democrats and unions successfully communicate to all workers the law will mean a cut in pay even for non-union employees.

But one of the initial reactions has to do with how the measure was passed. Even before the vote was taken, the conservative Holland Sentinel (in Erik Prince’s hometown and where Dick DeVos, who pushed Republicans to pass this, has a mansion) scolded Republicans for rushing through bills now after they had taken much of the summer off.

Michigan lawmakers are in a headlong rush to cram a year’s worth of policy making into a few frantic weeks. The same legislators who took off much of the summer and fall for vacation and campaigning are now trying to resolve issues ranging from right-to-work to education reform to wolf hunting in their “lame duck” session. The haste is unnecessary and simply bad government — the best thing senators and representatives could do for Michigan citizens right now would be to go home.

A lame-duck legislative session — the meetings between the November general election and the expiration of the current legislators’ terms at the end of the year — is always a dangerous time. With the election passed and, in many cases, their departure from office imminent, legislators often cast votes and push bills in a lame-duck session they would never do if they had to answer to voters for their choices.

After last night’s votes, the Detroit Free Press (the more liberal of Detroit’s two newspapers) called the lame duck shenanigans a rampage.

If the Michigan Legislature maintains its current pace, it won’t feel right to call the weeks between the election and the end of the year the “lame-duck session” any longer. This year’s lame-duck session has been more like a raging bull — or a runaway steamroller, flattening constituencies and citizens’ rights in the process.

It called out a number of the tools Republicans are using (notably, appropriations that will make these laws referendum-proof) to make these rash decisions even more dangerous.

And all that’s before you look at how the anti-labor bill was passed yesterday: The police shut protestors out of the Capitol (one was even overheard saying they were keeping just the union members out). To get rid of a few protestors, they sprayed pepper spray inside the building. Even after Democrats got an injunction to open the Capitol, the House declared itself immune from the injunction. And as they’re doing with an Emergency Manager bill meant to override the referendum that eliminated Governor Snyder’s changes to that anti-democratic policy, they attached appropriations to the anti-labor law to make sure it couldn’t be overturned via referendum.

The biggest irony? To introduce this gross abuse of democracy, Snyder used the word “freedom” eleven times. This is what Republicans think freedom is: not only the “freedom” to work for $1,500 less a year, the “freedom” to have more accidents on the job, the “freedom” to send our kids to crummier schools. But also the kind of “freedom” delivered with mobs of cops holding out citizens, the “freedom” to be pepper sprayed, the “freedom” that can’t be overturned by democratic vote.

This is what Republicans have been talking about when they discuss “freedom” all along, I guess.

Rick Snyder Wants Michigan to be Indiana

In a press conference, Rick Snyder just urged the MI legislature to pass a right to work bill (after having said it was not appropriate for MI in the past).

There were a number of funny aspects about the press conference, particularly the way Snyder and House Speaker Jase Bolger and Senate Majority Leader Randy Richardville dodged repeated questions about whether Dick DeVos’ funding had some influence on this decision (they answered by pointing to all the conversations they had with UAW President Bob King, avoiding the funding question entirely). Given all that dodging, I think it safe to assume that Dick DeVos just bought the right to force down wages $1,500 for every worker in this state (as right to work legislation has been shown to do in other states).

But the funniest part of the press conference, IMO, was the way Snyder said he’s doing this because IN passed right to work last February. Over and over, he said we’re doing this because … Indiana! The governor of the beautiful, more diverse, and better educated MI now aspires for his state to be the less beautiful, more racist, and less well educated IN.

All that said, there’s nothing funny about this move generally. Republicans are adding an appropriation to the bill to make it impossible to overturn via referendum (all while preaching choice and freedom!). They mean to take that money out of MI workers’ pockets and they’re going to do it undemocratically to ensure the do so.

Now that MI’s Unemployment Has Gone Up over 1%, Will the Press Report It?

I’ve been a little mystified by reporting on Michigan’s unemployment of late. There was this NYT story that gave credit to Rick Snyder credit for, “presiding over an employment rebound in a state that not long ago had the highest jobless rate in the nation” (and which I beat up here). There’s this MLive article that reports, “the state’s jobless rate has dropped from a high of 14.2 percent in August 2009 to 9 percent last month” without noting that that 9% was .7% higher than recent lows. And even this AP report on Rick Snyder’s decision to lay off a almost a quarter of the unemployment staffers (with the part timers Snyder laid off last month, 35% of unemployment staffers have been cut) didn’t say that unemployment actually started creeping up before Snyder made the layoff decisions.

Unemployment went up again in the last month, to 9.4% (some of this likely stems from a shift in model year layoffs and will probably go down next month), effectively reversing the last year of job gains and up 1.1% from its recent low.

Will the Snyder-loving press start reporting these job losses?

To be fair, I don’t think Snyder deserves all of the blame. Obama’s failure to provide real mortgage relief has been a big weight on economic growth in Michigan, even as the auto bailout and the energy investments have added jobs.

But Snyder has cut a lot of job-supporting efforts put in place under Jennifer Granholm. Not to mention–by gutting unemployment insurance staffers–cutting public employment so far as to bring down the rest of the economy.

Rick Snyder, like Mitt Romney is promising to do at the national level, promised his business friendly ways would grow MI’s economy. Instead, it looks like they’ve dampened the efforts that were put into place.

The Gray Lady Falls Off the Balance Beam

Granted, it pertains to my right-wing governor, so it’s personal. But this NYT profile of Rick Snyder is a remarkable example of the perverse journalistic fetish for “balance” gone so badly awry it amounts to disinformation.

Let’s start with this summarized claim.

Republicans and business leaders here widely praise Mr. Snyder, crediting him with balancing the state’s once-troubled budget, dumping a state business tax and presiding over an employment rebound in a state that not long ago had the highest jobless rate in the nation. [my emphasis]

You’d think a newspaper might want to point out that MI’s unemployment actually turned around in August 2009–well before Snyder’s election in 2010 and not coincidentally the month after GM came out of bankruptcy. Unemployment dropped 3.3% before Snyder took over, dropped a further 2.6% after he did. But more significantly, unemployment in MI has started to creep up again–it’s up .7% since its recent low in April, to 9%.

Setting that record straight is critical to the rest of the article, since it repeatedly gushes about Rick Snyder refusing to deny Obama credit for MI’s turnaround.

Just before the Republican primary in Michigan in February, Mr. Snyder was asked in an interview whether Mr. Obama ought to be given credit for the state’s economic improvements. “I don’t worry about blame or credit,” he said. “It’s more about solving the problem.”

Nowhere in the article does “reporter” Monica Davey consider the possibility that Obama–and, in fact, Jennifer Granholm–have more to do with the turnaround than Snyder. Yet even many Republicans in this state would grant that the successful bailout of Chrysler and GM had a lot to do with the turnaround (though Republicans almost universally ignore the energy jobs Obama focused on MI).

So maybe Snyder refuses to deny Obama credit because such a claim would not be credible? It’s not a possibility the NYT article–which is supposed to be a celebration of a lack of ideology–even considers.

Which brings me to the other area where NYT’s idea of what constitutes balance is completely whacked: its treatment of the right to organize.

Continue reading

In MI This Year It’s All about the Referenda

MI’s Supreme Court just ruled that, in spite of the purportedly improper font size used on petitions, the referendum to overturn MI’s Emergency Manager law will be on November’s ballot. This may be a tough vote: obviously if we can get rid of the law we can begin to talk about how MI can craft a recovery as a whole, rather than leaving behind our cities that have been devastated by globalization and segregation.

But I hope two of the other referenda on the ballot will help to push the EM repeal law over the top.

First, there’s Protect Working Families (AKA Protect Our Jobs). If passed, it will make collective bargaining a constitutional right in MI. It’s akin to OH’s Prop 2, in that it will rally labor, in an even more heavily unionized state. I canvassed for this referendum over the weekend in a modest middle class neighborhood, and it seemed there was a lot of support.

Then there’s Michigan Energy, Michigan Jobs. That will mandate 25% of MI’s energy come from renewable sources by 2025. Grist’s David Roberts described it as the country’s most important clean energy vote this year, partly because of the way that clean energy could fundamentally alter our economic picture in the state.

Hell, according to the National Renewable Energy Laboratory, Michigan could power itself with onshore wind alone.

The more Michigan develops its local renewable resources, the more electricity generation becomes a boon, an economic growth engine, rather than merely a cost. Energy money stays in the state and circulates in local communities (Michigan already has a substantial wind and solar supply chain [PDF]) rather than being transferred to out-of-state fossil-fuel companies. Michigan wins: more economic activity, more jobs, more pollution-free energy, more pride.

Those three referenda could dramatically make MI’s economy more fair and sustainable. Which means there will be unbelievable amounts of money spent to defeat them.

And then there’s the referendum that DDay called “Son of Prop 13,” which would require a supermajority to raise taxes. It would effectively lock in the reapportionment of taxes that Rick Snyder put into place, and take an already dysfunctional legislature and add another barrier to fixing the state’s woes.

Put that against the background of the Presidential election. One rule of MI politics is Democrats succeed when the state’s African American population turns out. Rick Snyder vetoed the kind of voter suppression measures that FL and PA have passed, though there were already some prohibitive measures on the ballot, particularly effecting students. Which means the African Americans who try to vote should be able to. Then there’s Obama’s popularity, which for obvious reasons is probably greater than in any other rust belt state.

So we should have a fairly democratic electorate come out in November. Let’s hope that makes the difference on these referenda.

Emptywheel Twitterverse
emptywheel @theurbansherpa ,,, and then corporations move onto a still cheaper country.
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emptywheel @onekade Not yet! That's old. CIA has prolly figured out a way around it.
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emptywheel @RupertStone83 I'd have to explain that one in detail. Very sketchy court docs, though.
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emptywheel @theurbansherpa Would never happen. Then they'd actually "own" their disposable employees, no longer be able to dispose of them.
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emptywheel RT @WeMeantWell: Report: Bribes to deliver US humanitarian aid in Syria helping fund ISIS. P.S. Also happening in Afghan, did in Iraq. http…
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emptywheel RT @kashhill: I told him he should consider using a Google Voice number or a burner number/phone. Sheesh, terrorists be slipping.
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emptywheel .@kashhill harsh! "Jetsetting Terrorist planned to remain anonymous, but it turns out he’s not very good at op sec." http://t.co/U7vMHrX71w
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emptywheel @theurbansherpa It has only arrived if you're losing.
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bmaz @emptywheel As he is not old enough to have been involved in WWII, no.
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emptywheel RT @csoghoian: Had it not been for @ashk4n's reporting, doubtful Yahoo Mail would be using HTTPS by default as they have since January.
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emptywheel While I share Nagl's opinion we don't have "winning" strategy v ISIS, has he ever been involved in winning strategy? http://t.co/N94i0pqYu0
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emptywheel @OKnox Has said COIN expert ever been involved in a "victory"?
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