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Three Things: CRC—What? An Indictment, Plus Shut Downs Ahead

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[NB: As always, check the byline. / ~Rayne]

Brett Kavanaugh’s nomination and confirmation process is an 800-pound gorilla in the media, as is the potential for the obstructive removal of Rod Rosenstein as Deputy Attorney General. They suck up enormous amounts of mental wattage, sitting wherever they want to sit.

Here are three things which are in some way related and worth more of our attention, whatever is left after the gorillas are done with it.

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CRC: One degree from Manafort

Thomas Fine went prowling around FARA filings, landing this juicy find (pdf):

Yes, Creative Response Concepts, Inc., the same firm for which Ed Whelan has worked, registered in 2005 as a foreign agent for Viktor Yanukovych — the same Yanukovych for which Paul Manafort also worked as an illegal foreign agent. CRC was paid $10,000 by Potomac Communications Group, for which Aleksei Kiselev worked. Kiselev also worked for Paul Manafort to assist Yanukovych.

What a small, small world.

Should note CRC’s registration was after the fact — they were contracted for April-October 2003. Why so late?

(Thanks to @JamesFourM for the PCG-Kiselev-Manafort link.)

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Indictment yesterday related to Trump Towers…in Azerbaijan

Didn’t see this until late last night: DOJ indicted Kemal “Kevin” Oksuz (pdf) on one count of hiding or falsifying material facts and four counts of making false statements to the U.S. House of Representatives Committee on Ethics. The filings were related to a Congressional trip to Azerbaijan ultimately paid for by State Oil Company of Azerbaijan Republic (SOCAR), the wholly state-owned national oil and gas company of Azerbaijan.

Oksuz is now a fugitive.

Ten members of Congress and 32 staffers traveled in 2013 to attend a U.S.-Azerbaijan convention in Baku after Azerbaijan had asked Congress for an exemption from sanctions on Iran for a $28 billion natural gas pipeline project. The members and staffers were later cleared as it appeared they believed the trip’s funding was provided by Oksuz’s nonprofit organization.

Personally, I think those members and staffers needed a rebuke. Nonprofits don’t print money; they rely on money from donors. Follow the money to the donors before accepting a trip and incidentals. It’s not rocket science.

Worth keeping in mind the Trump International Hotel & Tower built in Baku, overseen by Ivanka Trump, which burned in late April this year — an amazing two fires, same day. What are the odds?

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Shutdowns Ahead: U.S.-Canada and U.S. Government?

Doesn’t look like negotiations between the U.S. and Canada are going to make this Saturday’s deadline. No idea what will happen after that. We all know the Trump administration has been at fault; how could anybody screw up a long-term peaceful relationship like U.S.-Canada, our second largest trading partner after China, without deliberate bad faith? Without the intent to screw over another NATO member’s economy?

And the U.S. government itself faces a budget deadline. If the “minibus” budget bill isn’t signed by midnight this coming Sunday we’re looking at a shutdown and it appears the bottleneck may be Trump. The jerks at Breitbart are fomenting to encourage a shutdown by insisting Trump refuse to sign the bill — they’re just plain malicious, thinking not at all about the impact on fellow Americans or the economy.

Putin must be laughing his ass off at how easily the GOP’s white nationalist base has subverted U.S. and NATO stability by giving up control to a mobbed-up, golf-addicted, attention-deficient wig.

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Don’t miss Marcy’s interview on Democracy Now in which she talks about Rod Rosenstein’s status and the Kavanaugh confirmation process.

Treat this like an open thread — have at it.

p.s. A note on site operations: Please be sure to use the same username and email address each time you log into the site. It makes it easier for community members to get to know you. Deliberate sockpuppeting is not permitted.

The Problem of Liberal Elites Part 2 On Trade

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Paul Krugman begins his 1993 defense of NAFTA by insulting its opponents gratuitously and wrongly. Then he offers the readers of Foreign Policy the defense of trade treaties they love.

The truth about NAFTA may be summarized in five propositions:

• NAFTA will have no effect on the number of jobs in the United States;
• NAFTA will not hurt and may help the environment;
• NAFTA will, however, produce only a small gain in overall U.S. real income;
• NAFTA will also probably lead to a slight fall in the real wages of unskilled U.S. workers;
• For the United States, NAFTA is essentially a foreign-policy rather than an economic issue.

NAFTA won’t affect the number of jobs, says Krugman, because the only important factor driving number of jobs is interest rates set by the Fed.

Moreover, it is a choice that responds to economic conditions; the decision to raise or lower interest rates represents a trade-off between the Fed’s desire to raise employment (drive somewhere) and its fear of inflation (a speeding ticket). …

Suppose that NAFTA really does lead to a rise in U.S. imports from Mexico, one that would, other things being the same, reduce U.S. employment by 500,000 over the next ten years. Will other things actually be the same? Of course not. The Fed, faced with the prospect of a weaker economy, will set interest rates lower than it otherwise would have. Conversely, other things being equal, if NAFTA would add half a million jobs, interest rates would be higher. The Fed will, without doubt, miss the target-but it is as likely to overshoot as to undershoot, and over the course of a decade there is no reason to suppose that the average level of employment will be any different with NAFTA than without.

How did that work out? It seems to be true that the overall impact of NAFTA on employment was neutral, though not necessarily for the reason Krugman gave. See, for example this chart showing all manufacturing (definition) jobs for the period 1987 to the present, from the Bureau of Labor Statistics:
Manufacturing jobs 1987 - present

Formulating the issue in terms of total employment, by sector or otherwise, fails to answer any of the crucial questions. What was the effect of NAFTA on communities where the factories were closed? What kinds of jobs are the new ones? How do those jobs meet the needs of workers for income, financial security and job satisfaction? What happened in specific areas? Were the results the same for Los Angeles and for Celina, Tennessee? What happened to the losers? Who profited? Aggregate studies hide the real impact of trade treaties in exactly the way that they miss the point of the farmers’ anger as I discussed in this post.

So, here’s a a story. My law partner was a Bankruptcy Trustee in Tennessee; he was assigned to handle all the cases from the area around Cookeville, TN. In the mid to late 1990s, he was called to deal with an emergency bankruptcy of a cut and sew plant in his area. This is a company that has machines to cut fabric to a pattern and sewing machines; the workers cut the cloth and sew it into clothes. In this case, it was blue jeans. One Friday after work, trucks pulled up to the factory, loaded all the machines and office equipment and moved them to Mexico. They left behind several pallets of completed jeans, which needed to be secured and sold. The workers were not paid. The jeans were “hot goods”, and became property of the US Department of Labor, which hired the Trustee to sell them and distribute the funds to the workers so they got partial payment. The secured creditors and general creditors got nothing. It was about that time my partner reported that one of his cases was a 35 year old guy with few teeth, which, his lawyer said privately, was the result of heavy meth use. That was only the first such case.

Perhaps Krugman would be surprised to learn that the Fed did not intervene to create new jobs in the Cookeville area. How exactly would that happen? Workers who lose their jobs burn up their savings or live off their friends and relations and churches, or on credit cards or the safety net until they get back on their feet. Many don’t. Trade economists like Krugman don’t count these and related losses when they run their computerized models. Most people don’t care because they get cheaper jeans. All the discussion, all the studies of NAFTA, ignore these and many more localized effects.

Krugman admits that if the job losses were very large, his model might not work. Even if the impact of NAFTA on manufacturing jobs was small, that isn’t so with China. Recent studies say that imports from China might have resulted in 2.4 million jobs lost between 1999 and 2011. Is that enough to upset Krugman’s certainty? How many millions of jobs never happened here because US corporate executives exported US-made knowledge, US-generated capital, and frequently entire US factories to other nations. Computer chips and other high-tech equipment weren’t invented in Taiwan or China or Japan, but they got the advanced manufacturing jobs, not the citizens of the US whose hard work laid the groundwork for creating those valuable assets. Worse, the corporate executives arranged to duck US taxes on their profits. Their refusal to pay taxes leads to the further deterioration of conditions in the US.

Krugman knows this. His Nobel Prize was for his demonstration that “national location of specialized production is indeterminate; there will be specialization, but how it is distributed across countries cannot be determined ex ante”, as a correspondent explained it to me in a private email. The policy of Asian nations is to grab those manufacturing operations by nay means necessary. The US, dominated by single-minded free marketeers, doesn’t have an industrial policy, or a safety net, for that matter. It relies on some magic and undefined “market” to fix everything.

Congress won’t lift a finger to help the people of Cookeville. Liberal elites, like Krugman, tell us everything will work out fine. On average.

Index to prior posts in this series.

The Internet Didn’t Kill the Middle Class; Laxity and Apathy Did

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KodakBldgAtlanta_mcclanahoochie-Flickr_modIn tandem with the release of his book, Who Owns the Future?, Jaron Lanier’s interview with Salon generated a lot of hand-wringing across social media. It seems Lanier, one of our so-called intellectual visionaries, believes that the collapse of Kodak and its 140,000 jobs, and the rise of Instagram and its 13 jobs, exemplifies the killing field of the internet. Lanier theorizes good paying jobs that once supported a thriving middle class have disappeared as internet-enabled firms replaced them. As these jobs vaporized, so did necessary benefits. Here’s a key excerpt from the interview:

“Here’s a current example of the challenge we face,” he writes in the book’s prelude: “At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”

What a crock of decade-late shit.

Where the hell was Lanier in the late 1990s and early 2000s, when the U.S. manufacturing sector nose-dived due to government policies created by corporate-acquired elected officials and appointees?

It wasn’t the internet that killed the middle class. The apathy of intellectuals and the technology elite did; too few bothered to point out the potential repercussions of NAFTA and other domestic job-depleting policies. In the absence of thought leaders, corporatists sold the public and their electeds on job creation anticipated from globalizing policies; they just didn’t tell us the jobs created wouldn’t be ours.

It wasn’t the rise of digitization that killed the middle class. It was the insufficiency of protests among U.S. brain power, including publicly-funded academics, failing to advocate for labor and home-grown innovation; their ignorance about the nature of blue collar jobs and the creative output they help realize compounded the problem.

Manufacturing has increasingly reduced man hours in tandem with productivity-increasing technological improvements. It wasn’t the internet that killed these jobs, though technology reduced some of them. The inability to plan for the necessary shift of jobs to other fields revealed the lack of comprehensive, forward-thinking manufacturing and labor policies.

It all smells of Not-My-Problem, i.e., “I’m educated, technology-enabled, white collar; those stupid low-tech blue collar folks’ jobs aren’t my problem.”

Until suddenly it is. Read more →

The Obama Disconnect: Arlington, Korea and Catfood

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Marcy wrote earlier this morning about David Axelrod’s despicable announcement of Obama’s capitulation to the oligarchs on tax cuts (another lead balloon the Obama White House incompetently tried and failed to walk back). Later this morning, however, were a couple of events that put an even starker gloss on this pig.

First, was this from The Oval:

President Obama is in Seoul, South Korea, where today he said lawmakers in the United States should hold off on comments about his fiscal commission’s proposals to slash the federal budget deficit through spending cuts, ending tax breaks, and a revamping of the Social Security system.

“Before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts,” Obama told reporters.

He added: “If people are, in fact, concerned about spending, debt, deficits and the future of our country, then they’re going to need to be armed with the information about the kinds of choices that are going to be involved, and we can’t just engage in political rhetoric.”

So, Barack Obama is in Korea lecturing Americans to suck it up and embrace the catfood he and the wealthy elite have deemed necessary to feed us in order to pay for their grotesque largesse. Notably, at the same time Vice President Biden was left to be the White House representative at the traditional Arlington National Cemetery ceremony to honor America’s Veterans, where Presidents usually pay their respects and appreciation to veterans and the military. Especially during a “time of war”. Obama couldn’t make it to Arlington for the Memorial Day Ceremony either.

But Mr. Obama could not be present at Arlington this time because he was in Korea. And just what was so pressing in Korea? As Jane Hamsher points out, it is the desire to press for a horribly conceived US-Korea free trade deal:

It would be a truly horrific blow to whatever is left of American manufacturing at a time when unemployment is rampant. But from a political standpoint, fighting for another so-called “free trade” agreement right now has got to represent some kind of death wish for the Democratic party.

Yes indeed, but thus is what we are constantly served by Barack Obama. As Paul Krugman today rightfully termed it, Mush From the Wimp.

You know, it is not just that the arrogant and cluelessly detached President Pangloss is steaming toward a one and done Presidency, it is that he is literally destroying the Democratic Party and liberal ideology in the process and leaving them in his wake.

UPDATE: I guess Obama couldn’t even sell crack free trade to Charlie Sheen the Koreans.