Election Influencers

This past Friday, the US intelligence community released what the New York Times would later call a ‘damning report’ about their findings with regards to the involvement of Russia in the US election. This issue was a hot subject of contention over the last 6 months or so of the election, with the multitude of WikiLeaks and other revelations from the Democratic National Committee showing the organization to be corrupt, and in many cases working in league with mainstream media outifits to its own ends.

In the wake of Hillary Clinton’s defeat, the media and the DNC beat the ‘Russians hacked the election’ drum ever louder. Some establishment Republicans, such as John McCain and Linsey Graham cottoned on to this as well, perhaps hoping to parlay these allegations into the increased US military offensive they’d been dreaming about.

All of this noise set up the report that was released by US intelligence on Friday. It was a de-classified effort, which aimed to outline exactly what the Russians did to influence the US election. Both the report itself, and the media coverage of the report and the issue generally are important to analyze with respect to the larger issue of a legitimate Trump presidency, and beyond that, a political intelligence community and heavily biased media.

Analyzing The Report’s Findings

The meat of the report begins as follows:

We assess with high confidence that Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election, the consistent goals of which were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump. When it appeared to Moscow that Secretary Clinton was likely to win the election, the Russian influence campaign then focused on undermining her expected presidency

Given that the report was declassified for public consumption, it makes note of the fact that it could not be very extensive in terms of providing direct evidence as this would betray some of its ‘collection’ methods and perhaps compromise sources. Thus, phrases such as ‘assess with high confidence’ are littered throughout the report in lieu of concrete evidence. In short we’re supposed to just take their word for it that the conclusions reached are valid.

According to the report, Putin masterminded an influence campaign aimed at altering the US election by undermining faith in the electoral process and harming Clinton. The Russian government had a preference for Trump, and when it looked as though Clinton would win they focused on stopping her.

If that warrants a deeper look by US intelligence agencies with a view to determining foul play, then surely the actions of the ‘globalist influence campaign’ require a second look as well. After all, the Russian government was not the only foreign entity which was shown to have a clear preference for one of the candidates in the 2016 election.

Hillary Clinton says foreign leaders are privately reaching out to her to ask if they can endorse her to stop Donald Trump from becoming president of the United States.

“I am already receiving messages from leaders,” Clinton told an Ohio audience at a Democratic presidential town hall on Sunday night.

“I’m having foreign leaders ask if they can endorse me to stop Donald Trump.”

The likes of Matteo Renzi of Italy (when he was still PM), and Francois Hollande of France did so publicly, and many other former heads of state such as Tony Blair and Vicente Fox did as well. UK Parliament was forced to debate a motion to ban Donald Trump from the country, after receiving the requisite number of signatures to a petition.

Furthermore, in the vein of the reports’ allegation that the Russians tactically switched focus when they thought Clinton was set to win, when Trump actually won the election, the focus of the ‘globalist influence campaign’ switched to undermining his presidency.

Nationwide rioting, Jill Stein’s recount effort, the focus on getting the Electoral College to ‘vote its conscience,’ and of course the Russian hacking angle, were all tools used to undermine the incoming Trump presidency by planting the seed that something was ‘wrong’ with outcome on November 8. To date, I haven’t seen much in the way of outrage at this blatant attempt to question Trump’s legitimacy, let alone official intelligence inquiries.

The report continues on, painting a picture of a Russian revenge plot, seeking retribution for the US-backed release of the Panama Papers, as well as the Olympic Doping scandal. Putin personally is supposedly holding a grudge against Clinton for negative comments she made about him back in 2011 and 2012.

The report says that Putin preferred Trump owing to his ‘stated policy to work with Russia’ (the horror) versus ‘Secretary Clinton’s “aggressive rhetoric.”’ Yes, intelligence community, Secretary Clinton’s insistence on a no-fly zone above Syria, an action which US Generals are adamant would lead to war with nuclear-powered Russia, qualifies as aggressive rhetoric. No need for the dismissive quotes. The report continues:

Moscow’s use of disclosures during the US election was unprecedented, but its influence campaign otherwise followed a longstanding Russian messaging strategy that blends covert intelligence operations—such as cyber activity—with overt efforts by Russian Government agencies, statefunded media, third-party intermediaries, and paid social media users or “trolls.”

By ‘cyber activity,’ the report suggests that hackers such as Guccifer 2.0 obtained access to the DNC over a period of at least a year, and leaked the information it gathered to organizations such as WikiLeaks, which are also alleged to have had ties to the Russian government. The report alleges that Guccifer 2.0 is actually a Russian, and not a Romanian as is claimed.

One of the most important lines in the entire report is as follows:

Disclosures through WikiLeaks did not contain any evident forgeries.

In other words, the content that was released by the leaks was true. As for statefunded media, this ‘Russian Propaganda’ section of the report details the efforts of the likes of RT and Sputnik:

Russia’s state-run propaganda machine—comprised of its domestic media apparatus, outlets targeting global audiences such as RT and Sputnik, and a network of quasi-government trolls—contributed to the influence campaign by serving as a platform for Kremlin messaging to Russian and international audiences. State-owned Russian media made increasingly favorable comments about President-elect Trump as the 2016 US general and primary election campaigns progressed while consistently offering negative coverage of Secretary Clinton.

Starting in March 2016, Russian Government– linked actors began openly supporting President-elect Trump’s candidacy in media aimed at English-speaking audiences. RT and Sputnik—another government-funded outlet producing pro-Kremlin radio and online content in a variety of languages for international audiences—consistently cast President-elect Trump as the target of unfair coverage from traditional US media outlets that they claimed were subservient to a corrupt political establishment.

[…]

RT’s coverage of Secretary Clinton throughout the US presidential campaign was consistently negative and focused on her leaked e-mails and accused her of corruption, poor physical and mental health, and ties to Islamic extremism. Some Russian officials echoed Russian lines for the influence campaign that Secretary Clinton’s election could lead to a war between the United States and Russia.

If positive coverage of Trump by Russian media is deemed to have been a factor in nefarious intervention in the US election, then the overwhelming negative coverage of Trump by US media is also such an attempt to influence the election. Consider this chart, obtained from the Washington Post.

This overwhelming negative bias by US media has not been classed as an attempt to install Hillary Clinton as president in the way the converse claim has been, let alone received any closer scrutiny by intelligence agencies.

It was through the leaks themselves that the public learned of the ways in which the media coordinated with the Clinton campaign. Multiple reporters, including Glenn Thrush of Politico and John Harwood of CNBC were caught colluding with the Clinton campaign, allowing it to shape their reporting. Then DNC chairwoman Debbie Wasserman-Schultz was observed threatening MSNBC anchor Mika Brzezinski over her coverage of Hillary Clinton.

Despite the report characterizing the paradigm of press as subservient to a corrupt political establishment to be propaganda, the leaks showed that this is exactly what happened.

That comprised about half of the meat of the report. The other half was almost entirely focused on RT specifically, breaking down its political views, TV show lonely, and metrics such as its YouTube and Twitter subscribers.

As mentioned before, there is no hard evidence of any claim made in the report, and many of the claims are conjecture based on inferences and critical interpretations of fact. As discussed before, the leaked information was all true and beyond that, the report also contained this important line, with respect to Russian alleged targeting of US election boards:

DHS assesses that the types of systems we observed Russian actors targeting or compromising are not involved in vote tallying.

Again, the information which was leaked was true, and not one vote was tabulated incorrectly.

Media Response

As such, any media outlet which has used phrases such as ‘Russia hacked the election’ have been deliberately obfuscating fact. The Russians did not change the vote totals, nor did they put any pressure on any individual to vote one way or another.

At the very most, the Russians used their media outlets to express their views on Donald Trump and Hillary Clinton, and beyond this, Russian actors may have leaked pertinent, factual information in that regard. In terms of Russian media, expressing a pro-Trump, or anti-Clinton view is not propaganda as is claimed in the report, but merely expressing a political opinion.

RT or Sputnik have not done any different to the New York Times, Washington Post, ABC, NBC or CNN in terms of offering opinionated coverage of the election. If RT can be classed to have ‘influenced’ the election, in the pejorative manner that it has been accused, so too has the NYT and CNN influenced the election in this same manner.

Furthermore, RT and Sputnik together have nowhere near the level of influence over the American voter that the likes of the NYT, WaPo, ABC, NBC, CNN, CBS, the LA Times, Wall Street Journal, Boston Globe, and Fox do, in total, not to mention foreign outfits such as the BBC, The Guardian, Der Speigel and Al Jazeera. The efforts of that collective favored Hillary Clinton on balance, not Donald Trump. Yet US intelligence and those media outlets themselves are asking the American public to believe that plucky RT and Sputnik outweighed them all, to such a degree that it tipped the scales for Trump.

As for the leaked content, it bears repeating – none of it was false. The intelligence report confirmed it, as did the victims of the leak by not challenging the veracity of the emails themselves. Not one person piped up to say ‘Hey! I didn’t write that!’ Debbie Wasserman-Schultz was forced to resign as DNC chairman owing to the fact that the coordination among the DNC to boost Hillary Clinton at the expense of Bernie Sanders was true.

In short, what these Russian (to the extent that they were Russian) leaks showed was that the DNC and the Clinton campaign were running a corrupt operation, which used the power structure of the Democratic Party to freeze out Bernie Sanders, and tried to use the media power structure to do the same to Donald Trump.

The leaks exposed the fundamentally un-American position Hillary Clinton held with respect to things such as international trade and open borders. It exposed the dubious links between Clinton, her global charity foundation, and favors done for foreign businessman, politicians and other dignitaries, implicating her as using her position as Secretary of State to personally enrich herself selling influence to foreigners.

This was all pertinent information to the American electorate. As such, the media and the intelligence community are in effect saying that it was wrong for the American electorate to know about the duplicitous and perhaps illegal activities engaged by Clinton and her campaign. It is an argument for a less informed electorate.

On top of all of this, the manner in which some of the leaked information was obtained  presents another side to the story. It was not mentioned in the report, but it is widely accepted that John Podesta was the victim of a basic phishing attack which compromised his email account. This Vox article explains what happened in further detail. In short, it was Podesta’s incompetence which was more responsible than any other factor for his emails falling in the hands of those that would leak them. It is a relief that the likes of Podesta are no longer in the halls of power on this basis.

This hasn’t stopped the media angst. From the NYT article describing the report (emphasis mine):

President Vladimir V. Putin of Russia directed a vast cyberattack aimed at denying Hillary Clinton the presidency and installing Donald J. Trump in the Oval Office, the nation’s top intelligence agencies said in an extraordinary report they delivered on Friday to Mr. Trump.

The officials presented their unanimous conclusions to Mr. Trump in a two-hour briefing at Trump Tower in New York that brought the leaders of America’s intelligence agencies face to face with their most vocal skeptic, the president-elect, who has repeatedly cast doubt on Russia’s role. The meeting came just two weeks before Mr. Trump’s inauguration and was underway even as the electoral votes from his victory were being formally counted in a joint session of Congress.

Soon after leaving the meeting, intelligence officials released the declassified, damning report that described the sophisticated cybercampaign as part of a continuing Russian effort to weaken the United States government and its democratic institutions. The report — a virtually unheard-of, real-time revelation by the American intelligence agencies that undermined the legitimacy of the president who is about to direct them — made the case that Mr. Trump was the favored candidate of Mr. Putin.

The voluminous, dramatic writing in this, the opening three paragraphs of the article, is amazing when juxtaposed with the ‘substance’ of the report – that showed that Russian media had a favorable opinion of Trump, and that Russian hackers potentially leaked accurate information pertinent to the election. Through Michael Creighton-level spy thriller narration, the media has pyramided this into a tall tale of international espionage, warranting a counter attack of sanctions and perhaps more.

This fiction is intended to undermine the legitimacy of Trump’s presidency, just as the report itself. By hyping up the scale of Russian involvement, consistently dropping in phrases like ‘the disruption of our ELECTORAL PROCESS’ to highlight the sanctity of what was done, the media establishes an Us vs Them scenario vis a vis Russia, a country with which we already have priors.

The media then takes the next step and attacks Trump, who has been consistently skeptical of the Russian hacking angle. That the dramatization of the Russian involvement has a shred of truth embedded in it has allowed media pundits to be driven into a frenzy, tripping over themselves to express their shock that ‘Trump is ‘siding’ with a HOSTILE foreign power over US intelligence!!’

What is truly shocking is the fact that the media, and the intelligence community is siding with agitators for war such as McCain and Graham, all because Hillary Clinton, the media’s favored candidate also sided with the warmongers, as discussed before.

It is little wonder why Putin favored Trump – he was the candidate which wants cooperation with Russia. As I’ve discussed before, cooperation with Russia is a non-starter for the globalist influence campaign waged by leftists, which detests the country for its refusal to play ball with American hegemony geopolitically while rejecting imposing Cultural Marxist dogma on its people.

As a result, Russia has been fashioned, incorrectly,  as the mortal enemy of the United States once again. Fake news indeed.

Conventional Economic Thinking, Getting It Wrong

Yesterday I mentioned Paul Krugman, a NYT opinion columnist, and the tantrum he was in the midst of throwing over the result of the election. Despite his regular columns on politics, his day job is as an economist, a Nobel-winning one at that. This fact doesn’t render his views any more right, given the fact that economics is essentially a branch of Philosophy rather than a branch of the Hard Sciences.

Krugman took time out of his of his anti-Trump meltdown to post this tweet, in which me mocked ‘creative desctruction.’

(Tweet: “So creative destruction is mostly BS. Kind of suspected that  “)

Krugman has long held an antipathy to the idea of creative destruction, in particular when applied generally to an economy in the mold of Joseph Schumpeter. Consider this post he wrote a couple years ago:

The same impulse, I think, is why Schumpeter gets cited so much. If you read his stuff directly, it’s interesting, I guess, although his attempts to explain the business cycle were a waste of good paper. But it’s that glamorizing phrase “creative destruction” that did it, because it’s so flattering to the big money (and excuses a lot of suffering, too).

[…]

So here’s a revolutionary thought: maybe we need to do less disruption and put more effort into doing whatever we do well.

The post in question, as well as the recent tweet was in reference to the idea of creative destruction on a micro level in the sense of business innovation. The abstract of the paper in the tweet reads as follows:

Entrants and incumbents can create new products and displace the products of competitors. Incumbents can also improve their existing products. How much of aggregate productivity growth occurs through each of these channels? Using data from the U.S. Longitudinal Business Database on all non-farm private businesses from 1976–1986 and 2003–2013, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering firms (defined as those less than 5 years old). Second, most growth seems to occur through improvements of existing varieties rather than creation of brand new varieties. Third, own-product improvements by incumbents appear to be more important than creative destruction. We infer this because the distribution of job creation and destruction has thinner tails than implied by a model with a dominant role for creative destruction.

These conclusions are, in truth, straightforward. Following on Peter Thiel’s concept of ‘zero to one,’ it is much harder to create an entirely new product, concept or entire industry from scratch as opposed to improving an existing product, concept or industry. However, the true advances in humanity come from these ‘zero to one’ moments. Going from horse and carriage to automobile was a far more substantive and ‘ball advancing’ move than the improvement of the automobile which has taken place since.

Applied to the individual businesses, there is more ‘growth’ from the likes of Proctor and Gamble, Ford and GE than there are from the likes of Google simply because there are simply fewer Googles.

Krugman uses this to poo-pooh the idea of creative destruction generally. His fight is with the like of people such as myself, who argue that when economies as a whole enter into recession, the best thing for that economy would be for those stricken businesses to be allowed to fold, that bad debt to be liquidated, and prices find their appropriate level, in line with the incomes and economic reality.

This is where the disdain for the ‘glorification’ of creative destruction comes from, because when applied to an economy as a whole, the aforementioned recessionary symptoms lead to falling employment and lower prices in the short term. This is, of course a painful thing, and Krugman, with his pro-government  leanings, believes that the government can solve these problems by easing monetary conditions and spending money to prop up the failed businesses and restoring debt. When Krugman writes about sticking to doing ‘whatever we do well,’ he means ‘whatever economic paradigm was prevailing before the recession,’ when applied to economies as a whole.

The problem with his, and indeed the standard Keynesian approach to the world, is that existing paradigms may not be lasting. They may fail under changing conditions and thus must adapt to stay relevant to the new economic reality. As such printing trillions of dollars to revive a failing economic model founded on debt fueled spending collateralized by ever rising asset prices is a recipe for failure, in the long run. Creative destruction is thus far from being ‘BS’ but in fact the only way for economies as a whole to be structured appropriately, so as to be in line with the underlying economic realities of the time.

**********

Elsewhere in Ivy League Economics PhD News, Alan Kreuger, also of Princeton, and Lawrence Katz of Harvard recently released a study which showed that 95% of the jobs created in the Obama ‘recovery’ were part time or contractor work. This is hardly surprising to most who understood the problem with the idea that reflating asset bubbles was not a strategy for success.

The prior bubble popped because prices were sent out of wack. Businesses could not recoup the ever higher costs of production with ever higher prices for the final goods. The lack of demand at higher prices meant that prices could only fall, and with them wages, the price of labor.

Keynesian economists such as Krugman, Krueger and Katz, have no tolerance for such vagaries of the market, and seek to prop prices. In doing so, they propped the higher costs of production which meant they were forced to cut costs elsewhere. This meant workers were either laid off, replaced with robots, or had their hours reduced, or some combination of the three.

This thrust the worker into an environment in which his or her hours were cut while the prices he or she had to pay for goods and services rose. This meant that the worker had to supplement the now part-time or no-time work he or she was doing with a second or third part-time job, or becoming a contractor.

Obamacare crystallized this phenomenon, with its mandates on employers, especially service sector employers, leading to many of them reducing the hours of their staff to avoid the mandatory health care expenditures, hiring more part time workers to fill in the gaps.

This was how Obama’s ‘stellar’ job creation statistics were constructed. The most telling part of the article is the following [emphasis mine]:

Krueger, a former chairman of the White House Council of Economic Advisers, was surprised by the finding.

The disappearance of conventional full-time work, 9 a.m. to 5 p.m. work, has hit every demographic. “Workers seeking full-time, steady work have lost,” said Krueger.

Under Obama, 1 million fewer workers, overall, are working than before the beginning of the Great Recession.

That the likes of Krueger, a Keynesian through and through, would be surprised is of no surprise to me. The Keynesian understanding of the economic world has shown to be bankrupt in the long run. That it is survives as a respected school of thought is down to its ‘success’ in the short run, on a superficial basis. The fact that the Obama administration created millions of jobs, tripled the stock market and has engineered housing prices back to near pre-crisis levels is seeming evidence of the fact that these Keynesian polices have succeeded.

But as this paper notes, this was a papering over the cracks. Despite the touts of the administration, the people know that the economic recovery hasn’t been as great as it seemed, as they see it every day. They are the ones who have to go out in search of multiple part time jobs to make up the hours that were lost elsewhere. They are the ones who are paying higher and higher costs for the same standard of living.

To do this and to be continually told that the economy is improving was a slap in the face which proved one too many for the average voter, which ultimately goes some distance to explain why Trump had such a stern base of support.

Furthermore, this explains why the old media outlets who crow endlessly about how unqualified Trump’s picks are for his cabinet. Krugman, Katz and Kreuger have a combined 100 plus years of economic experience, yet for all their ‘wisdom,’ their understanding of the economy is wholly inadequate.

Chronicles in Old Media Delusion

Jim Rutenberg of the New York Times thinks he has found the solution to the pandemic of ‘fake news,’ which he and others in the Old Media are convinced cost Hillary Clinton the election. Of course, this ‘fake news’ is most accurately described as ‘news and/or opinions which do not line up with the views espoused by those on the left.’

In his article, he points to the latest outrage sparked by yet another Donald Trump tweet, in which he took umbrage to a Vanity Fair review of his own Trump Grill.

(Tweet: “Has anyone looked at the really poor numbers of Magazine. Way down, big trouble, dead! Graydon Carter, no talent, will be out!”)

Rutenberg, as with most old media journalists, treat these mini blasts from Trump as though they had been chiseled onto Moses’ stone tablets, such is the importance they give to 140-character, largely throwaway streams of consciousness.

In fairness, they can be quite entertaining, and given that Trump is going to be the next president of the United States, and an avid Twitter user, I can understand the fixation on them. In this particular tweet, Rutenberg sees the seeds of a victory for the old media he represents against Trump, who has been at odds with them since he embarked on his campaign for the presidency.

As Mr. Trump tries to burn the media village down, he may just be saving it.

His running campaign of Twitter attacks, declarations of failure and vows to punish the traditional news media is threatening to do what so many years of cost-cutting and re-envisioning could not do as easily: put the industry on more solid economic footing, where customers who realize its value are willing to pay for it more regularly.

It’s early. And, in traditional media, hope is the province of masochists.

But in the weeks since the election, magazines like The New Yorker, The Atlantic and Vanity Fair; newspapers including The New York Times, The Wall Street Journal, The Los Angeles Times and The Washington Post; and nonprofits like NPR and ProPublica have been reporting big boosts in subscription rates or donations.

It’s as if Mr. Trump’s media attacks have combined with the heightened attention on the perils of fake news to create one big fat advertisement for the value of basic journalism.

“The fake news business is going to be great for journalism in the long run,” Mr. Carter told me Friday, referring to Mr. Trump as “the Fake Newser in Chief.” “Proper news organizations should thrive under this.”

The irony if this is that Rutenberg’s conclusion describes the exact dynamic which existed between his Old Media and Trump throughout the campaign. That is, the constant attacks by the old media against Trump probably did more than anything to galvanize his supporters and turn those who originally opposed him. Take this quote from Slate Star Codex, who noted that he was an anti-Trump supporter, but understood the fact that the media, by ‘crying wolf’  enabled what should have been a joke candidate (in his eyes) to ascend to victory:

Stop fearmongering. Somewhere in America, there are still like three or four people who believe the media, and those people are cowering in their houses waiting for the death squads.

Stop crying wolf. God forbid, one day we might have somebody who doesn’t give speeches about how diversity makes this country great and how he wants to fight for minorities, who doesn’t pose holding a rainbow flag and state that he proudly supports transgender people, who doesn’t outperform his party among minority voters, who wasn’t the leader of the Salute to Israel Parade, and who doesn’t offer minorities major cabinet positions. And we won’t be able to call that guy an “openly white supremacist Nazi homophobe”, because we already wasted all those terms this year.

Stop talking about dog whistles. The kabbalistic similarities between “dog-whistling” and “wolf-crying” are too obvious to ignore.

Stop writing articles breathlessly following everything the KKK says. Stop writing several times more articles about the KKK than there are actual Klansmen. Remember that thing where Trump started out as a random joke, and then the media covered him way more than any other candidate because he was so outrageous, and gave him what was essentially free advertising, and then he became President-elect of the United States? Is the lesson you learned from this experience that you need 24-7 coverage of the Ku Klux Klan?

In that now-viral post, SSC points out the fact that the KKK has a memebership of about 5,000, which is about 0.02% of the population and orders of magnitude fewer numbers than groups like the Nation of Islam, Church of Satan and Harare Karishnas. Yet none of these groups are taken seriously at all, let alone feared by the media to have had the ear of a presidential candidate such that we should all cluth our children closer at night.

SSC notes Trump has explicitly ignored and denounced David Duke, the media’s KKK go-to figure of note, on a consistent basis since the year 2000. Yet this didn’t stop the media from beating on and on about Trump and his white nationalist base.

SSC tears apart many other similar old media talking points which were used to batter Trump with on a regular basis during the campaign. The problem for the old media was that their propaganda drives took place in the age of the internet, and more importantly in the age of social media. The existence of ALL of the source material and primary sources meant that the false narratives the old media could be deconstructed in real time, and spread to the public as a whole.

And in the face of this, the old media kept crying wolf, to the point where Rutenberg’s own employer had to print a mea culpa of sorts, in which it stated it would ‘rededicate’ itself ‘to the fundamental mission of Times journalism.’

Indeed, those last two words, Times journalism printed in that manner are quite curious. One would think that good, or even great journalism would be more appropriate an aim. By referring to their own special brand of journalism, one that had been categorically shoddy (recall, Rutenberg himself argued that it was right for journalists to treat Trump with open hostility earlier this summer), the piece from the Editorial Board reads less mea culpa and more ‘we’re doubling down.’

One of the NYT’s more famous columnists, Paul Krugman is in the midst of such a doubling down, a multi-day effort of Wrong spanned out across multiple outlets. To be sure, Krugman is an opinion writer, but in the context of this discussion, we live in a current journalistic climate in which doing ‘real’ journalism is to give the opinions of a leftist. To take an opposing view isn’t just disagreement, but heresy, worthy of censure. In that climate you can’t just have a difference of opinion, you are considered to be evil if you disagree.

Krugman’s meltdown began with this tweet last weekend in which he stated that Trump would be politically incentivized by a 9/11 style terror attack:

(Tweet: “Thought: There was (rightly) a cloud of illegitimacy over Bush, dispelled (wrongly) by 9/11. Creates some interesting incentives for Trump”)

He then frothed at the mouth after the Electoral College confirmed Trump’s Nov. 8 election victory:

(Tweet: “So it’s official, and it’s vile: the loser of the popular vote installed by Russian intervention, a rogue FBI, and epic media malfunction.”)

Then kept fighting the good ‘Trump is White Nationalist’ fight:

(Tweet: “To join Trump admin, you have to be white nationalist conspiracy theorist, but must also be always wrong re your supposed area of expertise)

His last three columns he wrote (here, here, here) were all to do with the fact that the election was stolen by the Russians and the FBI, and that our corrupt institutions let us down. On that final score he is partially right – our corrupt institutions have let us down – and it was because of that the electorate was galvanized by Trump and his call to ‘drain the swamp’ to take action against them.

The institutions didn’t want Trump. The problem was that in Clinton stood a candidate so corrupt herself that the institutions couldn’t deflect Trump’s charges. Clinton would have skated by a Jeb or Rubio, neither of whom were willing to ‘go there,’ and thus the public wouldn’t have cared about the alleged misdeeds of Clinton. If no politician was willing to stand up, the people would have trudged to the polls to elect Clinton, despite the stench of corruption.

Trump was different, Trump stood up to Clinton and the media who backed her. That’s why he won. And in the wake of it all, that same media has rushed to decry the constant discussion of that Clinton Stench during the campaign as ‘fake news.’

It’s been said repeatedly, but the post-election stance has shown that the old media has learned nothing. As they continue to define the fake news/proper news spectrum as pro-Trump/anti-Trump opinion respectively, they continue to dig themselves into a deeper hole.

Rutenberg is absolutely right in saying that proper news organizations will benefit wildly from the coming journalistic landscape, which in many ways is already here. However, given the waning trust in old media outlets like his, followed by his own shop posting middling profits, as well as an office space downsize in the offing, it is clear he has the specific organizations on each side of the real/fake news divide backwards.

Election Trutherism: Putin’s Akina-Inu Ate My Homewok

Hillary Clinton, spoke on Thursday to a group of her donors, presumably reassuring them as to why the $1 billion-plus they spent on her wasn’t a colossal waste of money.  She outspent Trump massively, while also having the vast majority of academia, the media, and pop culture behind her.

To lose with that sort of advantage at the foundation of her campaign from day one certainly makes this election result a contender for one of the greater upsets in political history. It had to be a tough ask, to get in front of the money men after such a catastrophe, which is probably why it took over a month for her to gather up the courage to face that music.

When she did, she chose to adopt the ‘Russia ate my homework’ explanation which had been a part of the discussion prior to the election, and has now been screamed from the rooftops afterward:

Speaking to a group of donors in Manhattan, Mrs. Clinton said that Mr. Putin, the Russian president, had never forgiven her for the accusation she made in 2011, when she was secretary of state, that parliamentary elections his country held that year were rigged.

“Putin publicly blamed me for the outpouring of outrage by his own people, and that is the direct line between what he said back then and what he did in this election,” Mrs. Clinton said.

It is the first time Mrs. Clinton has publicly addressed the impact of the hacks since the intelligence community concluded that they were specifically aimed at harming her campaign.

“Make no mistake, as the press is finally catching up to the facts, which we desperately tried to present to them during the last months of the campaign,” Mrs. Clinton told the group, which collectively poured roughly $1 billion into her effort. “This is not just an attack on me and my campaign, although that may have added fuel to it. This is an attack against our country. We are well beyond normal political concerns here. This is about the integrity of our democracy and the security of our nation.”

It wasn’t the fact that she was simply outworked by Trump. It wasn’t that she ran a campaign hyper-focused on an aggressive Identity Politics and a grievance culture which has long since worn out its welcome. It wasn’t that she merely assumed that because it was ‘her turn’ she would waltz to a coronation. It wasn’t that she was reckless with classified information while at Secretary of State. It wasn’t the fact that she was the poster child for modern day political corruption and pay-to-pay politics (exemplified by the very group she was speaking to).

It was the Russians and their mischievous hackers.

This Election Trutherism has been dutifully put forth by leftists and those in the Old Media who still cannot believe that Hillary Clinton lost the election. They have brought this Trutherism to a new level in recent days by lobbying for the Electoral College, which meets tomorrow, to reject the result of the election by denying Donald Trump the 270 votes he needs to become president. It is an exercise in hypocrisy and arrogance, not to mention a gross misinterpretation of the Constitution.

The Charge

Last week, The Washington Post published this story, which alleged that the CIA had come to a definitive conclusion that the Russians were behind the shenanigans that took place during the election, and did so specifically to aid Donald Trump at the expense of Hillary Clinton:

The CIA has concluded in a secret assessment that Russia intervened in the 2016 election to help Donald Trump win the presidency, rather than just to undermine confidence in the U.S. electoral system, according to officials briefed on the matter.

Intelligence agencies have identified individuals with connections to the Russian government who provided WikiLeaks with thousands of hacked emails from the Democratic National Committee and others, including Hillary Clinton’s campaign chairman, according to U.S. officials. Those officials described the individuals as actors known to the intelligence community and part of a wider Russian operation to boost Trump and hurt Clinton’s chances.

“It is the assessment of the intelligence community that Russia’s goal here was to favor one candidate over the other, to help Trump get elected,” said a senior U.S. official briefed on an intelligence presentation made to U.S. senators. “That’s the consensus view.”

There is plenty to note here, particularly the high level of vagueness involved. A ‘secret assessment,’ found that ‘actors’ with ‘connections’ to Russia leaked hacked emails to WikiLeaks, ‘according to US officials.’ There is not a shred of concrete evidence in any of these claims, and none has materialized since they were made.

Furthermore, that these alleged efforts were done with the express purpose of boosting Trump’s chances is also without evidence. The Post piece mentions that the CIA ‘findings’ had been questioned by other intelligence agencies, on the basis of there not being enough concrete information:

The CIA presentation to senators about Russia’s intentions fell short of a formal U.S. assessment produced by all 17 intelligence agencies. A senior U.S. official said there were minor disagreements among intelligence officials about the agency’s assessment, in part because some questions remain unanswered.

For example, intelligence agencies do not have specific intelligence showing officials in the Kremlin “directing” the identified individuals to pass the Democratic emails to WikiLeaks, a second senior U.S. official said. Those actors, according to the official, were “one step” removed from the Russian government, rather than government employees. Moscow has in the past used middlemen to participate in sensitive intelligence operations so it has plausible deniability.

These holes in the narrative were ‘corrected’ just a few days later when the major entities which comprise the Old Media reported that the intelligence community now believe that Vladamir Putin was directly involved, instructing the hacking and how it would be used. From NBC:

U.S. intelligence officials now believe with “a high level of confidence” that Russian President Vladimir Putin became personally involved in the covert Russian campaign to interfere in the U.S. presidential election, senior U.S. intelligence officials told NBC News.

Two senior officials with direct access to the information say new intelligence shows that Putin personally directed how hacked material from Democrats was leaked and otherwise used. The intelligence came from diplomatic sources and spies working for U.S. allies, the officials said.

Putin’s objectives were multifaceted, a high-level intelligence source told NBC News. What began as a “vendetta” against Hillary Clinton morphed into an effort to show corruption in American politics and to “split off key American allies by creating the image that [other countries] couldn’t depend on the U.S. to be a credible global leader anymore,” the official said.

In other words, the vague confirmation by anonymous ‘US officials’ that the Russians interfered with the election with the purpose of aiding Trump, was later backed up with ‘new intelligence’ from yet more anonymous ‘officials’ who declared that Putin was personally involved and even directed the whole thing.

Of course all of this vagueness can be justified as being necessary, so as to shield the sensitivity of ongoing intelligence work. The Post refers to this in its piece. However, that vagueness is also the perfect shield for narrative creation, which, in the context of the totality of the post-election events suggests that this is the likelier of the necessity of the ambiguity.

Spheres of Influence

The game is made much clearer once one advances from the contention that the Russians interfered with the election to the discussion of exactly how they interfered. Both Loretta Lynch on Thursday and President Obama yesterday unequivocally stated that there was no technical interference from Russia or anyone else in the election. In other words, voting machines were not tampered with, nor were votes incorrectly tallied, and things of that nature. This was confirmation from the highest level that the 2016 election was a free and fair one, at least in a pure technical sense.

So what is the outrage about? It stems from the fact that someone leaked emails from John Podesta and the Democratic National Committee to Wikileaks, who then leaked it to the public in driblets over the final months of the campaign. The Russians have been fingered as the ‘someone,’ and this has been spun to be evidence that the election was ‘hacked,’ and our Democratic Institutions have been tampered with.

That narrative is patently false, as Obama and Lynch have confirmed for us, and any characterization of Russian involvement in this manner is designed to deceive the audience. The Russians (if it was indeed them) engaged in an old fashioned data leak. That was it. They didn’t hack anything but John Podesta’s email account, and released its contents to the public.

The public was thus exposed to new information, which it absorbed and factored in to its decision making. If this constitutes an attempt to nefariously ‘interfere’ with the election, then the leak of the Billy Bush tape, in which Trump used some vulgar language in speaking about women, also qualifiesas an attempt to ‘interfere’ with the election.

Both leaks exposed pertinent information to the public about the candidates. That the Podesta and DNC leaks may have originated from international sources is irrelevant. The information itself was true, and damaging. Michael Tracey provides a bullet point list of what those leaks revealed in this piece, and he concludes it by correctly noting that what was leaked was most definitely in the public interest.

In short, the ‘Russians’ interfered with the US election by showing how the DNC and the Clinton campaign planned to themselves interfere with the US election by colluding with party bigwigs, donors and the media to stack the deck in her favor. They rigged the Democratic Party Primary against Bernie Sanders. Both Debbie Wasserman Schultz and Donna Brazile came under fire as heads of the DNC, with the former having to step down as a result. The latter was caught funneling debate questions to Clinton.

It exposed the private dealings of Hillary Clinton behind closed doors, notably her insistence that it was important to have both a private and public position on issues. It shed light onto some of the more shady dealings of the Clinton Foundation which coincided with Hillary Clinton’s time as Secretary of State. The leaks ultimately put some meat onto the bones of the concept that rampant political corruption goes on at the highest levels of modern government. Most people always suspected this, but lacked the concrete evidence. In many ways, those leaks provided that evidence.

It is telling that throughout the campaign, as the leaks were being delivered, those parties involved never outright denied the validity of the information being released. The most they could do was to appeal to the same sort alarm over foreign intrusion which has been taken to new heights post election.

The whole thing is reminiscent of the poker scene from the 1973 movie, The Sting, featuring Robert Redford and Paul Newman. Newman’s character, Shaw, outwits a mobster, Lonnegan, playing in a private game. The idea was to set Shaw up by trick dealing him a four of a kind, which in poker is a virtually unbeatable hand. This would induce Shaw to end up betting all of his chips, and possibly more, on such a sure thing. Lonnegan, carrying a second deck in his pocket, ‘dealt’ himself a better four of a kind, and thus would have shown down with Lonnegan, losing everything, thus completing the scam.

Shaw, wise to the gambit, was ready for it, and when the time came made a switch. The movie doesn’t show how he did it, but Shaw had originally been dealt four threes, while Lonnegan had been dealt four nines. The betting carries on until both players are all in. Shaw then turns over four jacks, to the dismay of all in the room. Lonnegan, defeated, storms into a side room angry enough to kill. His associate, bewildered, tells Lonnegan: “Doyle, I know I gave him four THREES. He had to make a switch. We can’t let him get away with that.”

Lonnegan response was famous: “What was I supposed to do – call him for cheating better than me, in front of the others?”

Unlike those on the left, Lonnegan understood that you can’t call someone out for being crooked when you are crooked yourself. Having been outsmarted, Lonnegan accepted Shaw had bested him and moved on.

Instead, the left has responded by ramping up the outrage, making it seem as though they had been wronged. Again, both the Attorney General and the President of the United States confirmed that the 2016 electoral process was a free and fair one, devoid of technical interference by any perpetrator, foreign or domestic.

Despite this, democrat politicians, aided by their leftist friends in the Old Media have succeeded in driving the hysteria about Russian involvement into the stratosphere. What happened was a data leak by unknown actors, who could have been foreign. What the old media has implicated, in their usage of terms such as ‘hacked the election,’ is that some sort of advanced espionage operation took place, which was coordinated to install Donald Trump as president.

In the past week or so op–ed after op-ed has filled the pages of newspapers across the country decrying the now ‘tainted’ election, calling on the Electoral College to rectify the situation when it meets on Monday. They’ve even resorted to the failed tactic of trotting out celebs to stand in front of a white wall delivering a public service announcement instructing the Electors to stand up for America and do the right thing, which is to not confirm Trump’s presidency. Naturally, the video has disabled comments and the like/dislike button.

Suddenly, Constitutional Originalism is In Vogue

Vox wrote this piece a few weeks ago to explain why it would be a legitimate action for the Electoral College to not vote for Trump, citing the constitution and Alexander Hamilton’s Federalist Papers writings. To be sure, it would be legitimate for the Electors to do whatever they wanted, individual state rules notwithstanding. The constitution allows for them to do this. However, the standard reasoning provided by leftist for why they should vote for someone other than Trump is wrong. The Vox article writes:

Constitutional history makes clear that the founders had three main purposes in designing the Electoral College.

The first was to stop a demagogue from becoming president. At the Constitutional Convention, arguing in support of the Electoral College, Elbridge Gerry of Massachusetts said he was “against a popular election” for president because the people would be “misled by a few designing men.” In Federalist No. 68, Alexander Hamilton wrote that the electors would prevent those with “Talents for low intrigue, and the little arts of popularity” from becoming president. They would also stop anyone who would “convulse the community with any extraordinary or violent movements.”

The characterization of Trump as a demagogue is a matter of opinion. The fact that political pundits in the old media refer to Trump as a demagogue nearly every time they speak about him does not make it a fact. The fact that Trump did tap into a huge wave of populism does not render his policies or his victory somehow illegitimate simply because of that populism.

Consider that Trump has been called a racist xenophobe for putting forth an immigration proposal that seeks to rigorously enforce existing law which for many years has been ignored on many levels. The fact that this is such a popular stance among his supporters and played a huge role in his victory has been used as an example of his ‘demagoguery.’

In terms of a ‘violent movement,’ to the left Trump’s campaign qualifies as such given his signal to aggressively follow the law means that those who break the law are going to be in for an uncomfortable time, to put it mildly. In the realm of immigration, this means illegal immigrants, a protected class of the left, are going to be subject to the ‘violence’ of facing consequences for breaking American immigration laws.

It says a lot about where we are as a society when calls to follow the law can be considered to be demagoguery, no matter how brash they are.

As for Hamilton’s wish to essentially banish charming, engaging, charismatic celebrity types from holding the office, if this is to be the standard, then most of the presidents in the television era are ineligible. Indeed, the 1960 Presidential Debates are immortalized based on the simple fact that the introduction of television altered the perception of the two candidates’ performances. Famously, those who listened on the radio believed that Nixon won, while those who watched on television believed Kennedy was more effective. Kennedy was the more visually appealing of the two, standing calm and assured, while Nixon famously looked a sweating mountain of nerves.

According to the standard now being imposed by the left, Kennedy’s superior charisma and charm should have been taken into account by the Electoral College, especially given the razor thin margin of his victory. Subsequent presidents in the TV era, from Reagan, to Bill Clinton, and even President Obama won, in part, on the strength of their charm, natural persuasion and ability to relate to people. They all displayed ‘talents for low intrigue, and the little arts of popularity,’ because it is a successful, almost necessary tactic in an era so influenced by television.

On the whole, this point is a non-starter, at all levels. Vox continues:

The second goal was to stop foreign interference in election. In the founding period, the framers were extremely concerned about infiltration by rivals including Great Britain. In Federalist No. 68, Hamilton wrote that one major purpose of the Electoral College was to stop the “desire in foreign powers to gain an improper ascendant in our councils.” He said that the college would “Guard against all danger of this sort … with the most provident and judicious attention” from the electors.

There is slightly more to this point, as I’ve discussed above. However, nothing about the Russian hacking rises to the level of gaining ‘an improper ascendant in our councils.’ If anything fits that bill, it would be the behind closed doors declaration of Hilary Clinton to international bankers that her dream was to establish a ‘hemispheric common market’ across North America, that would benefit globalist interest. It would be the Uranium One deal Clinton help broker with, you guessed it, Russia, as Secretary of State.

These are the sorts of things consistent with foreign entities looking to install a puppet as opposed to a relatively mundane action like a data leak. More from Vox:

The third goal was to prevent poor administration of government. This is a less well-known purpose of the Electoral College, but it is again expressly discussed in Federalist No. 68. Hamilton wrote that “the true test of a good government is its aptitude and tendency to produce a good administration,” and for that reason, he said, the electors should be “able to estimate the share which the executive in every government must necessarily have in its good or ill administration.”

Vox claimed that Trump had violated this goal because of his popular vote defeat, but that certainly isn’t evidence of anything. In fact the Electoral College exists precisely to prevent the majority vote from potentially harming the nation as a whole. Given that the majority voted against Trump, and thus against the rule of law to favor the nebulous concept of ‘racism’ as it is defined in 2016, the Electoral College worked exactly as it should have on November 8.

So while it is within the rights of the Electors to cast their votes in a manner that would deny Trump the presidency, the threat to the republic that is bandied as the reason for doing so does not exist. Trump is not a demagogue or foreign puppet and has not exhibited a stark inability to execute a good administration. The only ones who truly believe this are leftists and globalist Republicans, who collectively find Trump to be objectionable.

The grounds on which they have been objecting to Trump are the extension of a concept I’ve repeated over the latter stages of the election; that is the idea that racism, sexism, homophobia, xenophobia and so on are the gravest of societal sins while simultaneously being near ubiquitous in modern society. From the vantage point of this current cultural milieu, Trump is an illegitimate president, owing to his supposed racism and xenophobia.

Therefore, from this vantage point, looking to the Constitution for guidance, and encouraging the Electors to reject Trump is a legitimate course of action. More from Vox:

Modern-day conservatives favor so-called “originalist” understandings of the Constitution. They look to history and to the original texts of our founding documents for guidance. Recent decades have seen the invocation of original constitutional institutions to address present concerns, such as when the Rehnquist Court struck down Congressional laws such as the Violence Against Women Act and the Gun-Free School Zones Act on the grounds that they violated an originalist understanding of the Commerce Clause.

Whether or not you agree with such decisions, they establish the broad-spectrum appeal of our constitutional institutions — particularly in times of crisis. “Make America great again” is a clever marketing slogan. But our real greatness depends on employing our institutions and values to protect our republic from those who might prey on us.

This is written without a hint of irony, given the general leftist aversion to ‘originalist’ interpretation of Constitutional texts. Just in the last year or two they belittled the originalist opposition to gay marriage laws and Obamacare. Thus, their sudden sprint into the bosom of Alexander Hamilton and James Madison is tinged with hypocrisy.

As is Election Trutherism in general, given the fact that before the election Trump was hailed a threat to the 240 year republic for merely stating that he would wait to confirm the legitimacy of the election result rather than blindly accepting it. Now that Trump has won, the same factions which decried him are not accepting the election results, owing to their disagreements with Trump’s politics wrapped in the veneer of foreign meddling.

Had the shoe been on the other foot, there would have been calls for Trump’s arrest for disrupting the ‘peaceful transition of power’ in the way the leftists are doing to Trump.

Trump is a threat because his flouting Politically Correct cultural norms threatens the source of power that leftists have used to wield their influence on society. By establishing their opinions on social issues as the moral ones, mere disagreements are thus immoral, and therefore their disruptions become justified. Of course their views are conjecture, and nothing more.

Despite the jittering protestations of the likes of Keith Olberman, in a free and fair election, Donald Trump won 306 Electoral College votes, and thus the Presidency. None of the contingencies which should prompt the Electors to intervene exist. Even if the Electors chose to overturn the electoral vote on Monday, the decision would go to the House of Representatives, who would most likely elect Trump.

Conclusion

The entire episode is part of the drive to de-legitimize the Trump presidency. It is an attempt for leftists to deny responsibility for their loss, despite having the deck stacked in its favor. In crying foul, they give themselves an out. The drudges across the political establishment, from media pundits and columnists, to polling companies, to campaign advisers, lobbyists and other insiders, all rely on the status quo for their daily bread. That they completely misread Trump’s candidacy and the American electorate, even well after the election has ended, indicates that their usefulness is over.

Unless the election was literally stolen, swindled from under their noses. In this case, it wasn’t their fault. Their world view, their reading of current events, their prescriptions for the future were actually correct; it was unforeseen injustice which got in their way. It’s incredibly self-serving.

It is also incredibly encouraging to those of us who were on The Right Side Of History the entire time. Because to us, these flare-ups and meltdowns emanating from the left confirm that they have no wish to change. They have no wish to stop trying to foist their delusions of equality and social justice on the rest of the public, through the ‘everything and everyone is racist’ mode of argument. A mode of argument which, had just received a resounding defeat in the marketplace of ideas, as evidenced by the election results, and the growing influence of internet culture.

So let the leftists continue down this line for as long as they wish. Their losses will accrue accordingly.

Trump’s Greatest Challenge

…will be restoring the American economic machine to its former glory. To the extent he is able to achieve this, a lot of ills that may crop up elsewhere may be forgiven. Trump’s economic progress will be especially important from a political sense given the fact that Trump is the ‘change’ candidate. He ran, and was elected on a promise to shift away from the status quo in all aspects. Should the Trump economic doctrine fail, it will poison the anti-status quo rhetoric which won him the presidency for decades to come. It will potentially open the door for a complete and total return to power for the ‘establishment’ forces in a way that may be more damaging than if Hillary Clinton had won instead. That underscores how important it is for Trump to get the economics right.

As I write this, we are in the midst of a post-election victory haze which has seen the stock market make new highs virtually on a daily basis. Stock in commodities and manufacturing have risen by upwards of 50%. Trump himself has lauded the reaction in stocks since November 8 as a validation of his election.

In some ways he is correct. Should he enact his policies, especially the cutting of corporate taxes and reducing regulations, the business environment in this country will improve, which will lead to greater profitability and thus higher stock valuations.

The issue is that the market correctly assigning higher stock valuations to publicly traded companies is happening in an environment in which these valuations were already in the realm of the absurd. Indeed, Trump himself lamented the fact that the stock market was in a giant bubble on the campaign trail, calling it a ‘false’ stock market. Now that he has won, and stock prices have rocketed even higher, Trump is being inconsistent in his praise for what can only be described as the bubble getting even more absurd.

What has driven this bubble to its current heights has been the torrent of debt unleashed on the economy over the last 7+ years. This debt, in turn was facilitated by the depressing of interest rates to levels not seen in the history of the developed world, for nearly a decade, without interruption. Sticking with the United States, the Federal Reserve quintupled the size of its balance sheet, which enabled the totality of credit outstanding to continue to expand, in the manner it has done for the better part of four decades.

The result has been the restoration of the 2008 bubble, the popping of which led to so much destruction. What is important to note is that this bubble, like all bubbles, will pop. The only question is the needle which pricks it. It very well might be the Federal Reserve, which is set to raise interest rates at its meeting next week. It might be the plunging of the economy into a full blown recession, which is a natural part of economic cycles, but truly devastating when a bubble has been the foundation of the preceding period of growth.

Regardless of how it starts, the fact is that one peach of a smash is inevitable. This is because of the fact that as it currently stands, the US economy employs a debt driven consumer spending model as its method for achieving economic growth. This sort of model relies on constantly expanding debt, and constantly rising prices. These are two facets which are unable to endure indefinitely, much in the same way it is impossible for a human being to naturally propel oneself through the air indefinitely without gravity asserting itself at some point. From an earlier piece I wrote on the subject:

At some point, markets can’t support prices at the high levels producers need to set, which in turn leads to prices falling, profits falling, trouble servicing debts, liquidations, and layoffs. Yet, the solution presented by mainstream economics is to guide prices higher again.

All actors in the economy, from the government, to households to business are currently over-indebted.

As a result we are getting closer to the point when there will be no one left to take on the new debt required to push prices ever higher, in order to keep the ‘growth’ going. As this become more and more apparent, prices will start to fall, loans will become bad, bankruptcies will rise, and all the rest of it. Then the political game truly begins.

The economic carnage will be universally blamed on Trump, and it will not be a difficult story to sell. The surface level thinking will show that the economy was ‘fine’ under Obama, with rising stock prices, rising GDP, home prices and employment levels, a reduction in the deficit and so on. The fact that these metrics are superficial, and easily gamed by the cheap money which will have evaporated in the downturn will be overlooked.

It is at this point that the most pivotal moment in Trump’s presidency will arrive. He will have to choose between attempts at reflating the burst bubble, and allowing market forces to play out, and then rebuilding on the new landscape that forms thereafter.

The standard politician has always taken the former route. It is the route of political expedience, the route of slavish devotion to abstract metrics such as GDP. The last two administrations have done exactly that. In the wake of burst Internet and Housing bubbles, the Bush and Obama administrations respectively, in conjunction with the Greenspan and Bernanke Federal Reserves ‘stimulated’ the economy via a lowering of interest rates and dramatic increases of debt. The debt taken on under the Bush administration equaled that of the cumulative debt of every president prior to him. Eight years on, President Obama matched that dubious achievement.

The consequence of allowing market forces to run their course would have been catastrophic, in fairness. This is largely because the multi decade advance of asset prices was also the savings vehicle for many in the Baby Boom generation. For decades, they had not had to build real, legitimate savings because asset prices were always rising. When the time came to retire, conventional wisdom held, it was simply a matter of selling the assets and living happily ever after. That all changed when the bubbles burst, particularly in 2008. For many Boomers, their retirement nest egg had been wiped away, or at least severely diminished, just at the very moment they needed it.

The actions of world governments and central banks in attempt to reflate the bubble was in some sense a refusal by the Boomer generation to accept their mistake, demanding that economic gravity be defied indefinitely until they were made whole again.

These actions were able to ‘fix’ the problem in the short run, but are fundamentally inadequate for the long term. Indeed there has been positive talk about home prices which are nominally flirting with 2008 bubble levels. At some point there will again be ‘too much debt,’ and the whole system will be under pressure once more. The fact that asset prices have been engineered higher for the benefit of Boomers means that these very assets will be increasingly out of reach for a younger generation which itself is overburdened by student debt the Boomers never dealt with when they were young.

This will necessitate still further debt and money printing to enable the younger generation to purchase assets from Boomers at these stratospheric levels, in order for them to retire.

This paradigm is the equivalent of fixing the negative symptoms of a drug withdrawal with a higher dose of the drug. I sets in motion a cycle in which the only conclusion is either an overdose or the mother of all withdrawals.

The correct solution is to endure the withdrawals, no matter how bad they are, because they will still be better than a certain overdose. In the context of the current economic situation, that means allowing the gaggle of bad debt which hangs around the neck of the economy like an albatross, to be purged from the system.

Trump should understand this scenario well – for it mirrors the situation he was in personally during the early 1990s. Having overextended himself in the late 80s, he was in a fair bit of trouble, to put it mildly, when the market turned. This is all well documented, but Trump’s Comeback would not have been possible without a renegotiation with his creditors. This allowed Trump to survive without having to sell the assets which he had accumulated to that point, and set the stage for him to grow his empire not only to far greater heights, but with a far greater foundation which offered a substantial margin of safety.

The United States as a whole is need of something similar happening. I suspect, on some level, Trump is aware of the nastiness which might be involved. Back in May, he revealed as much when he suggested that the United States could simply renegotiate its debt to alleviate its problems. This set off a firestorm in the media, which posited that Trump would be threatening the pristine credit history of the US government, which had always honored its debts.

That is patently untrue, but the real cause for alarm comes from the fact that the bond market, and in turn all markets, rest on the fundamental idea that it is true. That is, US government debt is a 100% certainty to be paid on time and in full. As such, for Trump to suggest that the debt could be ‘renegotiated’ would upend world markets.

The premise from which this potential turmoil originates from is faulty however. The US does pay its debts on time, but owing to money printing exercises, it has not necessarily been paying them in full. Paying debts with printed money is to pay in a currency that is worth less than when it was borrowed. In theory, the interest rate should square the difference, but given that interest rates have been held artificially low by the Federal Reserve, a real case can be made that America’s creditors have already had involuntary renegotiations with America, which has been implicitly defaulting on its debt for years now.

What Trump mentioned in May was an explicit default. In that event, the tumult would be extraordinary, with interest rates rising precipitously, prices falling precipitously, and a temporary state of near depression ensuing, perhaps worldwide. Yet it would be the right thing to do.

The current game of kicking the can down the road and hoping for economic miracles has not worked. Consider that in the last two presidencies, each has had to double the national debt and keep interest rates at historic lows merely to maintain a period of growth with had nothing to show for it but stratospheric asset prices and a war torn planet. In the meantime wages have stagnated, home ownership has dropped, labor force participation has dropped, high paying manufacturing jobs have been replaced by low paying service sector jobs, and only those over the age of 55 have seen a net increase in employment.

This is the paradigm which the Keynesian academics, global central bankers and short term-ist politicians believe justifies the doubling the debt every 8 years to preserve.

In rejecting that prescription, Trump would put America in the position he himself was in in those early 1990s days, when he would tell himself repeatedly, ‘survive til 95. Survive til 95.’ It was at that point he figured that he would be able to have a proper foundation to work from, and that sustainable growth could begin.

The short term carnage which would result would no doubt be pounced on by a leftist media which will have been constantly begging for him to fail. There would be no end of horror stories describing the bankruptcies, foreclosures, layoffs, business closings and so on that would descend upon an a economy ridding itself of bad debts. These unfortunate occurrences would then be used to bolster the leftist line that Trumpism generally, with its America Fist, anti-globalist bent is a proven failure, with a view to then restoring the globalist, politically correct politics it was after all along.

Trump’s messaging  in the face of such an onslaught will have to involve the explicit illustration of our bubble-crash-new bubble cycle, and the framing of our choices as I’ve outlined.

It will be a truly Herculean task, merely because the size of the bubble is such that even the most modest worker will be involved owing to the fact he or she probably has a 401K. It will be difficult for the truism that all long term gains require short term sacrifice to gain traction when that sacrifice comes in the shape of a declining 401K or home price.

Indeed, we live in a culture which has been conditioned to crave instant gratification. The idea of saving and investing, and not seeing the fruits of that saving until years in the future is increasingly an alien concept. To impose a necessary, but painful economic downturn will be potentially suicidal to Trump’s political career, but a necessary component to a sustainable, longer term recovery.

It is because of this that there will be a strong temptation for Trump to do as his predecessors did, and to try and restart the bubble machine. However, as I’ve made clear here, it is the wrong answer. As I’ve mentioned before, I suspect that Trump does know the right answer. Indeed, his campaign was centered on having the ‘right answers’ in other areas such as immigration and foreign policy.

In these arenas his anti-status quo approach is correct. The same is true of the economy, and more specifically the debt driven consumer spending model of growth that currently drives it. That is the status quo. That has led to failure. That needs to go. Trump’s task, if he really is to go down as a great president, will be to destroy the bubble-crash-bubble paradigm and free an US economic machine, now running on savings and investment instead of cheap credit, to start once again, all the while holding the hand of a skittish public through the transition.

More On Old Media Bias

In ‘On Media Bias,’ I wrote the following:

Bias is a part of humanity, and there really isn’t anything wrong with it. Anyone who reads the stuff I write will know where I stand. I don’t hide anything. Even if you hate things like free markets, Western Civilization, the gold standard, traditional American values, and Donald Trump, you can’t be annoyed with me personally because I do not hide the fact that I support these things and tailor my words accordingly.

 

What people don’t like is duplicity. And for decades now, the mainstream media has been guilty of it in spades. This is because it (by ‘it’ I mean the collective of ABC, NBC, CBS, CNN and even Fox News, as well as the New York Times, Washington Post and numerous other major papers) purports itself to be objective actors who merely act as sieves, filtering the torrent of news that comes out in a particular time frame into the most pure elements.

In the past few days, Liz Spayd, public editor of the New York Times, has come under fire from those in the leftist old media, merely because she veered into the land of objectivity, which organizations such as the NYT hold themselves out to be. Brian Stelter of CNN implored is fellow journalists on TV to refer to Trump as an authoritarian strongman. Time magazine awarded Trump the ‘Person of the Year,’ but just couldn’t graciously give him the honor without adding some snark in the subheading, calling him the ‘President of the Divided States of America,’ as though he did the dividing as opposed to merely exposing existing divisions:

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The old media has been exposed bare during this election cycle, and they are showing no signs of learning from what happened.

The Spayd saga started when she went on Tucker Carlson’s show on Fox News to discuss a few tweets by NYT reporters which Carlson felt to be unbecoming:

Carlson’s point was that most of those journalists had no business injecting their personal criticisms of Donald Trump into the discussion via their tweeting if they still wanted to be called journalists. He spoke in tougher terms, naturally, but Spayd didn’t necessarily disagree with Carlson’s overall point.

To be sure, some of the tweets in question were rather tame, but a couple of the examples Carlson brought up were instructive:

Those tweets, as Carlson points out, give the impression that the media did its job by actively trying to keep Trump from getting elected, but failed because the pesky electorate wanted what they wanted. This is particularly true of Barbaro, who tried oh so hard to craft a narrative of Trump as Sexual Predator, with two major hit pieces in the NYT over the course of the campaign.

Spayd has been castigated for somewhat agreeing with Carlson’s point that there should be some semblance of objectivity in news reporting, especially when it comes to organizations with prestigious names, such as the NYT. Some suggested she should resign, and others suggested she was a disgrace.

That backlash is telling, in that it seems that for some of these leftist old media types, objectivity is potentially an antiquated thing in 2016. The NYT themselves famously struggled with this issue over the summer. The problem for the old media is that a push away from objectivity in the face of an adversary they don’t like is only going to backfire. Consider Brian Stelter’s assertion this weekend that the media should explicitly refer to Trump as an authoritarian strongman, and to ‘start using those words on TV.’

Stelter bemoans the fact that in authoritarian countries, the first thing a strongman does is to de-legitimize the press. While this is true, Stelter doesn’t realize that his position on Trump is what is doing the de-legitimizing, in that he is, and has been subscribing to the ‘Trump is literally Hitler’ argument for a year now, merely because he disagrees vehemently with Trump’s views.

In the article that accompanied the announcement of Trump as Time Person of The Year, while accurately describing the Trump phenomenon in some parts, was chock full of passages such as this:

His rhetoric had in fact opened up a new public square, where racists and misogynists could boast of their views and claim themselves validated. And to further enrage many Americans, Trump regularly peddled falsehoods, without offering any evidence, and then refused to back down from his claims. He promised to sue the dozen women who came forward to say they had been sexually mistreated by him over the years. He said he might not accept the outcome of the election if it did not go his way. He described a crime wave gripping the country based on a selective reading of statistics.

Rich, considering the Exhibit A of Trump’s ‘racism’ was the fact that in his announcement speech he ‘called Mexicans rapists, murderers and drug peddlers,’ which is only true through a ‘selective reading’ of what Trump said in full, in addition to erroneously thinking that ‘Mexican’ is a race.

As I’ve mentioned before, there is nothing wrong with bias, we all are biased to some degree. I don’t think reporters such as Stelter or Barbaro should be blamed for being biased. But what they do is ascribe an air of objectivity to what is really subjective bias, such that anything that opposes that is conspiracy, or more fashionably, ‘fake news.’

In constructing that paradigm, and then treating those who then disagree with it as thought criminals and worse, the old media is behaving like the authoritarians they accuse Trump of being, while painting the part of the public which doesn’t share their views into a corner. The fact that Stelter’s show is called ‘Reliable Sources’ is a bit of irony that underlines this point.

When disagreement is a social crime, dissidents are going to retreat into the underground and build its own resistance. This is what the alternative media is all about. The objectivity void created by the old media will be filled by others who are equally biased, but simply represent the other side of the argument. And given the old media’s side has shown to have bankrupt messaging, that other argument will become more and more attractive.

On the Carrier Deal

Last week, President Elect Donald Trump signaled his intent to follow through on his campaign promises when he personally intervened in a situation in which would have seen over 1000 manufacturing jobs move to Mexico from Indiana. Carrier, the business in question had planned to move those jobs and announced that the plant would be shut down in February. It became a campaign issue right after that, as Trump latched onto it, citing that specific deal as a symptom of the overall multi-decade problem of manufacturing being gutted in America.

Over the Thanksgiving festivities, Trump took to Twitter to note that a deal was being discussed:

Then a few days later, when it was completed Trump announced that he was going to visit the plant to meet the workers, as part of a ‘Thank You’ tour:

While the move clearly had a ton of political symbolism attached to it, it was a functional reminder of the Trump Doctrine, as it pertains to the economy, jobs and trade. It was a symbol that represents the Trump’s ‘America First’ outlook that he campaigned on.

The whole situation has been met with scorn from commentators on both the left and the Principled Right. From the left, the charge has been that United Technologies, the parent company of Carrier, was enticed to keep the jobs through a smattering of tax cuts and a promise of a more favorable regulatory situation. This was outlined by Bernie Sanders in a Washington Post op-ed.

The specific charge Sanders and others make is that Trump is flip flopping by giving ‘concessions’ to Carrier when he ran on being tough on corporations who send jobs overseas. In particular, Sanders says that Trump promised to levy a tax on these businesses, and here he is actually giving Carrier a tax cut.

This is yet another willful misinterpretation of something Trump does/said that has been a feature of leftist vituperations for 18 months now. During the campaign, Trump spoke of levying a ‘tax’ (tariff) on goods of companies which moved their jobs out of the country. That is a conditional statement. Carrier agreed to keep jobs in the country, and as such are not going to be subject to any additional ‘tax’ on their goods.

Furthermore, the reason for the about face isn’t cause for outrage. All reports indicate that Carrier was to receive a $7 million tax break over 10 years,or $700,000 per year. As Eric Bolling points out, the amount generated by state in taxes from the 1000 plus jobs that will remain far exceeds the amount in tax breaks for Carrier:

This is not to mention the amount of taxpayer money that won’t be spent on welfare for potentially 1000 people and their families.

During the statement Trump made at the Carrier plant, he indicated that his presidency would create a great environment for companies such that they wouldn’t want to leave:

But also, I just want to let all of the other companies know that we’re going to do great things for business. There’s no reason for them to leave anymore because your taxes are going to be at the very, very low end, and your unnecessary regulations are going to be gone.

 

We need regulations for safety and environment and things. But most of the regulations are nonsense — become a major industry, the writing of regulations. And that these companies aren’t going to be leaving anymore. They’re not going to be taking people’s hearts out. They’re not going to be announcing, like they did at Carrier, that they’re closing up and they’re moving to Mexico — over 1,100 jobs.

He cited the fact that during his travels campaigning, the one thing he kept hearing from businesses was that the poor regulatory state was their number one concern. Indeed, the average cost of regulations for a manufacturers was about $20,000 per employee. The Carrier plant specifically was under the burden of 53 new regulations in the last few years, which ultimately had made doing business in America unprofitable. This is why businesses are leaving America, and Trump has vowed to change that, by lowering taxes and massively scaling back regulations.

Many are failing to understand that this Carrier deal is a symbol of what will happen across the business community in a Trump presidency. It is not that Trump will get on the phone with every CEO in America and cut individual deals – of course that is unfeasible. It is that the basics of the deal – the government allowing a business to keep more of the money it earns while not being burdened by onerous regulations – is a generous enough ‘offer’ from the government to business in America such that they will want to keep their operations in the country on their own. That is the point.

Justin Wolfers, a leftist economist, also missed the point when he described this deal as Trump interfering with the natural churn of the economy, in that it creates and destroys jobs on a regular basis:

But the Carrier case also illustrates a larger point about how the economy works. In Mr. Trump’s telling, the economy is a fixed set of jobs getting shifted around a global chess board. Mexico’s loss is our gain and vice versa.

But you should think of the economy as being in a state of constant churn. The economist Joseph Schumpeter used the now-famous phrase “creative destruction” to describe this process by which new firms push out the old. The result can be cruel, but an extraordinarily fluid labor market, many economists argue, is the secret of American dynamism.

For a start, this deal was not about destroying jobs. These jobs were not being destroyed, but moved to another country. These jobs are not obsolete in the context of a modern economy. They were moving because they could have been done more efficiently elsewhere. The key is that the relative inefficiencies of staying in Indiana were totally self-wrought as opposed to being fundamental in nature. Removing those inefficiencies should really be no big deal, but for government it has been.

Furthermore, it is really rich to see an economist like Wolfers cite Schumpeter’s creative destruction. Economists of his ilk decry the phenomenon when it is correctly applied to our bubble economy as a whole. Many, such as myself have called for the American economy to shed its reliance on unstable bubbles and to move towards a more robust economy infused by the dynamism Schumpeter’s of creative destruction concept.

This involves the ‘destruction’ of the bubbles of yore, and thus necessary declines in asset prices, and debt levels, along with substantial increases in interest rates. That is beyond the pale for economists such as Wolfers who think that falling prices are the worst possible thing to happen to an economy.

Back to Carrier, many of the Principled Conservatives on the right are having big problems with the image of a specific company dealing with the government on a one on one basis in this manner. This group of critics (also some leftists, with a sudden reverence for Adam Smith) have slammed Trump for being anti-free market, dictating to individual businesses how to run their companies.

The first response is that in reducing taxes and regulations, Trump is actually moving towards a free market, not away from one. The ‘deal’ Trump is offering is not ‘Stay here, and be subject to high taxes and high regulations or face huge tariff,’ but ‘Stay here, we’re going to lower your taxes and regulatory burdens, but if you want to go anyway, you’ll be subject to a tariff.’

The latter option is a far superior one, despite its protectionist bent. I’m not a hardcore protectionist per se, I do recognize that tariffs are an effective tax, and they are not necessarily a free market construct. But tariffs are superior to a higher income tax, corporate tax and higher regulatory burden. Income and corporate taxes accrue to the government, while a tariff accrues to a protected class of business. The tariff influences behavior, but to a much lesser degree than do income taxes. In my view, the trade off for isolated tariffs for lower income taxes and regulation is a net positive.

Secondly, this specific deal has an element which hasn’t been discussed much – the Military Industrial complex. It has been speculated that Trump threatened the lucrative government contracts that United Technology has with the US government. These sort of contracts, and the existence of the MIC generally are a negative to anyone who of a free market mindset. Over the past 5 or 6 decades these sort of webs have been slowly built and expanded upon to the extent that corporate welfare is a very big problem.

The length of time over which this situation has developed means that untangling them isn’t going to be a quick thing. We aren’t going from a Corporatist attempt at Social Democracy to a free wheeling free market overnight. In (possibly) threatening United Technologies in this manner, Trump has done a very pro-market thing. He (possibly) used a feature of the corporatist landscape as leverage to benefit ordinary Americans.

That same dynamic applies to the arguments over the tariff question. The Principled Conservative argument of free trade listens well, but the reality is that multinational trade agreements such as NAFTA and TPP are not examples of free trade. Republicans and Principled Conservatives always argue against tariffs in that they are ‘regulated’ trade, yet thousand page bills written by politicians and special interests are apparently ‘free trade.’ Real free trade requires no agreements, no legislation, nothing. What we already have is far from free trade. So let’s mold it in our favor. Ideally this landscape would not exist, but when life gives you lemons, make lemonade.

 

Takeaways From the Third Debate

Here’s how I saw it:

Trump Won On Points, Clinton Won on Feels:

Trump was able to strike a happy medium between the first debate in which he was rather incoherent and defensive, and the second debate when he was on point but extremely aggressive. In the third debate, he was more ‘presidential,’ whatever that means. One of his biggest problems to date has been the fact that the uninitiated voter thinks he’s a crazy madman, so he had to convince those viewers that he could withstand attacks without blowing up. He did that, avoiding getting too deep into the weeds on side issues and was able to get a lot of points across firmly and effectively.

He was able to put Clinton on the defensive on several issues, such as the fact that she takes donations to the Clinton Foundation from countries like Saudi Arabia, which throws gays from rooftops and treat women poorly. He also brought up the James O’Keefe video in which DNC operatives were bragging about how they paid people to incite violence at Trump rallies. Clinton’s ‘dream’ of an open border for the hemisphere, as revealed through Wikileaks was also brought up.

In each instance, Clinton had no answer. She pivoted to blaming Russia, or outright ignoring the issue brought up. Her main avenue for scoring points on the night was through emotion. She tried it with abortion, with the typical politician tactic of telling a tale of how some random person from the campaign trail just happened to personify exactly the point wished to be made. She tried it with the use of the THINK OF THE CHILDREN angle with respect to both guns and Syria, and finally with the ‘this is not who we are’ cliche with respect to Trump’s supposed misogyny.

It listens well, but in the end it’s tired. Trump was able to bring new arguments into the fray which both bolstered his case and the case against Hillary Clinton. It still remains to be seen whether the public will see through the emotional manipulation of Clinton, however effective it may be in the moment.

Trump’s ‘Refusal’ to Accept the Result of The Election

Chris Wallace asked Trump (and not Clinton) whether he would accept the result of the election. He was also asked of it by Lester Holt at the first debate. This is a bit curious for reasons I’ll get into later. But Trump’s response is getting most of the play in the mainstream media today (H/T ZeroHedge):cvlboygxyaedl3s debate-4 debate-5 debate-1 debate-3

The media has gone apoplectic over the fact that Trump said that he’d keep us in ‘suspense,’ about how he would respond to the election results. Plenty of words were written and spoken last night about the GRAVE DAMAGE TRUMP HAD DONE TO A SANCTIMONIOUS PILLAR OF OUR 240 YEAR OLD REPUBLIC.

For a start such hyperbole and spewing of platitudes is hypocritical given the allegations that George Bush had stolen the 2000 and 2004 elections, which came from the same people who are today lambasting Trump. It was enough to make Joe Scarborough, hardly Trump’s greatest fan, laugh at the latest faux outrage:

The latest response to the ‘but Gore!’ argument from the left is now something along the lines of ‘but he accepted it!’ Yes, a month later, after it was brought to the Supreme Court. Why shouldn’t Trump be afforded that same level of skepticism if something fishy happens on election night?

That brings me to my next point, which is the James O’Keefe videos. In the last two weeks, the same leftists who are today extolling the virtues of American democracy and the sanctity of our free and fair elections have been caught on camera admitting that voter fraud is rampant, explaining step by step in detail how to perpetrate voter fraud without getting caught, and describing how to subvert democracy by inciting violence at opposition political rallies.

Robert Creamer, one of those involved in organizing those efforts, visited the White House over 340 times during President Obama’s two terms, according to White House records. Both Creamer, and Scott Foval, another one of the head honchos profiled in the O’Keefe videos, stepped down from their positions after they were exposed, a move that confirms the egregious nature of what is shown on the tapes.

In a sane world, there would be a massive investigation and this would be one of the political stories of the year. But who would look into it? The same Department of Justice which is headed by an Attorney General who secretly met with Bill Clinton in an airplane, days before a ruling was to be reached on whether his wife was to face charges? The same FBI which is headed by a Director who then verbally declared she had committed a crime but also stated there was no case? I doubt it.

The mere fact that Clinton is running for an office with the highest security clearance in the land, after provably mishandling classified information in a prior position in govenment, thus disqualifying her from access to such information ever again, is mind boggling. But thanks to the media, the DOJ and the FBI, the public has been conditioned to accept Clinton as a legitimate candidate.

In a similar vein, the constant media pushback of Trump’s assertions that the system is rigged (despite scores of prominent Democrats saying the same thing for years), and the watery-eyed appeals to the history of our 240 year Republic and its pristine elections, are potentially conditioning the public to accept what might ultimately be an illegitimate election result.

It’s not a stretch for Trump to be wary of shenanigans on election night, given everything discussed here, in addition the vociferous objections to things like voter ID and the removal of the dead from voter rolls, when the only conceivable objections to either of those things would be to commit fraud. As Scaborough said, those opposing Trump on this can bathe in the hypocrisy.

A Hillary Clinton Presidency = War With Russia

This is perhaps the most chilling, and important takeaway from the night, but it might get lost in the shuffle given the media hysteria discussed above.

The proxy war in Syria between the US and Russia has escalated in recent weeks and months, and last night Hillary Clinton reiterated her desire to impose a no-fly zone over the area, to ‘hasten the end of the conflict.’

This is in opposition to President Obama, who feels that such a move would entangle us deeper into the region, and in the face of concerns from Marine Corps General Joseph Dunford, chairman of the Joint Chiefs of Staff, who said that a no fly zone would mean war with Russia:

This was how Clinton outlined her support for the no fly zone:

A few things: Clinton noted her awareness of the ‘legitimate concerns’ of the President and the General Dunford. In fact as far back as 2013, she understood the fact that imposing a no-fly zone would create all sorts of problems and cause the deaths of scores of civilians. We know this, thanks to a Wikileaks release of her transcripts to Wall Street bankers (see page 66). Back in 2013, she said this, relating to a Syrian no-fly zone:

So we’re not as good as we used to be, but we still — we can still deliver, and we should have in my view been trying to do that so we would have better insight. But the idea that we would have like a no fly zone— Syria, of course, did have when it started the fourth biggest Army in the world. It had very sophisticated air defense systems. They’re getting more sophisticated thanks to Russian imports. To have a no fly zone you have to take out all of the air defense, many of which are located in populated areas. So our missiles, even if they are standoff missiles so we’re not putting our pilots at risk—you’re going to kill a lot of Syrians. So all of a sudden this intervention that people talk about so glibly becomes an American and NATO involvement where you take a lot of civilians. [ Speech to Goldman Sachs, 2013 IBD Ceo Annual Conference, 6/4/13]
So Hillary Clinton wants to do something – which by her admission requires at the very least the killing of ‘a lot of Syrians’ – in order to save lives.  She took the nonsensical logic a step further in that clip when she spoke of the refugees which are being displaced as a result of this civil war (which she started), and how she couldn’t just stand by watching as people got slaughtered:
I am not going to slam the door on women and children. That picture of that little 4 year boy in Aleppo, with the blood coming down his face, while he sat in an ambulance, is haunting.
Clinton is, in effect, justifying war with Russia, a nuclear power because of a humanitarian crisis created by US involvement which she led, and is using dead children as an emotional impetus to do it. Truly disturbing.

Furthermore, she believes a no fly zone, the establishment of which would lead to war, would then lead to diplomacy in which a deal could be struck. Even if this were true, how could one trust the bargaining skills of Clinton given her tenure at the State Department and her consistent failures in diplomacy with respect to the Russian reset, Libya, Egypt and more?

In the end, a vote for Clinton is a vote for war, potentially of the nuclear variety. It is shaping up to be just that simple. I’ll refer you back to the video above of General Dunford’s hearing. After he declares that a no-fly zone is tantamount to war, leaving the room in a momentary stunned silence, Senator John McCain can be heard grumbling in the background. He then takes over the discussion and angrily guilt trips Dunford for honestly answering the question he was asked, saying:

No, what he asked was should we have a no fly zone so we can protect these people form being slaughtered. That’s what he’s talking about, that’s what we’re all talking about.
Dunford immediately backs down and almost apologetically says that maybe we wouldn’t have to go to war after all. But the annoyance which McCain showed at the original answer was telling. It was as though he was upset that the real consequence of establishing a no fly zone was mentioned, by such an authoritative figure on the matter so as to leave no doubt. Note how he glibly knocks away such concerns about the no fly zone by enveloping it in humanitarian concerns, just as Clinton did last night.

It is thus ironic that Clinton has such support from leftists, despite her taking the same warmongering position as a notorious neocon warmonger. These are the same leftists who were up in arms during the Bush administration owing to the endless Middle East adventures the US embarked on. Hillary Clinton has done nothing but continue them as Secretary of State, and definitively promised to continue further last night.

Despite the fact these unnecessary adventures could directly result in nuclear war, these same leftists are not only standing behind Clinton, but have the audacity to declare that it is Trump who might get us into a war frivolously.

Clinton’s actual record of promoting just that, frivolous war, is apparently meaningless, because Donald Trump says mean things sometimes. It truly is a clown world we live in.

Final Thought

Not really a huge takeaway, but I was wrong in my debate preview about Chris Wallace. He did a good job last night, particularly compared to the moderators in the other debates. He was fair to both sides, and equally tough, which made for a substantive debate.

How this will play out on election night is to be seen, but from where I sit, the dynamic of the election is as follows: Trump is seemingly wearing a clown suit and speaking with helium gas, but what his actual words amount to the fact that two plus two is equal to four. Clinton speaks with professorial calmness and assuredness, but does so in relaying the argument that two plus two is equal to twenty-two.

It is up to the electorate to note this, and act accordingly.

The Great Unmasking

Last month, Donald Trump caused a stir in the economic world, with his analysis of the Federal Reserve and its monetary policy during an interview he did with CNBC.

In it, he was adamant that the zero interest rate policy of the Federal Reserve had created a ‘false stock market.’ This was after last week, in which he had said that the interest rate policy had created a ‘false economy.’ His reasoning for both was that the decisions were political in nature.

According to Trump, Janet Yellen, the Federal Reserve Chair, was embarking on these policies in order to help President Obama, in order to make sure he ends his term with a positive economy.

Politics aside, the administration, and most left leaning economists have quick to point to the job numbers as a sign of the recovering health of the economy. The fact that the stock market has made fresh all time highs in 2016 has been used to tout the strength of the business community and commerce. Indeed, at a campaign rally last month, President Obama vociferously patted himself on the back for an economic job well done:

Janet Yellen, during her remarks explaining the Federal Reserve’s interest rate decision on September 21, painted a rosy picture of the economy, repeatedly citing the employment figures along with household income increases as evidence.

It is my view that these data points – mainly the employment data, and the performance of the broad stock markets – are merely masks which give the perception of strength and improvement, while concealing a deteriorating reality underneath.

The Labor Market Mask

Let’s look at the employment data.

While it is true that the unemployment rate has come down to 5%, from about 10%:

Part of that is because the labor force participation rate has declined throughout President Obama’s tenure and is at multi-decade lows:

labor-force-participation-rate

With a ‘normal’ labor force participation,  the unemployment rate would be much higher, at least 10%.

The problem isn’t just with the totality of the workforce and the employment rate, but with the types of jobs which are being created in this economy, and who is filling them. Even a cursory look at the below surface trend reveals some problems.

The following is a breakdown of the labor force participation rate by age group: (Credit to the excellent Doug Short, who is a tremendous resource with his charting)

labor-force-participation-by-age

The following chart shows the breakdown in cumulative job gains for prime age workers versus those over 55, from 2007 through August 2016:

jobs-old-vs-young

The following chart shows the cumulative gains in the food and hospitality industry versus manufacturing:

water-bartender-mfg-workers

These charts show that the labor force is getting older, and the jobs that are being created are mostly of lower quality, in terms of goods producing. The bartenders vs manufacturing chart is somewhat tongue in cheek, but it does highlight the fact that most of the jobs that are being created are in the service sector, which are less paying jobs. The jobs that are being lost are the higher paying goods producing jobs.

Also concerning is he fact that the jobs data for September 2016 showed an increase in part time jobs of 430,000, compared to a loss in full time jobs of 5,000. In addition, there was a spike in the amount of individuals who hold multiple jobs of roughly 300,000, from 7.5 million to 7.8 million. The following two charts highlight these developments:

part-vs-full multiple-oct

Put it all together, and what we have is an economy which appears to be creating low paying jobs, which are being filled by people who may already have jobs, but need second and third jobs. Or, individuals who were laid off from a full time job, and are replacing it with multiple part time jobs, at lower pay.

Regardless, these are not signs of a robust economy, and those who point to headlines touting ‘X million jobs created since the recovery’ are being duped by an attractive mask that hides a horror show.

The Asset Price Mask

But what about the stock market? Isn’t it at all time highs?

It is, but masks are present here as well. Namely, the Federal Reserve. For nearly 8 years, the Federal Reserve has been engaged in unprecedented levels of monetary accommodation, with the Federal Funds rate resting at 0% until the most modest of raises in December 2015.

That raise was supposed to be the start of an easing cycle, which many experts predicted would result in four rate hikes for 2016. However, the stock market subsequently began 2016 with the worst start in the history of the stock market. This prompted an abrupt about face from the Fed, and then the ‘experts,’ with respect to the rate hiking schedule. Four rate hikes became two, and two became one, and as of this writing there is talk that there will be none at all.

That 12% stock market sell off in the first three weeks of 2016, on the back of the Fed raising rates for the first time in 7 years, from 0% to a negligible 0.25%, is indicative of the whole story: This market lives by the Fed and dies by the Fed. Some, myself among them, would call that a bubble.

The Fed’s persistence in keeping interest rates as low as possible is ultimately rooted in its flawed belief that elevated asset prices are the key to prosperity. Consider Ben Bernanke’s 2010 explanation of accommodative monetary policy and its intended result, the ignition of the ‘wealth effect.’

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate this additional action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

This is a description of an economic growth model that starts with the Fed lowering interest rates, pumping money into the economy, continues with various actors in the economy increasing their borrowing, and ends in them buying assets, which increase their prices, emboldening the owners of those assets to further spend or take on more debt as a result of their increased ‘collateral.’

The hope Bernanke and all Keynesian influenced central bankers had, and still have, is that this process continues and feeds on itself, a phenomenon known as the ‘virtuous cycle.’

Indeed, the Federal Reserve has accomplished this, expanding its balance sheet from roughly $800 billion in 2008 to roughly $4.5 trillion today:

fredgraph-2

Which has led to skyrocketing corporate debt:

fredgraph-3

Which has, in part, led to a substantial rise in the S&P 500, which I will use as a proxy for ‘asset prices’:

fredgraph-4

The problem with this, the Fed’s preferred model for growth, is that continued asset price increases rely on ever expanding debt, to provide the impetus to buy. It is a simple fact that debt cannot expand in perpetuity. It is limited by the ability to service that debt, which is in turn limited by the productive capacity of the borrower in question.

With respect to corporate borrowers, that productive capacity is seen in earnings. If corporates can produce increasing earnings, they can sustain larger debt loads, which justifies the higher debt-induced prices. The following chart, of the S&P 500 index compared with earnings of the companies in that index, tells an interesting tale:

spx-earnings-vs-stock-index-price-1

In short, the continued rise in stock prices are not justified based on the diminishing productive capacity of the companies themselves. A reason for this diminished capacity is general weakness in the economy itself, evidenced by the labor market situation which was discussed earlier.

An economy in which more and more people are working multiple lower paying part time service jobs instead of higher paying full time goods producing jobs is going to be an economy in which fewer and fewer people have incomes which allow them to spend freely. These household budgets are further constricted when taking into account the fact that the Fed is trying to engineer prices higher, so as to kick start the ‘virtuous cycle’ of the ‘wealth effect.’

The math just doesn’t work. Rigid incomes lead to constrained household budgets, which do not lend themselves to increased spending at higher price points, nor do they lend themselves to increasing borrowing to spend at higher price points.

Despite this roadblock, share prices continue to remain elevated, because the continued low interest rate environment established by the Fed enables corporates to take up the burden of spending. They can borrow at record low rates, and buy back stock. Or, other investors, banks, foreign central banks and others can borrow at low rates, in order to buy elevated stock prices. The rationale here is less a belief in a prospective restoration of business fundamentals, and more in a belief that buyers will buy for the sake of buying, rendering elevated prices becoming even more elevated.

Even the Fed is worried about the developments they have created:

In the minutes of the Fed’s September meeting, released this week,some officials “expressed concern that the protracted period of very low interest rates might be encouraging excessive borrowing and increased leverage in the nonfinancial corporate sector.”

 

Despite these worries, investors continue to demand corporate debt, helping fuel a years-long rip-roaring rally in corporate credit that shows few signs of stopping. Corporate bond issuance this year is set to total $1.5 trillion, nudging past last year’s tally, according to the credit strategists at HSBC, led by Edward Marrinan. Issuance of high-grade debt is expect hit [sic] another record high this year.

 

It’s all a sign that, in the words of the bank’s strategists, “Market participants seem to be downplaying—or looking past—the risks associated with the steady deterioration in the credit fundamentals of the US corporate sector,” such as rising leverage, contracting earnings, and stressed revenues.

 

After the financial crisis, many companies focused on rebuilding their balance sheets to withstand another shock. But as the prolonged period of low interest rates continued, cheap borrowing costs prompted, well, more borrowing. Much of that went to fund shareholder-friendly activities like dividend increases and share buybacks. It also funded big mergers and acqusitions.

Emphasis mine. The preponderance of ‘shareholder-friendly activities,’ not least of which being the explosion of asset prices themselves, looks very good on the surface. Indeed, many law makers, academics, and market cheerleaders (such as President Obama) have been in a celebratory mood over the last few years, boldly declaring that the Federal Reserve’s actions had worked.

However, the divergence described by the WSJ – that the Fed itself worries about – between elevated asset prices and the fundamental deterioration of those prices is real, and cannot persist in perpetuity.

Removing the Mask

Deteriorating fundamentals cannot support the further debt burdens that are required to keep asset prices rising even further beyond these levels. And the Fed knows it. This is why they abandoned the original plan for multiple rate hikes in 2016, as that would have slowed down borrowing and thus slowed down the impetus for asset price increases.

In this manner, the market going from four expected rate hikes to now one or zero rate hikes is an effective rate cut. This is what the Fed has been relegated to, sitting on its hands and hoping a miracle happens. If they are proactive in doing anything more accommodative, such as another round of QE, they will put themselves in an untenable position. They can’t on one hand tout the robustness of the economy  yet embark on further emergency policies, such as QE would be. The situation would be exposed for all but the most die-hard believers in the Fed.

Regardless of their games, or ‘forward guidance’ as they would call it, reality will assert itself at some stage. The mask will eventually come off. How exactly it will happen is uncertain. But this situation has happened several times before in financial history. There is no escaping a scenario in which too much debt has been taken on relative to the ability to service it. All the Federal Reserve (and central banking in general) can accomplish is to push the date of reckoning out into the future. But even that does damage.

The current boom/bust episode is merely the latest in a 40 plus year credit binge following the ending of the gold standard in 1971. This has eventually led to constantly rising asset prices, which fooled the majority of the public into eschewing the idea of accumulating real savings.

Most used their home or 401k as their savings account. This was fine as long as the stock and housing markets kept rising, which they did, temporary bear market corrections notwithstanding. That all changed in 2008, when the bubble burst in earnest, and asset prices crashed.

This resulted in mass layoffs, but more importantly, many who had counted on elevated real estate and stock prices for retirement were now out in the cold, just at the moment they were ready to retire. This meant they were forced to return to the labor market, because they had built up no real savings over the preceding decades. This explains the surge in labor force participation for the over 55 segment, discussed earlier.

The under 55s have struggled to regain a foothold during this latest ‘recovery,’ still being several million jobs underwater from where they began the Great Recession. Some of this is down to competition from the over 55 workers, who flooded the market. Many of them, closed off from their former occupations, went into parts of the market usually populated by younger workers. Hence the proverbial ‘Wal-Mart Greeter.’

That position really should be filled by a 16 year old kid, working his first job and acquiring the basic skills involved with employment. Instead, the position is filled by a 60 year old who is working one of his last jobs because he didn’t accumulate savings during most of his productive years.

This phenomenon doesn’t bode well for the economy as a whole going forward. When you have an economy which is severely under-employing those who are in their peak earning years, not only is the economy not going to be moving as robustly as it should, but in the future, as those workers persist with decades of under-employment, they too will have to encroach on future younger generations as they try to get their careers off the ground. Multiple generations impaired at once.

And therein lies one of the ultimate problems with central banking, played out over decades. It, like most of government, prioritizes political expedience over longer term sustainability, papering over the cracks instead of repairing them, thus consigning the ultimate costs to be dealt with in the future.

In this greater sense, reality will assert itself here as well. The exponential increase in debt and increases in money supply papering over business cycle after business cycle can only end in a currency crisis, as it has done many times in the past. One can only hope we correct course before such an event occurs.

On Media Bias

Bias is a part of humanity, and there really isn’t anything wrong with it. Anyone who reads the stuff I write will know where I stand. I don’t hide anything. Even if you hate things like free markets, Western Civilization, the gold standard, traditional American values, and Donald Trump, you can’t be annoyed with me personally because I do not hide the fact that I support these things and tailor my words accordingly.

What people don’t like is duplicity. And for decades now, the mainstream media has been guilty of it in spades. This is because it (by ‘it’ I mean the collective of ABC, NBC, CBS, CNN and even Fox News, as well as the New York Times, Washington Post and numerous other major papers) purports itself to be objective actors who merely act as sieves, filtering the torrent of news that comes out in a particular time frame into the most pure elements.

Consider this. The average Donald Trump rally goes on for something like 60 to 90 minutes. Your average news segment runs 2-3 minutes, which includes a description of the context in which whatever rally that is being reported on is taking place in. This means that at most, 30 seconds or so of actual footage of the rally will be used in the report.

30 seconds, which is 0.8% of the rally, is what will be presented to the public as representative of that rally. So which 0.8% will be used? Will it be a substantive 0.8%, in which Trump discusses the perilous economy, or the poor trade situation, or the fact that the status quo has failed us, or the deleterious effects of Obamacare, topics he discusses in every rally? Or will a 0.8% of the rally in which he makes an off color remark, or trashes the media, or speaks disparagingly of a third party, be chosen to be presented to the public?

That decision is a matter of bias.

And the media has overwhelmingly favored the latter. It makes sense; the more ‘explosive’ elements of the Trump rhetoric makes for good TV, increased ratings and all the rest of it. It also enables blowhard pundits the space to excoriate Trump for ‘failing to stick to the issues,’ as they declare his candidacy dead on a nightly basis.

Karl Rove did exactly this on Friday night. He was on the O’Reilly Factor, which I had on in the background and he cited the recent declaration by Minnesota that Obamacare was no longer affordable in his state. He went on to wail about OH MY DAYS WHY ISN’T TRUMP HAMMERING THIS INSTEAD OF TALKING ABOUT SEX SCANDALS THIS IS WHY HE IS GOING TO LOSE!

Rove must have missed Trump making that exact Obamacare point 24 hours prior, to his 12 million Twitter followers.

He must have missed Trump bringing it up in all of his rallies over the last few days. This is par for the course for the media coverage of Trump. They’ll take a quip about ‘second amendment people’ here, and a tweet about Alicia Machado there, and spin it into the idea that Trump spends 90 minutes talking to the tens of thousands at his rallies about nothing other than these side topics.

And the media wonders why it is so disliked.

But it goes far beyond this. The entirety of the mainstream news media has been against Donald Trump’s candidacy since the start, with the exception of a handful of personalities on Fox News. This is because Trump’s campaign represents a real challenge to the status quo, which the media is a part of.

Republicans in general receive less than favorable coverage from the press, but Trump has been on the receiving end of an intense all out blitz.

Since the conventions alone, the media has overblown ‘scandals’ such as the Khan family fiasco, the ‘second amendment people’ comment, Trump’s ‘dark’ convention speech, ‘Babygate,’ joking about Russia being involved in finding Clinton’s emails and more. Not to mention the Judge Curiel drama, the NYT story in May about Trump’s behavior regarding women, and the release of 3 pages of his 1995 tax release.

All of these episodes have been played up to ‘confirm’ the media’s preconceived notion that Trump is racist, sexist, homophobic, Islamophobic, xenophobic and generally unhinged. These sagas were given wall to wall coverage on cable news networks, replete with panels of 6 and 7 pundits to go over every last syllable Trump uttered, and in what intonation, so as to properly understand the level of bigotry therein.

Despite all of that huffing and puffing, none of it really worked. Trump stayed in the game, and was even thriving, when most GOP candidates would have folded at even one of these many ‘scandals.’

The ante had to be raised, and the media was ready to oblige. At the end of the first presidential debate, Clinton brought up Alicia Machado, former Miss Universe winner, in an attempt to put a face to the ‘Trump is a Sexist’ talking point. It was buttressed by glossy puff pieces in several outlets, and a tour of interviews for Machado across the major networks.

A cursory dig into the idea of Machado as an avatar for Trump’s ‘sexism’ blew the whole thing apart: Trump was nothing but gracious to Machado in what was a difficult time for her, and it was he who saved her job. The allegations that Trump’s ‘abuse’ led to her having an eating disorder was proven false when it was discovered that prior to having even met Trump, she had been quoted talking about dealing with those struggles. And this is all before any mention of her extremely seedy past, which includes drug lords, murder, and judge intimidation.

Yet when Trump, who was 100% in the right, merely defended himself from the allegations strewn at him by the Clinton campaign, the media turned around and portrayed him as some sort of crazy man who stays up all night plotting to eviscerate poor helpless Hispanic women he doesn’t like.

These sniveling, underhanded tactics are why the media is so disliked, and now outright hated by many in the public. The media seems to expect a one way street when it comes to their relations with anyone: they dish out the abuse, and the recipient is expected to stand there and take it, and even be grateful for the attention. That Trump refuses to sit there and take it seemingly vexes the media. Already being used to bullying Republicans, Trump’s resistance been met with blatant hostility dripping with contempt from some quarters of the media.

Yet, they still proclaim objectivity.

This dynamic has escalated in the past few days, after Trump spoke at length about the media and its duplicitous role in this election. He portrayed the media as being part of an establishment, alongside the large corporations, financial institutions and politicians which seeks to rob the US of its sovereignty. The media has gone apoplectic over this speech, immediately inventing dark implications:

Just to make his pedigree clear, Donald Trump is now suggesting that Hillary Clinton “meets in secret with international banks to plot the destruction of U.S. sovereignty, in order to enrich these global financial powers, her special interest friends, and her donors.”

 

What was it the Nazis called the Jews? Oh, yes, “rootless parasites,” that’s it. For Stalin they were rootless cosmopolitans.

 

Just saying.

Despite no mention of Jews in any way, the media has gone into an convulsion, comparing Trump to Hitler and Stalin. Meanwhile, Trump had been referring to this, a release from the recent Wikileaks Dump:

Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets. “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.”  [05162013 Remarks to Banco Itau.doc, p. 28]

What we have there, is Hillary Clinton, meeting behind closed doors with an international bank, discussing her ‘dream’ of a ‘hemispheric common market,’ which would necessarily be the end of American sovereignty economically, which would ostensibly be to the benefit of said international bank to whom she spoke.

In other words, relaying facts is now Antisemitic. And as stated before, to merely challenge the histrionic media in this manner is to invoke despair in the media themselves. Ironically, this reaction only serves to buttress Trump’s point – in feverishly defending the parties involved, they take the side of the establishment.

In general, when attacked, the knee jerk response of the media has been to wrap itself in the First Amendment, blubbering on about how important a free press has been to the fabric of America, and how necessary it is to prevent a tyrannical government.

That is, of course, unless that government is populated with leftists and Marxists of all stripes, as it has been for decades. In this case blatant corruption can be tolerated because to continue to press (heh) on would mean beating a dead horse or perhaps neglecting a different story about the latest mean thing Trump said, which could generate more clicks.

In short, the press is not doing its job, but is instead focusing on the molehills that are Trump’s manufactured scandals, simply because they could favor their preferred candidate. Google search trends tell a different story. It suggests that Wikileaks dwarfs Trump Sex scandals, yet is the latter which dominates media airwaves.


screenshot-from-2016-10-15-10-05-42

This discrepancy, between what the people care about and what the media is covering, should say it all.

Brian Stelter of CNN perhaps best crystallized the reason for growing media antipathy in this reaction he had to the Trump speech from last week:

For a long time, people treated Donald Trump like he was a joke. Right now, it’s a very serious drama. That speech was paranoid and that speech was dangerous. It was a speech driven with hatred. A speech driven with contempt. Railing against bankers, and corporations, and the media, and this grand conspiracy that somehow he has only been able to connect the dots of. It sounded a lot like a dog whistle to a lot of people.

 

If there is violence and unrest after election day, I think we now know why based on the hatred dripping out of that man’s mouth.

Stelter’s words can be taken as representative of most media types. The same media types who have dealt in paranoia as they saw Antisemitic Nazism in Trump’s statement of fact regarding Hillary’s Wall Street speeches. The same media types who never cease to refer to Trump as a bigot, racist and idiotic, defending Clinton’s assertion that his supporters are ‘deplorables,’ mostly uneducated losers. All of this hatred and contempt, for having the temerity to express views in opposition to the status quo.

These are the same media types who have justified violence against Trump and his supporters, and openly talk about purging what Trump represents from America entirely. It seems as though that advice has been taken to heart, as last night a GOP office in North Carolina was firebombed. On the side of a nearby building, the words ‘Nazi Republicans, leave town or else.’

When you spend month after month labeling a man who disagrees with your agenda as Hitler, frames these disagreements as the end of democracy and those who support them as deplorable, such that violence is an acceptable response, we shouldn’t be surprised when we get it. It is Trump supporters whose property is vandalized, and who show Trump support threatened at rallies. Indeed, it is official Democrat policy in some areas to create a ‘psychological environment unfavorable to such displays.’

Yet the media claims it’s Trump with hate and violence ‘dripping’ from his mouth. In short, Stelter, and the media at large are projecting. They have proven themselves to be crybullies, stabbing you in the back before moving to seek damages because they sustained a cut in the process. As such their dramatic protestations of Trump’s ‘chilling’ rhetoric ring hollower and hollower as time goes on.