Streetwise Professor

December 4, 2017

Bitcoin Futures: What? Me Worry?

Filed under: Clearing,Commodities,Derivatives,Economics,Energy,Exchanges,Regulation — The Professor @ 9:53 pm

The biggest news in derivatives world is the impending launch of Bitcoin futures, first by CBOE, then shortly thereafter by CME.

Especially given the virtually free entry into cryptocurrencies I find it virtually impossible to justify the stratospheric price, and how the price has rocketed over the past year. This is especially true given that if cryptocurrencies do indeed begin to erode in a serious way the demand for fiat currencies (and therefore cause inflation in fiat currency terms) central banks and governments will (a) find ways to restrict their use, and (b) introduce their own substitutes. The operational and governance aspects of some cryptocurrencies are also nightmarish, as is their real resource cost (at least for proof-of-work cryptocurrencies like Bitcoin). The slow transaction times and relatively high transaction fees of Bitcoin mean that it sucks as a medium of exchange, especially for retail-sized transactions. And its price volatility relative to fiat currencies–which also means that its price volatility denominated in goods and services is also huge–undermines its utility as a store of value: that utility is based on the ability to convert the putative store into a relatively stable bundle of goods.

So I can find all sorts of reasons for a bearish case, and no plausible one for a bullish case even at substantially lower prices.

If I’m right, BTC is ripe for shorting. Traditional means of shorting (borrowing and selling) are extremely costly, if they are possible at all. As has been demonstrated theoretically and empirically in the academic literature, costly shorting can allow an asset’s price to remain excessively high for an extended period. This could be one thing that supports Bitcoin’s current price.

Thus, the creation of futures contracts that will make it easier to short–and make the cost of shorting effectively the same as the cost of buying–should be bearish for Bitcoin. Which is why I said this in Bloomberg today:

“The futures reduce the frictions of going short more than they do of going long, so it’s probably net bearish,” said Craig Pirrong, a business professor at the University of Houston. “Having this instrument that makes it easier to short might keep the bitcoin price a little closer to reality.”

Perhaps as an indication of how untethered from reality Bitcoin has become, the CME’s announcement of Bitcoin futures actually caused the price to spike. LOL.

Yes, shorting will be risky. But buying is risky too. So although I don’t expect hedge funds or others to jump in with both feet, I would anticipate that the balance of smart money will be on the short side, and this will put downward pressure on the price.

Concerns have been expressed about the systemic risk posed by clearing BTC futures. Most notably, Thomas Petterfy sat by the campfire, put a flashlight under his chin, and spun this horror story:

“If the Chicago Mercantile Exchange or any other clearing organization clears a cryptocurrency together with other products, then a large cryptocurrency price move that destabilizes members that clear cryptocurrencies will destabilize the clearing organization itself and its ability to satisfy its fundamental obligation to pay the winners and collect from the losers on the other products in the same clearing pool.”

Petterfy has expressed worries about weaker FCMs in particular:

“The weaker clearing members charge the least. They don’t have much money to lose anyway. For this reason, most bitcoin interest will accumulate on the books of weaker clearing members who will all fail in a large move,”

He has recommended clearing crypto separately from other instruments.

These concerns are overblown. In terms of protecting CCPs and FCMs, a clearinghouse like CME (which operates its own clearinghouse) or the OCC (which will clear CBOE’s contract) can set initial margins commensurate with the risk: the greater volatility, the greater the margin. Given the huge volatility, it is likely that Bitcoin margins will be ~5 times as large as for, say, oil or S&Ps. Bitcoin can be margined in a way that poses the same of loss to the clearinghouses and FCMs as any other product.

Now, I tell campfire horror stories too, and one of my staples over the years is how the real systemic risk in clearing arises from financing large cash flows to make variation margin payments. Here the main issue is scale. At least at the outset, Bitcoin futures open interest is likely to be relatively small compared to more mature instruments, meaning that this source of systemic risk is likely to be small for some time–even big price moves are unlikely to cause big variation margin cash flows. If the market gets big enough, let’s talk.

As for putting Bitcoin in its own clearing ghetto, that is a bad idea especially given the lack of correlation/dependence between Bitcoin prices and the prices of other things that are cleared. Clearing diversified portfolios makes it possible to achieve a given risk of CPP default with a lower level of capital (e.g., default fund contributions, CCP skin-in-the-game).

Right now I’d worry more about big markets, especially those that are likely to exhibit strong dependence in a stress scenario. Consider what would happen to oil, stock, bond, and gold prices if war broke out between Iran and Saudi Arabia–not an implausible situation. They would all move a lot, and exhibit a strong dependency. Oil prices would spike, stock prices would tank, and Treasury prices would probably jump (at least in the short run) due to a flight to safety. That kind of scenario (or other plausible ones) scares me a helluva lot more than a spike or crash in Bitcoin futures does while the market is relatively modest in size.

Where I do believe there is a serious issue with these contracts is the design. CME and CBOE are going with cash settlement. Moreover, the CME contract will be based on prices from several exchanges, but notably exclude the supposedly most liquid one. The cash settlement mechanism is only as good as the liquidity of the underlying markets used to determine the settlement price. Bang-the-settlement type manipulations are a major concern, especially when the underlying markets are illiquid: relatively small volumes of purchases or sales could move the price around substantially. (There is some academic research by John Griffen that provides evidence that the settlement mechanism of the VIX contracts are subject to this kind of manipulation.)  The Bitcoin cash markets are immature, and hardly seem the epitome of robustness. Behemoth futures contracts could be standing on spindly cash market legs.

This also makes me wonder about the CFTC’s line of sight into the Bitcoin exchanges. Will they really be able to monitor these exchanges effectively? Will CME and CBOE be able to?

(I have thought that the CFTC’s willingness to approve the futures contracts could be attributable to its belief that the existence of these contracts would strengthen the CFTC’s ability to assert authority over Bitcoin cash exchanges.)

What will be the outcome of the competition between the two Chicago exchanges? As I’ve written before, liquidity is king. Further, liquidity is maximized if trading takes place on a single platform. This means that trading activity tends to tip to a single exchange (if the exchanges are not required to respect price priority across markets). Competition in these contracts is of the winner-take-all variety. And if I had to bet on a winner, it would be CME, but that’s not guaranteed.

Given the intense interest in Bitcoin, and cryptocurrencies generally, it was inevitable that an exchange or two or three would list futures on it. Yes, the contracts are risky, but risk is actually what makes something attractive for an exchange to trade, and exchanges (and the CCPs that clear for them) have a lot of experience managing default risks. The market is unlikely to be big enough (at least for some time) to pose systemic risk, and it’s likely that trading Bitcoin on established exchanges in a way that makes it easier to short could well tame its wildness to a considerable degree.

All meaning that I’m not at all fussed about the introduction of Bitcoin futures, and as an academic matter, will observe how the market evolves with considerable fascination.

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December 3, 2017

Please Reconcile This: The Kremlin Is Hermetically Sealed to Outsiders, But They Told All to Christopher Steele

Filed under: Politics,Russia,Uncategorized — The Professor @ 7:45 pm

This article caught my eye last week: “At the epicenter of the Russian election manipulation story, reporters can’t report.”

As tensions rise, Ferris-Rotman finds reaching sources inside the government all but impossible. She says foreign correspondents based in Moscow can’t just pick up their phone and text or call an official.

“Russia is a very closed place,” she says. “It’s not like the U.S. where, you know, over years or over some time you can develop a source in the White House — someone who you can trust and that you trade information with. Basically (the Kremlin) is a sealed up institution and there’s no way for us to get into it. “

The Kremlin is a “sealed up institution,” but we are supposed to believe that Christopher Steele was able to get multiple sources within the Kremlin to repeat highly sensitive conversations involving the highest personages in the Kremlin, including Putin himself.

The dossier itself is bad enough, but its handling in the US–specifically by the FBI and the intelligence community–is downright sinister. This is even more evident after it was revealed that the FBI agent who was responsible for handling the dossier was a pro-Hillary/anti-Trump partisan who was fired by Mueller for exchanging anti-Trump texts with his lover, also an FBI agent. (Not that Mueller told us that this was why he was fired when it happened months ago. I guess he didn’t have time because he was so busy leaking.) Moreover, this same individual allegedly has been interfering with the House Intelligence Committee’s attempts to get to the bottom of the story of the dossier.

But there’s more: the same FBI official led the investigation of Hillary’s emails.

As the expression goes: the fix is in! Although here, it is necessary to use the plural: the fixes are in!

Boy, if only there was a Republican attorney general who could get control of a rogue FBI and get some answers about the dossier–how it was obtained, and how it was used by the FBI.

 

 

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Flynnsanity

Filed under: Politics,Russia — The Professor @ 7:29 pm

Friday was a bonanza for dry cleaners, as the media and the political class collectively wet themselves in glee at the news that ex-National Security Advisor Michael Flynn plead guilty to lying to the FBI.

Alas, their fondest desires ran well ahead of the reality–which is the norm for this lot.

As was the case with Manafort, Flynn plead guilty to lying but not to any underlying crime, least of all a conspiracy with the Russians. The most reasonable inference for this is that there WAS no underlying crime and no conspiracy.

Indeed, Flynn will testify that he lied about two conversations with the Russian ambassador, Kirlyak, neither of which was illegal or even unethical.

In the first conversation, he spoke not just to Kirlyak, but to the ambassadors of every nation on the United Nations Security Council, including Senegal, Egypt–and wait for it–Ukraine. The subject was not Russia, but the stink bomb of an anti-Israel resolution that the outgoing Obama administration supported  but the incoming Trump administration opposed.

And it was the incoming Trump administration, because this conversation took place in December, 2016.

Flynn allegedly contacted the ambassadors at the direction of Jared Kushner.

So this contact is about Israel, not Russia. Flynn talked to Russia only because Russia was on the UNSC. As it (or the USSR) has been since its creation in 1945.

But the breathless media coverage was almost all headlined “Flynn spoke to Russia,” insinuating that his plea showed that Trump was canoodling with Putin.

In econometrics, omitting variables leads to biased inferences. Here, omitting that Flynn also spoke to every other nation on the UNSC about an issue that had noting to do directly with Russia definitely led to biased inferences. And that was exactly the intention, which demonstrates the bad faith of virtually the entire journalistic establishment.

The other conversation was about Russia directly. Specifically, Flynn asked Kislyak that Russia not overreact to Obama’s out-the-door sanctions on Russia. Trump wanted to avoid an escalatory dynamic, which is perfectly reasonable, especially given the fact that Obama almost certainly levied these sanctions with the intent of making life difficult for Trump.

Since these events happened after the election, they did not advance the collusion narrative. The media and the political class dealt with this in two ways.

First, they just lied. Brian Ross of ABC News reported–and the rest of the media repeated–that Flynn was going to testify that he had spoken to Russians during the campaign. WRONG. He will merely say that the Trump team had discussed plans to improve relations with Russia post-election. Big difference.

But this is a classic case of Twain’s dictum about a lie getting around the world before the truth got its boots on. And isn’t it funny how all the lies are in the same direction?

This is in fact a huge benefit to Trump, because what better illustrates his assertions that the mainstream media is a firehose of fake news?

Second, they harrumphed about the Logan Act, a likely un-Constitutional historical curiosity dating from January 30 . . . 1799–and which despite its longevity has never resulted in an indictment, let alone a conviction. The law forbids private individuals from negotiating with foreign states in a dispute with the US. About its only relevance to today is that it was adopted in fevered political times (the wars of the French Revolution, which also spawned the infamous Alien and Sedition Acts) which bear some similarity to today’s febrile political climate.

Further, it is common–and indeed imperative–for incoming administrations to establish contact with foreign governments, including–and perhaps especially–those with whom the US is experiencing tense relations. Indeed, the Trump team received permission from the Obama administration to make such contacts, and an administration spokesman said publicly that Obama had no objection to such contacts, including specifically with Russia.

So if anything, the Flynn plea actually substantiates what Trump et al have been saying all along, and provides no evidence of pre-election collusion, let alone an illegal pre-election conspiracy.

The main conclusions here are: (1) Flynn was an idiot for lying about something that was perfectly legal and ethical, and (2) to avoid outbursts of idiocy, when the FBI comes knocking, don’t talk–there’s no upside, and a big potential downside.

As for the conspiracy theory that excites the imaginations of today’s McCarthyites and Birchers, it is a big fat nada. Zip. Zero.

But that will not deter them. They are so invested in this theory that nothing will disprove it in their eyes. They will react exactly the same to the next hyped non-event, and dry cleaners everywhere will cheer.

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November 23, 2017

Igor Is Not Available. Please Leave Your Name and Number, and He’ll Return Your Call as Soon as Possible.

Filed under: Economics,Energy,Politics,Russia — The Professor @ 10:27 pm

Who knew that Igor Sechin was such a shy and retiring type? He has been summoned thrice to testify at the Ulyukaev bribery trial, and thrice he has failed to appear. One time he apparently dodged the summons by hiding in his office, and having his staff refuse to accept it. The other times he has said his busy travel schedule precludes him from attending. He has been summoned yet again to appear on 27 November, but the judge in the case said that Sechin indicates that his schedule wilt allow him to testify before the end of the year.

What will his next excuse be? “Sorry. I’m washing my hair that day”? Alas, “I’m scheduled to have my mullet trimmed” is no longer credible.

So why is Igor so reticent? After all, it is because of him, and a sting in which he participated, that Ulyukaev is in the dock. I discussed the issue with a Russian who follows the situation closely–perhaps too closely for comfort, in fact–and we pretty much agree on three possible explanations.

First, embarrassment. Transcripts, then audio, and now video of the sting have been released. Sechin does not come off well in these, and his offer of sausages in a hamper has become something of a running joke in Moscow. Relatedly, Sechin’s behavior violates the norms of inter-elite interaction (sort of like violating the mafia code), and this is there for all to see.

Second, there have been inconsistencies in the prosecution story. Sechin may dread cross-examination that will expose the episode as entrapment or fraud.

Third, Sechin may be testing the limits of his power and autonomy, or deliberately flouting the rules to show that he is an untouchable.

Will we ever learn the truth? This being Russia, there is considerable room for doubt. But one thing we can be sure is not the truth is that Sechin is a respectable figure. He is either an arrogant thug who operates outside the law–or wants to do so. Or he is a buffoon who played out a charade–badly–in order to punish someone who tried to thwart him.

Come to think of it, I’m going with “both”.

And it is not that Sechin’s performance as head of Rosneft compensates for his buffoonish thuggery (or is it thuggish buffoonery?). Indeed, the last earnings report was a disaster, and there are still many questions about the whole Rosneft-Glencore-QIA-Intesa-VTB-CEFC-Ivan Doesky* deal, and just how money from that deal made it (or didn’t) to the Russian budget to fulfill Putin’s privatization promise.

Rosneft’s stock price has been lackluster, at best. Yet the company has been on an acquisition binge overseas. (And how is that Venezueula thing working out? Pouring money down a corrupt rathole–sheer genius! What strategic vision!)

Things have gotten so bad–and so impossible to ignore–that even Sberbank released a scathing criticism of the company:

In the 64-page research report, dated October 2017, Sberbank’s division Sberbank CIB called on Rosneft to change its strategy “markedly” after the energy company incurred huge debts following an acquisition spree at home and abroad.

“Rosneft has been touting its top-down efficiency effort, complete with Stalinesque tales about employees being confronted with charges of malfeasance at management meetings and marched straight into police custody,” the initial report said.

. . . .

The report’s authors, in a section titled “Rosneft: We Need to Talk About Igor”, also said Rosneft’s powerful Chief Executive Igor Sechin “almost single-handedly sets the company’s strategy”.

They calculated that since purchasing oil and gas producer TNK-BP for around $55 billion in 2013, Rosneft had spent a net $22 billion on acquisitions, “with no clear focus”.

“Assuming he remains in charge, the company will continue to pursue volume growth. In doing so, its heft will push it further out of Russia and perhaps further out of oil. This will only disappoint its shareholders,” the report said.

LOL.

Actually, Sberbank wasn’t laughing, because Igor and Rosneft took extreme exception to the snarky criticism. Sberbank subsequently withdrew the report and reissued it, minus the offending language.

One can imagine what transpired in order to achieve that result.

Thus the management of the world’s largest publicly traded oil company (by volume, NOT by value, to be sure). Run by–indeed dominated by–a strategic imbecile who attempts to compensate for his managerial incompetence by strong-arming his domestic rivals into giving up their resources, and engaging in clownish masquerades to frame up those who have attempted to thwart him.

There are larger lessons here too. Keep Igor in mind whenever anyone shrieks about Putin’s fearsome juggernaut. If the management of a national champion in the largest and most important industry in Russia is any indication, the colossus has feet of clay–and a head of brick.

* And no, Donald Trump is not one of the Ivan Doeskys, dossier notwithstanding. I am referring to the unknown party or parties who (a) chipped in the difference between what Glencore, QIA, and Intesa cop to have paid, and the amount that Rosneft claim to have received, and (b) indemnified Glencore against loss.

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November 22, 2017

Obama Turned the Net Into a Neut: But It’s Getting Better!

Filed under: Economics,Politics,Regulation — The Professor @ 9:52 pm

Few subjects generate such intense reactions as net neutrality. It has become freighted with much emotional baggage, largely because it has been framed–artfully–as a matter of free choice and free speech vs. censorship and control of information by malign interests.

The Trump FCC’s announcement of its plans to reverse the Obama FFC’s 2015 net neutrality rule has led brought the issue–and the Manichean rhetoric–back to the fore.

One would hope that applying some basic economics might shed some light, and cool some of the rhetorical heat. I will give it a go.

The basic economic issue is straightforward. It is basically a matter of price discrimination, a subject that economists have analyzed and understood for years. The crucial feature of net neutrality is its ban on ISPs charging different prices for different types or categories of service. So for example, your Internet provider cannot charge higher prices for more intense consumers of bandwidth (e.g., streaming services).

Although the term “price discrimination” has bad connotations–which net neutrality supporters emphasize–it can be good, and it is difficult to identify conditions in which it is unambiguously bad compared to the real world alternative.

One reason that charging different prices for different types of customers can enhance efficiency–and why suppressing the ability to do so can be inefficient–is that the costs of providing a service can differ between customers. Some customers are more expensive to serve, or demand a differentiated service that is costlier to deliver. Providing the price signals that give the incentive to consume, produce, and invest in capacity efficiently requires price discrimination: higher cost customers should pay more than lower cost customers.

This is an issue in providing Internet services. Some services and users that consume more bandwidth, and impose greater risk of congestion on the system. A pricing structure that does not charge such users/services a higher price to reflect these higher costs induces overconsumption of these services, and imposes costs (e.g., poorer quality of service) on those who do not put such demands on the system. Furthermore, preventing ISPs from charging prices that reflect higher cost distorts their incentives to invest in more capacity, or in technologies and congestion management techniques that ease burdens on the system.

Prohibiting charging prices that vary by type of service or customer therefore results in cross-subsidization (low cost customers subsidize high cost ones), which both transfers wealth and undermines efficient allocation of resources.

Price discrimination can also occur as a result of market power. There are different “degrees” of price discrimination. To keep things simple, the most common kind is “third degree price discrimination”, in which a firm with market power who can segment customers based on their demand elasticities: less price sensitive customers pay higher prices than more elastic demanders.

It is plausible that demand elasticities for Internet services differ, and that elasticity may vary by the type of content, e.g., that the demand for streaming services is less price elastic than the demand for email or cat videos. In this case, charging a different price for streaming services vs. more mundane uses of the Internet could well be a form of 3d degree price discrimination.

It has long been known that the welfare effects of 3d degree discrimination are ambiguous: as compared to a single price for all services/customers charged by a firm facing a downward sloping demand curve, welfare (consumer plus producer surplus) or consumer surplus can be higher of lower with price discrimination. Furthermore, if a firm faces substantial economies of scale, the efficient way of covering fixed costs typically involves 3d degree price discrimination (“Ramsey Pricing”).

So one cannot say a priori that even if price discrimination by ISPs reflects market power, suppressing price discrimination improves welfare: the market power remains, and the ISP might exercise it in a way that causes welfare to be lower than if it exercises it by price discriminating.

Moreover, there is reason to doubt that a predicate for inefficient price discrimination–ISP market power–exists, or is more acute in this market than it is in many other markets where price discrimination is common (and believe me, that is pretty much every market). The days of the “last mile” monopoly are over. A very large fraction of Internet users in the US have access to multiple ISPs. Furthermore, wireless service (4G, and perhaps soon 5G services) competes with traditional cable and DSL service. Between wireless and cable, off the top of my head I can think of 8 providers that I can access. Yes, there is some overlap (e.g., ATT provides both types of service), but the number of choices most Americans have for Internet access is greater than they have for many other goods and services. Meaning that it is unlikely that market power problems are so acute in this market as to justify regulations unheard of in other markets where price discrimination is widely practiced.

I should also note that some kinds of price discrimination can unambiguously improve welfare relative to simple monopoly pricing. First degree (rare in practice) or second degree (e.g., quantity discounts, two part pricing) is superior to simple monopoly pricing. I would wager that some ISPs will adopt such efficiency enhancing price policies if freed from net neutrality restrictions.

Thus, if your concern is that ISPs exercise market power by price discrimination, suppressing price discrimination is not the best way to tackle the problem: attack the market power directly by reducing entry barriers or antitrust actions against ISPs. Furthermore, it is not at all clear that price discrimination in this market is driven primarily by market power, given the competitive conditions in the market. Lastly, and perhaps most importantly, attempting to squelch (at best ambiguously inefficient) market power driven price discrimination also precludes efficiency enhancing price discrimination based on differences in service/customer cost. Doing so imposes substantial costs.

For all these reasons, I conclude that net neutrality is (a) a solution to a non-existent problem, and (b) can do positive harm by preventing the development of efficient pricing systems that give appropriate incentives to consume and invest in system capacity, and to optimize its use.

Another aspect of the net neutrality rule is to prevent ISPs from favoring its content (which it either produces, or buys from others) over that supplied by independent parties.  Again, a necessary condition (but definitely not a sufficient one) for this to be a problem is ISP market power, which as noted above is unlikely to be a particularly serious issue. Furthermore, it is typically not in the interest of a downstream firm with market power to restrict its customers’ access to upstream product. Offering suboptimal product variety reduces the demand for the putative monopolist’s services, which reduces its profit. It is typically more profitable for the monopolist to offer the optimal product variety, and profit by charging a higher monopoly price.

There are some rather contrived models in which vertical restrictions (e.g., tying or exclusive dealing) can be used to lever market power from one good to another: the practical applicability of these models is dubious at best, as some of the modelers themselves acknowledge. But there is also an extensive literature (much of it originating in Chicago in the 1960s, including seminal contributions by my thesis advisor Lester Telser) showing that such vertical restrictions are usually efficiency-enhancing responses to some incompleteness in property rights or information problem. Indeed, in US antitrust law, horizontal restrictions (e.g., cartels) receive far more scrutiny that vertical ones, precisely because academic research on the potential efficiency enhancing effects of vertical restrictions, and the difficulty of using them to increase monopoly power, has informed antitrust policy–under administrations of both parties I might add. (As an aside, this makes the Trump DOJ challenge of the Time Warner-ATT deal somewhat strange, and intellectually at odds with the FCC’s move against net neutrality.)

In sum, I favor jettisoning net neutrality. No, I do not believe that the ISP market is perfectly competitive, but that is a red herring. Even acknowledging the possibility of imperfect competition in that market (although I do believe fear thereof is overblown), net neutrality is not the right way to address it, and indeed, might actually mean that market power is exercised in a way that reduces efficiency. In other words, the Obama FCC wanted to fight ISP market power in the worst way–and it did!

So if net neutrality is an inefficient policy, why did it prevail in the US, at least for a while? That is, what is the political economy of net neutrality?

Well, Chicago has a lot to say about this as well. Indeed, the work of another of my former advisors–Sam Peltzman–is directly on point. Sam’s amazing 1976 JLE article “Towards a More General Theory of Regulation” has an important, but widely overlooked prediction: regulation is likely to occur in industries where there are substantial differences in costs of serving different customers, and that regulated price structures suppress these cost differences. That is, regulated price structures cross-subsidize high cost customers. As Sam put it: “cross—subsidization follows a systematic pattern in which high cost customer groups are subsidized by low cost customers.” And: “The important contribution of politics is to suppress economically important distinctions and substitute for these a common element in all prices.”

That is net neutrality in a nutshell. Put simply, the Obama FCC bought political support Google, Facebook, Amazon, Microsoft, Netflix, et al by implementing a policy that cross subsidized their services. They used the political system to push regulation that suppresses economically important distinctions.

This result is less surprising from a political economy/public choice perspective than the Trump administration’s reversal of net neutrality. My first stab at an explanation is that this reflects the fact that a Trump administration can never expect to obtain political support from these companies, and can doesn’t really have to fear additional opposition: they already hate him with the heat of 1000 suns. So why  not stiff them?

Karma is a bitch, eh?

Now for some laughs!

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November 7, 2017

If the Dems Keep This Up, Ima Gonna Run Outta Popcorn

Filed under: Politics,Russia — The Professor @ 9:59 pm

The Democratic establishment has gone to DefCon One over Donna Brazile’s (so far only excerpted) blasts directed at the Hillary campaign. The biggest return salvo was in the form of an open letter signed by dozens and dozens, including notables such as Huma Abedin (Hillary’s constant companion, who frequently wore an outfit to match Hillary’s–yeah, I don’t want to know either), Robby Mook (campaign director), and–wait for it–Marc Elias (the Perkins Coie lawyer who was the intermediary between the Clinton campaign and Fusion GPS, which in turn was the connection to Christopher Steele of dossier infamy). The whole thing is a hoot, but this part totally cracked me up: “It is particularly troubling and puzzling that she would seemingly buy into false Russian-fueled propaganda, spread by both the Russians and our opponent, about our candidate’s health.”

I mean it had to be the Russians, right? Had. To. Be.

First, this is now the Democrats’ Theory of Everything: THE RUSSIANS DONE IT. Second, who could possibly have had any doubts about Hillary’s health? That nagging cough? Nothing! The fainting spell (or freezing episode) or whatever it was on 9/11/16? Just “overheating.” Brazil also points out some odd Hillary public behavior, most notably her infamous “basket of deplorables” comment, which led Brazile to wonder whether Clinton was so mentally out of it that she wasn’t aware that she was speaking in public, rather than at a closed event.

In other words, far more than the rest of us, Donna Brazile had the ability to observe closely Hillary’s health, and it raised grave concerns in her mind. Yet Hillary’s phalanx of flunkies denies Brazile’s first hand knowledge, and instead blames her concerns on Russian propaganda.

Unbelievable. The only thing Russian about this entire episode is the Hillary cabal’s obfuscation of her health issues, which brings back memories of the last days of Chernenko or Brezhnev.

For her part, Brazile has been nothing if not entertaining. First, she denied that the word “rigged” is in her book. Well, it is definitely in the Politico piece which is allegedly an excerpt, and everyone who read that concluded that Brazile was accusing the DNC of rigging the process against Bernie: if not, why the candles and the music to put her at peace before the confessional phone call to Sanders? But maybe her book has undergone a quick rewrite (perhaps like James Comey’s letter regarding Hillary’s server, which included the legally damning phrase “grossly negligent” before it didn’t). Or something.

Second, Brazile accuses the campaign leadership of being sexist, and treating her like a slave. Randy Mook in particular comes in for damning criticism. I’m not a big Brazile fan, but Mook is a first class creep, so it’s an easy call regarding whom to pull for here.

Third, she makes some rather odd statements about murdered campaign Seth Rich. This has sent conspiratorial minds–of which there are far too many these days–into paroxysms of theorizing.

There are many conjectures about Brazile’s motives. Self-protection is a leading candidate in the comments section. Shifting blame and making money are others. Revenge is also in the running. Another theory making the rounds is that she is attempting (perhaps at the behest of the Bernie branch of the party) to torpedo a potential Hillary! 2020 repeat. Yes, some think that Hillary is in fact scheming to run again. I can understand many Democrats’ horror at the thought–she would be a very serious contender to tie William Jennings Bryan and Adlai Stevenson as three time losers (though Stevenson, of course, only was the party’s standard bearer twice, losing the party’s nomination to JFK in 1960, as Hillary did to Obama in 2008).

I’m going with “all of the above.” I think this is a seriously overdetermined mixture of the personal and the political. Whatever it is, I hope she keeps on it. Though if she does I’ll have to restock the popcorn because I’m going through it like crazy.

Circling back to the Russia obsession. Have you noticed that the Russians are inveterate liars spewing disinformation everywhere, except when a Russian is dishing dirt on Trump, in which case they are telling the gospel truth? The dossier is one example: to the Dems and Never Trump Republicans, it is Matthew, Mark, Luke, and John rolled up into one. Another example is the recent story that the lawyer who met with Donald Jr., one Natalia Veselnitskaya, claims that Junior “hinted at a review” of the Magnitsky Act if Veselnitskaya could provide evidence in writing of Clinton skullduggery.

Did he give an exaggerated knowing wink? Or maybe he did the whole “grin, grin, nudge, nudge, wink, wink, say no more!”thing. I mean, seriously.

So since when did Veselntiskaya–a Russian!–become unimpeachably credible? Especially in light of numerous revelations suggesting that the Russians were (are?) not acting in a partisan way, but were (are?) merely intending to sow political chaos. In which case (a) they are succeeding beyond their wildest expectations, and (b) Huma and the Gang are accessories after the fact, and are compounding the chaos spawned by whatever Russian interference there was by overreacting to Russian interference.

Another revelation about Veselnitskaya came out today. In Congressional testimony in July, Bill Browder alleged that she hired Fusion GPS to conduct a smear campaign against Browder, a Russian bête noire.* Today it was reported that she met with Fusion GPS’s Glenn Simpson both immediately before and immediately after the Trump Tower meeting. You know, kinda like a briefing and debriefing. We also know that some time before this the Hillary campaign via Marc Elias had hired Fusion GPS to dig dirt on Trump (“opposition research” we’re told).

I don’t know about you, but to me that screams set-up. The Clinton-Fusion-Russia nexus is just too tight. (Note to the sickening hypocrisy. The outrage over the Trump Jr.-Veselnitskaya meeting is that he was looking for compromising material on Hillary. First, isn’t that just “opposition research”, per the Democrats’ defense of the Clinton hiring of Fusion? Second, for the people who hired dirt diggers par excellence-Fusion GPS–to get dirt on Trump from the Russians to wax indignant about Trump responding to offers of dirt on Hillary from Russians pegs the chutzpah meter–and mine goes to 11!)

So here’s where we are. Donna Brazile blasted Hillary and her campaign. Hillary’s henchpeople responded by saying that Brazile was a dupe for propaganda put out by those lyin’ no good Russkies. Meanwhile, the Hillary campaign hired a propaganda outfit with deep connections with the Russians, including Russians who just so happened to be in meetings that the Democrats and the media (but I repeat myself) claim compromised Trump. But to believe that, you have to believe that the lyin’ no good Russkies are telling the truth. Just this once!

Did I get that right? Pretty sure that I did. Truth is indeed stranger than fiction.

* Do not consider this an endorsement of Browder. In fact, I am not a Browder fan. I will detail the reasons for my distrust and dislike in an upcoming post.

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November 3, 2017

Did Donna Brazile Find a Horse’s Head in Her Bed This Morning?

Filed under: Politics — The Professor @ 10:53 pm

Who you gonna believe, Donna Brazile or your lyin’ eyes? I read the Politico piece  carefully, and I damn sure reached the conclusion that Brazile had confessed to Bernie Sanders that the DNC had rigged the process. But Donna says No! I said nothing of the sort. Indeed, she has started a hash tag, #NeverSaidHillaryRiggedElection.

So I read the article again, and I still conclude that’s exactly what she said.

Several people commented last night that Brazile’s jeremiad had put her in mortal danger. Today’s furious attempt to deny what was clearly said the day before surely does suggest that Donna awoke this morning to find a horse’s head in her bed, and that got her mind right.

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November 2, 2017

Donna Brazile Unloads on Hillary, and Gives SWP a Target Rich Environment!

Filed under: Politics,Russia — The Professor @ 7:16 pm

Donna Brazile–a long time Democratic operative and DNC official–has a book coming out. And the excerpt in Politico is damning of the erstwhile leaders of the Democratic Party.

To me the most interesting reveal is that the Lightworker left the Democratic Party’s finances is an utter, absolute shambles:

Obama left the party $24 million in debt—$15 million in bank debt and more than $8 million owed to vendors after the 2012 campaign—and had been paying that off very slowly. Obama’s campaign was not scheduled to pay it off until 2016. Hillary for America (the campaign) and the Hillary Victory Fund (its joint fundraising vehicle with the DNC) had taken care of 80 percent of the remaining debt in 2016, about $10 million, and had placed the party on an allowance.

This fits with my image of Obama as Mr. Magoo, who cheerily drove along, always coming out ahead, while leaving carnage in his wake. We already knew about how Democratic officeholders at the state, local, and Congressional levels were scourged during the Obama administration: now we know he did the same to the Democratic Party’s finances.

This, in turn, left the DNC vulnerable to the Clinton mafia, who basically extended juice loans to the DNC. In return for financing the party to allow it to exist, Hillary’s campaign demanded, and received, control over its finances, and most of its key personnel choices. Hillary used this arrangement to launder campaign contributions in a way that clearly was intended to circumvent federal limits on donations to individual campaigns.

Oh, and “launder” isn’t my word choice: it’s Politico’s. Here’s how Brazile explains it:

“Gary, how did they do this without me knowing?” I asked. “I don’t know how Debbie relates to the officers,” Gary said. He described the party as fully under the control of Hillary’s campaign, which seemed to confirm the suspicions of the Bernie camp. The campaign had the DNC on life support, giving it money every month to meet its basic expenses, while the campaign was using the party as a fund-raising clearinghouse. Under FEC law, an individual can contribute a maximum of $2,700 directly to a presidential campaign. But the limits are much higher for contributions to state parties and a party’s national committee.

Individuals who had maxed out their $2,700 contribution limit to the campaign could write an additional check for $353,400 to the Hillary Victory Fund—that figure represented $10,000 to each of the 32 states’ parties who were part of the Victory Fund agreement—$320,000—and $33,400 to the DNC. The money would be deposited in the states first, and transferred to the DNC shortly after that. Money in the battleground states usually stayed in that state, but all the other states funneled that money directly to the DNC, which quickly transferred the money to Brooklyn [i.e., Clinton campaign headquarters].

“Wait,” I said. “That victory fund was supposed to be for whoever was the nominee, and the state party races. You’re telling me that Hillary has been controlling it since before she got the nomination?”

Gary said the campaign had to do it or the party would collapse.

“That was the deal that Robby struck with Debbie,” he explained, referring to campaign manager Robby Mook. “It was to sustain the DNC. We sent the party nearly $20 million from September until the convention, and more to prepare for the election.”

The states’ take for being the front for this fundraising scheme? “Yet the states kept less than half of 1 percent of the $82 million they had amassed from the extravagant fund-raisers Hillary’s campaign was holding, just as Gary had described to me when he and I talked in August.” One percent? Credit card companies collect more for processing payments.

Brazile claims that this was not illegal, merely unethical. I have no doubt that it was unethical. The legality is hardly obvious, given that it effectively allowed the Clinton campaign to blow through the $2,700 limit on individual contributions to campaigns. Blow through by a factor of 13. That’s all. No big deal, right?

Hillary, you might recall, claimed to be a stalwart supporter of campaign finance reform. But here she was playing a shell game that made a travesty of existing contribution limits.

And who is this “Gary”, you ask?

GiGi! That’s right. The Gary is none other than Gary Gensler. The Saint of the CFTC. Crusader for financial probity. Yet he was neck deep in a scheme that not only was a mockery of the campaign finance system, but which also effectively made the DNC the adjunct of the Clinton campaign during the primary season, when it was supposed to be non-partisan.

Ah, what ambition does to a man’s morals, eh there, Gar? Appalling. It profits a man nothing to give his soul for the whole world . . .  but for the Secretary of the Treasury?

Brazile seems to cut Gensler some slack. After all, he didn’t negotiate the deal. He just counted the beans.

Like Al Capone’s accountant.

There’s one other terribly revealing thing about all this. No, not that Hillary is a grotesquely unethical and manipulative woman: that’s hardly news. What’s eye opening is that she was so insecure that she felt that she had to rig the Democratic primaries by suborning the DNC, and making it her creature.

Yet the woman who was so nervous about winning her own party’s nomination wants us to believe that the only way she wasn’t anointed as president must have been the nefarious doings of the likes of the Russians and Jim Comey.

And now that I mention the Russians, consider this. An alternative explanation for the release of the DNC emails is that it was the work of a disenchanted Bernie Bro, not a Russian hacker. I always thought this was plausible, and none other than stalwart Democratic operative Donna Brazile makes it eminently clear that Bernie supporters working in the DNC would have had every reason to be outraged, because their guy was getting shafted the way only the Clintons can.

So by going after Hillary, Donna Brazile has created a target rich environment for the likes of me. Not just Hillary, but Obama, Gary Gensler, and the Russians hacked the DNC conventional wisdom. And that was just an excerpt. I can hardly imagine what the whole book will bring.

I never thought I’d say this, but here it goes: Thanks, Donna!

 

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October 31, 2017

Kelly Causes Mass Apoplexy, Again

Filed under: Civil War,History,Politics,Uncategorized — The Professor @ 7:56 pm

John Kelly shares his boss’ ability to cause mass apoplexy on the left. And I think he knows it, and does it deliberately.

Kelly caused today’s mass freakout by making remarks about Robert E. Lee and the Civil War. He committed three grave sins.

First, he criticized presentism, which is an -ism that the left wholeheartedly endorses:

“There are certain things in history that were not so good, and other things that were very, very good,” Kelly said. “I think we make a mistake as a society, and certainly as individuals, when we take what is accepted as right and wrong, and go back 100, 200, 300 years or more and say, ‘What Christopher Columbus did was wrong.'”

“Five hundred years later, it’s inconceivable to me that you would take what we think now and apply it back then. I just think it’s very very dangerous. It shows you how much of a lack of appreciation of history and what history is,” said Kelly, a retired Marine Corps General.

Just so. Exactly.

Then, he defended Robert E. Lee as an honorable man:

“Robert E. Lee was an honorable man who gave up his country to fight for his state,” Kelly said. “One hundred and fifty years ago, that was more important than country — it was always loyalty to state back in those days.”

As a matter of historical truth, this is also spot on. Who disputes that Lee chose his state over the United States?–but only after secession, and when his state was threatened with invasion.

Whether this conduct is honorable or not is fundamentally subjective. Honor–as Lee understood it, and as people like Kelly understand it–means living up to a certain code of conduct, adhering to one’s beliefs, even at great personal cost. The underlying beliefs are not objectively verifiable: they inhere in the subject. Honor involves adhering to them.

Now, you may object to Lee’s code, and what his beliefs were. But it is nigh on to impossible to dispute that he made his choice in good conscience, fully recognizing the personal risks he was taking.

Insofar as that code is concerned, Lee was acting on the basis of a theory of the United States, and the Constitution thereof, that was widely held in the South. Namely, that the Union was a compact of sovereign states, and that states had the right to depart from the Union of the federal government infringed on the rights of the states. In this view, the purpose of Union was to defend the rights of the states, and an infringement by the federal government on those rights justified the dissolution of the Union.

The Civil War basically ended that theory as a practical force in American politics, but it was a viable, and widely held, theory in 1861. And under that theory, one was a citizen of the US via one’s citizenship in a state. The state was more basic, more fundamental, than the union of the states.

Many object that Lee swore an oath to the US. A couple of things here. First, hard cases–situations where basic principles are in conflict–make bad law. Lee indeed agonized over his oath and his divided loyalties. Second, under the theory that Lee (and others) operated, obligations went both ways: the federal government had obligations to the states, and their citizens. In the minds of many Southerners, the government’s violation of its obligations relieved them of theirs. And rightly or wrongly, many Southerners viewed those rights to be at risk as the result of Lincoln’s election in 1860.

This theory was taken very seriously. So seriously, in fact, that it greatly–and some would argue fatally–impaired the Confederate war effort. Southern governors, most notably Joseph Brown of Georgia, drove Jefferson Davis to distraction with their strict insistence that the Confederate government in Richmond respect the rights of their states. Jefferson Davis was one of those who claimed that this was indeed fatal to the South because it undermined a unified war effort necessary to achieve victory. When he said the epitaph of the Confederacy was “Died of a Theory,” the theory he was referring to was that of states’ rights.

It is true that many have dishonestly claimed that the insistence on states’ rights shows that the Civil War wasn’t about slavery. In fact, these are not alternative theories of secession, or the war, but complementary ones. The right that Southern states were insistent upon, to the point of dissolving the Union, was that of a state to choose its “domestic institutions.” And the domestic institution the Southerners were willing to fight over was that of slavery.

You may argue against the theory, but you can’t credibly argue that Lee was dishonorable in adhering to the principles thereof. One may be an honorable and faithful servant of a false god.

Among his contemporaries–including many Northerners–Lee was considered an honorable man, and indeed perhaps, the archetypal honorable man. Recall that Grant saluted Lee on the steps of the McClean House at Appomattox, after accepting the surrender.

Lee was also from an honor culture, or cultures, actually–the South, and the military (and the antebellum military was deeply infused with Southern cultural values). Lee’s idea of honor no doubts resonates with Kelly, the product of another honor culture, the US Marine Corps.

Again, you may dislike or even ridicule this culture (as Twain did in Huckleberry Finn) but you cannot deny its existence or fundamental features, or claim that Lee did not strive to adhere to its values and strictures.

But Kelly’s biggest sin was this:

Now it’s different. But the lack of an ability to compromise led to the Civil War, and men and women of good faith on both sides made their stand where their conscience had them make their stand.

This is what really got heads exploding. Deep thinkers like Rep. Ted Lieu (D-CA), Jake Tapper (you know, the ex-VH1 reporter who made his bones by doing snarky, superficial, and rather sleazy programs on, say, the legal battles over the Lynyrd Skynyrd legacy), and Ta-Nehiesi Coates inveighed against Kelly for daring even to suggest this.

In fact, Kelly’s remark is correct, as a matter of logic and of history.

Insofar as logic is concerned, a necessary condition for conflict is the failure to reach agreement–compromise. Those who make a deal aren’t fighting.

Insofar as history is concerned, sectional conflict was avoided throughout the 19th century through arduously negotiated compromises. The Missouri Compromise (1820), the Compromise Tariff (1833), the Compromise of 1850, the Kansas-Nebraska Act. Sectional compromise was the leitmotif of mid-19th century American political history: the Civil War was the exception to that rule, the time when compromise failed.

Abraham Lincoln’s political idol–Henry Clay–was known as “the Great Compromiser” for his work in negotiating the first three of these. But Clay was dead in 1860, as was another major figure in negotiating deals, Daniel Webster. Moreover, the political balance had changed, and the pernicious effects of Kansas-Nebraska made compromise even more difficult.

But nonetheless compromises were attempted. The Crittenden Compromise, introduced to Congress in December, 1860, was the most notable of these. It was satisfactory to southerners, but not to northerners, so it died aborning. (One of Crittenden’s sons became a Union general, another a Confederate general. The latter died in battle in 1861.)

Yet even in March 1861, Lincoln was making conciliatory gestures to the South in an attempt to achieve compromise. Lincoln ran explicitly denying any intent to interfere with slavery where it existed (a position he also took during the debates with Douglas), and conceded fundamental states rights principles to the South in his inaugural address:

have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.

Those who nominated and elected me did so with full knowledge that I had made this and many similar declarations and had never recanted them; and more than this, they placed in the platform for my acceptance, and as a law to themselves and to me, the clear and emphatic resolution which I now read:

Resolved, That the maintenance inviolate of the rights of the States, and especially the right of each State to order and control its own domestic institutions according to its own judgment exclusively, is essential to that balance of power on which the perfection and endurance of our political fabric depend; and we denounce the lawless invasion by armed force of the soil of any State or Territory, no matter what pretext, as among the gravest of crimes.

Note well this sentence: “we denounce the lawless invasion by armed force of the soil of any State or Territory, no matter what pretext, as among the gravest of crimes.” Lee would have agreed: he viewed the prospect of an invasion of Virginia by the government of the US to be a lawless act, and it is on that issue of lawlessness which he and Lincoln disagreed.

Lincoln went so far as to accept what was an anathema to abolitionists–the Fugitive Slave Act–arguing that the controversy was a matter of details (“a merely unsubstantial controversy as to how it should be kept”), not Constitutional principle:

It is scarcely questioned that this provision was intended by those who made it for the reclaiming of what we call fugitive slaves; and the intention of the lawgiver is the law. All members of Congress swear their support to the whole Constitution–to this provision as much as to any other. To the proposition, then, that slaves whose cases come within the terms of this clause “shall be delivered up” their oaths are unanimous. Now, if they would make the effort in good temper, could they not with nearly equal unanimity frame and pass a law by means of which to keep good that unanimous oath?

There is some difference of opinion whether this clause should be enforced by national or by State authority, but surely that difference is not a very material one. If the slave is to be surrendered, it can be of but little consequence to him or to others by which authority it is done. And should anyone in any case be content that his oath shall go unkept on a merely unsubstantial controversy as to how it shall be kept?

In other words, even Lincoln was perfectly willing to reach a compromise that preserved slavery where it existed, and which allowed Southerners to retrieve escaped slaves from anywhere in the US.

The basis for compromise on the lines of those thrashed out 1820-1854 existed, and many on both sides strove to realize it. But the Fire Eaters in the South in particular rejected it. So it is historical fact that the war came because the politicians of 1860-1861 failed to reach compromises like those their predecessors had accomplished a few decades before, despite attempts to do so.  There is a very solid historical basis for what Kelly said.

Now of course any such compromise would have perpetuated slavery. But this is something that Northerners were overwhelmingly willing to accept. And here is the irony. By rejecting the compromises that the North (and the Republicans specifically) would have been willing to offer that would have extended slavery, the Southern radicals embarked on a course that resulted in its destruction within a handful of years. They turned the would-be successor to the Great Compromiser into the Great Emancipator.

The morals of sectional compromise are also not nearly as clearcut as the Ta-Nahiesi Coateses of the world would have it. Yes, Lincoln would have willingly been complicit in the perpetuation of a great evil–something that he recognized as a great evil. But by rejecting Southern terms, and insisting on Union, Lincoln unleashed a war that resulted in the deaths of ~2.5 percent of the US population–and about 20 percent of the military age male population in the South. As Lincoln said in his Second Inaugural, “every drop of blood drawn by the lash was paid by another drawn by the sword.” War is a great evil too. You may prefer one evil to another, but you have to acknowledge that it is indeed a choice between great evils.

This raises another issue that I will write about in the future. It is relatively straightforward to understand why the South seceded, and to recognize that at root it left over slavery. It is harder to understand why the North fought to keep them in the Union. It most certainly was NOT to eradicate slavery: even by 1863, emancipation did not have majority support in the North, and the 13th Amendment was passed in 1865 only by the slimmest of margins, and with the help of some very swampy political dealings.

So why? I have some conjectures–largely unsatisfying–that I’ll share in the future. Suffice it to say it is far too neglected a subject, especially in contrast to the  vast amount of ink spilled over explaining secession.

In sum, for all of the freaking out that Kelly’s remarks induced, he has a far firmer grasp on historical truths than those freaking out do.

But he had to know that what he said would spark a backlash. Yet he went ahead. This is actually quite fascinating, and revealing. He did so after the left attempted to shut him up and shout him down for going after the execrable Florida representative over the Trump phone call to the widow of a soldier killed in Niger. By speaking up on such a controversial topic so soon afterwards Kelly is making it very clear that he will NOT be intimidated.

Further, it demonstrates on matters of substance that Kelly’s beliefs track Trump’s very closely–or should I say that Kelly’s sincere beliefs track positions that Trump has staked out? Further proof that anyone thinking that the temperamental difference between Trump and his chief of staff reflects differences in political positions is sadly deluded. Indeed, Kelly’s gravitas (isn’t it funny that word is usually reserved for Democrats, even those who don’t really have it?)  will make Trump far more effective. Kelly is an effective spokesman, and an unapologetic one.

Semper Fi. That makes him a very formidable foe for the left.He is not afraid of a fight, and knows how to win one.

 

 

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October 30, 2017

Michael Weiss: Stupid or Dishonest? I’m Going With “Both!”

Filed under: Politics,Russia — The Professor @ 7:18 pm

The usual suspects spent the weekend wetting themselves over the news of an impending Mueller indictment. This morning the eagerly anticipated event happened: Mueller indicted Paul Manafort and a heretofore nobody–Manafort’s former business associate Rick Gates.

BFD. The indictments had nothing to do with Trump, Trump’s campaign, or Trump collusion with the Russians. It involved Manafort’s concealment of his dealings with the Ukrainians (the ousted pro-Russia Yanukovych regime) and moneys associated therewith.

As Andrew McCarthy notes, the indictment seems shaky and overcharged, and a boon to Trump because it is an implicit validation of his assertion of no collusion. He further claims that the indictment is an attempt to pressure Manafort into cooperating.

Well, if that were the intent, it is likely that Mueller failed. Usually such cooperation would be negotiated in advance of an actual indictment, and the cooperator would then plead guilty to a reduced charge: that’s the negotiated quid pro quo. Here, it looks as if Mueller threw everything he had (which isn’t much) against Manafort, and then Manafort pled not guilty–hardly the actions of a cooperating witness.

As an aside, my friend, Houston attorney Tom Kirkendall, the most dogged follower of the Enron prosecutions, has told me that shaky overcharging in order to coerce witnesses is the MO of Mueller assistant Andrew Weissman, who was in charge of the Enron cases. Weissman is truly a piece of work, as detailed in this Rowan Scarborough article.

It is particularly interesting–and appalling–to note that Weissman was head of the DOJ Fraud Section that allowed a Russian the FBI (under Mueller’s and Comey’s directorships) had implicated in a vast bribery scheme connected to the Uranium One deal–including donations to the Clinton Foundation–to plead to a trivial charge (likely in violation of DOJ charging guidelines) with virtually no publicity. Quite a contrast, eh? Quite revealing that the one time where Weissman went against his normal MO resulted in the burying of a case that was highly damaging to the Clintons.

The most damning thing the Manafort indictment indicates is that Trump showed very bad judgment, and a serious lack of due diligence, in hiring Manafort. Another example of Trump’s injudicious choice of associates is one George Papadopolous, a Trump campaign advisor who pled guilty to lying to investigators. Throw in Carter Page, and it is clear that Trump’s campaign was so desperate to attract people that it scraped the bottom of the barrel and didn’t look too closely at what it dredged up. Trump is paying now for that carelessness.

The Papadopolous plea does provide some comic relief, however, for CNN’s Michael Weiss attempts to leverage it into evidence of Trump collusion with Russia. As with most Weiss efforts, it is a laughable failure, making up in gruesome wordiness for what it lacks in substance (or logic, for that matter).

Where to begin?

Well, let’s start with the biggest howler–a classic bait-and-switch. One wonders if Weiss is too stupid to recognize the fundamental logical defects in his argument, or thinks we are so stupid that we’ll miss it:

But “[o]n or about” April 26, 2016, Papadopoulous again met with the Professor in a London hotel. The complaint reads that the Professor told him he had “just returned from a trip to Moscow where he had met with high-level Russian government officials” where he learned that the Russians “have dirt” on Hillary Clinton; “the Russians had emails of Clinton” — “they have thousands of emails.”

This date is important because The Washington Post only first reported on June 14, 2016, that the hackers working for the Kremlin had penetrated the servers of the Democratic National Committee. And while this correspondence, first published by WikiLeaks in late July, days before the Democratic National Convention, was distinct from Clinton’s personal emails and those she turned over to the FBI as part of the investigation into her use of a personal server to conduct government business while she was secretary of state, it nonetheless caused a scandal within the Democratic Party.

Did you see what he did there? The first quoted paragraph refers to “thousands of emails [of Clinton]” the Russians claimed to have in April. The second paragraph refers to Democratic National Committee emails, the leaking of which was reported almost two months later. Two very different things. Very different. The emails the alleged interlocutor for the Russians mentioned are NOT the emails that subsequently appeared on Wikileaks, meaning that Weiss is either to stupid to know the difference, or so dishonest that he is trying to obscure the difference in order to make a hit on Trump.

It’s trivially easy to see what was going on here. Everybody and his 5th cousin knew about Hillary’s secret server by April, 2016, and there was widespread speculation that the Russians (and the Chinese, and the Iranians, and your Aunt Fanny) had hacked it. The Russians were clearly trying to entice the Trump campaign by dangling the bait of Hillary emails.

This pretty much blows the collusion narrative to smithereens, eh? If Trump (or his campaign) was colluding with the Russians, why would as late as April the Russians have to use an intermediary to attract  Trump’s attention by claiming to have the widely-speculated about Hillary emails?

Obviously: they wouldn’t.

This is a piece with the Trump Tower meeting, where a Russian intermediary again attempted to attract Trump’s attention by claiming to have dirt on Hillary. Again, if the Russians were already providing information to Trump, that would have been completely unnecessary.

Note that the Weiss article makes it plain that the alleged Russian-connected source (who was not Russian, but presumably a Greek or maybe a Cypriot, and who mainly asserted tight connections) was willing to tell whoppers to convince Papadopolous of her ability to deliver the goods: she introduced Papadopolous to a Russian national who claimed to be Putin’s niece. Hilarious. Did she also claim to have connections with Marie of Roumania?

So, according to Weiss, the Russians told outrageous lies, but Papadopolous–and the Trump camp–were supposed to know that the claims regarding Hillary emails were gospel. Gospel I tells ya!

OK. Sure.

But the hilarity has just begun! Note that if the Russians were referring to Hillary emails, if Weiss believes the Russians were telling the truth (as his story requires) that would be an admission that Hillary’s server had indeed been hacked. Andy Kaufmann lookalike Rep. Adam Schiff (D-CA, who is more absurd than Andy ever was) has made a similar implicit admission.

I really think they are too stupid to have figured that out. LOL.

But there’s more! (Isn’t there always?) The Trump campaign spurned the Papadopolous offer. But it’s even better than that: the alleged mastermind of the Russo-Trump collusive scheme–Manafort himself–is the one who told Papadopolous to pound sand:

In the event, no meeting ever took place. CNN reported in August 2017 that it was in fact Paul Manafort who “immediately dismissed the idea of meeting with top Russian officials and advised Trump to do the same.”

Manafort “[i]mmediately dismissed.” Self-satirizing.

The cherry on top of this comic sundae is this:

Gibbs is quite right to stress in his affidavit that using “nongovernmental intermediaries,” such as academics and think tankers, is one way Russian intelligence advances the Kremlin’s interests overseas. And there’s recent precedence for this in London, as I’ve documented elsewhere.

Uhm, Mike–the US does that too. And I would add journalists to that list: no conjecture there, as this is a widely documented fact. Further, I am highly confident that you fall into the category of U.S. “nongovernmental intermediary” as both a think tanker and a journalist. Heck, maybe this pathetic excuse of an article is just another example of that.

I could go on, but eviscerating this piece (of what, I’ll leave to your imagination) is far too easy. I need a much bigger challenge. So should I shoot fish in a barrel or steal candy from babies?

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