On The Secretary Of State Using A Private Email Server

One of my favorite things about observing the antics of politicians is that they will regularly make completely preposterous statements to justify their actions and exercise of power.  Many accuse them of "lying," and maybe that's the best word we have in our language, but plenty of the statements are just so detached from reality that merely calling them "lies" doesn't remotely do justice to the situation.  I'm thinking of examples like the line from Barack Obama's acceptance speech at his first nominating convention in 2008 where he said that this would be "the moment when the rise of the oceans began to slow and our planet began to heal."  Or the same guy's speech from just Monday of this week, where he blamed asthma among minority children on CO2 in the atmosphere from the burning of coal.

And then there is the question of our then-Secretary of State using a private email server, not up to government security standards, to do her government business.  And when questioned about the subject at a news conference in March, the New York Times quoted her as saying, “I did not email any classified material to anyone on my email."

Now I've never worked in the government in any capacity involving classified information, but I have had the experience of having to deal with classified information as part of working on private litigation.  Granted, it was a long time ago, and technology has changed a lot.  Still, I came away from the experience realizing that it's not possible to deal with classified information without taking seriously the rules and protocols surrounding it.

My tale goes back to a case in the late 1970s, involving an aerospace system with capabilities that the government would not want its adversaries to know.  Everyone involved first needed to get a security clearance to the level of "Secret" -- a process that took a couple of months and was quite intrusive.  But more important, the protocols surrounding the use of the classified information were very onerous and serious.  All classified documents needed to be in a locked file cabinet when not actually in use.  The locked file cabinet then had to be in a secure facility.  The nearest secure facility that we had access to was a factory in the South Bronx, and in one of the grimmest parts of that grim neighborhood, then in the midst of the worst days of its "Fort Apache" period.  Every few days I would have to take a long subway ride up there to sit in a windowless room to study the documents, making sure immediately to lock them back up as soon as I was done.  Witnesses who were to be questioned about the documents also needed to make the trek to the South Bronx facility for their testimony.  It was obvious through all of this that the people who had imposed the classification had always used a rule of "when in doubt, classify" -- a rule that added very substantial costs to the process.   If there was anything in a document that could possibly help an adversary to understand anything about the system that might be useful, the document was classified.

As far as I know, virtually everything the Secretary of State does or says to colleagues and aides would be classified by the very fact that the Secretary of State did or said it.  Anything about negotiations or discussions with other countries would be classified, even when the other country is among our very best friends, like say England or Israel.  All national security information would be classified.  Could Hillary really be asking us to believe that she was able to function as Secretary of State, and send and receive tens of thousands of emails, without any information in these categories being included?  Wow.

It really says something about the level of preposterousness here that even the New York Times is expressing skepticism.  Well, not in their own voice; but they interview and quote people in a position to know.  Example:

A former senior State Department official who served before the Obama administration said that although it was hard to be certain, it seemed unlikely that classified information could be kept out of the more than 30,000 emails that Mrs. Clinton’s staff identified as involving government business.  “I would assume that more than 50 percent of what the secretary of state dealt with was classified,” said the former official, who would speak only on the condition of anonymity because he did not want to seem ungracious to Mrs. Clinton. “Was every single email of the secretary of state completely unclassified? Maybe, but it’s hard to imagine.”

Seems to me that the strategy here has to have been that once a judge appointed by her husband had been drawn, and with a credulous and supportive press at her side, it would be possible to play out the string well past the next election, by which time everyone would have forgotten about the issue.  Unfortunately for her, it looks like the judge is not going along with that strategy.  Still, these things move very slowly.  It's more likely to be a slow drip than any big explosion.

Why Does U.S. Economic Performance Continue To Decline?

The government's latest GDP numbers, through Q2 2015, are now out, and they include some revisions to Q1, as well as other revisions for the period 2012 - 2014.  Lenore Hawkins analyzes the numbers at Elle's Economy, in an article titled "GDP Numbers Keep Getting Worse."   One consequence of the revisions is that Q1 2015 went from a slight decline to a slight increase.  But the other revisions to earlier years, particularly 2012 - 2014, had the effect of lowering previously-reported GDP substantially:

In the 138 years from 1870 to 2008, the US economy expanded by about an average of 3% a year.  After the revisions to GDP data from 2012-2014, we see that the U.S. economy since the financial crisis has been growing an average of 2.0% a year versus the earlier 2.3%. . . .   Most importantly, 2010-2014 was weaker in every quarter except the second and 2015 so far has been the worst yet! 

So why doesn't the U.S. economy just get going like it always did in the past -- even as recently as the decade of the 1990s and from 2001 - 2008?  Could there be something different about the Obama regime?

Well, there is the fact that the Obama administration continues to conduct what I have called its War Against the Economy.  As described in that article and elsewhere on this blog, that war has many fronts, including: massive wasteful spending and debt accumulation; artificially suppressing cheap and reliable energy in favor of subsidizing expensive and unreliable energy; overregulation and endless phony prosecutions directed against anyone who dares to make too much money in a financial business; forcing people to overpay for wasteful health insurance (Obamacare); big tax increases; and more.  You would think they might let up on the war as the economy continues to languish, but in fact they just keep doubling down.  I truly believe that Obama and his minions have no idea that there is any relationship between intentional suppression of economic activity by the government on the one hand and sluggish economic performance by the economy on the other.

So there was Obama yesterday announcing the final version of EPA's so-called Clean Power Plan.  This version has several changes from the prior proposal, including a goal to get rid of even more coal-based electricity generation, and new restrictions on shale gas.  Since it takes years to change over electricity generation from one source to another, the coal industry has already been gradually going out of business for the past several years.  So far it's a hundred or so power plants closed, and tens of thousands of miners out of work.  And now they're going to force this to happen even faster!  In his speech yesterday, Obama tried to claim the moral high ground by making the case for closing power plants on the basis of asthma.  From Breitbart News:

President Obama defended his new draconian rules on coal fired power plants today, using a moral argument for battling back the dangers of climate change.  As part of his argument for his new policies, President Obama insisted that more minorities were being hurt by air pollution.  He argued that African-American children was more than twice as likely to be hospitalized from asthma and a Latino child was 40 percent more likely to die from asthma.  “If you care about low income minority Americans, start protecting the air they breath. . . ."

So our President is so "smart" that he believes that CO2 in the air is a cause of asthma?  Yikes!  But then we also know that he believes that it's a good idea for a government to borrow as much money as it can and waste it as fast as possible.  Hey, Paul Krugman told him that.  All the "smart" people know it!  Anyway, in order to prevent young minority children from getting asthma from all that extra CO2 in the air, we are now going to intentionally jack up the price of electricity so that the underprivileged families can't afford lighting and air conditioning any more.  Because it's the moral thing to do!

Richard Wellings of the Institute of Economic Affairs comments on Obama's energy plans yesterday in The Telegraph, in an article aptly titled "Barack Obama's green plans could cripple America's economy."   

In much of the US, the power industry continues to rely on coal. Consumers in Kentucky, where over 90% of electricity is generated from coal, enjoy electricity prices roughly 50% lower than in the UK, an indication of the huge potential cost of Obama's plans.  Indeed much higher bills are almost inevitable now that the US is adopting EU-style policies. Carbon emissions from the power sector will be cut by an ambitious 32% by 2030 (compared to 2005 levels). Worse still, the Clean Power Plan will favour expensive renewable energy over the relatively low-cost option of cutting emissions by switching from coal to natural gas.

Actually Richard, the crippling of the American economy by the Clean Power Plan has been going on for quite a while already, because of the time it takes to change over power production, and because the utilities can't take the chance of being caught out on the day the new regulations take effect.  But then, that's only a fraction of the intentional crippling that these people are inflicting.  It's what we call Obama's "legacy."

Do Progressive Policies Cause Income Inequality?

Over at the City Journal, they published one of my articles on Saturday, titled "What Causes Income Inequality?  Progressive Policies Do."  The article was then linked by Real Clear Politics, and proceeded to attract a lot of readers and comments.

Reading the comments, I thought that many of the commenters had at least partially missed the point of the article.  In part that may be due to the title (which I didn't write).  What some commenters seemed to have concluded was that I was arguing that without "progressive policies" (like affordable housing, high minimum wage, and in-kind distributions such as Medicaid and food stamps) there would be no income inequality.  No, I would not say that.  But I would say that those policies, supposedly designed to address and ameliorate income inequality, actually make it worse, at least as measured by standard measures such as the Gini coefficient.

The point is important because progressive politicians, like our Mayor Bill de Blasio, use the government income inequality measures to prove the existence of inequality and to advocate for additional government action to address it -- more affordable housing, higher minimum wages, expanded Medicaid and food stamp eligibility.  Yet somehow the measures of inequality, particularly the Gini coefficient, do not move toward greater equality in the jurisdictions that adopt more of the progressive policies.

Actually, it's the opposite.  The jurisdictions in the U.S. with the most progressive state and local governments -- and the most public housing, the highest Medicaid and food stamp usage, and the premium minimum wages -- are the jurisdictions with the highest Gini coefficients, indicating the greatest income inequality.  As the article points out, Bloomberg Rankings did a study last year that ranked all Congressional Districts by Gini coefficient, and the results were eye-opening. Of the top (most unequal) 25 Congressional districts, 23 were represented by Democrats, and they included literally all the most progressive districts in the country:  all five Manhattan districts,  plus districts covering downtown Chicago, Cambridge, Berkeley, Santa Monica, and of course Nancy Pelosi's San Francisco district.  The very highest Gini coefficient of all is found in the New York 10 Congressional district, covering the Upper West Side of Manhattan, Greenwich Village, and the Financial District.  Bill de Blasio's office (City Hall) is in this district.

And it's not hard to understand why more government redistribution leads to higher and still higher income inequality.  It's because little to none of the redistributed goodies counts as income.  Nobody counts the value of a Medicaid benefit as income, and the government doesn't count it either.  In New York, the Medicaid benefit costs the taxpayers about $10,000 per beneficiary per year, $40,000 for a family of four.  Nobody counts the subsidy value of an "affordable" apartment either.  In New York the rent discount on many "affordable" apartments exceeds $50,000 per year; for some it exceeds $100,000 per year.  (We have low income projects lining miles of prime oceanfront, and more miles along the East River!)

So thousands of families get income redistributions exceeding $100,000 per year in cost to the taxpayers, only to find that they are still "poor."  And they really are poor.  They may live in an apartment that someone else would gladly pay $50,000 per year to rent; they may get first class medical care (Medicaid); and they may have plenty to eat (food stamps).  But they have little to no discretionary money to spend and they are at risk of having their benefits yanked at any time if they dare to go out and try to make some money of their own and become independent of their government masters.

So next up is the push for a $15 minimum wage.  In Puerto Rico they have a minimum wage at about 70% of median wage, and they have lost 20 points of labor force participation (42% versus 62% on the mainland).  How could following their lead do anything other than drive the Gini coefficIent through the roof?

Enforced Conformity In The Climate Alarmist Community

My piece a few days ago titled "The Greatest Scientific Fraud Of All Time -- Part VI" attracted a large number of comments.  Most were friendly, but at least a couple suggested that I must be accusing the climate alarmist community of some kind of great "conspiracy."  After all, how else could they present to the world a front of such seeming unanimity?

But actually I have never made a charge that there is a grand conspiracy.  Rather, I have contended that there is a grand groupthink.  In fact, here's a post I wrote just a few months ago in April 2015 called "How Groupthink Works," specifically discussing the mechanisms of groupthink enforcement against anyone who dares to engage in climate apostasy.  The particular subject of the post was constitutional law scholar Larry Tribe, who had then recently taken an assignment from Peabody Coal to argue a challenge in the D.C. Circuit to the constitutional legitimacy of the EPA's Clean Power Plan.  (That's the massive set of EPA regulations currently working their way through the process, that threaten to shut down the entire coal-power business in the United States.)

As early as March and April, Tribe's then-new apostasy had already earned him some good heapings of ridicule and shaming from his erstwhile co-icons of the lefty law tribe, published of course in Pravda where all members of the tribe would see them -- and would see what would happen to themselves should they dare to stray even momentarily from official orthodoxy.  For example, on March 26 the Times published an op-ed by recent ex-NYU Law Dean Ricky Revesz titled "An Obama Friend Turns Foe on Coal."     The op-ed stated that "To many Democrats and professors at Harvard, Mr. Tribe is a traitor."  The Revesz op-ed also cites two of Tribe's co-Harvard Law professors as calling his constitutional law arguments on behalf of Peabody "ridiculous."  (Of course, the op-ed did not actually attempt to deal with Tribe's constitutional arguments on their merits.  Hey, they're "ridiculous" -- isn't that enough?)

And the ridicule and shaming of Tribe continue.  The current (July 28) issue of New York Magazine has a long article on his ongoing ostracism.  The title is "Et Tu, Tribe."  The article begins by describing an interview given by Tribe on NPR on June 18.  NPR -- they're an official member of the tribe.  Surely their job is to save any difficult questions for conservatives, and pose only softballs to a liberal icon such as Tribe.  Well, not any more.  Suddenly the questioning turned hostile:

“Can a scholar take a client like that [Peabody] and maintain an appearance of independence?”

“Well, I’ve been doing this kind of thing for decades,” Tribe replied, the ice creeping into his voice. “And I’m just not for sale.” He had the urge to hang up the phone then and there. But he fought it off and handled another 90 seconds of questioning with superficial aplomb. “I have had a career that I’m proud of. I’ve represented causes that I believe in,” he said. . . .  Inside, though, Tribe was churning. “It was an inexcusable ambush,” he wrote immediately afterward, an “awful caricature.” He was flummoxed that people involved with a friendly NPR show would prove to be “such venomous snakes.”

And then, as the article continues, there are multiple examples of former friends and colleagues turning on poor Mr. Tribe.  For example:

“For most environmental-law scholars, climate change is the challenge of our lifetime, it is an existential threat to life as we know it,” says the UCLA law professor Ann Carlson, who has written that Tribe is “destroying his reputation” as a constitutional theorist. “I think the question is, how can Larry Tribe be attacking the president’s climate-change policy in this way?”

Really, it's not very different from how the Catholic Church enforced orthodoxy by the Inquisition, or how the Muslims enforce it today.  Or even from the way a political party rallies around a presidential candidate about whom many members have misgivings.  The misgivings are put aside for the sake of supporting the team and defeating the other guys.  No need to advance any kind of conspiracy theory to understand this process.  It's just basic Politics 101.

The Fight To Bring "Fair Housing" To Westchester Turns Humorous

Of all federal agencies, probably the most destructive dollar for dollar is the Department of Housing and Urban Development.  Its business is creating and perpetuating poverty traps.  The idea is to take people currently poor and offer them a deal with the devil whereby they can have an in-kind gift of a subsidized apartment for life, the highly-illiquid value of which does not count in income, in return for accepting a set of incentives that makes it almost impossible for them to rise up the income ladder.  And thus we have the HUD-supported New York City Housing Authority, supposedly started as a means for the poor to begin to escape poverty,  eighty years later reporting a poverty rate of residents of 51% and a turnover rate of 3%.  Motto:  "We warehouse poor people for life!"

OK, you're an HUD bureaucrat and you want more funding to grow your agency.  How to deflect attention from this obvious disaster and try to claim the moral high ground?  Easy!  Here's the official narrative: the poor are kept poor not by your own programs that intentionally trap them in poverty, but rather by evil discriminating towns in rich areas that have excluded the poor.  If only the poor could live in someplace fancy like, say, some upscale New York suburbs, they'd quickly be on the road to success!

And thus we have HUD, with the aid of Southern District of New York prosecutor Preet Bharara, currently turning its sights on Westchester County -- the mostly upscale area immediately North of New York City -- with accusations that it is dragging its feet in building some new subsidized units that somehow this time are going to succeed in helping the poor escape poverty.  Howard Husock of the Manhattan Institute has a report today on the National Review site.  It seems that Westchester County agreed with HUD to build some subsidized housing, but it's not getting built fast enough to satisfy the bureaucrats, so they are threatening fines and sanctions:

The Justice Department (specifically, the office of the nation's currently most prominent U.S. attorney, Preet Bharara of New York's Southern District) last week threatened to fine the county $60,000 a month and to force it to put more than $1 million in escrow against potential future fines. It's all the result of a lawsuit filed in 2006 by a New York City-based nonprofit called the Anti-Discrimination Center. . . .  To resolve the suit, Westchester pledged to use $50 million of its own funds, along with HUD money it receives, to build some 750 units of new subsidized housing . . . .

Now it's not like Westchester is some lily-white hotbed of racial exclusion.  According to Husock's article, in a county of about a million residents, Westchester has some 131,000 African Americans and 144,000 Hispanics, both figures rather closely in line with the percentages of those groups in the overall U.S. population.  And, Husock points out, some of those members of minority groups reside in "even the wealthiest enclaves."  But not enough to satisfy HUD!

So we come to the best part: a particular project in a particular wealthy enclave has become the focus of the prosecutor's ire.  That project is in a town with a median family income of $180,000.  Yes, it's none other than Chappaqua, home to Bill and Hillary Clinton.  (For that matter, Chappaqua is also part of the Town of New Castle, in which also lives New York Governor and former HUD Secretary Andrew Cuomo.)  It seems like Chappaqua has actually agreed to have the units built, but the project is stalled over issues of zoning variances and exactly where the projects will be located.

So a few days ago, County Executive Rob Astorino took the occasion to hold a brief news conference outside the Clinton's mansion.  Madame Hillary was actually home, so Astorino asked the nice Secret Service lady if he could go in to see the occupant, but of course he was refused.  Here's a clip of a part of the festivities.  Astorino posed a series of questions for HIllary, the key one of which was "Does she think that her town is discriminatory?"  No answer was forthcoming, but of course that's far from the only question that Hillary has not been answering lately.

Meanwhile, might somebody point out that Manhattan is the wealthiest county in the country by per capita income, and also right there next to all those rich people it has the highest concentration of subsidized housing, and yet somehow none of those poor people ever get out of poverty?  If the theory that merely living next to rich people ended poverty were right, New York City would not have a poverty rate 5 plus points above the national average.  The fact is that these subsidized housing projects intentionally perpetuate poverty, and this one in Chappaqua, if and when it gets built, will be no different.

Stamford's, And Connecticut's, Losing Strategy

In case you missed it (and you probably did -- who reads Pravda any more?), the lead story in the Sunday Business section of the New York Times this week had the headline "In Connecticut, the Twilight of a Trading Hub."  This long article (about 3000 words) chronicles the rapid recent shrinkage of employment at a few large international banks that had located their trading floors, and thousands of employees, in downtown Stamford, Connecticut.  These were not just any jobs, but plum, super-high-paying jobs on the big, exciting trading floors.  Now the trading jobs are rapidly drying up, and the big downtown office buildings near the train station are emptying out.

Why is this happening now to poor Stamford?  If you believe the Pravda narrative, the main reason would be "bad luck":

Stamford had the bad luck of housing the American headquarters of two European banks, which are facing particular challenges as the Continent has struggled to cope with several debt crises. RBS, or Royal Bank of Scotland . . . recently announced plans to reduce its work force in Connecticut, which was once 2,400 people, to fewer than a thousand, making its gleaming building far too large a home. The number of UBS employees in Stamford fell to 2,000 last year, from 4,400 before the crisis, and more cuts are likely. HSBC and Deutsche Bank are the most recent banks to announce major global overhauls.  The financial crisis in Greece is the latest headwind likely to challenge any recovery at European banks.

Really?  Let me ask you a question:  Might high taxes and/or a gigantic overhang from unfunded government employee pensions have anything to do with Stamford's loss of high-paying jobs?  Get this:  In about 3000 words on why Stamford is losing high-paying jobs, the Times doesn't mention one single word about either high taxes or the pension overhang.  Well, then I guess "bad luck" must be the only explanation!

So perhaps the Manhattan Contrarian should provide a little context to Stamford's "bad luck."  Until 1992, Connecticut had no state income tax.  The income tax began that year at a rate of 1.5%.  Today the top rate is 6.7%.  Democratic Governor Dannel Malloy was elected in 2010 on a promise not to raise taxes, and promptly raised them.  He was re-elected in 2014 on another promise not to raise taxes and has promptly raised them again.  The Tax Foundation in its most recent ranking of the states puts Connecticut 42nd of 50 for tax burden.  The most recent (June 2015) state budget included individual income tax increases (by eliminating some credits) as well as an extension of a 20% surcharge on the corporate profits tax that put a bullseye right on the heads of the biggest corporate employers.  From Rex Sinquefield in Forbes on June 16:

One of the budget’s most egregious inclusions is a $700 million increase in taxes on businesses, including extending the state’s 20 percent surcharge on the corporate profits tax. Not surprisingly, the hikes are prompting corporations headquartered in Connecticut to seek friendlier economic climates in order to maintain their competitive advantage. Last week, House Republican Leader Themis Klarides equated the newly passed budget to “holding up a sign at the border to businesses and saying get out.”  Indeed, multinational companies are reading that sign and looking for an exit. Jeff Immelt, the Chief Executive Officer of General Electric, announced to his thousands of Connecticut-based employees he’s built a team tasked with evaluating a move to a state “with a more pro-business environment.” Insurance giant Aetna, currently headquartered in Hartford, already pays $65 million a year in state and local taxes; under this new budget, Aetna’s tax burden goes up by another 27 percent.

According to data here from the Connecticut Department of Labor, Connecticut had 1,640,000 jobs in 1990 and 1,690,000 jobs in May 2015, or just about 3% growth in 25 years.  Or you could call it about 0.1% growth per year over that period.  It's almost perfect stagnation for two and a half decades.

Could it be just coincidence that two and a half decades of complete stagnation started right when the income tax came in?  If it helps you in considering that question, I can remember from personal observation that Stamford was having a boom back in the 70s and 80s.  New office buildings were going up everywhere.  In the late 70s New York's top income tax rate for combined state and city reached 19%.  Connecticut had no income tax at the time and its suburbs closest to the City boomed.  From the late 70s through the 80s New York State cut its top rate from about 15% to 7%.  And then Connecticut instituted its income tax in 1992.  Draw your own conclusions.

After putting in its income tax in 1992, Connecticut adopted an extreme form of job-buying crony capitalism to make its economy seem better than it was.  This is the ultimate game for suckers.  The job-buying crony capitalism is how Stamford got the big bank trading floors in the first place.  The New York Times article linked above actually has a pretty good list of the huge handouts that Connecticut has paid over the years to attract these bank jobs.  It started right there in the early 90s.  Examples:

Stamford began its bid to capitalize on Wall Street’s expansion in 1994, when it offered $145 million in tax credits, and a free parcel of land, to what was then Swiss Bank to build its American headquarters in the city.

RBS came substantially later in 2005:

RBS . . . agreed to build its American headquarters in Stamford in 2005 after the state promised incentives worth $100 million in exchange for 1,150 new jobs in the state.

And the great thing about blackmail is that you can keep going back to the marks and hitting them up for more money.  For example, in 2011 UBS threatened to move its trading operation back to Manhattan, and hit up Connecticut for a big subsidized loan:

In 2011, Connecticut’s governor, Dannel P. Malloy, the former mayor of Stamford, gave UBS a $20 million loan to keep employees in the state. Last year, Mr. Malloy, despite criticism, extended the loan to 2021.

And now they're saying that they are going to move the trading operation back to Manhattan anyway, and scatter an equivalent number of (much lower paying) stockbroker jobs around the state to fulfill their jobs commitment.  Hahahahahahahahaha.

Here's another thing I remember:  the cheerleading campaign of the New York Times editorial page back in 1992 pushing Connecticut to enact an income tax.  How has that worked out for you guys?