Tuesday, May 30, 2017

Kushner Investigation

 I don’t know what is wrong with Jared Kushner talking to Soviet diplomats about opening a secret channel of communications between the US and Russia.  You might question the political wisdom of such an arrangement, but I don’t see what is illegal about it.  

I see the potential criminality of Gen. Michael Flynn’s taking payments from the Russians, especially his not reporting the payments to the Pentagon.  I see a lot of smoke indicating the possibility of criminal activity surrounding Paul Manafort, who has been a paid consultant to a number of unsavory individuals and organizations connected to the Russians and the Ukrainians.  However, both of these potentially criminal actions are outside of those individuals’ activities directly connected to the Trump campaign. It is as if Trump had hired a thief to work in his campaign.  If that thief did not steal while he was working for Trump, then Trump might be guilty of poor judgment for hiring him, but that’s all.  There is no criminal liability attached to the campaign itself.  

I think the liberal press is trying to create some kind of guilt by association, by talking about the innuendo involving people in the campaign.  It is as if they were talking about someone going to a bar, and thereby trying to create the impression that he is a drunkard, just because he went to a bar after work.  

Your business is not criminally liable because one of your employees set his neighbor’s house on fire.  Again, you can be criticized for employing an unsavory character, but that does not make you a criminal or your business a criminal activity.  As usual in Washington, if there was some criminal act involved in trying to cover up the associate’s criminality in order to avoid bad publicity, then that coverup might be criminal, but not the original act itself.  But that coverup would have to be criminal in itself, not just poor judgment.  

In fact, I think much of the ado about Russia is an attempt by the liberal press to create some kind of implicit guilt for something that is not a crime.  Liking the Russians may be a poor political judgment, but it does not appear to me to be a crime.  The Democrats are trying to revive the hatred of the old Soviet Union from the bad old Cold War days.  Russia is not the Soviet Union.  The Democrats make the Russians look like some huge threat, but from the stories in the New York Times and Washington Post, the Russians look pretty incompetent.  We seem to see every cable that the Russian ambassador sends to Moscow.  Civilian Russian hackers may be pretty good, but the FSB security people seem like rank amateurs.  Their codes can be broken easily.  It’s like American breaking the German’s Enigma code in World War II, but in that case the intelligence services managed to keep it a secret.  It was not headlined on the front pages of newspapers.  America’s intelligence services can break codes, but they can’t keep a secret.  

I worry that some elements of the intelligence community have gone rogue and are more loyal to the Democratic Party than to the US Constitution, which they took an oath to uphold.  

Monday, May 29, 2017

NYT and Wash Post Leaks

The New York Times ran a front page article defending its decision to print leaked intelligence about the Manchester bombing from the British, which aided the terrorists by giving details of the British investigation.  The NYT put getting a scoop ahead of protecting the nation from terrorist attacks.  

The Washington Post printed leaked intercepted communications between the Russian ambassador in Washington and the Kremlin in Moscow.  I don’t know how the ambassador communicated with Moscow, but the ambassador does, and he will know not to use the same channel again unless he wants to give the information to the US. The article may have revealed that we have broken Russian codes that they did not know we had broken.  

Neither newspaper seems concerned about damaging US national security either vis-a-vis the terrorists or Russia.  It appears that whoever is leaking information to the press is less concerned about US national security than about other issues, like getting rid of Trump.  

The inability of the Russian government to keep a secret makes the Russian spy agency, the FSB, look like a joke. The Russian ambassador, Kislyak, looks like a fool, an incompetent nincompoop. If Putin had some plan to get an inside track with the new administration, his team botched it horribly. The Russians look like the gang that couldn't shoot straight.

Tuesday, May 09, 2017

Rice on Russian Election Hacking

On Morning Joe this morning Condi Rice (at about 14 minutes in) said Putin is probably pleased with all the chaos that his hacking has unleashed, because it has caused people to question the strength of American democracy.  He is happy that his actions are tearing apart our democratic system.  He wants to sow doubt about the legitimacy of US elections.  She thinks we should stress that we have confidence is our electoral system.  She says we should not jump to the conclusion that Putin wanted to elect Trump.  Rather she thinks that he just wanted to discredit our political system.    (Part 2 of Rice interview.)

I think she has a good point.  It is arguable that the Democrats are destroying democracy in order to save it, like the old aphorism that in Vietnam, American troops destroyed a village in order to save it. 

Morning Joe also discussed Ted Cruz’ questioning of Sally Yates regarding her refusal to defend Trump’s immigration order.  They thought she destroyed Cruz.  She had a good point that there were conflicting statutes, the one Cruz cited which seemed to support Trumps order, and the statute Yates cited that seemed to discredit it, because it discriminated on racial or religious grounds.  But then she went on to undermine her own statutory argument.  She says that the executive order was unconstitutional.  I don’t think the Constitution grants any right to a non-resident alien physically located outside of the US.  Thus, she may have a statutory argument, but not a Constitutional one, which she said was the basis for her action.  Even on the statutory argument, she relies on statements Trump made while campaigning.  I think using those statements is unprecedented in statutory interpretation.  It is an issue the Supreme Court should (and may) decide.  I would argue that to invalidate the order, opponents should find some basis from religious discrimination in official conduct of the Trump administration while in office.  I don’t think that has been shown so far. 

Video of Yates’ statement: 

Monday, May 08, 2017

Trump Healthcare and Taxes

Trump won an important political victory last week by getting the House to pass a bill repealing and replacing ObamaCare.  The victory showed that Trump and his staffers are able to put together the political power and intelligence to get the fractious Republican congressmen to agree on something that can get the necessary number of votes.  The bill is a mess, but it is a political victory. 

The reasonable, responsible thing for America to do is pass single-payer, government-funded healthcare, Medicare for all, as Trump recognized by his comment during his dinner with Australian Prime Minister Turnbull.  Trump probably personally favors this solution, but he can’t possibly pursue it with the Republican Party he leads. 

ObamaCare is bad.  It expands coverage, but it is a mishmash drafted by healthcare and insurance industry lobbyists.  It has turned out not to be so profitable for health insurance companies, but they have the option to drop out if it’s not profitable, which they are doing in droves.  ObamaCare is somewhat responsible about trying to provide funding for the new services, but it fails in the long run.  The Congressional Budget Office estimated that in 2016 federal subsidies for all types of health insurance coverage for people under age 65 (i.e., excluding Medicare) amounted to $660 billion, or 3.6% of GDP.  The amount would rise to $1.1 trillion by 2026.  For the ten year period from 2017 to 2026, the total federal subsidy for medical care for people under 65 would be about $8.9 trillion.  Of that subsidy, $3.8 trillion is for Medicaid, and $3.6 trillion is for the tax deductions for healthcare insurance provided by businesses. 

The main point of these figures is that ObamaCare is not self-funding; it results in a huge deficit funded either by higher taxes or borrowing from the Chinese.  Since higher taxes seem unlikely, China is picking up the tab for much of the medical treatment provided in the US.  The Chinese are buying lots of expensive homes and cars for American doctors. 

It’s hard to tell from this FactCheck.org report, but it sounds like about 6 million people with pre-existing conditions were covered by ObamaCare, who might otherwise have been denied insurance.  On the other hand, Kaiser and HHS say about 75 million people are enrolled in Medicaid; so, Medicaid is a much bigger, more expensive program.  I found it strange that the Democratic arguments against the Trump repeal and replace of ObamaCare were focused much more on pre-existing conditions than on Medicaid.  In addition, it sounds as if the Trump bill uses its Medicaid cuts to give a huge tax cut to millionaires.  It seems to me that this is a much more important issue. 

These articles in Forbes and MarketWatch so far seem some of the clearest on the tax implications of the Medicaid changes.  It looks like the TrumpCare bill eliminates a Medicare tax, not a Medicaid tax.  The Medicare tax imposed by ObamaCare is a 3.8% tax on net investment income for people earning over $200,000 (single) or $250,000 (married).  Plus, ObamaCare created a 0.9% Medicare tax on salary or income above those same amounts.  Apparently TrumpCare would eliminate these taxes, reducing taxes (and revenues) by about $900 million over a decade, i.e., about $100 million per year.  One advantage of putting these tax provisions in the healthcare bill may be that it will help a tax bill pass under the reconciliation process in the Senate, thus blocking a filibuster.  It may also make tax cuts look smaller by dividing them up between the healthcare and tax bills. 

In any case, the Medicaid provisions, which are the basis for including the tax cuts, seem much more important for the economy and for the population at large than the pre-existing condition provisions.  Nearly half of all births in the US are paid for by Medicaid, according to Kaiser.  Maybe the Democrats thought the pre-existing condition issue would be more attractive to the general public, but relatively few people will be affected by it.  More than 6 million people may have pre-existing conditions, but they probably have other options than ObamaCare, and can get insurance through another program. The 75 million people on Medicaid have fewer options. 

Saturday, May 06, 2017

Op-Eds on the Importance of the EU

Kissinger had an interesting op-ed in the Wall Street Journal:

I thought it was interesting history, but at first I wondered why he wrote it.  I guess it’s in the WSJ because of the French election and what Kissinger says about the importance of a united Europe.  It also sounds like he has a personal fondness for Adenauer that he wanted to get on the record.  Kissinger is unique.  He has written a relatively long piece about Germany just after WW II and does not mention the Holocaust once, despite being an ethnic Jew.  He has high praise for Adenauer and by implication the Germans who worked with him after the war.  My experience is, especially after my Poland tour, that as soon as you mention WW II to a Jew they start talking about how horrible the Holocaust was, and often think the US let the Germans off too lightly despite the Nuremberg trials. 

The one time I met Kissinger was on a Sunday afternoon while I was working in the current intelligence office of the State Department operations center in the 1970s.  We got a highly classified report that Anwar Sadat, who was at that moment in the US on an official visit, was going to be assassinated.  (They just got the time and place wrong, but it’s like the stopped watch that is going to be right sometime.)  Anyway we decided we should probably tell somebody about this report; so, I took it the 50 yards down the hall to the Secretary’s office in a locked pouch.  There was nobody there but his private secretary, who said he was in a conference room in the back. So I walked another 25 yards down a warren of corridors to a little conference room where he was sitting with Assistant Secretary Philip Habib.  I was going to hand him the report, but he said just tell me what it says.  So I told him; he said thanks, and that was it.  I think Sadat was around for several years after that.  Ford must have been President at that time, and Kissinger was his Secretary of State.    

There’s another interesting historical piece in today’s NYT on Central Europe:

It’s probably interesting to me because of the Polish connection -- King Sobieski’s defense of Vienna against the Turks.  It’s another pro-EU article before the French election.  He calls the EU “the necessary empire.” The EU can theoretically help knit together the ethnic rivalries of old Europe – Roman Catholic Slavs, Russian Orthodox Slavs, Muslims, etc., but I’m not sure it is up to the task at the moment if it can hardly keep the French on board.  Nevertheless, the history of the Balkans is interesting.  A more assertive Russia and Turkey versus a weakening EU could presage a resurfacing of these old rivalries. 

Monday, May 01, 2017

North Korea and the KEDO Attempt To Stop Its Bomb Program

This was in last week's installment of the Diplomacy Oral History project newsletter. 

Here is a link to an oral history of the first attempt to work out a nuclear deal with North Korea:

Near the middle, around the graph of KEDO (Korean Energy Development Organization) funding and the picture of the North Korean nuclear plant, is a description of the KEDO funding difficulties.  This article doesn’t mention it, but while I was in Rome, KEDO was having trouble getting funding for the fuel oil it had promised the North Koreans as a reward for them if they would not work on their bomb project while KEDO worked on building a nuclear power reactor in North Korea that would not produce bomb-usable plutonium.  As the article says, the US Congress would not approve the money for the fuel oil.  The main sticking point was the Republican congressman from Mobile, Alabama, (I forget his name) who was on the Appropriations Committee.  Since he would not approve the money, somebody from KEDO came to Rome (maybe Bosworth, I don’t remember) to ask the EU (through the Italians since they held the rotating presidency of the EU) if it would contribute $2 million to help KEDO meet its obligations.  I think the EU eventually said, “No thanks,” although they promised to think about it, and expressed European concern about a North Korean bomb.   

It really ticked me off that the North Korean deal looked like it might fail because the US refused to meet its obligations, thus giving the North Koreans an excuse to go back to building bombs.  Interestingly, Bosworth says here that the North Koreans were not too upset about the funding problems, but in Rome I didn’t know that.  In any case, the KEDO deal fell apart later.  Joel Wit, who worked for Bosworth and was more my level (we had worked together on the Missile Technology Control Regime),has said somewhere that KEDO never missed a payment.  But I think maybe he and Bosworth tend to gloss over the payment difficulties so as not to make themselves look too responsible for KEDO’s failure.