“The Lobbyist-Of-Choice”: How Trump’s Paul Manafort Became Expert On “Crooked” Washington
Will veteran GOP lobbyist Paul Manafort bring a measure of respectability to Donald Trump and his disreputable campaign apparatus? The Republican lobbyist isn’t likely to engage in the thuggish antics made infamous by campaign manager Corey Lewandowski.
But when I saw Manafort yapping about “Crooked Hillary” — while assuring other insiders that Trump is merely “playing a part” on the stump — I recalled certain aspects of his resume that deserve fresh scrutiny now.
Manafort first drew public attention during the Reagan era, when he and his lobbying partners represented Philippine dictator Ferdinand Marcos, a world-class kleptocrat whose theft of enormous amounts from his country’s treasury I helped to expose in The Village Voice more than 30 years ago (with my esteemed colleague William Bastone, who later created The Smoking Gun website). Few official criminals in the 20th century were as audacious and greedy as Marcos and his shoe-fetishist wife Imelda, but when their image cratered after our investigation, Manafort gladly took nearly a million dollars to apply lipstick to those pigs.
Not content with the tainted Marcos lucre, Manafort and company also advocated on behalf of international gangsters such as Mobutu Sese Seko, the kleptocratic dictator known as the “King of Zaire”; Jonas Savimbi, the reputed cannibal and blood-diamond purveyor who tried to seize power in Angola; Said Barre, the authoritarian crook who left the failed state of Somalia to pirates and jihadis; and Ukrainian overlord Victor Yanukovych, the corrupt, Kremlin-backed autocrat thrown out by massive street protests two years ago for fixing a national election.
How did Manafort become the lobbyist-of-choice for these odoriferous characters? His reputation as a powerful Washington insider was elevated by one of the Reagan administration’s worst scandals – the looting of Housing and Urban Development funds by well-connected Republicans like Manafort, who quietly stuffed their pockets with federal funds while bemoaning “big government.” In Congressional testimony, Manafort admitted to successfully peddling influence for big money – which impressed Mobutu so much that he hired the firm. The result was that taxpayers got fleeced for hundreds of millions of dollars, over and over again, ripped off in perfectly legal fashion by Manafort and his clients. Unlike several Republicans implicated in the scandal, Manafort not only escaped indictment but actually prospered as a result of his notoriety.
But don’t worry: Trump is going to clean up Washington corruption and waste. You can tell by the company he keeps.
By: Joe Conason, Editor in Chief, Editor’s Blog, Featured Post, The National Memo, April 25, 2016
“They Haven’t Learned Yet”: Republican’s Love Affair With Voodoo Economics
In a moment of sanity, George HW Bush once called Ronald Reagan’s proposal for tax cuts “voodoo economics.” The idea was that tax cuts for the wealthy would somehow “trickle down” to the rest of us and grow the economy. Bush eventually had to embrace the idea as Reagan’s vice president, but later as president himself, he paid the price when he had to abandon his “no new taxes” pledge because the tax cuts accomplished nothing more than to blow up the federal budget deficit.
Along came President Clinton, who raised taxes on the wealthy (something that seems to have been forgotten in this presidential primary) and we witnessed the first budget surplus in generations. Next came George W. Bush, who cut taxes with the same result – a huge budget deficit compounded by wars and the Great Recession. At that point we were treated to the “wisdom” of VP Dick Cheney who quipped that “deficits don’t matter.” Of course that only lasted until Barack Obama became president and all of a sudden it became a national crisis. Eventually President Obama raised taxes on the wealthy once again, and cut the deficit by two thirds.
At some point, one has to wonder how long Republicans can continue their love affair with trickle-down economics. And yet all three presidential candidates continue to espouse the idea that tax cuts for the wealthy will make the economy grow.
The failure of trickle-down has been demonstrated in states as well as at the national level. We’ve all watched as the Republican governors of Kansas, Louisiana and Wisconsin failed to grow their economies by providing massive tax cuts to the wealthy. The most extreme case for years now has been Gov. Brownback in Kansas.
Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.
Rather than grow the economy, that resulted in things like the following:
Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.
With the 2016 election on the horizon and the state budget still in crisis, it looks like some Republicans may be questioning their commitment to voodoo economics.
Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.
If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.
“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”
While Rep. Hutton’s remarks won’t win him a “profile in courage” award, the Republican proposal at this point – which Brownback rejected – is to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.
George HW Bush knew that trickle-down was just another name for voodoo economics. Now it sounds like a few Republicans in Kansas are figuring that out. But I don’t hold out a lot of hope that this kind of awareness will be contagious in the GOP. After all, acquaintance with facts and reality is clearly not their strong suit these days.
By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, April 19, 2016
“Gaming Election Laws”: Donald Trump’s Right That The Game Is Rigged—For Him To Make Money By Running
Win or lose, Donald Trump appears poised to come out ahead financially from his run for the White House thanks to campaign finance laws that, as he has pointed out, were not written with candidates of great wealth in mind.
Those laws let Trump shift many of his lifestyle costs to his campaign and earn a tidy profit, as we shall see.
The commercialization of the presidency is a modern development. When Harry S. Truman left the White House he had to live on his $112 a month (about $1,120 a month in today’s money) World War I army pension.
The big money for former presidents started with Gerald Ford, the only appointee to that post who turned his 29 months in office into a lucrative post-White House career making public appearances. Ronald Reagan upped the ante by collecting $2 million for speeches in Japan alone after he left the White House, plus much more money from other speeches and book royalties.
The full potential of the entrepreneurial ex-president, though, came when Bill Clinton left the White House. Together with his wife, Hillary, who hopes to be the next president, the couple raked in more than $153 million in speaking fees alone. She made $21 million from 91 speeches—with most of the money coming from Wall Street firms.
But Trump has figured out how to profit not by becoming president but merely by declaring himself a candidate—fulfilling his own prediction from 16 years ago, when he was running as the candidate of the tiny Reform Party, and told Fortune magazine: “It’s very possible that I could be the first presidential candidate to run and make money on it.”
At the time, Trump had a deal with Tony Robbins, the traveling motivational speaker, to deliver 10 speeches for $1 million. Trump coordinated his campaign stops with the speeches, boasting that this meant he was “making a lot of money” from flying his 1969 model Boeing 727 to campaign events.
He may be making lots more money this time. Here’s how: Federal law builds in a profit for a candidate who owns his own aircraft by requiring them to charge the campaign charter rates, which include a profit.
Most candidates hire planes, services, and equipment as needed during a campaign, giving them an incentive to get the lowest price so they have more money free to spend on television commercials, consultants, and get-out-the-vote drives.
But someone who must bear the ongoing cost of a private jet and helicopter, or a building, has an incentive to shift as much of the costs as possible to the campaign.
The same is true for shifting to the campaign the salaries and fringe benefits paid to bodyguards, which Trump has employed for at least 30 years.
If enough donations come in from supporters, Trump’s campaign can relieve Trump of much of the multimillion-dollar annual costs of his Boeing 757-200 jet—complete with gold-plated seatbelts, dining room, two bedrooms, and shower—and Sikorsky S-76 helicopter.
Trump claims he paid $100 million in 2011 for his 1991 model plane. At the time, aircraft brokers listed such planes for about $20 million, although they were outfitted for commercial airline service. Current prices are in the neighborhood of $10 million.
By putting that astronomical value on his plane, he can justify—assuming he’s put that number in his tax returns, which he’s yet to release, and not just his public bragging—a much higher charter rate, one that’s now paid to Trump by the Trump campaign.
All told, Trump’s Federal Election Commission spending reports show payments of $3.2 million to Trump Air Group (TAG), the Florida firm that operates his aircraft. That is almost 10 percent of the $33.4 million the campaign spent through February.
For comparison, Hillary Clinton, who has traveled much more extensively on the campaign trail, has spent about $2.5 million chartering jets. That is less than 2 percent of the $129 million her campaign has reported spending.
Donations have covered about 29 percent of Trump’s roughly $12,500 per day in aircraft costs. The rest is in the form of loans Trump made to the campaign, which may eventually be paid off with future donations.
Federal law says candidates who own their own aircraft must charge their campaign “the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size.”
Data from Boeing, analyzed by flight companies, suggests operating costs in the range of $8,000 to $9,000 per flight-hour when jet fuel prices were double current levels.
Charles Williams, editor of a British website which analyzes airline industry costs, and several charter operators put the hourly operating costs of a 757-200 in that range with charter flights starting at about $14,000 an hour. The chief sales agent for one charter firm told me that charges for blinged-out 757 like Trump’s could be as much as $30,000 per flight-hour.
Williams said the charter fees Trump charges the campaign, after a back of the envelope analysis using the limited data available from the campaign, seem reasonable.
So each hour Trump flies his jet to and from campaign events he both relieves himself of part of the burden of the plane’s fixed costs and turns a profit of several thousand dollars.
The law’s reference to “a comparable plane of comparable size” also suggests that Trump can charge a much higher than typical price for a Boeing 757 because he asserts it is the most fancily decked out private aircraft of its kind.
That’s right: He’s found the alchemist’s recipe for turning glitz into cash.
The campaign has also rented space in Trump Tower and rooms from Trump-branded hotels—both of which can legally charge rates that include a normal profit.
America would benefit from politicians as public servants and not from a campaign of presidency for profit.
By: David Cay Johnston, The Daily Beast, April 19, 2016
“Robber Baron Recessions”: Growing Monopoly Power Is A Big Problem For The U.S. Economy
When Verizon workers went on strike last week, they were mainly protesting efforts to outsource work to low-wage, non-union contractors. But they were also angry about the company’s unwillingness to invest in its own business. In particular, Verizon has shown a remarkable lack of interest in expanding its Fios high-speed Internet network, despite strong demand.
But why doesn’t Verizon want to invest? Probably because it doesn’t have to: many customers have no place else to go, so the company can treat its broadband business as a cash cow, with no need to spend money on providing better service (or, speaking from personal experience, on maintaining existing service).
And Verizon’s case isn’t unique. In recent years many economists, including people like Larry Summers and yours truly, have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages. Verizon-type stories, in which lack of competition reduces the incentive to invest, may contribute to persistent economic weakness.
The argument begins with a seeming paradox about overall corporate behavior. You see, profits are at near-record highs, thanks to a substantial decline in the percentage of G.D.P. going to workers. You might think that these high profits imply high rates of return to investment. But corporations themselves clearly don’t see it that way: their investment in plant, equipment, and technology (as opposed to mergers and acquisitions) hasn’t taken off, even though they can raise money, whether by issuing bonds or by selling stocks, more cheaply than ever before.
How can this paradox be resolved? Well, suppose that those high corporate profits don’t represent returns on investment, but instead mainly reflect growing monopoly power. In that case many corporations would be in the position I just described: able to milk their businesses for cash, but with little reason to spend money on expanding capacity or improving service. The result would be what we see: an economy with high profits but low investment, even in the face of very low interest rates and high stock prices.
And such an economy wouldn’t just be one in which workers don’t share the benefits of rising productivity; it would also tend to have trouble achieving or sustaining full employment. Why? Because when investment is weak despite low interest rates, the Federal Reserve will too often find its efforts to fight recessions coming up short. So lack of competition can contribute to “secular stagnation” — that awkwardly-named but serious condition in which an economy tends to be depressed much or even most of the time, feeling prosperous only when spending is boosted by unsustainable asset or credit bubbles. If that sounds to you like the story of the U.S. economy since the 1990s, join the club.
There are, then, good reasons to believe that reduced competition and increased monopoly power are very bad for the economy. But do we have direct evidence that such a decline in competition has actually happened? Yes, say a number of recent studies, including one just released by the White House. For example, in many industries the combined market share of the top four firms, a traditional measure used in many antitrust studies, has gone up over time.
The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan.
For Reagan didn’t just cut taxes and deregulate banks; his administration also turned sharply away from the longstanding U.S. tradition of reining in companies that become too dominant in their industries. A new doctrine, emphasizing the supposed efficiency gains from corporate consolidation, led to what those who have studied the issue often describe as the virtual end of antitrust enforcement.
True, there was a limited revival of anti-monopoly efforts during the Clinton years, but these went away again under George W. Bush. The result was an economy with far too much concentration of economic power. And the Obama administration — preoccupied with the aftermath of financial crisis and the struggle with bitterly hostile Republicans — has only recently been in a position to grapple with competition policy.
Still, better late than never. On Friday the White House issued an executive order directing federal agencies to use whatever authority they have to “promote competition.” What this means in practice isn’t clear, at least to me. But it may mark a turning point in governing philosophy, which could have large consequences if Democrats hold the presidency.
For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 18, 2016
“Cruz Wants The Mantle Of Camelot”: Why Do Conservatives Keep Talking About John F. Kennedy?
A day before Republican Senator Ted Cruz of Texas got an earful of Bronx jeers for his rightwing views on immigration and “New York values,” he summoned up the ghost of liberal icon John F. Kennedy to signal that his was a lofty, aspirational campaign not unlike one mounted by the youthful candidate for president way back in 1960.
“The American people expect more from us than cries of indignation and attack,” Cruz said, quoting JFK during his acceptance speech in Wisconsin, where he had trounced his main primary rival, front-runner Donald Trump. “We are not here to curse the darkness but to light a candle that can guide us from darkness to a safe and sane future.”
Cruz, who has slowed the potty-mouthed Trump’s momentum towards the Republican presidential nomination in Cleveland this summer, has pulled out other high minded phrases from the fallen crown prince of Camelot (and also from Winston Churchill) while on the stump.
In Massachusetts, the nation’s bluest state, he contended that Kennedy was “one of the most powerful and eloquent defenders of tax cuts.” He even contended: “JFK would be a Republican today. There is no room for John F. Kennedy in the modern Democratic Party.”
Unremarkably, Cruz’s commentary elicited angry blowback from Democrats, notably Jack Kennedy Schlossberg, JFK’s Grandson, who labeled the senator’s rhetoric “absurd” in an article for Politico Magazine in January. Schlossberg also denied Cruz’s assertion that Kennedy, who would be 98 years old if he were alive today, supported limited government.
“(Kennedy) created new federal programs with ambitious goals, such as the Peace Corps,” Schlossberg wrote from Tokyo. “He did not spend his years in the House and Senate devoted to obstructing the opposition. He certainly did not lead an effort, as Cruz did, to shut down the federal government to score political points and deny health insurance to millions.”
Cruz, of course, is hardly the first Republican to invoke JFK’s name, image and age on the campaign trail. As noted by many a political junkie, Sen. Dan Quayle of Indiana, George H.W. Bush’s pick for vice president in 1988, spoke of Kennedy when defending his inexperience during a debate with Texas Sen. Lloyd Bentson, his much older Democratic counterpart and running mate of unsuccessful presidential hopeful Massachusetts Gov. Michael Dukakis.
Bentson famously put down Quayle with scathing disdain: “Senator, I served with Jack Kennedy. I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you are no Jack Kennedy.”
These days, Michael R. Long, chairman of the Conservative Party of New York since 1988, which was founded in 1962 with support from conservative icon William F. Buckley, doesn’t believe that Cruz’s praise of JFK is a deviation from conservative orthodoxy. “There’s no problem with Cruz (invoking) JFK,” he told The National Memo in a telephone conversation. “Reagan invoked JFK on tax cuts,” added Long, who also noted that Kennedy’s legacy crosses party lines: “He was an inspirational person who brought a lot of hope to a lot of Americans. Probably some conservatives voted for him because of his love of America.”
It appears that Cruz’s use of Democratic imagery is his attempt to sell what is otherwise a far-right candidacy to voters from both parties as well as independents. Last summer, Cruz told PBS host Tavis Smiley that his campaign was “modeled” after President Obama’s successful 2008 primary campaign with its emphasis on social media. Others don’t quite agree with that assessment
“While Cruz may hope to attract Democratic votes, I can’t think that’s his primary motivation,” said David Birdsell, Ph.D., Dean of the Baruch College School of Public Affairs in an email to this reporter. “Kennedy was known as a great speaker, Cruz fancies himself a great speaker too. Kennedy was the youngest person elected to the presidency, Cruz is only two years older than Kennedy was. Cruz wants the mantle of Camelot, but the garment doesn’t fit well and he suffers in the comparison.”
Birdsell, who believes Canada’s Justin Trudeau is far more “genuinely Kennedy-esque” than Cruz or Quayle, does regard the Texas senator as a political pro who has recognized the quality of Obama’s field operation. “He obviously loathes Obama but has the perspicacity to know there was something to learn from his campaign. That reflects well on Cruz, and the quality of his own field operation is the single most important reason he’s in second place. Lesson learned.”
Cruz, however, hit a roadblock in the Bronx this week for his hardline views on immigration and had to cancel a meeting at a charter school after students threatened a walkout. State Sen. Ruben Diaz, Sr., a conservative Democrat who is also a pastor at a Bronx pentacostal church, hosted a sparsely attended event for him at Chinese-Dominican restaurant in Parkchester that also drew a few shouting local protestors.
Diaz, whose more liberal son Ruben Diaz, Jr. is the Bronx borough president and labels Cruz a hypocrite, said that he may also “do something” in the Bronx for Donald Trump, whose views are similarly loathed by many in the hispanic community.
“We’ve got to do something about the 12 million undocumented immigrants,” said the elder Diaz. “I want to build a wall to make America great again,” he added with a laugh, echoing Trump.
Trump, meanwhile, has put himself in the same league as Ronald Reagan on the issues, while his admirers have invoked Teddy Roosevelt and Andrew Jackson to describe his bellicose bloviating.
As for Trump’s purported allegiance to Reagan’s policies, Michael Long of the Conservative Party dismisses that notion. “He doesn’t come close to Ronald Reagan. He’s more like a populist candidate. Trump has brought a different style to this campaign that’s different from anything I’ve witnessed in my entire life.”
By: Mary Reinholz, The National Memo, April 11, 2016
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