Nick Anderson
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LETTERS FROM AN AMERICAN
April 17, 2024
HEATHER COX RICHARDSON
APR 18, 2024
Yesterday on the social media site X, formerly Twitter, Miles Taylor wrote: “After 2016, I helped lead the US gov[ernmen]t response to Russia’s election interference. In 2024, foreign interference will be *worse.* Tech[nology is] more powerful. Adversaries more brazen. American public more susceptible. Political leaders across party lines MUST UNITE against this.”
Taylor served as chief of staff in the Department of Homeland Security under Trump.
Today, Catherine Belton of the Washington Post reported on a secret 2023 document from Russia’s Foreign Ministry calling for an “offensive information campaign” and other measures that attack “‘a coalition of unfriendly countries’ led by the United States. Those measures are designed to affect “the military-political, economic and trade and informational psychological spheres” of Russia’s perceived adversaries.
The plan is to weaken the United States and convince other countries, particularly those in the North Atlantic Treaty Organization, that the U.S. will not stand by its allies. By weakening those alliances, Russian leaders hope to shift global power by strengthening Russia’s ties to China, Iran, and North Korea and filling the vacuum left by the crumbling democratic alliances (although it is not at all clear that China is on board with this plan).
According to Belton, one of the academics who advised the authors of the Russian document suggested that Russia should “continue to facilitate the coming to power of isolationist right-wing forces in America,” “enable the destabilization of Latin American countries and the rise to power of extremist forces on the far left and far right there,” increase tensions between the U.S. and China over Taiwan, and “escalate the situation in the Middle East around Israel, Iran and Syria to distract the U.S. with the problems of this region.”
The Russian document suggests that the front lines of that physical, political, and psychological fight are in Ukraine. It says that the outcome of Russia’s invasion of neighboring Ukraine will “to a great degree determine the outlines of the future world order.”
Putin critic Mikhail Khodorkovsky told Belton: “The Americans consider that insofar as they are not directly participating in the war [in Ukraine], then any loss is not their loss. “This is an absolute misunderstanding.”
Media and lawmakers, including those in the Republican Party, have increasingly called out the degree to which Russian propaganda has infiltrated American politics through Republican lawmakers and media figures. Earlier this month, both Representative Michael R. Turner (R-OH), chair of the House Intelligence Committee, and Representative Michael McCaul (R-TX), chair of the House Foreign Affairs Committee, warned about Russian disinformation in their party. Turner told CNN’s State of the Union that it is “absolutely true” that Republican members of Congress are parroting Russian propaganda. “We see directly coming from Russia attempts to mask communications that are anti-Ukraine and pro-Russia messages, some of which we even hear being uttered on the House floor.” When asked which Republicans had fallen to Russian propaganda, McCaul answered that it is “obvious.”
That growing popular awareness has highlighted that House Republicans under House Speaker Mike Johnson (R-LA) have for six months refused to pass a national security supplemental bill with additional aid for Ukraine, as well as for Israel and the Indo-Pacific, and humanitarian aid to Gaza. After the Senate spent two months negotiating border security provisions House Republicans demanded, Republicans killed that bill with the provisions at Trump’s direction, and the Senate then passed a bill without those provisions in February.
Johnson has been coordinating closely with former president Trump, who has made his admiration for Russia and his disregard for Ukraine very clear since his people weakened their support for Ukraine in the 2016 Republican Party platform. Johnson is also under pressure from MAGA Republicans in the House, like Marjorie Taylor Greene (R-GA), who oppose funding Ukraine, some of them by making statements that echo Russian propaganda.
While the White House, the Pentagon, and a majority of both chambers of Congress believe that helping Ukraine defend itself is crucial to U.S. security, Johnson has refused to take the Senate measure up, even though the House would pass it if he did. But as Ukraine’s ability to defend itself has begun to weaken, pressure for additional aid has ramped up. At the same time, in the wake of Iran’s attack on Israel last weekend, Republicans have suddenly become eager to provide additional funds to Israel. It began to look as if Johnson might bring up some version of foreign aid.
But discussions of bringing forward Ukraine aid brought not only Greene but also Thomas Massie (R-KY) to threaten yesterday to challenge Johnson’s speakership, and there are too few Republicans in the House to defend him.
Today, Johnson brought forward not the Senate bill, but rather three separate bills to fund Israel, the Indo-Pacific, and Ukraine, with pieces that House Republicans have sought. A fourth bill will include other measures Republicans have demanded. And a fifth will permit an up-or-down vote on most of the measures in the extreme border bill the House passed in 2023. At the time, that measure was intended as a signaling statement because House Republicans knew that the Democratic Senate would keep it from becoming law.
Johnson said he expected to take a final vote on the measures Saturday evening. He will almost certainly need Democratic votes to pass them, and possibly to save his job. Democrats have already demanded the aid to Gaza that was in the Senate bill but is not yet in the House bills.
Reese Gorman, political reporter for The Daily Beast, reported that Johnson explained his change of heart like this: “Look, history judges us for what we do. This is a critical time right now… I can make a selfish decision and do something that is different but I'm doing here what I believe to be the right thing.… I think providing lethal aid to Ukraine right now is critically important.… I’m willing to take personal risk for that.”
His words likely reflect a changing awareness in Republican Party leadership that the extremism of MAGA Republicans is exceedingly unpopular. Trump’s courtroom appearances—where, among other things, he keeps falling asleep—are unlikely to bolster his support, while his need for money is becoming more and more of a threat both to his image and to his fellow Republicans. Today the Trump campaign asked Republican candidates in downballot races for at least 5% of the money they raise with any fundraising appeal that uses Trump’s name or picture. They went on: “Any split that is higher than 5% will be seen favorably by the RNC and President Trump’s campaign and is routinely reported to the highest levels of leadership within both organizations.”
Nonetheless, Greene greeted Johnson’s bills with amendments requiring members of Congress to “conscript in the Ukrainian military” if they voted for aid to Ukraine.
A headline on the Fox News media website today suggested that a shift away from MAGA is at least being tested. It read: “Marjorie Taylor Greene is an idiot. She is trying to wreck the [Republican Party].” The article pointed out that 61% of registered voters disapprove of the Republican Party while only 36% approve. That approval rating has indeed fallen at least in part because of the performative antics of the extremists, among them the impeachment of Homeland Security Secretary Alejandro Mayorkas that made him the first cabinet officer to be impeached in almost 150 years. Today the Senate killed that impeachment without a trial.
As soon as Johnson announced the measures, President Joe Biden threw his weight behind them. In a statement, he said: “I strongly support this package to get critical support to Israel and Ukraine, provide desperately needed humanitarian aid to Palestinians in Gaza, and bolster security and stability in the Indo-Pacific. Israel is facing unprecedented attacks from Iran, and Ukraine is facing continued bombardment from Russia that has intensified dramatically in the last month.
“The House must pass the package this week and the Senate should quickly follow. I will sign this into law immediately to send a message to the world: We stand with our friends, and we won’t let Iran or Russia succeed.”
LETTERS FROM AN AMERICAN
HEATHER COX RICHARDSON
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Biden set to appoint mass foreclosure cheerleader to the Fed
Personnel are policy, something that the Biden administration has proved again and again since the 2020 election. Biden himself is a kind of empty vessel into which different wings of the Democratic party pour their will, yielding a strange brew of appointments both great and terrible.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/03/06/personnel-are-policy/#janice-eberly
On the one hand, you have progressive appointments like Jonathan Kanter at the DoJ and Lina Khan at the FTC, leaders who are determined to challenge and curb corporate power:
https://pluralistic.net/2022/01/10/see-you-in-the-funny-papers/#bidens-legacy
On the other hand, you have deferential leaders like Pete Buttigieg, who fill their own staff with status quo counsel, and then let those timid corporate apologists run the show, leaving the substantial enforcement powers of a powerful agency to gather dust:
https://pluralistic.net/2023/01/10/the-courage-to-govern/#whos-in-charge
While the Democrats’ anti-corporate wing got to drive the administration’s competition agencies, the corporate wing has enjoyed near-total dominance over finance regulations (with notable exceptions, e.g. Rohit Chopra), starting with Trump’s Jerome Powell, a bloodletting monster happy to shovel workers into their bosses’ crushers all day long:
https://pluralistic.net/2023/01/19/creditors-vs-workers/#finance-colored-glasses
Corporate Dems continue to flex their muscle. A seat has just opened up on the Federal Reserve Board, and the WSJ is pretty sure the seat is going to Janice Eberly, a corporate ghoul who helped Obama Treasury Secretary Timothy Geithner steal Americans’ houses on behalf of the bankers who destroyed the world economy in 2008:
https://www.wsj.com/articles/white-house-considers-two-economists-for-fed-vice-chair-58f13344
A quick refresher: Obama inherited the Great Financial Crisis, a massive global asset crash that followed from a decade of real-estate and derivatives deregulation that saw the world’s largest banks issuing mortgages they knew would fail, and then placing massive bets on “collateralized debt obligations” that were supposed to offset the risk.
The banks gambled trillions, nearly destroyed the world’s economy, and then blamed it all on reckless borrowers — mortgage holders who had been mis-sold predatory mortgages that were designed to trigger defaults thanks to low “teaser rates” that later “ballooned” into monthly payments the banks knew the borrowers couldn’t afford.
Geithner was Obama’s go-to guy for the GFC. It was under his leadership that billions were handed out to the banks to bail them out and keep them solvent during the crisis — and it was also under his leadership that bank execs were able to pay themselves millions in bonuses using that public money.
When the banks were in trouble, Geithner leapt into action. When the banks’ customers faced crises, he was MIA — especially during the foreclosure epidemic that followed, as the banks stole our homes out from under us, often forging the paperwork. No bank was seriously punished for this policy.
Back to Janice Eberly, who served as Geithner’s assistant secretary of the Treasury for economic policy — his hatchet-woman, in other words. Now, sometimes people in senior government roles stick around because they disagree with their bosses and want to mitigate the harm of their bosses’ policies.
That’s not why Eberly took the job. In 2014, she and Arvind Krishnamurthy co-wrote a Brookings Institute paper called “Efficient Credit Policies in a Housing Debt Crisis,” that explained why Geithner had it right all along — bailing out the banks and leaving homeowners in foreclosure is “efficient”:
https://www.brookings.edu/wp-content/uploads/2016/07/fall2014bpea_eberly_krishnamurthy.pdf
Writing in The American Prospect, Max Moran from the Revolving Door Project breaks down “Efficient Credit Policies,” explaining how Eberly’s stated views should disqualify her from sitting on the Fed board, especially as we teeter on the brink of a deep financial crisis:
https://prospect.org/economy/2023-03-06-janice-eberly-fed-nominee-mortgage-crisis/
The first thing you need to understand here is HAMP, the Home Affordable Modification Program, which received the $100b Congress allocated to help homeowners whose mortgages were “underwater” — that is, whose houses were worth less than they owed for them.
That money could have gone to “principal reduction” — that is, to paying off part of your loan. If you owned $350,000 on a house that was now worth $300,000, the Feds could give the bank $50k and you wouldn’t be underwater anymore. The FDIC proposed just this, in a plan that would have required homeowners to pay back the US government if the price of their homes rebounded.
If you want to keep Americans from losing their homes, principal reduction is a straightforward and reliable approach. But the banks hated this — and that meant Geithner wouldn’t do it. Banks don’t like principal reduction because it means that they’ll lose out on future payments: reducing your principal by $50k now means that the banks won’t get hundreds of thousands of dollars over the 30 years of your mortgage.
Using the money for principal reduction would have meant the banks’ balance sheets would have looked a little worse — which, as Moran points out, is a perfectly fair outcome for banks that had just come close to destroying the world economy, especially since many of these underwater borrowers were destined to lose their houses and would never make those payments.
But Geithner didn’t do principal reduction. Instead, he did HAMP, which was just a way to temporarily lower borrowers’ monthly payments so they could stay in their homes. Geithner sold Obama on this plan, convincing him to renege on his election promise to support a “cramdown” on the banks, which would have saved homeowners:
https://www.propublica.org/article/dems-obama-broke-pledge-to-force-banks-to-help-homeowners
HAMP was full of the kinds of complex requirements and paperwork that the professional managerial class love, rules that made it almost impossible for homeowners to invoke HAMP and improve their payments. Meanwhile, the banks got “investor incentive payments” that let them take in public money even as they foreclosed on the public:
https://www.irs.gov/newsroom/principal-reduction-alternative-under-the-home-affordable-modification-program
HAMP was a disaster. Almost no one managed to use it, and even among the lucky few who did manage to do so, many were tricked into foreclosure.
https://www.theguardian.com/money/2014/mar/30/government-program-save-homes-mortgages-failure-banks
This is the policy that Eberly and Krishnamurthy defend in their paper: rather than reducing debt, just temporarily restructure mortgage payments. One reason they defend this: it’s cheaper, and Congress didn’t allocate enough money to help everyone who needed principal reduction. But, as Moran points out, Geithner’s anemic response to the crisis caused Congress to claw back $225b of the money allocated to deal with it — enough to do $50k principal reductions for 4.5m households. Under Geithner, HAMP only spent $10b.
But of course, the US government didn’t need to pay the banks off to do principal reduction. They could simply order the banks to take a loss. That’s how lending usually works: lenders who originate bad loans have to eat them — they don’t get made whole by Uncle Sucker.
But when Eberly was working for Geithner, ��federal officials convinced themselves this was impossible.” Rather than hold banks to account for their reckless speculation, Geithner announced that he was going to “foam the runway” for the banks, pureeing Americans’ homes to make the foam.
But Eberly’s tenure coincided with the banks’ rebound — by the time she went to work for Geithner, they were rolling in dough, posting massive profits. As @
[email protected] put it, “If you force them to eat a bunch of foreclosure losses, maybe a few hundred billion over several years, it probably wouldn’t have been that bad.”
https://www.youtube.com/watch?v=pPLbnr1mxBs
Moran nails it here: “When a bad loan is made, it is both prudent and fair for the lender to bear the most responsibility. They are supposed to be wise stewards of their own capital. Instead, ordinary homeowners who did the least of any actor to cause the financial crisis ended up eating the losses.”
Eberly and Krishnamurthy claimed that Geithner’s policy would be efficient, and that it wouldn’t lead to mass foreclosures. As neoclassical economists love to do, they “proved” this using elaborate mathematical models. And, also in the grand neoclassical tradition, they didn’t bother to check whether their model was correct.
To quote Ely Devons: “If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’”
https://pluralistic.net/2022/10/27/economism/#what-would-i-do-if-i-were-a-horse
Here’s what Eberly and Krishnamurthy missed: the choice to foreclose wasn’t being made by the lenders, they were being made by the mortgage servicer, a kind of consequence-free middleman who made more money by foreclosing on homeowners, even if the lenders lost more money over the long term:
https://www.researchgate.net/publication/228125783_Why_Servicers_Foreclose_When_They_Should_Modify_and_Other_Puzzles_of_Servicer_Behavior_Servicer_Compensation_and_its_Consequences
Eberly and Krishnamurthy barely mention the existence of servicers, but another researcher was keenly aware of them: a law prof named Katie Porter, who delved into the servicers’ role in foreclosure in a report for the California AG:
https://oag.ca.gov/sites/all/files/agweb/pdfs/mortgage_settlement/01-report-waiting-for-change.pdf
Porter identified the servicers’ “dual track” approach to distressed mortgage borrowers: on the one hand, they slow-walked HARP-based changes to payments, and on the other hand, they raced to foreclose on those borrowers who were waiting for their payments to reset.
The servicers’ hunger to throw people out of their homes knew no bounds: they set up massive robo-signing boiler-rooms where low-waged employees forged deeds to plug the paperwork holes created by the high-speed, unregulated speculation on mortgages that precipitated the Great Financial Crisis:
https://www.reuters.com/article/robosigning-plea/ex-mortgage-document-exec-pleads-guilty-in-robo-signing-case-idUSL1E8ML0C120121121
Eberly knew about robo-signing, she knew about servicers, she knew about foreclosures. It was her job to know. But she still wrote her paper defending Geithner’s runway-foaming and all those ruined lives:
Principal reduction can be helpful, but it is a less efficient use of government resources, since it back-loads payments to households that cannot borrow against these future resources to support consumption today, and also because it is most helpful in reducing strategic default, rather than payment-distress-induced default,
This is just means-testing by another name, a fetish for separating the “deserving poor” from “moochers” (AKA “strategic defaulters”). The PMC loves means-testing, but only for poor people. As Moran points out, rich people like Trump use strategic defaults all the time:
https://www.nytimes.com/2016/06/12/nyregion/donald-trump-atlantic-city.html
Elite economists and finance ghouls convinced themselves that helping people stay in their homes would enable waves of crooked “strategic defaulting” but there’s no evidence this was ever widespread — rather, it was a fairy tale that justified mass foreclosure:
https://www.nber.org/system/files/working_papers/w27585/w27585.pdf
Eberly helped throw millions of Americans into the street in order to reward reckless banks, already wildly profitable banks, with even more profit. And far from regretting this, she went on to write elaborate justifications for the cruel policies she helped administer.
The historian Michael Hudson describes debt and debt cancellation as a key determinant of whether a given civilization survives. In every venture, producers have to borrow capital from lenders — farmers, for example, must borrow to pay for seed and fertilizer and labor. When the ventures are successful, the borrowers pay back the lenders.
But not every venture can succeed. There will always be blights, droughts, fires and other risks that can’t be fully mitigated. When failure occurs, borrowers can’t pay back creditors. If you farm long enough, you’ll eventually lose a crop, and have to roll over your debts next year. Eventually, you’ll owe so much that you can’t even make the interest payments.
In the absence of some structured, periodic debt cancellation — such as the Bronze Age tradition of Jubilee — creditors eventually end up controlling the work of the entire productive sector. When that happens, your society stops producing what everyone needs, and instead just makes the things that rich people want:
https://pluralistic.net/2022/07/08/jubilant/#construire-des-passerelles
A civilization can’t survive if all of its farmers are growing ornamental flowers for rich creditors’ villas instead of staple crops. It can’t survive if every productive worker is stuck in a dead-end job or a dead-end place because of medical or student debt.
Personnel are policy. Eberly has explained, in excruciating detail, exactly what policy she favors — policy that rewards reckless speculation by incinerating the life chances of everyday Americans. Appointing her to the Federal Reserve board would be a giant Fuck You from the Biden admin to every person who got their home stolen by a bank.
Tomorrow (Mar 7), I’m doing a remote talk for TU Wien.
On Mar 9, you can catch me in person in Austin at the UT School of Design and Creative Technologies, and remotely at U Manitoba’s Ethics of Emerging Tech Lecture.
On Mar 10, Rebecca Giblin and I kick off the SXSW reading series.
Image:
Medill DC (modified)
https://commons.wikimedia.org/wiki/File:Timothy_Geithner_in_2011.jpg
CC BY 2.0
https://creativecommons.org/licenses/by/2.0/deed.en
[Image ID: A bombed out neighborhood. Over the crumbling houses is the 'HOPE' wordmark from Shepard Fairey's Obama campaign posters. On the right is the grinning face of Obama Treasury Secretary Timothy Geithner, colorized to match the Fairey posters. On the left is an ogrish, top-hatted capitalist figure, chomping a cigar and disdainfully holding aloft a single-family home between a gloved forefinger and thumb. He stands before a podium bearing the Citibank logo. The podium has a lever in the shape of a golden dollar-sign, which he is yanking with his free hand. He, too, has been colorized in the mode of the Fairey poster.]
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The Georgia Republican Party paid at least $220,000 last year to two law firms defending fake presidential electors who could face charges as part of a Fulton County investigation into efforts by Donald Trump and his allies to overturn his 2020 loss.
According to recently filed campaign disclosures, the state party paid Strickland Debrow of Newnan, GA, about $170,000. Atlanta-based Pierson Law LLC, received roughly $52,000 from the Georgia GOP.
The disclosures come as outgoing state party chair David Shafer, one of the 16 phony electors, announced last week that he wouldn't run for another term. In his farewell letter, Shafer revealed that the party paid the elector's legal expenses.
"Thankfully, our State Executive Committee voted to ratify their acts and pay (the elector's) legal expenses," he wrote. "I have raised the money to honor that commitment so that none of them have had to pay a penny out of pocket."
A spokesperson for the Georgia Republican Party didn't respond to questions before publication. Representatives for Strickland Debrow declined to comment for this story. Holly Pierson of Pierson Law told 11Alive that none of the electors "did anything wrong."
"It’s incredibly frustrating that any of the Republican electors were put in the position of having to obtain counsel when it is so abundantly clear legally that none of them did anything wrong," Pierson said. "Recognizing that fact, the Georgia Republican Party voted to step up and protect its membership, which was the principled and courageous thing to do. The Republican electors recused themselves from the vote to ratify their actions and cover their legal expenses, which was otherwise unanimous."
Sixteen Georgians served as phony electors for Trump. They are:
• Shafer
•Joseph Brannan
•James "Ken" Carroll
•Vikki Townsend Consiglio
•Carolyn Hall Fisher
•Burt Jones
•Gloria Kay Godwin
•David G. Hanna
•Mark W. Hennesy
•Mark Amick
•John Downey
•Cathleen Alston Latham
•Daryl Moody
•Brad Carver
•Shaw Still
•C.B. Yadav
The two firms paid by the Georgia GOP represented 11 of the electors — Amick, Brannan, Carver, Consiglio, Downey, Fisher, Godwin, Latham, Shafer, Still and Yadav.
Fulton County prosecutors honed in on the electors as part of their investigation to determine if the former president and his allies violated state law after the 2020 Presidential election. Fulton County District Attorney Fani Willis said in a July 2022 court filing that the electors could face charges.
A Fulton County Superior Court Judge ruled last year that Willis couldn't prosecute Burt Jones, who currently serves as Georgia's Lieutenant Governor, because Willis hosted a fundraiser for Jones' Democratic opponent ahead of the November election. The Prosecuting Attorneys Council of Georgia will determine if Jones should be investigated by a special prosecutor.
Legal experts previously told 11Alive that the electors may face fraud or forgery charges for the documents they submitted to state authorities and the National Archives. The 16 Republicans said that they were the duly elected presidential electors, and they falsely claimed that Trump won the election.
The Fulton County Special Purpose Grand Jury finished its eight-month investigation last month. The panel heard from 75 witnesses. Three portions of the jury's report was released Thursday. Jurors expressed concern that at least one of the witnesses may have lied during testimony. Key sections of the report remain secret.
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