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Authored by David D’Amato via The American Institute for Economic Research,

The global spotlight was cast upon Edward Snowden in 2013 after he blew the whistle on the National Security Agency’s (NSA) warrantless domestic surveillance programs. Working with The Guardian and Pulitzer Prize-winning journalist Glenn Greenwald, Snowden famously (or infamously, depending on one’s point of view) revealed that the NSA was illegally gathering information on tens of millions of Americans – citizens who had been accused of no wrongdoing. Now, Snowden’s case is once again in the news, as President Trump recently told reporters that he will look carefully at “the Snowden situation,” going as far as polling his aides as to whether he should pardon the exiled whistleblower.

Snowden was a responsible whistleblower who took the role seriously and made careful, deliberate decisions in choosing the documents he would share with journalists. He performed this immeasurably brave act of public service at an enormous personal and professional cost. In an instant, he became one of the world’s most wanted individuals, reviled as a traitor by some of the most powerful and dangerous people in the world’s most powerful and dangerous government.

“Having watched the Obama administration prosecute whistleblowers at a historically unprecedented rate,” Snowden understood the risks; he understood that the CIA or “[a]ny of their agents or assets” could come after him. 

Known liar Michael Hayden, for example, has called Snowden a traitor and is sufficiently shameless to argue, “Whistleblowing requires someone to actually point out a violation of law and [Snowden] has not done that.”

Of course, the programs Snowden exposed were in fact quite illegal and, according to many legal scholars, unconstitutional. 

Hayden, whose career has seen him hold the top spot of Director at both the NSA and the CIA, intentionally misled Congress when he testified in 2007 on the CIA’s interrogation and detention program. James Clapper, who led the intelligence community under Obama, similarly lied to Congress when, replying to a question from Senator Ron Wyden (D-OR), he stated under oath that the federal government does “not wittingly” collect “any type of data at all on millions or hundreds of millions of Americans.”

Clapper, of course, knew he wasn’t telling the truth, but claimed that he “made a big mistake” and was thinking of another government surveillance program and “didn’t understand.”

Former Obama administration CIA Director John Brennan has also established a reputation for baldly lying to elected officials. In 2011, for example, he falsely claimed that the U.S. government’s drone strikes had never killed a civilian, even as he had constructive knowledge from the beginning of the Obama presidency that the drone program had killed “numerous civilians.” When Senator Dianne Feinstein (D-CA) accused the CIA of “cover-ups, intimidation and smears,” she spoke words much truer than we’re accustomed to hearing from politicians, words that go to the heart of the problem in the government:

Americans are, right now, governed by a permanent power bloc of unelected, unaccountable intelligence officials – whom we might call the Deep State. As a matter of practice, they can’t be disciplined or removed, nor do they have any sense that they answer to the American people or the people’s representatives.  

Under any sane standard, the country’s national security and intelligence establishment are the real traitors, selling out and betraying the American people in dangerous and misguided quests for unlimited power and knowledge about our every activity. 

The top brass in the intelligence community have established a clear, decades-long pattern of violating our rights and then brazenly lying to the people’s elected representatives, forgetting that they are supposed to be public servants, not omnipotent overlords. They lie under oath and violate their sworn duty to uphold the Constitution only to turn around and accuse actual heroes like Snowden of treason. And we let them get away with it—worse than that, we celebrate them, making them expert analysts on the major news networks, awarding them cushy posts at the nation’s most prestigious centers of learning, and generally ignoring, in investigative journalist William Arkin’s words, “the creeping fascism of homeland security.”

One can’t help but be reminded of the concept of what in George Orwell’s novel 1984 the Party calls “reality control”—or in its more famous Newspeak name: “doublethink.” The ascendency of America’s military and intelligence officialdom requires that we, paraphrasing 1984, deny the evidence of our senses. Orwell’s protagonist is tortured by the mental effort entailed in forcing himself to believe two opinions he knows to be irreconcilable.

“All that was needed was an unending series of victories over your own memory.” 

Americans must stop ignoring our senses and our memories. If President Trump has an ounce of decency, he should promptly pardon Edward Snowden, who at a very young age, with a promising career and his whole life ahead of him, put everything on the line to protect us from the very people who are supposed to be protecting us. Let’s hope that Trump does the right thing.

After publishing guidance warning about the serious risks of “airborne” infection associated with SARS-CoV-2, the CDC just seriously harmed its own credibility by acknowledging Monday that it had posted the new guidance “in error”, following a pressure campaign from the WHO.

Scientists have been gathering evidence that the novel coronavirus plaguing the world spreads via aerosol particles practically since it first emerged, and back in July, a group of 200 scientists sent a letter to the WHO urging the international public health agency to change its guidance on the spread of the disease. The problem scientists argued is that the WHO hasn’t updated its views to incorporate new research showing that aerosol spread is a much greater threat than touching contaminated surfaces, or via large droplets spread by close contact between individuals.

Yet, the WHO has refused these overtures, and this week it successfully convinced the CDC to do the same.

After the WHO announced earlier that it had reached out to the CDC over the guidance change, the agency informed American media outlets that a “draft version” of the guidance had been “posted in error”.

“A draft version of proposed changes to these recommendations was posted in error to the agency’s official website,” the CDC said. “CDC is currently updating its recommendations regarding airborne transmission of SARS-CoV-2 (the virus that causes COVID-19). Once this process has been completed, the update language will be posted.”

Even so, the American media has grown increasingly convinced that aerosols significantly contribute to overall spread of the virus, with ABC News suggesting yesterday that expensive UV-light powered surface cleaners were merely examples of “hygiene theater”. For months, the CDC has insisted that these large droplets are the primary mode of transmission, which is why – it argued – people must wear masks in public, because masks are effective at blocking large particles.

However, masks – at least, homemade clothe masks with imperfect seals – aren’t as effective at filtering all aerosol particles. Furthermore, research suggests aerosol particles released when a person sneezes can reach up to 26 feet.

Source: WSJ

Experts quoted in the US press reports are already slamming the CDC for injecting more confusion into the conversation surrounding COVID-19 prevention at a particularly risky time. After all, schools are still reopening across the US and many are diving headlong into the unknown, fearful that all of this activity could cause another wave of the pandemic, as Dr. Scott Gottlieb warned yesterday.

The FDA is already under fire for its allegedly “premature” approval of convalescent plasma, which critics claim is the result of untoward political pressure from the president.

All this scrutiny is helping to cement a new nickname for the agency.

Centers For Damage Control

— zerohedge (@zerohedge) September 21, 2020

It could also give more fodder to people like Bill Gates, who has started attacking the FDA’s credibility as the agency rushes toward emergency approval of a vaccine.

In the Fed’s latest Flow of Funds report released at noon today, the Fed unveiled the latest snapshot of the US “household” sector as of June 30 2018. What it showed is that one quarter after the biggest drop in household net worth on record when $8 trillion was wiped out, the net worth of households and nonprofit organizations rebounded by $7.6 trillion to $119.0 trillion, the biggest quarterly increase in history.

The second quarter increase in net worth was roughly equal to the $7.2 trillion decline recorded in Q1, leaving net worth about equal to its level at the end of 2019. As usual, the biggest swing factor was in the value of market-linked securities: in Q2, the value of directly and indirectly held corporate equities increased by $5.7 trillion due to the rebound in corporate equity prices (which plunged by $8.3 trillion in Q1 2020). The high rate of personal saving also contributed to the increase in net worth, while the value of real estate held by households increased modestly.

Looking at the big picture, real estate ($30.8 trillion) and directly and indirectly held corporate equities ($31.9 trillion) were among the largest components of household net worth. Household debt (seasonally adjusted) was $16.1 trillion, another modest increase.

Household debt grew at a 0.5% SAAAR in the second quarter of 2020. Home mortgages increased 3.0%, about in line with previous quarters. Non-mortgage consumer credit, however, declined 6.6%, primarily owing to a contraction in credit card balances.

At the same time, nonfinancial business debt expanded rapidly at an annual rate of 14.0%, with a notable expansion in depository loans associated with the PPP program and robust corporate bond issuance. Federal debt also rose by a record amount, owing to the fiscal stimulus. State and local debt increased 3.5%.

Naturally, the contraction in GDP in Q2, together with the record expansion in federal debt, led to a jump in the ratio of nonfinancial debt to GDP to 300%.

Naturally, with total nonfinancial debt now 3x US GDP, it makes sense to take a closer look at what’s going on here.

Looking at the various components of nonfinancial business debt, nonmortgage depository loans to nonfinancial business increased $134 billion. The Small Business Administration reports that about $521 billion of PPP loans were authorized through June 30.2 Excluding PPP loans, however, nonmortgage depository loans declined notably. The decline likely reflected a partial payback of the lines of credit that many firms had tapped in Q1, together with reduced origination of new loans outside of PPP. While PPP loans are included in the Fed’s measure of debt, a large fraction of them is expected to be forgiven.

Excluding the roughly $0.5 trillion of PPP loans disbursed in Q2, nonfinancial business debt would have increased much more modestly, about 2%. This growth was driven by robust net issuance of corporate bonds. Bond issuance rebounded in Q2 after a temporary halt in March.

Overall, outstanding nonfinancial corporate debt was nearly $11.0 trillion. Corporate bonds, at roughly $6.4 trillion, accounted for 58% of the total. Nonmortgage depository loans were $1.3 trillion. Other types of debt include loans from nonbank institutions, loans from the federal government, and commercial paper.

The nonfinancial noncorporate business sector is composed of mostly smaller businesses, which are typically not incorporated. Nonfinancial noncorporate business debt was $6.6 trillion, of which $4.5 trillion were mortgage loans and $1.7 trillion were nonmortgage depository loans.

The bottom line is that if one ignores the debt – which clearly will be monetized by the Fed before it all comes crashing down – US net worth both increased by the most on record and also hit a record high.

And while it would be great news if wealth across all of America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans.

According to a record Census Bureau report, over the past decade, during an economic expansion that benefited most Americans, the richest made out the best. In fact, the CB found that the top 5% of households – those making $451,122 on average last year – have seen their inflation-adjusted incomes jump 28% since 2009.

The gain – which helped push inequality to the widest in decades – compares with a mere 11% rise for the bottom 20%, whose income rose to about $15,290 from roughly $13,800 a decade ago. Those in the middle groups – who made between $40,600 and $111,100 last year – saw their incomes rise between 16% to 18%, the data show.

A separate breakdown of the change in net worth, as also discussed previously, one which looks at median net worth by age of head (of household) shows that the oldest Americans – those 65 and older – have seen gains in their net worth by over 60%. Everyone else is either flat or down!

This underscores just how endemic poverty is in America, even in times of economic expansion. While incomes have increased, so has the cost of living, with consumer prices rising 20% since 2009. Meanwhile, while financial assets – those which have grown the most in the past decade – soaring thanks to the Fed’s generous monetary policy and benefiting those who own financial assets, this turns out to be a tiny sliver of the population. In the CBO’s latest, if somewhat dated, Trends in Family Wealth analysis published in 2016, the budget office showed a breakdown of the net worth chart by wealth group, which sadly shows how the “average” American wealth is anything but, and in reality most of that $100 trillion belongs to just 10% of the US population. The distribution has only gotten worse since then.

Here is how the CBO recently explained the wealth is distributed:

• In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent.
• Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.

In other words, roughly 75% of the $7.6 trillion increase in assets went to benefit just 10% of the population, who also account for roughly 76% of America’s financial net worth. It also means that just 10% of the US population is worth roughly $90 trillion, while half of the US population was virtually no wealth, and if anything it is deeply in debt.

Even worse, when looking at how wealth distribution changed since the 1980s, an even more dire picture emerges: family wealth grew at significantly different rates for different segments of the U.S. population. In 2013, for example:The wealth of families at the 90th percentile of the distribution was 54% greater than the wealth at the 90th percentile in 1989, after adjusting for changes in prices.

• The wealth of those at the median was 4 percent greater than the wealth of their counterparts in 1989.
• The wealth of families at the 25th percentile was 6 percent less than that of their counterparts in 1989.
• As the chart below shows, nobody has experienced the same cumulative growth in after-tax income as the “Top 1%”

The above is particularly topical at a time when either party is trying to take credit for the US recovery. Here, while previously Democrats, and now Republicans tout the US “income recovery” they may have forgotten about half of America, but one entity remembers well: loan collectors. As the chart below shows, America’s poor families have never been more in debt.

The share of families in debt (those whose total debt exceeded their total assets) remained almost unchanged between 1989 and 2007 and then increased by 50 percent between 2007 and 2013. In 2013, those families were more in debt than their counterparts had been either in 1989 or in 2007. For instance, 8 percent of families were in debt in 2007 and, on average, their debt exceeded their assets by $20,000. By 2013, in the aftermath of the recession of 2007 to 2009, 12 percent of families were in debt and, on average, their debt exceeded their assets by $32,000.

The increase in average indebtedness between 2007 and 2013 for families in debt was mainly the result of falling home equity and rising student loan balances. In 2007, 3 percent of families in debt had negative home equity: They owed, on average, $16,000 more than their homes were worth. In 2013, that share was 19 percent of families in debt, and they owed, on average, $45,000 more than their homes were worth. The share of families in debt that had outstanding student debt rose from 56 percent in 2007 to 64 percent in 2013, and the average amount of their loan balances increased from $29,000 to $41,000.

And there – as we say quarter after quarter- is your “recovery”: the wealthy have never been wealthier, while half of America, some 50% of households, own just 1% of the country’s wealth, down from 3% in 1989. And finally, America’s poor have never been more in debt.

The feud between President Trump and Democratically-controlled cities, which have moved to defund police and enable rioters, sharply escalated Sunday after the Justice Department labeled New York City and three other metro areas as “anarchist jurisdictions,” according to a leaked report in the New York Post. 

Portland, Oregon, and Seattle, Washington, were the two other cities identified as “anarchist jurisdictions” in a measure that was approved by Attorney General William Barr. The “anarchist” designations set the pathway for the Trump administration to defund these “lawless” metro areas, which would likely worsen an emerging fiscal crisis.

“When state and local leaders impede their law-enforcement officers and agencies from doing their jobs, it endangers innocent citizens who deserve to be protected, including those who are trying to assemble and protest peacefully,” Barr said in a statement, expected to be released Monday.  

“We cannot allow federal tax dollars to be wasted when the safety of the citizenry hangs in the balance,” Barr added.

“It is my hope that the cities identified by the Department of Justice today will reverse course and become serious about performing the basic function of government and start protecting their own citizens,” he said.

In a five-page memo sent to federal agencies on Sept. 2, Trump directed Budget Director Vought to issue the new guidance within a month “to the heads of agencies on restricting the eligibility of or otherwise disfavoring, to the maximum extent permitted by law, anarchist jurisdictions in the receipt of federal grants.”

Trump tweeted on Sept. 2 that his administration “will do everything in its power to prevent weak mayors and lawless cities from taking Federal dollars while they let anarchists harm people, burn buildings, and ruin lives and businesses.” 

He added at the end of the tweet: “We’re putting them [liberal cities] on notice today.” 

My Administration will do everything in its power to prevent weak mayors and lawless cities from taking Federal dollars while they let anarchists harm people, burn buildings, and ruin lives and businesses. We’re putting them on notice today. @RussVought45

— Donald J. Trump (@realDonaldTrump) September 3, 2020

Vought told the Post earlier this month that “American taxpayers who fund the great programs that our cities rely on deserve to be protected by their local city officials.” He added that the administration was “exploring all options to ensure federal resources flowing to lawless cities aren’t being squandered.”

“The lack of law and order surrounding these riots, and response from local leadership, is a dereliction of duty. Our men and women in blue cannot be handcuffed by local leadership in their efforts to respond to riots and protect their fellow citizens.”

After months of social unrest, chaos, and a surge in violent crime, will Trump’s move to withhold federal funding from these cities be enough to force errant Democratic mayors back into line?

House Speaker Nancy Pelosi (D-CA) and House Democrats are risking a federal shutdown – releasing a stopgap government funding bill on Monday which failed to gain the support of the White House or Senate GOP, according to Bloomberg.

The bill extends current levels of funding beyond the Sept. 30 fiscal year deadline until December 11, however it excludes $30 billion in farm aid that the White House demanded, yet which Democrats insist on negotiating as part of separate stimulus negotiations, according to aide sin both parties.

Senate Republicans from farm states pushed for the $30 billion to replenish funding for the U.S. Department of Agriculture’s Commodity Credit Corp., a government-owned entity that aims to stabilize farm income. President Donald Trump announced $13 billion in new aid to farmers, drawing from the CCC, at a rally in Wisconsin on Thursday, and the corporation had already projected an increase in demand for agriculture-risk coverage, price-loss coverage, and marketing-assistance loans. –Bloomberg

Pelosi’s stopgap bill, known as a continuing resolution, had been under intense negotiation between Democratic and GOP congressional leaders along with the White House. Democrats had initially pushed an idea to provide the farm aid in exchange for $2 billion in child-nutrition funding on Friday, however Pelosi called Treasury Secretary Steven Mnuchin on to cancel the trade. Instead, the House bill set for Monday release will exclude the child-nutrition money, which is part of a program which runs out at the end of the month.

Earlier this month, Pelosi and Mnuchin agreed to separate discussions on COVID-19 relief and the funding bill, as the pandemic stimulus talks have been at an impasse since August, with both sides around $1 trillion apart from each other.

Following weeks of multiple Chinese fighter jet incursions over Taiwan, the Chinese air force released a shocking video on Saturday showing bombers conducting a simulated attack “on what appears to be Andersen Air Force Base on the U.S. Pacific island of Guam,” according to Reuters. 

Taiwanese Foreign Minister Joseph Wu warned Saturday that China was increasing drills and other forms of military pressure with the threat of intervention. Wu said China’s crackdown in Hong Kong is a reminder that “Taiwan might be next”.

The short video, titled “The god of war H-6K goes on the attack!,” was posted on the People’s Liberation Army Air Force (PLAAF) Weibo account, comes as the Chinese military carried out the second day of drills near Chinese-claimed Taiwan. 

The South China Morning Post (SCMP) said the island in the simulation video “has more than a passing resemblance to the US facility on the island of Guam.” Reuters noted the runway in the video mirrors that of Anderson’s.  

PLAAF wrote in the description of the video:

“We are the defenders of the motherland’s aerial security; we have the confidence and ability to always defend the security of the motherland’s skies.” 

Collin Koh, a research fellow at Singapore’s Institute of Defence and Strategic Studies, told Reuters the propaganda video has aims to project PLAAF’s increasing long-range power. 

“The video is meant to warn the Americans that even supposedly safe, rearward positions such as Guam may come under threat when conflicts over regional flashpoints, be it Taiwan or the South China Sea, erupt,” Koh said.

PLAAF’s H-6K bombers have a combat range of 3,700 miles and can carry nuclear weapons, long-range cruise missiles, and will one day be armed with hypersonic missiles. 

Drew Thompson, a former US defense department official who was responsible for managing US relations with mainland China and Taiwan, told SCMP the video is a warning to surrounding countries:

“The messages put out by the People’s Republic of China propaganda machine threaten anyone who opposes [mainland] China or the Communist Party,” Thompson said. “[The footage] warns that the PLA is prepared to use force to settle differences.”

To sum up, the video is likely a powerful message to Washington: Don’t mess with Taiwan. 

Secretary of State Mike Pompeo has just announced new sanctions on Venezuelan President Nicolas Maduro, along with two Iranian scientists working for the Iranian Defense Ministry who are said to be central to the country’s uranium-enrichment efforts.

Late last week, anonymously sourced reports citing senior US officials claimed that the US was preparing to sanction more than 2 dozen people and entities involved with Iran’s nuclear program as the Trump Administration seeks to unilaterally ramp up sanctions on the Iranian regime. Officials also warned that Iran has enough fissile material that it could develop a bomb by the end of the year.

The two Iranians targeted by the sanctions play “an essential role” in the country’s uranium enrichment.

The sanctions against Maduro follow several rounds of sanctions targeting top Venezuelan officials and even members of Maduro’s family (two of Maduros’ male relatives were even arrested by the US in 2015 after allegedly plotting to traffic drugs into the country).

Pompeo touted the ‘Abraham Accords’ – the deal to normalize relations between Israel and the UAE – during a speech unveiling the sanctions. After expounding upon the Trump Administration’s accomplishments in the Middle East, Pompeo accused the Iranian regime of being the world’s “leading state sponsor of terrorism” and the “arm’s dealer of choice” for terrorists and dictators. Fortunately, Trump’s executive order announced Monday gives the US “powerful tools” to enforce an Iranian arms embargo, even if the rest of the world isn’t cooperating.

Regarding the sanctions on Maduro, Pompeo said for years “corrupt officials” in Venezuela have helped Iran violate the US arms embargo.

Last night, Pompeo touted the “snap-back” in UN sanctions on Iran, even as the world “ignores” Washington’s demands, and Iran reportedly claims victory over the US after the Trump Administration failed to sway America’s European allies to back the resumption of sanctions on Iran.

Last night at midnight, the @UN sanctions snapped back, putting another increasing restraint on the capacity for the Islamic Republic of Iran to create harm in the Middle East. The United States has led and will prevent arms trafficking by Iran. pic.twitter.com/FrF4y1ARVW

— Secretary Pompeo (@SecPompeo) September 20, 2020

“When we launched the ‘maximum pressure’ campaign, critics said it wouldn’t work. They were wrong,” Pompeo said, citing hundreds of lives saved and the drain on Iran’s economy.

Watch remarks from Pompeo and Treasury Secretary Mnuchin below:

Today, @SecPompeo delivered remarks to the media on Iran Snapback Sanctions. pic.twitter.com/L1XCmTJvtb

— Department of State (@StateDept) September 21, 2020