Tag: finance

Billionaire hedge fund manager Leon Cooperman recently told Politico that, while he believes in a “progressive income tax and the rich paying more,” he disagreed with much of Warren’s approach.

“But this is the f—ing American dream she is s—-ing on,” he told the publication.

Warren later fired back in a tweet, suggesting Cooperman should “pitch in a bit more.”

Leon, you were able to succeed because of the opportunities this country gave you. Now why don’t you pitch in a bit more so everyone else has a chance at the American dream, too? https://t.co/OODIM7RcRn

— Elizabeth Warren (@ewarren) October 23, 2019

Cooperman rapidly penned a 5-page letter (below) to Warren explaining his disagreements with her recent criticisms of the influence of wealthy business leaders and her economic policy proposals, the investor said.

“However much it resonates with your base, your villification of the rich is misguided, ignoring, among other things, the sources of their wealth and the substantial contributions to society which they already, unprompted by you, make.”

The hedge fund manager took particular umbrage at Warren’s seeming hatred and disdain of all billionaires:

“Their stories, and many more like they are the very embodiment of the American Dream. For you to suggest that capitalism is a dirty word and that these people, as a group, are ingrates who didn’t earn their riches through strenuous effort and (in many cases) paradigm-shifting insights, and now don’t pull their weight societally indicates that you either are grossly uninformed or are knowingly warping the facts for narrow political gain.“

Cooperman offers an olive branch:

“The fact is, Senator Warren, that despite our philosophical differences, we should be working together to find common ground in this vital conversation – not firing off snarky tweets that stir your base at the expense of accuracy,” he writes.

“Let’s elevate the dialogue and find ways to keep this a land of opportunity where hard work, talent and luck are rewarded and everyone gets a fair shot at realizing the American Dream.”

We suspect the optics of Warren taking on a billionaire hedge fund manager is just too good for her to de-escalate – this war-of-words is far from over.

*  *  *

Full Letter below:

Dear Senator Warren:

While I am not a Twitter user, several friends passed along to me your October tweet in which, after correctly observing that my financial success can be attributed, in no small measure, to the many opportunities which this great country has afforded me, you proceeded to admonish me (as if a parent chiding an ungrateful child) to “pitch in a bit more so everyone else has a chance at the American dream, too.” Our political differences aside, your tweet demonstrated a fundamental misunderstanding of who I am, what I stand for, and why I believe so many of your economic policy initiatives are misguided. Because your tweet was publicly disseminated, I feel compelled to respond in the form of an Open Letter for all who are interested to read.

As I have noted elsewhere, mine is a classic American success story. I have been richly rewarded by a life of hard work combined with a great deal of good luck, including that to have been born in a country that adheres to an ethos of upward mobility for determined strivers. My father was a plumber who practiced his trade in the South Bronx after he and my mother emigrated from Poland. I was the first member of my family to earn a college degree. I benefitted from both a good public education system (all the way through college) and my parents’ constant prodding. When I joined Goldman Sachs following graduation from Columbia Business School, I had no money in the bank, a negative net worth, a National Defense Education Act student loan to repay, and a six-month-old baby (not to mention his mother, my wife of now 55 years) to support. I had a successful, near-25 year run at Goldman before leaving to start a private investment firm. As a result of my good fortune, I have been able to donate in philanthropy many times more than I have spent on myself over a lifetime, and I am not finished; I have subscribed to the Buffett/Gates Giving Pledge to ensure that my money, properly stewarded, continues to do some good after I’m gone. As I told Mr. Buffett when I joined the Pledge, asking for half of my money wasn’t enough; I intend to donate substantially all of it, Apart from my children and grandchildren, I cannot imagine a finer legacy.

My story is far from unique. I know many people who are similarly situated, by both humble origin and hard-won accomplishment, whose greatest joy in life is to use their resources to improve their communities. Many of their names — including those of Ken Langone, Carl Icahn and Sandy Weill, all self-made billionaires whom I am proud to call friends — are associated with major hospitals (NYU Langone Health, Icahn School of Medicine at Mount Sinai, Weill Cornell Medical College, and, in my own case, Saint Barnabas Medical Center and Boca Raton Regional Hospital) which tend to the needs of, among others, many thousands of poor patients each year who could not otherwise afford the best-of-class medical services that those fine institutions, with our support and that of others like us, provide.

Having grown up without much money and valuing highly the public education I received, have donated substantial sums to Hunter College of the City University of New York and to Columbia University’s Graduate School of Business —money for scholarships, libraries, and the construction of new buildings. In 2014, with a very large gift, I established Cooperman College Scholars, a program which identifies academically talented, highly motivated students of Strong character in Essex County (including Newark), New Jersey, who are traditionally underrepresented in higher education. children of color, impoverished children, children facing situational challenges that tug them away from educational priorities — and, through a contribution of high-school counseling, tuition grants, and ongoing cohort-based mentoring to help matriculated students navigate the challenges of transitioning successfully to college life — and by eliminating the negative impact of insufficient financial aid and social support systems on student persistence and graduation rates — enables them to attend college, thrive there and graduate. It is our goal to put 500 district and charter public-school students through college in the next few years. As I stated when my gift was announced, for splendid youngsters such as these to be denied access to a higher education, and to all the opportunities that that can afford, simply because of financial need is a national tragedy. My family feels very privileged to be in a position where we can help at least some of these children’s dreams•come true, and in the process fundamentally change their lives.

However much it resonates with your base, your vilification of the rich is misguided, ignoring, among other things, the sources of their wealth and the substantial contributions to society which they already; unprompted by you, make. Typically, unless born to money or married into it, people become rich by providing a product or service that others want and are willing to pay for.

• Ken Langone, Bernie Marcus and Arthur Blank founded Home Depot in 1978 with $2 million raised from 40 friends — none of whom were wealthy by your standards (average investment $50,000) — after Bernie (age 49) and Arthur (age 36) had been fired from their previous jobs and — with three children each, no health insurance, no savings, and heavily mortgaged homes — were effectively broke. The rest is history. From nothing, Home Depot has grown into an enterprise with market capitalization of over $250 billion that provides employment to more than 400,000 workers thousands of Whom became millionaires investing in the company’s stock — while the founders have given away in excess of $1 billion in charitable donations (and still counting).

• In 1981, Mike Bloomberg, whose record of public service and philanthropy are legendary, created a machine that changed the way the financial world —a sector that is the source of much of the tax revenues that fuel your legislative priorities — conducts business. Today, Bloomberg L.P. has morphed into a diversified financial-services company that employs 20,000 people.

• In 1998, computer scientists Larry Page and Sergey Brin, while still in graduate school, founded Google, now one of the foremost search engines that power the Internet. Today, Google employs more than 100,000 workers, and Page and Brin have donated billions of dollars each to charitable causes.

The list goes on of self-made billionaires — Bill Gates (Microsoft Corporation 144,000 jobs), Michael Dell (Dell Technologies – 145,000 jobs), Mark Zuckerberg (Facebook 39,000 jobs) and Larry Ellison (Oracle Corporation — jobs), among others — who have built huge businesses from the ground up, providing jobs and economic opportunity to hundreds of thousands of taxpaying workers, and voluntarily gift every year, in the aggregate, billions of dollars back to the society that nurtured their success. Their stories, and many more like they are the very embodiment of the American Dream. For you to suggest that capitalism is a dirty word and that these people, as a group, are ingrates who didn’t earn their riches through strenuous effort and (in many cases) paradigm-shifting insights, and now don’t pull their weight societally indicates that you either are grossly uninformed or are knowingly warping the facts for narrow political gain.

Now for your soak-the-rich positions on taxes and economic policy.

The two University of California at Berkeley economists who are advising your campaign, Emmanuel Saez and Gabriel Zucman, have drawn a lot of media attention for their contention that the U.S. federal income tax system is flat, which is to say, regressive and therefore fundamentally unfair to low-income Americans. But their analysis is open to challenge, and the conclusions which they (and you) draw from it are debatable.

• As others have pointed out, Saez and Zucman focus on gross, not net, taxes, ignoring transfer payments (Social Security, Medicare and Medicaid benefits) which are disproportionately paid to the poor and middle class, and whose inclusion in their tax-burden calculations would materially skew the outcome in the opposite direction.

• They include excise and taxes which are by their nature regressive (and therefore overstate the outsized tax burden on low-income Americans) but have nothing to do with federal fiscal policy and tax-code structure — it’s simply how state and local governments have chosen to fund themselves; excluding those and similar taxes from their analysis would again yield a result counter to the economist’s thesis.

• By focusing on current-year rather than lifetime tax burdens, Saez and Zucman understate taxes on the rich (who are taxed both on current year’s income and on future dividends, interest arid capital gains earned on savings) and overstate those on the poor and middle class (since future transfer-payment benefits, which as noted are excluded from the economists’ calculations, comprise an increasing share of their financial resources as they age).

In sum, Saez and Zucman’s economic model appears to be based on highly dubious assumptions and tailored to promote a specific “progressive” policy agenda, and their conclusions are far less definitive and unequivocal than they maintain.

Further undercutting your economists’ fair-share arguments, the Internal Revenue Service recently released data that detail, for tax year 2016 (the latest year for which these data are available), individual federal income tax shares according to income percentile.

• As a percentage of total individual federal income taxes paid, the top 1% of taxpayers paid a greater share of that total (37 than the bottom 90% combined (30.5%).

• As a percentage of taxpayers’ adjusted gross income paid in individual federal income taxes, the top 1% of taxpayers paid an effective tax rate (26.9%) which was more than seven times higher than that of the bottom 50% (3.7%).

• The top 50% of taxpayers paid 97% of all individual federal income taxes; the bottom 50% paid the remaining 3%.

As analyzed by the Tax Foundation, a leading independent tax-policy nonprofit, the data demonstrate “that the US. individual income tax continues to be very progressive, borne primarily by the highest income earners.”

Saez and Zucman surface again in the debate over an explicit, recurring wealth tax (as distinct from property and one-time estate taxes — alternative forms of levy on wealth) targeting the richest Americans, e major plank of your economic platform. As numerous economists (if not yours) have observed, the history and prognosis of explicit wealth taxes is not sanguine.

• In a February 2018 article for the International Monetary Fund, the authors, economists James Brumby and Michael Keen„ noted that “there are now very few effective explicit wealth taxes in either developing or advanced economies; Indeed between 1985 arid 2007, the number of OECD countries with an active wealth tax fell from twelve to just four. And many of those were, and are, of limited effectiveness.”

• At a recent conference sponsored by the Peterson Institute for International Economics; Saez and Zucman debated their advocacy of:a wealth tax with Harvard economists Lawrence Summers (Bill Clinton’s Treasury Secretary and Barack Obama’s Director of the National Economic Council) and Gregory Mankiw (George W. Bush’s Chair of the Council of Economic Advisers). Your made the case that federal tax revenues should be raised to finance increased expenditures on education, infrastructure and healthcare subsidization but:as Mankiw and Summers argued, whether an explicit wealth tax is the preferred route is at best questionable — plagued by issues of constitutionality, tax avoidance, asset valuation and administrability — and the assumptions underlying Zucman’s analysis are,:as noted, suspect. As Summers put it: “For progressives to use their energy on a proposal that has a more than 50% chance of being struck down by the Supreme Court, little chance of passing through Congress, and whose revenue-raising potential is very much in doubt, is to potentially sacrifice immense opportunities.”

The opportunities to which Summers was referring — opportunities to raise funds for a more progessive legislative agenda that might stand a chance of passing Congress and weathering constitutional scrutiny, and whose revenue-raising potential is unquestionable — could include eliminating the exemption of capital gains from taxation upon death, the carried-interest exemption for private equity and hedge funds, and the capital-gains tax-deferral preference accorded like-kind exchanges under Section 1031 of the Internal Revenue Code.

It may be worth considering that wealth redistribution advocates might be wrong to focus solely on income inequality rather than on income opportunity more broadly. In economics, the most commonly used gauge of economic inequality across a target population is the Gini coefficient (or Gini index), named for the Italian statistician who developed it in 1912. A Gini coefficient of means the country has perfect equality of financial prosperity; a coefficient of one means maximum inequality. The World Bank, in its Gini coefficient-by-country analysis for 2019, ranks a number of countries — including Afghanistan, Albania, Algeria, Kyrgyzstan, Romania, Slovakia, Slovenia and Ukraine, all with Gini coefficients in the 20s — high on its financial equality list. Yet despite the relatively high degree of financial equality implied by their numbers, none of these countries can boast booming economies or generalized income and wealth-creation opportunities. It would therefore appear that may be more aligned than those of most other countries in the fair distribution of wealth, but that does not translate in any meaningful sense into widespread prosperity. So what good is income equality to them? Should that — the narrowing of income inequality as an end in itself, as opposed to income growth for all — really be our fiscal policy imperative?

And that takes me to my final points — what I do, in fact, believe should be our fiscal policy priorities:

• Rather than adopt an explicit wealth tax whose efficacy has been widely debunked by experience around the world, let’s debate what the maximum individual and corporate: tax rates should be. I believe in a progressive income tax structure. The wealthy should pay more than those of lesser means, but they already do, and at some point, higher effective (federal, state and local combined) rates become confiscatory. That should never be the ethos of this country, I am on record as: having said that I don’t mind working six months of the year for the government and six months for myself, paying an effective combined tax rate of 50% off my income. But many who live in high-tax cities and states pay even more, while some of the nation’s highest earners pay less. A more effective way than a tax to right-size the latter imbalance might be to revisit some form of the Buffett Rule (repeatedly rejected by Congress since it was first proposed in 2012), which would implement a surtax on taxpayers making over a million dollars a year to better ensure that the highest earners pay their fair share.

• Let’s eliminate loopholes in our code that allow so much seepage through the cracks. A good start would be the short-list enumerated several above.

• Before levying more taxes of any stripe, candidates should commit to trying to fund their agendas through revenue-neutral proposals that would cull bureaucratic waste. I have seen too much evidence of governmental profligacy to have much faith in Congress’s ability to spend our tax revenues efficiently Frustrated efforts to privatize the U.S. Postal Service, which loses billions of dollars a year as a government-owned corporation, are a case in point. Social progress does not have to come at the cost of further administrative bloat.

I am a registered Independent who votes the issues and the person, not the party. The fact is, Senator Warren, that despite our philosophical differences, we should be working together to find common ground in this vital conversation — not firing off snarky tweets that stir your base at the expense of accuracy. Let’s elevate the dialogue and find ways to keep this a land of opportunity where hard work, talent and luck are rewarded and everyone gets a fair shot at realizing the American Dream.

Sincerely,
Leon G. Cooperman

*  *  *

This is not the first time Cooperman has written to politicians. In November 2011, a year before President Barack Obama was reelected, Cooperman previously wrote a critical letter accusing Obama and his allies of encouraging “class warfare.”

“What does matter is that the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them,” Cooperman wrote at the time.

“With due respect, Mr. President, it’s time for you to throttle-down the partisan rhetoric and appeal to people’s better instincts, not their worst,” he added.

Seems, looking back, that Cooperman was dead right then (and will likely be right again in November if Warren is elected).

Authored by Danny Sjursen via TruthDig.com,

“The trouble [with injustice] is that once you see it, you can’t unsee it. And once you’ve seen it, keeping quiet, saying nothing, becomes as political an act as speaking out. There is no innocence. Either way, you’re accountable.”

– Arundhati Roy

Once again, Arundhati Roy – the esteemed Indian author and activist – more eloquently described what I’m feeling than I could ever hope to. After tours in Iraq and Afghanistan, a lifetime in the Army and burying several brave young men for no good reason, I couldn’t remain silent one moment longer. Certainly not about the madness of America’s failed forever wars, nor about domestic militarization of the police and the border, nor about the structural racism borne of our nation’s “original sin.” Still, most of my writing and public dissent has stayed within the bounds of my limited expertise: the disease of endless, unwinnable and often unsanctioned American wars.

At times it’s been a decidedly lonely journey, particularly in the many years I remained on active duty while actively dissenting. I was, and remain, struck by how few of my fellow soldiers, officers and recent post-9/11 veterans felt as I did—strongly enough, at least, to publicly decry U.S. militarism. Then I discovered Tulsi Gabbard, an obscure young congresswoman from Hawaii who, coincidentally, serves in the Army and is herself a veteran of the war in Iraq. In the current climate of Gabbard-bashing, where even sites like Truthdig offer measured criticism, it’s hard to convey the profound sense of relief I felt that someone as outspokenly anti-war as Gabbard even existed way back in 2016. She said things I only dared think back then; and as I did, she backed Bernie Sanders—a risky endeavor that likely doomed her to the recent slanderous accusations of treason by Hillary Clinton. That’s called courage.

Perhaps the appropriate place to begin my qualified defense of Gabbard is with Clinton’s outrageous—and unsubstantiated—assertion that the long-shot 2020 presidential candidate is being “groomed” by the Russians to run a third-party spoiler campaign in the general election.

First off, Gabbard should seriously consider suing for libel. Clinton has veritably, and without a shred of evidence, accused her of treason, a crime that, due to Gabbard’s continued military service, is punishable by death. This is no small matter.

This absurd accusation could usher in a new Red Scare, if there isn’t one already underway—a frightful time in American history when almost anyone outside the hawkish Cold War mainstream consensus could be labeled a “Soviet asset” or Communist fellow traveler. Gay government employees, pacifists, leftist union leaders, anti-war activists and cultural bohemians, among others, were swept up in the conformist madness. Many were unable to recover their careers and reputations.

That a self-proclaimed liberal and supposed symbol of anti-Trumpism like Clinton would peddle in such fearmongering should be surprising, but in the Democratic Party of 2019, it sadly isn’t. When Gabbard fired back that Clinton is the “queen of the warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party for so long,” she was absolutely correct. From Iraq to Libya to Syria, Clinton has been a hawk’s hawk, and she’s been wrong on every major foreign policy issue of her day. As for the “corruption” and “rot” at the heart of the Democratic Party, consider this very simple but poignant fact: In 2005, Gabbard was serving her country in Iraq; Clinton was attending Donald Trump’s third wedding.

To be fair, there are aspects of Gabbard’s public career that deserve criticism, or at least firm requests for clarification. Early in her political life—though this has nothing much to do with foreign policy—she held some disturbingly anti-LGBT positions. I absolutely loathe that. However, she has since recanted and expressed her regret for once opposing marriage equality. Lest we forget, none other than Barack Obama “evolved” on that issue as well, moving from tepid opposition to enthusiastic support in a time period not dissimilar to Gabbard’s change of heart. As for Obama’s Iran nuclear deal, toward which Gabbard was foolishly lukewarm, she’s changed her mind on that as well. Some might accuse her of flip-flopping, but how many current Democratic favorites—think Elizabeth Warren, a former Republican—have changed course, rethought old positions and adapted to the times based on new evidence?

Then there’s Gabbard’s occasionally disturbing cozying up to dictators. I’m thinking specifically of the Hindu nationalist Narendra Modi in India, barrel-bomb-happy Bashar Assad in Syria and demonstrator-massacring Abdel-Fattah el-Sissi in Egypt. Modi is a neo-fascist; Assad is a monster; and el-Sissi runs the worst police state in Egyptian history. Still, it seems unproductive to reduce Gabbard’s views to the binary of loving or hating dictators. For one thing, there’s a measure of hypocrisy here. Clinton hasn’t raised a peep about Modi or el-Sissi, and the Obama administration worked hand in hand with the brutal Saudi regime.

When it comes to Syria, Gabbard has a point. She’s the only 2020 Democratic candidate willing to recognize that the U.S. launched a brutal regime-change war that involved backing al-Qaida-linked groups, even empowering Islamic State. The result has been the complete disintegration of Syrian society and a migration crisis that continues to roil the West. And this may not be politically correct to admit, but Assad, for all his many flaws, never posed a threat to the U.S. homeland and protected both Christians and other minorities. Gabbard, despite knowing it would hurt her politically, had the intellectual fortitude to admit that his was preferable to Islamist rule.

Whatever the merits of these criticisms, I can’t help but think they overshadow one vital point: Gabbard is the only Democratic hopeful to place foreign policy—specifically ending the absurd wars she was a part of herself—at the top of her campaign agenda. Love her or hate her, that is profound in post-9/11 America. She’s been an outspoken opponent of the U.S.-backed Saudi genocide in Yemen, repeatedly calls out the lie of an Iraq War that shattered the Middle East, and is almost alone in criticizing Obama’s repeatedly counterproductive actions that armed and fueled anti-American Islamists in Syria. These are vital truths in an age of obfuscation and foreign policy apathy.

Gabbard faces a near-impossible task. In today’s evermore paranoid and conspiratorial climate, anyone who espouses anything resembling Trump’s (unfulfilled) anti-war rhetoric is certain to be labeled—as I’ve regularly been—a “Putin apologist” or a “Russian asset.” Yes, she’s polling around 2%, so one could argue that I’m wasting my time defending her. Nonetheless, that Clinton bothered to attack her, that The New York Times did so twice before the “queen of the warmongers” did, and that she’s such a polarizing figure despite her long-shot status, suggests that a segment of the discredited Democratic establishment fears her. From my perspective, that alone is something to like about Gabbard.

So, from one Army major and combat vet to another, Tulsi Gabbard, please give a major speech clarifying each and every criticism leveled against you—even the uncomfortable ones. Don’t shy away from tough questions or hedge your bets. Be real; it’s potentially your best quality. Never stop beating the virulently anti-war drum, but explain how you’d use diplomacy to craft a holistic foreign policy that strays from the last 18 years of hyperinterventionist militarism.

Bang the drum; fight the good fight; and for however long you can stay in the race, force the other Democratic presidential contenders to engage with foreign policy, with the tough questions of war and peace that the party has ignored for so long, at its peril. Offer us a true answer to Trump’s muddled and possibly fraudulent “anti-war” policies.

Do that, and no matter your personal political fate, you’ll have done the nation and Constitution you swore to protect and defend a greater service than you already have. I’ll be there, rooting for you.

In what was oh-so-transparently aimed a debunking a so-called “right-wing-conspiracy,” Daily Show host Trevor Noah jokingly asked, during an interview with Hillary and Chelsea Clinton on Thursday, “How did you kill Jeffery Epstein?”

“I have to ask you a question that has been plaguing me for a while: How did you kill Jeffrey Epstein?“ asked Noah to laughter from the New York studio audience.

“Because you’re not in power, but you have all the power. I really need to understand how you do what you do, because you seem to be behind everything nefarious, and yet you do not use it to become president.”

“Honestly, what does it feel like being the boogeyman to the right?” the host asked. 

Clinton responded by saying it was a “constant surprise.”

“Well, it’s a constant surprise to me,” she said. “Because the things they say, and now, of course, it’s on steroids with being online, are so ridiculous, beyond any imagination that I could have. And yet they are so persistent in putting forth these crazy ideas and theories. Honestly, I don’t know what I ever did to get them so upset.”

Of course, it would not be Hillary Clinton if she did not take a jab at President Trump proclaiming that,

“I don;t think his real philosophy is America First, I think it’s Trump First…

[Trump]…clearly does Putin’s bidding…”

Forward to around 6:09 for Noah’s Epstein question…

So is she running or not?

 

The Trump administration State Department has agreed to turn over records which include communications from President Trump’s personal attorney, Rudy Giuliani, concerning Ukraine, according to a late Wednesday joint status report filed in court.

The agreement to produce the cache of records comes a little over a week after a federal judge ordered the State Department to start handing over records related to Giuliani’s communications with top department officials, in response to a Freedom of Information Act (FOIA) lawsuit filed by ethics watchdog group American Oversight, according to The Hill.

The judge ruled that the department had 30 days to turn over the documents, but that both parties needed to meet to narrow the scope of American Oversight’s request. 

The State Department is agreeing to search for records related to external communications between Giuliani, his associates Victoria Toensing and Joseph diGenova and Secretary of State Mike Pompeo, according to the status report released Wednesday.

The report says that “to the extent responsive records exist” the State Department will “process and produce” the documents “with appropriate redactions” by Nov. 22. 

The department has also agreed to process communications between Giuliani and some of Pompeo’s advisers, including including State Department counselor Ulrich Brechbuhl and former senior adviser Michael McKinley. –The Hill

The State Department search for records will include a review of emails, text messages, calendar entries and messaging platforms – as well as any correspondence regarding Giuliani, Toensing or diGenova’s plans to travel to Ukraine or encourage the country’s government to investigate Joe Biden and his son Hunter, who have been accused of corruption.

Joe Biden infamously bragged in a 2018 recording that he used his position as Vice President to withhold $1 billion in US military aid unless Ukraine fired its top prosecutor – who was leading a probe into a gas firm paying Hunter Biden to sit on its board.

The FOIA release comes as Democrats push forward with an impeachment inquiry based on a CIA officer’s second-hand whistleblower report concerning a July 25 phone call between President Trump and Ukrainian President Volodomyr Zelensky, in which Trump asked for investigations into Biden and pro-Clinton election meddling in 2016. The whistleblower, widely reported as Obama administration holdover Eric Ciaramella, also expressed concern over Giuliani’s efforts in Ukraine.

Thus far, Secretary of State Mike Pompeo has refused to comply with House Democrats’ subpoena for documents related to Ukraine, however he did suggest last week during an interview that he would comply with the court order.

According to the status report, the State Department has also agreed to produce communications between certain government officials and any non-government individuals regarding Marie Yovanovitch, the former U.S. ambassador to Ukraine.

It has also agreed to search for any “final directives” given to recall her in May. The search will be limited to communications between Pompeo, Brechbuhl and John Sullivan, the deputy secretary of State. 

The whistleblower complaint has alleged that Yovanovitch’s removal occurred because of accusations leveled by a former Ukrainian prosecutor. The State Department had called the allegations an “outright fabrication.”

Meanwhile, the status report noted that the parties did not reach on agreement on including summaries and readouts of the July 25 phone call between Trump and Ukrainian President Volodymyr Zelensky. The department claimed that the documents had a “high likelihood of being classified or privileged.” –The Hill

American Oversight executive director Austin Evers said in a statement last week that the court order was “an important victory for the American people’s right to know the facts about Ukraine.”

“While it is too early to say whether the State Department will ultimately meet the court’s order in letter and spirit, negotiations have begun in good faith,” he said following the agreement. “The Trump administration would do well to treat congressional subpoenas with the same approach rather than trying to sustain a failing strategy of total obstruction.”

Authored by Patrick Buchanan via Buchanan.org,

What are the roots of our present disorder, of the hostilities and hatreds that so divide us? When did we become this us vs. them nation?

Who started the fire?

Many trace the roots of our uncivil social conflict to the 1960s and the Johnson years when LBJ, victorious in a 61% landslide in 1964, could not, by 1968, visit a college campus without triggering a violent protest.

The morning after his narrow presidential victory in 1968, Richard Nixon said his goal would be to “bring us together.” And in early 1969, he seemed to be succeeding.

His inaugural address extended a hand of friendship to old enemies. He withdrew 60,000 troops from Vietnam. He left the Great Society largely untouched and proposed a Family Assistance Plan for the poor and working class. He created a Western White House in San Clemente, California.

In July, Neil Armstrong and Buzz Aldrin walked on the moon.

America approved. Yet the elites seethed. For no political figure of his time was so reviled and hated by the establishment as was Richard Nixon.

By the fall of 1969, that establishment, which had led us into Vietnam and left 500,000 U.S. troops there as of January 1969, had turned against their own war, declared it “an unwinnable war” and “Nixon’s war,” and begun to cheer the huge anti-war protests scheduled for October and November.

David Broder of The Washington Post was one who saw clearly what was happening: “It is becoming more obvious with every passing day that the men and movement that broke Lyndon Johnson’s presidency in 1968 are out to break Richard Nixon in 1969. The likelihood is great that they will succeed again.”

In a cover story titled “Nixon in Trouble,” Newsweek echoed Broder:

“From almost every quarter last week the nine-month-old Administration of Richard M. Nixon was under sustained attack and angry fire, and increasingly the target of the attacks was Mr. Nixon himself and his conduct of the Presidency.”

On Oct. 15, some 250,000 descended on the capital for the largest demonstration in history. A stunned Time declared that, instead of resisting its demands, Nixon should prepare “the country for the trauma of distasteful reversal.”

Time wanted Nixon to declare Vietnam a lost cause.

But by now, Nixon, realizing his presidency was in danger of being broken like LBJ’s — but believing he was reading the nation better than the establishment — had decided to wheel and fight.

On Nov. 3, 1969, Nixon delivered an Oval Office address that was carried live on every network. After reciting the case Ike, JFK and LBJ had all made for resisting a Communist takeover of South Vietnam, Nixon laid out his own policy, the rationale for it, and urged the “great silent majority” to stand by him for peace with honor.

The network commentators almost universally disparaged Nixon’s address as repetitive and unresponsive to the crisis of his presidency.

Washington’s elites, however, had misread the nation.

An instant poll found that 70% of the country supported Nixon’s declared policy. A coalition of 300 House members endorsed Nixon’s stand. Liberal Democrats in the Senate rejected Nixon’s policy, but Southern and conservative Democratic senators backed him.

Ten days after the “silent majority” speech, Vice President Spiro Agnew, in Des Moines, launched an assault on the unholy matrimony of media power and liberal bias. Agnew questioned whether the networks near-monopoly over the primary source of information for the American people should be permanently ceded to so tiny and unrepresentative an elite.

VIDEO: Spiro Agnew: Television News Coverage Speech – Des Moines, Iowa – Nov 13, 1969

[Note: Audio version and full text of speech can be viewed here…]

All three networks carried Agnew’s speech live, but were rocked on their heels by the reaction. Scores of thousand of telegrams and letters poured into network offices and the White House, with the vast majority agreeing with the vice president.

The liberal establishment had sustained a historic defeat.

By December, Nixon was the most admired man in America. His approval rating in the Gallup Poll was 68%. Only 19% disapproved of how he was conducting his presidency. Dr. Billy Graham was the second-most admired man, and Agnew third.

Nor was this but a blip in the Nixon presidency. When, three years later, Democrats nominated the most impassioned and articulate of their anti-war senators, George McGovern, Nixon would crush him in a 49-state landslide.

In Watergate, the establishment would get its pound of flesh for its rout by Nixon in November 1969 and its humiliation in November 1972. But that establishment would never recover what it lost — the respect and regard of the American people in the ’60s and early ’70s.

JFK’s “best and brightest,” whose hour of power was “Camelot,” were broken on the wheel of Vietnam. After taking us into Southeast Asia, they had washed their hands of their own war and declared it immoral.

So great was the loss of esteem for the establishment among the silent majority, America’s elite would soon cease to call themselves liberals and change their names to “progressives.”

As noted earlier, today’s payrolls report was a far stronger than expected 128K (exp. 85K), even with the negative impact of the GM strike and the unwind of census hiring, which subtracted 41,600 and 20,000 workers from the headline print. In any case, October marked the 109th straight month of U.S. job growth, the longest such streak on record; we for one, can’t wait to deconstruct this fabrication during the next recession when the truth behind these number will finally emerge but we digress.

And while the quantitative aspect of today’s jobs report was stronger than expected, what about the qualitative?

Here, as has been the case for much of the past decade, job gains were led by low-wage jobs in leisure and hospitality, education and health services as well as the somewhat better paying professional and business services. Construction and finance also posted modest gains. Even retail jobs rose, registering back-to-back gains for the first time in more than a year following seven straight declines.

While we present the full breakdown of jobs by sector below, it is worth noting that food services and drinking places added 48k jobs in October, as job growth in the industry has averaged 38k over the past three months, compared with an average monthly gain of 16k in the first seven months of 2019. And something even more remarkable: since February 2010 – a period covering nearly 10 years – the US “food service and drinking places”, i.e. restaurant industry, has added jobs every single month with just 4 exceptions!

Booming – supposedly – restaurant industry aside, this is who else hired in October and 2019:

• In October, food services and drinking places added 48,000 jobs.
• Employment in social assistance increased by 20,000 in October and by 139,000 over the last 12 months.
• Employment in financial activities rose by 16,000, with gains in real estate and rental and leasing (+10,000) and in credit intermediation and related activities (+6,000). Financial activities has added 108,000 jobs over the last 12 months.
• Employment in professional and business services continued to trend up in October (+22,000).
• Health care employment continued on an upward trend in October (+15,000). Health care has added 402,000 jobs over the last 12 months.
• Manufacturing employment decreased by 36,000 in October. Within manufacturing, employment in motor vehicles and parts declined by 42,000, reflecting strike activity.
• Federal government employment was down by 17,000 over the month, as 20,000 temporary workers who had been preparing for the 2020 Census completed their work.

The chart summarizing the above is below, with the sharp drop in manufacturing jobs, a direct result of the GM strike, highlighted. It is expected that most of this drop will reverse in November.

Finally as Bloomberg notes, blow are the industries with the highest and lowest rates of employment growth for the most recent month. Additionally, monthly growth rates are shown for the prior year. The latest month’s figures are highlighted.

 

 

Senator Elizabeth Warren unveiled more details of her “Medicare for All” plan she swears won’t cost the middle class “one penny,” while raising federal spending by $20.5 trillion. Paying for the increases would be a wave of taxes on large corporations, the wealthy, cracking down on tax evasion, an $800 billion reduction in defense spending, and putting newly legalized immigrants on the tax rolls.

Warren has come under pressure from her Democratic rivals to release the details of her ambitious plans – and in particular, how she plans to pay for them. As the New York Times notes, “Her new proposal marks a turning point for her campaign, in which she will have to sell voters on a tax-and-spending plan that rivals the ambitions of the New Deal and the Great Society while also defending it against both Democratic and Republican criticism.”

At a cost of “just under $52 trillion” (about what the current system will cost over 10 years), Warren’s plan calls for the elimination of employer-sponsored health insurance, which over 50% of Americans now receive. It would be replaced by free government health coverage for all Americans.

To pay for the $20.5 trillion, Warren would require employers pay trillions of dollars to the government. For those who currently pay for employee coverage, this would replace much of that spending. Businesses who don’t currently cover healthcare costs would be exempt. Warren would also tax financial transactions such as stock trades, as well as boost taxes for investment gains for the top 1% of households. Her signature wealth tax proposal would also take a larger chunk from billionaires. Lastly, Warren wants to cut $800 billion in military spending.

Ms. Warren’s estimate for the cost of Medicare for all relies on an aggressive set of assumptions about how to lower national health care costs while providing comprehensive coverage to all Americans. Like Senator Bernie Sanders of Vermont, she would essentially eliminate medical costs for individuals, including premiums, deductibles and other out-of-pocket expenses.

Critically, her new plan would not raise taxes on middle-class Americans, a question she has been asked over and over but has not answered directly until now. When confronted on the campaign trail and debate stage, she emphasized instead that her plan would result in higher overall costs for wealthy people and big corporations but lower costs for middle-class families. –NYT

Democratic 2020 rivals such as Joe Biden and Bete Buttigieg have repeatedly criticized Warren for her failure to detail the specifics of her plan – with Buttigieg calling her “extremely evasive.”

“A key step in winning the public debate over Medicare for all will be explaining what this plan costs — and how to pay for it,” Warren writes in her plan. “We don’t need to raise taxes on the middle class by one penny.”

After the Trump administration and Republicans unsuccessfully attempted to repeal the Affordable Care Act, Warren and other Democrats have taken up healthcare as a central issue to compete for their party’s presidential nomination.

The Times suggests that responding to her rivals in such detail has opened her up to attack from the right.

Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total. –NYT

Warren has aligned herself with Sen. Bernie Sanders, one of her top rivals who has long championed single-payer healthcare. Not only did she co-sponsor his Medicare for All legislation in the Senate, she declared “I’m with Bernie” regarding healthcare during her first primary debate in June.

According to the report, Warren’s financing plan is based on cost estimates that are on the low side. Her estimate that the plan will cost $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, except she inserts her own assumptions which reduce their estimate of $34 trillion over the same period.

Warren’s plan would create a new “employer Medicare contribution” which would total $8.8 trillion over a decade. Moreover, states would pay the federal government much of what they already spend to insure state workers and low-income residents covered by Medicaid.

$3 trillion of the plan would be raised via two proposals to tax the richest Americans. Previously, Warren floated a 3% annual tax on net worth over $1 billion. She is now raising that to 6%. The second proposal would alter how gains are taxed for the top 1% of households.

In addition to imposing a tax on financial transactions, she would also make changes to corporate taxation. She is counting on stronger tax enforcement to bring in $2.3 trillion in taxes that would otherwise go uncollected. And she is banking on passing an overhaul of immigration laws — which itself would be a huge political feat — and gaining revenue from taxes paid by newly legal residents. –NYT

On the medical side, Warren’s plan would put ‘substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies,’ according to the Times. Instead, Warren assumes that aggressive negotiations could lower spending on generic medications by 30% vs. current levels, and that spending on prescription drugs could plummet by 70%. Payments to hospitals would be around 10% higher than what Medicare currently pays – which would lead to big cuts for some hospitals, while helping others. Doctors would be paid less under Warren’s plan vs. what Medicare currently pays.

The level of desperation among monetary policy makers and administration officials to keep the stock market higher is becoming farcical.

Dow futures have rallied since payrolls, pushing above the China trade rumor losses and testing post-Powell highs…

And this is what it took to create that 200 point rally…

0830ET Jobs Beat – Dow +100

0915ET Fed’s Kashkari dovish: “we’re not at maximum employment.. in free lunch zone” – Dow +20

0920ET Mnuchin: “constructive talks, working hard” – Dow +30

0930ET Fed’s Rosengren hawkish: further monetary accommodation not needed – Dow unch

0935ET Fed’s Clarida neutral: “we will be data-dependent, economy/consumer in good place” – Dow unch

0936ET Fed’s Kaplan dovish: “growth in US is decelerating, need skills-based immigration” – Dow unch

0937ET Kudlow: White House wants tax cuts for middle class, Trump optimistic on trade deal – Dow unch

0945ET Kudlow: “enormous progress on IP theft” – Dow +30.

0950ET Record high for S&P and Nasdaq

0955ET Kudlow: “US-China trade call may be happening now, Ag & FX parts virtually completed” – Dow +20

1000ET ISM Manufacturing MISS, 3rd month of contraction – Dow +50

And all that managed to achieve was to run overnight stops.

Don’t get carried away though, gold and bonds are the biggest gainers since Powell’s inflation comments…

Following Chicago manufacturing’s survey collapse, September’s plunge in ISM Manufacturing, and October’s weakness in the Services ISM, all hope-filled eyes were on Manufacturing survey data this morning.

• US Manufacturing PMI 51.3, up from 51.1 in September (missed expectations of 51.5)

• US Manufacturing ISM 48.3, up from 47.8 in September (missed expectations of 48.9)

This is the third straight month of contraction (sub-50) for ISM, and this is after a surge in actual economic data in September and collapse in October.

Source: Bloomberg

Under the hood ISM is not pretty:

• Production fell to 46.2 vs 47.3, lowest reading since April 2009

• Imports fell to 45.3 vs 48.1, lowest reading since May 2009   

• New orders rose to 49.1 vs 47.3

• Employment rose to 47.7 vs 46.3

• Supplier deliveries fell to 49.5 vs 51.1

• Inventories rose to 48.9 vs 46.9

• Customer inventories rose to 47.8 vs 45.5

• Prices paid fell to 45.5 vs 49.7

• Backlog of orders fell to 44.1 vs 45.1

• New export orders rose to 50.4 vs 41.0 ?

Chris Williamson, Chief Business Economist at IHS Markit said:

“Tentative signs of renewed vigor are appearing in the US manufacturing sector, with the survey’s production gauge having now risen for three successive months to suggest that the soft patch bottomed out in July. Growth of new orders hit a six-month high, fuelled in part by a renewed increase in exports, prompting producers to take on more staff, with payroll numbers rising at the quickest pace since May.

“The improvement in current conditions was matched by a lifting of business optimism about the year ahead to the highest seen since June. It was also encouraging to see this optimism feed through to an upturn in demand for investment goods, such as plant and machinery, as this hints that firms are moving back into expansion mode, albeit only tentatively so far.

“However, while the outlook has improved, further growth is by no means assured. Survey respondents continue to report widespread concerns over issues such as tariffs, the auto sector’s ongoing malaise, a lack of pricing power amid weak demand and uncertainty about the economic and political situation over the coming year. While the survey data are moving in the right direction, the overall picture therefore remained one of only very modest growth and guarded optimism.”

So who do we believe? ISM or PMI?