FEMA Director Brock Long Racked Up $151,000 in Unauthorized Travel

|||Chris Kleponis/SIPA/NewscomThe Federal Emergency Management Agency (FEMA) has been thoroughly criticized for its poor preparation, wastefulness, and ineffective responses to natural disasters. Now, it faces a management scandal involving FEMA Administrator Brock Long. An internal investigation from the Department of Homeland Security’s (DHS) Office of Inspector General (OIG) found that Long used over $150,000 in government money for personal expenses.

The heavily redacted report tracked Long’s actions between December 2017 and April 2018 and was obtained by the Washington Post. According to the paper’s findings, Long commissioned staff and government vehicles for personal trips. The unapproved trips included being driven from Washington, D.C., to his home in Hickory, North Carolina, on the weekends. The aides would then stay in hotels so they could drive Long either back to Washington, D.C., or to Charlotte Douglas International Airport. On at least one occasion, an aide picked up Long’s children from their school.

Government-funded personal trips also extended beyond chauffered rides from D.C. back to his home. Long also took a trip to Hawaii with his family during his children’s spring break. Following business-related activities, an aide drove Long and his family to visit a pineapple plantation and a volcano.

A policy states that Long is only permitted to travel in government vehicles during national emergencies with approval from DHS Secretary Kirstjen Nielsen. Nielsen was reportedly made aware of the situation because of Long’s absences from his office, due, in part, to his frequent travel home. She confronted Long to inform him that agency resources were not for personal use.

Long spent about $151,000 on unauthorized travel, according to an estimate in The Wall Street Journal. Two officials have since been suspended in connection with the travel. Long remains in his position, but was ordered by Nielsen to pay the government back.

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Dollar Shortage Returns: Basis Swaps Snap Wider

In the aftermath of the Fed’s latest rate hike on Wednesday, which despite a hawkish dot plot was dovish in its removal of the “accommodative” language – a staple of the ZIRP period over the last decade – there was some immediate market confusion as to what the US dollar should do next, with a kneejerk reaction first lower, then higher, before eventually settling at unchanged.

It was not meant to be, however, and today the dollar has resumed its ascent higher, rising to the highest level since September 17, amid a sharply weaker Euro (due to the return of the Italian budget drama), Yen and even Yuan (overnight the PBOC failed to raise rates as it has traditionally done in the past alongside the Fed).

And while the market may have finally realized that there was little dovish in the Fed statement, especially after Powell explicitly said that “accommodation” remains, largely as a function of easy monetary conditions, and is starting to price in another 3 hikes in 2019 (after the December rate hike which now also appears guaranteed), a more notable move has been observed in various FX basis swaps, all of which are blowing out today, and are back to the widest levels of 2018.

It’s not just one pair, but an across the board move, which suggests that overnight there has been a sharp repricing of dollar liquidity.

What may be causing this? Two possible explanations have emerged: i) contrary to popular narrative, the Fed’s hike was not priced in and a rate differential-driven imbalance emerged, resetting basis swaps to reflect a continuation of the tighter US regime; ii) quarter end is approaching and coupled with the rate hike, financial institutions suddenly find themselves very short dollars.

Whatever the reason, the consequence is clear: there is an acute dollar shortage. Meanwhile, one consequence of this basis swap repricing is that USD-denominated treasuries are suddenly more expensive to hedged foreign buyers to the tune of roughly one rate hike. Which, all else equal, would mean that there is now that much less demand by international buyers for TSY paper on the long end. Could this shift in supply-demand mechanics impact the yield on long-dated paper? Judging by the leak wider in the 10Y yields which alongside the dollar were trading at session highs, all those traders who have been praying for at least some steepening in the curve may finally get their wish.

The second question is whether the latest Fed hike, and the sharp move in basis swaps, indicates that going forward every incremental rate hike will finally result in sharply tighter financial conditions.

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TSA Will Report Weed at LAX to Cops, Who Can’t Do Anything About It

Legalization of recreational marijuana in California means there’s very little action airport police can take against travelers caught with small amounts of weed. Leave it to federal law—and the Transportation Security Administration (TSA)—to complicate things.

At Los Angeles International Airport (LAX), anyone 21 and over can “possess up to 28.5 grams of marijuana and 8 grams of concentrated marijuana for personal consumption,” according to a “marijuana policy” posted on the airport’s website. As Marijuana Moment‘s Tom Angell pointed out on Twitter, the policy has been up on the website since at least April. Los Angeles Airport Police spokesperson Alicia Hernandez told McClatchy the policy has been in effect since January, when recreational weed officially became legal in the state.

Other California airports don’t have stated policies regarding marijuana, but police have essentially said there’s nothing they can do if travelers aren’t violating California law. “We’re really not in a place to do anything,” Sgt. Ray Kelly of the Alameda County Sheriff’s Office, which has jurisdiction over Oakland International Airport, told CNBC in December. Lieutenant Mark Gonzales of the Orange County Sheriff’s Department told USA Today in February the same goes for Orange County’s John Wayne Airport.

According to Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws (NORML), LAX’s marijuana policy is a sign that marijuana use in California isn’t a big deal to local authorities. “It exemplifies the widespread cultural shift and acceptance of marijuana that is ongoing in the state of California,” Armentano told Leafly.

But while local cops don’t seem to care, marijuana is still illegal under federal law. That means TSA agents have to flag fliers in possession of weed, even if that won’t accomplish anything. “TSA’s response to the discovery of marijuana is the same in every state and at every airport—regardless of whether marijuana has been or is going to be legalized,” TSA spokesperson Lorie Dankers tells Reason via email. “Airport law enforcement will be notified if marijuana is discovered by a TSA officer during the security screening process of carry-on and checked baggage.” Law enforcement will then decide “whether or not the passenger is allowed to travel with marijuana.”

Particularly at LAX, though, airport police have made it clear they’re not going to do anything. So what’s the point of the TSA making a fuss? In the end, travelers with weed will still be allowed to fly. Whether or not they’ll be able to catch their flights is another question, depending on how long they’re held by the TSA and local police.

Even though it’s easy to blame the TSA here, the oft-maligned agency doesn’t even deserve most of the blame. The TSA’s job is to enforce federal laws, even the bad ones. And in this case, the federal law is very, very misguided.

Back in 2010, Reason‘s Nick Gillespie offered three reasons why weed should be legalized. One, because the government could collect billions of dollars in tax revenue and save billions more in law enforcement costs. Two, because Americans increasingly support weed legalization, and three, because pot prohibition infringes on bodily autonomy. Those arguments are just as true today as they were eight years ago.

Since 2010, nine states (plus Washington, D.C.) have legalized weed for recreational use. But the federal ban continues to complicate matters, especially for travelers. There’s a simple fix, of course: Remove marijuana from Schedule I, and allow the states to set their own pot policies.

Bonus link: Is the TSA actually chiller about weed than the city of San Francisco? It’s possible, wrote Reason‘s Christian Britschgi in November.

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Trade Wars Could Collapse US Car Sales And Slash 715K Jobs: It Would Trigger A “Downward Cycle”

The most significant and dangerous risks stem from policymaking. And on top of the list is, of course, the protectionist crusade of the Trump administration to disrupt the post–World War II global economic order the US was instrumental in building.

The impact of President Trump’s escalating trade war with China is already being felt, auto experts warn, and not in a good way.

Retaliation by China to tariffs already in place have made some American auto exports uncompetitive, and could collapse US auto sales by 2 million vehicles per year, resulting in the loss of up to 715,000 American jobs and a devastating hit of as much as $62 billion to the US GDP.

As per NBC News, the Center for Automotive Research (CAR) warns that the auto industry could receive a devastating blow if Section 232 declares foreign-made cars and car parts a threat to national security.

Kristin Dziczek, a vice president and senior economist at CAR, said if Section 232 is enacted, it could trigger a “downward cycle” in the auto industry – not seen since the last great recession.

The latest research from CAR demonstrates how the trade war is disrupting the complex web of international supply chains, the repair of which will be expensive, and the jump in automobile costs could damage global and US markets. The uncertainty surrounding the trade war is also seen as extremely disruptive to business planning and hence investment plans.

The indirect effects on business investment may damage the auto industry on a medium-term basis.

Already announced tariffs on imported aluminum and steel have added about $240 to the cost of producing a new automobile in the US, said Peter Nagle, a senior economist at IHS Markit. The first round of tariffs with China has also increased the cost of foreign parts used on American assembly lines. Nagle added that the series of trade tariffs would “exacerbate” the difficulties the auto industry currently faces as it struggles to thwart the first downturn in sales since the last recession.

President Trump activating tariffs using Section 232 rules would be disastrous, he warned.

Nagel estimated consumers would be “looking at price increases of $1,300 for a typical mass-market product, up to $5,800 for a luxury vehicle.” He said those increases would not be limited to just imported vehicles. Toyota, for example, has forecast the price of a US-manufactured Camry would jump by about $1,600.

The report from CAR and IHS confirms that new auto sales would plunge by around 2 million vehicles annually, to 16.5 million per year from 2019 to 2025. In other words, America’s auto industry is on the cusp of a nasty recession. Caught in the crossfire, some medium-sized and smaller parts suppliers could be forced into bankruptcy, unable to afford the expenses of relocating their operations back to the US. That could result in disruptions at assembly plants, said Nagle.

Auto experts said that China is the leading supplier to the automotive aftermarket, with parts such as tires, wheels, filters, and wiper blades.

The consumer who is currently experiencing negative real wage growth will be shocked when parts for their vehicles become much more expensive.

And when it comes to auto exports, the US is already starting to feel the shock. Before the Trump administration enacted the first round of tariffs on Chinese goods, Beijing announced plans to reduce its duties on imported vehicles from 25 percent to 15 percent. Chinese imports of US autos are now subjected to 40 percent tariffs, making them even less competitive with auto imports from Europe and or Japan.

The escalating trade war with China “will further harm the U.S. auto industry and American workers and consumers,” said John Bozzella, CEO of the Association of Global Automakers. “Retaliation by China to tariffs already in place has made U.S. auto exports uncompetitive and will eliminate our bilateral auto trade surplus.”

There are no winners in trade wars, even if the ultimate goal is a noble one. The immediate impact is likely to ripple through the entire US auto industry, experts warn, even at the dealership level. The CAR study estimates as many as 117,000 employees at the country’s 17,000 new car dealerships could lose their jobs.

Lessons from past trade wars signal that the US auto industry is in for a walloping.

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“What Were You Thinking?”

Submitted by The Macro Tourist

 

The other day I was flipping through my database of research, saved quotes and most importantly – amusing pictures, and I stumbled upon this gem:

I love this quote because it clearly shows the absurd valuation of SUN Microsystems at the height of the “DotCon” bubble. For those too young to remember, there was a time that trading desks (but more importantly – the rest of the internet server ecosystem) was chocked full of beasts like these.

These computers were the cat’s-meow in serious computing power. Windows PCs were toys compared to these behemoths. I think back with amusement to the time in 1999 when I charged into my senior boss’s office after being turned down by the IT department for a new $40,000 Ultra-80 because I “traded too much already.” Good times.

Anyways, back then, SUN Microsystems was going to rule the world, and Scott McNealy’s company was priced for perfection. Actually I take that back. It was priced so far beyond perfection that it was head-shakingly-stupid.

I posted Scott’s tweet because I wanted to remind readers at how absurd valuations were way back then.

Well, it turns out I lifted this quote from super-nice-guy Jesse Felder’s blog and he was kind enough to send me his post – “What Were You Thinking?.

Ironically, in the context of the entire article, instead of making my point about the relative overvaluation of 2000 versus today, Jesse had some great stats regarding the number of modern-day-SUN-Microsystems that are trading for more than 10-times revenues.

Specifically Jesse, along with the AquirersMultiple.com created this terrific chart that plotted the total number of these over-priced-monstrosities.

In chatting with Jesse, we realized it would be great to have some up to date data for this chart, so we set about creating a Bloomberg query to recreate the data and get the latest values.

All I can say is Whoa!

I had no idea.

It’s not 2000-level-of-stupidness, but there can be no denying there is certainly no shortage of 2018-style-SUN-valuation stories out there today.

It’s not what I was expecting, so I have no profound observations, but I thought it would be a good stat to share. I know my bearish brethren (like my pal Jesse Felder) will use this as further ammunition to argue the market is priced for perfection and that this is a disaster in the making, but in my mind, it still doesn’t feel anywhere near as frothy as 2000.

Yet, I need to acknowledge that numbers don’t lie, and according to this metric, we are only a few ticks away from equaling “DotCon” stupidity. Someone phone up Scott McNealy and ask him what he thinks…

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Secretive Crypto Firm Opens Books For 1st Time To Reveal Enormous Profits

Crypto prices surged on Wednesday after Beijing-based Bitmain published its long awaited IPO prospectus, publicly disclosing for the first time just how enormously profitable the purveyor of crypto mining rigs and chips has become since it was founded in 2013 by crypto billionaires Jihan Wu and Micree Zhan. The company, which controls roughly 85% of the market for crypto mining rigs and chips, has seen its profits expand from just $12.3 million at the end of 2015 to more than $700 million during the first six months of 2018 alone. Importantly, its revenues and profits have continued to expand, even as the market for cryptocurrencies has cooled since the start of the year.

Bitmain

According to MarketWatch, the company’s profits increased by more than 800% from the prior year to $700 million. It revenues, meanwhile, expanded ten fold to $2.8 billion.

Bitmain

Bitmain was founded in 2013 by Wu and Zhan just as bitcoin was entering the mainstream. The price of a single coin peaked at around $2,000 in November of that year before plunging to around $200 following the spectacular collapse of Mt. Gox in February 2014. At the time, Gox was the largest crypto exchange in the world.

Speculation about an IPO has been metastasizing for years, but many believed that the secretive company would shelve its plans following the $600 billion drop in aggregate crypto valuations.

According to its prospectus, Bitmain’s business model revolves around the design of ASIC chips for both crypto mining and AI purposes. According to a consulting firm cited in the prospectus, Bitmain is one of the largest ASIC-based crypto mining company. Still, the success of its IPO is far from certain. As Bloomberg points out, two of the company’s biggest rivals, Canaan Inc. and Ebang International Holdings Inc., are also pursuing IPOs. And some analysts cited by BBG fear that the company could lose its competitive edge. If it follows through with the IPO (which is a big if considering Hong Kong’s benchmark index has fallen 16% from its January highs), analysts will view the offering as the first big test of investor appetite for crypto firms working on an industrial scale.

But like we said – that’s still a big if.

Read the prospectus below:

 

HIP1809026e Genesis AP by Zerohedge on Scribd

 

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The 3 Biggest Lies Trump Told About Tariffs at His Crazy Press Conference

President Donald Trump’s freewheeling press conference on Wednesday evening included a number of truly surprising moments, like when the president identified a reporter from a Kurdish news agency as “Mr. Kurd,” and when he offered probably the most honest assessment of his own presidency—”I was saying things that nobody in the room even understood,” Trump said of a conversation with Secretary of State Mike Pompeo and Japanese officials.

What’s not surprising is that the press conference also contained a number of outright lies about the status of the Trump administration’s trade policies, and the ways in which tariffs are affecting the domestic economy and America’s relationship with key trading partners. It’s not surprising because the Trump administration has spent months peddling misleading claims and outright fabrications (“trade wars are good and easy to win!”) to defend policies that are economically indefensible.

This is the same man who, according to Bob Woodward’s recently released book, couldn’t even offer a solid explanation for why he wanted tariffs in the first place. “I just do,” Trump reportedly told Gary Cohn, the White House’s economic adviser. “I’ve had these views for 30 years.”

Here are the three biggest departures from reality Trump offered on Wednesday.

1. “A lot of money is coming into our coffers, and it’s had no impact on our—absolutely, by the way—no impact on our economy, which I said it wouldn’t.”

Trump is half-right about the first part. Tariffs have brought more than $1.4 billion into the federal goverment, because they are taxes. Those payments are being made by American importers, not by China. In fact, if the current set of tariffs remain in place for a full year, they will suck more money out of the economy than the major taxes included in the Affordable Care Act.

The second clause is the big whopper here. Just hours before Trump’s press conference on Wednesday, Ford CEO Jim Hackett said the tariffs were costing his company more than $1 billion in the form of higher prices for steel and aluminum—two things that you need a lot of if you want to build cars. Even though Ford sources most of its steel and aluminum in the United States, Hackett said, the tariffs on imported steel and aluminum were causing domestic producers to hike their prices as well.

This is, well, exactly what everyone knew would happen when Trump slapped a 25 percent tariff on steel and a 10 percent tariff on aluminum earlier this year. But it’s not just Ford paying the price. Businesses from coast to coast have announced plans to close, lay off workers, delay expansions, move overseas, or postpone investments because of the tariffs. While the economy as a whole continues to perform well, the tariffs are an undeniable drag on dynamism, and economists warn that the latest round of tariffs on Chinese imports could have a significant impact on consumers and retailers during the upcoming holiday season.

And, of course, tariffs are meant to bend consumer behavior towards politically favored industries and firms. If tariffs truly were having no impact on the economy, they would be failing to achieve their one and only goal.

Absolutely no impact? Absolutely false.

2. “Steel is incredible. U.S. Steel is opening up a minimum of eight plants. NuCor is opening up plants. And these are big plants…What’s happening with the steel industry is very exciting to me. It’s being rebuilt overnight.”

This claim requires significantly less parsing, because Trump helpfully provides us with clear, exact numbers. They are also completely made up. While some American steelmakers have announced plans to increase production at existing plants, there are no plans to build new steel plants—and even if there were, they aren’t exactly the sort of thing that can be built overnight (or in the span of a few months).

Trump has previously claimed that U.S. Steel would open six new plants because of the newfound success they are having under his trade policies. That was false. Then he started claiming that U.S. Steel would open seven new plants. Also false. Trump’s claims keep inflating, but the number of new steel plants opening continues to remain the same.

What U.S. Steel and Nucor are doing is using their political influence to direct parts of the Trump administration’s protectionism. Businesses affected by the steel and aluminum tariffs can appeal to the Commerce Department for waivers from those taxes, but both major American steelmakers seem to be using their influence to block waiver claims.

Rep. Jackie Walorski (R–Ind.), whose office has conducted a review of the waiver applications granted and denied by the Commerce Department, found that not a single application has been accepted if U.S. Steel or another domestic steelmaker had objected to its granting. It’s a far cry from the “fair and transparent process” that Commerce Secretary Wilbur Ross promised in March when the steel and aluminum tariffs were unveiled.

To summarize: Trump’s trade protectionism isn’t causing steelmakers to open new plants, but it is causing them to engage in more cronyism. This, too, should have been expected.

3. “His tariffs are too high and he doesn’t seem to want to move, and I told him ‘fuhgeddaboutit’…We’re very unhappy with the negotiations and the negotiating style of Canada.”

Asked whether he had canceled a planned one-on-one meeting with Canadian Prime Minister Justin Trudeau to discuss the renegotiation of the North American Free Trade Agreement—something that is supposedly a priority for Trump—the president admitted in the most casual way possible to standing up Trudeau.

Canada says this whole thing is a lie and there was no plan for a meeting.

Maybe so. But the bigger lie here is that Canada’s tariffs “are too high.” Trump is fixated on a few Canadian tariffs—a tariff on dairy products is a favorite target—and while those are admittedly not good, the vast majority of trade between the U.S. and Canada is tariff-free.

Sinking the entire negotiation over a single issue seems like an odd way to reach an agreement, but it’s no more outlandish than Trump’s claim that Canada is negotiating in bad faith. After all, Trump admitted just weeks ago to having deliberately undermined NAFTA negotiations with Canada simply because he could.

If Trump wants foreign leaders to negotiate in good faith with the United States, perhaps he ought to demonstrate an ability to recognize the reality of his trade policies.

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3 Questions To Ask Yourself While Watching the Kavanaugh/Ford Hearings Today

The Senate Judiciary Committee will convene today to hear from Supreme Court nominee Brett Kavanaugh and research psychologist Christine Blasey Ford, the woman who has accused him of sexual assault when both were in high school in the early 1980s (her opening statement is printed here in full). Over the past two weeks, all manner of charges have been lobbed at Kavanaugh, including suggestions that he not only was a drunken slob in high school and college but participated in and helped to organize gang rapes during his years at Georgetown Preparatory School. He has admitted to drinking heavily but flatly denied all accusations of sexual impropriety.

It was clear going into the confirmation process that no Democratic senators would vote for Kavanaugh, who is widely seen as being staunchly anti-abortion and almost certainly in favor of limiting its practices through added restrictions if not an actual overturning of legal precedent granting women a right to terminate pregnancies in their early stages. Only three Democratic senators voted to confirm Neil Gorsuch (Joe Manchin of West Virginia, Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota), presumably out of political concerns, not ideological sympathy with him. And it was similarly clear that all Republicans would vote in favor of Kavanaugh, especially if he assuaged fears among one or two senators (especially Susan Collins of Maine and Lisa Murkowski of Alaska) that he wouldn’t challenge the core ruling in Roe v. Wade and subsequent decisions guaranteeing a right to an abortion. From a libertarian point of view, it’s disturbing that Kavanaugh’s bad positions on the Fourth Amendment and related issues didn’t rise to a higher level of scrutiny.

All of that is politicized enough, but the Kavanaugh confirmation has fused with a number of other potent cultural currents, especially widespread partisan hatred for Donald Trump, the upcoming midterm elections, and the #MeToo movement.

We know where political partisans stand, but what about the rest of us who do not identify primarily in partisan terms? The latest Gallup poll on party identification finds just 26 percent of us identifying as Republican and 27 percent as Democratic. Forty-four percent call ourselves independent, a near-record high. Here are three questions political independents should be asking ourselves before today’s Senate proceedings get underway:

  1. Is there any evidence or testimony that would change your mind about Kavanaugh? Some of the accusations are credible on their face, though there has been little in the way of concrete corroboration. Kavanaugh has flatly denied everything and said that even though he drank heavily at times, he never blacked out. If old letters from him confessing guilt and the like emerged, that would undermine his protestations of innocence in a definitive way. The last-minute nature of the gang-rape accusations from Julia Swetnick and her representation by publicity-hungry lawyer Michael Avenatti—whose language is oddly imprecise when actually saying Kavanaugh did this or that—raises doubts. At this point, at least two men have supposedly emerged claiming that they were the men who attempted to rape Ford, but how can anyone really verify their accounts? This battle has very much emerged as a marker for forces that overwhelm the specific individuals at the center of the drama. Even stories about the lurid atmosphere at elite prep schools in the D.C. area (such as this one in Vanity Fair, which has been relentlessly anti-Trump and Republican since at least 2016) cannot locate Kavanaugh at the scene of specific crimes. Most Americans (59 percent) think he should not be confirmed if Ford’s allegation is true, but a majority of Republicans think he should be confirmed even if he did assault her.
  2. Is there any way to depoliticize the selection of Supreme Court justices? Almost certainly not, and it probably would be inadvisable in any case. The Supreme Court is part of the government after all, and the justices read the opinion polls and headlines too. They are selected by one politician (the president) and vetted by others (senators). Getting politics out of the process is impossible and ultimately, elections do indirectly change the makeup of the bench. One argument that Kavanugh is guilty as charged is that the sexual assault accusations didn’t come up against Neil Gorsuch (also an alum of Georgetown Prep, by the way). Conservatives counter that activists are targeting Kavanaugh because the seat he might be taking will change the balance of the Court, the midterms are nigh, and this is a way for Democrats to derail Trump’s presidency. There’s no question that Sen. Dianne Feinstein of California, the ranking Democrat on the Judiciary Committee who knew about and disregarded Ford’s allegations since July, acted poorly in the matter. Had she raised these concerns when they first surfaced—or even during the actual confirmation hearings—they could have been dealt with in a less super-charged way. But maybe that was the point of withholding them until the last minute? It’s also true that Supreme Court nominations have always been flash points for politicking, even before the watershed moment of Robert Bork back in the 1980s. Yet if there is no way to completely drain politics out of the process, there are surely ways to make Supreme Court nominations less ridiculously and obviously politicized. The problem here resides with the Senate, which in recent memory flipped back and forth between getting rid of the filibuster rule for judicial appointees. Democrats and Republicans have reversed sides on this issue in the most brazen ways possible, reducing legislative process to mere politics. Both houses of Congress have shown themselves to be tied to their parties first, and Congress, a branch of government that should be fully independent of the White House, second. The hyper-politicization of this is all on the Senate’s head and it is up to them to fix it.
  3. Will things ever get back to “normal”? At least since the 2000 election, which was ultimately decided by a coin flip, there has been a pervasive sense of unreality in American politics that calls to mind the novels of Philip K. Dick. The 2016 election, in which the eventual victor promised to contest the results if he lost and the loser is now claiming Donald Trump is illegitimate, is simply the latest episode. But all of this started in earnest at least during the early 1990s, when literally any charge, however unsubstantiated, was being lobbed at Bill Clinton. By 1994, the Rev. Jerry Falwell, erstwhile preacher, president of Liberty Baptist University, and the head of the Moral Majority, was hawking a completely insane documentary that said the president was directly implicated in “countless” murders in Arkansas (and let’s not even start talking about Vince Foster). Falwell was not a fringe player and by the time George W. Bush was “selected” president a few years later, similarly grandiose conspiracy theories about him and stolen elections were being showcased in well-regarded news outlets. We have crossed a line where if someone can dream it, someone will publish it. And there doesn’t seem to be any directional change on the horizon. We have made it acceptable to say anything, believe anything, and still flourish in the political arena.

It’s the tragicomedy of America that we get the government deserve. If there is any grand takeaway from not just the past few weeks but the past few years, it’s that all of us, but especially the growing ranks of non-partisan independents need to insist on and demand better from the representatives of the dying major political parties, who have shown a willingness to lie to the American people about everything from state surveillance and war to policy implications to basic biographical details.

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New FAA Reauthorization Bill Tackles Seat Size, Supersonic Jets

The House and Senate have agreed on compromise legislation reauthorizing the Federal Aviation Administration (FAA). The legislation must pass by the end of the month to prevent the aviation safety agency from shutting down.

On Wednesday, the House passed H.R. 6897 which gives the FAA the legal authority to operate for the next five years and appropriates some $17 billion a year for its mission. The Senate is expected to pass the same bill this weekend.

At 1,200 pages, this year’s FAA reauthorization is a brick of a bill, dealing with everything from mandated rest breaks for flight attendants, to designating an official national airmail museum. Despite its length, the legislation contains few substantive reforms.

“Overall, it’s a rag bag of everything under the sun, but largely status quo. There’s no major policy changes,” says Robert Poole, director of transportation policy at the Reason Foundation, the nonprofit that publishes this website.

Notably missing from the bill are long sought reforms to spin off the operation of the air traffic control system from the FAA to a nonprofit corporation, and an increase in the limit on fees—called “passenger facility charges”—that airports collect from passengers to pay for things like expanding airport terminals.

A coalition of free market groups, airlines, pilots, and even the air traffic controllers union had lobbied hard to include corporatizing the air traffic control system in this year’s reauthorization bill, arguing that separating it from the FAA—and by extension the Congressional appropriations process—would enable quicker adoption of new technology, making for a more efficient air traffic control system.

The proposal gained traction in the House, and even got a personal endorsement from President Donald Trump, but was ultimately shunned by Senate Republicans and died on the vine.

Increased limits on passenger facility charges also went nowhere, sunk by opposition from airlines—who saw an increase in this independent revenue stream as weakening their bargaining power with airports—and some conservative groups who viewed the change as an impermissible tax increase.

Coupled with these missed opportunities, however, were some dodged bullets.

Senate Democrats, led by Sen. Ed Markey (D–Mass.) introduced an amendment that would have given the FAA the ability to regulate fees charged by airlines for ticket changes. Consumer rights groups, meanwhile, demanded a provision requiring the FAA to regulate the size, width, and pitch of airline seats. These policy changes could have opened the door for even more regulation down the road.

Neither made it into the bill as proposed. The seat regulations will require only that the FAA regulate seat size to prevent potential safety hazards (which will likely leave seat size unchanged), while the change-fee amendment was stripped out entirely at the last minute, which Poole considers a real victory.

“We’re not going to start down the slippery slope of reregulation of the price to fly on planes,” he tells Reason.

The bill also paves the way for emerging aerial technologies, including commercial drone operations, which have been in a holding pattern for years. The new bill directs the FAA to come up with final rules for cargo-carrying drones within a year, instructs the agency to expedite rules for certifying air traffic control systems for unmanned vehicles, and adopts a risk-based approach to drone regulation. All of these policies have delighted the commercial drone industry.

“What this bill says is it’s time to move forward with a robust, path for commercial UAS [unmanned aerial systems],” says Marc Drobac of the Small UAV Coalition, a trade group.

In opening the door for commercial drone operators however, the FAA has also put the squeeze on model aircraft enthusiasts, requiring them to take online knowledge tests, register their vehicles/toys, and also forbids them from flying above 400 feet.

Supersonic flight, currently prohibited in the United States, also might be on track toward legalization. This new legislation directs the FAA to consult with the aviation industry on what a regulatory framework for supersonic flight should look like, and issue a report to Congress within a year.

“From our perspective, this is the most forward-leaning language from Congress on supersonics since the 1960s,” says Eli Dourado of Denver-based aviation company Boom, which is working on creating an airliner capable of going Mach 2.2. “It’s clear that Congress wants a supersonic renaissance, and we think that, with policymaker support, the return of commercial supersonic flight is only a matter of time.”

While this language about supersonic flight and commercial drone operations is encouraging, says Marc Scribner, a transportation expert with Competitive Enterprise Institute, it also insufficient without the broader aviation reforms that Congress punted on this year.

Our outdated air traffic control system, relying on World War II-era radar technology, forces planes to fly farther apart. Caps on passenger facility charges constrain the ability of airports to fund expansions of terminal facilities. Between those two outdated policies, airports can handle only so many passengers and planes, which in turn makes flying slower, and more expensive.

“Until we have a modern air traffic control system and until our airport policies modernize to deal with terminal area congestion, you’re not going to see the benefits of supersonic, particularly transcontinental, because they’re going to have to slow way down as they approach terminal areas,” says Scribner.

Mass market supersonic flights and commercial drone deliveries are still a ways off, but so, too, are chances for further reforms. Provided the FAA bill passes—a near certainty at this point—it will be likely another five years before Congress takes up these issues again.

That could well feel like a lifetime for technologists trying to innovate in compliance with outdated government regulations.

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‘They’ Want You To Do As ‘They’ Say, Not As ‘They’ Do

Authored by Jim Quinn via The Burning Platform,

“Facts are threatening to those invested in fraud.” ― DaShanne Stokes

Insiders at US companies unloaded $5.7 billion of their company stock this month, the highest in any September over the past decade, according to TrimTabs Investment Research.  Insiders, which include corporate officers and directors, sold over $10 billion of their company stock in August, also at the fastest pace in 10 years. With the stock market at all time highs and valuations, based on all historically accurate measures, off the charts, it makes sense for knowledgeable insiders to sell high. Of course, if they were expecting the profits of their companies to soar because Trump says we have the best economy in history, why would they be selling?

When these Ivy League educated superstar CEOs go on CNBC, Bloomberg, and Fox to tout their companies and field softball questions from bimbos and boobs disguised as journalists, they proclaim a glorious future and declare their stocks to be undervalued and a screaming bargain. Buy, buy, buy. They talk the talk, but don’t walk the walk. They personally do the opposite with their own funds versus what they do with shareholder funds. Ethics among corporate executives has never been one of the required traits. Lying with a straight face is the key to being a successful CEO in today’s warped amoral world.

While dumping stock like there’s no tomorrow these very same CEOs of the largest US public companies have authorized a breathtaking $827.4 billion of stock buybacks in 2018 — already a record for any year, according to TrimTabs. Annualized, these CEOs will will buyback in excess of $1.2 TRILLION when stocks are at all-time highs. In contrast, in 2009 when they could have bought their stocks at 10 year lows, they bought back less than $100 billion. Buy high and sell low. How can they go wrong?

These feckless financiers know exactly what they are doing. Corporate executive compensation is mostly stock based, so they have tremendous incentive to boost Earnings Per Share by reducing the number of shares. That is so much easier than investing corporate cash in workers and new facilities to increase profits over the long-term. All that matters to these greedy scumbags is beating next quarter’s earning estimate to boost the stock price and enrich themselves. The stock price is all that matters.

When you hear corporate balance sheets have the most cash ever, take it with a grain of salt. Corporate balance sheets have the most debt ever. The Fed’s nine years of 0% interest rates lured these greedy bastard CEOs into loading up with debt to buy back their shares. And with Trump cutting corporate tax rates from 35% to 21%, the excess profits which were supposedly going to result in massive hiring and massive new capital investment, have mostly been utilized to buy back stock, which adds no value to the nation or the economy. Of course, it probably benefits the most expensive restaurants in NYC and real estate agents in the Hamptons, but doesn’t do much for the deplorables in flyover country.

The fact is these corporate executives know it’s late in the game and they are personally cashing out their chips, while gambling with shareholder chips, because there is no personal downside for these slimy bastards. When the crash “suddenly” occurs they’ll plead ignorance. How could they have known? They’ll be lying through their teeth as they beg for another taxpayer handout and massive helpings of Fed liquidity. The song remains the same. And the music is still playing. You can do as they say, or do as they do. Your choice.

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” – Chuck Prince – Citicorp CEO – 2007

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