Court Allows IRS to Order Bitcoin Exchange Coinbase to Give Up Their Customers’ Identities

Bad news for patriotic Americans who want to keep their bitcoin business to themselves this week from the Department of Justice:

A federal court in the Northern District of California entered an order today authorizing the Internal Revenue Service (IRS) to serve a John Doe summons on Coinbase Inc., seeking information about U.S. taxpayers who conducted transactions in a convertible virtual currency during the years 2013 to 2015. The IRS is seeking the records of Americans who engaged in business with or through Coinbase, a virtual currency exchanger headquartered in San Francisco, California.

“As the use of virtual currencies has grown exponentially, some have raised questions about tax compliance,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division. “Tools like the John Doe summons authorized today send the clear message to U.S. taxpayers that whatever form of currency they use – bitcoin or traditional dollars and cents – we will work to ensure that they are fully reporting their income and paying their fair share of taxes.”….

The court’s order grants the IRS permission to serve what is known as a “John Doe” summons on Coinbase. There is no allegation in this suit that Coinbase has engaged in any wrongdoing in connection with its virtual currency exchange business. Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. This John Doe summons directs Coinbase to produce records identifying U.S. taxpayers who have used its services, along with other documents relating to their virtual currency transactions.

The actual order from U.S. District Court for the Northern District of California.

The actual summons.

As Ars Technica quoted from that summons, the government wants:

Account/wallet/vault registration records for each account/wallet/vault owned or controlled by the user during the period stated above including, but not limited to, complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.

A Coinbase spokesman via email said earlier this week when the DOJ announcement was issued:

Although Coinbase’s general practice is to cooperate with properly targeted law enforcement inquiries, we are extremely concerned with the indiscriminate breadth of the government’s request. Our customers’ privacy rights are important to us and our legal team is in the process of examining the government’s petition. In its current form, we will oppose the government’s petition in court…..

We are aware of, and expected, the Court’s ex parte order today. We look forward to opposing the DOJ’s request in court after Coinbase is served with a subpoena. As we previously stated, we remain concerned with our U.S. customers’ legitimate privacy rights in the face of the government’s sweeping request.

Jim Harper at Cato noted when the news of the summons broke:

Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.

If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.

Anecdotes and online bragodaccio about tax avoidance are not a reasonable basis to believe that all Coinbase users are tax cheats whose financial lives should be opened to IRS investigators and the hackers looking over their shoulders. There must be some specific information about particular users, or else the IRS is seeking a general warrant, which the Fourth Amendment denies it the power to do.

Unfortunately, the District Court disagreed with Harper’s sensible Fourth Amendment view.

My reporting from back in April 2014 when the IRS first declared that bitcoin is property whose sale creates potential tax liabilities, setting the inevitable stage for something like this. As I wrote then, if you keep your bitcoin use totally in the digital alt-coin world, very hard for the taxman to find you. But as soon as you try to interface with turning them into U.S. currency, certainly through a trying-to-be legitimate business, things will get trickier. (Some thoughts from Bitcoin expert Andreas Antonopoulos on the intersection of bitcoin and “know your customer” banking regs.)

Robert W. Wood at Forbes pretty much advises Bitcoin sellers to come clean if they haven’t already before the IRS nabs them.

As far as I’ve been able to ascertain, backed up by experts in the bitcoin exchange space I spoke to, this is the first time the government has tried this particular summons trick on an exchange to root out possible bitcoin tax scofflaws.

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CNN Caught in Locker Room Talk; Crew Jokes About Trump’s Plane Crashing

Nothing to see here. The girls at CNN were merely fraternizing, joking it up about the President elect’s airplane crashing. If you listen closely, one of the catamites caught giggling said he’d only be injured, not killed, so there’s that. 

Hot mics are a bitch and so is the person who made these comments.

Content originally generated at iBankCoin.com

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Stanford Study Reveals California Pensions Underfunded By $1 Trillion Or $93k Per Household

Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California’s public pension underfunding levels.  After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015.  But don’t worry, we’re sure pension managers can grow their way out of the problem…hedge fund returns have been stellar recently, right?

Stanford University’s pension tracker database pegs the market value of California’s total pension debt at $1 trillion or $93,000 per California household in 2015. 

 

In 2014, California’s total pension debt was calculated at $77,700 per household, but has increased dramatically in response to abysmal investment returns at California’s public pension funds that hover at or below zero percent annual returns.

 

The Pension Tracker database (http://ift.tt/2gX65u1) is maintained by the Stanford Institute for Economic Policy Research (SIEPR) and is intended to help localize pension data by providing the ability to look up the market value of pension debt in any locality in California.

Looking back to 2008, the underfunding levels of California’s public pension have skyrocketed 157% on abysmal asset returns and growing liabilities resulting from lower discount rates. 

Perhaps this helps shed some light on why CalPERS is having such a difficult time with what should have been an easy decision to lower their long-term return expectations to 6% from 7.5% (see “CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme“)…$93k per household just seems so much more “manageable” than $150k.

Pension

 

Oddly enough, California isn’t even the worst off when it comes to pension debt as Alaska leads the pack with just over $110,000 per household.

Pension

 

Of course, at this point the question isn’t “if” these ponzi schemes will blow up but rather which one will go first?  We have our money on Dallas Police and Fire

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The Propaganda About Russian Propaganda

Authored by Adrian Chen, originally posted at The New Yorker,

In late October, I received an e-mail from “The PropOrNot Team,” which described itself as a “newly-formed independent team of computer scientists, statisticians, national security professionals, journalists and political activists, dedicated to identifying propaganda—particularly Russian propaganda targeting a U.S. audience.” PropOrNot said that it had identified two hundred Web sites that “qualify as Russian propaganda outlets.” The sites’ reach was wide—they are read by at least fifteen million Americans. PropOrNot said that it had “drafted a preliminary report about this for the office of Senator Ron Wyden (D-OR), and after reviewing our report they urged us to get in touch with you and see about making it a story.”

Reporting on Internet phenomena, one learns to be wary of anonymous collectives freely offering the fruits of their research. I told PropOrNot that I was probably too busy to write a story, but I asked to see the report. In reply, PropOrNot asked me to put the group in touch with “folks at the NYTimes, WaPo, WSJ, and anyone else who you think would be interested.” Deep in the middle of another project, I never followed up.

PropOrNot managed to connect with the Washington Post on its own. Last week, the Post published a story based in part on PropOrNot’s research. Headlined “Russian Propaganda Effort Helped Spread ‘Fake News’ During Election, Experts Say,” the report claimed that a number of researchers had uncovered a “sophisticated Russian propaganda campaign” that spread fake-news articles across the Internet with the aim of hurting Hillary Clinton and helping Donald Trump. It prominently cited the PropOrNot research. The story topped the Post’s most-read list, and was shared widely by prominent journalists and politicians on Twitter. The former White House adviser Dan Pfeiffer tweeted, “Why isn’t this the biggest story in the world right now?”

Vladimir Putin and the Russian state’s affinity for Trump has been well-reported. During the campaign, countless stories speculated on connections between Trump and Putin and alleged that Russia contributed to Trump’s election using propaganda and subterfuge. Clinton made it a major line of attack. But the Post’s story had the force of revelation, thanks in large part to the apparent scientific authority of PropOrNot’s work: the group released a thirty-two-page report detailing its methodology, and named names with its list of two hundred suspect news outlets. The organization’s anonymity, which a spokesperson maintained was due to fear of Russian hackers, added a cybersexy mystique.

But a close look at the report showed that it was a mess. “To be honest, it looks like a pretty amateur attempt,” Eliot Higgins, a well-respected researcher who has investigated Russian fake-news stories on his Web site, Bellingcat, for years, told me. “I think it should have never been an article on any news site of any note.”

The most striking issue is the overly broad criteria used to identify which outlets spread propaganda. According to PropOrNot’s recounting of its methodology, the third step it uses is to check if a site has a history of “generally echoing the Russian propaganda ‘line’,” which includes praise for Putin, Trump, Bashar al-Assad, Syria, Iran, China, and “radical political parties in the US and Europe.” When not praising, Russian propaganda includes criticism of the United States, Barack Obama, Clinton, the European Union, Angela Merkel, NATO, Ukraine, “Jewish people,” U.S. allies, the mainstream media, Democrats, and “the center-right or center-left, and moderates of all stripes.”

These criteria, of course, could include not only Russian state-controlled media organizations, such as Russia Today, but nearly every news outlet in the world, including the Post itself. Yet PropOrNot claims to be uninterested in differentiating between organizations that are explicit tools of the Russian state and so-called “useful idiots,” which echo Russian propaganda out of sincerely held beliefs. “We focus on behavior, not motivation,” they write.

To PropOrNot, simply exhibiting a pattern of beliefs outside the political mainstream is enough to risk being labelled a Russian propagandist. Indeed, the list of “propaganda outlets” has included respected left-leaning publications like CounterPunch and Truthdig, as well as the right-wing behemoth Drudge Report. The list is so broad that it can reveal absolutely nothing about the structure or pervasiveness of Russian propaganda. “It’s so incredibly scattershot,” Higgins told me. “If you’ve ever posted a pro-Russian post on your site, ever, you’re Russian propaganda.” In a scathing takedown on The Intercept, Glenn Greenwald and Ben Norton wrote that PropOrNot “embodies the toxic essence of Joseph McCarthy, but without the courage to attach individual names to the blacklist.”

By overplaying the influence of Russia’s disinformation campaign, the report also plays directly into the hands of the Russian propagandists that it hopes to combat. “Think about RT and Sputnik’s goals, how they report their success to Putin,” Vasily Gatov, a Russian media analyst and a visiting fellow at the University of Southern California’s Annenberg School for Communication and Journalism, told me. “Their success is that they have penetrated their agenda, that they have become an issue for the West. And this is exactly what happened.” (Kristine Coratti Kelly, a spokeswoman for the Post, said, “The Post reported on the work of four separate sets of researchers. PropOrNot was one. The Post reviewed its findings, and our questions about them were answered satisfactorily during the course of multiple interviews.”)

In a phone interview, a spokesman for PropOrNot brushed off the criticism. “If there’s a pattern of activity over time, especially combined with underlying technical tells, then, yeah, we’re going to highlight it,” he said. He argued that Russian disinformation is an enormous problem that requires direct confrontation. “It’s been clear for a while that Russia is a little braver, more aggressive, more willing to push the boundaries of what was previously acceptable.” He said that, to avoid painting outlets with too broad a brush, the group employs a sophisticated analysis that relies on no single criterion in isolation.

Yet, when pressed on the technical patterns that led PropOrNot to label the Drudge Report a Russian propaganda outlet, he could point only to a general perception of bias in its content. “They act as a repeater to a significant extent, in that they refer audiences to sort of Russian stuff,” he said. “There’s no a-priori reason, stepping back, that a conservative news site would rely on so many Russian news sources. What is up with that?” I asked to see the raw data PropOrNot used to determine that the Drudge Report was a Russian-propaganda outlet. The spokesman said that the group would release it to the public eventually, but could not share it at the moment: “That takes a lot of work, and we’re an all-volunteer crew.” Instead, he urged me to read the Drudge Report myself, suggesting that its nature would be apparent.

On its Twitter account, PropOrNot, in support of its research, cites an article I wrote for the Times Magazine, in 2015, about an online propaganda operation in Russia. But my investigation was focussed on a concrete organization that directly distributed disinformation. I was able to follow links from Twitter accounts and Web sites to a building in St. Petersburg where hundreds of young Russians worked to churn out propaganda. Despite the impressive-looking diagrams and figures in its report, PropOrNot’s findings rest largely on innuendo and conspiracy thinking.

Another major issue with PropOrNot is that its members insist on anonymity. If one aims to cut through a disinformation campaign, transparency is paramount. Otherwise you just stoke further paranoia.The Russian journalist Alexey Kovalev, who debunks Kremlin propaganda on his site, Noodleremover, floated the possibility that PropOrNot was Ukrainians waging a disinformation campaign against Russia. The PropOrNot spokesman would speak to me only on the condition of anonymity and revealed only bare biographical details on background. “Are you familiar with the assassination of Jo Cox?” he asked, when I asked why his group remained in the shadows, referring to the British M.P. murdered by a right-wing extremist. “Well, that is a big thing for us. Basically, Russia uses crazy people to kill its enemies.”

I can report that the spokesman was an American man, probably in his thirties or forties, who was well versed in Internet culture and swore enthusiastically. He said that the group numbered about forty people. “I can say we have people who work for major tech companies and people who have worked for the government in different regards, but we’re all acting in a private capacity,” he said. “One thing we’re all in agreement about is that Russia should not be able to fuck with the American people. That is not cool.” The spokesman said that the group began with fewer than a dozen members, who came together while following Russia’s invasion of eastern Ukraine. The crisis was accompanied by a flood of disinformation designed to confuse Ukraine and its allies. “That was a big wake-up call to us. It’s like, wait a minute, Russia is creating this very effective fake-news propaganda in conjunction with their military operation on the ground,” the spokesman said. “My God, if they can do that there, why can’t they do it here?” PropOrNot has said that the group includes Ukrainian-Americans, though the spokesman laughed at the suggestion that they were Ukrainian agents. PropOrNot has claimed total financial and editorial independence.

Given PropOrNot’s shadowy nature and the shoddiness of its work, I was puzzled by the group’s claim to have worked with Senator Ron Wyden’s office. In an e-mail, Keith Chu, a spokesman for Wyden, told me that the PropOrNot team reached out to the office in late October. Two of the group’s members, an ex-State Department employee and an I.T. researcher, described their research. “It sounded interesting, and tracked with reporting on Russian propaganda efforts,” Chu wrote. After a few phone calls with the members, it became clear that Wyden’s office could not validate the group’s findings. Chu advised the group on press strategy and suggested some reporters that it might reach out to. “I told them that if they had findings, some kind of document that they could share with reporters, that would be helpful,” he told me. Chu said that Wyden’s office played no role in creating the report and didn’t endorse the findings. Nonetheless, he added, “There has been bipartisan interest in these kind of Russian efforts, including interference in elections, for some time now, including from Senator Wyden.” This week, Wyden and six other senators sent a letter to the White House asking it to declassify information “concerning the Russian Government and the U.S. election.”

The story of PropOrNot should serve as a cautionary tale to those who fixate on malignant digital influences as a primary explanation for Trump’s stunning election. The story combines two of the most popular technological villains of post-election analysis – fake news and Russian subterfuge – into a single tantalizing package. Like the most effective Russian propaganda, the report weaved together truth and misinformation.

Bogus news stories, which overwhelmingly favored Trump, did flood social media throughout the campaign, and the hack of the Clinton campaign chair John Podesta’s e-mail seems likely to have been the work of Russian intelligence services. But, as harmful as these phenomena might be, the prospect of legitimate dissenting voices being labelled fake news or Russian propaganda by mysterious groups of ex-government employees, with the help of a national newspaper, is even scarier. Vasily Gatov told me, “To blame internal social effects on external perpetrators is very Putinistic.”

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Hillary Supporters Get Welcome News As Study Confirms White Population Dying Off Fast In Key Swing States

Disaffected Hillary snowflakes at colleges and universities all around the country, many of whom surely cried themselves to sleep last night, woke up this morning to some of the best news they’ve received in weeks.  According to a new study by the University of New Hampshire Carsey School of Public Policy, white people are dying off faster than ever in the U.S.  Moreover, the biggest declines are coming in key swing states like FL and PA.  Even better, the study expects the “natural decrease” of whites to accelerate in the future.

In 2014, deaths among non-Hispanic whites exceeded births in more states than at any time in U.S. history. Seventeen states, home to 121 million residents or roughly 38 percent of the U.S. population, had more deaths than births among non-Hispanic whites (hereafter referred to as whites) in 2014, compared to just four in 2004. When births fail to keep pace with deaths, a region is said to have a “natural decrease” in population, which can only be offset by migration gains. In twelve of the seventeen states with white natural decreases, the white population diminished overall between 2013 and 2014.

 

This research is the first to examine the growing incidence of white natural decrease among U.S. states and to consider its policy implications. Our analysis of the demographic factors that cause white natural decrease suggests that the pace is likely to pick up in the future.

Here are some of the the “Key Findings” from the study:

NH

 

At the national level, the White birth-to-death ratio has been shrinking aggressively since the “great recession” started in 2008.  By the time 2014 rolled around the rate had declined to near parity.  Researchers attribute the trends to “declining fertility due to the Great Recession” and an aging baby boomer population.

Over the last several decades, demographers have noted the growing incidence of natural decrease in the United States. More widespread natural decrease results from declining fertility due to the Great Recession, and the aging of the large baby boom cohorts born between 1946 and 1964. This senior population is projected to expand from nearly 15 percent of the total population in 2015 to nearly 24 percent in 2060.  Much of this aging baby boom population is white, and so white mortality is growing. Together, growing white mortality and the diminishing number of white births increase the likelihood of more white natural decrease.

NH

 

Meanwhile, white populations in the key swing states of FL and PA have been shrinking for years while NV and AZ also joined the club in 2010 and 2012, respectively.

NH

 

And while white populations are declining the Southwest and Northeast, the Midwest populations are still growing…but no real problem there as those are Republican strongholds anyway.

White natural decrease states are widely dispersed, with clusters in the South, West, and Northeast regions. States with minimal white natural increase are also widely distributed, though they are often in close proximity to the natural-decrease states. States with high natural increase are concentrated in the Mountain West and the West North Central regions but also include Texas, Louisiana, Indiana, and Virginia.

NH

 

So it’s not all bad news for democrats…if Hillary can hold out for a couple more election cycles, and suppress her “pneumonia” flare ups, she may just be unbeatable.

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Washington State Set to Deny Libertarian Party Major Party Status, Based on Write-In Votes

In order to gain gain major party legal status in the state of Washington, the Libertarian Party needed to get 5 percent of the vote in the presidential race. As the final counting for the state dragged on for weeks, the state party looked on eagerly as it seemed they’d just make the cut.

And indeed, according to the public data on the Washington secretary of state’s website on election results, they did! 5.01 percent as of this morning for Gary Johnson for president in that state. Seeing this, Ballot Access News thought major party status was a done deal.

But you didn’t think the state would make it that easy, did you? This week, as later reported in Ballot Access News, the secretary of state Kim Wyman announced that the L.P. did not in fact qualify.

Why? Because that public total doesn’t include the sacred-to-Washington-process write-in vote.

This is despite the fact, as Winger reports, that the state has never even announced any counts of such votes for the past 24 years. But Wyman insists that including the write-ins will be done, and will dunk Johnson’s percentage below 5.

Since you are technically voting for slates of electors for president in that state, and write-ins have none attached, some in the L.P. have questioned whether there is any legal grounds for considering them “real votes” there. My reading of the statute seems to indicate that no candidate who didn’t file a declaration of candidacy with the state has the right to have his or her write-in votes counted, but I am not a campaign law litigator.

David Traynor, chair of the state L.P., says in a Facebook post last night that including the around 100,000 write-ins as valid parts of the vote total would likely lower the Johnson percentage to 4.86. Traynor says in a phone interview today that one county, Franklin, has not yet certified its vote, so a final-final tally of statewide vote percentages isn’t official yet.

Some in the state party consider getting major party status perhaps more of a burden than a boon. Winning the status would eliminate the need to gather 1,000 signatures to get the next presidential candidate on the ballot, but it would also create the legal need for a variety of county and state committees and precinct committee officers, well over 6,500 of the latter, for the party, which some think requires more active Libertarians than the state might have to offer. (The state party has around 650 active dues paying members, according to figures provided by the Libertarian National Committee.)

In an interesting twist, statutorily major parties by law must have a chair and vice chair of each of their county and state committees who are of the opposite sex.

Traynor believes the precinct committee officer being on the ballot everywhere is a boon, giving the Party a labeled candidate on many more ballots and giving the L.P. more general reputational weight as real, important, and significant. (If only one Libertarian puts him or herself in contention for precinct committee officer, from my read of the statute, then they automatically win, with no ballot listing done.)

The Party would also, if it wins major status, have a statewide primary election for presidential candidates, like the Democrats and Republicans, which Traynor believes has immeasurable impact on public perception of them as a legitimate choice. “I got like 350 emails this year asking why the L.P. didn’t have a presidential candidate on the primary ballot,” he says. Such major party status “would be huge, an avenue to more effectively grow and get exposure and stand shoulder-to-shoulder with the old parties.”

Traynor says some who don’t see the importance of the major party status represent an “old guard” who see the L.P. more “bringers of information, making people enlightened” and less about doing everything possible to win elections.

Given that the state has a “top two” primary system, in which only the top two vote getters of any party proceed to the general election for most offices, it wouldn’t be that relevant to most L.P. candidates below the presidential level. Even with that system that many think hobbles third parties, Traynor is proud that the state L.P. got 10 candidates into the general election for state legislative offices.

“I love top two,” Traynor says, “and my personal feeling is if you can’t get second place in a primary then you have no business running a candidate in the general.” The system, he says, allows the L.P. to “focus resources on races that might be won” and puts them in a better position.

Traynor said in a Facebook post last night that “We are currently working the Libertarian National Committee and local legal professionals to determine the most effective strategy that aligns with our state party goals and the principled positions of the national committee. No official notice has been given from the Secretary of State, and no strategy has been decided as of yet from the LPWA.”

He confirmed in a phone interview today that while he is confident some legal action will be taken, its exact nature or shape is still being considered and planned. One issue is that such a challenge could well cost over $100,000, possibly as much as $300,000.

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In Defense Of Trump’s Deal With Carrier

Submitted by Tho Bishop via The Mises Institute,

Donald Trump hasn’t yet made the move from Trump Tower to America’s most expensive public housing, but he was able to come through with one campaign promise this week by announcing a deal with Indiana-based Carrier Air Conditioning that will keep almost 1,000 jobs in the state. As reported, the deal seems largely focused on the State of Indiana offering millions in tax breaks and an understanding that the Trump administration will push for regulatory and corporate tax relief at the Federal level.

While the jobs Carrier will be keeping in the US only makes up about a third of the jobs the company had planned to move to Mexico, the underlying deal seems to reflect a larger commitment to addressing the corporate tax and regulatory burdens that have long held back the American economy. While some have described Trump's approach as crony capitalism, if the terms of the deal really are limited to tax relief, such claims are baseless. While it is true that tax breaks for specific companies are less ideal than across-the-board cuts (or outright abolishment) of business taxes, they should not be confused with taxpayer subsidies.

As Matthew McCaffrey wrote last year defending tax credits for video game companies:

Decades ago, economists like Mises and Rothbard were already arguing that tax breaks are not economically or ethically equivalent to receiving subsidies. Simply put, being permitted to keep your income is not the same as taking it from competitors. Exemptions and loopholes do not forcibly redistribute wealth; taxes and subsidies do, thereby benefiting some producers at the expense of others.

 

Yes, entrepreneurs who take advantage of tax breaks will incur fewer costs than entrepreneurs who don’t. But this doesn’t show that exemptions or loopholes provide unfair advantages; in fact, just the opposite — it shows that taxes penalize entrepreneurs unlucky enough to be left holding the bill.

Tax breaks are beneficial to those who claim them, but they are not subsidies. Rather, exemptions and loopholes are life jackets in a sea of wealth redistribution. Mises said it perfectly: “capitalism breathes through those loopholes.” Sadly, his simple insight continues to elude most commentators.

Yet still, unsurprisingly, the deal has been condemned by devoted Trump-critics from across the ideological spectrum.

David Boaz, vice president of the Cato Institute, found the offering of tax breaks and regulatory relief alarming, telling The Fiscal Times:

This is not a precedent we want to see — American presidents aren’t supposed to interfere on behalf of individual companies. When the president does it himself it makes clear that this is a crony economy, to benefit the president’s friends, and that individual companies can be subject to pressure and punishment directly at the hands of the president.

Of course, Trump didn’t make this deal by himself — he worked with the Vice President-elect Mike Pence, who is still the governor of Indiana. There’s also no indication that Trump’s deal with Carrier reflected any sort of personal interest in the specific company, but rather is part of a larger push to keep companies from re-locating overseas. While Trump’s rhetoric on trade, with a heavy focus on the potential use of tariffs, is itself troubling, there is nothing inherently wrong with an administration focused on keeping jobs in America — especially if this is accomplished by relieving tax and regulatory burdens.

A more compelling argument against Trump’s deal was made by AEI’s James Pethokoukis:

More broadly, this is all terrible for a nation's economic vitality if businesses make decisions to please politicians rather than customers and shareholders. Yet America's private sector has just been sent a strong signal that playing ball with Trump might be part of what it now means to run an American company. Imagine business after business, year after year, making decisions based partly on pleasing the Trump White House. … Indeed, one Indiana official, Politico reports, thinks the deal was driven by concerns United Technologies “could lose a portion of its roughly $6.7 billion in federal contracts.”

Pethokoukis is correct, if business decisions start to be made entirely to please President Trump, then the American economy would suffer. But, again, the carrots Trump used for the Carrier deal involved lower taxes and a promise of regulatory relief. Should he follow through, then Trump’s economic policy would be helping American workers while simultaneously benefiting American customers and company shareholders. While future deals may deviate from this approach, and any move to push punishing tariffs should be rightfully criticized, it isn’t applicable in this specific situation.

And while it’s fair to speculate that Carrier’s parent company, United Technologies Corp., is hoping any good will it builds with a Trump administration will either lead to future government contracts, or protect the ones it has, this is simply the unfortunate consequence of having government and business so tightly entwined to begin with. It is hardly unique to either the Carrier deal or the Trump administration.

Of course it should come as no surprise that the most absurd analysis of Trump’s deal comes from Senator Bernie Sanders, who in The Washington Post wrote:

Just a short few months ago, Trump was pledging to force United Technologies to “pay a damn tax.” He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?

 

In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.

Sanders main criticism is that Trump moved away from rhetoric punishing American businesses and instead tried to alleviate some of the additional costs government imposes on them. It’s not a surprise this upsets the senator from Vermont, as in his world, an opportunity to increase someone’s tax burden is a terrible thing to waste — which is why he campaigned on raising them for most of America.

Though the deal with Carrier will go a long way to make America great again for those workers who were facing losing their jobs, it is a drop in the bucket for the ills that really plague the country. There are still many warning signs about what the economic policy of a Trump administration will look like. But not every action he takes will necessarily be bad policy.

If Trump builds on this win with broader cuts on corporate taxes and regulatory relief, as he ran on during the campaign, than these policies should be praised — just as any future attacks on sound economics or individual liberty should be condemned.

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“Fake News” Has Been a Problem for Thousands of Years … Here’s How It’s Been Stopped

Throughout history, government officials have tried to stop "fake news" through various means before it was published.

The crime of the peddlers of fake news: failing to acknowledge that those in power were perfect saints.

Socrates

For example, Socrates was killed in 399 BC for spreading "fake news".

His crime: “Failing to acknowledge the gods that the [mainstream media of the day] acknowledges”.

Tyndale

William Tyndale was killed in 1536 for spreading "fake news".

His crime:  Translating the Bible into English so that everyone could read it for themselves, and no longer had to rely on the clergy to tell them what it said.

Galileo

In 1616 and 1633, Galileo was tried for spreading "fake news".

His crime: spreading fake news that the Earth rotates around the Sun.

Heretics

Scores of people have been killed over the centuries for spreading "fake news".

Their crime: Saying anything that the church authorities of the day disliked.

Benjamin Franklin

In 1773, Ben Franklin was fired as colonial Postmaster General for spreading "fake news".

His crime: informing the American Colonists about what the British were really doing.

Strongmen

Strongmen of all stripes have cracked down on "fake news".

The fake news pushers' crime:  criticizing the dictator or his policies.

Book Burnings

In 1933, the Nazis carried out numerous book burnings of "fake news". The targeted authors included Einstein, Freud, Kafka, Hellen Keller, Jack London, Thomas Mann, Proust, Upon Sinclair and H.G. Wells.

The authors' crime:  their books “acts subversively on our future or strikes at the root of German thought, the German home and the driving forces of our people…”

There have been many other book burnings of "fake news" throughout history.

Mussolini

Mussolini had around 2,000 purveyors of "fake news" killed.

Their crime: opposing Mussolini.

Stalin and the Soviet Union

Stalin handled the peddlers of "fake news" by murdering them or throwing them into insane asylums.

Their crime:  criticizing the Soviet government or Communism.

Other Communist Regimes

China's Mao and other Communist leaders killed many "fake news" spreaders.

Their crime: failing to sing the Great Leaders' praises.

CIA

In 1972, CIA director Richard Helms put a stop to those within his agency spreading "fake news" by labeling them "terrorists".

Their crime:  criticizing domestic operations by the CIA  on U.S. soil.

Conclusion

See how easy it is?

If only U.S. Supreme Court justices stopped being such sissies.

</sarc>

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The New American Dream – A Life In Hock

Submitted by Eric Peters via EricPetersAutos.com,

We live in a society driven by debt.

Cars, for example, have become hugely expensive (even on the low end) relative to what people can afford – because of the easy availability of credit. Which is the nice word used to speak about debt, intended to encourage us to get into it.

It takes at least $15,000 or so to drive home in a “cheap” new car, once all is said and done. And the “cheap” car will have to be registered, plated and insured.

It runs into money.

And most new cars cost a lot more money. Which most people haven’t got. So they get debt. A loan. Which, when it becomes commonly resorted to as a way to live beyond one’s means as a lifestyle, drives up the cost of life for everyone. Including those who try to live within their means – or better yet, below them.

When most people (when enough people) are willing – are eager – to go into hock for the next six years in order to have a car with an LCD touchscreen, leather (and heated) seats, six air bags, a six-speaker stereo, electronic climate control AC and power everything – which pretty much every new car now comes standard with – the car companies build cars to satisfy that artificial demand.

Artificial because based on economic unreality. That is a good way to think about debt. It is nonexistent wealth.

You are promising to pay with money you haven’t earned yet.

And maybe won’t.

The car market has become like the housing market – which has also been distorted by debt to a cartoonish degree. The typical new construction home is a mansion by 1960s standards. Not that there’s anything wrong with living in a mansion. Or driving a car with heated leather seats and climate control AC and a six-speaker surround-sound stereo and six air bags and all the rest of it. Provided you can afford it.

Most people can’t.

Normally, that fact would keep things in check. There would be mansions, of course – and high-end cars, too. But only for those with the high-end incomes necessary to afford them. Everyone else would live within their means. We wouldn’t be living in this economic Potemkin village that appears prosperous but is in fact an economic Jenga Castle that could collapse at any moment.

jenga

There would be a lot less pressure to “keep up with the Joneses”… as they head toward bankruptcy and foreclosure.

As society heads that way.

Like the housing industry, the car industry has ceased building basic and much less expensive cars because of easy and grotesque debt-financing.

Which is tragic.

There ought to be (and would be) a huge selection of brand-new cars priced under $10,000 were it not for the ready availability of nonexistent wealth (.e., debt and credit).

Cars many people could pay cash for.

Brand-new cars.

Not shitboxes – as the late great Brock Yates christened them.

They would have the build quality/body integrity and quality paint jobs that are now standard equipment with every new car, because of generally improved (and largely automated) manufacturing techniques, such as robotic welding and painting. Part of the reason yesterday’s low-cost cars felt shoddy – and rusted early – was because they were shoddily (and spottily) constructed. By often-aggrieved line workers, who maybe got a little too drunk the night before and so weren’t being very careful the next day, while fitting panels to the car.

It’s not like that today – and irrespective of price point. The humblest new car is built to a much higher standard than top-of-the-line luxury cars once were. Those costs have been amortized; build quality would not regress if debt-financed flim-flam went away. To think it would is like thinking we’d go back to corded wall phones.

They would have reliable, efficient – and not balky/hard-starting/stalling – engines, too. Because the cost of simple (throttle body) electronic fuel injection – an exotic technology back in the shitbox days – no longer is.

It’s everywhere – economies of scale have made it so.

Probably our less-than-$10k-car would have things like power windows and AC, if you wanted it. But wouldn’t it be nice if it were optional?

None of this is pie-in-the-sky.

Such cars are being sold all over the world right now, just not in the Western world – which is  in debt up to its eyeballs.

Because the debt lifestyle has been normalized. There now exists social stigma to live below one’s means. To not give the appearance of wealth one doesn’t have by purchasing – on credit – things one can’t really afford.

That – as much as the regulatory burden of government – is what’s driving up the cost of life for all of us. Including those still trying to live within our means.

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House Quietly Passes Bill Targeting “Russian Propaganda” Websites

On November 30, one week after the Washington Post launched its witch hunt against “Russian propaganda fake news“, with 390 votes for, the House quietly passed “H.R. 6393, Intelligence Authorization Act for Fiscal Year 2017“, sponsored by California Republican Devin Nunes (whose third largest donor in 2016 is Google parent Alphabet, Inc), a bill which deals with a number of intelligence-related issues, including Russian propaganda, or what the government calls propaganda, and hints at a potential crackdown on “offenders.”

A quick skim of the bill reveals “Title V—Matters relating to foreign countries”,  whose Section 501 calls for the government to “counter active measures by Russia to exert covert influence … carried out in  coordination with, or at the behest of, political leaders or the security services of the Russian Federation and the role of the Russian Federation has been hidden or not acknowledged publicly.”

The section lists the following definitions of media manipulation:

  • Establishment or funding of a front group.
  • Covert broadcasting.
  • Media manipulation.
  • Disinformation and forgeries.
  • Funding agents of influence.
  • Incitement and offensive counterintelligence.
  • Assassinations.
  • Terrorist acts.

As ActivistPost correctly notes, it is easy to see how this law, if passed by the Senate and signed by the president, could be used to target, threaten, or eliminate so-called “fake news” websites, a list which has been used to arbitrarily define any website, or blog, that does not share the mainstream media’s proclivity to serve as the Public Relations arm of a given administration.

Curiously, the bill which was passed on November 30, was introduced on November 22, two days before the Washington Post published its Nov. 24 article citing “experts” who claim Russian propaganda helped Donald Trump get elected.

As we reported last week, in an article that has been widely blasted, the WaPo wrote that “two teams of independent researchers found that the Russians exploited American-made technology platforms to attack U.S. democracy at a particularly vulnerable moment, as an insurgent candidate harnessed a wide range of grievances to claim the White House. The sophistication of the Russian tactics may complicate efforts by Facebook and Google to crack down on “fake news,” as they have vowed to do after widespread complaints about the problem.”

The newspaper cited PropOrNot, an anonymous website that posted a hit list of alternative media websites, including Zero Hedge, Drudge Report, Activist Post, Blacklisted News, the Ron Paul Report, and many others. Glenn Greenwald penned an appropriate response two days later in “Washington Post Disgracefully Promotes a McCarthyite Blacklist From a New, Hidden, and Very Shady Group.”

PropOrNot has pushed a conspiratorial thesis, without any actual proof, that the listed websites have been either used directly or covertly by the Russians to spread propaganda.

While the bill passed the House with a sweeping majority, it is unknown if and when the bill will work its way through the Senate and be passed into law, although one would think that it has far higher chances of passing under president Obama than the President-Elect. It is also unclear if it will be used to shut down websites anonymously characterized as “useful idiots” or subversive elements used in disseminating supposed Russian propaganda.

Those interested can read the full “H.R. 6393: Intelligence Authorization Act for Fiscal Year 2017″ at the following location” bill that may soon proclaim much of the internet to be criminal “Russian propaganda” at the following link.

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