David L. Cohen has parted company with his old boss Ed Rendell on the issue of nearly $1 million in bonuses the former governor and mayor approved for staff of the host committee for the 2016 Democratic National Convention.
Cohen, now senior executive vice president at Comcast Corp., but once Rendell's chief of staff when mayor, said he was never told of the bonus plan while serving as a host committee special adviser.
“Nobody ever ran the idea of giving any bonuses to anyone in connection with the host committee of the convention,” Cohen said Thursday evening. “Had they done so, I would’ve done everything in my power to kill the concept.”
Cohen, who was instrumental in the host committee’s fund-raising efforts, said he learned of the bonuses last week, when the Inquirer and Daily News reported that in November, the committee used part of its surplus to give out more than $900,000 in bonus checks. The highest bonus, $310,000, went to the committee’s executive director, Kevin Washo, followed by $220,000 for the chief financial officer, Jason O’Malley, with the rest receiving between $13,000 and $58,000 each.
“There were never any bonuses included in any budget for the host committee that I ever saw,” Cohen said.
Rendell, who served as the host committee’s chairman, said Cohen was kept "at arm's length" on purpose because of his position at Comcast, which was the largest vendor working with the host committee.
"Obviously he couldn't be involved in spending decisions, because it would've been a conflict," Rendell said Friday. Comcast donated $5.1 million in in-kind services, which included personnel, telecommunications, hospitality and events, and $500,000 cash, the host committee reported in September.
Rendell said Cohen "wasn't privy to conversations" he had with host committee staff when they were hired. He said they were told there would be bonuses if there was money left in the end. The staff’s monthly salaries ranged from $3,000 for the office manager to $13,000 for Washo. Some, including Washo, continued to be paid months after the convention and months after starting other full-time jobs.
The host committee was charged with fund-raising and organizing the events surrounding the convention, held from July 25 to 28. It wasn't until September, when the committee filed its financial reports with the Federal Election Commission, that it reported exceeding its fund-raising goal.
The committee used its surplus to pay the city more than $500,000 for municipal services incurred during the convention, distribute $1.2 million in grants to local nonprofits, and provide the nearly $1 million in bonuses.
Washo, who also served as the committee's treasurer, previously said that the decision to hand out bonuses to the staff was made by himself, chief operating officer Eliza Rose, and Rendell.
Washo and Rendell have defended the bonuses by saying the staff worked very hard for what Rendell has described as “low pay.”
Cohen disagreed with the notion that the staff was not paid well.
“I would’ve had serious concerns over bonuses, particularly bonuses of that size, and particularly of well-compensated employees of a nonprofit organization,” Cohen said.
Cohen questioned the “propriety” of such bonuses when “100 percent of the funding was being provided by donors and by the state.”
Gov. Wolf, a Democrat, and state Republicans have criticized the bonuses and called for an audit of the $10 million grant the state gave the host committee. The state’s grant was the largest single donation received. On Thursday, Auditor General Eugene DePasquale said he would audit the $10 million state grant.
Cohen said he has been fielding calls from donors complaining about the bonuses, but he declined to identify them other than to describe them as “many people who are asking how or why this was done.”
Rendell said he had received no complaints from donors. He added that if donors were upset, he would be the one to get the calls.
"I raised the lion's share of the money," Rendell said.
Monday, May 22, 2017
Sunday, May 21, 2017
BALTIMORE (WBFF) -- A Project Baltimore investigation has found five Baltimore City high schools and one middle school do not have a single student proficient in the state tested subjects of math and English.
We sat down with a teen who attends one of those schools and has overcome incredible challenges to find success.
Navon Warren grew up in West Baltimore. He was three months old when his father was shot to death. Before his 18th birthday, he would lose two uncles and a classmate, all gunned down on the streets of Baltimore.
“I’ve lost a lot of people, so I’m used to it. It hurts,” Warren said. “I just chose not to show it. I just keep it in. You just have to live on and keep going on every day. You have to do it somehow.”
Despite his tremendous loss, Warren is set to graduate this year from Frederick Douglass High School. It’s a school where only half the students graduate and just a few dozen will go to college. Last year, not one student scored proficient in any state testing.
“That’s absurd to me. That’s absurd to me,” says Warren’s mother Janel Nelson. “That’s your teachers report card, ultimately.”
Project Baltimore found Frederick Douglass is not alone. Four other city high schools and one middle school also have zero students proficient.
The schools are:Booker T. Washington Middle SchoolHigh school students are tested by the state in math and English. Their scores place them in one of five categories – a four or five is considered proficient and one through three are not. At Frederick Douglass, 185 students took the state math test last year and 89 percent fell into the lowest level. Just one student approached expectations and scored a three.
Frederick Douglass High School
Achievement Academy at Harbor City
New Era Academy
Excel Academy at Francis M. Wood High
New Hope Academy
Despite the challenges at his school, Warren found a path to higher education. He’s the reigning Baltimore City 50 and 100 freestyle champion who competed at the junior Olympics, finishing in fourth place. In the fall, he will leave the streets of Baltimore and head to Bethany College in West Virginia, where he will swim.
“It’s exciting for him to get out of the city and exciting for him to start a new chapter in his life,” says Nelson.
Warren told FOX45, he believes zero students are proficient at Frederick Douglass, because the state tests are more advanced than what the students are learning in class.
Sunday, May 14, 2017
Washington (CNN)President Donald Trump is living every child's dream: More ice cream.
For example: Trump takes two scoops of ice cream with his chocolate cream pie, TIME reported, while everyone else around the table gets just one.
Saturday, May 13, 2017
When we elect a president (like him or not) we don’t try and change the rules to take away his authority granted by the voters, and that is exactly what has been done in Aberdeen.for more info on the changes made to the City Charter, go here
The Citizens of Aberdeen voted for a Mayor and for a Council in November of 2015, and the City Council voted Monday night to change the results of the election because they think they know better than the voters how the Mayor and Council should interact.
The Charter of the City of Aberdeen is the document that establishes our government– it is our Constitution. It is a radical and unacceptable action to fundamentally change the form of government between elections.
This action is a violation of the fundamentally American principle that voters get to make decisions about their government.
Changes to the structure of government should never be rammed through without the public approving of the changes, and that is what Councilwoman Landbeck, Councilman Lindecamp, and Councilman Taylor have voted to do.
Specifically, these changes will take away the powers of the duly-elected Mayor over the budget, over oversight of the City government, of reporting to the public via the State of the City address, and removes the authority to make appointments for all public commissions of the City.
In order to include the voters in this process, I attempted to make these changes effective after the next Mayor is elected so that the people have a say in these changes. However, Councilwoman Landbeck, Councilman Lindecamp, and Councilman Taylor all voted against this change.
I have had multiple calls from community members to petition this issue to referendum, and I’m evaluating what would need to happen for that to be successful.
Patrick L. McGrady
Wednesday, May 10, 2017
Fentanyl (also known as fentanil) is a potent, synthetic opioid pain medication with a rapid onset and short duration of action. It is a potent agonist at μ-opioid receptors in the brain. Fentanyl is 50 to 100 times more potent than morphine, but some fentanyl analogues, which are designed to mimic the pharmacological effects of the original drug, may be as much as 10,000 times more potent than morphine.
Fentanyl was first made by Paul Janssen in 1960, following the medical inception of pethidine (also known as meperidine, marketed as Demerol) several years earlier. Janssen developed fentanyl by assaying analogues of the structurally related drug pethidine for opioid activity. The widespread use of fentanyl triggered the production of fentanyl citrate (the salt formed by combining fentanyl and citric acid in a 1:1 stoichiometric ratio), which entered medical use as a general anaesthetic under the trade name Sublimaze in the 1960s. Following this, many other fentanyl analogues were developed and introduced into medical practice, including sufentanil, alfentanil, remifentanil, and lofentanil.
In the mid-1990s, fentanyl was introduced for palliative use with the fentanyl patch, followed in the next decade by the introduction of the fentanyl lollipop, dissolving tablets, and sublingual spray which are absorbed through the tissues inside the mouth. As of 2012, fentanyl was the most widely used synthetic opioid in medicine. In 2013, 1700 kilograms were used globally.
Fentanyl is also used as a recreational drug, leading to thousands of overdose deaths from 2000 to 2017. Deaths have also resulted from improper medical use. Fentanyl has a relatively wide therapeutic index which makes it a very safe surgical anesthetic when monitored carefully; however, its extreme potency requires careful measurements of highly diluted fentanyl in solution.
Tuesday, May 9, 2017
Maryland's top lawyer is advising local jails that they should not honor requests from federal officials to hold people suspected of immigration violations for up to 48 hours past their release date.
The guidance from Attorney General Brian Frosh says local jails should only hold such people longer when immigration officials present a warrant signed by a judge. Otherwise, he cautioned, the jails could be sued for unlawful detention under the Fourth Amendment of the Constitution.
Frosh, a Democrat, said he offered the advice because of confusion amid President Donald Trump's pronouncements to crack down on immigration violators and some lawmakers' efforts to pass legislation in Maryland to regulate local involvement in immigration enforcement.
"There is a great deal of fear and anxiety and certainly a lot of uncertainty about what the law is. ... We thought it was important for us to re-emphasize what the law is," Frosh said.
The document is not an order; instead, it provides advice for local officials to consider when making decisions about their jail and policing policies.
The local immigrant-rights group CASA applauded Frosh.
"We think it's very helpful and necessary," said Nick Katz, CASA's senior manager of legal services. "We appreciate that he issued this. We hope that law enforcement agencies read it and comply with the recommendations that he makes."
Lt. Dan Lasher is director of operations for the Allegany County Detention Center and president of the Maryland Correctional Administrators Association. He said most local jails do not honor detainer requests from federal Immigration and Customs Enforcement officials.
Lasher said correctional officers don't want to "let someone go who is of the criminal element. But without a warrant, there's just no basis to do it."
Baltimore's jail, which is run by the state, does not honor ICE detainer requests without a judicial warrant, so Frosh's guidance won't affect the jail's policies, said state corrections spokesman Gerard Shields.
For the first time, Frosh's advice addresses partnerships in which local law enforcement officials are trained by the federal government and become deputized to carry out certain federal immigration duties.
Known as 287(g) programs, for the portion of federal law that authorizes them, they've come under fire from advocates for immigrants and civil liberties.
Frosh's guidance notes that it's permissible for counties to join 287(g) programs, but cautions that the federal government doesn't necessarily pay for them. And the programs have the potential to open the door to illegal racial profiling, Frosh wrote.
Frederick and Harford counties have 287(g) programs in their jails to screen people for possible immigration violations. Anne Arundel County has applied to join, and a bill pending before the Baltimore County Council would require that county to join as well. Baltimore County Executive Kevin Kamenetz has pledged to veto the bill if it passes.
"The three Republican members of the County Council are trying to frankly grandstand the issue in defiance, now, of the attorney general's opinion," said Kamenetz, a Democrat. "I think that they should withdraw their bill."
Frederick County Sheriff Chuck Jenkins said all people booked in his jail are given the same paperwork asking about their country of birth and citizenship status. Frosh said that's fine, but if the 287(g) program expands into one involving patrol officers — a change the Trump administration has expressed interest in — there is a "greater danger" of improper racial profiling.
Jenkins, a Republican, maintains that the jail screening is a helpful tool for public safety, and says he's gotten a surge of public interest in the program.
In Harford County, 34 people in the county jail have been identified for possible immigration violations since the staff began working with ICE in November, said Sheriff Jeffrey Gahler, a Republican.
Gahler said he doesn't think the new guidance will affect his jail's operations and questioned whether it was really necessary.
"It certainly has an air of partisan persuasion to it," Gahler said. "It seems to be one-sided on the 'anti' front."
Monday, May 8, 2017
Following Macron’s win, famous Slovenian philosopher Slavoj Zizek lashed out at the French president-elect, saying he “stands for the worst of Europe” and “is the candidate of fear of Le Pen,” He also noted that neither candidate had a “positive vision.”
The outspoken philosopher and cultural critic said, while he was not happy with either of the French run-off candidates’ visions, those who voted against Macron were the “only true hope” for France, as they represent the people “who didn’t succumb to this liberal blackmail [of] ‘Now things are serious. Let’s all unite behind Macron.’”
“They said: ‘No. Sorry. Whatever that is, we’re not ready to play this game – the fascist threat and the politics, which feeds this fascist threat,’” Zizek said.
In Zizek’s view, this so-called “blackmail” included a recent La Liberation cover, which featured the headline, “Do whatever you want, but vote Macron.”
“Isn’t this the very essence of what worldwide is becoming today? You have all the freedom you want if you make the right choice. This is the very formula of why our democracy is becoming more and more meaningless,” he said, adding that it appears to be the media that is making choices for the people.
However, Zizek’s biggest issue with both candidates was that neither had a “positive vision” of the state of affairs in France, and both eventually became candidates of “fear.”
“Marine Le Pen was, obviously, the candidate of fear – fear about immigrants, foreign threat, financial capitalism and so on. But Macron was also a candidate of fear – fear of Le Pen. Macron won not because of what he is, but because he was anti-Le Pen,” Zizek said.
The problem is bigger than that, the philosopher added, concluding that the “European political elite is no longer able to rule properly,” and changes are urgently needed.
“I already quoted Didier Eribon [French author and philosopher], who said : ‘A vote for Macron today, is a vote for Marine Le Pen four years in the future.’ We’re just caught in this vicious circle. Macron means business as usual. But it’s precisely this business as usual that will give new strength to Marine Le Pen. It takes time. She can wait. One election, two elections, three. In the end, she may win,” he said.
Friday, May 5, 2017
Those who doubt the necessity of reforming America’s corporate tax laws should consider cash-fat Apple Inc.I'd not only encourage it, I'd raise the corporate tax rate for ALL corporations, foreign and domestic, to 95% so as to encourage small individual-owned business formation. I'd make it so that you'd have to be crazy to incorporate a company in America, or to be a foreign corporation trying to sell it's products in America.
The Wall Street Journal reported Monday that the company is sitting on $250 billion — that’s a quarter trillion — in cash reserves, almost all of it parked abroad. The amount is “greater than the market value of either Walmart Stores Inc. or Proctor &Gamble Co. and exceeds the foreign currency reserves held by the U.K. and Canada combined,” the paper noted.
The company’s windfall has doubled in less than five years. By the end of 2016, it was accumulating cash at a rate of $3.6 million an hour, the Journal reported
Why is Apple essentially stuffing greenbacks in a mattress? Because it would pay a huge tax penalty if it brought the money home.
As Steven Pearlstein of the Washington Post noted in March, “The current tax regime encourages companies to move operations, assets and even corporate citizenship overseas, while raising less and less money every year as companies come up with ever more ingenious and ethically questionable ways to avoid it.”
The combined U.S. federal and state corporate tax rate is 39 percent, among the highest in the world. And while it’s true that many companies pay a lower effective rate, American multinationals still have higher tax burdens than their counterparts in many other jurisdictions.
In addition, the federal government taxes American corporations on income earned overseas if they bring it back to the United States. That’s why many companies, such as Apple, prefer to lock up their cash in foreign instruments rather than invest it in domestic endeavors.
“There is a growing political consensus that the time has come for change in the tax rules to encourage repatriation of the vast troves of corporate earnings held outside the country,” wrote Jeff Sommer of The New York Times last year.
Donald Trump’s tax proposal calls for lowering the corporate rate to 15 percent and perhaps creating a one-time tax holiday to encourage companies such as Apple to bring their profits home. This makes sense. Critics of such a plan argue these corporations are less likely to create jobs or new businesses with the money than they are to reward investors. But so what? Either way, the money is working in the United States rather than sitting idly in some foreign investment vehicle.
Apple is not alone. Microsoft, General Electric, Pfizer and others all prefer to leave large chunks of earnings stranded overseas. While this makes good sense from a corporate standpoint, it simply nuts for Washington politicians to impose tax policies that encourage this behavior.
Thursday, May 4, 2017
Having won the presidency, the House, and the Senate, the GOP’s first major legislative accomplishment is to… increase spending.They say that, "elections have consequences". That's probably true everywhere BUT the USA. WTF, Donald?
This “accomplishment” is both sad and predictable.
Let’s take the new 2017 bipartisan omnibus spending bill. To avert a looming governmental shutdown, Trump didn’t get his wall funded—and he didn’t get Planned Parenthood defunded. And after all the handwringing in the wake of his proposed budget, which would have taken the knife to most domestic agencies, Trump only trimmed the Environmental Protection Agency by a mere 1 percent.
Freedom Caucus Member Justin Amash called it “another deal to grow government. Instead of compromising to cut spending, each side agrees to let the other side spend more.”
And James Hohmann observed in The Washington Post that “Democrats are surprised by just how many concessions they extracted in the trillion-dollar deal, considering that Republicans have unified control of government.”
It seems that once Republicans gain high office, worries about “generational theft” segue to the “deficits don’t matter” philosophy—when deficit hawks morph into deficit doves.
In 2010, Rep. Paul Ryan speculated that America was about to turn into Greece. And in the 2012 vice presidential debate, Ryan declared, “We’ve got to tackle this debt crisis before it tackles us." The irony, of course, is that he has ascended to the speakership, but his own president is pushing policies that seem likely to substantially increase the debt.
This is a long-standing trend. We might forgive Ronald Reagan for increasing spending (he was busy trying to defeat the Soviet Union, and Democrats in Congress had the power of the purse), but what’s the excuse for George W. Bush—and now Donald J. Trump?
It’s not just the spending bill, either. Some are estimating that Trump’s tax reform outline could increase the debt by trillions of dollars over a decade. Don’t get me wrong. Tax cuts could help grow the economy, create jobs, and broaden the tax revenue base. But the assumption that these tax cuts will pay for themselves is dubious. (Note: Trump is now saying that he would consider a gasoline tax hike to pay for infrastructure.)
In fairness to Ryan, the primary reason for this is that Trump won’t embrace what might be Ryan’s signature issue: entitlement reform. A well-rounded conservative agenda might pair tax reform with sensible entitlement reform (which, aside from national defense, is where the real money is), but Trump has eschewed the latter.
What remains is the bigger story of how, when Democrats are in office, Republicans worry about deficits and the debt, but how they magically forget about all that once they take power. This strikes me as an inexorable structural problem. Almost all of the incentives lead to more spending.
“Name me one politician who tried to cut spending and has been rewarded for it,” said former Georgia Rep. Jack Kingston. “Sure there are many Members of the House and Senate who have consistently voted ‘no’ and been considered heroes, but they haven't delivered a spending cut.”
While there are powerful conservative organizations that promote cutting taxes and general fiscal responsibility, no major lobbyists or interest groups dole out support solely to cut spending. Meanwhile, in our action-oriented culture, politicians gain support by putting points on the board—not for taking them off. There are incentives for creating a new program or passing a new bill, not for rolling back spending.
And if the media and the public clamor for the passage of legislation, then how might a Republican president corral enough Democratic votes to make that happen? You guessed it: by increasing spending. Amid criticism from the right over his spending bill, Donald Trump tweeted: “The reason for the plan negotiated between the Republicans and Democrats is that we need 60 votes in the Senate which are not there!”
The only way for a Republican president to implement the rest of his agenda—to pass otherwise good policies and to keep the government functioning—is to trade them for pork-barrel appropriations and pet projects.
This structural problem predates Donald Trump, but the “King of Debt” might be even more inclined (than your average Republican) to increase spending if it means extra points on his scoreboard. But the short-term benefits of kicking the can down the road will mean long-term insolvency.
When Democrats were last in charge, they enacted an extremely politically risky health care regime knowing it could cost them control of Congress—or even the presidency. They did this because they believed expanding health coverage was a moral imperative. Republicans have repeatedly said slashing our debt is a moral imperative. When will they act like it?
Wednesday, May 3, 2017
Monday, May 1, 2017
Recent moves by Ms Le Pen to appeal to a wider audience seem to be working as she has removed herself as the leader of the Front National party, and rebranded her campaign with the new motto “Choose France”.
Pollster Harris Interactive, who correctly predicted the result of the first round, revealed a six points slip by Mr Macron since last Sunday.
Ms Le Pen said: “The country Mr Macron wants is no longer France; it's a space, a wasteland, a trading room where there are only consumers and producers.”
The latest polls were conducted prior to the announcement that defeated first round presidential candidate Nicolas Dupont-Aignan, would be Ms Le Pen’s prime minister if she wins the presidency.
Mr Dupont-Aignan’s policies are seen as less extreme than her own, despite being eurosceptic and a longstanding critic of the eurozone.
The French media reported it represented an important move to grab moderate voters and could prove a decisive decision during the election on May 7.
Mr Dupont-Aignan and Ms Le Pen, in a joint statement on Saturday, said that “the transition from the single currency to the European common currency is not a prerequisite for any economic policy”.
The presidential candidate denied that her position on the euro has changed. The former Front National leader said: “I have been calling for the transformation of the single currency to the common currency for quite a long time, so there is no contradiction in that.”
The Harris Interactive poll places Mr Macron on 61 per cent and Ms Le Pen on 33 per cent.
Robert Ménard, the mayor of the town of Béziers in the south of France who was elected with Front National support, said: “It's very good news. It proves that she has finally understood.
“To win an election it's necessary to assemble and gather first in your own camp. For the Front National, that’s the right.”
Political Science Professor Douglas Webber said: “It would be almost impossible for the EU to survive if Marine Le Pen should win the up-coming French Presidential elections, and subsequently win a referendum to withdraw France from it.”
"Far as the sun extends its genial ray,
Each nation boasts her consecrated day;
Some visionary saint, some monarch's birth,
Gilds the blest morn, and wakes to annual mirth:
The stately Spaniard yields his pride of names,
Once in each year, to smile upon St. James.
Saint Dennis gives the word! behold all France
Lost in the ecstasy of song and dance.
Flush'd with the grape, Saint Patrick's sons appear,
And with his birthday lasted all the year;
‘Oh he's a jewel of a saint—no rigid numper—
But dead himself gives life to ev'ry bumper!'
'Hoot, hoot, man quoth the Scot 'a' these are bairns o' dross,
Nae worth a bawbie, compar'd wi' Andrew on his cross,'
Nor is the festal day to realms confin'd
By science honor'd and by arts refin'd;
The Savage tribes their jubilee proclaim,
And crown Saint Tammany with lasting fame.
E'en the poor Negro will awhile resign
His furrows, to adorn Saint Quaco's shrine;
For one bright hour of joy forego complaint,
And praise his tyrant, while he nails his saint.
But while the dupes of legendary strains
Amuse their fancy, or forget their pains,
While mimic Saints a transient joy impart,
That strikes the sense but reaches not the heart,
Arise, Columbia!—nobler themes await
Th' auspicious day, that sealed thy glorious fate:
A nation rescu'd from oppression's soil,
And freedom planted in a purer soil;
By worth enobled, and by valor grac'd
(The ball of empire rolling to the west),
Lo! a new order in the world arise
And thy fair fame spread boundless as the sky;
Yet as the tale of triumph we renew,
To patriot virtue yield the tribute due;
With fond remembrance, each revolving year,
To martyr'd heroes shed the grateful tear;
And with the fragrant wreath of laureate bloom
Adorn the warrior's ever honor'd tomb!
‘Midst these sad rights the moral let us trace,
That points the soldier's fire, the statesman's grace;
From Warren and Montgomery catch the flame,
And follow Lawrence in the track of fame.
Is there a child who urg'd the arduous strife
For liberty (thou dearer boon than life!)
Is there a heart to troth and virtue form'd,
By pity soften'd and by passion warm'd,
That seeks not here a monument to raise,
To speak at once, their country's grief and praise?
Recording history their deeds shall tell;
On the rich theme the muse enraptur'd dwell
To future worlds examples shall supply,
And with the glist'ning tear fill beauty's eye.
Thus when revolving time shall sanctify the name,
And Washington great favorite of fame!
By some enraptur'd bard recall'd to view,
In sons unborn your feelings shall renew;
See! as the story of his life is told,
His courage charm the young his worth the old;
His martial feats the Veteran admires;
The patriot bosom glows as he retires;
While all mankind in admiration lost,
Strive who can follow or applaud him most!
Go, Sons of liberty! assert your fame!
And emulate the Greek and Roman name;
The prize of arms by virtue be maintain'd
And wisdom cultivate what toil has gain'd;
Thus shall the sacred Fane of Union stand,
And this day's Independence bless the land!"
Monday, April 24, 2017
from The Intercept
TO RESIDENTS OF MARYLAND, catching an occasional glimpse of a huge white blimp floating in the sky is not unusual. For more than a decade, the military has used the state as a proving ground for new airships destined for Afghanistan or Iraq. But less known is that the test flights have sometimes served a more secretive purpose involving National Security Agency surveillance.
Back in 2004, a division of the NSA called the National Tactical Integration Office fitted a 62-foot diameter airship called the Hover Hammer with an eavesdropping device, according to a classified document published Monday by The Intercept. The agency launched the three-engined airship at an airfield near Solomons Island, Maryland. And from there, the blimp was able to vacuum up “international shipping data emanating from the Long Island, New York area,” the document says. The spy equipment on the airship was called Digital Receiver Technology – a proprietary system manufactured by a Maryland-based company of the same name – which can intercept wireless communications, including cellphone calls.
With the exception of a few military websites that refer to the Hover Hammer as an “antenna mounting platform,” there is little information in the public domain about it. The classified NSA document describes the airship as a “helium-filled sphere inside another sphere, constructed of Spectra, the same material used to make bullet-proof vests. … It ‘hovers’ above small arms fire, has a negligible [infrared] signature, and radar can’t detect it.” The agency added in the document that it planned to conduct more tests with the Hover Hammer, and said it wanted to develop a larger version of blimp that would be capable of flying at altitudes of 68,000 feet for up to six months at a time. “More experiments, including the use of onboard imagery sensors, are being conducted,” it said.
The NSA declined to comment for this story.
In recent years, airships – or aerostats, as they are formally called – have been a source of major military investment. Between 2006 and 2015, the U.S. Army paid Raytheon some $1.8 billion to develop a massive missile-defense blimp called the JLENS, which is equipped with powerful radar that can scan in any direction 310 miles. (That’s almost the entire length of New York state.) In October 2015, the JLENS attracted national attention after one became untethered amid testing and drifted north from Maryland to Pennsylvania before it was brought back under control. In 2010, the Army commissioned another three airships – called Long Endurance Multi-Intelligence Vehicles – as part of a $517 million contract with Northrop Grumman. The company stated that the airships would “shape the future” of the military’s intelligence-gathering capabilities and provide a “persistent unblinking stare” from the sky.
Unsurprisingly, privacy groups have expressed concerns about the prospect of the blimps being used domestically to spy on Americans. However, military officials have often been quick to dismiss such fears. In August 2015, Lt. Shane Glass told Baltimore broadcaster WBAL that the JLENS blimps being tested in Maryland were not equipped with cameras or eavesdropping devices. “There are no cameras on the system, and we are not capable of tracking any individuals,” Glass stated. The same cannot be said, it seems, of the NSA’s Hover Hammer.
Are you trying to monitor a huge political protest? Look no further than DRT. Nicknamed “dirt boxes,” these devices can locate up to 10,000 targets and can process multiple analog and digital wireless devices all at the same time. They’re even capable of intercepting and recording digital voice data. The best thing about the devices is the fact that no one may ever know you’ve used one. Just be careful — if your targets do figure out you’ve used a DRT box, and you haven’t gotten a warrant, they may be able to convince a judge to throw out all the evidence you’ve collected on them after you used the device. The smaller 1301C model has advanced passive cooling technology, meaning there’s no noisy fan to give it away.
Saturday, April 8, 2017
Gov. Larry Hogan avoided a confrontation with Democratic lawmakers on Thursday by allowing more than a dozen bills to become law without his signature — including measures that give money to the attorney general to sue the federal government and require the state to fund Planned Parenthood if it loses federal funding.
The Republican governor declined to comment on the bills he elected not to sign or veto. Several drew stiff opposition from Republican lawmakers as they passed through the General Assembly.
Some of the other measures set to become law will prevent the state from opening oyster sanctuaries to harvesting until a population study is done and repeal a requirement that the state mass transit system get a certain portion of its income from fares paid by riders.
Hogan also let two of the state's budget bills become law without his signature — signaling his dissatisfaction that lawmakers refused to grant him relief from funding formulas and spending requirements that tie his hands in future budgets.
Meanwhile, Hogan's sole veto so far — of a bill that would limit some school reforms — was swiftly overridden on party-line votes in the House of Delegates and state Senate on Thursday. The bill sets guidelines for how the state identifies low-performing schools and limits actions the Maryland State Board of Education can take to help those schools.
Lawmakers sent 27 bills to the Republican governor's desk last week, early enough to require Hogan to sign or veto them while the legislature was still in Annapolis for their 90-day session, which ends Monday. That allowed Democrats the chance to override potential vetoes.
Hogan vetoed only the education bill, doing so during a visit to a Baltimore charter school on Wednesday. He signed 11 bills into law during a series of ceremonies over the past week.
The remaining 15 become law without his signature.
Supporters of Planned Parenthood said Maryland is the first state in the nation to guarantee funding for the nonprofit health organization, which has been criticized by Republicans in Congress and Trump administration officials. Planned Parenthood serves 25,000 patients at nine centers in the state.
"We must remember that a state solution does not change the fact that politicians in Congress are trying to prohibit millions of people from accessing care at Planned Parenthood," said Karen J. Nelson, CEO of Planned Parenthood of Maryland, in a statement.
Environmentalists were happy that oyster sanctuaries will be protected until a population study is completed. The Hogan administration had been considering giving watermen periodic access to the sanctuaries.
"We have so few oysters left, we can't randomly increase harvesting especially on sanctuaries," said Alison Prost, Maryland executive director of the Chesapeake Bay Foundation. "Those areas are our insurance policy for the survival of oysters in the Chesapeake."
Transit advocates cheered passage of a law that will end the Maryland Transit Administration mandate known as farebox recovery, which set a goal of financing 35 percent of the agency's operations through fares. Republican lawmakers have long sought to keep that standard as a way of holding down taxpayer subsidies for public buses and trains, but supporters of transit programs have insisted the goal is unrealistic.
"The farebox recovery mandate repeal will remove a steep impediment to a more reliable, affordable public transportation system for the citizens of Baltimore and residents of Maryland," the Get Maryland Moving Coalition said in a statement. "Maryland was one of the few states that legally required a transit system to cover a certain percentage of operating costs from fares. Maryland has no such mandate in place for other modes of transportation receiving public investment such as roads and highways."
Another bill becoming law without Hogan's signature extends the EmPOWER Maryland energy efficiency program. Under that program, customers are charged a fee on their utility bills that utility companies use for energy efficiency programs such as home energy checkups, rebates and bill credits for reducing electricity use and efficient appliances.
The American Council for an Energy-Efficient Economy praised lawmakers and the governor for continuing EmPOWER Maryland.
"EmPOWER Maryland means more electricity savings for consumers, reduced operating costs for employers and increased jobs across the state," said Brendon Baatz, a policy manager for the council who has studied the effectiveness of EmPOWER.
Hogan's decision to avoid most of his possible veto fights this year is a concession to the political reality that Democrats hold super-majorities in both the House and Senate and can override his vetoes anytime they remain united.
That's what happened on Thursday, as lawmakers easily overrode Hogan's veto of the Protect Our Schools Act, which prohibits the state from enacting some school reforms.
On largely party-line votes of 90-50 in the House and 32-15 in the Senate, lawmakers upheld the measure, which they passed last week.
The bill had become a contentious political issue in the waning days of the session.
Hogan, the state school board and Republican lawmakers argue that it will trap students in troubled schools and tie the hands of the state when it tries to help. Democrats and the state teachers union, meanwhile, say the bill is necessary to prevent the state from taking over and privatizing troubled schools.
Del. Nic Kipke, an Anne Arundel County Republican who is the House minority leader, said the education bill has gotten caught up in the fervor to combat Republican President Donald J. Trump's administration. U.S. Education Secretary Betsy DeVos supports some of the controversial reforms that the measure would prohibit Maryland from enacting.
Kipke said school children are becoming "collateral damage in the war on Washington, D.C."
Del. Eric Luedtke, a Montgomery County Democrat who sponsored the bill, said the Protect Our Schools Act will lead to "a new era in education" that isn't overly reliant on standardized tests and keeps decision-making on how to help struggling schools at the local level.
The bill will protect students from "vouchers and other quick fixes," said Sen. Paul Pinsky, a Prince George's County Democrat.
The measure will guide the state's plan for complying with the federal Every Student Succeeds Act, which is due in September. Under the act, the plan would not include the ability for the state to convert low-performing schools into charters, bring in private operators, give the children vouchers to attend private schools or putting all of those schools into a statewide "recovery" school district.
The measure also sets a formula for identifying low-performing schools that includes a mix of standardized tests and other factors, such as attendance and quality of the curriculum. The state would report how schools are ranked on the factors but would not be allowed to assign letter grades to the schools.
Hogan responded to the veto override with a posting on his Facebook page, saying he was "sad" for children who will be trapped in failing schools and concerned the state could lose education aid if the federal government finds Maryland's plan to be insufficient.
"This will long be remembered as a low point in Maryland's legislative history," Hogan wrote.
Sunday, April 2, 2017
by Pat Buchanan
"If we were to use traditional measures for understanding leaders, which involve the defense of borders and national flourishing, Putin would count as the preeminent statesman of our time."
"On the world stage, who could vie with him?"
So asks Chris Caldwell of the Weekly Standard in a remarkable essay in Hillsdale College's March issue of its magazine, Imprimis.
What elevates Putin above all other 21st-century leaders?
"When Putin took power in the winter of 1999-2000, his country was defenseless. It was bankrupt. It was being carved up by its new kleptocratic elites, in collusion with its old imperial rivals, the Americans. Putin changed that.
"In the first decade of this century, he did what Kemal Ataturk had done in Turkey in the 1920s. Out of a crumbling empire, he resurrected a national-state, and gave it coherence and purpose. He disciplined his country's plutocrats. He restored its military strength. And he refused, with ever blunter rhetoric, to accept for Russia a subservient role in an American-run world system drawn up by foreign politicians and business leaders. His voters credit him with having saved his country."
Putin's approval rating, after 17 years in power, exceeds that of any rival Western leader. But while his impressive strides toward making Russia great again explain why he is revered at home and in the Russian diaspora, what explains Putin's appeal in the West, despite a press that is every bit as savage as President Trump's?
Answer: Putin stands against the Western progressive vision of what mankind's future ought to be. Years ago, he aligned himself with traditionalists, nationalists and populists of the West, and against what they had come to despise in their own decadent civilization.
What they abhorred, Putin abhorred. He is a God-and-country Russian patriot. He rejects the New World Order established at the Cold War's end by the United States. Putin puts Russia first.
And in defying the Americans he speaks for those millions of Europeans who wish to restore their national identities and recapture their lost sovereignty from the supranational European Union. Putin also stands against the progressive moral relativism of a Western elite that has cut its Christian roots to embrace secularism and hedonism.
The U.S. establishment loathes Putin because, they say, he is an aggressor, a tyrant, a "killer." He invaded and occupies Ukraine. His old KGB comrades assassinate journalists, defectors and dissidents.
Yet while politics under both czars and commissars has often been a blood sport in Russia, what has Putin done to his domestic enemies to rival what our Arab ally Gen. Abdel-Fattah el-Sissi has done to the Muslim Brotherhood he overthrew in a military coup in Egypt?
What has Putin done to rival what our NATO ally President Erdogan has done in Turkey, jailing 40,000 people since last July's coup -- or our Philippine ally Rodrigo Duterte, who has presided over the extrajudicial killing of thousands of drug dealers?
Does anyone think President Xi Jinping would have handled mass demonstrations against his regime in Tiananmen Square more gingerly than did President Putin this last week in Moscow?
Much of the hostility toward Putin stems from the fact that he not only defies the West, when standing up for Russia's interests, he often succeeds in his defiance and goes unpunished and unrepentant.
He not only remains popular in his own country, but has admirers in nations whose political establishments are implacably hostile to him.
In December, one poll found 37 percent of all Republicans had a favorable view of the Russian leader, but only 17 percent were positive on President Barack Obama.
There is another reason Putin is viewed favorably. Millions of ethnonationalists who wish to see their nations secede from the EU see him as an ally. While Putin has openly welcomed many of these movements, America's elite do not take even a neutral stance.
Putin has read the new century better than his rivals. While the 20th century saw the world divided between a Communist East and a free and democratic West, new and different struggles define the 21st.
The new dividing lines are between social conservatism and self-indulgent secularism, between tribalism and transnationalism, between the nation-state and the New World Order.
On the new dividing lines, Putin is on the side of the insurgents. Those who envision de Gaulle's Europe of Nations replacing the vision of One Europe, toward which the EU is heading, see Putin as an ally.
So the old question arises: Who owns the future?
In the new struggles of the new century, it is not impossible that Russia -- as was America in the Cold War -- may be on the winning side. Secessionist parties across Europe already look to Moscow rather than across the Atlantic.
"Putin has become a symbol of national sovereignty in its battle with globalism," writes Caldwell. "That turns out to be the big battle of our times. As our last election shows, that's true even here."
Saturday, April 1, 2017
Sunday, March 26, 2017
I have a friend who is a retired public school teacher. She is very likeable and in some areas an independent thinker. One day in conversation she brought up the terrible poverty and near-anarchy that prevails just on the other side of America’s southern border. It quickly became clear that she believed America was at fault, that America’s prosperity was somehow the cause of Mexico’s problems. When I asked her what the solution might be, she replied without hesitation that we should get rid of that border, and not stop there but get rid of all borders. Then, she said, people everywhere could live in peace.
If I could capture for you precisely how she said this, you would hear as I did John Lennon’s “Imagine” forming her thoughts:Imagine there’s no countriesThe simplest explanation of what happened to the modern progressive Baby Boomers is that they found for themselves a new national anthem, one they like much better than that old and out-dated one that asked them to be brave if they expected to be free.
It isn’t hard to do
Nothing to kill or die for
And no religion too
Imagine all the people living life in peace…
Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man.
When John Kerry in a commencement speech told college graduates they will live in a borderless world, he made it clear his muddled Marxist thinking—like my friend’s—is of the Lennonist variety.
In conversations with my progressive friends, I find they see America as the problem. They place their hopes in the world beyond America’s borders. When Kerry said America needed France’s approval to conduct foreign policy, his assertion made perfect sense to Lennonists. When Bill Maher said if half the country wants Trump as president then the United Nations needs to intervene, he spoke for American Lennonists everywhere.
You have to admit that American Lennonism has a certain logic. If America is the problem, then getting rid of America’s borders is an important and even an essential step toward a better world. But if America is not the problem, if America deserves to live, if there are still many Americans who want America to live, then not so much. And if getting rid of America turned out to be a mistake, it would be a mistake impossible to undo.
If you doubt that Lennonism has a powerful hold on the thinking and the imaginations of many in America, please consider this: “Imagine” has become the more-or-less official anthem played in the United States on New Year’s Eve.
I prefer “The Star-Spangled Banner.” To me, nothing expresses America’s uniqueness better than the fact that, as it is traditionally performed, America’s national anthem ends with this question:O say does that star-spangled banner yet waveThat question is actually a challenge. Our national anthem issues a challenge to every generation down to our own, reminding us of our responsibility to preserve the Founders’ gift.
O’er the land of the free and the home of the brave?
I’ll ask you the same question: have we kept America the land of the free and the home of the brave?
Saturday, March 18, 2017
Gov. Larry Hogan announced Friday he supports banning fracking, a surprise revelation that could make Maryland one of the first states to ban the controversial method of drilling for natural gas.
The Republican governor said passing legislation to prohibit fracking was "an important initiative to safeguard our environment.
"I urge members of the legislature on both sides of the aisle and in both houses to come together and finally put this issue to rest," Hogan said during a State House news conference.
Some Democratic lawmakers in the General Assembly and environmental advocates have pushed for years to ban fracking.
Supporters of the drilling say it would bring jobs that are needed to boost the economy in Western Maryland, where fracking could be used to extract underground natural gas from a type of shale. Opponents have countered that it could harm the environment and public health, threatening the region's tourism industry.
The House of Delegates approved a bill last week that would ban the practice and a companion bill is expected to move forward in the state Senate.
Environmentalists say Maryland would become the first state with natural gas that could be fracked from underground shale to pass a law banning the practice. New York, which also has shale gas, banned the practice by executive order. Vermont passed a law to ban fracking, but has no gas that could be fracked.
"This would be the most nationally significant environmental bill Maryland has ever passed," said Mike Tidwell, director of the Chesapeake Climate Action Network.
Thomas Meyer, a Maryland organizer for the national group Food and Water Watch, said Hogan's announcement should send a message to politicians in other states that banning fracking is a smart decision.
"It says to Republicans: This is the direction we need to be going in," Meyer said. "More importantly, it says to Democrats: You can't call yourself a progressive on climate issues if you're supporting fracking."
Hogan's announcement took fracking opponents by surprise. Advocates have been rallying for the fracking ban all session. About a dozen, including Tidwell, were arrested Thursday morning during a demonstration at the State House.
As environment and climate activists rejoiced in the unexpected boost to their cause, supporters of fracking expressed frustration.
Del. Wendell R. Beitzel, an outspoken opponent of the fracking ban, said in a Facebook post that he was disappointed by Hogan's announcement. Beitzel, a Garrett County Republican, did not respond to a request for comment.
"While campaigning for Governor, he implied to members of the Western Maryland Delegation he supports responsible natural gas development," Beitzel wrote of Hogan. "We were told that the 'war on Western Maryland was over.' It appears that the Governor has capitulated to the environmental community."
The oil and gas industry also panned the governor's announcement. Maryland Petroleum Institute director Drew Cobbs said Hogan is making a poor decision for political reasons.
"Maryland families and opportunities for job creation have lost out to the whims of a vocal minority — inconsistent with the governor's vision to create well-paying jobs in Maryland," Cobb said in a statement.
Sen. Bobby Zirkin, a sponsor of the fracking ban, joined Hogan at his announcement.
"There is simply no regulatory way to protect our citizens from the dangers of this technology," said Zirkin, a Baltimore County Democrat. "This is the right policy for the citizens of our state."
Zirkin said he's been lobbying the governor to ban fracking since approaching him at a Baltimore Ravens football game more than a year ago.
"I was working him over a Bud Light," Zirkin said. "And I've been working him ever since."
Not invited to the news conference was the ban's House sponsor, Del. David Fraser-Hidalgo.
"I'm happy to hear the governor has managed to see the light," the Montgomery County Democrat said. He said he was "surprised that nobody bothered to contact me."
A moratorium on fracking is due to expire later this year, and Hogan had proposed what he called "platinum" regulations to govern the practice. As recently as last week, Hogan's environment secretary, Ben Grumbles, touted those proposed regulations as "the most protective and comprehensive in the country."
Hogan said Friday that the regulations would have made it "virtually impossible" to engage in fracking, and he chided lawmakers for delaying their implementation.
When Senate President Thomas V. Mike Miller suggested a long-term moratorium followed by a non-binding voter referendum, the governor said he decided to act. He said he "decided that we must take the next step, and move from virtually banning fracking to actually banning fracking."
Miller, a Calvert County Democrat, said he suggested a referendum to hear the opinions of residents in Garrett and Allegany counties, which have part of the Marcellus Shale formation where fracking is possible.
"I am not for fracking, never have been for fracking, never will be for fracking," Miller said.
"The advocates for fracking have claimed that the people of Western Maryland are for fracking, and I believed it was important to let those residents' opinions be heard," he said.
Hogan's support for the ban eliminates the need for fracking opponents to count votes in the Senate, where they were trying to get a veto-proof majority of senators to support the bill. Baltimore Sen. Joan Carter Conway, who chairs the Senate's environment committee, had previously said she wouldn't let the bill out of her committee unless there were 29 votes in the 47-member Senate — enough to override a veto.
But Conway said Friday she'd already made up her mind to allow the bill to advance to the full Senate.
"I have never said I was holding the bill, but that was the perception," she said.
Conway had sponsored a bill that would have set a long-term moratorium on fracking. She said she opposes the drilling practice.
"Do I think they should frack in Maryland? No, I don't," she said.
Hogan's announcement was welcome news for former delegate and gubernatorial candidate Heather Mizeur. The Democrat started pushing for a fracking ban in 2011 and continued even after she was no longer in office.
Mizeur spoke this month at an Annapolis rally for a ban. She was tipped off Friday that Hogan would make the announcement but said, "I didn't actually believe it until I saw it."
"I never doubted once that this day would arrive," Mizeur said. "I just didn't think we'd have Larry Hogan standing next to us — a change of heart on the most meaningful of issues."
Wednesday, March 15, 2017
It was a telling moment when China’s President Xi Jinping rose on January 16, 2017, to proclaim himself the new champion of free trade in the great conference hall of Davos, Switzerland, the citadel of globalization. This proclamation came just four days before the inauguration of the newly elected U.S. president, who has traditionally served as the leader of the globalization movement.
The symbolism was rich. As a result of comments by President Donald Trump that his new administration might take a tougher line on trade policy than all U.S. administrations since World War II, the Davos crowd was uneasy. The elite gathering of global billionaires, celebrities, scholars, bankers, heavyweight pundits, CEOs, and upwardly mobile government officials cheered as the leader of the Chinese Communist Party promised to take over from an apparently faltering United States and lead each Davos Man into the glorious nirvana of ultimate globalization. Xi’s remarks reassured them that with China, at least, it would be business as usual and that their lifestyles would be safe.
Globalization with Chinese Characteristics?
Yet, for the Americans who had elected Trump, and even for those who had voted against him but who had supported Senator Bernie Sanders, this business as usual was precisely the problem. And no leader symbolized this better than Xi. Here was the newly anointed “core leader” of the Chinese Communist Party appointing himself captain of the globalization team. But what is his approach to globalization?
Xi’s approach starts with a state-controlled and censored Internet. It means banning companies that offer freedom of information, like Google and Facebook, from the Chinese market. It means strict controls on foreign investment in China while Chinese corporations go on shopping sprees in the rest of the world. It means that, in order to enter the Chinese market, foreign companies are required to invest in China, to export from China, and to transfer technology to China. It means that the exchange rate of the Chinese yuan is managed by the government, not freely determined by the currency markets like the euro and the U.S. dollar. It means investment subsidies for a broad range of key Chinese manufacturers and exporters. It means warnings of possible problems for Samsung’s business in China if the South Korean government obtains an American anti-missile defense system. In short, it means nationalistic mercantilism. This is what the masters of the universe in Davos were actually embracing.
But it is precisely this kind of mercantilism that the post–World War II founders of the global trading system had sought to avoid. It is the ongoing lack of success in the battle against mercantilism that has created the constant gap between the promises and the results produced by generations of American trade negotiators. And it was to respond to this gap that American voters just elected Donald Trump to the presidency.
Although none of these points were included in any of the pundits’ dispatches from Davos, historians looking back from the future might well identify this moment—when the world elite embraced Chinese-style mercantilism—as the moment when the era of the liberal free trade movement finally ended.
From Bretton Woods to the Japanese Miracle
The free trade movement was, of course, rooted in the pre–World War II turmoil of stock market crashes, wartime debt hangovers, depression, mercantilist currency devaluations, and tariff increases. The establishment of a system to prevent a replay of this 1930s mercantilism began in 1944 at Bretton Woods, New Hampshire. To avert competitive currency devaluations, a system of fixed exchange rates was established with all other currencies valued to the dollar at a set rate and with the dollar valued at a set rate to gold. To avert financial crises, capital markets were essentially closed. And to avert protectionism, a doctrine of free trade was established along with a system for negotiation of continual reductions in tariffs and trade barriers and for the adjudication of disputes.
The goal of Bretton Woods was for the trade system’s members to remain in rough balance. Indeed, the International Monetary Fund (IMF) was created to provide emergency financing and rescue plans for countries that might find themselves with large trade deficits and inadequate reserves of dollars and gold. At the time, the British representative to the discussions, John Maynard Keynes, argued forcefully that in addition to loans for deficit countries, the IMF should also be empowered to impose tariffs on the exports of countries with large, chronic trade surpluses. As the country with the then-largest surpluses, the United States was not receptive to this proposal, and it was not formally adopted. But it was expected that the member countries of the trading system would maintain roughly balanced trade accounts. Otherwise, trade-related unemployment might become a problem.
It all worked splendidly for about twenty years, during which time the United States enjoyed its greatest ever economic boom. This period also encompassed the German and Japanese economic miracles. By the late 1960s, however, the system was seriously out of balance. The exchange rates fixed in 1948 had not been changed despite the dramatic shifts in productivity that had occurred in many countries and especially in Germany and Japan as they recovered from the war. The United States began to have balance-of-payments problems with some countries and was continually shipping gold from Fort Knox to the likes of the United Kingdom and France. Then, in 1971, America accumulated its first trade deficit since 1888, in the amount of $2 billion. In 1972, with gold flowing out of the country like a big yellow river, President Nixon ended the fixed exchange-rate system by removing the dollar peg to gold and allowing its value to be determined entirely by market forces in the global currency exchanges. That resulted in a revaluation of the German mark and the Japanese yen along with other currencies and, for a while, provided relief to U.S. producers and Fort Knox. But by 1980, the U.S. trade deficit was back, and it was not $2 billion. It was $20 billion. Of course, a lot of things had been happening in the world of trade, including the introduction of roll-on-roll-off containerized shipping, the advent of jet travel, and the development of faster communications. In addition, major trading countries like Japan had adopted increasingly mercantilist policies.
Free trade theory stipulates that countries should concentrate on producing and exporting what they did best while importing the rest. But Japan and some others chose not to accept that reasoning. As Naohiro Amaya, an architect of the Japanese economic “miracle,” once explained to me, “we did the opposite of what the Americans told us.” He pointed out that the key elements of the miracle model included the protection of domestic markets, export-led growth, government-guided investment in industries with economies of scale (steel, ship-building, autos, semiconductors, etc.), a managed currency undervalued versus the dollar, and technology transfer as a condition of foreign investment in the domestic market.
This was not Adam Smith’s famous “unseen hand,” nor was it free trade as imagined by Anglo-American economists, such as David Ricardo. It was mercantilist “catch up” industrial policy, and it worked so well that it was quickly imitated by Korea, Taiwan, Singapore, and most other developing countries, as well as many developed countries, in various ways (e.g., Germany, Switzerland). The combination of these strategic trade policies plus growing international flows of finance and technology and the impact of international economies of scale negated some of the fundamental assumptions of the free trade system. What a country did best was not necessarily predetermined by resource availability. It could be changed for the better by clever policies.
This is what Naohiro Amaya meant when he spoke of rejecting American advice on free trade. He was not in the business of “unseen hands.” He was in the business of picking winners. It was by the government’s picking and strong backing of winners that South Korea (one of the world’s poorest countries in 1960 with no natural resources, no capital, and virtually no skilled labor) came to be a major player in the steel, auto, and semiconductor industries.
Theory and Practice in American Trade Policy
But the notion of government picking winners and losers with trade policy was contrary to the American suspicion of government intervention as well as to powerful U.S. geopolitical interests, not to mention established academic orthodoxy on free trade. When the U.S. trade deficit hit $50 billion in the mid-1980s, Treasury Secretary James Baker eventually concluded another agreement to revalue the Deutschmark and the yen in 1985. That again eased the pressure of the trade imbalances, but the American economic and foreign policy elite firmly maintained the orthodoxy that more and better free trade agreements were chiefly what was needed to ensure equitable trade. They continued to insist that trading partners were adhering to American assumptions and values regarding how international markets should work.
During succeeding administrations, free trade advocates pushed through a string of trade deals—including the Uruguay Round (1986–1994), the North American Free Trade Agreement (NAFTA) in 1994, establishment of the World Trade Organization (WTO) in 1995, China’s accession to the WTO in 2001, the United States-Korea free trade agreement (KORUS FTA) in 2007, and, most recently, the proposed TPP. Not surprisingly, these deals resulted in a steady increase of the annual U.S. trade deficit from $20 billion in 1980 to approximately $500 billion today. Meanwhile, the offshoring of U.S. production continued—not only in labor-intensive industries but also in the capital- and technology-intensive industries in which America is supposed to be competitive. During that time, the gap widened significantly between the top one percent of earners and the rest.
However, as the elite persisted in its fixation with orthodox, Anglo-American free trade doctrine, the public and their politicians increasingly developed doubts. For instance, Congress voted 395-7 in support of the Tokyo Round free trade deal of 1979 and 366-40 for the Canada-U.S. Free Trade Agreement of 1988. By 1993, Bill Clinton was able to get NAFTA through the House by a margin of only 234-200 and was unable to obtain new approval for negotiating more trade deals. President George W. Bush was able to get the Central American Free Trade Agreement through the House by only two votes in 2005.
The difference between what trade proponents advertised and what actually occurred had become impossible for voters to ignore. Advocates of globalization repeatedly promised that trade would be win-win, that more and freer trade (and investment) would produce more jobs and rising wages even as it delivered lower consumer prices. Although they admitted that some workers might be displaced or disadvantaged, they invariably argued that there would be more winners than losers and that the winners would compensate the losers. In fact, however, as the U.S. trade deficit climbed inexorably, the gap between the top one percent of income earners and the rest also grew considerably. Consumer prices were kept low, but so also were the wages of most earners.
The final nail in the coffin of the conventional free trade doctrine’s credibility was the admission of China to the WTO. The Clinton administration argued that it would essentially be a unilateral opening by China, which would have to reduce its high trade barriers, while America would simply keep its low tariffs in place. Analysts predicted that the 2001 U.S. trade deficit of $83 billion with China would drop dramatically in the wake of the deal and that millions of good, new U.S. jobs would be the result. What occurred was quite the opposite. By 2015, the deficit had risen to $370 billion and millions of jobs had been lost while U.S. income inequality continued to rise.
Symbolizing the chasm between the promises and results of globalization is the adoption of Xi Jinping as the champion of Davos Man. President Xi and China have never been playing by the Anglo-American rules or assumptions. This is also true of many of the world’s leading and most rapidly growing economies such as South Korea, Japan, Singapore, and Sweden. The failure of America’s elite to learn from experience and its obstinate adherence to a flawed set of theories contributed to the strong campaign of Bernie Sanders for the Democratic Party nomination and the election of President Trump.
Achieving Balanced Trade
The overall objective of a new American trade and globalization policy should be to achieve roughly balanced trade over the long term while maintaining a strong, domestically based wealth-producing capacity. Such an approach would mean fully utilizing American human and capital resources, thus reducing or eliminating the inefficiencies resulting from today’s high rate of underemployment. U.S.-based producers, as a result, would enjoy higher profits which, in turn, would stimulate greater investment, R&D, and skills training. By eliminating the chronic trade deficit, balanced trade would lead to increased economic growth as domestic production supplied not only more of domestic demand but was also bolstered by growth in newly competitive exports. America would be able to stop borrowing abroad to pay for what it could produce domestically at competitive prices if exchange rates were properly established. Balanced trade would also mean more revenue for the U.S. government, even under a reduced tax rate regime, lower expenditures on both corporate and individual welfare, and smaller budget deficits. Moreover, research from former World Bank economist John Hansen indicates that balanced trade results in more equal patterns of domestic income distribution. Thus, fewer Americans would feel as if they are being left out of the American dream.
The most important step toward establishing balance must be to establish an exchange rate system that fairly and continually reflects roughly the true value of the range of global currencies. To this end, the U.S. should reverse the Commerce Department’s policy of not applying countervailing duty remedies to currency subsidies. At the moment, the Petersen Institute’s C. Fred Bergsten estimates that a 25% tariff is levied on foreign imports of all American goods and services while a similar amount of subsidy is provided for all exports to America by the chronic overvaluation of the dollar. Not only would adjustment of this overvaluation contribute greatly toward achieving balanced trade, but it would also simplify negotiation of other elements of trade. Rules of origin, tariff rate adjustment, and rules for judging whether dumping is occurring would all be simpler to negotiate and of less importance if exchange rates were properly set and adjusted. Or consider interest rates: the Fed has been reluctant to raise rates, in part, due to fear that doing so could strengthen the dollar, increase the U.S. trade deficit, and thereby cause a slower recovery. The creators of the postwar global economic system understood that before they could even speak of trade, they had to establish a sensible currency system that would tend to keep trade roughly balanced.
In view of the failure of that system and the subsequent floating rate system, a new one must be developed. For the time being, the dollar may remain the principal global reserve currency, but U.S. trade must also remain in rough, long-term balance. In order to achieve such a balance, costs must be imposed on countries that accumulate chronic trade surpluses, as John Maynard Keynes recommended back in 1948. One efficient way of doing this would be to adopt a currency corrective such as the Market Access Charge (MAC) system, as Hansen has argued. This system can be thought of as a kind of “peak load pricing” mechanism similar to those used by electricity utilities, airlines, rental car companies, and hotel operators. At specified points, a charge would be imposed on capital investment entering the United States. For example, suppose the U.S. trade deficit exceeded one percent of GDP over the preceding twelve months. That would trigger automatic imposition of a MAC of, say, 50 basis points on the value of incoming foreign capital. The rate might increase if the deficit became larger or persisted for another six months. Of course, the rate would decline as the trade deficit declined so that it would again be zero once the trade deficit fell below one percent of GDP. The system would essentially be automatic and would be administered by the Fed.
A set rate for all capital inflows would discourage short-term speculation. But because such investment comes only once, stays put, and yields higher returns than speculative flows, it would impose only a minuscule burden on direct foreign investment. The charge would be collected electronically and automatically by the computer systems already existing in the banks that handle most cross border U.S. financial transactions. The funds would be transferred to the U.S. Treasury where they would be deposited into an American International Competitiveness Account (AICA) that would be dedicated to investment in R&D, the National Network for Manufacturing Innovation, worker training, adjustment assistance programs. Such funds could also be used for infrastructure development, to offset costs associated with the enforcement of trade agreements, and to offset any increased costs of borrowing linked to MAC charges on the purchase of government debt obligations.
Because the U.S. trade deficit is a well-established and easily available objective statistic that directly reflects the misalignment of the dollar, it points to an easier path for identifying foreign currency manipulation. Currently, the designation of a foreign country as a currency manipulator depends on the difference between the market exchange rate and the “fundamental equilibrium exchange rate.” Under the MAC system, there would be no pejorative element in assigning the “manipulator” label, and thus there would be no need to consider a particular country’s strategic importance to the United States in taking action to balance trade. Furthermore, the MAC would be completely in accord with existing IMF and WTO rules and would act to reduce the number and intensity of anti-dumping and other trade disputes being adjudicated by that body.
The Offshoring Dilemma
The second major problem for the United States in the current global system is that of American foreign investment and the so-called offshoring of production and jobs. Often, countries with strategic economic policies use investment incentives as a way of causing the transfer of production from other countries to themselves, even when the original countries were perfectly internationally competitive. Destination countries may not have lower actual operating costs, but they may waive taxes for ten or twenty years, or provide free land for production and office facilities, provide utilities at a reduced rate, provide capital grants, and so forth. State benefits such as these have nothing to do with so-called comparative advantage and everything to do with indirectly subsidizing production in order to shift the location of comparative advantage to the sponsoring country. Although there is nothing illegal about this under WTO and IMF rules, it is at odds with the whole notion of competitive markets.
The United States is half in and half out of this game. It does not play at the federal level, but the individual states do play. Washington does not offer special benefits to, say, BMW, in order to persuade it to locate an auto assembly plant in the United States. But the state of Alabama or South Carolina may do so. The difference between these local benefits and an offer of investment benefits by another country like Ireland, Singapore, or France is that U.S. states simply do not have the resources or authority to make the kind of big offers that a national government can. For instance, Alabama cannot offer to suspend federal corporate income taxes nor does it have the resources to make the same kind of capital grants as a nation state. The United States, consequently, tends not to do as well in the game of attracting foreign direct investment and transfer of production as some other countries. Over time, this has the effect of creating a structural trade deficit for America and erasing what should be its natural centers of training and production.
On top of this, U.S. corporate tax rates are the world’s highest, and the United States is one of only two countries in the world that taxes the overseas earnings of its domestically incorporated companies. Thus GM pays U.S. taxes on its earnings in Germany, but BMW does not pay German taxes on its earnings in the United States. As a result, the big accounting firms make a bundle by dreaming up schemes with names like the “double Irish” and “Singapore Sling” to enable global U.S. corporations to hoard earnings in tax shelters abroad rather than investing in productive activity in America.
There are actually rather straightforward solutions to these problems. One is to stop taxing the foreign earnings of U.S. corporations, and the other is to reduce U.S. effective corporate tax rates from the current 39 percent to somewhere between 15 and 20 percent. This may look like a big tax cut for the global corporations, but as a practical matter, it would actually increase tax revenue by negating all the tax avoidance schemes that now keep actual (as opposed to potential) corporate tax revenue at very low levels. A move by the U.S. in this direction would put enormous pressure on virtually all other countries to adopt similar rates. Washington should, therefore, use this kind of a tax law shift to negotiate a global agreement on corporate tax rates under the WTO.
The second solution is for Washington to establish a war chest with which to respond in kind to the investment incentive offers of other countries. There is precedent for this. In the late 1980s and early 1990s, the United States countered foreign export subsidies by creating a fund and striking back in kind. Simultaneously, Washington led an initiative for a global agreement limiting export subsidies that eventually was adopted as part of the creation of the WTO. Exactly the same kind of effort is now called for to solve the problem of investment incentives.
A third issue of this kind is that of investment driven by conditional market access. Some countries effectively pressure global corporations to transfer technology and production to them as a condition of market access. Of course, this is not a matter of law because any such law would be illegal under WTO rules, but it is a matter of practical and political reality. Washington should closely monitor investment in such jurisdictions and apply counterpressure when conditional market access measures are detected. Such counterpressure could include the withholding of certain export licensing permits on high technology relating to national security, or quid pro quo measures imposed on the corporations of the country in question.
Another major tax issue is that of value-added taxes (VAT). Although the United States does not have a VAT, almost all of its trading partners do. A VAT works by imposing a tax on the value added to a product or service at each step of production. Typically, it amounts to about 20 percent of the end value of the product. In effect, it is a kind of sales tax that is generally rebated to the producer on exports and imposed on imports. Instead of a VAT, the United States imposes an effective tax of about 39 percent of corporate income on American companies. Under WTO rules, this kind of a tax cannot be rebated on exports or imposed on imports. While other countries also have corporate income taxes, the rates are usually much lower than those of the United States. Thus, in practice, the VAT imposed by foreign countries tends to function as a kind of tariff on imports from the U.S. while their VAT rebates function as a subsidy for exports. For years, Washington has tried to persuade its trading partners to accept various remedies, but all to no avail. Since it cannot beat its trading partners in this arena, Washington should join them. The United States should adopt its own VAT system. Not only would this be a major step toward balancing U.S. trade and creating increased investment and jobs in America, it would also raise domestic revenue and be a major step toward balancing the federal budget.
The U.S. might also consider unbinding specified import tariffs. Immediately raising any tariff could give rise to outcries of “trade war,” counter-threats, and eventually legal retaliation. By contrast, simply unbinding tariffs could open the door to a series of renegotiations of multilateral, bilateral, and regional agreements without any immediate downside. In this way, the U.S. could redress specific grievances (such as Canadian dairy protectionism, back-door imports of third country beef cattle, and inadequate protection of intellectual property), raise existing legal standards (e.g., on labor, health and environmental standards, industrial subsidies, and the functioning of state-owned enterprises), and, for the first time, achieve effective, enforceable restrictions on issues such as currency misalignment.
Another part of this trade and globalization reform package would be a program to deal actively with the excess capacity and dumping that inevitably arise from the industrial and export led growth policies of key U.S. trading partners. The U.S. secretary of commerce should initiate investigations under Section 232, the national security clause of the trade law, to determine when U.S. industries are being damaged by global excess capacity and should impose charges to halt such activity. At the same time, the secretary should be actively negotiating with the countries having such policies to restrain new investment in industries already suffering from gross excess capacity—such as the steel industry, in which China alone has enough capacity to supply most of the world’s needs. In extreme situations, the U.S. could declare an emergency under the International Economic Emergency Powers Act. This approach would involve setting targets for a reduction in the U.S. current account deficit (perhaps on a semiannual basis) and authorizing the application of import tariffs in the event that the targets are not met.
Finally, there is the issue of foreign investment in the United States. In principle, investment is a good thing that creates jobs, rising productivity, and technological advance. But investment can also be predatory. It can be used by state-owned or guided enterprises to strip out technology, transfer production, and shift so called comparative advantage. The Committee on Foreign Investment in the United States should carefully monitor foreign investment from countries or corporations with significant industrial policies and state influence over investment to prevent any such predatory kinds of investment.
Together, these measures would dramatically change the course of America and of the world. They would greatly increase the growth, productivity, and dynamism of the U.S. economy. They would also end the dependence of America on continued borrowing from China, Japan, and other countries. In short, the United States would become richer, more secure, and more independent.