Friday, July 29, 2016

President Obama and the Broken Guantanamo Promise

With the Obama Administration finally releasing its drone strike casualty data (or a semblance thereof), it's a good time to take a look at another one of President Obama's signature first-term policies; the closure of the terrorist prison at Guantanamo in Cuba.

Let's start with this excerpt from a speech on national security that Barack Obama gave at the National Archives in Washington, D.C. on May 21, 2009, just five months after "Hope and Change" took office:

"The second decision that I made was to order the closing of the prison camp at Guantanamo Bay.  (Applause.)

For over seven years, we have detained hundreds of people at Guantanamo.  During that time, the system of military commissions that were in place at Guantanamo succeeded in convicting a grand total of three suspected terrorists.  Let me repeat that:  three convictions in over seven years.  Instead of bringing terrorists to justice, efforts at prosecution met setback after setback, cases lingered on, and in 2006 the Supreme Court invalidated the entire system.  Meanwhile, over 525 detainees were released from Guantanamo under not my administration, under the previous administration.  Let me repeat that:  Two-thirds of the detainees were released before I took office and ordered the closure of Guantanamo.

There is also no question that Guantanamo set back the moral authority that is America's strongest currency in the world.  Instead of building a durable framework for the struggle against al Qaeda that drew upon our deeply held values and traditions, our government was defending positions that undermined the rule of law.  In fact, part of the rationale for establishing Guantanamo in the first place was the misplaced notion that a prison there would be beyond the law -- a proposition that the Supreme Court soundly rejected.  Meanwhile, instead of serving as a tool to counter terrorism, Guantanamo became a symbol that helped al Qaeda recruit terrorists to its cause.  Indeed, the existence of Guantanamo likely created more terrorists around the world than it ever detained.

So the record is clear:  Rather than keeping us safer, the prison at Guantanamo has weakened American national security.  It is a rallying cry for our enemies.  It sets back the willingness of our allies to work with us in fighting an enemy that operates in scores of countries.  By any measure, the costs of keeping it open far exceed the complications involved in closing it.  That's why I argued that it should be closed throughout my campaign, and that is why I ordered it closed within one year...

We are currently in the process of reviewing each of the detainee cases at Guantanamo to determine the appropriate policy for dealing with them.  And as we do so, we are acutely aware that under the last administration, detainees were released and, in some cases, returned to the battlefield.  That's why we are doing away with the poorly planned, haphazard approach that let those detainees go in the past.  Instead we are treating these cases with the care and attention that the law requires and that our security demands."

In this speech, the newly minted President uses "Guantanamo" a total of 28 times.

Seven years later, what has happened?  SFA.  Here's what he had to say about Guantanamo in his State of the Union address on January 12, 2016:

"That's American strength. That's American leadership. And that kind of leadership depends on the power of our example. That’s why I will keep working to shut down the prison at Guantanamo. (Applause.) It is expensive, it is unnecessary, and it only serves as a recruitment brochure for our enemies. (Applause.) There’s a better way. (Applause.)"

That's it.  A single mention of Guantanamo and a very half-hearted, talking point mention at that.  

According to Close Guantanamo, since the prison opened on January 11, 2002, 779 prisoners have been held at the facility.  Of these, 690 have been released or transferred, nine have died, one has been transferred to the United States for trial and 79 are still being held with 29 of those being recommended for release.  Interestingly, of the 690 prisoners that have been released or transferred, 158 were released under the Obama Administration with there being a 15 month period between January 2011 and August 2013 in which no prisoners were released, a hiatus that was ended due to a prolonged hunger strike by a majority of the remaining prisoners, 45 of whom were force fed.  By December 2013, there were 164 men held at Guantanamo, the majority of which were held without charge.  Of the 79 remaining prisoners, 15 were cleared for release in 2009 by President Obama's Guantanamo Review Task Force yet, these men still languish in prison. 

Here is a list of the current prisoners, their country of origin and their current legal status:

The current president could always use an Executive Order to skittle past a reluctant Congress although that would likely lead to a series of unintended consequences for his other pet projects like gun control.  If, indeed, he is succeeded by the rather hawkish Hillary Clinton, although she has stated the following:

"“I support President Obama’s plan today to close the detention facility at Guantanamo Bay and finally close the door on this chapter of our history. Over the years, Guantanamo has inspired more terrorists than it has imprisoned. It has not strengthened our national security; it has damaged it. That’s why I backed closing Guantanamo as a Senator, and when I ran for President in 2008, as did both then-Senator Obama and Senator McCain. As President Obama’s Secretary of State, I appointed a special envoy and worked with our friends and partners around the world to repatriate or resettle prisoners, with all appropriate monitoring and security. Closing Guantanamo would be a sign of strength and resolve. Congress should implement President Obama’s plan as quickly and responsibly as possible.”

...she will likely face the same issues that her political master has faced over his seven plus years in the seat of power and may take the path of least resistance and leave things at Guantanamo as they are since this is obviously not one of her signature campaign issues.  On the other hand, if Donald Trump takes the Oval Office, here's what he's likely to do with the Guantanamo issue:

So, from all appearances, it looks like the current administration has frittered away any chance that the very existence of Guantanamo will continue to negatively impact the hearts and minds of America's enemies around the globe.  It appears that the Guantanamo prison facility is here to stay.

Thursday, July 28, 2016

A Cashless America

Updated January 2017

Over the past few months, with increasing frequency, I have been posting articles on negative interest rates, the shiny new, untried and unproven policy that has become the tool of choice for many of the world's central bankers.  While I don't want to sound like a tin foil hat-wearing conspiracy nut, in order to successfully implement a negative interest rate policy, central banks will have to prevent the sweaty masses from hoarding cash.  The only way to do this is to entirely abolish cash in all forms, otherwise, consumers will merely withdraw their funds from the banking sector, which will leave banks in the unenviable position of not being able to charge their customer base for "storing" their cash in bank accounts and other forms of saving.  

With my theory in mind, I want you to take a look at two recent polls by Gallup, America's preeminent pollster regarding the use and future of cash in American society.  In the first poll, Gallup looked at what percentage of Americans still used cash for purchasing retail items.  They found that the percentage of consumers using cash for all or most retail transactions has shrunk from 36 percent in 2011 to 24 percent now, a drop of 33.3 percent.

Here is a more detailed breakdown:

The percentage of Americans who now use cash for either none or some of their purchases has risen from 43 percent in 2011 to 53 percent in 2016.

Let's look at how age impacts the use of cash.  Here is a detailed breakdown showing the percentage of each of three age ranges that use cash for all or most of their purchases of retail items, comparing the results from 2011 to those in 2016:

Over the five year span, the percentage of Americans between the ages of 23 and 34 who use cash for most or all of their purchases has dropped from 39 percent in 2011 to 21 percent in 2016.  This is largely because younger Americans have embraced cashless payment technology at a higher rate than their older counterparts.

Now, let's look at part two of Gallup's research into cash.  In the second poll, Gallup asked the following question:

"How likely do you think it is that in your lifetime the United States will be a cashless society, in which all purchases are made with credit cards, debit cards and other forms of electronic payment?" 

Here are the results:

Very likely - 30 percent
Likely - 32 percent
Unlikely - 25 percent
Very Unlikely - 11 percent

Interestingly, strong majorities in all age groups stated that they could see a time when America was a cashless society; 58 percent of those 65 years of age and older and 63 percent of those aged 18 to 29 years of age believed that American society would become cashless.

Here is a table showing how people in each age range deal with having cash on hand and how comfortable they are without having any cash on hand:

The oldest Americans, 65 years of age and older, are much more likely to have cash on hand at all times than their younger counterparts and are far less comfortable with the prospect of not having cash than their younger counterparts.

Here is a table showing how much cash each age group generally carries:

Those Americans in their peak earning years of between 30 and 49 are more likely to have more cash on their person than their younger or older counterparts.  

This research is a negative interest-rate central banker's dream come true.  Americans are less and less enamoured with cash as the years pass and it will be a far simpler process to wean consumers off of cash now than it would have been a decade or decades ago.  The generation that used cash for most of their daily retail needs is quickly departing this earthly orb and with a young generation who has grown up using plastic, e-money and other forms of payment rapidly becoming the new consuming generation, policy makers may find that there is far less resistance to abolishing the use of paper and worthless metal currency than one might hope.

Tuesday, July 26, 2016

Political Patronage, Democratic Party-Style

The recent dump of DNC emails thanks to Wikileaks has provided the mainstream media with a glimpse inside the functioning of the Democratic Party during an election cycle.  One email that received relatively little attention was this one:

This email thread, originating from the desk of Rebecca Herries on May 6, 2016, requests names from other members of the DNC including that of Jordan Kaplan, National Finance Director of the DNC, for possible attendance at the United State of Women Summit to be hosted by the White House on June 14, 2016.  If you follow the thread up, you will notice that the DNC was allotted only 25 tickets in total for the event and that they had "tons of requests for people to submit (their names)".

For your illumination, here is a link to the United State of Women website.  Speakers to the 2016 inaugural edition included Oprah Winfrey, Gloria Steinem, Michelle Obama, Tina Rey and Meryl Streep.  If you happen to be interested enough, here is an extremely lengthy video that provides you with a glimpse of what the movement is about:

Here is a complete list of speakers:

I am kind of surprised that they didn't have Bill Clinton as a keynote speaker, offering up his opinions on how to really treat a lady like a lady.

The United State of Women advocates on the following issues:

1.) Equal pay/economic empowerment for women

2.) Health and wellness for women

3.) Educational opportunities for women

4.) Violence against women

5.) Entrepreneurship and innovation for women

6.) Leadership and civic engagement for women

Now that you have that background, let's go back to the subject of this posting, the email thread from the DNC dated May 6, 2016.  We already know that tickets were almost impossible to get and that there was only a very small allotment for DNC staffers to give out.  Who would they pick?  I suspect that while you won't recognize the women by name, you will have a pretty good idea of why they are picked by the DNC.  On May 9, DNC Finance Director, Zachary Allen, emailed DNC Director of Data and Strategic Initiatives, Daniel Parrish, stating the following:

"I trust your judgement - any women who've given to us"

This was followed up with this response:

"So she has Judith Gibbons, Sarah Kovner, and Mina Malik on the list for WLF support. I've submitted Anne Hess and Leslie Lewis and she's going to try to add them, but she hasn't heard from CA yet so there may not be room. Will it be an issue for you if either of them don't make it in?"

Let's look at the first name on the list, Judith Gibbons a retired high school teacher from Hunter College who is married to hedge fund researcher, Francesco Scattone.  Here's a screen capture from Open Secrets showing her political donations in the 2016 cycle:

Hasn't Ms. Gibbons been a busy donor in this cycle?  No wonder she was on the list of potential invitees!  Interestingly, her name also appears on this list that appears to be a spreadsheet that was going to be used as a template for offering positions on boards and commissions in the Clinton II Administration as shown on this email:

...and this email:

Let's look at the donations from the second name on the list, Sarah Kovner, a senior research scholar at the Arnold A. Salesman Institute of War and Peace Studies at Columbia University:

Sarah Kovner was also a bundler for Barak Obama in 2012And, lastly, let's look at the third name on the list, Mina Malik, the executive director of the Civilian Complaint Review Board who sued her boss, Richard Emery, for referring to her and another female attorney as "pussies":

The "Party of the People" certainly seems to thrive on the "you scratch my back with cash or cheque and I'll scratch your back with a favour" method of operation.  While this isn't really surprising, it is interesting to actually see it in writing, thanks to the Wikileaks DNC email release.  I guess you have to have an ample supply of green paper lying around that is destined for the coffers of the Democratic Party (more specifically, Hillary Clinton) if you hope to rise above the sweaty masses.

Monday, July 25, 2016

Super PACs 2016 - Awash with Cash

As has become increasingly apparent over the past two election cycles, wealthy Americans have become big players in American political theatre, especially after the  July 2010 federal court v. Federal Election Commission "gave birth" to Super PACs. Super PACs, aka independent expenditure-only committees, are allowed to raise unlimited funds from corporations (and their employees and executive teams), unions and other associations and are allowed to spend unlimited sums of money to either promote or advocate against political candidates.  They are to operate independently of a candidate (i.e. their spending must not be coordinated with any candidate) and, unlike the traditional PACs, they are not allowed to donate directly to any candidate.

Super PACs have become big business.  According to Open Secrets, so far in the 2016 election cycle,  Super PACs have raised a total of $936,510.815 and spent $442,431,629.  Here is a listing showing the Super PACs that have raised more than $1 million in the current cycle:

Here is a listing showing the Super PACs that have spent more than $1 million in the current cycle:

In terms of fundraising, Right to Rise which supported Jeb Bush raised the most money, hitting $121.146 million and spending $86.817 million.  This goes to prove that big money doesn't always guarantee political success.  In second place (and by a wide margin), we find Priorities USA Action, a pro-Hillary Clinton Super PAC that has raised $100.041 million and spent $36.297 million.  To give you a sense of the size of these donations and keeping in mind that we are still more than three months away from election day, in the last presidential election cycle, Restore Our Future, a pro-Romney Super PAC raised $153.742 million and spend $142.097 million, putting it into first place among all Super PACs in 2012.  American Crossroads, a conservative Super PAC funded mainly by Sheldon Adelson and Harold Simmons came in second place with revenues of $117.472 million and expenditures of $104.747 million and Priorities USA Action, a pro-Obama Super PAC raised $79.050 million and spend $65.167 million.

Let's look at the biggest funders (i.e. more than $1 million donated) of the number one fundraiser in the 2016 cycle, Right to Rise USA pro-Bush Super PAC:

I always find it interesting to see "homemakers" among the million dollar plus donors.  Unfortunately, those homemakers wasted seven figures on a candidate that didn't even make it into the top five when it came to the popular vote.

Now let's look at the biggest funders (i.e. more than $1 million donated) of the number two fundraiser so far in the 2016 cycle, the Priorities USA Action pro-Clinton Super PAC:

No homemakers listed there!  Among the names you see on the list is George Soros who has donated $7 million to Priorities USA Action alone, Cheryl and Haim Saban, the strongly pro-Israel couple, who have donated $10 million to Priorities USA Action alone and James Simons who has donated $7 million to Priorities USA Action.

Looking back in time, we can see how much the Super PAC movement has grown:

2010 Cycle

Raised - $89,179,293
Spent - $62,641,448

2012 Cycle

Raised - $828,224,700
Spent - $609.417,654

2014 Cycle

Raised - $696.011.919
Spent - $345,163,595

The 2016 cycle is already setting Super PAC records for both receipts and expenditures and, given that we are now down to two tightly ranked mainstream candidates in the final three months of the 2016 election cycle, you can bet that Super PACs will pass the one billion dollar mark in revenues for the first time.