POLITICO NIGHTLY: Sorry I broke the country

 

View in browser   BY ELLA CREAMER With help from Joanne Kenen Britain's Prime Minister Liz Truss attends a press conference. | Daniel Leal/Pool Photo via AP, File PANNED AND SEARED — Not long into her tenure, British Prime Minister Liz Truss’ chancellor, Kwasi Kwarteng, unveiled a catalog of unfunded tax cuts — the largest in 50 years — as part of a “Growth Plan.” Markets recoiled. The pound hemorrhaged value, almost reaching a historic parity with the dollar. Government borrowing costs spiked along with mortgage rates. The IMF stepped in to issue a sharp warning that the proposals in the so-called mini-budget would exacerbate the U.K.’s cost-of-living crisis. Prominent critics came out of the woodwork. Even President Joe Biden, holding a chocolate chip waffle cone in an Oregon Baskin Robbins, said that Truss made a “mistake,” and the consequences were “predictable.” On Friday, Truss fired Kwarteng, subbing in Jeremy Hunt — who went ahead and tore up most of what remained of Truss’ mini-budget on Monday. While markets are responding positively to the reversal in policy, Truss’ reputation remains in shreds. Tory MPs have publicly called upon her to resign, and many more are understood to have submitted letters of no confidence. Latest YouGov polling shows Truss’ net approval at -70 — the lowest in history, 17 percentage points below her disgraced predecessor Boris Johnson’s worst score and almost as low as the rating for Russian President Vladimir Putin. The mini-budget fiasco may or may not prove fatal to Truss, but the damage to the Conservative Party is wide and deep. “The government has completely lost its credibility on its ability to manage the economy and to be seen as a solid custodian of people’s money,” said Mark Leonard, director of the European Council on Foreign Relations. The public won’t forgive quickly, Leonard added, citing the plummeting popularity the Tories suffered after Black Wednesday, when a 1992 collapse of the pound forced Britain to withdraw from the European Exchange Rate Mechanism. “A cliche is that the Tory Party’s purpose is to be economically competent. If it loses that, people start to ask, ‘What’s the point in the Conservative Party?’” said Garvan Walshe, former national and international security policy adviser for the Conservatives. Indeed, a recent poll-of-polls predicted that Labour would seize a landslide 507 seats if a general election were held today, and the Tories would fall behind the SNP to third place, with 48 seats. In an interview Monday, Truss apologized for “mistakes” made, claiming that she had “fixed” them. She also vowed to “lead the Conservatives into the next general election,” scheduled for January 2025 at the latest. Beyond the domestic calamity, the Conservatives face an uphill battle convincing the rest of the world that the U.K. is a country to be taken seriously. The mini-budget drama has been “extremely damaging to British reputation abroad,” Leonard said. Global expectations are that U.K. macroeconomic policymaking should be at least somewhat consistent and professional — yet Truss’ policy circus and the monthslong merry-go-round of job-hopping Tories smacks of a government losing control. Aside from Biden’s comments in the ice cream parlor, other leaders have weighed in, some tongue-in-cheek: The Greek Prime Minister, Kyriakos Mitsotakis, told the Sunday Times: "If you need experience in dealing with the IMF, we are here to help!" The Egyptian delegation at a D.C. IMF meeting reportedly joked that their pound had brighter prospects than the British counterpart. But behind every joke there is some truth; mini-budget fallout has “created a sense in many international debates that Britain is now like an emerging economy,” Leonard added. The recent fiasco is compounded by previous knocks to the U.K.’s global credibility — notably, Brexit. “Truss and her team hadn’t really understood how Britain’s international reputation had already been damaged by Brexit,” said Walshe. While the Conservatives may have been able to get away with the raft of tax cuts pre-Brexit, the U.K. is now “associated with a more unreliable type of political economy,” he added. Biden, in particular, has been trying to move away from the sort of Reaganite economics reflected in the “Trussonomics” mini-budget, said Leonard. In this way, the plan’s utter failure should reassure America that trickle-down policies are a no-go in the current economic climate. Whether Truss is ousted or not, the Conservatives face a reputation struggle domestically and globally. Rebuilding trust begins at home: By and large, governments that “have strong support from the population have more credibility on the international stage,” said Leonard. Projecting “stability and policy continuity,” said Walshe, will also be important. Yet that is unachievable as long as the domestic situation remains volatile. Probabilities based on Betfair Exchange wagers give a 1-in-3 chance that Truss will stay in Downing Street for the remainder of the year. Just six weeks into her premiership, she has managed to become the least popular prime minister in recent history. In aiming at “ Britannia Unchained ,” the U.K.’s prime minister has done nothing less than forge her own cage. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author on Twitter at @ella_louise_c .   NEW AND IMPROVED POLITICO APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. With a fresh look and improved features, the sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. Already a POLITICO app user? Upgrade today! DOWNLOAD FOR iOS  – DOWNLOAD FOR ANDROID .     FROM THE HEALTH DESK Former President Barack Obama, former first lady Michelle Obama, President Joe Biden and first lady Jill Biden. | Kevin Dietsch/Getty Images CLOSING LOOPHOLES — Back in 2020, Biden beat competitors for the Democratic nomination by promising to take a step-by-step approach to improving the Affordable Care Act, rather than scrapping it for Medicare for All. Despite skepticism, Biden has expanded eligibility and subsidies for what you might call “Obamacare-For-All-Who-Need-It.” The administration took another step a few days ago, closing the so-called Family Glitch . It didn’t get a lot of attention given the flood of news, but it’s a significant change to the 2010 health law, emails Joanne Kenen , now the Commonwealth Fund Journalist in Residence at Johns Hopkins Bloomberg School of Public Health. The “Family Glitch” never made a whole lot of sense — except that without it, Obamacare would have been even more expensive and therefore even harder to pass back in 2009-2010. The ACA required most businesses to give their workers an affordable option (about 9.5 percent of income). But they didn’t have to make it affordable for workers’ spouses/partners and kids. And the dependents couldn’t go on the Obamacare exchanges and get federal subsidies as long as they had an option — even an unaffordable one — through a family member’s employer. The Biden administration closed the “glitch” via an executive rule. (Presumably someone will try to challenge it in court, but as of this writing, we’re not aware of a case.) So if Ms. Smith has good coverage at work but Mr. Smith and the little Smiths do not, they can now get an ACA-subsidized plan. Around 5 million people fell in the glitch, but many found other coverage, sometimes through the second person’s job. The administration anticipates about a million of them will get covered (or get covered more affordably) through the ACA in 2023. Open enrollment starts Nov. 1. This basically means that Biden is getting closer and closer to universal coverage — except for several million low-income people who live in mostly southern states that still refuse to expand Medicaid, a dilemma the Democrats had hoped to address in their doomed Build Back Better legislation. But the ACA changes that did get enacted have improved coverage; Biden noted the other day that the uninsured rate for Americans is at a record-low 8 percent. The challenge from here — for both individuals and the government — remains cost and affordability of care, which generally remains the most expensive — but not the best — in the world.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today .     POLL WATCHER 28 percent The percentage of New York likely voters who believe that crime is the most urgent issue facing the state, according to a new Quinnipiac University poll . That’s the highest percentage of any issue; inflation had the second-highest number at 20 percent. Republican gubernatorial candidate Lee Zeldin has made crime the centerpiece of his agenda; the Quinnipiac poll has Zeldin polling at 46 percent compared with Democratic Gov. Kathy Hochul’s 50 percent in the deep-blue state. Only 6 percent of respondents to the poll said that abortion — which Hochul has cut the most ads about — was the most pressing issue. WHAT'D I MISS? — Biden pledges to sign abortion rights into law if Dems hold Congress: Biden today promised that the first bill he’ll send to the next Congress will be legislation to reinstate the abortion protections of Roe v. Wade . “Your right to choose rests with you, and if you do your part and vote, Democratic leaders of Congress, I promise you, will do our part. I will do my part,” he said. Biden acknowledged that his plans are contingent on Democrats holding the House and increasing their majority in the Senate. As such, his new vow appears aimed squarely at energizing Democrats to turn out in force in the upcoming midterm elections. — Oz closing in on Fetterman in Pennsylvania Senate race: Republican Mehmet Oz has narrowed Democrat John Fetterman’s lead in Pennsylvania’s bare-knuckle Senate election, and the two candidates are now polling inside the margin of error, according to a new survey shared exclusively with POLITICO. Fetterman is slightly ahead with 48 percent of likely voters, while Oz has 46 percent, the poll by AARP found. That’s a shift in Oz’s direction since June, when Fetterman, the state’s lieutenant governor, was leading by six percentage points in the AARP survey. — Biden administration to tap oil reserve again ahead of midterms: The Biden administration plans to announce a release of oil from the Strategic Petroleum Reserve in a bid to drive fuel prices down, two sources familiar with the plans said. The White House will release 10 million to 15 million barrels from the reserve as part of an existing plan, announced in March, to release 180 million barrels of crude oil into the market throughout the year, according to two industry people granted anonymity to discuss confidential discussions with the administration. — Inflation silver lining: Tax changes could fatten paychecks: Millions of Americans could see a bump in their paychecks next year thanks to new inflation adjustments to the tax code. Because of soaring prices, the size of the standard deduction will jump 7 percent next year to $27,700, the IRS announced today. The maximum amount people can put in health care flexible savings accounts will climb to $3,050 from $2,850. And though the agency cannot change income tax rates, the earnings threshold at which they begin will go up. AROUND THE WORLD Members of the Tigrayan community protest against the conflict between Ethiopia and Tigray rebels in Ethiopia's Tigray region, outside the the United Arab Emirates embassy in Pretoria, South Africa on Oct. 12. | AP Photo/Themba Hadebe WAR AND PEACE TALKS — The Ethiopian government says it has taken back control of three towns in the northern region of Tigray, according to The Associated Press. Since August, there has been a resurgence in fighting between the Tigray People’s Liberation Front and the Ethiopian government. The conflict began in November 2020, and a cease-fire had been in place since March. And now, Ethiopian government authorities are saying that they are determined to retake immediate control of airports and other essential infrastructure in Tigray. Shire, a major town in the northwest of Tigray, was captured by Ethiopian forces on Monday. According to a statement from the Ethiopian government, the offensive was completed “without fighting in urban areas,” adding that authorities will coordinate with humanitarian groups in the areas that have come under the control of Ethiopian forces. Tigrayans around the world have protested conflict in the area. Ethiopia is under pressure to begin the peace talks that were set to kick off this month in South Africa. They were delayed because of logistical issues. NIGHTLY NUMBER 30 percent The percentage of power stations in Ukraine that Russia has destroyed in the last week, according to Ukrainian President Volodymyr Zelenskyy. The destruction has led to “massive blackouts” around the country. RADAR SWEEP PROPHET OF DOOM — David Sacks, PayPal’s founding chief operating officer, might not be a household name like Elon Musk. But he’s become increasingly popular across conservative media . He’s also become a significant Musk backer and a leader in the space of a new conservative movement that’s both isolationist and nationalist, worried about the deep state and angry about the swamp. Read Jacob Silverman ’s deep dive into Sacks and his world in The New Republic. PARTING WORDS TikTok has ballooned in popularity around the world. | Sean Gallup/Getty Images SCROLL HOLE — TikTok has recently conquered the internet. The app now gets more visits than Google. Its average American viewer logs on for 80 minutes a day. And two-thirds of our teens use it. Once considered a delightful boon that entertained and diverted, the time-wasting app has recently followed the path of other new media sensations to become regarded as a bane. A cultural sensation of the 2020s, TikTok has also become the internet’s whipping boy, shamed by governments and advocates more often these days than even Facebook. Jack Shafer argues that it doesn’t deserve all of the hate. That it’s a new form of media going through a period that many others have over the course of history — from radio to television to other social media. Is our fixation on TikTok overblown ? Did someone forward this email to you?  Sign up here .   Follow us on Twitter Charlie Mahtesian @PoliticoCharlie Calder McHugh @calder_mchugh Naomi Andu @naomiandu   FOLLOW US

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Three Business Days after Credit Suisse Was Named “Credit Derivatives House of the Year,” Its Own Credit Derivatives Blew Out

 

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Three Business Days after Credit Suisse Was Named “Credit Derivatives House of the Year,” Its Own Credit Derivatives Blew Out

By Pam Martens and Russ Martens: October 18, 2022 ~

Credit Suisse presents a cautionary tale about creating so much innovation in the realm of credit derivatives that one gets named “Credit Derivatives House of the Year.” That award might sound like a good thing to traders who make their living cooking up and trading exotic derivatives but it might sound like a very bad thing to pension funds and mutual funds who own big chunks of the stock and bonds of that bank and remember how credit derivatives blew up much of Wall Street in 2008.

On September 28, Risk.net named Credit Suisse the “Credit Derivatives House of the Year.” Three businesses days later, Credit Suisse saw its own Credit Default Swaps blow out to more than 300 basis points and some of its own bonds trade at 63 cents on the dollar. Simultaneously, its shares traded at an intraday low of $3.70 in New York on October 3, closing at $4.01, and putting it in crisis management mode.

On the same day that its stock, bonds and Credit Default Swaps were exhibiting severe stress, Reuters decided to run an article in the early afternoon reminiscing on the serial scandals that have plagued the global bank: words like “cocaine,” “kickbacks,” “fraud,” and “spying,” reminded investment managers of just how voluminous and varied Credit Suisse’s scandals had been of late.

Losing billions of dollars on derivatives and being scandalized in news headlines is apparently no barrier to getting an award from Risk.net.

In late March and early April of last year, Credit Suisse lost $5.5 billion from the highly-leveraged, highly concentrated stock positions it was financing via tricked-up derivatives for Archegos Capital Management, the family office hedge fund of Sung Kook “Bill” Hwang. Archegos blew up on March 25, 2021 after it defaulted on margin calls to the banks financing its trades. (See our report: Archegos: Wall Street Was Effectively Giving 85 Percent Margin Loans on Concentrated Stock Positions – Thwarting the Fed’s Reg T and Its Own Margin Rules.)

To cover their backsides, the Board of Credit Suisse decided to hire the BigLaw firm, Paul, Weiss, Rifkind, Wharton & Garrison, to conduct an internal investigation of the matter. On July 29, 2021 Paul Weiss issued a 165-page report on its version of what happened. Paul Weiss found no fraud had occurred — just zombie risk management at a Global Systemically Important Bank (G-SIB). (We’re not sure if fraud might have been a less troubling determination.)

This is how the Paul Weiss report portrayed the zombie risk managers at Credit Suisse:

“The Archegos-related losses sustained by CS [Credit Suisse] are the result of a fundamental failure of management and controls in CS’s Investment Bank and, specifically, in its Prime Services business. The business was focused on maximizing short-term profits and failed to rein in and, indeed, enabled Archegos’s voracious risk-taking. There were numerous warning signals—including large, persistent limit breaches — indicating that Archegos’s concentrated, volatile, and severely under-margined swap positions posed potentially catastrophic risk to CS. Yet the business, from the in-business risk managers to the Global Head of Equities, as well as the risk function, failed to heed these signs, despite evidence that some individuals did raise concerns appropriately.”

And this:

“…a Prime Services business with a lackadaisical attitude towards risk and risk discipline; a lack of accountability for risk failures; risk systems that identified acute risks, which were systematically ignored by business and risk personnel; and a cultural unwillingness to engage in challenging discussions or to escalate matters posing grave economic and reputational risk. The Archegos matter directly calls into question the competence of the business and risk personnel who had all the information necessary to appreciate the magnitude and urgency of the Archegos risks, but failed at multiple junctures to take decisive and urgent action to address them.”

The report from Paul Weiss sounds very similar to the findings of the U.S. Senate’s Permanent Subcommittee on Investigations’ on how JPMorgan Chase dodged risk limits and lost more than $6 billion using bank depositors’ money to make high risk derivative trades in the London Whale scandal of 2012-2013. That 300-page report found the following:

“In the first three months of 2012, when the CIO [Chief Investment Office] breached all five of the major risk limits on the Synthetic Credit Portfolio [SCP], rather than divest itself of risky positions, JPMorgan Chase disregarded the warning signals and downplayed the SCP’s risk by allowing the CIO to raise the limits, change its risk evaluation models, and continue trading despite the red flags.”

And, of course, there were also the zombie risk managers at Morgan Stanley who allowed Howie Hubler to lose at least $9 billion on derivative trades following the 2007-2008 financial crisis. Bestselling author, Michael Lewis, wrote about Hubler’s losses in his book, The Big Short, describing Hubler as a star bond trader at Morgan Stanley, making as much as $25 million in one year. Hubler was one of the Wall Street traders who made early bets that lower-rated subprime bonds would fail. He used credit default swaps to make his bets. But because he had to pay out premiums on these bets until the collapse came, he placed $16 billion in other bets on higher-rated portions of the subprime market, according to Lewis. When those bets failed, Morgan Stanley lost at least $9 billion.

The really big problem in all this hubris is that Credit Suisse, JPMorgan Chase and Morgan Stanley are not just trading houses; each of these financial institutions accept deposits from the public. In the case of JPMorgan Chase and Morgan Stanley, their deposit-taking units are federally-insured and backstopped by the U.S. taxpayer. In the case of Credit Suisse, its New York branch accepts deposits, but they are not insured.

In the resolution plan for Credit Suisse that it filed with the Federal Reserve, it writes:

“Our New York Branch is not a member of, and its deposits are not insured by, the FDIC. CS’ biggest U.S. presence is through its broker-dealer related businesses. Typically broker-dealer activities are resolved with a rapid runoff of the businesses as long as the resolution strategy is supported by adequate operational capabilities, such as the ability to transfer client accounts to peer institutions while causing minimal disruptions to the broader financial markets.”

According to an historical timeline on the Credit Suisse website, it was previously known as Schweizerische Kreditanstalt, which was eventually shorted to SKA. The timeline notes that SKA’s New York Branch was granted a license to accept deposits in 1964.

Wall Street trading houses accepting uninsured deposits resulted in the banking crisis of the early 1930s when thousands of banks failed and people rushed to pull their money from uninsured banks. Congress passed the 1933 Glass-Steagall Act banning the combination of investment banks/brokerage firms with federally-insured banks. (Federal deposit insurance was also created under the Glass-Steagall Act to restore confidence in the U.S. banking system.) The Glass-Steagall Act served the nation well for 66 years until its repeal under the Bill Clinton administration in 1999, allowing trading firms to merge with federally-insured, deposit-taking banks. It took just nine years without Glass-Steagall for Wall Street to collapse in a replay of the crash of 1929.

It’s long past the time to restore Glass-Steagall and permanently separate the nation’s taxpayer-backstopped banks from the Wall Street casino.

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RSN: FOCUS: Elon Musk Can't Stop Peddling Putin Propaganda

 

 

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FOCUS: Elon Musk Can't Stop Peddling Putin Propaganda
Ryan Bort, Rolling Stone
Bort writes: "Elon Musk has taken some time off from his protracted legal battle with Twitter to try to end the war in Ukraine."

The world's richest man thinks the only way to avoid nuclear annihilation is to give in to Russia

Elon Musk has taken some time off from his protracted legal battle with Twitter to try to end the war in Ukraine. The world’s richest man earlier this month drew intense scrutiny for advocating a peace agreement that involves recognizing Crimea as part of Russia. He pushed Vladimir Putin’s claim of dominion over the Ukrainian territory again on Monday, arguing on Twitter that Russia’s relationship to Crimea is comparable to America’s relationship to Hawaii.

“Whether one likes it or not, Crimea is absolutely seen as a core part of Russia by Russia,” he wrote. “Crimea is also of critical national security importance to Russia, as it is their southern navy base. From their standpoint losing Crimea is like USA losing Hawaii … Pearl Harbor.”

He made the Hawaii comparison again later. “Crimea *is* seen as a crucial part of Russia by Russia, much as Hawaii is seen as a crucial part of America,” he wrote.

The comments came on a thread that began with Musk praising an op-ed, titled “Neocons and the Woke Left Are Joining Hands and Leading Us to Woke War III,” that bashes the “woke mob” for “canceling” Musk for his plan to recognize Crimea as belonging to Russia.

Musk’s contention that “Crimea is absolutely seen as a core part of Russia by Russia” is certainly true — at least if by “Russia,” you mean Putin and his fellow hardliners. But this is kind of like saying Trump “absolutely” sees the 2020 election as rigged. Putin also believes Russia should have control of the rest of Ukraine, as well as a host of other delusions predicated on the idea that anything he feels is correct — and anyone who tries to say different is a tool of the West as it seeks to corrupt the divine purity of a regime that has spent 2022 bombing hospitals.

Ukraine does not belong to Russia. Crimea doesn’t, either. The territory was recognized internationally as part of Ukraine when Russia invaded the nation to illegally annex it in 2014. Russia has not been faring well since invading Ukraine earlier this year, and many, including Musk, are worried about how Putin may respond should his prospects to take over Ukraine continue to dim. Musk says the West should cow to Putin’s demands in order to avoid nuclear annihilation.

Musk is carrying Putin’s water by broadcasting the idea that the West should just let Russia keep control of Crimea. “It’s very clear that Elon Musk is transmitting a message for Putin,” Fiona Hill, a former National Security Council official who specializes in Russia, told Politico in an interview published Monday. “Putin plays the egos of big men, gives them a sense that they can play a role,” she added. “But in reality, they’re just direct transmitters of messages from Vladimir Putin.”

Musk supported Ukraine early in the war by sending the nation thousands of Starlink terminals that allowed it to access the internet as it fought off Russia’s invasion. He said last week that his company SpaceX could not fund their use “indefinitely,” before appearing to change his mind a few days later. “The hell with it … even though Starlink is still losing money … other companies are getting billions of taxpayer $, we’ll just keep funding Ukraine govt for free,” he tweeted on Saturday.

Ukrainian President Volodomyr Zelensky has praised Musk for the infusion of terminals allowing internet access, but didn’t take kindly to his recent tweet suggesting Ukraine should cede to Russia’s demands over Crimea. “Which @elonmusk do you like more?” he wrote on Twitter along with a poll, the two responses being “One who supports Ukraine” and “One who supports Russia.”

Russia, however, welcomed Musk’s proposal, with Kremlin spokesperson telling reporters it was a “very positive” development, according to The New York Times, adding that it’s “absolutely impossible” to end the war “without fulfilling Russia’s conditions.”

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October 17, 2022 HEATHER COX RICHARDSON

 

October 17, 2022 Heather Cox Richardson Oct 18 Today the Biden administration opened the website to apply for relief from student debt, a policy that is expected to benefit 43 million Americans directly and others tangentially as debt relief frees up family resources. The administration also announced that the Food and Drug Administration’s final rule concerning Biden’s Executive Order on Promoting Competition in the American Economy went into effect today, making hearing aids available over the counter and thereby lowering costs for the devices by as much as $3,000 a pair.  The administration has also recently achieved a historic diplomatic victory by brokering an agreement between Israel and Lebanon, two countries that have been formally at war since 1948, to establish a maritime boundary.  But all that news got drowned out by the continuing drama coming from the Republican Party. As Republican political strategist Sarah Longwell wrote in The Bulwark today, the Republican Party is facing an “extinction event,” having been taken over by former president Trump to become the right-wing MAGA Party. As Longwell wrote, “In the Republican party as it is currently constituted, political power emanates completely and totally from Donald Trump.”  Longwell explains that Republicans have been stuck in a “Triangle of Doom,” in which Republican base voters want their media to confirm their biases. Fringe media outlets confirming those biases gain traction. In order to reach voters, Republican politicians have to go on those fringe outlets, and that, in turn, normalizes fringe media. Over time, this triangle radicalized the party until 70% of Republicans now believe the lie that Democratic president Joe Biden didn’t win the 2020 election.  “Say goodnight,” she writes. “The party’s over.” All but the MAGA Republicans have left. “The Good Republicans are gone,” Longwell writes. “Probably for good.” Today, Fox Nation began a mock trial of Hunter Biden, with reality TV personality Judge Joe Brown saying that “something’s way wrong here, way wrong,” and suggesting that the legal investigations into Trump and the lack of them into the Bidens give the appearance that Trump and Biden “don’t live in the same country.”  Hunter Biden is not in the government, of course, and is not under indictment; Trump and the Trump Organization are embroiled in a number of lawsuits that suggest the former president and his associates saw government service not as a way to improve American lives but as a way to make money. Ginning up a show trial for Hunter Biden seems an attempt to rile up the base and undercut the many legal issues in the news concerning the former president. But such a show trial is also a fundamental rejection of the rule of law, suggesting that the law is simply a political tool to use against enemies rather than a body of laws before which we are all treated equally. There is a reason Trump supporters are trying to undermine the rule of law. In New York, Trump’s wealthy friend and financial backer Thomas Barrack is on trial for selling his access to Trump to the leaders of the United Arab Emirates in exchange for investment money. The U.S. government says that Barrack fed confidential information to UAE leaders while permitting them to shape Trump’s speeches and policies. In the first three years of Trump’s term, Saudi Arabia and the UAE invested about $1.5 billion in Barrack’s real estate company.  In Northern Virginia the trial of Igor Danchenko for making false statements to the FBI, led by John Durham and other holdovers from the Trump Justice Department, suggests the Trump administration played fast and loose with national security in an attempt to undermine the Russia investigation. Witnesses in the trial have testified that the “highly unusual” decision by Trump attorney general Bill Barr to declassify an interview with Danchenko and share it with Senator Lindsey Graham (R-SC) hurt national security. Graham promptly made a summary of the interview public to bolster the argument that the Russia investigation was “corrupt.” But that release meant that internet hobbyists quickly figured out who Danchenko was, exposing a key FBI informant as well as his friends and family in Russia.  This exposure for political reasons not only burned a key source, it weakened the ability of the U.S. to cultivate informants.  Last week, Drew Harwell of the Washington Post broke the story that Will Wilkerson, an executive who had been in on the ground floor of Trump’s “Truth Social,” filed a whistleblower complaint against the company with the Securities and Exchange Commission last August 28. Wilkerson alleges that Truth Social and the special purpose acquisition companies (SPACs) enlisted to finance the media company behind Truth Social violated federal securities laws. The Trump Media and Technology Group and one of those SPACs, Digital World Acquisition Corporation (DWAC), have been under criminal investigation since the summer; Wilkerson’s cooperation should advance that case. Without laws, governmental office can be used simply as a way to amass money and power. Today the Select Subcommittee on the Coronavirus Crisis issued the third installment of its report. This one detailed how the Trump administration “engaged in an unprecedented campaign of political interference in the federal government’s pandemic response, which undermined public health to benefit the former president’s political goals.”  Angry that the Centers for Disease Control and Prevention called for masks and lockdowns, Trump and his aides attacked CDC scientists and suppressed reports. Political operatives downplayed the risks of the novel coronavirus and used the power of the CDC to achieve Trump’s political goal of shutting down legal immigration across the southern border. The administration also used “hundreds of millions” of dollars of CDC funds to “what amounted to a celebrity vanity campaign to ‘defeat despair and inspire hope’” before the 2020 election. Today, Carol D. Leonnig at the Washington Post wrote that records obtained by the chair of the House Oversight and Reform Committee, Representative Carolyn B. Maloney (D-NY), show that when Trump was in office, his company charged Secret Service agents as much as five times the government rate to stay in his hotels while providing protection for Trump and his family. Secret Service supervisors frequently asked for special waivers to enable them to pay rates higher than approved government guidelines.  Leonnig noted that billing documents representing “a fraction” of those expenses show that U.S. taxpayers paid at least $1.4 million to the Trump Organization for rooms at Trump properties, which he visited more than 500 times during his presidency and continued to visit with security after he left office.  Eric Trump took issue with the story, saying that the Trump Organization provided services to the Secret Service at the agents’ request, and that services were provided “at cost, heavily discounted, or for free.” “The company would have been substantially better off if hospitality services were sold to full-paying guests, however, the company did whatever it took to accommodate the agencies to ensure they were able to do their jobs at the highest levels.” — Notes: https://www.govinfo.gov/content/pkg/FR-2022-08-17/pdf/2022-17230.pdf https://www.mediaite.com/tv/fox-nation-holding-a-mock-trial-of-hunter-biden-with-judge-joe-brown-presiding-youll-never-guess-how-its-going/ https://www.washingtonpost.com/opinions/2022/10/17/biden-lebanon-israel-diplomatic-victory/ https://www.cnn.com/2022/10/17/politics/biden-student-loan-forgiveness-launch/index.html https://www.thebulwark.com/the-end-of-the-good-republicans/ https://www.theguardian.com/us-news/2022/oct/10/trump-ally-tom-barrack-trial https://www.nytimes.com/2022/10/13/us/politics/steele-dossier-national-security-fbi.html https://www.nytimes.com/2020/07/25/us/politics/igor-danchenko-steele-dossier.html https://docs-cdn-prod.news-engineering.aws.wapo.pub/publish_document/5c2a8163-b9f6-44e5-b2ba-16362ac79eea/published/5c2a8163-b9f6-44e5-b2ba-16362ac79eea.pdf https://www.cnbc.com/2022/07/01/trump-media-company-subpoenaed-in-federal-criminal-probe-of-spac-deal.html https://www.washingtonpost.com/technology/2022/10/15/truth-social-trump-animosity-whistleblower/ https://www.washingtonpost.com/nation/2022/10/17/trump-secret-service-hotel-rates-records/ https://coronavirus.house.gov/news/press-releases/clyburn-trump-cdc-redfield-caputo-report