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2017-07-12 07:00 by Karl Denninger
in Politics , 309 references
[Comments enabled]  

There is a rather interesting question that has developed with regard to Donald Trump Jr. and the Russians.

See, he met with one of them.  A Russian attorney, who claimed to have dirt on Hillary.

She didn't, and the conversation quickly turned to Putin's killing off the adoption of Russian orphans by Americans, which turned out to be a fruitless avenue as well, since this Russian lady really wasn't connected to the Kremlin at all -- although she was relatively powerful within Russian "circles in influence."

This has led critics to scream Russia! once again, of course, but raises a rather novel question that I've not really seen addressed.  Indeed, it may be, if tested, a case of first impression, and it's one that bears some attention for that reason.

The central point is this: It is illegal to knowingly solicit, or accept (either through knowledge or lack of reasonable inquiry), anything of value in respect to a US Federal political campaign from a foreign national.

I've been the Treasurer for a US House run, and am quite-aware of this law.  It's why you have to disclose who you are, and affirm that you're a US citizen when you give money to a campaign.  But it's not just money -- for example, when I ran ads for Kerry Bentivolio during his US House run I had to report my best estimate of their fair market value to his campaign.  That's because the ads are valuable; if he bought them he'd have to pay me, and therefore since I gave them to his campaign I had to document that (and he had to report it.)  If I had not been a US Citizen for him to accept that donation would have been illegal.

This is a materially-different matter though.  The lawyer didn't offer money, or advertising, or anything of that sort.  She offered information which Trump Jr. was prepared to accept and in fact made every effort to obtain.

Is information something falls under the definition of "something of value" and thus subject to this law.

I don't know, to be frank.

My first impression is "No", but I'm a long way from certain that's right, and I sure as Hell wouldn't take my own counsel on the legality of that impression.

The implications here are profound.  Much information is in fact gathered, held and processed by people who are not US Citizens, or firms controlled by non-US Citizens.  Is it illegal for a US political campaign to, for example, use a database of information that passes through and is processed by a company in England?

Is it illegal for a US political campaign to use a cloud computing platform that has part of its operation in other nations if any part of the data passes through or is contained upon said systems, and derives any of its value from the acts of foreign nationals?

I don't know.

But this question is not a "nothingburger", and is going to consume the political process and debate for quite some time.  I think maybe it should too, because there is little doubt that enormous amounts of political information pass through and derive at least some of their usefulness from people and entities that are not entirely of US allegiance and citizenship.

If it's unlawful for Trump Jr. to have had that meeting then it is, under the same argument, similarly unlawful for anyone running a political campaign to derive any benefit from the use of information processing (e.g. cloud computing, databases, graphics design, political intelligence, etc) or related services from any firm or entity that obtains any of the value in same from foreign nationals, including holders of H1b visas which of course instantly implicates every single large technology company in the United States.

This is going to be fun to watch.

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2017-07-02 07:00 by Karl Denninger
in Politics , 221 references
[Comments enabled]  

Folks, you really need to read this -- carefully:

Every 45 seconds or so, a neatly wrapped VanHeusen dress shirt destined for a J C Penney store in the United States drops off a new production line at a factory north of Vietnam's capital.


The wage for garment workers is $250 a month in Vietnam, compared to $700 in China, where TAL recently shut a factory for cost reasons.

That's $3,000 a year in Vietnam and $8,400 a year in China.

Can you live on $3,000 -- or $8,400?

Well, if you can't then you have two options when it comes to jobs in America:

1. Demand and enforce legal and political framework changes so the cost of living falls to the point that $3,000 is a viable living wage in America.


2. Demand and enforce wage and environmental parity tariffs so that it becomes uneconomic to shift the work there.

If you don't you will find that irrespective of one place (e.g. China) having wages rise over time, which has happened, the jobs will simply shift from one nation to another and it will be centuries before we run out of third-world ****holes in which to exploit people and try to extract more and more from you.

The only way to bring the jobs back is to make it uneconomic to move them.

It's not that complicated folks.

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2017-06-29 07:00 by Karl Denninger
in Politics , 264 references
[Comments enabled]  

I've long raised hell about the Libertarian Party's refusal to insist on two things:

1. Wage and environmental parity tariffs.  These are anti-exploitation tariffs.  They are one of my proposals to prevent people from dumping toxic waste in the air, water and ground as a means of making production in one place cheaper than the other and thus moving their manufacturing to that location, along with making the exploitation of workers through non-voluntary measures that amount to extortionate work arrangements unprofitable.

2. True medical system reform that stops medical extortion in this country.  I left the party formally during the 2012 election cycle over this issue.

Well, it's come up again.  The most-virulent attacks against my one sentence bill to stop medical extortion have come from..... Libertarians.

Let's note for the record the alleged non-aggression principle that Libertarians claim to profess: One shall not initiate aggression via force or fraud.

That leaves as perfectly-legitimate the exercise of self-defense.

The second principle is that any voluntary transaction is perfectly fine.

I agree with this provided that the transaction is truly voluntary.

Let's look at the current medical system.  It is a fact that if you show up at a hospital with no health insurance they will try to bill you at 2, 5, 10 or even 100x more than they will bill someone who has insurance, whether that insurance be private, Medicare or Medicaid.

Note that in every case we are talking about the same malady, the same procedure, the same drugs and the same people.  The only thing that changes the bill by a factor of, in some cases, 100x, is whether you did or didn't buy a service previously from some favored party.

Please explain how this does not fit the legal definition of extortion?  Does not "buy this or be bankrupted!" fit the definition?

There is no "bargaining" and there certainly is no consent either when you're flat on your back having a heart attack -- or if you were just bit by a snake.

What's even worse is that hospitals will allow and even encourage "out of network" doctors to, without the knowledge or consent of the customer, treat them when they know said charges will not be paid by the insurance company.  This is known as "balance billing" and in many states it can saddle with a bill for thousands or more without your consent.

Let's extrapolate these practices to a common purchase -- gasoline.

Let's say there's a hurricane coming.  There is a line of cars leaving town.  Some percentage of them are low on gas and thus will have stop to buy fuel.  Since Libertarians believe prostitution should be legal let's now have a gas station owner on said route who decides that when there is a hurricane coming if you're a woman the price of gasoline is one sex act per five gallons, paid in advance, and he will accept nothing else.

I will note that this does not violate legal tender laws (since there's no debt; you must pay before you pump -- or, perhaps it's better put that you must hump before you pump.)

How outrageous would you find such a practice?  What if it only applied to people who had SR-22 insurance -- that is, had previously driven drunk and been caught, or driven without insurance and been caught?  Or, perhaps it applied only to people who bought insurance from, oh, State Farm?

Now what if every gas station in town adopted the same policy -- or effectively all?  What if none of them would give you a price for the gas until after you put it in the car and all of them had similar policies?

This is the sort of******that takes place daily in the medical industry.  Maybe you think that it's not sex being demanded of you but I assure you that when you get a $200,000 bill for a snake bite you will sure feel like you got sexed -- and it wasn't pleasant either!

The Libertarian Party as a political party at both the State and Federal levels has refused to take this on.  Indeed the loudest pushback that I got on my proposed one-sentence bill to stop this extortion was from self-professed Libertarians!

I'm sorry folks -- this is why I can't call myself one.  The Democrats and Republicans, who I note also have refused to take this up, at least don't call me a communist or a promoter of a jackbooted government for putting forward a proposal that would stop practices that I believe fit the definition of extortion -- all of it -- in one single day.

Libertarians do, almost to an individual.

The Libertarian Party has destroyed any credibility it once had, and it's done so right here on this issue.  Snatching defeat from the jaws of victory, it has refused for the last two full Presidential cycles to take its alleged banner of "non-aggression" and actually demand it in any of the state or federal races I am aware of nor will any of the state and local party subdivisions take this banner and make it their key issue, arguing to fix this problem before and in preference to anything else.

In short the Libertarian Party has refused to take a 90% issue -- that is, one that would instantly win 90% of the vote and at the same time fully comply with its own internal policy and platform claims and make it the centerpiece of both its state and federal election cycle efforts.

Just one state that passed my proposed law would see an instant detonation of all "forced insurance" schemes in the medical realm.  Medical insurance companies would no longer be able to sell their products based on the fear of being bilked and bankrupted if you didn't buy them.  They would have to offer actual value for the price paid since for most people in most circumstances the option to simply pay cash at a reasonable and profitable price for the providers would immediately exist.

If there is a just purpose for government to exist in the first place it is to prevent entities, whether singular or in concert with others, from sticking you up when you have no effective means of resistance or refusal. If the government will not do that then there is no purpose to and no justification for government at all.

That the Federal and State government refuse to look at these actions, all taken in concert by providers on a near-universal basis, as worthy of investigation and sanction is an outrage.  That we actually need to codify this by separate statute is likewise outrageous, given that there is 100+ year old Anti-Trust Law found in 15 USC Chapter 1 which makes clear that any scheme to fix prices or tie sales where the result or intent among persons or firms with market power is to decrease competition is a crime, and that such statutes apply to the medical and health insurance industry has been litigated twice all the way to the Supreme Court with said firms trying to argue they were exempt (in the 1970s and early 80s) and the medical firms lost both cases.

Nonetheless here we are, and if the Libertarians, say much less any other political entity, want my support or assistance this needs to become their primary, singular and forceful focal point.

Thus it should be with you as well.

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2012-10-04 17:19 by Karl Denninger
in Politics , 1644 references

Here's The Bill that either Obama or Romney could propose and demand be passed.

(For that matter so could Gary Johnson, and if he had a lick of sense, he would as this would be a "break the glass" moment for the Libertarians, but I digress...)


An Act to redress the imbalances in the economy related to health care products and services, enforce the law, improve patient outcomes, enhance access to treatment modalities, decrease costs and open competition in the Medical Industry.


Article I - Competition

  1. The Sherman, Clayton and Robinson-Patman Acts shall apply to medical commodities, services and related products without exception, including but not limited to pharmaceuticals, hospital services, clinical services, medical devices, implements, drugs and supplies, financial services such as payment plans and health insurance or any other service or good used or provided for the purpose of promoting health, treating or diagnosing disease, provided that said goods, products or services are marketed, sold, advertised or used anywhere inside the United States and its territories.

  2. Medical providers shall post via conspicuous method and bill at a level price for their services to all users of like kind and quantity without regard to the means of payment, subject only to reasonably-defensible discounts for volume of service or product rendered or sold.

  3. All State CON laws and other regulations that serve to prevent, deter, bar or impair medical good or service providers from entrance or exit to or from a market area, where said facilities do or may serve customers on an interstate basis, are hereby preempted and void under the Interstate Commerce Clause to the US Constitution.

  4. The doctrine of first sale shall be applied to all medical and health-related commodities, pharmaceuticals, supplies and goods, including but not limited to drugs, medical devices, implements and health-related products, provided that such goods are truthfully and lawfully labeled as to their origin, manufacturer and contents, irrespective of their point of original purchase.

  5. No manufacturer, distributor or other seller of medical goods or commodities may prohibit by contract or other provision the effects of Article I Section 4, and any such clause in existing contracts for sale are hereby declared void as a violation of public policy.

  6. Medical goods and commodities permitted or lawfully offered for sale in nations and territories other than the United States may be imported, marketed and sold for consumption and use in the United States irrespective of FDA approval provided that any drug, device, implement or commodity not approved by the FDA shall be conspicuously labeled that it does not have FDA approval in no less than 14 point white print on a black background on all bulk and, where applicable, individual use or dispensed packages.  All such unapproved drugs, devices, implements and commodities shall bear or have enclosed with their packaging truthful information as to their exact contents, purity, method of action, expected benefits and known risks and side effects of its use.  All such unapproved drugs, devices, implements and commodities shall be explicitly disclosed to the consumer before use or administration by any licensed medical facility or physician and an explicit release shall be obtained from said consumer in advance of the use of such unapproved drugs, devices, implements or commodities.


Article II -- Access To Medical Care And Records

  1. EMTALA is hereby repealed.

  2. Privately-run and operated medical clearing firms are hereby authorized who citizens and visitors to the United States may register with to document verifiable means of coverage or payment for potential medical services and products.  These firms shall be regulated only as to privacy of information maintained.

  3. Such registration shall include not only insurance coverage by traditional health insurance firms but also registration of escrowed funds or other unencumbered and liquid assets available for disbursement in the event of unplanned and emergency medical expense.

  4. Medical providers may query any such registry only for a bona-fide purpose of determining whether a proposed procedure is covered for payment, and shall not issue more than one query per patient, per medical incident without that patient or their agent's explicit approval.

  5. Registries shall not provide information on coverage or escrowed and liquid limits beyond a response indicating whether the explicit and queried amount proposed to be billed is or is not covered.

  6. Patients shall own all records in any such registry, including the record of all inquiries and shall have a right of inspection of any such records during reasonable business hours and by reasonable means.

  7. Medical records shall be the property of the consumer to whom they pertain, and shall be provided to and may be maintained by the consumer upon his or her reasonable request.  No provider shall provide access to or permit the copying of any such record to any third party without the explicit authorization of the consumer or his or her lawful representative, except where applicable statute mandates the disclosure of said records such as in the case of communicable disease or mandatory reporting statutes.

  8. A registry or medical provider that violates any provision of this section shall be liable for all damages that a consumer shall suffer, but not less than $25,000 (twenty-five thousand dollars US) per incident in liquidated damages if the actual amount of damages shall be less.

  9. EMS providers and systems shall maintain a registry of charitable hospitals and other providers of medical care willing to provide services to those who have no verifiable or actual means of payment so as to be able to expeditiously make decisions on transport of indigent patients, and shall update their listing of such available care facilities not less than once daily.


Article III - Enforcement

  1. Consumers, employers or other parties harmed by violations of this act shall have a private right of recovery for all harm sustained in triplicate, but not less than five thousand dollars ($5,000) for each occurrence.

  2. Each day that any such violation occurs shall constitute a separate and distinct civil offense.

  3. Willful and intentional violations of consumer privacy, or any act of conspiracy between parties to violate any provision of this act shall be a Federal Felony Criminal Offense punished by not less than 2 nor more than 20 years of confinement and a fine of not less than $10,000 or more than $100,000 for each count, except that if permanent physical injury shall occur to any person as a consequence of said violation the penalty shall be not less than 10 nor more than 25 years of confinement and a fine of not less than $50,000 nor more than $250,000 for each count, and if death to any person shall occur as a consequence of said violation the penalty shall be not less than 25 years to life of confinement and not less than $100,000 nor more than $2,000,000 for each count.


That would pretty much do it, I suspect (that is, cut the cost of medical care by about 80% -- if not more.)

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The piece sent "over the transom" taking a shot at Governor Johnson's possible motives for running as a Libertarian contains some interesting theories.

However, it also contains some disturbing claimed facts, and one thing I did do before publishing that piece was check them.

Unfortunately the facts cited are correct and Gary is being less-than-honest.

This is what his campaign web site claims on his record:

  • Left office with New Mexico as one of the only four states in the country with a balanced budget
  • Left New Mexico with a budget surplus
  • Used Line Item Veto thousands of times to trim the budget
  • Vetoed 750 bills during his time in office; more than all other governors combined
  • Cut over 1,200 government jobs without firing anyone
  • Created more than 20,000 new jobs
  • First New Mexico Governor to challenge education status quo and propose statewide voucher program
  • Restored State General Fund reserves to more than $222 million from a low of $28.1 million
  • Limited annual state budget growth to 5.0% during eight years in office
  • Cut taxes 14 times while never raising them—a first for New Mexico
  • Vetoed 32% of the total number of bills submitted for his signature

This all sounds good, right?

Well, no.  Yes, the budget rose 5% per year during his time in office.  Unfortunately that's a roughly 50% increase in the size of the State Government during those eight years.

That might be ok if the rate of increase was less than the rate of inflation.  So let's check the rate of inflation and see if Governor Johnson was telling the truth or if he's being less-than-honest with the public.

In 1995 the CPI index stood at 150.3.  In 2003 when Johnson left office it stood at 181.7.  That's a 20.9% increase over the same eight years.

In other words Gary Johnson increased spending in New Mexico at approximately 240% the rate of inflation -- or about double and a half as fast as prices rose.

Do you define that as "fiscally conservative" or "responsible"?  I do not.  Further, can you find any part of spending in this chart that he actually cut during his time in office or did every single one of these bars get bigger?

 by genesis 


Then there's the claim of a "balanced budget".   That's a nice claim.  Unfortunately it was achieved by lying, just as it has been in the other states, because the amount of debt the State Government had outstanding nearly doubled during those very same years.

 by genesis

That's a gross $2.78 billion increase in debt during those years.  The population of the state was (as of 2003) 1.87 million, so Governor Johnson added about $1,500 in debt to the financial responsibility of every man, woman and child in New Mexico during his administration and that's only for the state itself -- municipal governments added another billion, so the total was well over $2,000 per person.

Is that "fiscally conservative"?

Ron Paul has often been called "Dr. No" for his refusal to accede to more spending and bigger deficits.  While he's one man in Congress, you can rarely if ever find a bill that he has approved which increases spending and public debt. 

Gary Johnson, on the other hand, was the man with the pen who signed the spending bills in the end analysis.  He is the one who was responsible for approval of the budget and the actual spending and borrowing profile of the State.  And he has repeatedly claimed, and claims today, a huge number of vetoes.

It's true that Governor Johnson vetoed a huge number of bills.  But the implication he wishes you to believe, that he shrunk the size of government in New Mexico and thus that he also shrunk residents' responsibility, both directly in current government spending and in the debt that was left for both residents who voted for various policies and the children and unborn unable to vote for or against those policies is simply false.

Governor, you have some explaining to do if you expect me to support or vote for you, as I believe you have actively and intentionally misled not only myself personally but the Libertarian Party in general on the actual facts when it comes to your spending and debt record as Governor.

Nobody should vote for this man believing he will cut their debt load or actually shrink one single line item in the Federal Budget, as his history shows that over eight years as Governor of a small state he saddled every single resident with more than $1,500 worth of additional debt, sanctioned municipal and local governments adding roughly $1,000 more, and in fact added to State Spending in all of the categories he claims he will "control" or "cut" including pensions, health care and education. 

Not one of those areas was cut in size during his time in office.

And that, my friends, is a fact.

Ps: Before someone pipes up and tries to claim that population increases were responsible for this, the population of New Mexico in 1995 was ~1.7 million.   In 2003 it was 1.9 million, or 12% higher, an approximately 1.4% annual expansion.  It is thus immaterial to the expansion of the State budget and debt, and one cannot lay off these expansions on "growing population"; any such attempted claim is a futher lie.

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