Mid-Day Digest

Sep. 19, 2018

THE FOUNDATION

“When we are planning for posterity, we ought to remember that virtue is not hereditary.” —Thomas Paine (1776)

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IN TODAY’S EDITION

  • Trump has good strategic aims behind his tariff battle with China.
  • Finally, some FBI investigation information will be declassified.
  • Have we learned from the history of the 2008 financial crisis?
  • Betsy DeVos has some powerful words for campus free speech.
  • Hillary Clinton accuses Trump of doing exactly what she does.
  • Daily Features: Top Headlines, Memes, Cartoons, Columnists, and Short Cuts.

IN BRIEF

Behind Trump’s China Tariffs

Thomas Gallatin

With President Donald Trump’s announcement Monday of an additional $200 billion in tariffs on Chinese goods, the specter of an all-out trade war increasingly looms. China was quick to vow $60 billion in retaliatory tariffs. But Trump only doubled down, declaring on Tuesday, “China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted.” (We’ve previously warned of exactly this kind of electoral manipulation by China.) He then threatened to add another $267 billion in tariffs, raising the total to $517 billion — which essentially covers all of China’s U.S. exports — should Beijing follow through with its own retaliatory tariffs.

There is no question Trump’s tariffs will do further damage to an already hurting Chinese economy, but U.S. business will also increasingly feel the hit. Such is the harmful nature of tariffs and why free trade is preferable for sustaining business growth and a healthy economy. However, Trump has several important issues in view here beyond the immediate concern for the nation’s current economic welfare.

Almost like clock-work, every time Trump presses China, he gets results with Beijing’s nuclear puppet, North Korea. On Tuesday, it was reported that Kim Jong-un has agreed to allow outside inspectors to visit the country’s missile-test sites and that he is open to decommissioning its nuclear enrichment facility at Yongbyon. After meeting with South Korean President Moon Jae-in, Kim reiterated his desire to work “toward a peaceful peninsula without nuclear weapons or nuclear threat.” This is welcome news, though we note it with a healthy dose of skepticism. There is clearly still a long way to go, but few can reasonably argue that this is going in the wrong direction. This concession by Kim has Beijing written all over it.

But ending the North Korean threat is not Trump’s only aim. He is countering China’s active attempts to gain the upper hand in global economics. Investor’s Business Daily reports, “As part of its 10-year Made In China 2025 initiative, also known as CM2025, China hopes to gain global technological and market dominance in 11 key technologies.” Beijing’s goal is especially problematic because China has consistently and persistently violated international trade rules. In other words, the Chinese are not and never have been interested in fair play or truly free trade.

Trump’s ultimate aim is to force China into forgoing its efforts to control world markets. As IBD notes, “Nothing short of China abandoning its export-driven model for extending its economic domination of Asia and its CM2025 plan to dominate world markets — at the expense of the U.S. — will satisfy Trump. For free trade to work, it requires both parties to play by the rules. So far, China has failed to do so.”

So now it’s become a high-stakes game of chicken. Will China’s economic downturn push Beijing to blink first? Or will Trump’s play backfire on his booming economy?

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Trump Orders Page FISA Warrant Declassified

One of the most significant pieces to the Trump/Russia collusion narrative was Donald Trump’s one-time campaign adviser Carter Page and his connection to Russia. As the story progressed, it was eventually learned that in October 2016 the FBI had procured a FISA warrant to secretly surveil Page. It later came to light that the FBI used the dubious, unverified, Hillary Clinton-funded dossier, compiled by British ex-spy Christopher Steele, as primary evidence for obtaining the FISA warrant. None of this is new news.

What has been long questioned by congressional Republicans is to what degree the FBI rested its case for the FISA warrant on the infamous dossier. Well, it appears the answer to that question may be coming soon. On Monday, Trump ordered the declassification of the FISA warrants granted to surveil Page, as well as key communications between other major players. The White House announcement read:

At the request of a number of committees of Congress, and for reasons of transparency, the President has directed the Office of the Director of National Intelligence and the Department of Justice (including the FBI) to provide for the immediate declassification of the following materials: (1) pages 10-12 and 17-34 of the June 17 application to the FISA court in the matter of Cater W. Page; (2) all FBI reports of interviews with Bruce G. Ohr prepared in connection with the Russia investigation; and (3) all FBI reports of interviews prepared in connection with all Carter Page FISA applications.

In addition, President Donald J. Trump has directed the Department of Justice (including the FBI) to publicly release all text messages relating to the Russia investigation, without redaction, of James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr.

Rep. Mark Meadows (R-NC), who has been one of the leading lawmakers calling for the release of the FISA applications, praised Trump’s actions, stating, “Transparency wins. This is absolutely the right call from @POTUS. It’s time to get the full truth on the table so the American people can decide for themselves on what happened at the highest levels of the FBI and Justice Department.”

Slowly but surely, more and more pieces behind the deep-state plot are being exposed to the light of day.

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Top Headlines

  • GOP rejects Kavanaugh accuser’s bid for FBI probe before hearing, she hasn’t responded to invitation for Monday (Bloomberg)
  • Feinstein on Kavanaugh accusation: “I can’t say everything is truthful” (National Review)
  • Dem senator reveals two year SCOTUS vacancy plan (Hot Air)
  • Senate approves $854B spending bill (The Hill)
  • Trump says exposing “corrupt” FBI probe could be “crowning achievement” of presidency (The Hill)
  • State Department bureaucrat caught plotting “deep state” resistance (The Washington Times)
  • Political nonprofits must now name many of their donors under federal court ruling after Supreme Court declines to intervene (The Washington Post)
  • Christian-bashing Emmys’ ratings hit new low (CNS News)
  • “Sesame Street” denies Bert and Ernie have a sexual orientation after former writer’s comments (Fox News)
  • Humor: “Sesame Street” producers deny rumors that Bert, Ernie are Russian spies (The Babylon Bee)
  • Policy: Feel-good bans on straws and plastic bags don’t help the ocean (National Review)
  • Policy: Nurse practitioners: A solution to America’s primary care crisis (American Enterprise Institute)

For more of today’s news, visit Patriot Headline Report.

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TODAY’S MEME

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For more of today’s memes, visit the Memesters Union.

TODAY’S CARTOON

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For more of today’s top cartoons, visit the Cartoons archive.

BEST OF RIGHT OPINION

For more of today’s columns, visit Right Opinion.

FEATURED ANALYSIS

Repeating the Mistakes of the 2008 Economic Crash

Louis DeBroux

“Progress, far from consisting in change, depends on retentiveness. When experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.” —George Santayana, The Life of Reason

It is truly mind-boggling that, just a decade after one of the worst financial crises in American history, we are now turning back to the very policies that laid the foundation for the crisis in the first place.

In 1977, Democrats in Congress passed, and President Jimmy Carter signed, the Community Reinvestment Act. The law coerced lending institutions to abandon the long-held practice of basing loans on the ability of the borrower to repay, essentially demanding lending institutions issue these “sub-prime” loans to virtually anyone who applied.

In 1995, Democrat President Bill Clinton renewed and expanded the CRA. In order to assuage the fears of lending institutions that were now at significantly higher risk of losses due to loan defaults, the federal government, through government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, offered implicit guarantees of taxpayer-funded bailouts if borrowers defaulted. This created a perverse incentive for lenders because they could either continue to be fiscally responsible and carefully manage risk (and have the government punish them for lending discrimination), or they could make risky loans, pocket the profits, and have losses covered by taxpayers.

In 2005, the House Financial Services Committee chairman, Democrat Rep. Barney Frank, dismissed what he called an “excessive degree of concern” by Republicans regarding the growing housing bubble, declaring he wanted to “roll the dice a little bit more in this situation.” Other Democrats, including Sen. Chuck Schumer and Rep. Maxine Waters, vehemently argued against reining in Fannie Mae and Freddie Mac’s reckless lending policies.

Even Alexandria Ocasio-Cortez would have been able to figure out what would happen next.

Lending institutions began writing sub-prime loans in bulk. Investment banks bought up these loans and packaged them as Residential Mortgage-Backed Securities, and sold them to investors. This drove a massive boom in the housing market, driving up prices far above the homes’ actual value, stoked by easy money policies.

This created a domino effect driving risky speculation, and eventually the bubble burst — with devastating results. Lehman Brothers, one of the nation’s largest financial institutions, went bankrupt. Firms like Merrill Lynch and AIG, as well as GSEs Fannie Mae and Freddie Mac, required hundreds of billions of dollars in taxpayer bailouts to remain afloat.

Almost overnight, tens of millions of Americans discovered their homes were worth a fraction of what they paid for them, and their retirement portfolios had been devastated. No longer able to afford their mortgages, and unable to come close to breaking even if they sold their homes, many Americans simply walked away.

In the aftermath, the architects of the disastrous financial crisis were, unbelievably, placed in charge of the recovery process. Tim “Turbo Tax” Geithner, president of the New York Fed from 2003-2009, became Barack Obama’s Treasury secretary. Rep. Barney Frank, whose previous dice-rolling played a direct role in the financial meltdown, co-wrote the Dodd-Frank financial regulatory reform bill that, in direct contradiction to Democrat claims, actually made “too big to fail” bailouts a matter of law.

In retrospect (and, as many conservatives at the time argued), it’s obvious the bailouts simply prolonged the suffering. Rather than allowing these institutions to go through managed bankruptcies and suffer the consequences of their reckless, extremely risky investment decisions, the taxpayers, who bore no responsibility, nevertheless were forced to take a massive hit to their wallets to bail out these politically connected banks and investment firms.

Even more infuriating is the fact that these bailed-out banks — including CitiGroup, Bank of America, and Merrill Lynch — paid out more than $11 billion in bonuses in 2008, long before the dust cleared from the rubble that remained of the U.S. economy.

Obama eventually claimed taxpayers had not only been paid back, but that TARP (the Troubled Asset Relief Program, which bought up these toxic assets) had actually turned a profit for taxpayers. Unfortunately, that claim is nothing more than a rhetorical and accounting sleight of hand.

Though millions of Americans never fully recovered from the financial disaster, some politicians and bank executives failed to learn the lessons of the meltdown and are returning to the policies that caused it in the first place.

Wells Fargo, still trying to regain the public trust following revelations that bank employees created millions of fraudulent checking and savings accounts on behalf of customers without their knowledge or consent, is wading back into the sewer of sub-prime mortgages. Unbelievably, this announcement comes just weeks after Wells Fargo paid a $2 billion fine for its role in the 2008 financial crisis.

Despite the Justice Department’s report finding Wells Fargo urged its underwriters to “to take more chances, and be more aggressive, in approving loans that were outside of Wells Fargo’s underwriting guidelines,” CEO Tim Sloan is working with non-bank lenders to package sub-prime loans in “mass capacity” and sell to investors.

Comedian Will Rogers once quipped, “Good judgment comes from experience, and a lot of that comes from bad judgment.”

Apparently, we haven’t had enough experience yet.

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MORE ANALYSIS FROM THE PATRIOT POST

OPINION IN BRIEF

Ben Shapiro: “Many on the left insist that the ‘believe all women’ standard be applied to accusers against those on the right but that the general credibility standard should be applied to their own favorites. That’s nonsensical, and insulting. What’s more, it deliberately undermines the bulwark of universal approval with which #MeToo should be met. We should all be able to agree that some standard beyond mere belief is required here — and we should all be willing to hear evidence that implicates our favorite political figures. But if we insist on applying a politically motivated double standard in the name of #MeToo, the support for #MeToo will crumble. That would be a tragedy, but it would also be a familiar tragedy. All too often, movements that should draw broad public support are undermined by fringe cases used as clubs by members of politically driven groups. We should all agree that any racist police shootings must be stopped — but such agreement falls apart when some insist that questionable shootings be treated as racist shootings. We should all agree that sexual abuse must be stopped — but such agreement disintegrates when some insist that unsubstantiated sexual abuse allegations be treated just like substantiated allegations. Politics should not be allowed to override basic human decency. Yet again, that’s what’s happening.”

SHORT CUTS

Non Compos Mentis I: “We just can’t go back to [the pre-Roe era]. That’s unconscionable to me. And also — I’m sure that this will unleash another wave of hate in my direction — but as a deeply religious person, it’s also unchristian to me.” —Chelsea Clinton

Non Compos Mentis II: “We need to judge Brett Kavanaugh not just by what he may or may not have done but how he treats a woman’s pain.” —Wonkette founder Ana Marie Cox (“The real question of the Duke lacrosse case, by this standard, wasn’t whether a stripper was actually raped — the question is whether the members of the Duke lacrosse team were sensitive to her feelings while she was falsely accusing them of rape.” —Ben Shapiro)

What due process? “Enough with the ‘he said, she said’ storyline. If this is he said, she said, then let’s believe the ‘she’ in these scenarios. She has nothing to gain, and everything to lose. For 250 years we have believed the ‘he’ in these scenarios. Enough is enough.” —ABC News’s Matthew Dowd

Guilty until proven innocent: “For a woman to come forward in the glaring lights of focus, nationally, you’ve got to start off with the presumption that at least the essence of what she’s talking about is real, whether or not she forgets facts, whether or not it’s been made worse or better over time.” —Joe Biden

Hypocrite: “Supreme Court justices should not be an extension of the Republican Party.” —Sen. Dianne Feinstein (D-CA), who wants the Supreme Court to be an extension of the Democrat (read: “Living Constitution”) Party

Braying Jackass I: “[Trump] really is the rare combination of an eight-year-old boy — he’s got the maturity of an eight-year-old boy with the insecurity of a teenage girl.” —John Kerry (Ironically, Kerry’s comrades weren’t amused … because sexism!)

Braying Jackass II: “Barack and I agreed we would be quiet for the first year to let the new administration get up and running. God forgive me.” —Joe Biden

And last… “Hello, FBI? We need you to investigate a sexual assault allegation? Oh, that’s a police matter? Still. When was it? Roughly 36 years ago? The actual date? No idea. The location? Not sure. What do we know? There were either 2 or 4 people in the room. Hello, hello? Did you hang up?” —John Hawkins

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Semper Vigilans Fortis Paratus et Fidelis

Nate Jackson, Managing Editor
Mark Alexander, Publisher