Clause 61: The Pushback Blog

Because ideas have consequences

It’s Not Your Soapbox, Margaret

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Yesterday on Face the Nation, Margaret Brennan was interviewing Sen. Rand Paul (R-KY). Here is the relevant excerpt from the transcript:

BRENNAN: Well, the CIA is looking at declassifying the details of exactly what her job was. They have not confirmed that she ran that black site, but why don’t you withhold your judgment on her until you see the details of her 33-year career?

SEN. PAUL: Because I think there’s ample information out there and it’s not disputed that she ran the black ops operation in Thailand, that she did oversee enhanced interrogation. In fact, her colleagues have said that she was an enthusiastic supporter of these enhanced interrogation or waterboarding or torture as most of us have come to believe it. There is also evidence that she signed a cable to destroy the evidence. There were videotapes which I’m sure were ghastly of the simulated drowning and these were destroyed with her support and advocacy when she returned home to Washington.

So I think there’s got to be plenty of good people at the CIA who weren’t involved with torture and really we, you know, we’re supposed to be the symbol of hope for the world and people who want freedom from totalitarianism. They want freedom from torture. They don’t want the freedom to torture–

BRENNAN: But that was–

SEN. PAUL: — so I think this sets a terrible, this sets a terrible example for the world.

BRENNAN: To be clear, though that was U.S. policy at that time. That wasn’t her individual policy, but just to quickly fact check you on something there, sir, the investigator who looked into some of what you’re talking about with those tapes, the CBS News senior security contributor, the former number two at the CIA, Mike Morell, did clear Haspel saying she didn’t order the destruction. Her superior, did she just drafted the cable. Does that change your view of her?

I have added emphasis to highly the critical point of the interview, where Brennan starts talking over Paul to make her own point. It does not really come through as clearly in the transcript as it does in the original video, which is linked to the transcript.

It is out of scope for this essay to consider the merits of the arguments the Senator is making. It is clear from his presentation that, even though “enhanced interrogation techniques” were legal and authorized at the time Haspel was involved in their conduct, Paul finds them immoral and challenges the morality of persons who were engaged in executing them. It is not my purpose to support or refute his position here.

The problem is that Brennan’s conduct of the interview strongly suggests that she has a position, which is to exonerate Haspel because her actions were legal at the time. That is a potentially valid argument, and as a citizen herself, she is entitled to her viewpoint. But we are not here to watch Margaret Brennan interview herself. The people of Kentucky elected Rand Paul to the Senate; who elected Margaret Brennan to anything?

As a citizen, what I want Brennan to do is to draw out and clarify her interviewee’s arguments in favor of his planned course of action. In this case, her interviewee is Sen. Paul and his planned course of action is to object to the confirmation of Gina Haspel.

Brennan could have asked Paul a question such as, “Why do you believe that, even though the actions in which we know Haspel to have been involved with were legal at the time, her participation in them disqualifies her from consideration for the position she has been nominated for?” Had she done this, and let him answer, she would have been doing good journalism.

Instead, in the part of the transcript I emphasized, she cut him off and inserted advocacy for her own point of view. Then she changed the subject so that she could have the last word. If she was running out of time for the segment, she should have said so and not taken the last word. He’s the person being interviewed; he gets the last word.

The earlier paragraph, in which Brennan asked Paul why he would not withhold his judgement until further information is made available, is also a questionable insertion of perspective. Senators are there to make judgments, not withhold them. Particularly where black operations are involved, withholding judgment until you have all the facts is just a license for people to withhold the facts. Paul is within his rights to basically say, “Here is my current position based on what I know; you persuade me to change it.”

I don’t mean to pick on Margaret Brennan. She didn’t do anything plenty of other journalists are not also doing. She is the person CBS has chosen to lead Face the Nation. I watch the show regularly and I want her to succeed; look what happened to Meet the Press after Tim Russert died. I just caught Brennan in flagrante delicto and I knew within a few days I would have a transcript.

But what this incident illustrates is part of the problem journalists have, and they have to fix it. You can’t take sides and then claim to just be reporting the facts. Furthermore, it is not enough to tell yourself and your friends you are not taking sides; you cannot give the appearance of taking sides.

I don’t agree with the claim that mainstream media is presenting fake news. This is a gross oversimplification, shallow and easy to refute. Journalists, editors and media executives know their credibility is on the line. They are rather vigilant about policing themselves in that regard. When The New York Times discovered that they had a problem with reporting done by Jayson Blair, they took action to clean up the mess and keep the initiative in tending their reputation.

The problem is that journalists fluidly flip back and forth over the line between advocacy and impartiality. As a citizen, I want to understand the positions of my elected representatives. There is really little difference between journalists inserting their own opinions and athletes, actors or musicians using their celebrity status to pontificate to the rest of us. They are citizens just like the rest of us. They just have more access. Having access does not confer expertise, nor does it gives you more votes than any other citizen.

This flipping back and forth impairs effective journalism, because people who disagree with your agenda start to distrust you. They start looking for you to insert your agenda, even where you really haven’t. They start preferring the most cynical interpretation of everything you say. They start discounting your reporting. This is already happening.

Journalists, being people, can’t avoid having their own viewpoints. They are not going to be robots and always report the facts without color of their own biases. However, in order for us to have effective journalism, those practicing it have to make an honest attempt to square this circle. It is difficult, but we are heading into increasingly rough weather. We haven’t even got to the difficult part yet.


Written by srojak

March 19, 2018 at 6:25 pm

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Follow the Trump Money

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At an early age, I learned that control comes from the sources of financing. Donald Trump has had six corporation bankruptcies (note that Trump himself has never personally filed for bankruptcy), yet he retains a business empire and, unlike many other who enter government service, has refused to put his business interests at arms’ length while serving as President. From where does he obtain his financing?

Donald Trump definitely qualifies as someone who was born on third base and tells everyone he hit a triple. He not only had his father’s wealth to draw on, but his father’s relationships with lenders. His record in business is checkered, to say the least. He has a long record of disputing his bills to suppliers; even if the suppliers were delivering substandard products and services, as the Trump attorneys allege, it would suggest a problem in the selection process within the Trump organization. A less charitable — but more believable — interpretation would be that he uses his lawyers to strong-arm suppliers out of what he owes them. Now, thanks to Stormy Daniels and her lawyer Michael Avenatti, we have further insight into how Trump uses lawyers and courts as weapons against people who don’t have his resources to fight back.

Others have done the investigation for how Trump’s presidential campaign was financed. The Center for Responsive Politics has provided this summary of funding for efforts both to support and to oppose the election of Donald Trump.

The more interesting story is where his business financing is coming from. This is especially true given both his continued direct involvement in his business interests while in the White House, and his proven record of inability to distinguish his person from his office. This last is one of the most menacing aspects of his behavior in office, as it would set politics back four hundred years.

Who would lend money to an entrepreneur with six business bankruptcies under his belt? In June 2017, Francine McKenna reported that Trump has still been able been able to obtain substantial loans without facing penalizing interest premiums. Her article suggests that many lenders are supplying credit to Trump’s business, but only names Deutsche Bank and Ladder Capital, the latter of which is a real estate investment trust (REIT). In December 2017, Wendy Siegelman did some further investigation into these two organizations. Siegelman observed:

The various overlapping connections among these companies and developers is likely representative of common intersections in the finance and real-estate world. However, given the significant leverage Ladder Capital and Deutsche Bank have as holders of hundreds of millions of dollars of Trump debt, it’s important to bring these business connections and potential conflicts of interest to light.

The relationship with Deutsche Bank may present some problems. Trump has already fallen out with one arm of the bank, only to cozy up to another. For its part, Deutsche Bank has its own murky issues. In 2016, Federal regulators went after it to the tune of $14 billion for securities fraud during the 2008 mortgage crisis; the final settlement was a $7.2 billion penalty, split between fines and community service. In 2017, the bank paid $41 million to settle claims by the Federal Reserve that Deutsche Bank failed to maintain adequate controls against money laundering.

Representative Maxine Waters (D-CA) got on the trail of Deutsche Bank in late 2017, demanding that the Justice Department get moving on a investigation of the $10 million money-laundering operation that the bank is alleged to have organized. This may be the true source of Trump’s recent Twitter outbursts against Waters. Yes, Waters has her own issues, but even a stopped clock is right twice a day.

Trump has a long history of seeking business in Russia, going back before the fall of the Soviet Union. He has actively pursued business ventures in Russia. He has working relationships with Russian oligarchs. Many of these relationships are tended by son-in-law Jared Kushner, who is in way over his head. Michael Wolff, in his book Fire and Fury, quoted Steve Bannon predicting that Robert Muller would be coming after Kushner, Donald Trump, Jr., and Paul Manafort. Per Wolff, Bannon made the observation that Robert Mueller chose Andrew Weissmann, who has a reputation flipping witnesses to build cases against mobsters and white-collar criminals, as a top aide. Mueller has by now already brought charges against Manafort.

Deustche Bank could also be fertile ground for Weissman to find candidate canaries. Martin Sheil wrote this report in which he went through the various smells emanating from the bank’s closet. This two-part report is required reading for anyone who wants to understand the meat of the matter. He explained the mechanics of how the money laundering technique worked; the Russians call this action “konvert”, as in to convert subterranean assets into legitimate assets. Sheil also cited a prosecution conducted by Weissmann and Preet Bharara against an important Deutsche Bank client in 2016. Yes, that is the same Preet Bharara whom Donald Trump fired as U.S. attorney in early 2017.

Sheil also specifically identified the Mercer family, funders of Breitbart News, as deeply involved with questionable bank activities. Patriarch Robert Mercer ran a hedge fund, Renaissance Technology (RenTec), that received favored trading relationships from the bank, to the extent that the IRS has challenged them. A risk management executive whose area of responsibility included the bank’s relationship with RenTec committed suicide in January 2014.  Mercer, for his part, has elsewhere been on record for claiming that the 1964 Civil Rights Act was “a major mistake.” We may not have heard the last about the Mercer family.

If, reading this, you conclude that there is nothing but innuendo here, consider this: Donald Trump ran his entire campaign on innuendo. He didn’t really mock a reporter for his disability, right? And what was that about Megyn Kelly having “blood coming out of her wherever“, if not innuendo he could walk back from? So I don’t want to hear the complaints. Live by the innuendo, die by the innuendo.

The point is that there is that there is a large potential to mine here. Robert Mueller has already subpoenaed records from Deutsche Bank. As Christopher Brennan wrote in the Daily News, money laundering requires the prosecutor to prove both that the original funds are illegal and the people involved knew that they were illegal. The latter requires more than hard records of transfers; the prosecutor needs witnesses and testimony. That is why Weissmann is there.

The question Rosemary Fanelli asked in Forbes is critical: do the Russians hold and control the debt of Donald Trump’s businesses? “Why was Trump able to borrow additional funds even after he defaulted on his prior loans? Does this mean the President is compromised and beholden to a foreign government?” Russians understand capitalism well enough to know that, when you have people by the financing, their hearts and minds will follow.

I found all these links in less than a day, sitting alone on my computer in Texas. Robert Mueller has lawyers, subpoena power and a no-limit special prosecutor credit card. What do you think he’s doing? Why do you think his investigation is taking so long?

I predict that, if the Democrats win the House this November, Trump will have Mueller fired before the end of the year. Trump has to know that a Democrat-controlled House will rain impeachment motions into the hopper, anyway. Trump will figure, “What have I got to lose?”




No King in Israel

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In the current month of The Atlantic, Michael Gerson has written about the conflicted relationship between many evangelical Christians and President Donald Trump. Gerson has included a partial history of the political challenges evangelicals have faced in America over the past 150 years. He’s an evangelical himself, and I do not dispute his direct experience. I like context, and appreciate the history. But it is incomplete in several respects, and I am taking up the task of filling it out.

The Book of Judges has many instances of Israel being led by people whom most people would not have chosen. Ehud was a murderer. Deborah was a woman living at a time and place where women were not considered worthy wielders of power. Gideon was the runt of the family. Jephthah was the son of a prostitute, exiled from his father’s house. The people always visualize their leader as a great king, who will drive their enemies before them, but God has other ideas. The ultimate example is Jesus himself, who, instead of leading the people to victory over and freedom from the occupying Romans, died on the cross.

The Third Great Awakening

Tom Wolfe wrote that the 1970s were seeing the Third Great Awakening, but he was off by one. The actual Third Great Awakening started shortly after the Civil War. It had mostly sputtered out by 1900.

In many respects, the period was full of solutions looking for problems. The Civil War had brought about the bloody end of legalized slavery. What great achievement would be left to the successor generation? For some, the call was to convert the rest of the world to the person’s accepted form of Christianity. There was a great burst of missionary activity, both within the US and around the world. The 1842 Treaty of Nanking, which ended the Second Opium War, opened China to missionaries. After the Civil War, American missionaries joined their British brethren in China. Henry W. Luce was an important American missionary in China; he was the father of the Henry Luce who started Time, Life, Fortune and Sports Illustrated magazines.

Another important movement was the Social Gospel movement, which Gerson also mentions. The Social Gospel declared that the focus of salvation must be at the community level, rather than the individual level. I have previously addressed the problems of the Social Gospel in a previous essay.


The third important outgrowth of the time was Prohibition. Although it was not achieved until 1919 when the 18th Amendment was ratified, Prohibition was an important goal that was taken up by many of the faithful. Prohibition would become their greatest short-term success and hang a millstone around their necks for decades.

Evangelicals went all-in on Prohibition. As late as 1933, C. Oscar Johnson, president of the Northern Baptist Convention, told FDR:

Baptists are back of you 96.8 percent. We cannot go the other 3.2 percent.

The 3.2 percent was an allusion to 3.2% beer that was already available in many states.

Evangelicals thus made themselves outcast for a generation, gaining a reputation as national prigs, indifferent to the failure of a well-intentioned national crusade that had only served to benefit violent crime syndicates. David Frum would later write:

For all that, a Christian who in 1955 applied an “In Case of Rapture This Car Will Be Unoccupied” bumper sticker to his car would attract puzzled looks from his neighbors.
How We Got Here, p. 156.

The majority of the GI generation was cold toward evangelicals, who were politically marginalized in America in the 1950s.


Gerson also mentions fundamentalism. This arose from a series of challenges posed by modern society to orthodox belief, including evolution and biblical scholarship.

The immediate source of fundamentalist doctrine was a series of documents published between 1910 and 1915, titled The Fundamentals. The core beliefs that fundamentalists identified to distinguish themselves were:

  1. The inerrancy of the Bible;
  2. The literal truth of the biblical accounts;
  3. The virgin birth of Christ;
  4. The bodily resurrection and physical return of Christ;
  5. The substitutionary atonement of Christ on the cross.

The publication of The Fundamentals started the Fundamentalist-Modernist Controversy in American Protestantism. In 1922, Harry Emerson Fosdick launched a counterattack with his sermon, “Shall the Fundamentalists Win?“.

At the same time, there was the controversy over evolution, which Gerson discusses. Secular, sophisticated America considers the 1925 Scopes “Monkey” Trial to have been the decisive milestone that, once and for all, made the opponents of evolution look ridiculous. But this is also a tenet of faith; evangelicals do not share it. Writing in 1963, Richard Hofstadter reported with some degree of evident mortification:

A few years ago, when the Scopes trial was dramatized in Inherit the Wind, the play seemed on Broadway more like a quaint period piece than a stirring call for freedom of thought. But when the road company took the play to a small town in Montana, a member of the audience rose and shouted “Amen!” at one of the speeches of the character representing Bryan.
Anti-Intellectualism in American Life, p. 129.

By 1940, the Protestant churches we generally identify as “mainline” went modernist, and the evangelicals predominantly took up fundamentalism. The Baptists actually cease to be considered “mainline” to the extent they support fundamentalism.

The Remnant

There is a constant tension in Christianity between beliefs that assert salvation is open to all and those that maintain only a remnant of the people can be saved. After World War II, evangelicals took the remnant position and retreated into their own communities, where they could be true to their faith as they understood it.

However, the forces of secular modernism followed them. Let the evangelicals speak for themselves on this:

The 1960s ushered in another set of rapid cultural and political changes. Local controversies over textbooks and sex education in public schools, the tax-exempt status of religious schools, and gay rights raised concerns. Activists motivated by their religious beliefs began grassroots efforts to promote their causes locally, and their efforts eventually captured national attention.
— Amy Black, “Evangelicals and Politics: Where We’ve Been and Where We’re Headed” []

Challenged by the twin attack vectors of public policy and television, it was becoming harder for evangelicals to maintain their own values in their own communities. By 1980, many evangelicals felt like they were colonists in their own nation, dictated to by faraway people who do not share their values and seek to impose their own norms upon the evangelicals. If only out of self-defense, evangelicals had to mobilize politically.

The Abusive Boyfriend

So evangelicals get involved in politics. As I outlined in this article, they found themselves in the Republican party, in coalition with libertarians, right-corporatists and Republican “wets” who want everyone to get along. What generally happens is that the donors get the policies they want and the rest of us get a lot of sunshine blown at us.

Consider the issue of gay marriage. Evangelicals detest it, because they believe it to be contrary to scripture. Libertarians think it’s a great idea, and why don’t we legalize polygamy while we’re at it? Corporate types need this as an issue like they need holes in their heads; gay people have money to spend that is just as green as anyone else’s, and the corporate people are not anxious to alienate that market. So what happens is that elected officials generally make inconsequential noises to keep the various coalition members interested, making sure that nothing meaningful ever really happens.

I quoted Amy Sullivan in the referenced essay, but her observations are worth repeating:

Like an abusive boyfriend, Republicans keep moderate evangelicals in the coalition by alternating between painting their options as bleak and wooing them with sweet talk. You can’t leave me-where are you going to go? To them? They think you’re stupid, they hate religion. Besides, you know I love you-I’m a compassionate conservative. The tactic works as long as evangelicals don’t call the GOP’s bluff and as long as Democrats are viewed as hostile to religion.
“Why Evangelicals Are Bolting the GOP”  []

Republicans were correct in their belief that most of the evangelicals were not going to go over to the Democrats, but they never dreamed that a Democrat would come over to them.

Enter the Serpent

Donald Trump promised to be like no other politician, and he has definitely delivered on that. Be careful what you ask for — you just might get it.

Throughout the 2016 campaign, evangelical leaders were rather clear on their criteria. They were looking for a President, not a youth pastor. They wanted someone who would get in the political arena and fight for what they wanted.

Trump has been very busy appointing federal judges. Given the scope judges currently have to take an activist role in laying down black-letter law, there is a lot for evangelicals to like.

Also consider how willing Trump is to take the political initiative. Look at his State of the Union speech. No other Republican since Reagan has been willing to take the fight to the opposition like that.

I can understand why evangelicals might look at Trump as their last, best hope. They certainly would not be alone in that regard. There is no Republican on the horizon who has demonstrated any readiness to seize the favorable terrain on messaging.

Note that I did not say, “take the high ground,” because where Trump is involved, that would be laughable. That is the problem facing all Trump supporters, particularly those who want an intact reputation after the Trump era ends.

It is remarkable to hear religious leaders defend profanity, ridicule, and cruelty as hallmarks of authenticity and dismiss decency as a dead language. Whatever Trump’s policy legacy ends up being, his presidency has been a disaster in the realm of norms.
— Michael Gerson, “The Last Temptation”

Gerson documents how the evangelicals are doing it again. Just like with Prohibition, they are going all-in for Trump. It is not enough for them to like what Trump is doing for them; they feel this need to like him. They have to like, or at least excuse, everything he does. By doing so, they are prostituting themselves.

Solzhenitsyn wrote about the message Soviet culture was constantly drumming into their heads: “The result is what counts.” But he saw through it:

But that is a lie! Here we have been breaking our backs for years at All-Union hard labor. Here in slow annual spirals we have been climbing up to an understanding of life—and from this height it can all be seen so clearly: It is not the result that counts! It is not the result — but the spirit! Not what — but how. Not what has been attained — but at what price.
The Gulag Archipelago, Vol. II, p. 609.

Spiritual leaders are supposed to know this. They will pay a high price for ignoring this truth.

Written by srojak

March 12, 2018 at 5:58 pm

What Took Him So Long

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Gary Cohn announced his intention to resign as the Director of the National Economic Council yesterday. His announcement is being generally attributed to his opposition to Trump’s plans to impose tarriffs on steel and aluminum imports.

The editorial board of The New York Times, predictably, found little to lament about his departure other than the fact that he was the devil they knew. You can read it here if you want to; I found their editorial generated more heat than light.

Writing in The Week, Scott Lemieux asked what took Cohn so long to quit:

Cohn was well aware of Trump’s penchant for economic nationalism, so it’s a little odd that this, of all things, was what pushed him to his breaking point. Personally, I would be more offended by, say, Trump firing the FBI director to obstruct the investigation into his campaign’s possible collusion with Russian interference into the 2016 election, or his travel ban plainly targeted at Muslims, or his assertion that some of the neo-Nazi protesters in Charlottesville were “very fine people.”

This is worth exploring, even if it requires speculation.

Lemieux continued:

Of course, I never would have joined the administration of an unprecedentedly corrupt and dishonest president who began his ascension within the Republican Party by popularizing the racist conspiracy theory that Barack Obama was born in Africa, and started his nomination campaign by referring to Mexican immigrants as “rapists.” It’s always been clear that nobody who goes to work for Trump is going to come out looking better.

OK, so we have established that Lemieux is going to have limited insight into the viewpoint of someone who would join the administration. I have been on the inside of some unwell organizations, and seen how people react under stress. So I am going to put the value positing on hiatus and try to examine this from Cohn’s perspective.

There is a school of thought that says that when the President calls you to serve, you go. For people holding this belief, working in the White House is more than an opportunistic run on a career ladder. This, I believe, is why Mitt Romney allowed himself to be jerked around when Trump dangled the job of Secretary of State in front of him (wait, the Russians quashed this?).

In The Human Condition, Hannah Arendt decomposes human activity into labor, work and action. Action is the creation of change in human affairs. People who want to engage in action want to have influence. Public service attracts many of them. Most of them are thick-skinned; they had better be.

Gary Cohn had a net worth of at least $250 million when he accepted his White House role, according to this article in Fortune. If he had wanted to make more money, there were other places for him to go. It is reasonable to believe that he preferred to go where he could, ideally, influence economic policy at the national level.

So he gets there; what does he find? He finds he has a boss who does not intend to be influenced when he gets an idea in his head. Now what?

We will probably never know the truth about when Cohn began to sour on his job. He may not even know. I have worked with people who were sold a bill of goods when they were hired. Then they find, once they are in the door, that they don’t have the influence they were led to believe they would have. It’s a difficult adjustment. There is a grief cycle one has to go through.

Do not discount the importance of cognitive dissonance. You took the job to have influence. You were promised influence. Yet, the behavioral facts indicate that you have no influence. You’re a pilot strapped to a guided missile. This is a bitter pill. It is hard to admit to yourself that you have been had. Know any project managers? How are they dealing with this?

So, maybe at the time of the Charlottesville clash, Cohn was still in the bargaining phase of his grief cycle (or possibly the denial phase, but let’s be charitable). Possibly, as Lemieux wrote, Cohn prioritized influencing economic policy over protesting the racist pronouncements of his boss.

You can argue with his prioritization, but sneering at it is not called for. People in positions of responsibility pick their battles. People who don’t pick their battles never make it to positions of responsibility and influence. Anybody can sit in the bushes and throw rocks at the person who is making himself visible by taking action. Arendt mentioned that, too.

There are a lot of miserable people in the White House these days. Sarah Huckabee Sanders looks like an abused puppy. Jeff Sessions appears to be hanging on out of spite; some kind of perverse endurance rally. And whatever happened to Kellyanne Conway?

I have worked with people who have been kicked around for much less of a job than a White House position. They tell themselves they can take it, they are not going to give in and quit. They start developing Stockholm syndrome, making excuses for the people being abusive to them. At one company, we used to debate whether it was really any better anywhere else. I am coming round to believe that, if you have to ask the question, the answer is yes.

Not everyone who leaves the White House wants to write a tell-all book describing how the management sucked. It is possible that Cohn was eyeing the exit for some time, and this issue gave him the pretext he needed to have “peace with honor.” He might prefer a narrative where he left over a visible policy difference to one where he left because working there was beyond unpleasant. Some people really don’t reveal everything — hard to believe these days, but there it is.

With the information available to us at this time, it looks like Gary Cohn has called in well. Boss, I’m too well to come to work and be made miserable. It’s been a slice.

How many of the people criticizing him are jealous?

Written by srojak

March 7, 2018 at 6:27 pm

The Bad Family Business

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I have some experience with badly run family businesses, both direct and through the stories of people I have known. My mother did not want to work for a large company when I was a teenager, so she went to work for small, owner-managed companies. As I grew up and got real-world experience, I was able to reflect upon how some of her employers qualified as bad family businesses. I can recognize some patterns. I am in a position to make a few generalizations about the bad family business.

Many privately-held small businesses feature some interesting owner behaviors. The owner often does not want to become the next GE; he just wants to be in business, set his own hours and have the business landscape his house. He has no plans to take the company public; he wants to retain control of the company, as his position confers status, power and perquisites. Thus, the behaviors of the firm you study in economics are not the behaviors of this firm, not because the owner is irrational, but because his primary goals are not market expansion or profit maximization.

The owner reasons that, without him, there would be no business, which is usually true. Therefore, in the reasoning of many owners, it logically follows that he is at liberty to impose any policies that please him, or none at all. After all, who signs your paycheck? He may decide he doesn’t have to tolerate disagreement or indulge in wasteful or unnecessary practices such as progressive discipline. If he wanted to put up with that stuff, he could work in a corporation and not have to worry about making payroll. The day he’s sick of looking at you, you can be gone. Don’t count on getting warnings like you would in a large corporation.

The bad small business does not distribute ownership of work. Micromanagement is common. If the owner thinks sentences cannot end in prepositions, no correspondence had better go out the door with a preposition on the end of a sentence. Never mind that his letters look like they were scrawled in crayon; he’s the boss, so he gets to do that. If you, his employee, do not do what he wants the way he visualizes you ought to do it, you may lose his trust forever. This will not end well for you. There is a right way, a wrong way and the boss’s way; guess which two don’t count.

The bad family business overlays a badly managed business with a governance structure heavily dependent upon members of the owner’s family. Of course, this leads to nepotism, but that is not the half of it. The family culture becomes the corporate culture. The interpersonal pathologies of the family move into the company, bag and baggage. The way the other family members deal with the owner — or don’t, as the case may be — becomes the norm for the organization. Any kind of conflict that the family can’t resolve becomes a kind of conflict the company can’t resolve. If you can’t relate to the family the way his family members relate to one another, you are not going to fit in.

Periodically, the owner of the bad family business will respond to some problem by bringing in a manager from outside. This manager will have credentials and experience that the owner believes he needs. The manager will start making changes. He will begin to have conflicts with the owner’s family members who participate in the business. He will believe that, because he was brought in to fix a problem, that he has the political clout to prevail over the family members in a conflict. Usually, the manager will be dead wrong. He will go into the owner’s office for a showdown, and come out unemployed.

It is easy to understand how these managers go wrong. They allow themselves to believe that, because the big boss complains about something, that his top priority is to get that something fixed at any cost. But when the cost reveals itself as family members losing influence, the big boss recoils. Blood is thicker than water.

The kids may not know how to build a sales force. They may not know the difference between debits and credits. They may not know all sorts of business stuff. But they know how to push Daddy’s buttons. They’re really good at that, having practiced all their lives.

On 20 January, 2017, the Executive branch of the US Government was taken over by a bad family business. It was a hostile takeover. Nobody wants to hear how things used to be done. Have you not heard? The people who did things the way they used to be done are losers. There is a new President and a new set of norms.

Donald Trump, Jr., Ivanka Trump and Jared Kushner are family. Steve Bannon found out what happens when you clash with the kids. He won a few rounds, such as with the Paris Climate Accord, but ultimately he was cut off at the knees. Now, it looks like John Kelly, the White House chief of staff, is on the road to ruin.

Sources tell the news network that Kelly believes Trump is blurring the lines between first daughter and senior adviser to the president.
Kelly has reportedly said privately that the first daughter is “playing government,” and referred to her child tax credit as “a pet project.”
— Julia Manchester, The Hill, 27 Feb []

In badly run family businesses, kids get to have pet projects. You, who are outside the family circle, disparage them at your peril.

Even better: Jared Kushner received a downgrade to his security clearance, from top secret to secret [].

Jarvanka, as the two are commonly known, are reported to be preparing for a “death match” with Kelly []. I have seen this movie before. It does not end well for Kelly.

The employer generally gets the employees he deserves.
— J. Paul Getty

So does a President.

Written by srojak

February 28, 2018 at 6:43 pm

What Do You Want from Your Government?

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Years ago, in The Economist, I saw this list of positive attributes of a government:

  1. Stability: the government has the ability to provide continuous governance over time. This is not to say that the individual people in power stay in power, but that there is a continuity of principle over time even as people doing the governing shift in an out.
  2. Security: the government protects its citizens and their property from violence:
    1. Caused by internal agents, such as criminals and criminal organizations;
    2. Caused by external agents, such as foreign governments.
  3. Predictability: the government provides a legal structure that offers citizens understandable and predictable consequences of their actions. You take this action, you get that outcome. You can know it in advance and plan accordingly.
  4. Accountability: everyone in the government is either directly answerable to the citizens through election or reports up a bureaucratic structure to someone else who is directly answerable to the citizens.
  5. Transparency: the citizens can see into operations of the government. We can find out what the people who govern us are doing so that we can decide whether or not we want that to continue to be done.

This list is a starting point. You may believe something is missing. Perhaps justice leaps out at you; we can discuss that, although we also have to discuss what we mean by justice.

A libertarian minimalist government and a highly paternalistic welfare state could both provide these five attributes. So there is also a need to discuss the degree of scope the citizen has to determine her own life results, and this is not present in the foregoing list.

Nevertheless, we can take these five attributes and get a good argument going by simply trying to prioritize them. They require tradeoffs. For example, security and transparency are inherently opposed. Agents who would do harm to citizens thrive on transparency, so that they can know what the government security apparatus does. However, there has to be enough transparency to support accountability.

Similarly, stability, predictability and accountability often oppose one another because the polity itself is not predictable. So if the government is to offer stable and predictable protections to minorities within the polity, this may aggravate the majority. A government that is totally accountable to the people may not uphold these protections.


Politics is the process by which we come to enough collective agreement to make decisions that affect everyone in the collective. Nationally, we have to determine how we want to make the tradeoffs among these five attributes. The people in positions of responsibility in the government have their own ideas about them; do those ideas align with ours? If not, what are we going to do about it?

Due to our Enlightenment heritage, the word politics has a smelly connotation. Bill George, who teaches at Harvard Business School and used to run Medtronic, says we ought to put country before politics. This is a common enough sentiment. What would it mean in real life?

If we were all wired the same way, we would all agree on what we ought to do as a country. We would all rank order the five attributes above the same way and set the same tradeoffs. We would all define justice the same way. We would all want the same relationship between the individual and the state.

Many Enlightenment thinkers hoped that progress would reveal optimum answers to these questions. Knowing these answers, there would be no need for politics, because we would rationally agree on how to proceed. In 1878, Friedrich Engels wrote in Anti-Dühring:

The first act by virtue of which the state really constitutes itself the representative of the whole of society — the taking possession of the means of production in the name of society — this is, at the same time, its last independent act as a state. State interference in social relations becomes, in one domain after another, superfluous, and then dies out of itself; the government of persons is replaced by the administration of things, and by the conduct of processes of production. The state is not “abolished”. It dies out.

This is the origin of the idea of withering away of the state. We all agree on what to do, so “the government of persons is replaced by the administration of things.” Government is superfluous, because all rational citizens share a common agreement of what the entire collective ought to decide.

However, since we do not observe the promised convergence to a common agreement, this is not achievable. There is not going to be a universally shared understanding of how difficult societal tradeoffs ought to be made. What the rationalist program actually calls for is to take the politics out of politics.

The Rehabilitation of Politics

Instead, I am calling for engagement with politics. I am asserting that there is a right way and many wrong ways to be political, just like there is a right way and many wrong ways to be religious.

A person who walks around all smug and sanctimonious because of religious convictions is doing it wrong. A person who says that any religion is just as good as any other religion is also doing it wrong: in Roman Catholicism, this is the sin of indifference. We are called to believe that we are right in our beliefs, without asserting that all who believe otherwise are necessarily evil.

All they ask, we could readily grant, if we thought slavery right; all we ask, they could as readily grant, if they thought it wrong. Their thinking it right, and our thinking it wrong, is the precise fact upon which depends the whole controversy. Thinking it right, as they do, they are not to blame for desiring its full recognition, as being right; but, thinking it wrong, as we do, can we yield to them? Can we cast our votes with their view, and against our own? In view of our moral, social, and political responsibilities, can we do this?
— Abraham Lincoln, “Cooper Union Speech“, 1860.

Similarly, in politics, there is a balancing act to be done to hit the sweet spot between the strident “We’re right; they’re wrong” and the spineless “Who am I to have an opinion?” The Cooper Union Speech is my favorite Lincoln speech because I find that he did hit that sweet spot. He recognized that there were Americans who believed as fervently that slavery was right as he believed it was wrong, without rendering those who disagreed stupid, evil or crazy, and at the same time without a misguided call to compromise on principle. He was ready to compromise politically as far as leaving slavery in place in the states that already allowed it, because he foresaw secession and civil war if this was not done. But, in principle, there could be no compromise; we were either going to have legalized slavery in this country or we weren’t. In fact, we could not avoid secession and civil war. Four years later, Lincoln would come to see the war as a divine judgement on a nation that had tolerated slavery.

I believe that this is what We the People have to do. We have to be able to have reasoned discussions with those who disagree with us. We can settle our differences with words or with bullets. There is no third option.

We believe that political power is derived from the consent of the governed. If the governed cannot even have an intelligent conversation among ourselves with those of us who differ in our beliefs and priorities, how can we consent to anything?

Written by srojak

February 3, 2018 at 4:42 pm

On the Other Hand, There’s a Fist

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(With apologies to Jona Lewie, whose album by this name was part of the 1978 Be Stiff release.)

I watched the State of the Union speech last night. Donald Trump had a respectable outing. Given his track record, it’s only a matter of time before he squanders it with an ill-advised tweet. I think the over-under is about 36 hours.

However, he also demonstrated his vision for the Republican Party. Reading the speech carefully, you can understand how he won the Republican nomination over what has been described as “the GOP’s deepest White House field in a generation.

Michael Goodwin understands this. Writing in the New York Post yesterday, he claims “Donald Trump is teaching Republicans how to fight.

Yes, those responsible for writing this address deserve credit. However, so does Trump. Just like I discussed with Napoleon, the advisers and staff can advise and plan, but someone in an executive role has to sit at the table and act with his own chips. Donald Trump had to have the will to pursue this line, or the speech would have ended in the wastepaper basket.

Laughing Tonight

Last night on the post-game — er, post-speech wrap-up (have you noticed how political coverage and sports coverage have converged?), CNN’s Jake Tapper was critical of Trump for having offended Democrats (the horror!):

What you saw tonight was President Trump, I think, with one hand reaching out his hand to Democrats, and with the other hand holding up a fist. And this is almost the conundrum of Donald Trump. In addition to more Republican positions, such as tax cuts, talking about strong borders, etc., there is in his Trump Republicanism — nationalism, populism, whatever you want to call it — room for Democrats to work with him. He talked about changing trade deals. He talked about lowering the cost of prescription drugs, spending money on infrastructure, paid family leave, prison reform, path to citizenship for dreamers. There is that there. But by the same token, I think President Trump doesn’t quite necessarily understand just how offensive many Democrats in that chamber are going to find some of the things he proposed and some of the things he said, in terms of “there are Americans who are dreamers, too”, etc. … And this really is the mystery of Donald Trump.

Conundrum? Mystery? Are you serious?

The only mystery is why it took Donald Trump to address the Republicans’ inability to stand up for their beliefs and push back effectively. Goodwin summarized it perfectly: “After all, that’s what Republicans usually do — soften their tone and, badgered by a liberal Washington press corps, give in to big government ideas.” It is why the electorate was fed up, why they started talking about “cuckservatives“, why they were ready to take a chance on Donald Trump.

Republicans are supposed to decline the opportunity to offend Democrats? Let’s review:

You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it’s not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.
— Barack Obama, 2008

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
— Barack Obama, 2012

You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables. Right? The racist, sexist, homophobic, xenophobic, Islamaphobic—you name it. And unfortunately there are people like that. And he has lifted them up.
— Hillary Clinton 2016

How does it feel to be flipped off? Democrats appear to believe they can say anything they want to, because they’re the caring people. They mean well, so any kind of sanctimonious attitude is to be given a pass.

[Oh, by the way, Government research did create the Internet, but there was no intention of creating it as a means by which the commercial sector could make money. The government exposed the Internet to the public, and people in commercial enterprises promptly figured out how to use it to make money. That’s what we do.]

Feeling Stupid

The Democrats and their sympathetic friends in the press are masters at showing the human costs of the problems they are trying to solve. I can’t fault them for that; that’s good messaging. Conservatives have typically been horrible at humanizing their ideas, preferring to present dry, abstract arguments that do not reach ordinary people effectively.

So when Trump presents the human costs of letting the MS-13 gang into this country, he is taking a page out of the Democratic playbook. Democrats don’t have a patent on this approach. Van Jones was lame when he accused Trump of a “smear” on dreamers:

What he said about those young people, he implied — and he did it deliberately — that Dreamers are gang members

This is the standard Democrat response: anything other than full rollover is morally unjustifiable. Jones inferred that Trump was saying that dreamers are gang members, but it was an unwarranted inference. You can make the inference, if you want to, but you can’t lay it at Trump’s doorstep. Trump specifically addressed the dreamers:

Here are the four pillars of our plan: The first pillar of our framework generously offers a path to citizenship for 1.8 million illegal immigrants who were brought here by their parents at a young age. That covers almost three times more people than the previous administration covered.

At the same time, Trump promoted his program for border security. Republicans have historically shied away from taking on these issues, whether because they didn’t know how or they were afraid they would get it wrong.

I would have liked to see some discussion of how our drug policies have enabled cartels, destabilized Mexico and created further incentives for Latin Americans to try to get into this country by any means possible. Nevertheless, I recognize that Trump is not going to follow that line. Instead, he is going to assert the need for border security and immigration restriction. And, to his credit, he effectively humanized the costs of not doing so.

I’ll Get by in Pittsburgh

Also in the Post, Salena Zito profiled the experience of one exurban Pittsburgh family watching the State of the Union address.

The children in the family noticed how Democrats on the floor sat through the speech in stony, unresponsive silence. Their fourteen-year-old daughter mused, “I just wonder if they thought this through past their politics, on many of these things all of America is applauding while they are sitting.”

These are people who do really want to take care of people who, they feel, deserve to be taken care of (I’m married to such a person). They don’t want to deport people who were brought here as children, and know no other country. But they also want laws enforced and borders secured.

When Democrats get righteous, when they start equating objections to their policies with racism, when they paint themselves as the caring people but are selective in their choices of people about whom to care, these people want Republicans to stand up, push back and, without apology, represent their concepts of equity and justice.

At this point, it looks like Donald Trump is the only person who has any idea how to do that.

Written by srojak

January 31, 2018 at 10:14 pm