Tuesday, December 20, 2016

Gingrich suggests Trump pardon advisers who break the law

Former House Speaker Newt Gingrich suggested that Donald Trump could pardon members of his administration who break the law.
Referring to a law that could prevent Trump from hiring his daughter and son-in-law to serve in his administration, Gingrich said on "The Diane Rehm Show" Monday morning: “In the case of the president, he has a broad ability to organize the White House the way he wants to. He also has, frankly, the power of the pardon."
"It is a totally open power, and he could simply say, 'Look, I want them to be my advisers. I pardon them if anyone finds them to have behaved against the rules. Period.' Technically, under the Constitution, he has that level of authority," he said, according to Politico.

Gingrich also suggested that Congress change ethics laws so Trump can avoid any conflicts of interest that his global business empire may pose.
“We’ve never seen this kind of wealth in the White House, and so traditional rules don’t work,” he said.
“We’re going to have to think up a whole new approach.”
Gingrich didn't provide any details for what a new approach would entail.
Trump previously said he would hand over the management of his real estate and investment portfolio to his children and longtime executives, but has not given further details. He called off a planned press conference to address the issue last week.
Gingrich conceded that Congress can't ignore the relationships Trump's businesses have with foreign governments.
“It’s a very real problem. I don’t think this is something minor. I think certainly in an age that people are convinced that government corruption is widespread both in the U.S. and around the world, you can’t just shrug and walk off from it," he said.

Samantha Bee, Glenn Beck team up to fight 'Trumpism'

"It's not just individual people against Donald Trump, it's all of us against Trumpism," Bee said.
Beck explained he agreed to be on Bee's show because, after years of criticizing liberals and President Obama, he doesn't want to do any more "damage."
"Please don't make the mistakes that I made," Beck said. "And I think all of us are doing it. We're doing it on Facebook, we're doing it on Twitter. We tear each other apart and we don't see the human on the other side."
Beck's appearance on "Full Frontal" comes as part of his pivot towards the mainstream media, as he's sat for interviews with both the New York Times and the New Yorker. Beck's The Blaze media network laid off staffers during 2016 as his opposition to Trump's presidential bid put him at odds with some other conservative media figures.

Four more charged in Flint water crisis

Michigan’s attorney general on Tuesday charged four officials with criminal accusations stemming from the Flint drinking water crisis.
Among the people charged by Attorney General Bill Schuette (R) are the highest-ranking individuals implicated yet in the investigation into the lead contamination in the city of 100,000. They could face up to 25 years in prison.
Darnell Earley and Jerry Ambrose were both emergency managers of Flint, appointed by Gov. Rick Snyder (R) to oversee the city while it is under state receivership.
The charges announced Tuesday get criminal investigators a significant step closer to Snyder, who has maintained that he believed state bureaucrats when they told him Flint’s water was safe up until September 2015.
Snyder has not been charged, though Schuette declined again Tuesday to rule out any potential suspects.Schuette said at a news conference that both Earley and Ambrose were instrumental in securing $85 million to connect the city to a new water source. But the financing contract required the city to temporarily use Flint’s mothballed water treatment plant, which Earley and Ambrose knew was not equipped to treat water straight from the Flint River, Schuette alleged.
That led to improper treatment after the April 2014 switch, which caused the water to corrode lead pipes. The city’s water is cleaner now since switching back to Detroit’s water, but residents cannot drink it without filtering first.
Earley was emergency manager from November 2013 to January 2015, and Ambrose served from January to April 2015. Both are accused of making false pretenses, conspiring to make false pretenses, misconduct of office and neglect of duty.
“The tragedy we know as the Flint water crisis did not occur by accident,” Schuette said at the news conference. “Flint was a tragedy of arrogance, disdain and a failure of management. An absence of accountability, shirking responsibility. We will proceed to deliver justice and hold those accountable who broke the law, period.”
Daugherty Johnson and Howard Croft, both Flint city employees, were also charged Tuesday. They are accused of false pretenses and conspiracy, also related to the $85 million financing deal, and face up to 20 years in prison.
With the latest charges, 13 people have been formally accused criminally in connection with the Flint crisis. Some have pleaded guilty and some are fighting their charges in court.
People working on the investigation said that the contract at issue with the latest charges shows that Flint residents were tricked with the planned water switch.
“This case, as we charged it right here, is a classic bait-and-switch. It’s a bait-and-switch where the citizens of Flint got the shaft, that’s the simple truth,” said Todd Flood, the special prosecutor in charge of the Flint cases.
Andy Arena, the chief investigator Schuette assigned to the cases, expressed surprise that officials made the water switch.
“So many people knew that plant was not ready, and so many people said ‘don’t do this,’ and yet, it was done. And I think that’s the thing that shocked me,” he said.
Earley testified at a March congressional hearing on the crisis that he had no reason to believe that lead contamination was a risk in switching Flint’s water, based on what federal and state environmental regulators told him.
“I believe, based on the information we were given, we acted responsibly, and did what we did knowing the information we had at the time,” Earley told lawmakers.
In response to the charges, Rep. Elijah Cummings (Md.), top Democrat on the House Oversight Committee, renewed his call for the panel’s Chairman Jason Chaffetz (R-Utah) to subpoena Snyder.
Chaffetz closed the committee’s investigation last week despite Snyder not supplying all of the information that the panel sought for its probe.
“Gov. Snyder appointed the two emergency managers charged today, and it is beyond irresponsible for the committee to close its investigation without demanding full accountability and transparency from him. The families of Flint deserve no less,” Cummings wrote in an open letter to Chaffetz.

Trump plots two-for-one assault on Obama regs

President-elect Donald Trump is setting out to gut the Obama administration’s regulations, starting with a mandate that would slowly chip away at the number of rules on the books.
In a video message mapping out his first 100 days, Trump said he would issue an executive order stating that for every new rule issued, two must be eliminated.
The president-elect has decried the regulations that he says have hurt businesses and the economy, particularly those aimed at the environment. And Republicans in Congress are eager to help him roll back many of President Obama’s regulations.
“One of the keys to unlocking growth is scaling back years of disastrous regulations unilaterally imposed by out-of-control bureaucrats,” Trump said during a September speech at the Economic Club of New York. “Regulations have grown into a massive, job-killing industry – and the regulation industry is one business I will absolutely put to an end on day one.”

It’s unclear how such a two-for-one arrangement would be carried out, but the proposal is raising hopes among those who are calling for deregulation.

“Rules have compounded for decades with very little rollback ever taking place, so it is a reasonable request that any time an agency issues a regulation, it should remove a similar magnitude regulatory burden (or, better, two) somewhere else,” Clyde Wayne Crews Jr., policy director of the libertarian Competitive Enterprise Institute, said in an op-ed in Forbes last month.
But Crews worries the requirement will only work on the periphery – getting rid of things like paperwork and forms instead of major rules.
In a white paper, Marcus Peacock, a research professor at the George Washington University Regulatory Studies Center, said this "pay as you go" style of regulating has potential for “more regulatory balance," but it depends on what would be considered a new regulation and who will decide on the trade-offs.
"Limiting the scope of offsets to the agency creating a new burden provides much stronger incentives within agencies to more carefully consider whether a new regulation is necessary, minimize the new regulation’s burden, and identify those existing rules that are most ripe to be reduced or eliminated," he wrote.
Pro-regulatory groups, meanwhile, say such a strict two-for one mandate could put needed public health and safety protections on the chopping block.
“The idea that for any given regulation we’d remove another or two is arbitrary,” said Lisa Gilbert, director of Public Citizen’s Congress Watch Division. “There’s no connection between different public protections and the purpose they serve.”
Trump has provided little detail about his plans. But some lawmakers and experts say that he could pull some lessons from other countries -- Canada, Australia and the United Kingdom all have similar requirements.
“Canada does it based on administrative costs, the U.K. and Australia try to look at compliance costs on business,” said Susan Dudley, director of the GW Regulatory Studies Center at George Washington University and former administrator of the White House Office of Information and Regulatory Affairs.
“It’s going to be complicated no matter what he chooses.”
Jitinder Kohli, a former senior official in the British government who now leads work on government performance at Deloitte Consulting LLP, said the U.K. policy has forced government agencies there to look for ways to streamline regulations to reduce costs.
Instead of focusing on cutting the number of regulations, Kohli recommended Trump focus on the actual costs of rules, though they are sometimes difficult to calculate.
“Sometimes you can get rid of a regulatory requirement and it doesn’t save businesses any money,” he said.
For every rule issued in the U.K., three existing rules must be eliminated.
According to a U.K. government report, that requirement saved businesses £885 million from May 5, 2015 to May 26, 2016, or nearly $1.1 billion based on current conversion rates.
“Sometimes you can achieve significant reductions in regulatory costs without removing protections,” Kohli said.
Kohli said the U.K. has made a point of working with businesses to comply with new regulations.
“Often small businesses told us that it’s hard for them to know how to comply with regulations. It’s too complicated, so we were able to significantly reduce the costs to small business by making it clearer what the requirements were,” he said.
“There was a concerted effort to change the way regulators thought about their jobs and engaged with regulated entities in the U.K.,” Kohli said. “We focused on improving compliance and protections while mitigating costs.”
Sen. James Lankford (R-Okla.) previously said the U.K. and Canada have had “limited success” with their policies.
“I don’t mind talking about it and looking at it, but we have to figure out how to actually make it work,” he said shortly after the election.
Philip Howard, chair of Common Good, a government and legal reform advocacy group, said the U.K.’s policy produced “modest” cost savings, but said it’s a first step toward regulatory reform that could benefit the U.S.
“You’re never going to drain the swamp with one-in, two-out,” he said. “What’s really good about it is it imposes on regulators a discipline that before they add a new burden they should look at old burdens no longer needed or effective.”
"Making people put on the hat and say, 'Gee if we want to regulate that, we have to remove twice as many burdens,' it changes the way regulators approach their job," he said. “That’s a very good thing."
Advocates for health and safety protections, however, say Americans shouldn’t be forced to give up one protection for another.
“I’ve never argued that every rule on the books is perfect and doesn’t need an update, but I don’t think we need a strictly limiting process,” Gilbert said.
In addition to the two-for-one rule, Trump has also promised to specifically dismantle ObamaCare, the Dodd-Frank financial reform regulations, and several major environmental regulations, including Obama's Clean Power Plan.

Friday, December 16, 2016

A lesson from abroad for creating American jobs

The presidential election exposed deep and painful rifts in the U.S. economy.
One underlying concern is the future of U.S. jobs, millions of which have been lost in recent decades, and not just in manufacturing, where more than 5 million jobs have been shed since 2000, but also in financial services, technology, energy, publishing and other sectors. Not only has Archie Bunker lost his footing, so too have his college-educated son-in-law Meathead and subsequent generations.
Many voters affected by these trends have focused their anger on “foreigners” at home and abroad. To dismiss this anger as bigoted or misinformed, however, misses the point. What is needed now is a strategic path forward that enables U.S. workers to compete effectively in global labor markets.

To start, we need to revisit a core tenet of free trade policies like the North American Free Trade Agreement (NAFTA) and Trans-Pacific Partnership (TPP). This tenet is comparative advantage. It is the theory that each country should focus on what it’s comparatively best at producing and then trade with others doing the same. Each country gains, the theory goes, with more produced at lower prices. This of course overlooks the impact on workers if a country loses its comparative advantage in a particular industry, hence arguments for protectionism.
But it also overlooks the fact that comparative advantage isn’t static. It is often created. American dominance in technology and related areas, for example, is rooted in Cold War-era government investments in research and development and higher education. These investments coordinated efforts across government, business, academia and beyond in a way that would have been difficult if not impossible for any one company to achieve.
These investments helped launch the internet as an entire job-creating ecosystem of innovation and entrepreneurship that endures today. So what’s gone wrong since then? The internet itself has been a major disruptor. So has the rise of China as a manufacturing center, particularly since it joined the World Trade Organization (WTO) in 2001. A perfect storm of these and other factors have led to fundamental changes in the U.S. economy and in our labor markets.
Using the S&P 500 as a proxy for these changes reveals that 60 percent of companies on the list in 1996 are no longer on it today. A telling pattern that emerged was the decline of steel. Once the dominant world player and a major employer, the U.S. steel industry has been under siege for decades. More than 30 American steel companies went bankrupt between the 1990s and 2004. The industry continues to shed jobs today. U.S. Steel, for example, employed 340,000 at its peak in 1943 but is down to about 21,000 today. It now ranks 24th worldwide in steel production and is no longer listed on the S&P 500 because its market capitalization is too low. Worse, Bethlehem Steel had 167,000 workers at its peak in 1957. Today, it no longer exists. It shuttered in 2003.
To blame cheap steel from China, however, is not only facile, it’s lazy. Japan’s Nippon Steel has somehow managed to thrive, ranking 3rd worldwide, as has Korea’s Posco, which ranks 4th. There is much to be learned from both of these cases, but to start, neither Nippon nor Posco has to shoulder healthcare costs because their governments provide these. In contrast, healthcare as a cost borne by U.S. steel companies-—a legacy of post-World War II labor shortages and union pressures—has been crippling.
Shifting the burden to a national healthcare system is one step toward putting U.S. workers on equal footing with their global competitors. This can also free up corporate capital to invest in research and development, as Posco has done, effectively pivoting from low cost to high value added steel as a smart strategy for competing with China.
Amy Blitz is a lecturer at Babson College, where she teaches economics and strategy. She holds a Ph.D. from the Massachusetts Institute of Technology and has more than 15 years of strategy consulting experience.

Will Trump’s wild card Tillerson pay out?

President-elect Donald Trump’s pick for secretary of State has caught most off guard. Rex Tillerson, CEO of Exxon Mobil Corp., is widely seen as completely out of left field. However, it shouldn’t be — you just need to understand Trump’s business legacy.
One of the quotes Trump uses most from his book “The Art of the Deal” is: “Leverage, don’t make deals without it.” It is a theme the businessman constantly rehashed during the election campaign when discussing his policy of renegotiating such agreements as the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP) and even the Joint Comprehensive Plan of Action (JCPOA), otherwise known as the Iran nuclear deal, among others.
Trump has oft stated that these agreements were not balanced enough toward American interests, and that he would be able to strike a “better deal.” Whether he is capable of this — or if it is even possible to reopen such multilateral agreements — remains to be seen, but with this in mind it should come as little surprise that his choice for America’s top diplomat should be the CEO of one of the world’s biggest companies.
Tillerson has signed agreements in some of the most challenging places in the world, including a deal with Russia to drill in the Arctic that could be valued up to $300 billion and a deal to develop oil fields in the autonomous region of Iraqi Kurdistan.
While Trump has mostly conducted business with private individuals, Tillerson has had to deal with the very highest levels of government, and gain their trust.
It is his relationship with Vladimir Putin that has raised most eyebrows, especially as Russia-U.S. relations are at their most strained for quite some time. While some argue that he has become too close to Putin, others contend that this relationship was based purely on interests and the prospective secretary of State has no particular love for the Russian leader.

Inmate turns down Obama clemency offer

A federal inmate in Texas has declined President Obama’s offer for clemency, USA Today reported Friday.
Arnold Ray Jones applied for the president’s clemency program for low-level drug offenders, and was accepted on August 3.
But Jones reportedly declined the condition that came with the offer that required him to enroll in a residential drug treatment program — a condition that has been attached to 92 of Obama’s clemency offers.

Jones is reportedly the first to refuse the condition.
He is expected to be released in April 2019 if he gets time off for good behavior. The commutation would have gotten him out nine months earlier.
Jones has not commented on why he refused the clemency offer.