The Bonner group/A Super PAC and fundraiser for Hillary & DNC. The Campaign against Bill OReily is orchestrated by MM & BG. #Smearproof
Glenn Beck ✔ @glennbeck The Bonner group/A Super PAC and fundraiser for Hillary & DNC. The Campaign against Bill OReily is orchestrated by MM & BG. #Smearproof 5:58 AM – 19 Apr 2017 321 321 Retweets 232 232 likes
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Sources: Fox News Has Decided Bill O’Reilly Has to Go
By Gabriel Sherman
The Murdochs have decided Bill O’Reilly’s 21-year run at Fox News will come to an end. According to sources briefed on the discussions, network executives are preparing to announce O’Reilly’s departure before he returns from an Italian vacation on April 24. Now the big questions are how the exit will look and who will replace him.
Wednesday morning, according to sources, executives are holding emergency meetings to discuss how they can sever the relationship with the country’s highest-rated cable-news host without causing collateral damage to the network. The board of Fox News’ parent company, 21st Century Fox, is scheduled to meet on Thursday to discuss the matter.
Sources briefed on the discussions say O’Reilly’s exit negotiations are moving quickly. Right now, a key issue on the table is whether he would be allowed to say good-bye to his audience, perhaps the most loyal in all of cable (O’Reilly’s ratings have ticked up during the sexual-harassment allegations). Fox executives are leaning against allowing him to have a sign-off, sources say. The other main issue on the table is money. O’Reilly recently signed a new multiyear contract worth more than $20 million per year. When Roger Ailes left Fox News last summer, the Murdochs paid out $40 million, the remainder of his contract.
According to sources, Fox News wants the transition to be seamless. Executives are currently debating possible replacement hosts. Names that have been discussed include Eric Bolling, Dana Perino, and Tucker Carlson, who would move from his successful 9 p.m. slot and create a need for a new host at that time. One source said Sean Hannity is happy at 10 p.m. and would not want to move.
The Murdochs’ decision to dump O’Reilly shocked many Fox News staffers I’ve spoken to in recent days. Late last week, the feeling inside the company was that Rupert Murdoch would prevail over his son James, who lobbied to jettison the embattled host. It’s still unclear exactly how the tide turned. According to one source, Lachlan Murdoch’s wife helped convince her husband that O’Reilly needed to go, which moved Lachlan into James’s corner. The source added that senior executives at other divisions within the Murdoch empire have complained that if O’Reilly’s allegations had happened to anyone else at their companies, that person would be gone already.
Spokespersons for 21st Century Fox and Fox News did not respond to requests for comment, nor did O’Reilly’s agent, Carole Cooper.
By EMILY STEEL and MICHAEL S. SCHMIDT APRIL 19, 2017
Bill O’Reilly has been the top-rated host in cable news, serving up defiant commentary with a message that celebrated patriotism and expressed scorn for political correctness.CreditAndrew Hetherington/Redux Pictures
Bill O’Reilly has been forced out of his position as a prime-time host on Fox News, the company said on Wednesday, after the disclosure of multiple settlements involving sexual harassment allegations against him. His ouster brings an abrupt and embarrassing end to his two-decade reign as one of the most popular and influential commentators in television.
“After a thorough and careful review of the allegations, the company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel,” 21st Century Fox, Fox News’s parent company, said in a statement.
Mr. O’Reilly’s departure comes two and a half weeks after an investigation by The New York Times revealed how Fox News and 21st Century Fox had repeatedly stood by Mr. O’Reilly even as sexual harassment allegations piled up against him. The Times found that the company and Mr. O’Reilly reached settlements with five women who had complained about sexual harassment or other inappropriate behavior by him. The agreements totaled about $13 million.
Since then, more than 50 advertisers had abandoned his show, and women’s rights groups called for his ouster. Inside the company, women expressed outrage and questioned whether top executives were serious about maintaining a culture based on “trust and respect,” as they had promised last summer when another sexual harassment scandal forced the ouster of Fox News’s chairman, Roger Ailes.
That put pressure on 21st Century Fox and the Murdoch family that controlled it. After the dismissal of Mr. Ailes, the company struck two settlements involving sexual harassment complaints against Mr. O’Reilly and also extended his contract, even as it was aware of the complaints about his behavior.
Last week, the Murdochs enlisted the law firm Paul, Weiss, Rifkind, Wharton & Garrison to conduct an investigation into Mr. O’Reilly’s behavior after one woman, who had detailed her allegations against Mr. O’Reilly to The Times, called the company’s hotline to report her complaints. Another complaint was reported on Tuesday, according to the lawyer who represents the woman making the allegations.
Mr. O’Reilly has denied the allegations against him.
Mr. O’Reilly, 67, has been an anchor at Fox News since he started at the network in 1996. He was the top-rated host in cable news, serving up defiant commentary every weekday at 8 p.m., with a message that celebrated patriotism and expressed scorn for political correctness. His departure is a significant blow to Fox News’s prime-time lineup, which in January lost another star, Megyn Kelly, from a lineup that dominated the prime-time cable news ratings.
Media Matters President Angelo Carusone: “Even If Bill O’Reilly Stays, His Show Will Never Be As Profitable”
Carusone: Fox News Said It Themselves … ‘If You Have A Television Show And You Have Advertiser Problems, You No Longer Have A Television Show That Is Viable.”
Video ››› April 5, 2017 6:30 PM EDT ››› MEDIA MATTERS STAFF
From the April 5 edition of Cheddar News:
KRISTEN SCHOLER (CO-HOST): We know that you’ve been following the developments in these sexual harassment claims against Fox News’ Bill O’Reilly, and as of right now ABC reporting 22 advertisers pulling out of advertising at least temporarily on his show. How is this going to force Fox News to respond long term? We’ve heard the response short-term which is it’s working with these advertisers, but big picture what do you think this means?
ANGELO CARUSONE: One thing that at the top that I point out is, when we think about the number of advertisers that have dropped, that 22 number is the ones that have given public statements. From just observing the program and his advertisers the last couple of weeks, and then what his advertising looked like last night, and just from my own experience of running and being involved in similar kinds of advertiser efforts, like against Glenn Beck, I suspect that many more advertisers have actually adjusted their ad buys but just haven’t given public statements yet. Because many of the advertisers that had been advertising on the program every single night for the past few weeks did not appear last night after this controversy blew up, and I don’t think they’ll be there tonight.
JON STEINBERG (CO-HOST): Angelo, at what point — because they’re sticking by this guy, because he brings in money. And they basically don’t care; they don’t care how bad it is or what he’s done, he makes them so much money that they’re going to stick with him. At what point is it enough advertisers that the math — the problem is, this looks bad for them, and it could be even worse for them, they could have gotten ahead of this and been like, “this guy’s toxic, we’re done,” right? Instead they paid his settlements, stuck by him, now they’re going to lose money and now they’re going to have to pull the ripcord on him, at which point it looks like they’re just doing it for the money.
CARUSONE: And I think that’s the exact right question, which is at what point does it actually start to affect them? What happens during these kinds of flare-ups is that there’s an assumption on the public’s part that if O’Reilly was to leave the program in a couple of days, that everything was pointless and worth it and Fox News is totally fine and Bill O’Reilly is totally fine. That’s actually just not true, and during the Glenn Beck period, after he lost a wave of advertisers, his advertiser rates never recovered. He limped along for over a year. His advertiser rates were a quarter of what other Fox News programs were even though he had a million viewers than many other Fox News programs, comparable ones, during similar time slots. He was beating the programs around him by a million viewers but his advertiser rates for the same advertisers, and for the same commercials, were sometimes a fifth of what they were on just a program an hour later or an hour earlier. That’s because they fell precipitously after he lost a lot of advertisers. The market addressed that issue; once you started to see there’s a problem buying ads on that show, media buyers weren’t going to pay the same rates anymore, and they never did. So that’s the first thing that I would point out, that no matter what, even if Bill O’Reilly stays, his program will never be as profitable as it was three days ago. That is just a bottom-line fact.
On The O’Reilly Factor and on his former talk-radio program, Bill O’Reilly has focused on news and commentary related to politics and culture. O’Reilly has long said that he does not identify with any political ideology, writing in his book The O’Reilly Factor that the reader “might be wondering if whether I’m conservative, liberal, libertarian, or exactly what…. See, I don’t want to fit any of those labels, because I believe that the truth doesn’t have labels. When I see corruption, I try to expose it. When I see exploitation, I try to fight it. That’s my political position.” On December 6, 2000, the Daily News in New York reported, however, that he had been registered with the Republican Party in the state of New York since 1994. When questioned about this, he said that he was not aware of it and says he registered as an independent after the interview. During a broadcast of The Radio Factor, O’Reilly said that there was no option to register as an independent voter; however, there was in fact a box marked “I do not wish to enroll in party.” Despite being registered as an Independent, many view him as a conservative figure. A Pew Research February 2009 poll found that 66% of his television viewers identify themselves as conservative, 24% moderate, and 3% liberal. A November 2008 poll by Zogby International found that O’Reilly was the second most trusted news personality after Rush Limbaugh.
I’m not a political guy in the sense that I embrace an ideology. To this day I’m an independent thinker, an independent voter, I’m a registered independent… there are certain fundamental things that this country was founded upon that I respect and don’t want changed. That separates me from the secularists who want a complete overhaul of how the country is run.
According to the Newsmax publication, O’Reilly has repeatedly claimed that Clinton had the Internal Revenue Service audit him. O’Reilly says that he was audited three times since his program debuted in 1996.
In 2002, O’Reilly had criticized Democratic Senator Hillary Clinton, stating that she would run for president in 2008. In an interview with Jay Leno on The Tonight Show, he said, “I just feel that Hillary is a socialist, and I’m paying enough tax. Hillary wants to take my money [and] your money… and give it to strangers. There’s something about that that offends me.” He said that she had voted for every single spending bill that year. In the same interview, he accused her of running as a political carpetbagger, and said that she intends to abolish the Electoral College in favor of the popular vote, claiming that it would be done only to give her an advantage in the presidential race.
During the lead up to the 2004 presidential election, O’Reilly said that the Democratic Party has been taken over by the “far-left” in a conversation with former Democratic Congressman Brad Carson. Shortly following the election, O’Reilly ridiculed a message in which Democratic challenger John Kerry thanked his supporters for their support as well as opposing “the attacks from big news organizations such as Fox, Sinclair Broadcasting, and conservative talk radio.” O’Reilly shot back, calling Kerry a “sissy” six times. Kerry himself stated publicly in a 2006 interview that he always felt he’d have a “fair shot” at conveying his views on The O’Reilly Factor and regrets not doing an interview prior to the election.
Although O’Reilly has never officially endorsed any candidate, he did advise his audience not to support Democratic South Dakota senator Tom Daschle in his Senate re-election bid on his radio program, saying that, “[W]ith all due respect to the senator, we don’t have any respect for him at all. And we hope he loses in South Dakota. And I — really, I stay out of all these races, but you guys listening in South Dakota, vote for the other guy.” Daschle would lose the 2004 Senate election in South Dakota to John Thune.
2008 presidential election
In the 2008 Democratic primary, O’Reilly urged his viewers not to vote for a candidate, this time John Edwards, and called Edwards a “phony” regarding his public statements on poverty. O’Reilly has, on many occasions, admitted to “having no respect for him”, and called him “arrogant” for keeping his campaign staffer Amanda Marcotte on after making remarks O’Reilly called offensive to Christians.
O’Reilly has also criticized Republicans. When speaking to Ed Schulz in 2007, O’Reilly said that then-presidential candidate Rudy Giuliani had “terrible character judgement” with Bernard Kerik and felt that “disqualified him from being president.”
“Culture War” and domestic politics
O’Reilly has taken to using the abbreviation “S-P”, for “SecularProgressive“, as a shorthand way of referring to a political category of people who want “drastic change” in the country. O’Reilly classifies the group as “far left”, and almost always refers to the group in a negative manner. However, he says that he is not equating the negative qualities he sees in “SPs” with a “liberal” political ideology, saying the SP camp is far more “libertine” with social values:
Liberal thought, however, can be a good thing. Progressive programs to help the poor, fight injustice and give working people a fair shake are all positive. But libertine actions damage a just society because actions have consequences. Kids who drink and take drugs are likely to hurt themselves and others. But obviously, the SPs do not make judgments like that.
O’Reilly initially supported the invasion of Iraq. Speaking on ABC’s Good Morning America on March 18, 2003, O’Reilly promised that “If the Americans go in and overthrow Saddam Hussein and it’s clean [of weapons of mass destruction]…I will apologize to the nation, and I will not trust the Bush administration again.” In another appearance on the same program on February 10, 2004, O’Reilly responded to repeated requests for him to honor his pledge: “My analysis was wrong and I’m sorry. I was wrong. I’m not pleased about it at all.” With regard to never again trusting the current U.S. government, he said, “I am much more skeptical of the Bush administration now than I was at that time.”
O’Reilly has questioned the U.S. invasion of Iraq in hindsight, in particular the performance of Defense Secretary Donald Rumsfeld. However, he maintains that the United States “did a good thing by trying to liberate a country”. O’Reilly says the war effort should continue as long as progress is being made. He has also said that some anti-war activists are actively rooting for the United States to lose:
Again, I don’t know. With all America has sacrificed in Iraq, though, it seems reasonable to let the end game play out. If things are getting better, don’t derail the train.
But the anti-war crew is now fully invested in defeat. So the struggle at home is becoming even more vicious. Iraq is a shooting war. America’s a political war. Both are driven by hatred.
O’Reilly called the Iraqi people a “prehistoric group”, citing a poll showing that only two percent of them viewed the U.S. Forces as liberators and 55 percent preferred that they leave. “We cannot intervene in the Muslim world ever again”, he said. “What we can do is bomb the living daylights out of them (…) no more ground troops, no more hearts and minds, ain’t going to work.”
You can’t win. No one could. No nation could unless the Iraqi people turn on all the terrorists. And they’re not. They’re not, Tony.
O’Reilly went on to say that the country was corrupt and compared the situation to the American support of South Vietnam during the Vietnam War:
It’s like South Vietnam. It’s the same thing. There were a lot of South Vietnamese helping us. A lot fought and died on our side but there wasn’t enough of them to prevent the communists which were more united.
The cost has been great. We all know that. In suffering and cash. And the Iraqi government is still a mess. But General Petraeus, backed by a brave and professional U.S. military, has restored much order, largely defeated the Iraqi Al Qaeda thugs, and at least given the good people of that country a chance to prosper. General David Petraeus is “The Factor” person of the year by a wide margin.
O’Reilly has endorsed an aggressive War on Terror policy. He supports coercive measures to extract information from detainees at Guantanamo Bay, which he visited on two occasions. He has said that, in comparison to procedures used under the regimes of dictators such as Adolf Hitler and Pol Pot, the U.S.’s tactics are not torture and are beneficial even when involving physical techniques, claiming that “Torture is taking my fingers off, disfiguring me, taking my eye out — not keeping me in a cold room and uncomfortable with blaring rock music.” O’Reilly cites waterboarding as a successful coercive measure that should not be classified as torture, citing that Abu Zubaydah and Khaled Sheikh Mohammed have both given up valuable information after being subjected to the technique:
In my opinion, it is immoral to allow terrorists to kill people when you can stop them. If you capture someone who knows the inner workings of a terror outfit, you make life very uncomfortable for that person within boundaries set by Congress.
But let’s stop the nonsense here. America’s not a bad country because it waterboarded Zubaydah. The Bush administration has done its job. We haven’t been attacked since 9/11.
The liberal press, politicians, the ACLU can’t stop any wrongdoing. They’re all lost in a fog of misguided indignation, crazy with hatred for Bush, but we the people must take a stand here. This isn’t a game. This is life and death. And if you don’t believe it, I know scores of people right here in New York City that will tell you about their dead loved ones.
Waterboarding should be a last resort, but it must be an option.
O’Reilly has said that both political parties in the United States are “playing games” with regards to the war on terrorism:
…both the right and the left are playing games to some extent. Certainly, Al Qaeda remains dangerous, but the only way to hit them is to invade Pakistan. Do the Democrats want to do that?
On the other hand, it would be a tragedy if after all the blood and treasure Americans have sacrificed, Al Qaeda has not been badly damaged.
America should be united in fighting these savages, but we’re not. Ideology has poisoned a reasoned, disciplined approach to defeating the jihadists. America’s great strength, diversity of thought, can also be a weakness. And Al Qaeda knows it.
The old saying goes, “United we stand, divided we fall.” Well, we’re divided.
O’Reilly has accused billionaire businessman, investor and political activist George Soros of trying to influence the 2008 election by donating to causes and organizations that O’Reilly calls the “radical left”, such as moveon.org, which regularly criticizes conservative politicians. O’Reilly said of Soros “If Mike Myers didn’t invent Dr. Evil, some would give Soros that moniker.” O’Reilly also accused Media Matters for America of receiving funds from Soros; although Media Matters denies having any funding directly or indirectly from Soros, he and the group’s founder, David Brock, have raised money together to fund political advertisements challenging John McCain in the 2008 election for what politico.com called “attack ads”. O’Reilly responded to the politico report by labeling Soros, Brock and Paul Begala an “American axis of evil” and saying
This, ladies and gentlemen, is ultra dangerous. Most Americans have no idea who Soros or Brock are. They will only know what they see on TV, smear stuff against McCain. And the pipeline extends directly to NBC News, which will publicize every piece of slime Brock can create. Only one word describes this: despicable.
O’Reilly alleged that PBS personality Bill Moyers oversaw $500,000 worth of money transferred from the Shoeman Center Foundation (a group Soros donated to) to Media Matters.
you know, you’ve got to admire Soros for coming up with this organization. I mean, you know, he’s made billions by doing this in business, by being in Curaçao and Bermuda and France, where he was convicted of a felony. And he knows how to do this. He knows how to move the money around and use it to gain influence. And now he’s set his sights on changing the basic fabric of this country.
O’Reilly alleged hypocrisy on the part of the ACLU for stating that New York City‘s random searches of bags in the public transportation as a breach of personal rights, but requiring people entering their New York headquarters to consent to a bag search.
O’Reilly asserted that the ACLU is now a political organization rather than an advocacy group, taking positions and cases based on politics rather than free speech.
He has come down hard on the organization for its actions on behalf of the North American Man Boy Love Association (NAMBLA) which is currently under suspicion of involvement with the rape and murder of a young boy:
Now many of these people subscribe to a philosophy of relativism. That is a theory which says there’s no absolute right or wrong. All moral values are relative. What’s wrong for you is not wrong for your neighbor if he or she doesn’t think his or her actions are wrong. That’s what the North American Man-Boy Love Association (NAMBLA) is all about. Those loons believe it’s OK to rape kids because they want to.
The ACLU defends NAMBLA’s freedom of speech surrounding their publications and has said that the legal blame in the murder should go to who committed it.
The ACLU has said that they sometimes have to defend “unpopular” speech or speech that they don’t agree with, including the Ku Klux Klan‘s, saying their only “client” is the Bill of Rights. O’Reilly alleges the ACLU “cherry picks” its cases to promote a left wing agenda while not supporting causes of free speech that conservatives support in his criticism of the ACLU defending live sex shows in Oregon.
O’Reilly decried the group’s criticism of The Minutemen, claiming the latter were only engaging in a form of protest, a right the ACLU defends. O’Reilly alleges that the organization is protesting the Minutemen because they are going against the ACLU’s agenda.
O’Reilly criticized the ACLU for suing San Diego County for renting property to the Boy Scouts of America in Balboa Park. The ACLU brought up a law claiming that the Boy Scouts discriminated against gays and atheists. O’Reilly criticized the San Diego City Council for voting 6-2 to vote the Scouts out before a ruling on the lawsuit was made.
It would be impossible for the Boy Scouts (search) or any children’s organization to admit avowed homosexuals because of the potential liability. Say the Scouts put openly gay and straight kids together and some sexual activity occurred. Well, parents could sue for millions, same way parents could sue if the Scouts put boys and girls together and underaged sex occurred. As far as the atheist issue is concerned, the Scouts say no specific belief in God is necessary, only an acknowledgement of a higher power. And that power could be nature. Come on. The whole discrimination thing is bogus.
Part of the Boy Scout Oath begins, “On my honor, I will do my best to do my duty to God and my country” and the final point of the Scout Law reads, “A Scout is reverent,” with the Boy Scouts’ of America official explanation being that “a Scout is reverent toward God. He is faithful in his religious duties. He respects the beliefs of others.” However, the bylaws of the organization specifically state that Scouts must “respect the religious beliefs of others” and “in no case where a unit is connected with a church or other distinctively religious organization shall members of other denominations or faith be required, because of their membership in the unit, to take part in or observe a religious ceremony distinctly unique to that organization or church.”
O’Reilly argues this is a liberal definition of what God may be, allowing diversity for anyone believing in a higher power to join.
Now the ACLU is free to come to your town and sue the heck out of it. And believe me, that organization will. The ACLU doesn’t care about the law or the Constitution or what the people want. It’s a fascist organization that uses lawyers instead of Panzers. It’ll find a way to inflict financial damage on any concern that opposes its secular agenda and its growing in power.
He later went on to criticize the Boy Scout leadership for not standing up to the ACLU.
On October 16, 2006 at Mount Pleasant High School in Michigan, a student stood up publicly in the cafeteria and called the principal of the school “a skank and a tramp.” In addition to this, the student called the school administrators Nazis and questioned the sexuality of the vice-principal. The school suspended the boy for 10 days, an action that brought a lawsuit by the ACLU. O’Reilly criticized the ACLU for defending the remarks as satire when he saw it as hate speech.
O’Reilly strongly condemns doctors who provide legal abortion services. Since 2005, he has repeatedly referred to physician and abortion doctor George Tiller as “Tiller the baby killer” on his Fox News prime time show, claiming that there must be “a special place in hell” for him. In May 2009, Tiller was murdered by anti-abortion gunman Scott Roeder.
O’Reilly has said that there is a lack of leadership among the traditionalists and this has emboldened the secular-progressive cause. He consistently says that using religion to justify public policy is wrong:
Right now, religious people are the ones speaking out for traditional values. But America does not forge public policy based on religion. Thus as soon as God enters the debate, the secularists win.
O’Reilly supports some forms of gun control, such as gun registration.
O’Reilly opposed the nationalizedhealth care plan that filmmaker Michael Moore argues for in his film Sicko, saying it would create huge backlogs. He also said, however, that he thinks the government should perform more oversight functions on health care:
…[G]overnment-run health care would be a disaster, featuring long waits for treatment and an enormous rise in taxation. But there should be government oversight on private insurance companies and strict guidelines about abusing customers. There can be compromise and effective government control of medical care abuse in the USA. It is possible. But if Michael Moore’s plan ever gets traction, pray hard you never get sick.
O’Reilly’s stance on LGBT issues has been evolving.
On October 27, 2004, he was quoted saying: “I’ve been saying that all along, that if you open the door for gay marriage, then you have to have the polygamists and the triads and the commune people and everybody else, right?”
O’Reilly supports civil unions for gay and lesbian couples, but has said that nobody has the “right” to marry; he says that marriage, like driving a car, is a privilege, not a right. He has said that if the government felt marriage was a right, then it would not stop polygamists and incestuous couples from marrying. O’Reilly further explained his position in his book Culture Warrior:
To this culture warrior, gay marriage is not a vital issue. I don’t believe the republic will collapse if Larry marries Brendan. However, it is clear that most Americans want heterosexual marriage to maintain its special place in American society. And as long as gays are not penalized in the civil arena, I think the folks should make the call at the ballot box. Traditional marriage is widely seen as a social stabilizer, and I believe that is true.
On March 26, 2013, O’Reilly stated “I support civil unions, I always have. The gay marriage thing, I don’t feel that strongly about it one way or the other. I think the states should do it.” O’Reilly then said, “The compelling argument is on the side of homosexuals … ‘We’re Americans, we just want to be treated like everybody else.’ That’s a compelling argument, and to deny that you’ve got to have a very strong argument on the other side. And the other side hasn’t been able to do anything but thump the Bible.
O’Reilly discussed a story surrounding around a teenage lesbian couple being elected as the “cutest couple” in their school yearbook. He stated that he believed that this couple was elected by the students to “tweak the adults” and to “cause trouble”. He explains further here:
High school kids, they experiment. They experiment all over the place, they have a chip on their shoulder. They do things just to get a reaction, just to rebel. Parents might say “We don’t want to normalize homosexuality in a public way in an academic setting among minors. We don’t think that reflects how we feel about it”.
O’Reilly is known to favor adoption by a same-sex couple since 2002.
O’Reilly is opposed to the School Success and Opportunity Act (Assembly Bill 1266), which extends gender identity and expression discrimination protection to transgender and gender-nonconforming K-12 students in public schools. O’Reilly described the law as “madness” and “anarchy” on Fox News Channel.
Just before the repeal of the “Don’t Ask, Don’t Tell” law banning homosexuals from serving in the military, he appeared on the Tonight Show and called the law “nonsense” and said he didn’t understand why the President, in his role as commander in chief of the armed forces, simply didn’t sign an executive order rescinding it.
US legal system
He regularly criticizes jurists in controversial cases as “activist judges.” He uses the issue of gay marriage as an example. “The folks decide that by voting and, in the case of gay marriage, the folks have decided. And that decision should be respected.”
He has suggested convicted rapists, mass murderers, terrorists, and other people who commit crimes against humanity be sent to a gulag style prison in Alaska with strict rules and minimal privileges. He has said this would serve as a replacement for the death penalty, to which he is opposed.
O’Reilly has been very critical of the U.S. film industry for producing films featuring violence and human suffering, such as the Saw series. He has compared this to the brutal displays of death in the Colosseums of ancient Rome. O’Reilly has said that films like these are marketed to children and can have consequences on their personal development. He commented on Kill Bill: Volume 1:
It’s the most violent movie ever made, featuring brutal dismemberments and a scalping close-up. And you should see the raves this movie is getting from the pinhead critics. And who’s lining up to see it? Children, that’s who.
O’Reilly severely chastized billionaire Mark Cuban, owner of the Dallas Mavericks, for his support of Brian De Palma‘s film Redacted that portrayed the rape of an Iraqi girl by American soldiers. O’Reilly claimed that the film would be used as a recruiting tool by terrorists.
Every educator that I’ve talked to, and I’ve talked to hundreds, say that the kind of gangsta rap that Ludacris traffics in has debased the culture, made it more difficult for them to teach children and indeed, led children into anti-social behavior.
In 2007, O’Reilly had a dispute with Nas after the rapper was hired to play a concert at Virginia Tech one year after the school had experienced the Virginia Tech massacre. “Having a rapper who trades in violence perform at Virginia Tech insults the victims, the university and the entire commonwealth,” declared Bill O’Reilly.Nas subsequently called Bill O’Reilly a racist, and accused O’Reilly of going to extremes for publicity. He repeated this stance again in July 2008, when a dispute between Nas and O’Reilly led to Nas taking a petition to Fox News, and appearing on both Fox News, and the The Colbert Report. Also in 2008, Nas challenged Bill O’Reilly to a public debate, to which O’Reilly did not accept.
In May 2015, O’Reilly blamed the decline of American religion particularly the declining numbers of American Christians on hip hop music citing the genre as “pernicious entertainment” and an adducing factor for contributing to the decline. O’Reilly remarked that people of faith are being marginalized by a secular media and pernicious entertainment and rap industry often glorifies depraved behavior causing the minds of people who consume the music as the least likely to reject religion.” American rapper Killer Mike subsequently criticized him for his remarks calling O’Reilly “full of s**t than an outhouse” and then mocked him while he was a guest Real Time with Bill Maher.
Several rappers and hip hop producers have appeared on The O’Reilly Factor. Rapper Cam’ron and hip hop entrepreneur Damon Dash appeared on the program to defend their supposed corruption of young people, to which Damon Dash responded:
So, if you know there is negative in something, try to find the positive as opposed to always talking about the negative. That’s the thing I don’t understand, why we’re criticized so hard within hip-hop. No one talks about the jobs we create, no one talks about the things we do within our community, and no one talks about the businesses we’ve done, how we’ve opened the doors and shown people that it’s cool to be smart, it’s cool to be a CEO, and it’s cool to not take advantage but to reap the benefits of all your labor and to do it fairly.
Bill O’Reilly has also interviewed Marilyn Manson on the topic of being a “dangerous” influence on U.S. youth. O’Reilly asked Manson if he thought his work encouraged kids to have sex, homosexuality, use drugs and profanity. He also asked Manson whether his songs encouraged suicide or not. Marilyn Manson answered that in his view the songs were about getting through those feelings, and that ultimately people make their own decisions.
O’Reilly believes the American news media is corrupt and often criticizes it for not reporting topics that hurt the liberal agenda. He has often stated that he is the only one in the media holding people accountable on both sides. In June 2007, Adweek Magazine sponsored a survey that asked participants who they trusted more as a source of political information between ABC News and O’Reilly. According to the poll, 36 percent believe that O’Reilly is a better source than ABC News, while 26 percent believe the opposite. According to the survey, 23 percent of Democrats believed that O’Reilly was a better source while 55 percent of Republicans believed the same.
O’Reilly has criticized the media for not highlighting Rosie O’Donnell‘s controversial remarks saying the United States attacked itself on September 11th while they highlighted Ann Coulter‘s remarks about calling Senator John Edwards a “fag.” O’Reilly said in response to the situation:
Doing the math, Ms. O’Donnell says something 100 times more offensive than Ms. Coulter, in my opinion, yet there’s no coverage about it. But there’s no left wing media bias in this country. Oh no!
O’Reilly has criticized journalists who donate to political parties after a report stated that nine out of 10 journalists donated to Democrats or liberal causes; he has said this has resulted in news media tilting to the left.
O’Reilly says that news coverage about positive improvements for American and Iraqi objectives in Iraq have been largely ignored. He conjectured that the ignoring of the positive news took place to help a Democrat win a presidential election.
O’Reilly has asked his viewers and listeners to not patronize the following media outfits, saying those organizations “have regularly helped distribute defamatory, false or non-newsworthy information supplied by far-left websites”:
In an interview with commentator Bill Maher, former CBS News anchor Dan Rather accused Fox News Channel of receiving “talking points” from the Republican controlledWhite House. O’Reilly criticized Rather heavily, responding that Rather did not offer any evidence to support the claim. O’Reilly cited his defense of Rather during the Memogate incident:
As you may remember, I defended Rather in the Bush National Guard debacle. I said Rather did not intentionally put on a bogus story. He just didn’t check it out, he was too anxious for the story to be true.
Now many of you criticized me for that defense, but I’m a fact-based guy. And there’s no evidence Dan Rather fabricated anything. It was sloppy reporting that did him in.
But now the fabrication word is in play again. If Dan Rather has evidence of White House dictums coming to FOX News employees, he needs to display that evidence. We are awaiting his appearance. We’ll let you know when it is.
O’Reilly has gone after PBS personality Bill Moyers. O’Reilly criticized Moyers for having no balance in his presentations, citing a criticism by PBS’ own ombudsman. He also called Moyers dishonest for making disparaging remarks about O’Reilly to Rolling Stone and then later denying he made the remarks when confronted by one of O’Reilly’s producers.
CNN journalists were prominent among those critical of O’Reilly when he stated that he “couldn’t get over the fact” that a largely African-American crowd at a Harlem restaurant behaved no differently than patrons of a white restaurant and garnered media coverage O’Reilly objected to CNN’s portrayal of his commentary, stating that CNN had been irresponsible in mischaracterizing his remark as racist, when in fact, he said, he was actually speaking against racism.
O’Reilly scolded MSNBC and CNN for not providing coverage of the ceremony that awarded Lieutenant Michael P. Murphy the Medal of Honor during their primetime shows. O’Reilly said that “[O]n their prime-time broadcast last night, CNN and MSNBC just said no to Lieutenant Michael Murphy and his proud family,” that the networks “despise the Bush administration and believe anything positive like American heroes in war zones, detract from their negative assessment of the administration” and that they should not claim to support the troops and ignore their heroism. MSNBC and CNN had covered the events during their daytime programs.
NBC News and MSNBC
O’Reilly has criticized NBC News and their affiliated cable service MSNBC several times for their coverage of the war in Iraq, claiming that it is biased toward the war’s opponents. He later called NBC News the most “anti-military news operation in the country,” when he cited an example of NBC correspondent William Arkin that called American troops “mercenaries.”
He also criticized the network of trying to downplay the War on Terror in the wake of American casualties in Iraq.
Robert Greenwald, who had directed the controversial documentary Outfoxed that criticized O’Reilly and the Fox News Channel, put together an event of homeless veterans criticizing O’Reilly for calling John Edwards dishonest when Edwards asserted that there were about 200,000 homeless veterans. O’Reilly denied Edwards claim, stating “They may be out there, but there are not many of them out there, OK. So if you know where there is a veteran sleeping under a bridge, you call me immediately, and we will make sure that man does not do it.” After government statistics supported Edwards, O’Reilly then said that there was no linkage between the economy and homeless veterans and claims that Veterans Affairs has up to 150,000 beds ready for them every night. O’Reilly felt Greenwald’s event was a “contrived” situation after O’Reilly’s producers had interviewed some of the homeless veterans whom were protesting and found out that some did not actually hear O’Reilly’s comments. O’Reilly blasted NBC’s Steve Capus and the New York Daily News for covering the event and claimed that Capus did not know about the nature of the event.
O’Reilly called NBC hypocritical for putting supporters of legalizing prostitution in the wake of Democratic Governor of New YorkEliot Spitzer resigning his post after allegedly engaging in the act in an effort and felt they would not be as defensive if a Republican had gotten in trouble.
Although he praised the late Meet the Press host Tim Russert in the past, O’Reilly criticized Russert for what he saw as a misinterpretation of what were seen as potentially racially insensitive comments by former President Bill Clinton. In his comments, Russert challenged Senator Hillary Clinton about her husband’s remarks regarding Senator Barack Obama, when Mr. Clinton referred to Obama’s position on Iraq as a “fairy tale.” O’Reilly said that Russert “should have known better” and realized the former President’s comments were regarding Obama’s Iraq policy and not his entire candidacy.
Tape doctoring incidents
O’Reilly would join in the criticism of others when NBC News was found to have doctored tapes on multiple occasions. The first was about accused killer George Zimmerman that portrayed Zimmerman as having a racial motivation. He also criticized veteran news correspondent Andrea Mitchell for her reporting of a doctored tape of Mitt Romney to portray him as out of touch. After the Sandy Hook Shooting, O’Reilly and others criticized MSNBC’s Martin Bashir of dishonesty when Bashir only played a part of the entire tape that portrayed the father of a victim being heckled when the entire tape showed the audience only saying something after he made it clear he was looking for an answer. O’Reilly criticized MSNBC host Rachel Maddow showed a tape of Senator John McCain portraying him as insensitive to the plight of a person who lost a family member to gun violence. Although Maddow did readily admit the tape may have been doctored, O’Reilly criticized her nonetheless for airing it knowing that it could have been edited.
O’Reilly has accused the print press of purposely misquoting him and using their hard news pages to further their editorial points of view. He has said that print media is too liberal and attacks opposing viewpoints.
In 2003, O’Reilly criticized the Los Angeles Times for endorsing then-governor Gray Davis, who was running against Arnold Schwarzenegger and a whole field of different candidates, including Republicans, Democrats and Independents, in a recall election. He said that he “has never seen a newspaper try to destroy someone as aggressively as the Times is doing.” He also criticized The New York Times on the same issue for referring to Schwarzenegger solely as a bodybuilder. He made the claim that Californians have canceled their subscriptions due to the “extreme left-wing bias” of the newspaper.
O’Reilly frequently criticizes The New York Times, accusing them of omitting information that would be damaging to left-wing organizations and causes.
On March 15, 2007, The New York Times ran an editorial titled “Immigration Misery” that had claimed a “screaming baby girl has been forcibly weaned from breast milk and taken dehydrated to an emergency room so that the nation’s borders will be secure.” Upon further investigation, the only two babies admitted to the hospital in the area of Bedford, Massachusetts (where the raid took place) were due to dehydration because of pneumonia and not as a result of being “forcibly weaned.” O’Reilly alleged that the information in the editorial was falsified and claimed The Times wanted to promote illegal immigration in order to make the illegal immigrants into legal US citizens and register them as Democrats.
On June 2, 2007, Homeland Security stopped a plot by four terror suspects thought to be linked to Al Qaeda. Authorities have alleged that the suspects were trying to blow up an oil pipeline in the Howard Beach section of New York City that carries jet fuel to JFK Airport. O’Reilly went on his program and told his listeners that he expected The Times to report it as a featured story on its Sunday edition for June 3, but found that the story was on page 37. A story that occupied the front page talked about brick laying in India. O’Reilly accused the newspaper of burying the story not to highlight a successful foiled terror plot because it contradicts the paper’s editorial point of view. O’Reilly claims that as polls show most Americans feel Republicans would do a better job of handling a terrorist threat than Democrats, The Times intentionally gave the news less exposure in hopes of influencing their readers’ focus away from issues that Democrats tend to poll weaker than Republicans in. O’Reilly has also said that the paper would highlight any terrorist attack if one was to occur so they may criticize the Bush Administration:
So The Times wins both ways. The paper diminishes the War on Terror by putting it on page 37, but if something bad ever happened, it can attack President Bush.
O’Reilly has accused the paper of being deceptive about television ratings for The O’Reilly Factor against that of MSNBC during the same time slot, citing that the paper felt that MSNBC was “competitive” with his program when O’Reilly’s ratings were significantly higher.
O’Reilly has questioned the paper’s interpretation of violence statistics among veterans of the military. His contention is that the paper is out to disparage the military as being overly violent after returning home from deployment in the War on Terror.
O’Reilly criticized the paper for running an article alleging Senator John McCain had an “inappropriate relationship” during the lobbyist controversy story the paper had. O’Reilly raised the question about why the paper had endorsed McCain on January 25, 2008 for the Republican nomination if they had information that alleged an inappropriate relationship.
In May 2009, O’Reilly severely criticized the paper as “corrupt” for dropping a story about a possible violation of campaign laws by ACORN and the Obama campaign. O’Reilly claimed that sworn testimony before Congress by a former ACORN employee, Anita Moncrief corroborated the story. O’Reilly stated:
Strong evidence suggests the paper killed a story linking ACORN to some Obama people. Instead they ran a general piece stating ACORN has a left-wing bias, knowing that story would be largely ignored while the Obama connection would not be.
In response, the New York Times ombudsman, Clark Hoyt stated it “was a normal and reasonable editorial decision” not to run the article. He said the Times had run four other stories on ACORN. The story in question had remained unpublished because Anita Moncrief had not provided independently verifiable proof. In addition, The Times ombudsman stated that Moncrief had not given sworn testimony to Congress as claimed by O’Reilly, and that she had credibility problems, having been fired from Acorn for employee theft.
O’Reilly has accused a few liberal political websites of “distorting the truth” and “engaging in hatred”:
There are no rules. These people will do and say pretty much anything to harm people with whom they disagree politically. The trend started back in the Clinton–Lewinsky days, and now thousands of bloggers are operating, throwing dirt all over the place. Now they’re not all bad. Some of these bloggers are good, accurate watchdogs. But there are plenty of awful ones.
In summer of 2007, O’Reilly said that the entire field of 2008 Democratic Presidential Candidates (aside from Senator Joseph Biden) went to the Yearly Kos convention that was sponsored by the Daily Kos. He has said that sites like the Kos are taking control of the Democratic Party through intimidation:
As we have been reporting, a group of far-left bloggers has succeeded in frightening most of the Democratic presidential candidates and moving the party significantly to the left, at least in the primary season. The lead intimidators are MoveOn, Media Matters and the vicious Daily Kos. These people savagely attack those with whom they disagree. And the politicians don’t want to become smear targets. So most of the Democratic candidates have agreed to speak at the Kos convention this coming weekend, something that is beyond shameful.
O’Reilly has compared the Huffington Post to the Nazis and the KKK. He also called MoveOn.org the “new Klan.” In response, Arianna Huffington wrote that O’Reilly had confused bloggers with anonymous commentors and suggested he enroll in “How to Use the Internet 101.” Huffington alleged that offensive comments are taken down from her site when confronted by one of O’Reilly’s producers. She also noted that offensive comments are posted by users of O’Reilly’s own site, billoreilly.com. O’Reilly alleged that Huffington had no standards of conduct and did not remove comments about wishing Nancy Reagan had died after she fell that were written on her site. “She says it is down, but it is not. She does not tell the truth.” O’Reilly later alleged that Huffington implied Pope Benedict XVI was a Nazi. O’Reilly referred to a satirical article written by comedian Chris Kelly, which mocked O’Reilly on Huffington’s website.
O’Reilly generally supports the notion of a clean environment, although he has said that he is not entirely certain that fossil fuels are the cause of global warming. Nonetheless, he has expressed support for a long-term strategy to curb fossil fuel use. He has said he would not support the Kyoto Treaty for economic reasons, but supports the use of fewer polluting agents, more conservation, and “tons more innovation” such as tax credits for alternative fuels. He has said that renewable energy is a waste of time because “God controls the climate” and that “nobody can control the climate except God, so give a little extra at mass”.
O’Reilly is a frequent critic of government welfare and poverty programs. He is also critical of the estate tax. However, he does not differentiate between the marginal tax rate (46 percent) and the effective tax rate (roughly nine percent ).
O’Reilly has said French unemployment and subsequent riots are the “common effects of socialist thinking”. He claims the French unemployment rate is high because of entitlements sanctioned by the French government, and that these entitlements make employers hesitant to hire young employees for fear that they will be required to give benefits to underperforming workers.
O’Reilly has been critical of companies doing business with countries that are hostile to the United States. O’Reilly criticized General Electric for doing business with Iran. O’Reilly cited how NBC News‘ correspondent John Hockenberry did a report on Dateline highlighting GE’s business relationship with the Bin Laden family and was criticized by the company, who owns NBC, for the Dateline report.
Free markets, profits, and the oil companies
O’Reilly questions the free market by suggesting that the oil companies need an excuse to raise prices thereby overlooking the fact that in a free market, oil companies have the right to increase prices so as to increase profits or for any other reason. Rather than praise oil companies for their record profits, O’Reilly has been critical of oil companies, claiming their record profits are evidence that they have price-gouged Americans with artificially high gas prices. and has said he is personally boycotting products by Exxon-Mobil. It therefore appears that O’Reilly does not recognize profit maximization as a virtue. He has often taken an opposing point of view to conservatives such as fellow Fox News analyst and commentator, Neil Cavuto. During one discussion on The O’Reilly Factor, Cavuto accused O’Reilly of “push[ing] populist nonsense.” He said blocking Brazilian ethanol imports was “awful” and has criticized both the Bush Administration and the Clinton Administration for not doing enough to stem the cost of oil from “foreign predators”.
In a May 8, 2006 article published at the Jewish World Review, O’Reilly said, “There is no question that illegal workers deliver more profit to business than American workers do. A Harvard study says that the employment of illegal foreign workers has driven down wages among American high school dropouts, the lowest labor pool rung, by 7 percent.”
Bill O’Reilly on his show The O’Reilly Factor has expressed the view that “if everybody followed the teachings of Jesus Christ, […] we’d have peace on earth, […] everybody would love one another, and we’d almost be an idyllic civilization.”
O’Reilly claims that the United States is not doing enough to make itself independent of foreign oil, stating that “There’s no way the ethanol industry could be dominated by five mega-companies. I mean corn and sugar cannot be carteled. The oil racket is simple: We control the marketplace, and you have to buy from us. … If Brazil can develop an ethanol industry that makes it completely independent of foreign oil, then the USA can.”
Story 2: Totalitarians of Lying Lunatic Left Attempt to Suppress Speech of Conservatives, Libertarians, and Classical Liberals — Nothing New — Go On Offense And Attack The Collectivist Totalitarians — Battle For Berkeley — Berkeley Protesters Take the Pepsi Challenge — Why the Right Won — Chief of Police Orders Berkeley Police To Stand Down — Videos
Does Free Speech Offend You?
Ben Shapiro on Free Speech, College Campuses, and The Regressive Left
Ben Shapiro – Practical Tactics For Fighting The Left
UC Berkley Must Be Disciplined For Furthering Leftist Violence Against Conservatives
Amid Mounting Controversy, Media Matters Says It’s Time for Bill OReilly to Go | Cheddar
HIDDEN CAM: Media Matters Brags About Sabotaging Roger Stone
Published on Oct 28, 2016
Project Veritas Action has released the sixth video in a multi-part series that is sending shockwaves through the DNC and the Clinton campaign. In a new video released by Project Veritas Action, a PVA journalist exposes how his pay for play with Robert Creamer landed him a meeting with Bradley Beychock, the President of Media Matters For America, an organization that has been attacking James O’Keefe for years.
During the meeting, Beychock gave the PVA journalist a tour of their offices. He also proudly boasted about the Media Matters assault on conservative writer and political consultant Roger Stone.
Battle of Berkeley: Why the Right Won
Published on Apr 17, 2017
Berkeley erupted into political violence on April 15th, 2017, with leftwing radicals attacking the Freedom Rally hosted by Trump supporters. The Antifa thugs were roundly defeated by the Freedom Rally attendees, but where did this violence start? I discuss the events that lead up to this day and uncover the progression of leftwing violence that’s destroying a city that once celebrated free speech.
Lauren Southern And The Madness Behind The Battle Of Berkeley
THE BEAUTIFUL LAUREN SOUTHERN; ProudBoys and Some Ugly Antifa
The Battle of Berkeley in 81 seconds
Berkeley Protesters Take the Pepsi Challenge
Battle of Berkeley 3 FULL DAY[ANTIFA Vs FREE SPEECH PROTESTERS]Patriots Day Rally Ft. Based Stickman
Trump Supporters chase Antifa down the street at FREE SPEECH Rally in Berkeley
Battle of Berkeley 3 as Antifa circled the park
2017 The Battle for Berkeley LARP!
Patriot’s Day Riot in the Streets
UC Berkeley Cancels Coulter Appearance Over Security Concerns
Conservative Commentator Ann Coulter To Speak At UC Berkeley
Ben Shapiro interviews Ann Coulter; Adios America; 7/13/2015; C-Span
UC Berkeley Presses Campus Republicans To Cancel Another Conservative Speaker
WARNING:TRUMP SUPPORTERS ATTACKED AT BERKELEY BY ANTI TRUMP PROTESTERS
Free Speech Battle For Berkeley, California! | Lauren Southern and Stefan Molyneux
Lauren Southern Coverage of Antifa vs Trump Supporters Battle
Berkeley April 15,Based stick man Antifa smashing
ANTIFA VS America Compilation
Antifa Reddit Admits They Lost Berkeley Battle with Trump Supporters
Berkeley April 15,BAMN leader Yvette Felarca assaults patriots
Berkeley Leftists Riot Against Milo (Mini Documentary: Arrest Yvette Felarca Part 2)
Handicap Senior Citizen U.S Military Vet Stands Up & Cucks Antifa
Is It Wrong To Bash Antifa Leftist Scum?
Berkeley Police Refuse To Stop the Riots – When Told People are Being Beaten, Officer Says “…and?”
Steyn: Media annoyed someone has outfaked their fake news
BILL O’REILLY EXPOSES GEORGE SOROS
EXPOSED : George Soros Owned Media Matters Sabotages Pro Trump Media
George Soros Lost Interview Compilation – Left Wing Oligarch
George Soros exposed!
George Soros Warns The World About Fox News And How Dangerous IT Really Is
George Soros, Puppet Master
Mark Levin: Media Matters is “A Criminal Enterprise”!
Andrew Breitbart — Media War
Thomas Sowell — Dismantling America
TAKE IT TO THE LIMITS: Milton Friedman on Libertarianism
Andrew Breitbart Predicted and Warned us about George Soro’s Media Matters Controlling our Media
One World Government & Collectivism – G. Edward Griffin
The Quigley Formula – G. Edward Griffin lecture
The Mainstream Media Are Enemies of Freedom, Agents of Tyranny and Must Be Overthrown
Super rich are in a conspiracy to rule the world – G. Edward Griffin – 2007
Antifa and Conservatives Throw Down At ‘Battle Of Berkeley’…
TEAM CROWDERMONDAY APRIL 17 2017
In the course of history, there have been many great battles. Thermopylae. Gettysburg. Tupac and Biggie. The forces of good and douchebag have long utilized beating the crap out of each other to resolve their grievances. Well, last weekend, yet another battle was had. Conservative and leftist blood alike was shed at what shall henceforth be referred to as the Battle of Berkeley…
For the third time this year, Trump supporters and Antifa clashed on the streets of Berkeley, California. The two forces met Saturday during the pro-Trump Patriot Day rally.
Berkeley Police have arrested at least 15 people this morning and afternoon, after antifascists met Trump supporters at a pro-Trump rally. Police attempted to maintain order with poles and fence mesh, but the barriers did not stop the two sides from violently engaging.
Trump supporters had organized a Patriot Day rally, starring Lauren Southern, a former reporter for conservative Canadian outlet The Rebel Media and Kyle Chapman, a man who achieved internet stardom as “Based Stickman” after assaulting a member of Antifa with a stick at the March 4 scuffle in Berkeley, among others.
Berkeley police have confiscated banned items such as knives, flagpoles, and sticks used as weapons.
Story 1: Amazing Grace and Forgiving Hearts of Robert Godwin Family — Breaking– Facebook Killer/Suicide of Steven Stephens — Amazing Grace — Rest In Peace — Videos —
Amazing Grace: The children of Robert Godwin with Anderson Cooper
Cleveland Police Chief and Mayor react to news of Steve Stephens death
Family of Robert Godwin Sr. remembers their father
Emotions flow at vigil for Robert Godwin
Rumors circulate about Facebook killer, Tara Molina reports
Debunking the rumors about Facebook live shooting, News 5’s Tara Molina takes you into our newsroom
Users call for Facebook to address “safety risk”
FBI: Massive Police hunt for Cleveland live stream Facebook killer Steve Stephens – LoneWolf
Manhunt in Cleveland for alleged gunman Steve Stephens in Facebook Live shooting of elderly man
BREAKING NEWS: Crazed Suspect Loose in Cleveland: 5 Things You Need to Know about Steve Stephens
Timeline of Facebook killer’s posts
Air Tracker 5: Jon Rudder reports
JUDY COLLINS – “Amazing Grace” with Boys’ Choir Of Harlem 1993
Amazing Grace (without choir) by Judy Collins
Celtic Woman – Amazing Grace
Amazing Grace (original version)
Amazing grace! (how sweet the sound)
That saved a wretch like me!
I once was lost, but now am found,
Was blind, but now I see.
‘Twas grace that taught my heart to fear,
And grace my fears relieved;
How precious did that grace appear
The hour I first believed!
Through many dangers, toils, and snares,
I have already come;
‘Tis grace that brought me safe thus far,
And grace will lead me home.
The Lord has promised good to me,
His word my hope secures;
He will my shield and portion be
As long as life endures.
Yes, when this flesh and heart shall fail,
And mortal life shall cease,
I shall possess, within the veil,
A life of joy and peace.
The earth shall soon dissolve like snow,
The sun forbear to shine;
But God, who called me here below,
Will be for ever mine.
Amazing grace! (how sweet the sound)
That saved a wretch like me!
I once was lost, but now am found,
Was blind, but now I see.
A Clip from Amazing Grace
Amazing Grace – full movie
Amazing Grace, Ending
‘We just want him to know that God loves him’: Children of Cleveland man who was gunned down on Facebook say they FORGIVE his killer
Robert Godwin’s family spoke out about their father’s shocking death on Sunday
The 74-year-old father-of-ten was filmed as he was gunned down in Cleveland
‘Each of us forgives the killer, the murderer,’ his daughter, Tonya, said Monday
Police said the killer, Steve Stephens, 37, shot himself on Tuesday
By Dailymail.com Reporter
PUBLISHED: 12:03 EDT, 18 April 2017 | UPDATED: 14:09 EDT, 18 April 2017
The children of the man who was shot dead in a Facebook video has incredibly forgiven his murder – just hours before it was announced the killer had been found dead.
Steve Stephens, 37, gunned down 74-year-old Robert Godwin – a father-of-ten and retired manufacturing worker – in Cleveland on Sunday. Police said on Tuesday morning the 37-year-old shot himself after a brief officer pursuit.
Godwin’s family spoke to WJW on Monday prior to Stephens’ death, saying they forgave him and called on him to turn himself in before hurting anyone else.
‘Each one of us forgives the killer, the murderer,’ his daughter, Tonya, said.
The family of 74-year-old Robert Godwin (pictured with his daughter, Tonya) has said they forgive the man who murdered their father in Cleveland on Sunday
‘We want to wrap our arms around him.
‘We just want him to know that God loves him, we love him. Yes we’re hurt, but we have to forgive him because the Bible says if we don’t then the heavenly father won’t forgive us.’
Godwin’s son, Robert Jr,echoed the sentiment.
‘One thing I do want to say is I forgive him. Because we are all sinners,’ he told CNN.
‘Steve, I forgive you man. I’m not happy with what you did, but I forgive you.’
Police had been searching for Stephens since the video of the shooting emerged on Sunday afternoon.
Police presser on Facebook murder suspect who killed himself
Stephens (pictured) had been on the run since posting the video on Facebook on Sunday. Police said he shot himself on Tuesday morning
Godwin’s son, Robert Jr (left), and his daughter, Tonya (right), both said they have forgiven their father’s killer
It showed him driving in his car, before getting out and walking up to a man – who was later identified as Godwin.
The two spoke briefly in the clip, before Stephens pulled the trigger and got back in his car to drive away.
In the video Stephens posted on social media, he was heard saying: ‘I snapped, I just snapped.’
He then addressed a woman, Joy Lane, by saying: ‘She’s the reason that this is about to happen.’
Robert Godwin’s (pictured) son said he just wanted Stephens to turn himself in before hurting anyone else
Stephens had been wanted on aggravated murder charges for killing 74-year-old Robert Godwin and then posting video of the shooting (above) to Facebook
Lane said in a text message to CBS News: ‘We had been in a relationship for several years. I am sorry that all of this has happened.’
Stephens filed for bankruptcy two years ago despite holding down a job as a counselor helping young people develop job skills and find employment.
The behavioral health agency where he worked said an extensive background check before he was hired turned up nothing worrisome.
In another video posted on Facebook, Stephens said he gambled away everything and that he and his girlfriend had planned to marry but did not, without saying why.
Pennsylvania State Police say they will hold a news conference on the Steve Stephens case at 3:30 p.m. at Troop E barracks in Lawrence Park.
Steve Stephens’ taste for McDonald’s helped the Pennsylvania State Police catch the accused Facebook killer in Erie.
Employees at the McDonald’s on Buffalo Road, in Harborcreek Township, said a drive-through attendant alerted state police when Stephens stopped at the restaurant’s drive-through window shortly after 11 a.m.
The McDonald’s is about five miles east of where state police stopped Stephens in Erie.
Thomas DuCharme Jr., owner and operator of the McDonald’s, said the attendant thought she recognized Stephens. DuCharme said the attendant then called state police.
DuCharme said Stephens ordered 20 chicken nuggets and a basket of fries, but that the workers held off on delivering the fries to delay Stephens. He said Stephens got the nuggets.
“We told him his fries were going to be a minute,” said Henry Sayers, the restaurant’s manager.
Said DuCharme: “I am pretty sure he figured out that we were on to him. He didn’t want to wait for his fries.”
He said Stephens then drove away without the fries.
Erie County Coroner Lyell Cook pronounced Stephens dead at the scene at 11:35 a.m. Investigators are getting search warrants for the car and are waiting on the arrival of a state police accident reconstruction team later this afternoon.
Cook said his office would conduct an autopsy at 11 a.m. on Wednesday.
Three state police cruisers involved in the stop of Stephens’ car remained at the scene, along with Stephens’ car.
Warren Harris, 64, of Erie, who is on the scene of the investigation, said he had lived near Steve Stephens and his family in Beachwood, Ohio.
Harris, who said he has lived in Erie for 12 years, said the family is “good, churchgoing family.” He said that today’s events did not surprise him because “incidents like this happen where I’m from.”
A spokeswoman at Stephens’ employer told the Erie Times-News in a telephone interview on Tuesday afternoon that employees there learned quickly of Stephens’ death in Erie via news reports.
“It’s just been a tragic situation, on every front, with this story,” said Nancy Kortemeyer, senior director of marketing and public relations at Beech Brook, located in northeast Ohio.
Beech Brook is a behavioral health organization serving children, teenagers and families.
According to a statement Beech Brook officials posted on its website, Stephens worked there since 2008, most recently as a vocational specialist for youth and young adults. Prior to that, Stephens had been a youth mentor.
Stephens had no major disciplinary actions at Beech Brook, Kortemeyer said, and there was nothing in his work history “that would have been a red flag.”
The manhunt for Stephens has been “very much a strain and a worry” for the Beech Brook staff, Kortemeyer said.
“We’ve been worried about the safety of our staff and our clients,” Kortemeyer said. “We are just relieved the situation has been resolved without any further harm to anyone else.
Kortemeyer added, “It’s so sad that Steve Stephens took his own life. We don’t know what would have caused him to do this.”
Beech Brook issued a statement regarding Stephens’ death later Tuesday on its website:
“It was with a mixture of sadness and relief that Beech Brook learned of the suicide of Steve Stephens. Every suicide is a tragedy, but we also share a sense of relief with the rest of our community because we are no longer fearful that Mr. Stephens will take more lives.
“We are deeply grateful to the law enforcement officials who vigorously pursued this case. Our thoughts are with all of those impacted by these senseless acts of violence.”
From Pennsylvania State Police, or PSP, in a news release:
” ‘Facebook Killer’ Steve Stephens was spotted just after 11 a.m. by an alert citizen near the intersection of Buffalo Road and Downing Avenue in Erie County, Pennsylvania, which is less than two miles from PSP Troop E headquarters.
“PSP troopers immediately began to canvas the area for Stephens and located him in his vehicle a short time later. Troopers in marked patrol units initiated a pursuit that lasted approximately two miles.
“The troopers attempted a PIT maneuver to disable Stephens’ vehicle, a white Ford Fusion. As the vehicle was spinning out of control from the PIT maneuver, Stephens pulled a pistol and shot himself in the head.”
Agents with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives have arrived on scene. The FBI arrived earlier and agents are still on scene.
From a news conference in Cleveland at about 12:15 p.m.
Cleveland Police Chief Calvin Williams said he had no information on why Steven Stephens was in Erie.
“We are taking a cautious approach,” he said. “There may be connections we don’t know about. There is still a lot we don’t know.”
Chief acknowledged that their federal partners had spent time searching Erie and the surrounding area.
Anyone who knows that area, he said, knows “there are a lot of places to hide.”
The press conference was held less than an hour after Stephens took his own life. At that early point, “We have spoken with all the families involved. They had all been notified,” Williams said.
Williams said at the news conference that he had few details: “Our investigators are on their way now,” he said.
Another officer who spokes at the news conference, but whose name was not available, said: “We had hoped to bring Steve in peacefully and talk to him about what happened.”
The same police officials said: “Kudos to Pennsylvania State Police for doing an outstanding job.”
Asked if he was worried about potential copycats who might commit their own crimes and post them to social media, Chief Williams shook his head no.
“We’re not putting that energy out there,” he said. “We’ve talked about people not living their lives on social media. This is something that should never have been shared on social media, period.”
Chief Williams said police followed up on about 400 leads across the country, but it was one particular tip that led police to Stephens.
“We are grateful to the people who gave this tip to Pennsylvania State Police,” he said.
State police commanders have left the scene. Erie County Coroner Lyell Cook had been examining the body of Steve Stephens inside the white Ford Fusion, where police said he fatally shot himself after state police pulled him over at around 11:10 a.m.
Spectators at the scene of an investigation of Steve Stephens’ apparent suicide in Erie, many streaming video of the scene from their smartphones, were glad the manhunt for the accused Cleveland Facebook killer was over. They said they’d been worried about the safety of local children after first hearing Stephens might be in Erie.
Others were not afraid at all.
“Everyone was scared of this dude for no reason,” Melvon Heidelberg said.
Heidelberg, 21, of Erie, traveled to the scene from East Lake Road after his friend told him Stephens had been found.
“People get shot out here everyday,” he said. “In Erie, that’s how it is. It’s real out here. You gotta be careful.”
Another spectator, Lisa Jenkins, of Erie, said the city has enough problems already.
“We don’t need Cleveland’s,” said Jenkins, 47.
Erie police have confirmed the suicide in Erie on Tuesday of Steve Stephens, the Cleveland resident suspected of fatally shooting a Cleveland man on Sunday and posting video of the slaying on Facebook.
Stephens died of a self-inflicted gunshot wound while driving a white Ford Fusion near Buffalo Road and Downing Avenue around 11:10 a.m., police said.
State police were following the car as it headed west into Erie after leaving a nearby McDonald’s, police said.
The car, pointed west, is stopped in the westbound lane of Buffalo Road, across from the former Burton Elementary School, 1660 Buffalo Road. Police are blocking off the entire school grounds.
Erie police are also at the scene, with Erie County Coroner Lyell Cook and the FBI and Erie County District Attorney Jack Daneri.
Erie Mayor Joe Sinnott said early Tuesday afternoon that he did not have much information about the incident, but he expected to be briefed later in the day by Police Chief Don Dacus.
“Obviously when you’ve got a fugitive out there, you’re pleased to see it come to some quick resolution,” Sinnott said.
Increase in Violent Crime, Decrease in Property Crime
Today, the FBI released its annual compilation of crimes reported to its Uniform Crime Reporting (UCR) Program by law enforcement agencies from around the nation. Crime in the United States, 2015 reveals a 3.9 percent increase in the estimated number of violent crimes and a 2.6 percent decrease in the estimated number of property crimes last year when compared to 2014 data.
According to the report, there were an estimated 1,197,704 violent crimes committed around the nation. While that was an increase from 2014 figures, the 2015 violent crime total was 0.7 percent lower than the 2011 level and 16.5 percent below the 2006 level.
Among some of the other statistics contained in Crime in the United States, 2015:
The estimated number of murders in the nation was 15,696.
During the year, there were an estimated 90,185 rapes. (This figure currently reflects UCR’s legacy definition. Learn more about the revised rape definition.)
There were an estimated 327,374 robberies nationwide, which accounted for an estimated $390 million in losses (average dollar value of stolen property per reported robbery was $1,190).
Firearms were used in 71.5 percent of the nation’s murders, 40.8 percent of robberies, and 24.2 percent of aggravated assaults.
Property crimes resulted in losses estimated at $14.3 billion. The total value of reported stolen property (i.e., currency, jewelry, motor vehicles, electronics, firearms) was $12,420,364,454.
In addition to national crime data, the publication also contains agency-level data, regional data, state totals, data from cities and counties grouped by populations, and statistics from certain metropolitan areas.
Crime in the United States, 2015 also features several smaller reports:
Federal Crime Data, the second report from UCR looking at crime reporting from federal agencies, includes 2015 data from FBI and ATF cases as well as traditional offense information from other federal agencies.
Human Trafficking, the third report from UCR’s Human Trafficking data collection, includes general content about human trafficking as well as data provided by agencies that reported human trafficking offenses in 2015.
Cargo Theft, the third report from UCR’s Cargo Theft data collection, contains general information about cargo theft and data provided by agencies that reported cargo theft violations during 2015.
Also included in Crime in the United States, 2015 is a message from Director James Comey on FBI efforts to improve the collection, analysis, and uses of crime statistics and data about law enforcement’s use of force, primarily through its ongoing shift to the more detailed National Incident-Based Reporting System (NIBRS) and a use-of-force database. Both, he said, will “give us a more complete, richer picture of crime in our communities, and a national and detailed picture of the ways we in law enforcement are using force.”
According to Comey, who cited the need for more transparency and accountability in law enforcement, “Information that is accurate, reliable, complete, and timely will help all of us learn where we have problems and how to get better.”
Expanded offense data are the details of the various offenses that the Uniform Crime Reporting Program collects beyond the count of how many crimes law enforcement agencies report. These details may include the type of weapon used in a crime, type or value of items stolen, and so forth. For example, expanded homicide data provide supplemental details about murders, such as the age, sex, race, and ethnicity of both the victim and the offender, the weapon used in the homicide, the circumstances surrounding the offense, and the relationship of the victim to the offender. In addition to these types of details, expanded data include trends (for example, 2-year comparisons) and crime rates per 100,000 inhabitants.
Expanded offense data, including expanded homicide data, are details collected in addition to the reports of the number of crimes known. As a result, law enforcement agencies can report an offense without providing the supplemental information about that offense.
Story 2: Breaking — Racist Black Muslim Kori Ali Muhammad,39, aka Black Jesus Kills Three Shouting “Allahu Akbar” (“God is great” in Arabic) — Pop, Bang, Boom — Camera Moves — Shot Spotter — Red Dot — Digital Justice — Videos —
Fresno shooting 4-18-17 Kori Ali Muhammad screaming Ali Akbar!
Fresno Shooting Suspect Identified – Kori Ali Muhammad AKA Black Jesus
Fresno Shooting Spree: Three Dead After Gunman Opens Fire | NBC Nightly News
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Shooting Spree in California Leaves Three People Dead
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At Issue In Brief #140102 “Shot Spotter — How It Works”
SST – ShotSpotter Overview
Uploaded on Oct 27, 2011
ShotSpotter is a family of acoustic gunshot detection, alert and analysis solutions developed by SST Inc. Gunshot data has a trickle-down effect that can provide immense value. Watch the video to learn how our real-time data helps law enforcement respond more intelligently and make communities safer. It is our mission and honor to serve our communities and their respective law enforcement agencies.
Published on Apr 18, 2017
Three people were shot to death in less than a minute at separate locations Tuesday in Fresno, California, authorities said. A fugitive wanted in a previous homicide was arrested at the scene.
The man, identified as Kori Ali Muhammad, 39, who investigators said used the alias “Black Jesus,” was arrested and was being held awaiting at least four counts of murder, Fresno Police Chief Jerry Dyer told reporters.In addition to the three people who were killed Tuesday, Muhammad had been wanted in connection with the shooting death of a security guard at a Motel 6 last Thursday, Dyer said.
At least 16 rounds were fired in less than a minute at four locations, including a Catholic Charities facility, where the gunman killed a man in the parking lot, Dyer said. None of the victims worked at the charity, he said.
While police said the gunman yelled “Allahu Akbar” (“God is great” in Arabic) during the incident, it was too early to say whether terrorism was a factor, Dyer said.
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Hate crime is suspected after a gunman kills 3 white men in downtown Fresno
Veronica Rocha , Joseph Serna, Diana Marcum and Hailey Branson-PottsContact Reporters
Kori Ali Muhammad told his family there was a war going on between blacks and whites in America.
On social media, he referred to white people as “devils.” Earlier in the year, he posted a rap album on YouTube replete with violent, explicit, racially-charged lyrics, including referring to himself in one song as a “black soldier.”
On Tuesday morning, police say Muhammad stalked the streets of downtown Fresno, fatally shooting three white men with a .357 revolver. Before surrendering to police, he allegedly shouted “Allahu akbar” and expressed hatred toward white people and the government, according to Fresno Police Chief Jerry Dyer.
Local authorities said they don’t believe the attack was an act of terrorism but are investigating it as a hate crime.
“If in fact he’s lashing out at white people — white males in this case — that would constitute a hate crime,” Dyer said. “We believe it is a hate crime, definitely a hate crime.”
The chief said investigators don’t believe Muhammad worked with anyone else in the attack, calling him “an individual that is filled with hate, filled with anger.”
The attack occurred over less than two minutes with Muhammad firing a total of 16 shots. Dyer said he surrendered to a responding officer without incident and later apologized to the chief.
In addition to Tuesday’s killings, police said Muhammad was suspected in the fatal shooting of a security guard, also a white male, last week.
Muhammad’s father, Vincent Taylor, told The Times on Tuesday that his son believed that he was part of an ongoing war between whites and blacks, and that “a battle was about to take place.”
The attack began at around 10:45 a.m. in the 300 block of North Van Ness Avenue. Within a few seconds, a second burst of gunfire was heard, then a third and a fourth. Sixteen rounds were fired in four locations, Dyer said.
After the shots were heard, Dyer said the driver of a PG&E truck arrived at the city’s police headquarters to report that a passenger had been shot by a gunman who had approached them on foot.
After firing at the truck passenger, Muhammad walked west on East Mildreda Avenue, where he came across a resident and opened fire, Dyer said, but missed his target.
Muhammad then continued walking on Mildreda and approached Fulton Street, where he fatally shot another man before reloading his weapon, Dyer said.
He then headed toward Catholic Charities in the 100 block of North Fulton Street and fired a second fatal volley of gunfire, killing a man in the parking lot.
An officer in the area spotted the gunman running south on Fulton. He then “dove onto the ground” and was taken into custody, the chief said.
“As he was taken into custody, he yelled out, ‘Allahu akbar,’ ” Dyer said.
“Allahu akbar” roughly translates to “God is great” in Arabic and is a common positive refrain uttered by Muslims in prayer or in celebration. But the phrase has also been linked to terrorist attacks. The gunman who killed 13 people in a terror attack at Fort Hood, Texas, screamed “Allahu akbar” as he opened fire in 2009, and the phrase is often tweeted by social media accounts sympathetic to Islamic State and other terror groups.
The victims in Tuesday’s attack were not immediately identified. In a statement released last week, Fresno police said Muhammad was believed to have shot and killed Carl Williams, an unarmed 25-year-old security guard, outside of a Motel 6 on North Blackstone Avenue on Thursday.
Muhammad did not make any references to race during last week’s attack, according to Dyer, who said investigators will need time to determine the exact motive in the shootings.
“There was no statement made on Thursday night when he shot the security guard and killed him,” Dyer said. “There was no comments or no statements made at that time, so I am not certain why he said what he said today.”
Muhammad legally changed his name from Kori Taylor when he was a teenager, according to his grandmother, Glenestene Taylor, who said Muhammad was acting strangely when he visited her Sunday. He was crying, but she believed he was simply going out of town.
“I thought that’s why he’s upset, because he thinks of me as a mother,” said Taylor, 81. “He’s always telling me, ‘I’ll take care of it. I’ll protect you. Don’t you worry about it.’ He really didn’t want to go but he was going.”
A Facebook profile page for a Kori Ali Muhammad from Fresno paid homage to black pride and black nationalism, with images of the red, green and black Pan-African flag and a raised fist.
The rambling profile includes militant and apocalyptic language and repeated demands to “let black people go.” He referenced “white devils” and praised melanoma skin cancer.
On Saturday afternoon, Muhammad posted a photo of himself in a colorful garment, with his head covered, and the words: “LET BLACK PEOPLE GO OR THE DOOM INCREASES REPARATIONS & SEPARATION NOW.”
On Monday he wrote: “MY KILL RATE INCRESASES TREMENDOUSLY ON THE OTHER SIDE ASÈ ALLAH U AKBAR.”
Brian Levin, director of Cal State San Bernardino’s Center for the Study of Hate and Extremism, said many of Muhammad’s social media postings make reference to terms used by the Nation of Islam, which has been labeled a racist hate group by the Southern Poverty Law Center. Pointing to Muhammad’s repeated references to “white devils” and “Yakub” — the villainous figure responsible for creating white people, according to Nation of Islam lore — Levin said it is likely Muhammad thought he was taking part in a race war against whites.
“We’re living in an era of violent reciprocal prejudice, and there are references on his website to Fard Muhammad, the founder of Nation of Islam, and Nation of Islam uses the term white devils quite prolifically, as did this shooter,” Levin said.
Muhammad also repeatedly used the phrase “Black Dragon Lion Hawk” in his Facebook posts, and Levin said such nods to warrior culture are also common in black separatist circles.
But Glenestene Taylor said she didn’t remember her grandson showing a racial bias, toward whites or anyone else, in all his years staying with her or during countless visits to her predominately white Fresno neighborhood.
“He would say something derogatory about anybody, didn’t matter about the color,” she said. “If he didn’t like what they did, he didn’t like what they did no matter the color.”
Muhammad had run afoul of Fresno police before. He was indicted by a federal grand jury in February 2005 for possession of cocaine with intent to distribute, possession of a firearm for drug trafficking and possession of a firearm by a convicted felon, after a Fresno police officer searched his car and found two large bags of cocaine, a loaded handgun and two rifles, court records show. A federal judge later declared Muhammad mentally incompetent to stand trial.
He was deemed competent in August 2006 and pleaded guilty to the charges of cocaine possession with intent to distribute and a weapons charge. He ultimately served 92 months in federal prison, records show.
Hours after the shootings Tuesday, two shaken workers at the Catholic charity said they had ducked under yellow police tape to get out.
They said they were told not to talk to the news media. But one, a Vietnam veteran, said a person never forgets the sound of guns. He said that the charity gives away food every day and that families are allowed to come only once a week.
“We feed a lot of children, so we have to make sure that the food gets spread around,” he said.
“This is a sad day for us all. My thoughts and prayers are with the families of the victims,” Fresno Mayor Lee Brand said in a statement. “None of us can imagine what they must be going through.”
Vincent Taylor said he hopes his son’s capture headed off any future bloodshed.
“I’m happy he was arrested,” he said. “I would hope that whatever Kori tells [police,] they take him seriously and they start following up.”
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John Lott Presentation: Do Gun-Free Zones Make us Safer?
Three dead in central Fresno shooting spree; suspect caught, linked to Motel 6 slaying
BY JIM GUY
Three people were shot and killed after a man went on a shooting spree Tuesday in Fresno, randomly shooting at four white men, killing three, before he was taken into custody, police Chief Jerry Dyer said.
Two of the people shot outside Catholic Charities, on Fulton Street just north of downtown, may have been clients of the social service agency, not employees, Dyer said. The third victim was a passenger in a Pacific Gas & Electric truck. A fourth man was shot at but not injured.
Dyer said the gunman walked up to a PG&E truck in the 300 block of North Van Ness Avenue about 10:45 a.m. and shot the passenger repeatedly. The driver of the pickup then sped to Fresno police headquarters on M Street. The second shooting was only a few seconds later and was at Van Ness and Mildreda Street, where the gunman shot at but missed a resident. The gunman then turned onto Fulton Street and fired several rounds at another man, striking and killing him, Dyer said. After reloading at a bus stop, the gunman then shot and killed a man in the parking lot of Catholic Charities in the 100 block of North Fulton Street, he said.
Officers responding to the initial shotspotter reports found Muhammad running south on Fulton. Muhammad dove to the ground and yelled “Ali Akbar” before he was taken into custody, Dyer said. Although police found rounds of .357 caliber bullets and speed loaders for a revolver when Muhammad was taken into custody, no weapon was found, Dyer said.
Dyer said that it’s too soon to determine if the shootings involved terrorism.
Kori Ali Muhammad. FRESNO POLICE DEPARTMENT
However, a review of Muhammad’s social media shows he quoted the phrase “Allahu Akbar” in a tweet. The Arabic phrase translates to “God is the greatest.”
The FBI and ATF have both been notified about Tuesday’s shootings, Dyer said. But Dyer noted that in Thursday’s shooting at Motel 6, which was caught on surveillance video, Muhammad did not make any similar statements. “What we know is that this was a random act of violence,” Dyer said. “There is every reason to believe he acted alone.”
Muhammad was identified early in the Motel 6 murder, based on the surveillance cameras, and officers had sought him in Madera and other locations in subsequent days. His Facebook page at one point indicated that he was in Atlanta, which was untrue, Dyer said. His Facebook posts indicated that “he does not like white people, and he has anti-government sentiments,” the chief said.
Witnesses reported the gunman sprayed rounds while reloading and cursing. One man was reportedly shot to death at the scene near Catholic Charities.
A second gunshot victim was reported outside of the the Fresno Police Department station at Mariposa Mall and M Street at 10:51 a.m. The victim also was taken to Community Regional Medical Center, where he was pronounced dead, Dyer said.
Police are investigating at four separate crime scenes on Van Ness, Mildreda and Fulton, and those areas will remain closed for at least a few hours, Dyer said. At least one shooting victim remained on the scene, and officers with K-9 are searching for the murder weapon.
At 10:54 a.m., a report of a man down was reported at 215 N. Fulton St., about a block from Catholic Charities. That victim died at the scene, county Emergency Medical Services officials confirmed.
Fresno County government offices are on a lockdown alert. People have been urged to shelter in place. Homicide detectives were called to the shooting scenes. At least one agent from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives was at the Fulton Street shooting scene, and agents from Homeland Security were outside Fresno police headquarters.
A witness who lives close to Catholic Charities who did not want to be identified, said he watched the chaos unfold from his front yard as the suspect, carrying a large-caliber revolver, shot a man repeatedly in a front yard on the west side Fulton Street north of Nevada Avenue. Then, he stopped and calmly ejected spent shell casings from the weapon and reloaded near a bus stop south of Nevada.
“The shells are still there,” the witness said, pointing them out.
The suspect then walked south on Fulton, where he opened fire on a man in the Catholic Charities parking lot, the witness said.A witness said the suspect carried a large-caliber handgun and shot a man repeatedly in a front yard on Fulton Street north of Nevada Avenue, then reloaded at a bus stop south of Nevada.
The suspect then shot a man in the Catholic Charities parking lot, the witness said.
“He didn’t look like a gang-banger or anything,” the witness said.
At Catholic Charities, about a dozen distraught people cried, moaned and hugged one another as several undercover police officers worked furiously to keep the shooting victim alive by pumping on his chest. Blood from the gunshot wounds flooded the ground nearby.
“It could have been me,” moaned one man. “I ran. He couldn’t get away,” he added, pointing to the victim as an ambulance sped toward the shooting, driving the wrong way up Fulton with siren blaring.
“Give us some room! Move back,” shouted a woman, apparently a worker at the charity, where people line up daily to seek food and necessities. It’s an area where misery and petty crime happen every day, but nothing like this.
Arriving police officers jumped from their cars, pushing everyone back and throwing up crime scene tape.
A witness describes the shooting near Fulton Street on Tuesday, April 18.
Jim GuyThe Fresno Bee
Teresa Dominguez, chancellor for the Roman Catholic Diocese of Fresno, said the diocese is providing support for those who witnessed the shooting.
“The diocese will be present to the needs of all those serving as witnesses to this violent and traumatic event,” Dominguez said, “such as counseling and pastoral care, and Bishop Ochoa asks for the prayer of all the faithful for the victims of this violent crime and their families, and that law enforcement will be successful in the their investigation in identifying the perpetrator.”
Imam Seyed Ali Ghazvini of the Islamic Cultural Center of Fresno said this attack is against the Muslim faith.
“We denounce and reject in the strongest words possible this kind of violence and attack,” Ghazvini said, “and we request law enforcement agencies investigate the reasons and motivations about the person himself. He’s not known in our community, and we are in touch with other communities to see if he was a member or not. At this time, we are collecting information to see who is this person.…We have a very active relationship with all branches of state and federal law enforcement agencies in the Valley to make them aware of possible extremism within our area.”
Ghazvini said the literal translation of “Allahu Akbar” means “God is the greatest.” It is used during prayers and “unfortunately the same term is being used in an evil manner by extremists and terrorists trying to give some kind of religious legitimacy to their acts – we strongly denounce this.
“We do use this term during our prayer and calls for prayer, and we use it to pray to God and ask for healing people and bringing peace…the way it is being used by extremist and violent people is actually against our faith and is a misrepresentation of the word.”
FRESNO, Calif. — A man shot and killed three people on the streets of downtown Fresno on Tuesday, authorities said.
Suspect Kori Ali Muhammad, 39, shouted “Allahu Akbar” — meaning “God is great” in Arabic — as police tackled him to the ground after the shootings, which were spread over four locations, Fresno Police Chief Jerry Dyer said, CBS affiliate KGPE-TV reports.
He later told police that he hates white people, according to authorities.
All three victims were white, police said, and the victims appeared to be random, according to Dyer.
The suspect had been wanted in connection to a killing last week, the Fresno Police Department said.
Shot Spotter detected the first gunshots around 10:45 a.m., according to KGPE. The suspect shot into a Pacific Gas & Energy vehicle, killing the passenger, the station reports, and Muhammad continued walking and opened fire at a local resident but missed.
KGPE said the suspect approached another resident and shot and killed that person.
Ashlee Wolf of Catholic Charities told the Fresno Bee newspaper that the final shooting took place at a bus stop near the charity.
Wolf said the charity doesn’t believe the shooter was tied to Catholic Charities. She says the charity is working with police to provide information.
Sayed Ali Ghazvini, imam of the Islamic Cultural Center of Fresno, said Muhammad was not a member of his congregation and he did not recognize him. The imam said he is consulting with other faith leaders.
“We’re kind of shocked and surprised for what happened,” Ghazvini said. “We are very sorry for this to happen. We offer condolences for the victims, we pray for the victims and their families.”
Following the shooting, Fresno city spokesman Mark Standriff said county offices were placed on lockdown, and people were urged to shelter in place.
For years the city of Dallas has toyed with the idea of using ShotSpotter to pinpoint exactly where a gun was fired inside the city limits. But in 2009 the deal with the California company got hung up because of Oncor, which didn’t want ShotSpotter hanging its sensors on electrical poles. In 2011, SpotShotter went ahead and axed the pilot. And now, the council discovered Monday, it’s just too danged expensive.That’s what Dallas assistant police chiefs Catrina Shead and Mike Genovesi told the Dallas City Council’s Quality of Life Committee yesterday, as in: SpotShooter wants $50,000 per square mile of equipment, with a three-square-mile minimum. The city could try to lease it from SpotShooter, said Shead, but the price would remain about the same. At which point the council more or less dropped the subject.
Ralph A. Clark, the company’s chief executive, tells The Dallas Morning News today that it’s actually a little more than that — anywhere from $60,000 to $90,000 per square mile, depending on the terrain and the amount of sensors needed for deployment. ShotSpotter installs and maintains the sensors — which, he says, are “specialized computers with microphones that record, triangulate and time-stamp an impulse of noise” — which are monitored by police. Officers can be dispatched to a gunshot site in real time.
New York City started piloting ShotSpotter back in March, around Brooklyn and the Bronx, joining the likes of Boston, Washington, Boston, San Francisco, Minneapolis and other big and small cities willing to cough up the dough. Clark says his company’s had no “substantive” contact with Dallas officials during his tenure, which began in 2010. But “I do recall from the company oral history there were discussions with Dallas at one point” — but those died after Oncor took its firm pole position.
Dallas officials had hoped to use ShotSpotter all over town — not merely to track down violent crimes, but to cut down on so-called “celebratory noise violations” that occur, oh, every major holiday in some parts of town and every single night in others.
Outgoing council member Dwaine Caraway wants ShotSpotter no matter the price. He made that very, very clear yesterday.
“Even if we engage ourselves in a lease program for a minimum period of time, the idea is to change the behavior,” he told the chiefs and his colleagues. “I’d like to think we’d like to take a look at this program.” He proposed several locations: Audelia and LBJ Freeway, in Highland Hills, near Paul Quinn College. No doubt anyone reading this could suggest several other hot spots.
“I think it’s well worth trying to minimize that activity and let folks know the tech is there to prevent this,” he said. “Sometimes spending a few dollars to make sure people are aware would begin to minimize that behavior.”
But for now, at least, Dallas isn’t going to spot the shot, even if most of the gunfire in Dallas goes unreported. Instead, per the briefing materials, Dallas police will launch an “enhanced public awareness campaign against gunfire during celebrations.” Because that always works.
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Published on Apr 13, 2017
Mother of all bombs GBU-43 B Massive Ordnance Air Blast.
U.S. on 04.11.2017 dropped the most powerful conventional bomb in its arsenal on Nangarhar, Afghanistan.
The bomb, known in military ranks as “MOAB,” or the “mother of all bombs,” was used Thursday for the first time in combat, though it was developed in the early 2000s.
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PUBLISHED: 12:52 EDT, 13 April 2017 | UPDATED: 16:50 EDT, 13 April 2017
The United States has dropped its largest non-nuclear weapon after it targeted ISIS a network of caves and tunnels in eastern Afghanistan.
U.S. forces used a GPS-guided GBU-43 bomb, which is 30 feet long and weighs a staggering 21,600 pounds.
It is known as the ‘Mother Of All Bombs’ – a play on ‘MOAB,’ an acronym that stands for ‘Massive Ordnance Air Burst.’
A crater left by the blast is believed to be more than 300 meters wide after it exploded six feet above the ground. Anyone at the blast site was vaporized.
President Donald Trump told reporters at the White House that he was ‘very, very proud’ and called the operation ‘really another successful job. We’re very, very proud of our military.’
The Pentagon is denying that the attack was a revenge strike despite the fact that it came in the same area of Afghanistan where a Green Beret soldier was killed on Saturday.
Staff Sgt. Mark De Alencar, of 7th Special Forces Group, was cut down by enemy small arms fire while his unit was conducting counter-ISIS operations.
The military used a GBU-43 (pictured), which weighs a staggering 21,600 pounds, and has earned the moniker ‘Mother Of All Bombs
That MOAB’s first practical test was carried out on March 11, 2003 at Eglin Air Force Base in Florida
President Donald Trump told reporters at the White House that he had authorized his military commanders to take actions like the one put into play on Thursday
Trump suggested he had not personally ordered the bomb strike but delegated authority to commanders in the field.
‘Everybody knows exactly what happened. So, what I do is I authorize my military … We have given them total authorization,’ he said.
The move marks the fulfilment of a 17-month-old campaign promise Trump delivered in Iowa, when he scoffed at ISIS terror forces and said he ‘would bomb the s**t out of them’ if he became president.
It also comes at a moment in the young Trump presidency when tensions are rising with Russia over its role in Syria, where ISIS has its headquarters.
Huge: The MOAB test fired in 2003 shortly before final preparations for it to be loaded onto an MC-130 attack aircraft
Then-candidate Donald Trump told an Iowa audience in November 2015 that he would fight ISIS from the air as president: ‘I would bomb the s**t out of them’
The explosion will also send a saber-rattling message to North Korea and Iran that rogue states’ nuclear-weapons ambitions could be met with brute force.
Trump said of North Korean dictator Kim Jong-Un: ‘I don’t know if this sends a message. It doesn’t make any difference if it does or not.’
‘North Korea’s a problem. The problem will be taken care of.’
The Department of Defense is denying that Thursday’s attack was revenge for Saturday’s death of Green Beret sergeant Mark De Alencar in the same region of Afghanistan
White House press secretary Sean Spicer told reporters that MOAB is ‘a large, powerful and accurately delivered weapon’ whose use was intended to collapse underground spaces used by ISIS terrorists to move freely and attack U.S. and allied troops.
‘The United States takes the fight against ISIS seriously, and in order to defeat the group we must deny them operational space – which we did,’ Spicer said.
He referred reporters’ questions to the Pentagon and ignored a shouted question about whether Trump had been aware the bomb was dropped before or during the military operation.
Trump said during a November 2015 campaign rally in Fort Dodge, Iowa that ISIS was ‘making a tremendous amount of money’ because of ‘certain areas of oil that they took away’ after the Obama administration withdrew U.S. troops from Iraq and Afghanistan.
‘They have some in Syria, some in Iraq. I would bomb the s**t out of them,’ he said to wild cheers. ‘I would just bomb those suckers. That’s right. I’d blow up the pipes. … I’d blow up every single inch. There would be nothing left.’
Trump said in 2015 that he would ‘Bomb the sh*t out of ISIS’
Preparations: This was the scene as the only other MOAB to be exploded was readied for action in 2003 in Florida. The tail rotor is part of the guidance system for it to exploded over a specified target
Mushroom cloud: This was the aftermath of the test explosion seen outside Eglin Air Force Base in Fort Walton Beach, Florida
The MOAB was pushed out the back door of a giant cargo plane on Thursday, flying to its target with GPS guidance. A MOAB has only been exploded once before – in a 2003 test
A specialized MC-130 ‘Hercules’ cargo aircraft released the weapon at 7:00 p.m. local time.
It was too big to drop from a traditional bomb-bay door or release from an aircraft wing, so ‘we kicked it out the back door,’ a U.S. official told Fox News.
The weapon’s sheer power produces a blast that can be felt miles away, largely because of its construction.
Engineers used an unusually thin aluminum skin to encase MOAB’s payload, in order to avoid a thicker steel frame interfering with the impact on a target.
The U.S. fast-tracked the MOAB in 2003 for use in Operation Iraqi Freedom, but the Defense Department later decided that the enemy provided too little resistance to justify its deployment.
It was available to the Obama administration throughout the former president’s entire two terms, but he never deployed it in combat.
Its first practical test was carried out on March 11, 2003 at Eglin Air Force Base in Florida.
Sean Spicer announces dropping of GBU-43 bomb in Afghanistan
HOW ‘MOAB’ WORKS
Known as the ‘Mother Of All Bombs’
The U.S. military’s largest non-nuclear weapon
Each bomb costs around $16 million (£12.8 million)
Its explosion is equivalent to 11 tons of TNT and the blast radius is a mile wide
First tested by US forces in 2003
It is designed to destroy heavily reinforced targets or to shatter ground forces and armour across a large area
30 feet (9 meters) long and 40 inches (1 meter) wide
Weighs 21,000lbs (9,500kg) – heavier than the Hiroshima nuclear bomb
Leaves no lasting radiation effect
How it’s deployed:
The bomb has ‘grid’ fins that fold into the body and then open up in flight to help control its descent
It can only be deployed out of the back of a large cargo plane due to its size
The bomb rides on a pallet, a parachute pulls the pallet and bomb out of the plane
The pallet then separates so that the bomb can fall to its target
It accelerates rapidly to its terminal velocity and is partially guided to its target via satellite
It explodes six feet (1.8 meters) above the ground
The idea behind this ‘airburst’ mechanism is to spread its destructive range
The Pentagon confirmed Thursday that the explosive colossus was dropped in Afghanistan’s Nangarhar province, making it the first time America’s largest non-nuclear weapon has been used in a combat situation.
Pentagon spokesman Adam Stump said it was the first ever combat use of the bomb, which contains 11 tons of explosives.
Stump said the bomb was dropped on a cave complex believed to be used by ISIS fighters in the Achin district of Nangarhar province, very close to the border with Pakistan.
Gen. John Nicholson, commander of U.S. forces in Afghanistan, said in a statement about ISIS that ‘as ISIS-K’s losses have mounted, they are using IEDs, bunkers and tunnels to thicken their defense.’
‘This is the right munition to reduce these obstacles and maintain the momentum of our offensive against [ISIS-K].’
News reports suggest Nicholson made the decision to drop it from the sky.
He added that ‘[t]he strike was designed to minimize the risk to Afghan and U.S. Forces conducting clearing operations in the area while maximizing the destruction of ISIS-K fighters and facilities.’
The ISIS faction in Afghanistan is known as the Islamic State in Iraq and Syria-Khorasan province, or ISIS-K.
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Sec. Tillerson, Russian Minister Lavrov. News conference in Moscow. Syria. April 12. 2017
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Story 4: Trump Will Not Name Communist China As Currency Manipulator –United States Is A Currency Manipulator — Video —
A New Approach to Currency Manipulation?
How China’s devaluation impacts the U.S.
How Does China Manipulate Its Currency?
China’s Currency Manipulation
Donald Trump Economic Speech | Calls China as a Currency Manipulator | Monessen, PA | Mango News
Trump Tv | Japanese reporter asks Trump about China currency Manipulation | February 10 2017
Why Trump Should Stop Accusing China of Yuan Manipulation
Chinese Yuan Devaluation is an Act of War
C. Fred Bergsten on Currency Wars and US Economy
China’s Upward Currency Manipulation Might Have To End – FX Reserves Are Falling
Tim Worstall , CONTRIBUTOR
It is a standard belief of many in the US, including the new President, Donald Trump, that China is a currency manipulator. This is true, China has indeed been manipulating the value of the yuan. However, contrary to popular belief it has, at least recently, been manipulating that value up against the American dollar, not down. This of course makes Chinese exports to America more expensive and reduces the trade deficit between the two countries. Not that simple facts tend to change many peoples’ beliefs about the economy of course.
However, this all might come to an end soon enough because China’s foreign currency reserves are falling as a result of their interventions. In fact, that those reserves are falling is the very evidence we need to show that they are intervening up, not down:
China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years, though tighter regulatory controls appeared to making some progress in slowing capital outflows. China has taken a raft of steps in recent months to make it harder to move money out of the country and to reassert a grip on its faltering currency, even as U.S. President Donald Trump steps up accusations that Beijing is keeping the yuan too cheap.
As we can see the general assumption in the financial markets, and the correct assumption too, is that China has been intervening to keep the value of the yuan up, not down. The major way it has been doing this being by limiting the amount that Chinese citizens can move out of the country:
Further erosion of the world’s largest stockpile may prompt policy makers again to tighten measures for controlling outflows and on companies transferring money to other countries. Authorities recently rolled out stricter requirements for citizens converting yuan into foreign currencies as the annual $50,000 foreign exchange quota for individuals reset Jan. 1.
For a capital outflow does indeed reduce the value of a currency:
China’s foreign exchange reserves fell below the $3 trillion mark for the first time in almost six years as capital continued to flow out of the world’s second-largest economy, data from the People’s Bank of China showed Tuesday.
The reserves fell by $12.31 billion from the previous month to $2.998 trillion, following a drop of $41.08 billion in December. Economists polled by The Wall Street Journal had expected a $1 billion decrease in January.
The reason a capital outflow does this should be obvious. Yuan work only in China. Thus, to take money out of China you must sell yuan and buy some other form of money. That sale reduces the value of the yuan (more of something for sale does usually mean a price fall) against those other currencies. And thus the truth of those accusations of currency manipulation. As we can see the Chinese government is placing restrictions on peoples’ ability to sell yuan. This is thus manipulation which keeps the value up, not such that pushes it down.
All of which leaves us with an interesting point. The general demand is that China stop manipulating the value of its currency. OK, so, let’s insist upon that. The value of the yuan will fall, Chinese exports to America will be cheaper and we might well then see an increase in the US trade deficit. Which isn’t really what the people complaining about manipulation want, is it? But it may well be what they’re about to get.
Trump says he will not label China currency manipulator, reversing campaign promise
By Ana Swanson and Damian PalettaApril 12
During his presidential campaign Trump talked tough on China, accusing them of undervaluing the yuan. The International Monetary Fund has said that Chinese currency is “no longer undervalued”. Does China still deserve to be called a “currency manipulator”?(Daron Taylor/The Washington Post)
President Trump on Wednesday said he would not label China a currency manipulator, contradicting one of the biggest economic promises he made on the campaign trail.
Trump told the Wall Street Journal that he had changed his mind because China is not currently manipulating its currency, adding that he hoped to enlist China’s help on containing the nuclear threat from North Korea.
Trump also indicated that he might be open to keeping Janet L. Yellen as Federal Reserve chair after her term expires. “I like her, I respect her. … It’s very early,” he said when asking about her reappointment.
Trump was highly critical of Yellen during the campaign. He accused her of keeping interest rates low to benefit the Obama administration and said she should be ashamed of herself. But Yellen has a reputation for being slow to raise interest rates, and Trump had also professed his preference for low interest rates in the past.
“I do like a low-interest rate policy, I must be honest with you,” he told the Journal, when asked about Yellen.
The president is also “very close” to naming a vice chair and filling another open seat that governs community banking on the Federal Reserve Board, Treasury Secretary Steven Mnuchin said during the interview.
In the interview, Trump also inveighed against the strong U.S. dollar, saying that the strength of the currency stemmed partially from people’s confidence in him, but that it was also hurting the economy.
“It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency,” he said.
Eswar Prasad, a professor of international trade at Cornell University, said it was striking that a sitting president would comment so directly on the value of the dollar.
“It could also be taken as an implicit threat to other countries that if the dollar stays strong and if U.S. bilateral trade imbalances with its major trading partners stay high or continue to expand, that he will take some sort of action,” Prasad said.
The judgment on currency manipulation was scheduled to be released in a semiannual report from the Treasury Department that is due this week.
China defies international trade rules in some respects, economists say, but devaluing its currency is not currently one of them. While China suppressed the value of its currency for years to make its products cheaper abroad and boost its exports, for the past several years it has been intervening in currency markets to prop the yuan up, which actually benefits American exporters.
Your daily policy cheat sheet from Wonkblog.
“Certainly for the past six months, which is the period notionally covered by the April 15 report, China has been intervening to raise the value of its currency, not to suppress it,” said Matthew Goodman, a former Treasury official who helped to label China a currency manipulator during the Clinton administration.
China was a favored target of Trump’s on the campaign trail. He often said the world’s second-largest economy was taking advantage of the U.S., and that he would respond on his first day in office by labeling China a currency manipulator. He has also said he would impose tariffs of up to 45 percent on China if the country does not negotiate better trade terms with the United States.
Labeling a country a currency manipulator triggers an investigation and can eventually lead to tariffs or other economically punitive measures.
But when Trump met with Chinese President Xi Jinping at Mar-a-Lago last week, the conversation was much more genial. The outcome of the talks was a 100-day plan to reevaluate the countries’ trading relationship, including trying to boost American exports to China.
President Trump met with China’s president on April 6, after months of criticizing China and promising big trade changes. From blasting China for currency manipulation to accusing them of “raping our economy,” here are some of his biggest blusters from the campaign trail. (Jenny Starrs/The Washington Post)
President Trump and the Chinese leader Xi Jinping at Mr. Trump’s Mar-a-Lago estate in Florida last week. Mr. Trump has promised to take action on Chinese trade and currency issues.CreditDoug Mills/The New York Times
Has the United States mismanaged the ascent of China?
By April 15, the Treasury Department is required to present to Congress a report on the exchange rate policies of the country’s major trading partners, intended to identify manipulators that cheapen their currency to make their exports more attractive and gain market share in the United States, a designation that could eventually lead to retaliation.
It would be hard, these days, to find an economist who feels China fits the bill. Under a trade law passed in 2015, a country must meet three criteria: It would have to have a “material” trade surplus with the rest of the world, have a “significant” surplus with the United States, and intervene persistently in foreign exchange markets to push its currency in one direction.
While China’s surplus with the United States is pretty big — almost $350 billion — its global surplus is modest, at 2.4 percent of its gross domestic product last year. Most significant, it has been pushing its currency up, not down. Since the middle of 2014 it has sold over $1 trillion from its reserves to prop up the renminbi, under pressure from capital flight by Chinese companies and savers.
Even President Trump — who as a candidate promised to label China a currency manipulator on Day 1 and put a 45 percent tariff on imports of Chinese goods — seems to be backing away from broad, immediate retaliation.
And yet the temptation remains. “When you talk about currency manipulation, when you talk about devaluations,” the Chinese “are world champions,” Mr. Trump told The Financial Times, ahead of the state visit of the Chinese leader, Xi Jinping, to the United States last week.
For all Mr. Trump’s random impulsiveness and bluster — and despite his lack of a coherent strategy to engage with what is likely soon to become the world’s biggest economy — he is not entirely alone with his views.
Many learned economists and policy experts ruefully acknowledge that the president’s intuition is broadly right: While labeling China a currency manipulator now would look ridiculous, the United States should have done it a long time ago.
“With the benefit of hindsight, China should have been named,” said Brad Setser, an expert on international economics and finance who worked in the Obama administration and is now at the Council on Foreign Relations.
There were reasonable arguments against putting China on the spot and starting a process that could eventually lead to American retaliation.
Yet by not pushing back against China’s currency manipulation, and allowing China to deploy an arsenal of trade tactics of dubious legality to increase exports to the United States, successive administrations — Republican and Democratic — arguably contributed to the economic dislocations that pummeled so many American workers over more than a decade. Those dislocations helped propel Mr. Trump to power.
From 2000 to 2014 China definitely suppressed the rise of the renminbi to maintain a competitive advantage for its exports, buying dollars hand over fist and adding $4 trillion to its foreign reserves over the period. Until 2005, the Chinese government kept the renminbi pegged to the dollar, following it down as the greenback slid against other major currencies starting in 2003.
American multinationals were flocking into China, taking advantage of its entry into the World Trade Organization in December 2001, which guaranteed access to the American and other world markets for its exports. By 2007, China’s broad trade surplus hit 10 percent of its gross domestic product — an unheard-of imbalance for an economy this large. And its surplus with the United States amounted to a full third of the American deficit with the world.
Though the requirement that the Treasury identify currency manipulators “gaining unfair competitive advantage in international trade” dates back to the Omnibus Trade and Competitiveness Act of 1988, China was never called out.
There were good reasons. Or at least they seemed so at the time. For one, China hands in the administration of George W. Bush argued that putting China on the spot would make negotiations more difficult, because even Chinese leaders who understood the need to allow their currency to rise could not be seen to bow to American pressure.
Labeling China a manipulator could have severely hindered progress in other areas of a complex bilateral economic relationship. And the United States had bigger fish to fry.
“There were other dimensions of China’s economic policies that were seen as more important to U.S. economic and business interests,” Eswar Prasad, who headed the China desk at the International Monetary Fund and is now a professor at Cornell, told me. These included “greater market access, better intellectual property rights protection, easier access to investment opportunities, etc.”
At the end of the day, economists argued at the time, Chinese exchange rate policies didn’t cost the United States much. After all, in 2007 the United States was operating at full employment. The trade deficit was because of Americans’ dismal savings rate and supercharged consumption, not a cheap renminbi. After all, if Americans wanted to consume more than they created, they had to get it somewhere.
And the United States had a stake in China’s rise. A crucial strategic goal of American foreign policy since Mao’s death had been how to peacefully incorporate China into the existing order of free-market economies, bound by international law into the fabric of the postwar multilateral institutions.
And the strategy even worked — a little bit. China did allow its currency to rise a little from 2005 to 2008. And when the financial crisis hit, it took the foot off the export pedal and deployed a giant fiscal stimulus, which bolstered internal demand.
Yet though these arguments may all be true, they omitted an important consideration: The overhaul of the world economy imposed by China’s global rise also created losers.
In a set of influential papers that have come to inform the thinking about the United States’ relations with China, David Autor, Daron Acemoglu and Brendan Price from the Massachusetts Institute of Technology; Gordon Hanson from the University of California, San Diego; and David Dorn from the University of Zurich concluded that lots of American workers, in many communities, suffered a blow from which they never recovered.
Rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs, one paper estimated. Another found that sagging wages in local labor markets exposed to Chinese competition reduced earnings by $213 per adult per year.
Economic theory posited that a developed country like the United States would adjust to import competition by moving workers into more advanced industries that competed successfully in global markets. In the real world of American workers exposed to the rush of imports after China erupted onto world markets, the adjustment didn’t happen.
If mediocre job prospects and low wages didn’t stop American families from consuming, it was because the American financial system was flush with Chinese cash and willing to lend, financing their homes and refinancing them to buy the furniture. But that equilibrium didn’t end well either, did it?
What it left was a lot of betrayed anger floating around among many Americans on the wrong end of these dynamics. “By not following the law, the administration sent a political signal that the U.S. wouldn’t stand up to Chinese cheating,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “As we can see now, that hurt in terms of maintaining political support for open trade.”
If there was a winner from this dynamic, it was Mr. Trump.
Will Mr. Trump really go after China? In addition to an expected executive order to retaliate against the dumping of Chinese steel, he has promised more. He could tinker with the definitions of “material” and “significant” trade surpluses to justify a manipulation charge.
And yet a charge of manipulation would add irony upon irony. “It would be incredibly ironic not to have named China a manipulator when it was manipulating, and name it when it is not,” Mr. Setser told me. And Mr. Trump would be retaliating against the economic dynamic that handed him the presidency.
China is No Longer Manipulating its Currency
C. Fred Bergsten (PIIE)
November 18, 2016 9:45 AM
US President-elect Donald Trump has vowed to instruct his Secretary of the Treasury to label China a currency manipulator on his first day in office, just as Republican presidential candidate Mitt Romney did in 2012. He would then presumably seek to negotiate with the Chinese to reduce their large trade surplus, which equals roughly half the total US trade deficit of about $500 billion, under the threat of limiting imports unilaterally if they failed to cooperate (and risking retaliation against US exports). A declining US trade deficit, if it could be achieved, would increase US economic growth. But China has not manipulated its currency, the renminbi, for the past two years, and even an erroneous designation would not enable the new president to take any retaliatory trade actions.
China was the champion currency manipulator of all time from 2003 through 2014. During this “decade of manipulation,” China bought more than $300 billion annually to resist upward movement of its currency by artificially keeping the exchange rate of the dollar strong and the renminbi’s exchange rate weak. China’s competitive position was thus strengthened by as much as 30 to 40 percent at the peak of the intervention. Currency manipulation explained most of China’s large trade surpluses, which reached a staggering 10 percent of its entire GDP in 2007.
China was not the only manipulator. A number of other Asian economies, including Taiwan and Hong Kong, also intervened regularly to keep from losing their competitive position to China (and thus to the United States as well). A few others, including Japan and Korea, intervened occasionally as well.
Naming a country a manipulator, however, has no significant operational consequences (which is one of the reasons it has not been done in recent years). The relevant US law, dating from 1988, requires only that the Secretary of the Treasury launch a negotiation with the indicted countries in an effort to rectify the situation. Trump and his advisors have suggested they would use a designation to impose new import restrictions against China, up to the level of the renminbi undervaluation that resulted, but they would have to invoke other US statutes to justify such action. (Regardless of manipulation, the administration might authorize the Commerce Department to apply countervailing duties against imports that were subsidized by undervalued exchange rates in China and elsewhere; this would probably run afoul of US obligations in the World Trade Organization, however, and might also be challenged domestically unless Congress explicitly authorized such treatment.)
I was among the first to call attention to the manipulation by the Chinese and others and to advocate strong action to counter it, but it must be recognized that the situation has changed dramatically over the past two years. China has experienced large outflows of private capital that have driven its exchange rate down and indeed sparked market fears of disorderly renminbi devaluations. To their credit, the Chinese have intervened heavily on the opposite side of the market: Instead of buying dollars to keep the renminbi weak, they have sold large amounts of dollars to prevent it from sliding further. Their recent intervention has promoted US competitiveness rather than undermined it. Manipulation (including by other countries) has passed largely into remission.
It would thus be factually incorrect, as well as ineffectual, for the new Trump administration to label China a currency manipulator (and the Chinese might well refuse to negotiate under such circumstances). Indeed, the White House would be running counter to the thrust of the new US currency law (although it could still label a country as a “manipulator,” even if it did not meet the terms of that law). The Trade Facilitation and Trade Enforcement Act of 2015 spells out three criteria for identifying a country for currency misbehavior:
a large bilateral trade surplus with the United States, which China has;
a material global current account surplus, which the Treasury Department interprets as meaning more than 3 percent of a country’s GDP, a bit more than China is now running; and
“persistent one-sided intervention” in the currency markets, to keep its exchange rate from rising, which China is clearly not conducting.
These tests would have caught China for eight consecutive years, from 2003 through 2010, but Treasury currently has placed China only on a “monitoring list” along with five others that meet at least two of the criteria or have met them in the recent past. There is always a possibility that China (and others) could resume the competitive nonappreciation of the earlier period if market pressure again pushed the renminbi upward, especially if China’s economic reforms faltered and its growth rate sank below the new target of 7 percent. So we cannot be confident that the problem has been definitively resolved.
Indeed, it would be desirable for the Trump administration to add a new tool to the US policy arsenal, to ensure the problem will not resurface, by announcing that the United States will counter any future manipulation by others with offsetting intervention of its own. If China buys $1 billion in an effort to keep the dollar artificially strong, the United States could buy $1 billion worth of renminbi to neutralize any impact of the Chinese action on the exchange rate between the two currencies. The Chinese currency and bond markets are now large enough to permit any foreseeable level of US intervention that might be needed. But simply the announcement of a policy of such “countervailing currency intervention” would almost surely deter future manipulation efforts, requiring very little if any actual activity. It should thus prolong the current remission of manipulation indefinitely. The Senate passed a bill authorizing “remedial currency intervention” in 2011, but the policy could be adopted under current law.
Trump’s economic team may decide to address a number of Chinese policies that support its exports and impede its imports, in an effort to reduce the Chinese surplus and the US deficit, as its predecessors have done for many years. There are several US statutes that provide a basis for doing so. Currency manipulation is not one of these, however, especially at the present time. The new administration should look for alternative paths to any immediate action while shoring up the country’s defenses against possible recrudescence of currency aggression in the future.
C. Fred Bergsten is senior fellow and director emeritus of the Peterson Institute for International Economics. He was the founding director of the Institute from 1981 through 2012. He was previously assistant secretary of the Treasury for International Affairs and is coauthor, with Joseph E. Gagnon, of the forthcoming Institute book Currency Conflict and Trade Policy: A New Strategy for the United States.
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Trump’s base turns on him
Steve Bannon’s downgrade is just one of many complaints. ‘We expect him to keep his word, and right now he’s not keeping his word,’ says one campaign supporter.
Donald Trump’s true believers are losing the faith.
As Trump struggles to keep his campaign promises and flirts with political moderation, his most steadfast supporters — from veteran advisers to anti-immigration activists to the volunteers who dropped their jobs to help elect him — are increasingly dismayed by the direction of his presidency.
Their complaints range from Trump’s embrace of an interventionist foreign policy to his less hawkish tone on China to, most recently, his marginalization of his nationalist chief strategist, Steve Bannon. But the crux of their disillusionment, interviews with nearly two dozen Trump loyalists reveal, is a belief that Trump the candidate bears little resemblance to Trump the president. He’s failing, in their view, to deliver on his promise of a transformative “America First” agenda driven by hard-edged populism.
“Donald Trump dropped an emotional anchor. He captured how Americans feel,” said Tania Vojvodic, a fervent Trump supporter who founded one of his first campaign volunteer networks. “We expect him to keep his word, and right now he’s not keeping his word.”
Earlier this week, Vojvodic launched a Facebook group called, “The concerned support base of President Trump,” which quickly drew several dozen sign-ups. She also changed the banner on her Facebook page to a picture of Bannon accompanied by the declaration: “Mr. President: I stand with Steve Bannon.”
“I’m not so infatuated with Trump that I can’t see the facts,” she said. “People’s belief, their trust in him, it’s declining.”
The swiftness and abruptness of Trump’s shift from bomb-throwing populist outsider to a more mainstream brand of Republican has taken the president’s stalwarts by surprise.
“It was like, here’s the chance to do something different. And that’s why people’s hopes are dashed,” said Lee Stranahan, who, as a former writer at Breitbart News, once worked with Bannon. “There was always the question of, ‘Did he really believe this stuff?’ Apparently, the answer is, ‘Not as much as you’d like.’”
The White House did not respond to a request for comment.
The deflation of Trump’s base threatens to further weaken a president who’s already seen his public support drop to historic lows. Frustration among the president’s allies has intensified in recent days, with many expressing worry that Bannon, the intellectual pillar of the nationalist movement that catapulted Trump to the presidency, is being pushed out.
As Bannon’s influence wanes, on the rise is a small group of Wall Street-connected advisers whose politically moderate and globalist views are anathema to the populist cause.
The palace intrigue intensified this week after Trump refused to say he still had confidence in Bannon and downplayed the former Breitbart chairman’s role in his campaign victory. And it’s feeding suspicions that the president is changing his priorities.
Rep. Steve King (R-Iowa), one of the president’s most vocal backers on Capitol Hill, said he’s been disheartened by the chief strategist’s isolation.
“A lot of us look at Steve Bannon as the voice of conservatism in the White House,” said King, who has known Bannon for years.
The displeasure over Bannon’s reduced status has trickled down to Trump’s grass-roots army of volunteers. Among those unsettled is Shane Bouvet, a 24-year-old campaign volunteer and blue-collar single father from Illinois who became something of a hero in the Trump movement. On the eve of the inauguration, Trump, who had read about how Bouvet trekked across the country by car so he could watch the swearing-in, gave him a check for $10,000.
Bouvet later said the gift saved the life of his father, who was battling cancer and needed the money to cover medical costs.
That day, Bouvet also was introduced to Bannon. The two spoke briefly, and Bouvet came to identify with the adviser who, like him, represented a “forgotten America” that Trump had appealed to with his blue-collar pitch. He said in an interview that he still supports the president, but is troubled by reports that Bannon is on the outs and that senior adviser Jared Kushner, a New York City real estate scion, is accumulating influence.
“I see a lot of people upset about his role,” Bouvet said of Bannon.
“I love our president,” he added. “I would tell him, follow his heart instead of whispers in his ears.”
On his South Florida-based radio show, Trump backer John Cardillo has begun to hear from listeners who are disillusioned with the rising influence of moderate staffers like Kushner and Gary Cohn, the Goldman Sachs executive-turned-Trump economic adviser.
For Cardillo, too, it’s been a letdown. During the 2016 Republican primary, he was attracted to Trump because of his insurgent streak. As a former New York City police officer, Cardillo identified with the candidate’s blue-collar style. He fell hard and got aboard the Trump train early, backing the insurgent candidate over home-state favorite Marco Rubio.
Trump voters “felt like they were voting for an anti-establishment candidate — and they’re terrified, they’re losing faith,” Cardillo said. “They’re saying, ‘Why does he have these people around him?’”
The gripes go beyond Bannon’s apparent downgrade. Many of Trump’s most stalwart supporters, including radio show hosts Michael Savage and Laura Ingraham, called last week’s bombing of Syria a betrayal of Trump’s pledge to be an “America First” commander in chief who would avoid unnecessary conflicts overseas.
Concerns about Trump’s foreign policy approach intensified on Wednesday when he backed away from his oft-repeated campaign line that NATO is “obsolete.” Instead, during an appearance with NATO Secretary General Jens Stoltenberg, Trump called the organization a “great alliance.”
Howie Carr, an influential Boston radio show host and a vocal Trump backer, said he’s been mostly satisfied with the president’s tenure so far. But he said he and his listeners weren’t on board with the Syria bombing and warned against a U.S.-led push to overthrow Syrian President Bashar Assad.
“People are concerned because it’s such a morass over there,” Carr said. “I don’t think any of my listeners have any great stomach for overthrowing Assad, as odious as he is.”
Other Trump boosters worry that he’s ditching his economic agenda. They wonder why he backed off his vow to label
China a currency manipulator, and are chagrined by his reversal on his position to eliminate the Export-Import Bank.
On Thursday, White House press secretary Sean Spicer took issue with the premise that Trump’s switch on labeling China a currency manipulator amounted to abandoning a campaign promise.
“The president’s tough talk … on a variety of subjects was to get results for the American people. That’s what he has pledged to do, to get more jobs here, to grow more manufacturing, to keep our country safe,” Spicer told reporters. “At the end of the day, this is always about developing a better situation for the American people, and I think he’s done that.”
Still others are concerned about Trump’s lack of progress on reforming the tax code.
Larry Kudlow, a veteran economist who advised Trump’s campaign, expressed dismay that the president hadn’t yet released a tax plan. He said he was beginning to wonder whether the president is about to walk back his pledge to cut taxes.
“What is their product?” Kudlow asked. “It doesn’t make any sense to me. I’m not giving up hope. But it’s looking very shaky to me.”
Conservative economist Stephen Moore, who also advised the Trump campaign, said he’s reached out to the White House about the lack of a tax package.
“They’re all over the map,” he said. “I don’t know if they’re listening or not.”
Then there’s immigration, the issue that catapulted Trump to front-runner status. Activists are increasingly alarmed that the president has yet to follow through on his pledge to rescind protections for undocumented parents and children put in place under former President Barack Obama.
Brenda Sparks, an “angel mom” whose son was killed by an illegal immigrant, appeared onstage with Trump at an August campaign event in Phoenix. She said he promised her that he would overturn the program known Deferred Action for Childhood Arrivals, or DACA, in short order.
While Sparks said she didn’t think it would be done immediately, “I had expected it before now.”
“I still support Trump, but I’m going to hold his feet to the fire,” she said. “He has not lived up to that promise.”
Michelle Dallacroce, an anti-immigration activist, is more pointed. Immigration is “why we voted for Donald Trump,” she said. “This could be the most elaborate reality show. I’m wondering, was this all an illusion for us, using our movement so he could get in there?”
Trump is hardly the first president to get crosswise with his supporters. After running on a promise to infuse Washington with change, Barack Obama faced sharp accusations from backers that he was moving too slowly to change the culture of the capitol. Governing, Obama learned, is a lot different than campaigning.
Not all of the president’s backers are disappointed. They point to his successful nomination of Supreme Court Justice Neil Gorsuch and his rollback of environmental regulations as early wins.
“There’s always going to be things that aren’t perfect, but it’s exciting,” said Ed Martin, a conservative leader in Missouri.
But as Trump evolves, some of his loyalists are beginning to compare him to another Republican who lost the support of the party’s base: Arnold Schwarzenegger. After being elected California governor in 2003, the former movie star took on entrenched Democratic interests, lost badly, then tacked sharply to the left.
This week, some Trump die-hards passed around a column by conservative commentator Kurt Schlichter headlined: “Trump Can’t Let His Real or His Fake Friends Turn Him into Schwarzenegger Part 2.”
Schlichter, in an interview, said conservatives are fundamentally distrustful of Republican politicians who had often misled them. He urged the president to take some immediate actions, however small, to put his supporters at ease.
“You’ve got to understand the base. It’s like dating a girl whose father cheated on her mother. She’s always going to be suspicious,” he said. “He’s got to constantly provide wins because he’s got an emotionally damaged base that’s been abused.”
Within Trump’s inner circle, a moderate voice captures the president’s ear
Gary Cohn, director of the National Economic Council, has found an edge within the Trump administration by hiring two dozen policy experts, most with government experience. (Jabin Botsford/The Washington Post)
As power struggles and ideological battles engulfed the White House, an unlikely player is exercising new influence on the direction of President Trump’s administration.Gary Cohn, a former Goldman Sachs president, is capitalizing on his new position as director of Trump’s National Economic Council to push a centrist vision and court bipartisan support on some of Trump’s top agenda items such as tax reform and a $1 trillion infrastructure plan.The growing strength of Cohn and like-minded moderates was on display this week as Trump reversed himself on several high-profile issues — including a less confrontational approach to China, an endorsement of government subsidies for exports and the current leadership of the Federal Reserve. The president’s new positions move him much closer to the views of Cohn and others on Wall Street, not to mention mainstream Republicans and Democrats.It was the clearest sign yet that an alliance of moderates in the White House — including Cohn; senior adviser Jared Kushner, the president’s son-in-law; and another influential Goldman Sachs alumna, Dina Powell — is racking up successes in a battle over ideology and control with hardcore conservatives led by chief strategist Stephen K. Bannon, who held sway at the start of the administration.In a White House short on experienced personnel, Cohn has found an edge by hiring two dozen policy experts, most with government experience. His team produced detailed proposals on overhauling the tax code, rebuilding infrastructure, cutting back financial regulations and restructuring international trade deals. He is widely considered a future candidate to be chief of staff.
From left, National Economic Council Director Gary Cohn, White House press secretary Sean Spicer and Dan Scavino, assistant to the president and director of White House social media, listen during a news conference this week at the White House. (Jabin Botsford/The Washington Post)
“Cohn might be a newbie to policy and Washington, but you have to give him credit for one thing,” said Gene Sperling, who held Cohn’s job during the Obama administration. “While others seemed engaged in ideological and ‘House of Cards’-like staff warfare, he quietly and quickly focused on the first rule of governing: He hired some competent, professional staff at the NEC, and it has paid off for him.”
Cohn now finds himself in the awkward — and politically risky — position of being praised by Democrats but shunned by conservative allies of Trump who see the former Goldman Sachs executive as anathema to the values that got Trump elected.
“From a pure political perspective, I do not know if the White House appreciates how Gary Cohn is a liability with the Republican and conservative base, as well as the Republican Congress,” said Sam Nunberg, a strategist on Trump’s 2016 campaign. “The Trump White House will always be held in suspicion when you have someone who’s consolidated full economic power in the White House who is also a liberal, New York Democrat.”
Cohn has been getting flak in the conservative media as he has risen in profile. Rush Limbaugh last week called him “a very ideological liberal Democrat” and a “trader at Goldman Sachs.” He expressed concern that Cohn and his allies in the White House “are starting to have sway” at Bannon’s expense.
Cohn, who declined to comment for this article, has given thousands of dollars to candidates from both parties, including President Barack Obama and former candidate Hillary Clinton.
White House aides say Cohn has done well because Trump sees him, more than anything else, as a dealmaker. Cohn represents a bloc of White House officials who are working harder than before to court Democratic support for key parts of Trump’s agenda, having seen the Republican Party splinter during the health-care debate.
“I’m not a Democrat, and I’m not a Republican,” Cohn often says in meetings with business executives, according to two people familiar with his exchanges. “I just want to get things done.”
People who have met with Cohn in his new role said they weren’t aware of what his ideology was. He just seemed driven to forge agreements.
That philosophy has led Cohn to show enthusiasm for ideas such as a new tax on carbon — a Democrat-friendly idea which would raise revenue to ease tax reform, a top presidential priority, while also helping to curb carbon emissions. The idea is ridiculed by many conservatives on Capitol Hill, and the White House rapidly distanced itself last week after word leaked that senior officials were studying the concept.
“I think the National Economic Council has done a terrible job,” said Larry Kudlow, who was one of Trump’s top economic advisers during the campaign. “It’s the NEC’s job to put a plan together and show the president options and make decisions. So far, I would say they are way behind the eight ball.”
But even as the legislative agenda struggles to gain momentum, Cohn and his allies are having a clear impact on the president’s thinking. In the past week, Trump reversed his earlier statements and said he supported the Export-Import Bank, would not declare China a “currency manipulator” and said flattering things about Federal Reserve Board Chair Janet L. Yellen.
Conservatives took aim at the Ex-Im Bank and the Fed throughout much of Obama’s term, while Trump, as part of his tough trade rhetoric, promised to go after China’s currency practices on Day One of his administration.
Cohn’s stature among the top advisers is notable because he is one of the few who played no role in the campaign. Cohn, who grew up in a middle-class family and struggled in a number of schools because of dyslexia, graduated from American University and took a job with U.S. Steel in Ohio. During a trip to New York, he coaxed a well-dressed senior Wall Street executive into sharing a cab with him to the airport, acting as if he knew financial markets (he knew virtually nothing), according to an interview he gave author Malcolm Gladwell. Cohn schmoozed his way into his first Wall Street job and then climbed the ranks, eventually becoming Goldman’s president and chief operating officer.
While friends say he loves his new job, they say Cohn also holds the traditions of Washington in low regard.
At a recent dinner with friends in New York, he called Washington a “s—show,” according to a person familiar with the exchange.
Cohn has not tried to shirk his past at Goldman Sachs or hide his lavish lifestyle. He recently had drinks at the Four Seasons with Goldman Sachs chief executive Lloyd Blankfein, and shortly after the failure of the House GOP health-care legislation, he went on vacation in the Bahamas.
If he is able to deflect the growing criticism from hardcore conservatives, White House officials say Cohn will have a strong future as a Trump adviser given his experience and the deep bench of experts he has established.
This includes DJ Gribbin, an infrastructure expert, and Shahira Knight, a former congressional aide on tax policy who joined the White House from Fidelity Investments.
Other top members of the team include Kenneth Juster, who is slated to play a top White House role in international negotiations; Jeremy Katz, a former White House official in the George W. Bush administration; and Ray Starling, who works on agriculture issues and was formerly the general counsel for the North Carolina Department of Agriculture and Consumer Services.
While Cohn has met with lawmakers from both parties and executives from numerous companies in his role, he rarely telegraphs what the White House plans to do.
One exception came last week, when — during a gathering of chief executives — he went into great detail about how the U.S. air-traffic-control system needed to be reworked.
He quickly moved through a technical discussion on why the United States should scrap its land-based radar system and adopt a global-positioning system, suggesting he had already devoted time to the topic. He said their approach would save 25 percent of the jet fuel consumed each year.
“We are going to cut flight times down fairly dramatically,” he told the executives. “We are going to cut the experience down. We are going to cut tarmac time down.”
His penchant for dealmaking has even attracted the admiration of Office of Management and Budget Director Mick Mulvaney, a tough fiscal conservative and longtime critic of government spending. Cohn, working to fulfill Trump’s pledge to spend billions to rebuild infrastructure, has toyed with an idea that would pair $200 billion in taxpayer money with $800 billion in additional funds, mostly from private investors.
“You’ve got to give these Goldman Sachs guys credit,” Mulvaney said this week on CNBC about Cohn’s plan. “They know how to lever up.”
Bannon was previously a US Navy officer, a Goldman Sachs banker, a radio host, a research director, a film producer and then a media executive. He was an officer in the United States Navy for seven years in the late 1970s and early 1980s, serving on the destroyerUSS Paul F. Foster as well as at the Pentagon. After his military service, he worked at Goldman Sachs as an investment banker in the Mergers and Acquisitions Department. When he left the company, Bannon held the position of vice president. In 1993, he was made acting director of the Earth-science research project Biosphere 2. In the 1990s, he became an executive producer in the Hollywood film and media industry and has produced 18 films since 1991.
In 1990, Bannon and several colleagues from Goldman Sachs launched Bannon & Co., a boutique investment bank specializing in media. In one of Bannon & Co.’s transactions, the firm represented Westinghouse Electric which wanted to sell Castle Rock Entertainment. Bannon negotiated a sale of Castle Rock to CNN, which was owned by Ted Turner at the time.Instead of a full adviser’s fee, Bannon & Co. accepted a financial stake in five television shows, including Seinfeld, which was in its third season. Bannon still receives cash residuals each time Seinfeld is aired.Société Générale purchased Bannon & Co. in 1998.
In 1993, while still managing Bannon & Co., Bannon was made acting director of the Earth-science research project Biosphere 2 in Oracle, Arizona. Under Bannon, the closed-system experiment project shifted emphasis from researching human space exploration and colonization toward the scientific study of earth’s environment, pollution and climate change. He left the project in 1995.
Bannon persuaded Goldman Sachs to invest, in 2006, in a company known as Internet Gaming Entertainment. Following a lawsuit, the company rebranded as Affinity Media and Bannon took over as CEO. From 2007 through 2011, Bannon was the chair and CEO of Affinity Media.
Bannon was a founding member of the board of Breitbart News, an online far-right news, opinion and commentary website which, according to Philip Elliott and Zeke J. Miller of Time, has “pushed racist, sexist, xenophobic and anti-Semitic material into the vein of the alternative right“.
In March 2012, after founder Andrew Breitbart‘s death, Bannon became executive chair of Breitbart News LLC, the parent company of Breitbart News. Under his leadership, Breitbart took a more alt-right and nationalistic approach toward its agenda. Bannon declared the website “the platform for the alt-right” in 2016. Bannon identifies as a conservative. Speaking about his role at Breitbart, Bannon said: “We think of ourselves as virulently anti-establishment, particularly ‘anti-‘ the permanent political class.”
In 2016, Ronald Radosh claimed in The Daily Beast that Bannon had told him earlier, in a book party on November 12, 2013, that he was a Leninist, in that “Lenin wanted to destroy the state, and that’s my goal too. I want to bring everything crashing down, and destroy all of today’s establishment”. While Snopes considers this claim unproven, other media such as Time magazine and The Guardian have reported or discussed it.
In a 2014 speech to a Vatican conference, Bannon made a passing reference to Julius Evola, a twentieth-century, Nazi-linked Italian writer who influenced Mussolini‘s Italian Fascism and promoted the Traditionalist School, described by a New York Times writer as “a worldview popular in far-right and alternative religious circles that believes progress and equality are poisonous illusions.” In referring to the associated views of Vladimir Putin, who is influenced by Evola follower Aleksandr Dugin, Bannon stated “We, the Judeo-Christian West, really have to look at what he’s talking about as far as Traditionalism goes — particularly the sense of where it supports the underpinnings of nationalism.” He has likewise quoted French anti-Enlightenment writer Charles Maurras approvingly to a French diplomat.
On November 15, 2016, U.S. Representative David Cicilline of Rhode Island released a letter to Trump signed by 169 Democratic House Representatives urging him to rescind his appointment of Bannon. The letter stated that appointing Bannon “sends a disturbing message about what kind of president Donald Trump wants to be”, because his “ties to the White Nationalist movement have been well documented”; it went on to present several examples of Breitbart News’ alleged xenophobia. Bannon denied being a white nationalist and claimed, rather, that he is an “economic nationalist.”
On November 18, during his first interview not conducted by Breitbart Media since the 2016 presidential election, Bannon remarked on some criticisms made about him stating that “Darkness is good: Dick Cheney. Darth Vader. Satan. That’s power. It only helps us when they get it wrong. When they’re blind to who we are and what we’re doing.” The quote was published widely in the media.
Trump responded to the ongoing controversy over Bannon’s appointment in an interview with The New York Times by saying “I’ve known Steve Bannon a long time. If I thought he was a racist, or alt-right, or any of the things that we can, you know, the terms we can use, I wouldn’t even think about hiring him.”
Bannon and other advisors watching Trump sign an executive order.
White House Chief Strategist Steve Bannon shake hands with WH Chief of Staff Reince Priebus at 2017 CPAC
Several days after Donald Trump’s inauguration, Bannon told an American newspaper, “The media should be embarrassed and humiliated and keep its mouth shut and just listen for a while. I want you to quote this: the media here is the opposition party. They don’t understand this country. They still do not understand why Donald Trump is the president of the United States.”
At the end of January 2017, in a departure from the previous format of the National Security Council (NSC), the holder of Bannon’s position, along with that of the Chief of Staff, were designated by presidential memorandum as regular attendees to the NSC’s Principals Committee, a Cabinet-level senior interagency forum for considering national security issues. The enacted arrangement was criticised by several members of previous administrations and was called “stone cold crazy” by Susan E. Rice, Barack Obama’s last national security adviser. In response, White House spokesman Sean Spicer pointed to Bannon’s seven years experience as a Navy officer in justifying his presence on the Committee.
In February 2017, Bannon appeared on the cover of Time, on which he was labeled “the Great Manipulator”. The headline used for the associated article was “Is Steve Bannon the Second Most Powerful Man in the World?”, alluding to Bannon’s perceived influence in the White House. In an interview with The Hollywood Reporter in the aftermath of the 2016 election, Bannon analogized his influence to that of “Thomas Cromwell in the court of the Tudors“.
Bannon was removed from his NSC role in early April 2017 in a reorganization by National Security Advisor H. R. McMaster, who Bannon had helped select. Some White House officials said Bannon’s main purpose of serving on the committee was as a check against former National Security Advisor Michael T. Flynn, who had resigned in February 2017 for misleading the vice president about a conversation with the Russian operatives. Hence, with Flynn gone, Bannon was no longer needed. Bannon reportedly opposed his removal from the council and threatened to quit if president Trump went forward with it, although Republican megadonor Rebekah Mercer urged him to stay. The White House said Bannon had not attempted to leave, and Bannon said any indication that he threatened resignation was “total nonsense”. Bannon had only attended one NSC meeting.
Bannon has been married and divorced three times. He has three adult daughters.
His first marriage was to Cathleen Suzanne Houff. Bannon and Houff had a daughter, Maureen, in 1988 and subsequently divorced.
Bannon’s second marriage was to Mary Louise Piccard, a former investment banker, in April 1995. Their twin daughters were born three days after the wedding. Piccard filed for dissolution of their marriage in 1997.
Bannon was charged with misdemeanor domestic violence, battery and dissuading a witness in early January 1996 after Piccard accused Bannon of domestic abuse. The charges were later dropped when his now ex-wife did not appear in court. In an article in The New York Times Piccard stated her absence was due to threats made to her by Bannon and his lawyer:
Mr. Bannon, she said, told her that “if I went to court he and his attorney would make sure that I would be the one who was guilty” … Mr. Bannon’s lawyer, she said, “threatened me,” telling her that if Mr. Bannon went to jail, she “would have no money and no way to support the children.” … Mr. Bannon’s lawyer … denied pressuring her not to testify.
Piccard and Bannon divorced in 1997. During the divorce proceedings, Piccard alleged that Bannon had made antisemitic remarks about choice of schools, saying that he did not want to send his children to The Archer School for Girls because there were too many Jews at the school and Jews raise their children to be “whiny brats”. Bannon’s spokesperson denied the accusation noting that he had chosen to send both his children to the Archer School.
Bannon’s third marriage was to Diane Clohesy; they divorced in 2009.
Jared Corey Kushner (born January 10, 1981) is an American real estate investor and developer, publisher, and senior advisor to his father-in-law, President Donald Trump. Together with Chief of Staff Reince Priebus and Chief Strategist Steve Bannon he formed Trump’s leadership team. Kushner is said to be President Trump’s most trusted advisor, showing “unwavering loyalty” to his father-in-law.
He was principal owner of the real estate holding and development company Kushner Companies and of Observer Media, publisher of the weekly, on-line New York Observer. On January 9, 2017, Kushner was named to be a Senior White House Adviser to his father-in-law, President Donald Trump. As a result, Kushner resigned as CEO of his family’s real estate company and as publisher of the Observer. He also divested “substantial assets”.
Kushner was raised in a Modern Orthodox Jewish family in New Jersey. He graduated from the Frisch School, a private, coed yeshiva high school, in 1999. According to a spokeswoman for Kushner Companies, he was an honors student and a member of the debate, hockey, and basketball teams while at Frisch.
According to Forbes, in 2017 Jared Kushner and his parents had a personal fortune of around $1.8 billion. Kushner is a real estate investor, and has increased the Kushner Companies’ presence in the New York City real estate market as a principal in his family’s real estate company. His father, Charles Kushner, was arrested on charges of tax evasion, illegal campaign donations, and witness tampering in 2004, and was eventually convicted on all charges (by the then U.S. Attorney Chris Christie) and sentenced to two years in federal prison.
Kushner Companies purchased the office building at 666 Fifth Avenue in 2007, for a then-record price of $1.8 billion, most of it borrowed. However, following the property crash in 2008, the cash flow generated by the property was insufficient to cover its debt service, and the Kushners were forced to sell the retail portion in the building to Stanley Chera for more than $1 billion and bring in Vornado Realty Trust as a 50% equity partner in the ownership of the building.
In 2015, Kushner scored spot No. 25 on Fortune Magazine’s 40 under 40 list ranking the most influential young people in business.
At age 25, Kushner purchased the New York Observer, a weekly New York City newspaper, for $10 million, using money he says he earned during his college years by closing deals on residential buildings in Somerville, Massachusetts, with family members providing the backing for his investments.
After purchasing the Observer, Kushner published it in tabloid format. Since then, he has been credited with increasing the Observer‘s online presence and expanding the Observer Media Group. With no substantial experience in journalism, Kushner could not establish a good relationship with the newspaper’s veteran editor-in-chief, Peter W. Kaplan. “This guy doesn’t know what he doesn’t know,” Kaplan remarked about Kushner, to colleagues, at the time.  As a result of his differences with Kushner, Kaplan quit his position. Kaplan was followed by a series of short-lived successors until Kushner hired Elizabeth Spiers in 2011. In December 2011, the New York Post reported that the Observer expected to become profitable for the first time. Spiers left the newspaper in 2012. In January 2013, Kushner hired a new editor-in-chief, Ken Kurson. Kurson had been a consultant to Republican political candidates in New Jersey and one-time member of Rudy Giuliani‘s unsuccessful 2008 presidential primary campaign.
According to Vanity Fair, under Kushner, the “Observer has lost virtually all of its cultural currency among New York’s elite, but the paper is now profitable and reporting traffic growth … [it] boasts 6 million unique visitors per month, up from 1.3 million in January 2013″. In April 2016, the New York Observer became one of only a handful of newspapers to officially endorse United States presidential candidate Donald Trump in the Republican primary, but the paper ended the campaign period by choosing not to back any presidential candidate at all.
Kushner stepped down from his newspaper role in January 2017 to pursue a role in President Donald Trump’s administration. He was replaced by his brother-in-law, Joseph Meyer.
Jared Kushner had been a life-long Democrat and had made major donations to its candidates for years before reportedly undergoing an “ideological conversion” and supporting the 2015–16 Trump campaign. Kushner has had no prior involvement in campaign politics or in government before his father-in-law, Trump’s, campaign.
Trump presidential campaign
From the outset of the presidential campaign of his father-in-law Donald Trump, Kushner was the architect of Trump’s digital, online and social media campaigns, enlisting talent from Silicon Valley to run a 100-person social-media team dubbed “Project Alamo”. Kushner has also helped as a speechwriter and was tasked with working to establish a plan for Trump’s White House transition team should he be elected. He was for a time seen as Trump’s de factocampaign manager, succeeding Corey Lewandowski, who was fired in part on Kushner’s recommendation in June 2016. He has been intimately involved with campaign strategy, coordinating Trump’s visit in late August to Mexico and he was believed to be responsible for the choice of Mike Pence as Trump’s running mate. Kushner’s “sprawling digital fundraising database and social media campaign” has been described as “the locus of his father-in-law’s presidential bid”.
According to Eric Schmidt, “Jared Kushner is the biggest surprise of the 2016 election, Best I can tell, he actually ran the campaign and did it with essentially no resources.” Eric Schmidt said, “Jared understood the online world in a way the traditional media folks didn’t. He managed to assemble a presidential campaign on a shoestring using new technology and won. That’s a big deal. Remember all those articles about how they had no money, no people, organizational structure? Well, they won, and Jared ran it.”Peter Thiel said “If Trump was the CEO, Jared was effectively the chief operating officer.”
On July 5, 2016, Kushner wrote an open letter in the New York Observer addressing the controversy around a tweet from the Trump campaign containing allegedly antisemitic imagery. He was responding to his own paper’s editorial by Dana Schwartz criticizing Kushner’s involvement with the Trump campaign. In the letter, Kushner wrote, “In my opinion, accusations like “racist” and “anti-Semite” are being thrown around with a carelessness that risks rendering these words meaningless.”
The Washington Post, New York Times and numerous other national news authorities explain Kushner was an influential factor behind the firing of New Jersey governor Chris Christie as head of the transition team, as well as the dismissal from the Donald Trump transition team of anyone connected to Christie. A source familiar with the Trump campaign explained that “Jared doesn’t like Christie. He’s always held [the prosecution of his father, Charles Kushner] against Christie.” Kushner told Forbes that the reports that he was involved in Christie’s dismissal were false: “Six months ago Governor Christie and I decided this election was much bigger than any differences we may have had in the past, and we worked very well together. The media has speculated on a lot of different things, and since I don’t talk to the press, they go as they go, but I was not behind pushing out him or his people.”
Senior Advisor to President Trump
Japanese PM Shinzō Abe, Jared Kushner, Ivanka, and President Trump, November 17, 2016
Trump put Kushner in charge of brokering peace in Israeli–Palestinian conflict as well as making deals with foreign countries, although in what way he is in charge is unclear. Furthermore, after Donald Trump became President-elect, Kushner and his wife met with Japanese Prime Minister and other Japanese officials while his wife was conducting a licensing deal between her namesake clothing brand and a Japanese government-owned company. His wife sat in on a meeting between her father, then President-elect Donald Trump and Japan’s Prime Minister Shinzo Abe. In February 2017, his wife Ivanka Trump was a surprise attendee at the Chinese Embassy’s New Year’s party. In late March 2017 he was also given the new role of leading the “White House Office of American Innovation”.
On January 20, 2017 Cohn took office as Director of the National Economic Council (NEC) in President Donald Trump‘s administration, a position which did not require Congressional confirmation. By February 11, 2017, The Wall Street Journal described Cohn as an “economic-policy powerhouse” and The New York Times called him Trump’s “go-to figure on matters related to jobs, business and growth”. With the confirmation of Trump’s December 12, 2016 nominee for Secretary of Treasury, Steven Mnuchin, being held back by Congressional hearings, Cohn filled in the “personnel vacuum” and pushed “ahead on taxes, infrastructure, financial regulation and replacing health-care law”. Had Cohn stayed at Goldman Sachs, some believed he would have become CEO when Lloyd Blankfein vacated that office. His severance package at Goldman Sachs amounted to $285 million. Additionally, Cohn sold a stake valued at $16 million in the Industrial and Commercial Bank of China, the world’s largest bank as of 2017.
Cohn supports reinstating the Glass-Steagall legislation, which would separate commercial and investment banking.
Cohn started his career at the U.S. Steel home products division in Cleveland, Ohio. After a few months, he left U.S. Steel and started his career as an options dealer in the New York Mercantile Exchange. He taught himself the basics of options by reading about it in the days between meeting the hiring manager and joining the New York Mercantile Exchange.
Cohn was recruited by Goldman Sachs in 1990. In 1996, he was named head of the commodities department and in 2002, he was named the head of the entire Fixed Income, Currency and Commodities Division (FICC) division. In 2003, he was named co-head of Equities and in January 2004, Cohn was named the co-head of global securities businesses . He became President and Co-Chief Operating Officer and director in June 2006.
In late 2009, Cohn led a delegation from Goldman Sachs to meetings with the government of Greece, which included proposals (that were not adopted) to push debt-due dates far into the future, “much as when strapped homeowners take out second mortgages to pay off their credit cards.” Goldman Sachs had been scrutinized for creating or pitching products used by Greece to “obscure billions in debt from the budget overseers in Brussels”.
In 2010, Cohn testified to Congress on the role of Goldman Sachs in the 2007-2008 financial crisis. Cohn testified: “During the two years of the financial crisis, Goldman Sachs lost $1.2 billion in its residential mortgage-related business. We did not ‘bet against our clients,’ and the numbers underscore this fact.”
In February 2015, Cohn hosted the Goldman Sachs Technology and Internet Conference in San Francisco. As host, Cohn asked questions of Tim Cook, CEO of Apple Inc., while Cook was on stage.
Cohn’s salary at Goldman Sachs was US$22 million in 2014. He received $21 million in 2015.
He received a severance package worth around $285 million – mostly in stock – from Goldman Sachs upon leaving to join the administration of Donald Trump.
Personality and work style
Critics of Cohn attribute to him an arrogant, aggressive, abrasive and risk-prone work style. They see his “6-foot 3-inch & 220lbs” as intimidating, as he might “sometimes hike up one leg, plant his foot on a trader’s desk, his thigh close to the employee’s face and ask how markets were doing” According to former Bear Stearns Asset Management CEO Richard Marin, Cohn’s arrogance is at the root of the problem.
When you become arrogant, in a trading sense, you begin to think that everybody’s a counterparty, not a customer, not a client.
“He’s a trader. He has that whole feel in his body and brain and fingertips.”
Ovitz sees Cohn’s toughness as a “positive” value, explaining that a high ranking executive can’t be “all peaches and cream.”
Donna Redel, who was Chairman of the Board of the New York Mercantile Exchange when Cohn worked there as a silver trader, remembers Cohn as “firm,” “strategic” and “driven.” Martin Greenberg, her predecessor, said Cohn “was tough,” and added that “Gary got in with the right people, worked his ass off and used his head.”
In 2009, the Hillel International building at Kent State University was named the Cohn Jewish Student Center in recognition of a gift from Cohn and his wife. It is the first Hillel building built directly on the campus of a state university.
Cohn has been a supporter of Reviving Baseball in Inner Cities and has supported Harlem RBI since 2011. At that time, Harlem RBI was given the chance to build its own charter school. Mark Teixeira of the New York Yankees and Harlem RBI director Rich Berlin asked Cohn if he could help them raise the capital they needed to build the school.
In December 2012, Cohn attended the 12-12-12 Concert for Sandy Relief which raised money for the Robin Hood Relief fund to help victims of Hurricane Sandy.
On June 17, 2013, Cohn was honored at the annual “Bid for Kids” gala in order to raise funds for Harlem RBI and the DREAM charter school. Cohn said in an interview that Harlem RBI is a project that is “very near and dear to his heart.”
Cohn has written editorials in prestigious journals and newspapers. In March 2014, he wrote an opinion piece for the Wall Street Journal, discussing “The Responsible Way to Rein in Super-Fast Trading.”
PUBLISHED: 08:13 EDT, 12 April 2017 | UPDATED: 10:10 EDT, 12 April 2017
A US Navy unit which killed Osama Bin Laden will be taking part in drills simulating removing North Korean despot Kim Jong-un from power.
The Special Warfare Development Group, best known as SEAL Team 6, will carry out drills in South Korea, the country’s Ministry of National Defense has revealed.
It is the team which carried out Operation Neptune Spear, the killing of the Al-Qaeda leader in Pakistan back in May 2011.
The Navy SEAL team is responsible for the killing of Osama Bin Laden in Pakistan in May 2011
It will be taking part in exercises aimed at removing North Korean despot Kim Jong-un from power
An aircraft carrier, the USS Carl Vinson, will arrive in South Korea today, The Japan Times reports, along with US Army unit Delta Force, which specialises in counterterrorism operations.
It comes a day after US President Donald Trump said North Korea was ‘looking for trouble’ following missile tests, and vowed the United States would ‘solve the problem’ with or without China’s help.
Pyongyang has reacted angrily to the impending arrival of the aircraft carrier, warning of ‘catastrophic consequences’.
It comes after US President Donald Trump said North Korea was ‘looking for trouble’, and vowed the United States would ‘solve the problem’ with or without China’s help
The move is part of a growing US presence off the Korean Peninsula, and is reportedly part of a plan aimed at ‘incapacitating’ Kim Jong-Un‘s regime should conflict break out.
A nuclear-powered US aircraft carrier arrived in South Korea last month for joint military exercises in the latest show of force against the North.
More than 80 aircraft, including the fighter aircraft F/A-18F Super Hornet, the E-2C Hawkeye and the carrier-based EA-18G Growler were on board the supercarrier.
South Korea’s Yonhap News Agency claims the heightened military presence is part of a plan to decapitate North Korean leadership.
It claims a military official, who wished to remain anonymous, said: ‘A bigger number of and more diverse U.S. special operation forces will take part in this year’s Foal Eagle and Key Resolve exercises to practice missions to infiltrate into the North, remove the North’s war command and demolition of its key military facilities.’
More than 80 aircraft, including the fighter aircraft F/A-18F Super Hornet (at the front of the carrier), the E-2C Hawkeye and the carrier-based EA-18G Growler (in the middle) are on board the super carrier
The USS Carl Vinson approaches Busan port in South Korea to join the annual joint military exercise called Foal Eagle
The aircraft carrier and a US destroyer carried out naval drills including an anti-submarine manoeuvre with South Koreans in waters off the Korean peninsula as part of the annual Foal Eagle exercise.
Washington insisted they are purely defensive in nature.
Rear Admiral James Kilby, commander of USS Carl Vinson Carrier Strike Group 1, said: ‘The importance of the exercise is to continue to build our alliance and our relationship and strengthen that working relationship between our ships.’
The US has also started to deploy ‘Gray Eagle’ attack drones to South Korea, a military spokesman revealed last month.
The nuclear-powered aircraft carrier is taking part in South Korea-U.S. joint military maneuvers carried out in the largest scale yet, with North Korea’s growing nuclear and missile threats in focus
Amid tensions USS Carl Vinson arrives in South Korea
South Korean and US troops began the large-scale joint drills on March 1.
The spike in tensions concerned Beijing, with China’s Foreign Ministry calling on all sides to end ‘a vicious cycle that could spiral out of control.’
North Korea, which has alarmed its neighbours with two nuclear tests and a string of missile launches since last year, said the arrival of the US strike group was part of a ‘reckless scheme’ to attack it.
The North Korea’s state KCNA news agency said: ‘If they infringe on the DPRK’s sovereignty and dignity even a bit, its army will launch merciless ultra-precision strikes from ground, air, sea and underwater.
‘On March 11 alone, many enemy carrier-based aircraft flew along a course near territorial air and waters of the DPRK to stage drills of dropping bombs and making surprise attacks on the ground targets of its army,’ KCNA said.
Last month, North Korea fired four ballistic missiles into the sea off Japan in response to annual US-South Korea military drills, which the North sees as preparation for war.
The murder in Malaysia last month of North Korean leader Kim Jong Un’s estranged half-brother has added to the sense of urgency to efforts to get a grip on North Korea.
Visiting the headquarters of an army unit early this month, Kim praised his troops for their ‘vigilance against the US and South Korean enemy forces that are making frantic efforts for invasion’, according to the North’s official KCNA news agency.
Kim also ordered the troops to ‘set up thorough countermeasures of a merciless strike against the enemy’s sudden air assault’, it said.
The threat represented by North Korea’s growing nuclear and missile arsenal is the main reason for his trip to the region.
An F/A Super Hornet fighter jet takes off from the nuclear-powered USS Carl Vinson aircraft carrier
F/A Super Hornets and other fighter jets await takeoff aboard the nuclear-powered USS Carl Vinson aircraft carrier
A U.S. F18 fighter jet lands on the deck of U.S. aircraft carrier USS Carl Vinson during the annual joint military exercise
A U.S. Navy crew member works on a U.S. F18 fighter jet on the deck of USS Carl Vinson
A F18 fighter jet prepares for take off as part of the annual military drills in South Korea that the North regards as rehearsal for invasion
South Korean and U.S. troops began the large-scale joint drills, which are billed as defensive in nature, on March 1
US Navy crew members look at an F/A-18 fighter from the deck of the Nimitz-class aircraft carrier USS Carl Vinson
US aircraft carrier visits South Korea for joint drills
US Navy crew members run next to an E-2C Hawkeye as it lands on the deck of the USS Carl Vinson
The all-weather E-2 Hawkeye airborne early warning and battle management aircraft has served as the ‘eyes’ of the U.S. Navy fleet for more than 30 years
PLANES ON THE USS CARL VINSON
The aircraft carrier, commissioned in 1982, is the centerpiece of the 7,500-sailor strike group. The 100,000-ton ship measures 333 meters in length and 77 meters in width.
The Carl Vinson has been involved in a number of notable events including Operation Iraqi Freedom. The ship also received huge attention in 2011 when the body of Osama bin Laden was buried at sea from its deck.
More than 80 aircraft, including the fighter aircraft F/A-18F Super Hornet, the E-2C Hawkeye and the carrier-based EA-18G Growler are on board the supercarrier.
The F/A-18E/F Super Hornet is the U.S. Navy’s primary strike and air superiority aircraft.
The E-2C Hawkeye is the U.S. Navy’s primary carrier-based airborne early warning and command and control aircraft.
The EA-18G Growler is the U.S. Navy’s newest electronic attack aircraft intended to replace ageing EA-6B Prowlers in the service’s fleet.
As part of his plans to bolster the military, President Trump has vowed to expand the number of carriers the US fields from 10 to 12.
And he promised to bring down the cost of building three ‘super-carriers,’ which has ballooned by a third over the last decade from $27 to $36 billion.
US Navy crew members stand by an EA-18G Growler electronic warfare aircraft on the deck of the Nimitz-class aircraft carrier USS Carl Vinson
The Carl Vinson Strike Group is participating in the annual joint Foal Eagle exercise between South Korea and the US
The joint exercises involve tens of thousands of troops, as well as strategic US naval vessels and air force assets
Story 1: Will President Trump Boldly Cut Taxes and Spending? — A Competitive Race Towards Lower Taxes And Less Government Spending: Replace All Income Based Taxes (All Income, Capital Gain and Payroll Taxes) With Broad-Based Consumption Tax With Generous Tax Prebate ( FairTax or Fair Tax Less!) And Real Cuts of 5% Per Year In Government Spending To Balance The Budget In 8 Years Or Less To Pay For Tax Cuts!) — Cut Taxes and Spending — Videos —
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Robert Wolf: Border adjustment not going to happen
PUBLISHED: 02:20 EDT, 10 April 2017 | UPDATED: 10:56 EDT, 10 April 2017
President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.
The administration’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.
Some view the search for new options as a result of Trump’s refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
Administration officials say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.
Off plan: Donald Trump is abandoning the tax overhaul he campaigned on
Tough deadline: Steven Mnuchin, the Treasury Secretary who was at the table when Trump was briefed on the Syria missile strikes, had set an the August deadline for tax reform
But the ambitious pace to figure out a plan reflects Trump’s haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.
The White House is trying to learn the lessons from health care. Rather than accepting a bill written by the lawmakers, White House officials are taking a more active role.
Administration officials have signaled that they want to pass tax legislation with only Republican votes, yet they’ve also held listening sessions with House Democrats.
White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live.
But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.
Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.
Brady, a Republican from Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise $1 trillion over 10 years that could fund lower corporate tax rates.
But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules.
Brady has said he intends to amend the blueprint but has not spelled out how he would do so.
Other options are being shopped on Capitol Hill.
One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.
The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses.
This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates.
Those additional revenues could then enable the end of the 12.4 percent payroll tax, split evenly between employers and employees, that funds Social Security, while keeping the health insurance payroll tax in place.
This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to the lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.
Although some billed this as a bipartisan solution, and President Barack Obama did temporarily cut the payroll tax after the Great Recession, others note it probably would run into firm opposition from Democrats who are loathe to be seen as undermining Social Security.
The White House would not comment on the plan, but said a value-added tax based on consumption is not under consideration ‘as of now,’ according to a White House statement.
The lack of detail about how to significantly rewrite tax laws for the first time in 30 years may provide Trump some time to build consensus among Republicans. But without Trump laying down his hand, lawmakers appear reluctant to back a plan that will likely stir controversy.
How will markets react? Stocks rallied after the election on the promise of lower taxes and fewer regulations, but the Dow has dipped 1.2 percent over the past month
Stock markets take a hit after Trump’s healthcare defeat
‘Because there are trade-offs, congressmen need cover from the president to withstand the lobbyists and constituents who are going to complain,’ said Bill Gale, an economist at the Brookings Institution who worked at the White House Council of Economic Advisers during President George H.W. Bush’s administration.
The Trump administration appears to have shut out the economists who helped assemble one of his campaign’s tax overhaul plans, which independent analyses show would have increased the budget deficit.
‘It’s a little frustrating that they feel they have to write a new tax plan when they have a tax plan,’ said Steven Moore, an economist at the conservative Heritage Foundation who helped formulate tax policy for the Trump campaign.
Rob Portman, the Republican senator from Ohio, a member of the Senate Finance Committee, said that all of the trial balloons surfacing in public don’t represent the work that’s being done behind the scenes.
‘It’s not really what’s going on,’ Portman said. ‘What’s going on is they’re working with on various ideas.’
Investors are beginning to show some doubts that Trump can deliver. Stocks rallied after his election on the promise of lower taxes and fewer regulations, but the Dow Jones Industrial Average has dipped 1.2 percent over the past month as the path for health care and tax revisions has become muddied.
‘The White House is going to need its own clear direction, or it’s going to need to defer to Congress, but saying that your plan is forthcoming and then not producing a plan kind of puts everything in stasis,’ said Alan Cole, an economist at the conservative Tax Foundation.
The BAT is a bad idea. There are far better ways to shrink the federal budget deficit.
By GENE EPSTEIN
March 18, 2017
“Anytime I hear border adjustment, I don’t love it,” Donald Trump told The Wall Street Journal shortly before his inauguration, noting that the proposed border adjustment tax was “too complicated.”
Trump isn’t always right when he makes off-the-cuff remarks such as that, but this time he was. The proposed border adjustment tax is so complicated that even its advocates can’t agree on how its disruptive effects on the U.S. economy will play out, and there’s nothing to love about that. The BAT is a bad idea, and it should be scrapped. And while taking it off the table will bring more red ink to the federal budget, there are better ways to stanch the bleeding than subjecting the economy to the trauma of a BAT.
Despite protestations to the contrary, the border adjustment levy is a tax hike embedded in the program of tax reductions that House Republicans put forward last June under the rubric of “A Better Way.” It’s there, presumably, to help offset the effect of the administration’s planned cuts, since the Republicans’ stated aim is to keep those cuts revenue-neutral. Barron’s fully supports the goal of not adding to deficits that, before too long, will be running above $1 trillion a year, given repeated warnings from the nonpartisan Congressional Budget Office about the risk of a financial crisis, due to exploding debt.
The attraction of a BAT is that it could generate an estimated $100 billion a year in revenue. There may be reasons to challenge that estimate, but we’ll accept it for now. There are, however, better ways to slash the fiscal deficit by $100 billion a year than the Better Way plan, and most fall under the heading of spending cuts.
President Trump has spoken about “waste, fraud, and abuse” in “every agency” of the federal government. Indeed, he promised that “we will cut so much, your head will spin.” He should therefore find plenty to love in our proposed reductions in spending. Just for starters, if all corporate welfare were cut from the budget, as much as $100 billion a year could be saved, about matching the total expected from the BAT.
The president also favors slashing the top rate on corporate income to 15% from 35%. Barron’s has proposed a more modest cut, to 22% (“Cut the Top U.S. Corporate Tax Rate to 22%,” Nov. 26, 2016). The Republican package calls for a reduction to 20%, which is close enough to our original proposal and which we believe should boost revenue rather than shrink it.
A list of potential cuts and revenue enhancements, totaling $200 billion, is in the table at the bottom of this page.
THE BETTER WAY PLAN, as noted, would reduce the top federal tax rate on corporate profits to 20% from 35%—which is all to the good. The proposed tax cut would not only be revenue-neutral; it would probably be revenue-enhancing.
In a study released this month by the London-based Centre for Policy Studies, analyst Daniel Mahoney traces the effect on revenue from Britain’s cuts in the corporate tax rate over a 34-year period. According to his calculations, the take from the corporate tax has added three-tenths of a percentage point annually to gross domestic product since rates were slashed.
Similarly, last year, in calling for a maximum U.S. rate of 22%, we traced the significant decline in the average top rate on corporate income for 19 countries in the Organization for Economic Cooperation and Development, which includes the U.S. and the United Kingdom. Over 33 years, their average tax take as a share of GDP rose six-tenths of a percentage point.
While that might not sound like much, every tenth of a percentage point of U.S. nominal GDP is worth $18.9 billion. So if revenue from the corporate tax rises by, say, three-tenths of a percentage point, to 2.5%—a conservative guess—that increase would translate into a bonus of nearly $57 billion a year in revenue. That alone gets us more than halfway to the $100 billion value of a BAT.
The idea of a revenue-enhancing cut in the corporate income tax was put forward in 1978, when economist Arthur Laffer was first cited as arguing that some rate decreases could generate enough added economic growth that the government wouldn’t lose revenue over the long run—and might, in fact, even gain revenue. Laffer also noted that most tax hikes generate less revenue than a conventional “static” analysis indicates, and that most tax cuts lose less.
Laffer’s “dynamic” analysis covered all of the behavioral changes likely to result from a cut. To begin with, if the tax collector claims a lower share of income, there is an incentive to produce more income. Second, a lower rate means there’s less incentive to spend time and effort avoiding the tax.
Corporations don’t pay taxes; only people do. And there is a tendency to forget that if a corporation nets more profits as a result of a lower tax, those funds will soon take the form of salaries, dividends, and capital gains, and will be taxed in those forms.
The second factor, less tax avoidance, applies with special force to a rollback of corporate taxes. As we noted last year, bringing down the top rate to 22% from 35% would dramatically reduce corporate flight to low-tax jurisdictions in the rest of the world.
Following the publication of our article, the CBO released a study confirming that U.S corporate tax rates are among the highest in the world. Among the Group of 20 countries—including Japan, China, Russia, Germany, France, Canada, and the U.K.—the U.S. is No. 1, 3, and 4, respectively, in “top statutory corporate tax rate,” “average corporate tax rate,” and “effective corporate tax rate.” The Better Way plan would narrow this gap significantly and make the U.S. more competitive.
But when it comes to the Better Way plan for cutting tax rates on personal income, Barron’s believes that there would be a loss of revenue even after taking into account behavioral changes. The revenue reduction from the proposed personal income-tax cuts has been estimated, on a static basis, at an average of $98 billion a year. We can assume that dynamic losses would run 10% less, or $88 billion, mainly because lower taxes are likely to encourage people to work.
Still, $88 billion a year is a huge loss of revenue. Barron’s proposes that the Better Way plan consider splitting the difference and going halfway on the tax cut, thus saving $44 billion.
THE REVENUE-ENHANCING corporate tax cut would include a special kicker in the form of the border adjustment tax. The BAT would deny corporations the ability to deduct the cost of imports from their taxable income, while all income earned from exports would be exempt from the 20% levy.
This means that companies selling imported goods in the domestic market would be taxed on the sale’s full proceeds—not just on the profit earned—which could more than offset the gains from the corporate tax reduction. At the same time, as noted, there would be no tax on the sale of exports.
The GOP’s Big Three Key players in the border adjustment tax debate: Senate Majority Leader Mitch McConnell, above, and House Speaker Paul Ryan and President Donald Trump, below. McConnell has said that he hasn’t made up his mind about the levy. Alex Wong/Getty Images
The BAT would bring uncertainty and disruption to the U.S. economy, making it hard to predict whether it really would raise $100 billion annually in revenue. The basic idea is that, because the U.S. imports more than it exports, the export exemption would be more than offset by hitting imports hard. Regardless of how it shakes out, the value of the transactions affected by the BAT is huge.
The U.S. trade deficit—the difference between exports and imports—ran at just 3.4% of real GDP in 2016, much lower than the 5.5% peak of 2005. But the actual gross flows of exports and imports are much larger than the difference between the two flows. Exports last year were valued at $2.2 trillion, or 12.8% of real GDP, and imports at $2.7 trillion, or 16.2% (see chart). Given those magnitudes, the tax plan is likely to require massive readjustments throughout the economy.
That’s why major importers, like Wal-Mart Stores, are objecting—and why exporters are clearly pleased. As you might expect, then, the BAT is pitting exporters against importers, creating needless discord at a time when the country is surely suffering from more discord than it can handle.
THE POSITION PAPER for the Better Way asserts that by “exempting exports and taxing imports,” the BAT does “not” consist of the “addition of a new tax.” But of course, the BAT’s designers know that imports normally exceed exports by about $500 billion a year. Apply a back-of-the-envelope 20% to that $500 billion, and you get the hoped-for $100 billion in revenue. So the maneuver of “exempting exports and taxing imports” certainly looks and sounds like a new tax.
The Better Way statement also argues that there is an imbalance in the tax treatment of imports and exports that the BAT must remedy. “In the absence of border adjustments,” it states, “exports from the United States implicitly bear the cost of the U.S. income tax, while imports do not bear any federal income tax cost. This amounts to a self-imposed unilateral penalty on American exports and a self-imposed unilateral subsidy for U.S. imports.”
Ryan strongly supports the tax. Chip Somodevilla/Getty Images
But all other countries impose this “implicit cost” on exports through their own corporate income tax. And since the Better Way would slash America’s top rate to 20%, this implicit cost would finally become competitive with that of other nations.
Some supporters of the BAT like it precisely because it would help exports and penalize imports. The mercantilist view of economics implicit in that aim was discredited in Adam Smith’s 1776 treatise, The Wealth of Nations. And apart from the massive dislocations that will occur if imports shrink, this calls into question whether the projected $100 billion a year in revenue is realistic. As Alan Greenspan once wisely said, “Whatever you tax, you get less of.”
Then again, whether we really will get fewer imports depends a lot on the exchange value of the dollar. Other supporters of the BAT predict that the dollar will respond by appreciating against other currencies, conforming to the dictates of textbook fundamentals. If the dollar appreciates enough, the advantage to exporters and disadvantage to importers will be nullified. Without getting into the technicalities of how all this would work, we concede that it is all quite possible.
But as currency analysts and traders can tell you, exchange rates are subject to all kinds of forces and can spend long periods flouting textbook fundamentals. So whether the dollar will really strengthen in response to the BAT is anyone’s guess. But even if it does, a much stronger greenback would bring other disruptions. American investors with holdings denominated in foreign currencies would take a huge hit. And America’s tourist industries, which are already hurting from what the Los Angeles Times has called a “Trump slump,” would be hurt even more, as the cost of traveling to the States jumps.
There are other questions. Would the World Trade Organization challenge the BAT? Might our trading partners respond in ways that would be unfavorable to us? The border adjustment tax is an experiment in Rube Goldberg economics that the U.S. can do without.
SINCE REVENUE NEUTRALITY is the goal of the Better Way package, what about making up for the $100 billion a year in revenue that the border adjustment tax is supposed to generate?
Whether this tax really will raise as much as $100 billion depends on how imports and exports respond, which is hard to predict. Also, the reduction in the corporate income tax would probably be revenue-enhancing and could generate more than $50 billion in annual revenue.
The president has declared that “anytime I hear border adjustment, I don’t love it” and has voiced concern that it’s overly complicated. Michael Reynolds/Getty Images
We note that the full title of the House Republican plan is “A Better Way: Our Vision for a Confident America,” which leaves room for a vision that includes cost-cutting, along with tax-cutting.
That discussion revealed much low-hanging fruit. For example, the Medicare system is rife with “improper payments,” which Medicare itself estimates at 11% of its spending in 2016. That’s probably a low estimate, because those who get improperly paid tend to keep these payments hidden. Barron’s calculated that if the improper-payment rate could be halved, it would save more than $400 billion over 10 years.
That would contribute $40 billion a year to the $100 billion shortfall from forgoing the BAT. To that we add $65 billion, and perhaps as much as $100 billion, by eliminating corporate welfare.
The Better Way statement properly criticizes the tax code for being “littered with hundreds of preferences and subsidies that pick winners and losers” and “direct resources to politically favored interests.” Spending on corporate welfare is another form of subsidy that picks winners and losers and directs funds to politically favored interests.
IN A 2012 PAPER, “Corporate Welfare in the Federal Budget,” the Cato Institute identified nearly $100 billion worth of yearly spending on corporate handouts, broadly defined, that could be ended. At Barron’s request, Cato senior fellow Chris Edwards updated the scoring on just 10 of the institute’s 40 categories of corporate welfare and came up with $66 billion in potential cuts.
High on Edwards’ list: farm subsidy programs, which redistribute taxpayer money to relatively rich agribusinesses and landowners. That the farm industry receives subsidies makes about as much sense as channeling funds to the restaurant industry, which could well be riskier than farming, based on its high failure rate. This form of corporate welfare goes back to the Great Depression of the 1930s. But whatever argument might have been made for it then hardly applies today, with the yearly tab currently at $25 billion.
Also on the corporate welfare list: pork-barrel handouts administered by the Department of Housing and Urban Development, totaling $13 billion, which go under the heading of “community development,” and which distribute funds to such recipients as museums, recreational facilities, and parking lots. Whatever one may think about the worthiness of these projects, they are better left to states and localities.
Another $10 billion could be saved by abolishing the Universal Service Fund, through which the Federal Communications Commission subsidizes telecommunications companies, among others. A creation of the Telecommunications Act of 1996, this attempt to pick winners and losers is more unnecessary than ever in this dynamic and competitive industry.
PRESIDENT TRUMP PROMISED to “drain the swamp” of Washington’s special interests. One route toward that admirable goal would be to cut corporate welfare. Trump should repeat his objections to a border adjustment tax that would favor the interests of some businesses over others. He can help make U.S. corporations great again by weaning them off subsidies and reducing their tax burdens.
And there are many other provisions that would reduce penalties on work, saving, investment, and entrepreneurship. No, it’s not quite a flat tax, which is the gold standard of tax reform, but it is a very pro-growth initiative worthy of praise.
That being said, there is a feature of the plan that merits closer inspection. The plan would radically change the structure of business taxation by imposing a 20 percent tax on all imports and providing a special exemption for all export-related income. This approach, known as “border adjustability,” is part of the plan to create a “destination-based cash flow tax” (DBCFT).
When I spoke about the Better Way plan at the Heritage Foundation last month, I highlighted the good features of the plan in the first few minutes of my brief remarks, but raised my concerns about the DBCFT in my final few minutes.
Allow me to elaborate on those comments with five specific worries about the proposal.
Concern #1: Is the DBCFT protectionist?
It certainly sounds protectionist. Here’s how the Financial Timesdescribed the plan.
The border tax adjustment would work by denying US companies their current ability to deduct import costs from their taxable income, meaning companies selling imported products would effectively be taxed on the full value of the sale rather than just the profit. Export revenues, meanwhile, would be excluded from company tax bases, giving net exporters the equivalent of a subsidy that would make them big beneficiaries of the change.
Charles Lane of the Washington Postexplains how it works.
…the DBCFT would impose a flat 20 percent tax only on earnings from sales of output consumed within the United States… It gets complicated, but the upshot is that the cost of imported supplies would no longer be deductible from taxable income, while all revenue from exports would be. This would be a huge incentive to import less and export more, significant change indeed for an economy deeply dependent on global supply chains.
That certainly sounds protectionist as well. A tax on imports and a special exemption for exports.
But proponents say there’s no protectionism because the tax is neutral if the benchmark is where products are consumed rather than where income is earned. Moreover, they claim exchange rates will adjust to offset the impact of the tax changes. Here’s how Lane explains the issue.
…the greenback would have to rise 25 percent to offset what would be a new 20 percent tax on imported inputs — propelling the U.S. currency to its highest level on record. The international consequences of that are unforeseeable, but unlikely to be totally benign for everyone. Bear in mind that many other countries — China comes to mind — can and will manipulate exchange rates to protect their own short-term interests.
For what it’s worth, I accept the argument that the dollar will rise in value, thus blunting the protectionist impact of border adjustability. It would remain to be seen, though, how quickly or how completely the value of the dollar would change.
Concern #2: Is the DBCFT compliant with WTO obligations?
The United States is part of the World Trade Organization (WTO) and we have ratified various agreements designed to liberalize world trade. This is great for the global economy, but it might not be good news for the Better Way plan because WTO rules only allow border adjustability for indirect taxes like a credit-invoice value-added tax. The DBCFT, by contrast, is a version of a corporate income tax, which is a direct tax.
The column by Charles Lane explains one of the specific problems.
Trading partners could also challenge the GOP plan as a discriminatory subsidy at the World Trade Organization. That’s because it includes a deduction for wages paid by U.S.-located firms, importers and exporters alike — a break that would obviously not be available to competitors abroad.
Advocates argue that the DBCFT is a consumption-base tax, like a VAT. And since credit-invoice VATs are border adjustable, they assert their plan also should get the same treatment. But the WTO rules say that only “indirect” taxes are eligible for border adjustability. The New York Timesreports that the WTO therefore would almost surely reject the plan.
Michael Graetz, a tax expert at the Columbia Law School, said he doubted that argument would prevail in Geneva. “W.T.O. lawyers do not take the view that things that look the same economically are acceptable,” Mr. Graetz said.
A story in the Wall Street Journal considers the potential for an adverse ruling from the World Trade Organization.
Even though it’s economically similar to, and probably better than, the value-added taxes (VATs) many other countries use, it may be illegal under World Trade Organization rules. An international clash over taxes is something the world can ill afford when protectionist sentiment is already running high. …The controversy is over whether border adjustability discriminates against trade partners. …the WTO operates not according to economics but trade treaties, which generally treat tax exemptions on exports as illegal unless they are consumption taxes, such as the VAT. …the U.S. has lost similar disputes before. In 1971 it introduced a tax break for exporters that, despite several revamps, the WTO ruled illegal in 2002.
And a Washington Posteditorial is similarly concerned.
Republicans are going to have to figure out how to make such a huge de facto shift in the U.S. tax treatment of imports compliant with international trade law. In its current iteration, the proposal would allow corporations to deduct the costs of wages paid within this country — a nice reward for hiring Americans and paying them well, which for complex reasons could be construed as a discriminatory subsidy under existing World Trade Organization doctrine.
Concern #3: Is the DBCFT a stepping stone to a VAT?
If the plan is adopted, it will be challenged. And if it is challenged, it presumably will be rejected by the WTO. At that point, we would be in uncharted territory.
Would that force the folks in Washington to entirely rewrite the tax system? Would they be more surgical and just repeal border adjustability? Would they ignore the WTO, which would give other nations the right to impose tariffs on American exports?
One worrisome option is that they might simply turn the DBCFT into a subtraction-method value-added tax (VAT) by tweaking the law so that employers no longer could deduct expenses for labor compensation. This change would be seen as more likely to get approval from the WTO since credit-invoice VATs are border adjustable.
This possibility is already being discussed. The Wall Street Journal story about the WTO issue points out that there is a relatively simple way of making the DBCFT fit within America’s trade obligations, and that’s to turn it into a value-added tax.
One way to avoid such a confrontation would be to revise the cash flow tax to make it a de facto VAT.
One tax initiative that should be strangled before it sees the light of day is to give a tax rebate to exporters and to impose taxes on imports. …It’s a bad idea. Why do we want to make American consumers pay more for products while subsidizing foreign buyers? It also could put us on the slippery slope to our own VAT.
And that’s not a slope we want to be on. Unless the income tax is fully repealed (sadly not an option), a VAT would be a recipe for turning America into a European-style welfare state.
Concern #4: Does the DBCFT undermine tax competition and give politicians more ability to increase tax burdens?
Alan Auerbach, an academic from California who previously was an adviser for John Kerry and also worked at the Joint Committee on Taxation when Democrats controlled Capitol Hill, is the main advocate of a DBCFT (the New York Timeswrote that he is the “principal intellectual champion” of the idea).
He wrote a paper several years ago for the Center for American Progress, a hard-left group closely associated with Hillary Clinton. Auerbach explicitly argued that this new tax scheme is good because politicians no longer would feel any pressure to lower tax rates.
This…alternative treatment of international transactions that would relieve the international pressure to reduce rates while attracting foreign business activity to the United States. It addresses concerns about the effect of rising international competition for multinational business operations on the sustainability of the current corporate tax system. With rising international capital flows, multinational corporations, and cross-border investment, countries’ tax rates and tax structures are of increasing importance. Indeed, part of the explanation for declining corporate tax rates abroad is competition among countries for business activity. …my proposed reforms…builds on the [Obama] Administration’s approach…and alleviates the pressure to reduce the corporate tax rate.
This is very troubling. Tax competition is a very valuable liberalizing force in the world economy. It partially offsets the public choice pressures on politicians to over-tax and over-spend. If governments no longer had to worry that taxable activity could escape across national borders, they would boost tax rates and engage in more class warfare.
Concern #5: Does the DBCFT create needless conflict and division among supporters of tax reform?
As I pointed out in my remarks at the Heritage Foundation, there’s normally near-unanimous support from the business community for pro-growth tax reforms.
That’s not the case with the DBCFT.
The Washington Examiner reports on the divisions in the business community.
Major retailers are skeptical of the House Republican plan to revamp the tax code, fearing that the GOP call to border-adjust corporate taxes could harm them even if they win a significant cut to their tax rate. As a result, retailers, oil refiners and other industries that import goods to sell in the U.S. could provide a major obstacle to the Republican effort to reform taxes. …The effect of the border adjustment, retailers fear, would be that the goods they import to sell to consumers would face a 20 percent mark-up, one that would force retailers like Walmart, the Home Depot and Sears…to raise prices and lose customers.
A story from CNBC highlights why retailers are so concerned.
…retailers are nervous. Very nervous. …About 95 percent of clothing and shoes sold in the U.S. are manufactured overseas, which means imports make up a vast majority of many U.S. retailers’ merchandise. …If the GOP plan were adopted as it’s currently laid out, Gap pays 20 percent corporate tax on the $5 profit from the sweater, or $1. Plus, 20 percent tax on the $80 cost it paid for that sweater from the overseas supplier, or $16. That means the tax goes from $1.75 to $17 for that sweater, more than three times the profit on that sweater. Talk about a hit to margins. …Retailers certainly aren’t taking a lot of comfort in the economic theory of dollar appreciation. …the tax reform plan will dilute specialty retailers’ earnings by an average of 132 percent. …Athletic manufacturers could take a 40 percent earnings hit… Gap, Carter’s , Urban Outfitters , Fossil and Under Armour are most at risk under the plan.
And here’s another article from the Washington Examiner that explains why folks in the energy industry are concerned.
…the border adjustment would raise costs for refiners that import oil. In turn, that could raise prices for consumers. The border adjustment would amount to a $10-a-barrel tax on imported crude oil, raising costs for drivers buying gasoline by up to 25 cents a gallon, the energy analyst group PIRA Energy Group warned this week. The report warned of a “potential huge impact across the petroleum industry,” even while noting that the tax reform plan faces many obstacles to passage.
Concern #6: What happens when other nations adopt their versions of a DBCFT?
Advocates of the DBCFT plausibly argue that if the WTO somehow approves their plan, then other nations will almost certainly copy the new American system.
But is also has negative implications for the fight to protect America from a VAT. The main selling point for advocates of the DBCFT is that we need a border-adjustable tax to offset the supposed advantage that other nations have because of border-adjustable VATs (both Paul Krugman and I agree that this is nonsense, but it still manages to be persuasive for some people).
So what happens when other nations turn their corporate income taxes into DBCFTs, which presumably will happen? We’re than back where we started and misguided people will say we need our own VAT to balance out the VATs in other nations.
The bottom line is that a DBCFT is not the answer to America’s wretched business tax system. There are simply too many risks associated with this proposal. I’ll elaborate tomorrow in Part II and also explain some good ways of pursuing tax reform without a DBCFT.
Chairman Brady Acknowledges “Valid Concerns” About the Border Adjustment Tax Harming U.S. Businesses
Post by Freedom Partners
After months of insisting that a trillion-dollar Border Adjustment Tax (BAT) on American consumers is the best and only way to achieve pro-growth tax reform without adding to the deficit, Ways and Means Chairman Kevin Brady acknowledged that importers fearful of the new tax have “valid concerns.”
The proposed BAT from House Republicans would mean a new 20 percent tax on everything imported into the U.S., raising up to $1.2 trillion of new government revenue in the form of higher prices, shouldered by consumers. In effect, the regressive tax could undercut positive economic outcomes from lower rates and a simplified tax code through tax reform.
According to Chairman Brady, House Republicans need to “make sure that we allay the valid concerns of those that are importing today,” CNBC reports.
Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:
“Some of the ‘valid concerns’ that Chairman Brady acknowledges include a devastating new trillion-dollar tax hike, higher costs on everyday goods, fewer jobs, and less economic opportunity. We hope to work with the administration and Congress to get pro-growth tax reform done, but a 20 percent tax hike on all imports would only undermine the point of tax reform – which is to provide much-needed relief for taxpayers and the economy. A massive tax hike on all imports is bad policy, and Americans deserve a better plan that can unite lawmakers in both the House and Senate behind comprehensive tax reform.”
Americans for Prosperity has already identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that ought to be eliminated before any new tax on U.S. consumers. Freedom Partners and its coalition allies support the efforts of Congress and the administration to bring comprehensive tax reform to reality in a way that protects all Americans from a massive tax hike.
U.S. Businesses Facing Massive Tax Increases Under A Border-Adjusted Tax System Have “Valid Concerns”
Wall Street Journal: “Some Retailers And Other Big Importers … Warn Of Tax Bills That Would Exceed Profits, Forcing Them To Pass Costs To Consumers. ”Cody Lusk, president of the American International Automobile Dealers Association, says his members are shocked that a Republican Congress is proposing a 20% tax on imports.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
LUSK: “We view this as a very, very serious potential blow to the auto sector and the economy.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
Financial Times: Border Tax Threatens To Devastate Importers Through Soaring Tax Bills. “Yet for Mr. Woldenberg the hope has turned to horror. Republicans are still promising the most sweeping changes since the Reagan reforms of 1986. But the only firm proposal on the table — from the House of Representatives — threatens to devastate his 150-person business because it includes a 20 per cent tax on imports … The problem for Mr. Woldenberg is that his goods come from China — 98 per cent of the products he sells in the US are imported. US factories could not produce them with the same low costs and specialized skills, he says. So he would have no choice but to pay the import levy. He estimates it would send his tax bill soaring to 165 per cent of earnings.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RICK WOLDENBERG: “To preserve cash flow I [would have to] raise my prices by a third, expect volume to go down by 40 per cent, and fire one out of five people.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RBC Capital Markets: Major Retailers Would Face Tax Bills That Exceed Their Operating Profits. “Major retailers like Wal-Mart, Best Buy, Costco and Dollar Tree would face tax bills that exceed their operating profits under House Republicans’ plans to create a ‘border adjustable’ business tax, RBC Capital Markets said. The investment bank sided with retailers in a debate over the proposal, saying in a research note it would have a ‘seriously adverse’ impact on them. ‘If the US moves to a border-adjusted tax system, most of our retailers would be forced to raise prices (and revenues) or meaningfully change their import/domestic sourcing mix, or their earnings would be materially reduced,’ it said.” (Brian Faler, “RBC Capital Markets: GOP Border-Adjustment Plan Bad For Retailers,” POLITICO Pro, 12/12/16)
POLITICO: “Retailers Fear Massive Tax Increases Under House Republican Tax Plan” “Many retailers fear that, even with Republicans promising to slash the corporate tax rate, they will still face big tax increases that in some cases will exceed their profits. On high alert over the proposal, retailers have begun a big lobbying campaign on the Hill, warning lawmakers and their aides that any tax hikes will get passed on to their constituents in the form of higher prices.” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
The National Retail Federation Warns That A Border Tax Could Shut Businesses Down Completely. “‘Our members have told us that the import tax could be as high as five times their profits,’ said David French, chief lobbyist for the National Retail Federation. ‘I don’t know how viable some retailers would be in the face of this import tax.’” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
POLITICO Pro: “Some Of The Biggest Losers Would Be Retailers Like Walmart, Best Buy And Home Depot That Import Massive Amounts Of Goods And Materials On Which They Would Suddenly Have To Pay Taxes.” “The border adjustment plan would affect individual companies differently, depending in part on how much they import and export. Some of the biggest losers would be retailers like Walmart, Best Buy and Home Depot that import massive amounts of goods and materials on which they would suddenly have to pay taxes.” (Brian Faler, “Some Companies May Never Pay Taxes Under Border-Adjustment Tax Plan,” POLITICO Pro, 1/9/17)
Axios: Cowen Research Released A Study Highlighting Some Of The Big Name Companies That Will Be Hurt By The Border Adjustments High Tax Hikes. “Cowen Research published a report Thursday that estimates the effect of the reform plan, and other planned measures, like eliminating the deductibility of interest and a headline corporate tax cut, on different industries and companies. Here are some of the big-name firms Cowen says will be hurt by reform: 1. Apple: The world’s largest company would see its tax bill jump because it won’t be able to deduct the expense of assembly abroad. 2. Constellation Brands: The largest beer importer in America will not be able to expense the cost of goods it brings across the border, like its Corona brand. 3. Gap: Between 50% and 80% of the retailer’s cost of the goods its sells comes from abroad. Walmart: 4. Walmart’s low margins means that it may not be able to survive a tax hike on imported goods without raising prices. 5. Target: Will suffer from the same conundrum as Walmart, but will be worse off since less of its revenue comes from domestically-sourced groceries. J.C. Penney: The department store has high debt loads, and interest on debt will not be deductible under the Republican plan. (Christopher Matthews, “These Companies Will Be Hit Hardest By GOP Tax Reform,” Axios, 1/27/17)
Border Adjustment Tax Would Result In Higher Costs For Hard-Working Families
Christian Science Monitor: Border Tax Could Raise Car Prices By Thousands Of Dollars. “Michigan-based Baum & Associates says that a border tax–one that applies not only to vehicles imported from factories abroad but also to foreign-made vehicle parts–could increase sticker prices by as much as $17,000 … Most increases would be smaller, but still very substantial. Volvo, for example, would need to up its prices by more than $7,500 to accommodate a border tax. Volkswagen wouldn’t be far behind, with increases of around $6,800. Even Detroit brands would see price upticks: Ford’s would climb $285, and General Motors’ would rise by nearly $1,000. Fiat Chrysler would have to boost prices by closer to $2,000.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
Auto Sales Would Plummet Under A Border Adjustment Tax. “A report from UBS Securities says that the higher car prices would slash U.S. auto sales by about 2 million vehicles per year. That would more than erase the increased capacity and almost certainly result in layoffs.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
More Than A Hundred American Businesses Are Opposing The Republican Border Tax: “Don’t Make Hard-Working Families Pay More On Essential Products.” “Nike, Rite Aid, The Gap, Best Buy and Abercrombie & Fitch have joined a new advocacy group aimed at killing House Republicans’ plans to create a border adjustable business tax. They are some of the more than 100 companies and trade associations behind Americans for Affordable Products, an organization launched today that is pushing lawmakers to dump a plan to begin taxing imports as part of a broader tax-code rewrite. The groups, which rely on imports, fear the House Republican plan will mean huge tax increase even as Republicans promise to simultaneously slash the corporate tax rate … Other well-known companies joining the effort include Target, Walmart, QVC, Petco, AutoZone, Macy’s and Levi Strauss.” (Brian Faler, “Border Adjustment Tax Opponents Launch New Group Targeting GOP Proposal,” Politico, 2/01/17)
“A Sweeping Tax Reform Proposal Meant To Boost U.S. Manufacturing Faces Mounting Pressure From Industries That Rely Heavily On Imported Goods …” “A sweeping tax reform proposal meant to boost U.S. manufacturing faces mounting pressure from industries that rely heavily on imported goods as President-elect Donald Trump and congressional Republicans work to finalize new tax legislation. As Republican members of the House of Representatives tax committee prepared to discuss tax reform this week, the panel received a letter from 81 industry groups rejecting the proposal known as ‘border adjustability.’ A lynchpin of the House Republican ‘Better Way’ agenda and viewed favorably by Trump’s team, the policy would help manufacturers by exempting export revenues from corporate taxes. But it would tax imports, hitting import-dependent industries.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
“Companies That Rely On Global Supply Chains Would Face Huge Business Challenges Caused By Increased Taxes And Increased Cost Of Goods.” “In a Dec. 13 letter to House Ways and Means Chairman Kevin Brady and incoming top Democrat Richard Neal, groups representing the auto and retailing industries, among others, said: ‘Companies that rely on global supply chains would face huge business challenges caused by increased taxes and increased cost of goods.’ They warned of ‘reductions in employment, reduced capital investments and higher prices for consumers’ as potential consequences.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
CNBC: Coach CEO Victor Luis Acknowledged That “Any Border Tax Will Lead To Higher Prices For The Consumer.” “If we see this border adjustment in an economy where 70 percent of GDP is driven by consumption that is driven on imports, any border tax will lead to higher prices for the consumer … That’s just a reality that we’ll have to face if it comes to that.” (Rachel Cao, “Coach CEO: Any Border Tax Will Lead To Higher Prices For The Consumer,” CNBC, 1/31/17)
National Retail Federation: The Border Adjustment Tax Could Cost The Average Family $1,700 In Just The First Year. “The imposition of a ‘border adjustment tax,’ a key provision of a pending House tax reform proposal, would end up seriously harming U.S. consumers. NRF analysis indicates that this plan could cost the average family $1,700 in the first year alone if the border adjustment provision is enacted. While economic theory suggests that trade flow of imports and exports would balance out over the long run due to offsetting exchange rate and price adjustments, there is no consensus as to the degree or the timing of these adjustments. In the near term, consumers would be left to pick up the significant tab while hoping that the economic theory proves out.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
NRF: Annual Family’s Savings Could Be Wiped Out By Nearly A Third. “For the average family, 27 percent of their savings (income after taxes and expenditures) could evaporate with the cost increases caused by the border tax.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
“Unmarried adults without children currently have only $443 left over annually after taxes and expenditures. If the border adjustment tax were enacted, they could see an $836 increase in costs — nearly 200 percent higher than their annual savings.”
“One-parent households, which are already in the red, could see an additional $1,000 added to their debt burden as they do what they can to make ends meet. Their apparel and footwear bills would increase by $271”
“The average family (married with children) could see their apparel costs (including shoes) increase by $437 a year.”
“Single people could see their annual gasoline bills rise by $189, a whopping 43 percent of their annual average savings.”
“Married couples with children could see their annual gasoline bill could increase by over $400.”
CNBC: “The Republicans’ Plan To Enact A Border Adjustment Tax Will Leave Consumers Digging Deeper Into Their Pockets,” Increasing The Price Of Everyday Goods Like Clothes And Shoes By 20 Percent. “It will force consumers to pay as much as 20 percent more for the products they need. Gasoline is estimated to go up as much as 35 cents a gallon,’ said ‘Americans for Affordable Products’ advisor Brian Dodge … ‘Common household goods, apparel, things that people count on every day, pajamas, will cost more and really just so a certain, select group of corporations can avoid paying taxes forever. We think that’s bad policy…” (Michelle Fox, “Consumers Could See 20% Price Hike With Border Adjustment Tax, Retail Group Says,” CNBC, 2//17)
Economists And Analysts Weigh-In Against Border Adjustments
Dan Mitchell, Cato Institute: “I’ve Never Understood Why Politicians Think It’s A Good Idea To Have Higher Taxes On What Americans Consume And Lower Taxes On What Foreigners Consume.” (Dan Mitchell, “A Remarkably Good And Reasonably Bold Tax Reform Plan From House Republicans,” International Liberty, 6/25/16)
President Of The New York Fed Bill Dudley: “… There Could Be A Lot Of Unintended Consequences.” “Another prominent critic of a ‘border adjustment tax’ emerged Tuesday: the president of the New York Federal Reserve. Bill Dudley was asked by Macy’s CEO Terry Lundgren at a meeting of the National Retail Federation trade group what he thinks of the idea of a border adjustment tax, which involves taxing imports at 20 percent, while making U.S. exports tax-free. … ‘I think that it will lead to a lot of changes in the value of the dollar, the price of imported goods in the U.S., and I’m not sure that would all happen very smoothly,’ Dudley said. ‘I also think there could be a lot of unintended consequences.’” (Michelle Caruso-Cabrera, “NY Fed’s Dudley Sees ‘A Lot Of Unintended Consequences’ From Border-Tax Plan,” CNBC, 1/17/17)
Stephen Moore, Heritage Foundation: Border Tax Unlikely To Be Enacted. “A Heritage Foundation economist who advised President Trump’s campaign said he doubts a proposal from House Republicans to tax imports and exempt exports will gain traction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
MOORE: “I think it’s a distraction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
Steve Forbes: Border Adjustment Amounts To “Sneaky, Anti-Consumer Tax.” “This levy will cost American consumers at least a trillion dollars over the next ten years … Prices for everyday items, such as socks, shoes and household appliances, will go up. So will tech devices like the iPad, not to mention automobiles and trucks. Gasoline? Millions of Americans will pay an additional 30 cents or more per gallon at the pump. Lower-income and struggling middle-class Americans will get hit the hardest.” (Steve Forbes, “OMG! House Republicans Are Preparing To Hit Consumers With A Horrible New Tax That Will Harm Trump And Hurt The Economy,” Forbes, 1/11/17)
POLITICO Pro: “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans.” “An economic adviser to President-elect Donald Trump slammed plans to create a so-called border adjustable business tax, and predicted it could kill efforts to overhaul the tax code. The House Republican proposal is overly complicated … said Larry Kudlow, who helped write Trump’s tax-reform plans.” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “That is an exercise in government planning and complexity that I believe is doomed to fail … I think the whole corporate tax reform, which is the most important pro-growth measure, will go down the drain over this … There’s a problem that exists, but this is not the right solution …” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “GOP’s Border Adjustment Tax Is ‘Voodoo Economics” “President-elect Donald Trump is correct to criticize the House Republican plan to tax cross-border trade … said Larry Kudlow, who served as a senior economic adviser to Trump’s campaign…’I hate to say this, but it’s ‘voodoo economics’” (R. Williams, “Larry Kudlow: GOP’s Border Adjustment Tax Is ‘Voodoo Economics,” Newsmax, 1/17/17)
I wrote yesterday to praise the Better Way tax plan put forth by House Republicans, but I added a very important caveat: The “destination-based” nature of the revised corporate income tax could be a poison pill for reform.
I listed five concerns about a so-called destination-based cash flow tax (DBCFT), most notably my concerns that it would undermine tax competition (folks on the left think it creates a “race to the bottom” when governments have to compete with each other) and also that it could (because of international trade treaties) be an inadvertent stepping stone for a government-expanding value-added tax.
Brian Garst of the Center for Freedom and Prosperity has just authored a new study on the DBCFT. Here’s his summary description of the tax.
The DBCFT would be a new type of corporate income tax that disallows any deductions for imports while also exempting export-related revenue from taxation. This mercantilist system is based on the same “destination” principle as European value-added taxes, which means that it is explicitly designed to preclude tax competition.
Since CF&P was created to protect and promote tax competition, you won’t be surprised to learn that the DBCFT’s anti-tax competition structure is a primary objection to this new tax.
First, the DBCFT is likely to grow government in the long-run due to its weakening of international tax competition and the loss of its disciplinary impact on political behavior. … Tax competition works because assets are mobile. This provides pressure on politicians to keep rates from climbing too high. When the tax base shifts heavily toward immobile economic activity, such competition is dramatically weakened. This is cited as a benefit of the tax by those seeking higher and more progressive rates. …Alan Auerbach, touts that the DBCFT “alleviates the pressure to reduce the corporate tax rate,” and that it would “alter fundamentally the terms of international tax competition.” This raises the obvious question—would those businesses and economists that favor the DBCFT at a 20% rate be so supportive at a higher rate?
Brian also shares my concern that the plan may morph into a VAT if the WTO ultimately decides that is violates trade rules.
Second, the DBCFT almost certainly violates World Trade Organization commitments. …Unfortunately, it is quite possible that lawmakers will try to “fix” the tax by making it into an actual value-added tax rather than something that is merely based on the same anti-tax competition principles as European-style VATs. …the close similarity of the VAT and the DBCFT is worrisome… Before VATs were widely adopted, European nations featured similar levels of government spending as the United States… Feeding at least in part off the easy revenue generate by their VATs, European nations grew much more drastically over the last half century than the United States and now feature higher burdens of government spending. The lack of a VAT-like revenue engine in the U.S. constrained efforts to put the United States on a similar trajectory as European nations.
And if you’re wondering why a VAT would be a bad idea, here’s a chart from Brian’s paper showing how the burden of government spending in Europe increased once that tax was imposed.
In the new report, Brian elaborates on the downsides of a VAT.
If the DBCFT turns into a subtraction-method VAT, its costs would be further hidden from taxpayers. Workers would not easily understand that their employers were paying a big VAT withholding tax (in addition to withholding for income tax). This makes it easier for politicians to raise rates in the future. …Keep in mind that European nations have corporate income tax systems in addition to their onerous VAT regimes.
And he points out that those who support the DBCFT for protectionist reasons will be disappointed at the final outcome.
…if other nations were to follow suit and adopt a destination-based system as proponents suggest, it will mean more taxes on U.S. exports. Due to the resulting decline in competitive downward pressure on tax rates, the long-run result would be higher tax burdens across the board and a worse global economic environment.
Brian concludes with some advice for Republicans.
Lawmakers should always consider what is likely to happen once the other side eventually returns to power, especially when they embark upon politically risky endeavors… In this case, left-leaning politicians would see the DBCFT not as something to be undone, but as a jumping off point for new and higher taxes. A highly probable outcome is that the United States’ corporate tax environment becomes more like that of Europe, consisting of both consumption and income taxes. The long-run consequences will thus be the opposite of what today’s lawmakers hope to achieve. Instead of a less destructive tax code, the eventual result could be bigger government, higher taxes, and slower economic growth.
My concern with the DBCFT is partly based on theoretical objections, but what really motivates me is that I don’t want to accidentally or inadvertently help statists expand the size and scope of government. And that will happen if we undermine tax competition and/or set in motion events that could lead to a value-added tax.
Let’s close with three hopefully helpful observations.
Helpful Reminder #1: Congressional supporters want a destination-based system as a “pay for” to help finance pro-growth tax reforms, but they should keep in mind that leftists want a destination-based system for bad reasons.
Based on dozens of conversations, I think it’s fair to say that the supporters of the Better Way plan don’t have strong feelings for destination-based taxation as an economic principle. Instead, they simply chose that approach because it is projected to generate $1.2 trillion of revenue and they want to use that money to “pay for” the good tax cuts in the overall plan.
That’s a legitimate choice. But they also should keep in mind why other people prefer that approach. Folks on the left want a destination-based tax system because they don’t like tax competition. They understand that tax competition restrains the ability of governments to over-tax and over-spend. Governments in Europe chose destination-based value-added taxes to prevent consumers from being able to buy goods and services where VAT rates are lower. In other words, to neuter tax competition. Some state governments with high sales taxes in the United States are pushing a destination-based system for sales taxes because they want to hinder consumers from buying goods and services from states with low (or no) sales taxes. Again, their goal is to cripple tax competition.
Something else to keep in mind is that leftist supporters of the DBCFT also presumably see the plan as being a big step toward achieving a value-added tax, which they support as the most effective way of enabling bigger government in the United States.
Helpful Reminder #2: Choosing the right tax base (i.e., taxing income only one time, otherwise known as a consumption-base system) does not require choosing a destination-based approach.
The proponents of the Better Way plan want a “consumption-base” tax. This is a worthy goal. After all, that principle means a system where economic activity is taxed only one time. But that choice is completely independent of the decision whether the tax system should be “origin-based” or “destination-based.”
The bottom line is that you can have the right tax base with either an origin-based system or a destination-based system.
Helpful Reminder #3: The good reforms of the Better Way plan can be achieved without the downside risks of a destination-based tax system.
The Tax Foundation, even in rare instances when I disagree with its conclusions, always does very good work. And they are the go-to place for estimates of how policy changes will affect tax receipts and the economy. Here is a chart with their estimates of the revenue impact of various changes to business taxation in the Better Way plan. As you can see, the switch to a destination-based system (“border adjustment”) pulls in about $1.2 trillion over 10 years. And you can also see all the good reforms (expensing, rate reduction, etc) that are being financed with the various “pay fors” in the plan.
I am constantly asked how the numbers can work if “border adjustment” is removed from the plan. That’s a very fair question.
But there are lots of potential answers, including:
Make a virtue out of necessity by reducing government revenue by $1.2 trillion.
Reduce the growth of government spending to generate offsetting savings.
Reduce the size of the tax cuts in the Better Way plan by $1.2 trillion.
I’m not pretending that any of these options are politically easy. If they were, the drafters of the Better Way plan probably would have picked them already. But I am suggesting that any of those options would be better than adopting a destination-based system for business taxation.
Ultimately, the debate over the DBCFT is about how different people assess political risks. House Republicans advocating the plan want good things, and they obviously think the downside risks in the future are outweighed by the ability to finance a larger level of good tax reforms today. Skeptics appreciate that those proponents want good policy, but we worry about the long-run consequences of changes that may (especially when the left sooner or late regains control) enable bigger government.
P.S. This is not the first time that advocates of good policy have bickered with each other. During the 2016 nomination battle, Rand Paul and Ted Cruz proposed tax reform plans that fixed many of the bad problems in the tax code. But they financed some of those changes by including value-added taxes in their plans. In the short run, either plan would have been much better than the current system. But I was critical because I worried that the inclusion of VATs would eventually give statists a tool to further increase the burden of government.
THE CORNER THE ONE AND ONLY. Speaker Ryan’s Use of Reporters’ Recorders to Explain His Border Tax Was Cute — But Misleading
Faced with growing opposition to their border-adjustment tax, congressional Republicans are nonetheless on the offensive trying to sell it. I have expressed my many reasons for opposing the tax, including my disbelief that Republicans would support a massive tax increase alongside what is otherwise a pro-growth tax reform. While they oppose tax increases to pay for spending increases in other contexts and usually make the case that spending increases should be paid for by spending cuts, Republicans continue to push for this massive new source of revenue, in spite of the distortions it would introduce.
Until now, supporters of the tax have used many questionable arguments. For instance, they claim we shouldn’t worry about the protectionist aspect of a tax that imposes a 20 percent rate to imports but exempts exports under the hope that the U.S. dollar will adjust fully and quickly. However, there are reasons to believe that while the U.S. currency will adjust, it won’t adjust fully (Federal Reserve Board chairwoman Janet Yellen is only the latest one to stress that point), it won’t adjust as quickly as they claim (especially if the tax is challenged under the World Trade Organization as the Europeans have warned is going to be the case), and it won’t result in unicorns and rainbows.
But the latest misguided statements about the border-adjustment tax comes from House speaker Paul Ryan — who ought to know better. During a press conference last week, he repeated the claim that United States was at a disadvantage because other countries’ exports are exempted from taxes while U.S. goods aren’t. [Ryan] noted that most other countries already border-adjust their taxes and tax goods based on whether they were consumed in their jurisdiction.
That comment is bound to confuse reporters because, as Mr. Ryan must know, no other country border-adjusts their corporate income tax. They border-adjust their Value Added Tax. Conflating the two is misleading, to say the least.
The Speaker picked up two reporters’ recorders to give an example of how goods are taxed currently. He suggested one was American-made and the other was Japanese-made. Early on, he dropped one of the recorders, saying “oops” and receiving laughter from the reporters. “Here’s what Japan does when they make this tape recorder: When they send it for export they take the tax off of it, and then it comes to America and it’s not taxed, and it comes through to compete against our good, which was taxed. Theirs was untaxed twice,” Ryan said. “When America makes something, like a tape recorder, we tax it, and then we send it to Japan. As it enters Japan it’s taxed again, to compete against their tape recorder,” he continued. “So we are doing it to ourselves. We are hurting our manufacturing and jobs. We are putting a bias against making things in America in the tax code. . . . That is why we think this is very important. This is good manufacturing policy.”
Oh boy, where do I begin? First, it is true that U.S. companies are at a disadvantage but it is not because of other countries’ tax codes. It is because our corporate-income-tax system has the highest rate of all OECD countries and because, unlike most of our competitors, it taxes U.S. companies’ profits no matter where they are earned in the world. The solution to this disadvantage is to reduce the rates and move to a territorial system. Oh, and by the way, unlike what Ryan and other proponents of a border-adjustment tax would like you to believe, you do not need to move to an expansive destination-based-cash-flow tax to have a territorial tax.
Now let me address the cute tape-recorder example used by the speaker. It is totally misleading because it conflates foreign countries corporate tax and VAT taxes and it paints a picture that is incorrect. For instance, he claims that Japanese exports are exempt from taxes. No, Japanese products exported to the U.S. are exempt from the Japanese VAT but the Japanese company is still paying U.S. corporate tax on its U.S. profits. And you know what? In that sense, the Japanese export is treated exactly like the U.S. goods sold in the U.S. In other words, the playing field is even! I repeat: Japanese goods in the U.S. are taxed like U.S. goods in the U.S.
How about U.S. exports in Japan? Well, it gets hit by the Japanese VAT in Japan and by the Japanese corporate tax but so are Japanese goods sold in Japan. Again, the only disadvantage faced by U.S. companies selling tape recorders abroad comes from the U.S. tax system, which requires that income earned in Japan be taxed by Uncle Sam at 35 percent after benefiting from a tax credit for tax paid in Japan. If the U.S. company decides to keep its Japanese income outside the U.S., the U.S. rate won’t apply.
Dan Mitchell explains why the VAT doesn’t change the terms of trade in this video.
Finally, economists have debunked the idea implied by the speaker that foreign VATs give an advantage to foreign exports — and therefor boost foreign exports. It is simply not true. It follows that imposing a border-adjustment tax in the U.S. will not boost U.S. exports either. Period.
Let me summarize this for you:
No, other countries do not border-adjust their corporate income tax.
Comparing other countries’ VATs and our corporate tax is problematic to say the least.
No, foreign exports sold in the U.S. do not have an advantage over U.S. goods sold in the U.S. Foreign VATs do not boost foreign exports.
A border tax in the U.S. will not boost our exports but it will hurt consumers and many U.S. retailers.
The disadvantage faced by U.S. companies exporting goods abroad comes from the terrible worldwide tax and high rates of the U.S. tax regime, not from other countries’ tax system.
The way to fix the U.S. disadvantage is not to create a new expansive tax that would penalize imports in the U.S. — including imports for the benefit of U.S. domestic companies — and would penalize U.S. consumers.
The Border Adjustment Tax, a proposal favored by House Speaker Paul Ryan, has aroused serious opposition from Republican senators.
FEB 21, 2017
Donald Trump is feeling good about taxes. In his gonzo press conference last Thursday, he assured Americans that “very historic tax reform” is absolutely on track and is going to be—wait for it!—“big league.” The week before, he told a bunch of airline CEOs that “big league” reform was “way head of schedule” and that his people would be announcing something “phenomenal” in “two or three weeks.” And at his Orlando pep rally this past weekend, he gushed about his idea for a punitive 35 percent border tax on products manufactured overseas. The magic is happening, people. And soon America’s tax code will be the best, most beautiful in the world.
But here’s the thing. What Trump doesn’t know about the legislative process could overflow the pool at Mar-a Lago. And when it comes to tax reform, even minor changes make Congress lose its mind. Weird fault lines appear, and the next thing you know, warring factions have painted their faces blue and vowed to die on the blood-soaked battlefield before allowing this marginal rate to change or that loophole to close.
Such drama has, in fact, already begun over the proposal percolating in the House. At issue: a provision known as the border adjustment tax—let’s call it BAT—which, shrunk to its essence, incentivizes domestic manufacturing by slapping a 20 percent levy on imports, while making U.S. companies’ export-revenues tax deductible.
BAT fans—most notably House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady—pitch the provision as an economically elegant twofer: an America-First measure that discourages companies from moving operations overseas while creating a revenue stream ($1 trillion every decade or so) that allows the overall corporate tax rate to be slashed.
Opponents—most vocally Senators David Perdue and Tom Cotton—argue that a BAT is another grubby government cash grab that will ultimately hurt consumers when, say, Walmart has to jack up the prices of underwear, bananas, and Playstations. In a February 8 letter to colleagues, Perdue, who spent four decades in the business world, charged that the BAT is “regressive, hammers consumers, and shuts down economic growth.”Thus the battle lines are drawn. And, make no mistake, this will not be some bush-league, penny-ante skirmish. Behind the legislative factions are amassing some of the heaviest hitters in corporate America, ready to spend millions to sway debate on behalf of their team.Roughly speaking, companies that do a lot of exporting dig the BAT (think: Boeing, Merck, and Dow Chemical) while import-dependent retailers (including Target, Nike, and, yes, Walmart) fear it will destroy their bottom lines. The oil industry isn’t feeling much BAT love either. The Koch brothers want it dead, like, yesterday.At this point, anti-BATers have an edge. Why? Partly, because the provision is super complicated and almost impossible to explain in terms that don’t sound like something a coven of economists vomited up. Ask BAT fans why the provision won’t, in fact, hurt retailers or consumers, and you’re instantly hip-deep in talk of currency revaluation, purchasing power, and territorial taxation. Last Wednesday, one day after Paul Ryan tried to educate Senate Republicans on the wonders of BAT at their weekly policy lunch, Tom Cotton (who represents Walmart’s home state of Arkansas) snarked on the Senate floor, “Some ideas are so stupid only an intellectual could believe them.”This is in no way to suggest that the pro-BAT arguments are wrong. They simply don’t push the same buttons as anti-BAT warnings that Congress is poised to screw consumers in order to fund big tax cuts for corporations.For the past few weeks, in fact, an anti-BAT coalition called Americans for Affordable Products has been busy hawking this exact message. “This is a consumer tax—a means by which House Republicans are paying for other tax deductions,” asserted AAP member Brian Dodge. “It’s not about America First. It’s not a trade-deficit reduction tool. It is a pay-for.”AAP is lobbying lawmakers and staffers and doing public outreach. Last Wednesday, it dispatched eight CEOs to chat with Trump and Vice President Pence. “We view our job as leading a large education campaign,” said Dodge. “We believe the more that lawmakers understand about this proposal, the less inclined they’ll be to support it.”Of course, BAT fans are gearing up as well and promise to be equally aggressive. The day after the AAP roll out, the American Made Coalition launched, with an eye toward helping Ryan’s office spread the good word. “It takes time to educate both policy makers and businesses on what’s on the table,” said Brian Reardon, an adviser to the group.There is no place for subtlety in this war. Part of BAT supporters’ argument is that, without the provision, tax overhaul will implode altogether. Message: Get on board or kiss your once-in-a-lifetime reform opportunity good-bye.It’s a question of Senate math. To pass with a simple majority (and avoid a filibuster by Democrats), the GOP’s plan must go through under the procedure known as reconciliation. But to qualify for reconciliation, the package–which slashes both corporate and upper-bracket taxes–cannot blow a hole in the long-term budget. Without the $1 trillion in revenues from BAT, say advocates, there’s no way that hole can be plugged.“This is the only way at these rates and keeping things revenue neutral,” insisted a senior Republican aide. There is no other viable option. Period. End of story.But anti-BATers are eyeing a different Senate equation. To amass even a simple majority of votes, the BAT can lose only two of the 52 Republican members. (Unless Democrats cross the aisle, of course.) In addition to Cotton’s and Perdue’s open hostility, Senators John Boozman, Mike Rounds, John Cornyn, Tim Scott, and Mike Lee have all expressed reservations. “I have real concerns that this piece of the House blueprint will cause more disruption than necessary,” Lee said. “Will the dollar suddenly shoot up by 20 percent? Will U.S. manufacturers have to redo their international supply chains? These are all open questions.”
With the provision’s Senate prospects iffy, there’s less incentive for House conservatives to support something that smells even faintly like a tax. Both the current chairman of the Freedom Caucus, Mark Meadows, and the former chairman, Jim Jordan, have said they’d like reform done without a BAT.
“My reasoning is very basic,” Jordan told me. “Why in the world would we want to add another revenue stream?” You can debate the impact on exchange rates and purchasing power all day, said Jordan, but that doesn’t address many conservatives’ core objection. “We come at it from fundamental perspective,” he said. “The idea that you’re going to add an entirely new tax is a big problem.”
(BAT fans, for the record, dispute that this is a new tax. It is, they insist, replacing the existing system with an entirely new, far superior one that must be looked at, as Reardon put it, “holistically.”)
The only thing everyone can agree on is that this will be a long, ugly fight. If Trump drops his tariff idea and embraces BAT, it could boost the cause. But even then, he’d need to do major arm-twisting to get Senate skeptics on board (especially with the likes of Walmart and the Kochs twisting the other arm.) Like it or not, this is what the political big leagues are like: slow, messy, and infuriating.
The up side for Trump: He’ll have time to throw a lot more pep rallies on this topic before anything gets decided.
The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2014, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.
The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.
In 2014, 139.6 million taxpayers reported earning $9.71 trillion in adjusted gross income and paid $1.37 trillion in individual income taxes.
The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).
Reported Income and Taxes Paid Both Increased Significantly in 2014
Taxpayers reported $9.71 trillion in adjusted gross income (AGI) on 139.5 million tax returns in 2014. Total AGI grew by $675 billion from the previous year’s levels. There were 1.2 million more returns filed in 2014 than in 2013, meaning that average AGI rose by $4,252 per return, or 6.5 percent.
Meanwhile, taxpayers paid $1.37 trillion in individual income taxes in 2014, an 11.5 percent increase from taxes paid in the previous year. The average individual income tax rate for all taxpayers rose from 13.64 percent to 14.16 percent. Moreover, the average tax rate increased for all income groups, except for the top 0.1 percent of taxpayers, whose average rate decreased from 27.91 percent to 27.67 percent.
The most likely explanation behind the higher tax rates in 2014 is a phenomenon known as “real bracket creep.”  As incomes rise, households are pushed into higher tax brackets, and are subject to higher overall tax rates on their income. On the other hand, the likely reason why the top 0.1 percent of households saw a slightly lower tax rate in 2014 is because a higher portion of their income consisted of long-term capital gains, which are subject to lower tax rates.
The share of income earned by the top 1 percent rose to 20.58 percent of total AGI, up from 19.04 percent in 2013. The share of the income tax burden for the top 1 percent also rose, from 37.80 percent in 2013 to 39.48 percent in 2014.
Table 1. Summary of Federal Income Tax Data, 2014
Number of Returns
Adjusted Gross Income ($ millions)
Share of Total Adjusted Gross Income
Income Taxes Paid ($ millions)
Share of Total Income Taxes Paid
Income Split Point
Average Tax Rate
Note: Does not include dependent filers
High-Income Americans Paid the Majority of Federal Taxes
In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.
In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $465,626 and above) earned 20.58 percent of all AGI in 2014, but paid 39.48 percent of all federal income taxes.
In 2014, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $543 billion, or 39.48 percent of all income taxes, while the bottom 90 percent paid $400 billion, or 29.12 percent of all income taxes.
High-Income Taxpayers Pay the Highest Average Tax Rates
The 2014 IRS data shows that taxpayers with higher incomes pay much higher average individual income tax rates than lower-income taxpayers.
The bottom 50 percent of taxpayers (taxpayers with AGIs below $38,173) faced an average income tax rate of 3.45 percent. As household income increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($133,445 and $188,996) pay an average rate of 13.7 percent – almost four times the rate paid by those in the bottom 50 percent.
The top 1 percent of taxpayers (AGI of $465,626 and above) paid the highest effective income tax rate, at 27.2 percent, 7.9 times the rate faced by the bottom 50 percent of taxpayers.
Taxpayers at the very top of the income distribution, the top 0.1 percent (with AGIs over $2.14 million), paid an even higher average tax rate, of 27.7 percent.
5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 2. Number of Federal Individual Income Tax Returns Filed 1980–2014 (Thousands)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 3. Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 4. Total Income Tax after Credits, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 5. Adjusted Gross Income Shares, 1980–2014 (percent of total AGI earned by each group)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable