The Pronk Pops Show 1060,April 12, 2018, Story 1: Clueless Congress Questions Facebook Founder Mark Zuckerberg Who Does An Imitation of Brenda Lee I’m Sorry and The End of The World — Privacy Is Dead — Stop Your Addiction — Quit Social Media and Big Lie Media and Select Better Sources of Entertainment — Be Addiction Free and Happy — Congress Sings Special Angel and Be My Baby To Zuckerberg — NSA: Secret Surveillance State — Every Step You Make –Videos

Posted on April 15, 2018. Filed under: Addiction, Addiction, Addiction, American History, Blogroll, Breaking News, Business, Cartoons, Communications, Congress, Corruption, Countries, Culture, Deep State, Drugs, Education, Elections, Empires, Federal Bureau of Investigation (FBI), Federal Bureau of Investigation (FBI) and Department of Justice (DOJ), Federal Communications Commission, Federal Government, First Amendment, Fourth Amendment, Free Trade, Freedom of Speech, Government Dependency, Government Spending, Hate Speech, Health, History, House of Representatives, Human Behavior, Illegal Drugs, Independence, Investments, Language, Legal Drugs, Movies, Music, National Security Agency, News, People, Philosophy, Photos, Politics, Polls, President Trump, Public Corruption, Radio, Raymond Thomas Pronk, Regulation, Rule of Law, Second Amendment, Senate, Social Networking, Spying on American People, Success, Surveillance/Spying, Taxation, Taxes, Ted Cruz, Trump Surveillance/Spying, United States Constitution, United States of America, Videos, Violence, Wall Street Journal, War, Wealth, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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The Pronk Pops Show Podcasts

Pronk Pops Show 1060, April 12, 2018

Pronk Pops Show 1059, April 11, 2018

Pronk Pops Show 1058, April 10, 2018

Pronk Pops Show 1057, April 9, 2018

Pronk Pops Show 1056, April 4, 2018

Pronk Pops Show 1055, April 2, 2018

Pronk Pops Show 1054, March 29, 2018

Pronk Pops Show 1053, March 28, 2018

Pronk Pops Show 1052, March 27, 2018

Pronk Pops Show 1051, March 26, 2018

Pronk Pops Show 1050, March 23, 2018

Pronk Pops Show 1049, March 22, 2018

Pronk Pops Show 1048, March 21, 2018

Pronk Pops Show 1047, March 20, 2018

Pronk Pops Show 1046, March 19, 2018

Pronk Pops Show 1045, March 8, 2018

Pronk Pops Show 1044, March 7, 2018

Pronk Pops Show 1043, March 6, 2018

Pronk Pops Show 1042, March 1, 2018

Pronk Pops Show 1041, February 28, 2018

Pronk Pops Show 1040, February 27, 2018

Pronk Pops Show 1039, February 26, 2018

Pronk Pops Show 1038, February 23, 2018

Pronk Pops Show 1037, February 22, 2018

Pronk Pops Show 1036, February 21, 2018

Pronk Pops Show 1035, February 16, 2018

Pronk Pops Show 1034, February 15, 2018  

Pronk Pops Show 1033, February 14, 2018  

Pronk Pops Show 1032, February 13, 2018

Pronk Pops Show 1031, February 12, 2018

Pronk Pops Show 1030, February 9, 2018

Pronk Pops Show 1028, February 7, 2018

Pronk Pops Show 1027, February 2, 2018

Pronk Pops Show 1026, February 1, 2018

Pronk Pops Show 1025, January 31, 2018

Pronk Pops Show 1024, January 30, 2018

Pronk Pops Show 1023, January 29, 2018

Pronk Pops Show 1022, January 26, 2018

Pronk Pops Show 1021, January 25, 2018

Pronk Pops Show 1020, January 24, 2018

Pronk Pops Show 1019, January 18, 2018

Pronk Pops Show 1018, January 17, 2018

Pronk Pops Show 1017, January 16, 2018

Pronk Pops Show 1016, January 10, 2018

Pronk Pops Show 1015, January 9, 2018

Pronk Pops Show 1014, January 8, 2018

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Image result for cartoons on nsa and facebook spying on american people

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The Police – Every Breath You Take

How the Government Tracks You: NSA Surveillance

NSA Whistleblower: Everyone in US under virtual surveillance, all info stored, no matter the post

NSA WILLIAN BINNEY EXPLAINS THE ORIGINS OF FACEBOOK AND SOCIAL NETWORKS

NSA Whistleblower William Binney: The Future of FREEDOM

How NSA Tracks You Bill Binney

NSA Surveillance and What To Do About It

Facebook Spies on You For The Government

How to Avoid Surveillance…With Your Phone | Christopher Soghoian | TED Talks

NSA-Whistleblower William Binney on Apple, Google, Facebook, Microsoft

William Binney – The Government is Profiling You (The NSA is Spying on You)

William Binney Warning: Surveillance Turns Inward & Political

Intel community ‘not being honest’ with president about Russia ‒ Bill Binney

 

William Binney Breaks Down What Sort Of Surveillance Donald Trump Was Actually Under

NSA Whistleblower Bill Binney on Tucker Carlson 03.24.2017

Bill Binney explodes the Russia witchhunt

‘NSA owns entire network anywhere in the world’ – whistleblower William Binney

XKeyscore: The search engine that lets the NSA keep tabs on you

X-KeyScore: The Government’s Farthest Reaching Intelligence Program Yet

NSA’s ‘XKeyscore’ gives warrantless access to all Internet activity

“You’re Being Watched”: Edward Snowden Emerges as Source Behind Explosive Revelations of NSA Spying

Report: NSA can indeed monitor you online

NSA Spying on YouTube, Facebook | The Rubin Report

The Police – Every Breath You Take

 

Story 1: Clueless Congress Questions Facebook Founder Mark Zuckerberg Who Does An Imitation of Brenda Lee I’m Sorry and The End of The World — Privacy Is Dead — Stop Your Addiction — Quit Social Media and Big Lie Media and Select Better Sources of Entertainment — Be Addiction Free and Happy — Congress Sings Special Angel To Zuckerberg — Videos

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Brenda Lee – I’m Sorry

I’m sorry, so sorry
That I was such a fool
I didn’t know
Love could be so cruel
Oh-oh-oh-oh-oh-oh-oh-yesYou tell me mistakes
Are part of being young
But that don’t right
The wrong that’s been done(I’m sorry) I’m sorry
(So sorry) So sorry
Please accept my apology
But love is blind
And I was too blind to see

Oh-oh-oh-oh-oh-oh-oh-yes

You tell me mistakes
Are part of being young
But that don’t right
The wrong that’s been done
Oh-oh-oh-oh-oh-oh-oh-yes

I’m sorry, so sorry
Please accept my apology
But love was blind
And I was too blind to see

(Sorry)

Music by:

Ronnie Self
Lyrics by:

Dub Allbritten

Brenda Lee – The end of the world(1963)

Brenda Lee – End Of The World Lyrics

Why does the sun go on shining
Why does the sea rush to shore
Don’t they know it’s the end of the world
’cause You don’t love me anymore, YesWhy do the birds go on singing
Why do the stars glow above
Don’t they know it’s the end of the world
It ended when I lost your loveI wake up in the mornin’ and I wonder
Why everythings the same as it was
I can’t understand, No
I can’t understand
How life goes on the way it doesWhy does my heart go on beating
Why do these eyes of mine cry
Don’t they know it’s the end of the world
It ended when you said goodbye(spoken)
Why does my heart go on beating
Why do these eyes of mine cry
(sung)
Don’t they know it’s the end of the world
It ended when you said goodbye
Goodbye
Songwriters: PETER MCNULTY-CONNOLLY, MARCUS MYBE, LOUIE ST. LOUIS, KURTIS DESHAUN WILLIAMS, MICHAEL ANGELO
End Of The World lyrics © Universal Music Publishing Group

This Is What People Really Think About Zuckerberg’s Congressional Testimony (HBO)

#MSM Sockpuppet Coverup and Shell Game: #Zuckerberg’s Show Trial and #Syrian Gas Hocus Pocus

Facebook Is a Government Surveillance Tool: Lionel Buries Hillary Apologist in this Epic Takedown

POLL: Americans Blame Deep State Shill Mark Zuckerberg and Facebook for Fake News

Why Facebook’s Business Model Is Only Now Coming Under Fire | CNBC

Mark Zuckerberg admits to ‘big mistake’ at Senate hearing

Zuckerberg’s Senate hearing highlights in 10 minutes

Analysis: House tougher on Zuckerberg than Senate

5 awkward moments at the Facebook hearing

Would Congress be able to successfully regulate Facebook?

Jim Cramer: Congress Won’t Accept Mark Zuckerberg’s Analysis Of Data Breach | CNBC

Zuckerberg, Cruz get feisty over Facebook bias

Sen. Harris questions Facebook’s values on trust and transparency

Rep. Marsha Blackburn reacts to Zuckerberg’s testimony

An in depth look at Zuckerberg’s Senate testimony

Why Facebook’s Business Model Is Only Now Coming Under Fire | CNBC

Facebook will find a way around regulations: Mentor to Mark Zuckerberg

Ari Melber’s Two Takeaways From Mark Zuckerberg’s Testimony | The Beat With Ari Melber | MSNBC

Silicon Valley insider on why smartphones are “slot machines”

New Rule: Social Media is the New Nicotine | Real Time with Bill Maher (HBO)

Facebook founder warns of social media addiction

How social media makes us unsocial | Allison Graham | TEDxSMU

5 Crazy Ways Social Media Is Changing Your Brain Right Now

Is Social Media Addictive? | Through The Wormhole

Facebook Documentary | The Dangers of Social Media: Facebook | Facebook facts

A year offline, what I have learned | Paul Miller | TEDxEutropolis

Is Social Media Hurting Your Mental Health? | Bailey Parnell | TEDxRyersonU

Social Media: Too Much of a Good Thing? | Samia Khan | TEDxTerryTalks

Rebuilding Self-Esteem After Addiction to Social Media | Sarayu Chityala | TEDxMarkhamPublicLibrary

Live in the Moment: Delete Social Media | Ryan Thomas | TEDxAshburnSalon

Tucker REACTS to Mark Zuckerberg’s Testimony (Day 1)

“Facebook EXPLOITS a Vulnerability in Human Psychology!” Tucker Carlson on Social Media

Silicon Valley execs sound off on Mark Zuckerberg’s testimony

Social Media Nightmares

Fmr. Facebook Exec: Social Media Ripping Apart Society, “You are programmed.” [Chamath Palihapitiya]

Chamath Palihapitiya, Founder and CEO Social Capital, on Money as an Instrument of Change

CBS 60 Minutes interview Donald Trump Social Media Has More Power Than Money pIdZZb1DddA

Facebook Locks Out Jordan Peterson | Campus Unmasked

Jordan B Peterson – Let go of Bad Habits & People and rise like a Phoenix

Jordan Peterson | How to Rise to the Top of the Dominance Hierarchy

Jordan Peterson; Talks Facebook and It’s Emotionally Addictive Powers..!

Jordan Peterson – What Makes Overcoming Addiction So Difficult?

Jordan Peterson – How to Solve addiction simply

Motivate yourself to beat addiction | Jordan Peterson & Stefan Molyneux

Potential: Jordan Peterson TEDxUofT

Quit social media | Dr. Cal Newport | TEDxTysons

Sen Kennedy destroys Mark Zuckerberg

Sen. Kennedy to Mark Zuckerberg: ‘Your User Agreement Sucks’ 4/10/18

“WHY DIDN’T FACEBOOK INFORM USERS??!!” Kamala Harris CONFRONTS Mark Zuckerberg on Facebook’s Breach

7 Facts That’ll Make You Delete Your Facebook

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Senator Asks How Facebook Remains Free, Mark Zuckerberg Smirks: ‘We Run Ads’ | NBC News

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Questions that left Mark Zuckerberg SPEECHLESS during Senate Hearing

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Congressman Scalise Acts Nice Then Hammers Mark Zuckerberg Over Facebook Shutting Down Republicans!

WATCH: Mark Zuckerberg Stumbles When Asked To Define ‘Hate Speech’ – His Answer Is Truly Shocking

Congresswoman Won’t Let Mark Zuckerberg WEASAL His Way Out Of Her Question About Tracking People!

Jim Cramer: Congress Won’t Accept Mark Zuckerberg’s Analysis Of Data Breach | CNBC

Tucker REACTS to Mark Zuckerberg’s Testimony (Day 1)

Bobby Helms – You Are My Special Angel – ( Alta Calidad ) HD

My Special Angel
You are my special angel
Sent from up above
The Lord smiled down on me
And sent an angel to love (to love)
You are my special angel
Right from paradise
I know you’re an angel
Heaven is in your eyes
The smile from your lips brings the summer sunshine
Tears from your eyes bring the rain
I feel your touch, your warm embrace
And I’m in heaven again
You are my special angel
Through eternity
I’ll have my special angel
Here to watch over me
I feel your touch, your warm embrace
And I’m in heaven again
You are my special angel
Through eternity
I’ll have my special angel
Here to watch over me (watch over me)
Here to watch over me
(Angel, angel, whoa-oh-oh-oh, oh, oh oh, oh)
Songwriters: Jimmy (usa Duncan / Jimmy (usa 2 Duncan
My Special Angel lyrics © Warner/Chappell Music, Inc

The Ronettes – Be My Baby – 16:9 – ( Alta Calidad ) HD

Be My Baby
The night we met I knew I needed you so
And if I had the chance I’d never let you go
So won’t you say you love me
I’ll make you so proud of me
We’ll make ’em turn their heads every place we go
So won’t you, please, be my, be my baby
Be my little baby, my one and only baby
Say you’ll be my darlin’, be my, be my baby
Be my baby now, my one and only baby
Wha oh oh oh
I’ll make you happy, baby, just wait and see
For every kiss you give me I’ll give you three
Oh, since the day I saw you
I have been waiting for you
You know I will adore you ’til eternity
So won’t you, please, be my, be my baby
Be my little baby, my one and only baby
Say you’ll be my darlin’, be my, be my baby
Be my baby now, my one and only baby
Wha oh oh oh oh
So come on and, please, be my, be my baby
Be my little baby, my one and only baby
Say you’ll be my darlin’, be my, be my baby
Be my baby now, my one and only baby
Wha oh oh oh
Be my, be my baby, be my little baby
My one and only baby, oh oh
Be my, be my baby, oh
My one and only baby, wha oh oh oh oh
Be my, be my baby, oh
My one and only baby, oh
Be my, be my baby, oh
Be my baby now
Songwriters: Ellie Greenwich / Jeff Barry / Philip Spector
Be My Baby lyrics © EMI Music Publishing, Universal Music Publishing Group, BMG Rights Management US, LLC

Zuckerberg Faces Tough Questions From the House

Members of the Energy and Commerce Committee pressed Facebook’s chief executive on data privacy, security and political bias on the social media platform.

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Mark Zuckerberg, the billionaire founder and chief executive of Facebook, faced a much tougher crowd on the House side of Capitol Hill in his second day of congressional testimony.

Over the two days, there were nearly 10 hours of hearings, during which almost 100 lawmakers grilled Mr. Zuckerberg.

While Tuesday’s Senate hearing contained tough questions, the lawmakers were generally deferential to the executive. That was less the case in the House, where lawmakers repeatedly interrupted Mr. Zuckerberg and chided him for not answering questions to their satisfaction.

Lawmakers on both side of the aisle on Wednesday pushed Mr. Zuckerberg on his company’s handling of user data. They were particularly focused on the platform’s privacy settings, which put the onus on users to protect their privacy. He was also asked about:

• Whether the social network should be regulated.

• What Russians did on Facebook during the 2016 election.

• Whether the social network had a liberal bias.

• What Facebook ultimately is as it has grown into a global behemoth.

READ MORE:

• Mr. Zuckerberg was the only technology chief in the room on Tuesday, but he was often treated as a stand-in for the whole industry.

• The public scolding on Capitol Hill may do little to change how Facebook powers its $40.6 billion business: meticulously monitoring what you do online. Here’s how they do it.

• Mr. Zuckerberg wore a suit and tie to testify before Congress instead of his usual gray T-shirt. One might say it was his “I’m Sorry” suit.

• The hearings were prompted by a scandal over data harvesting by a third-party organization. Fallout from the scandal has dealt a blow to the political clout of the Mercers, the conservative donors behind organization.

Regulating the use of private data

Representative Greg Walden, Republican of Oregon and chair of the Energy and Commerce Committee, kicked off the hearing by declaring that “while Facebook has certainly grown, I worry it has not matured.”

Mr. Walden floated the prospect of regulation, saying that “I think it is time to ask whether Facebook may have moved too fast and broken too many things.”

Later in the hearing, Mr. Zuckerberg said regulation was “inevitable.” But he repeated that the right kind of regulation mattered and he pointed out that some regulation could only solidify the power of a large company like Facebook, which could hurt start-ups.

GRAPHIC

How Facebook Lets Brands and Politicians Target You

A history of the steps the company took to become an advertising giant.

 OPEN GRAPHIC

On Tuesday, several senators sounded a similar tune, saying Facebook couldn’t be trusted with the vast amounts of data being collected, much of which was being done without users’ full understanding. Three senators introduced privacy legislation that would require users’ permission to collect and share their data.

On Wednesday, Mr. Zuckerberg was asked to agree to privacy legislation that requires permission for data collection. Mr. Zuckerberg demurred and did not express support for any specific legislative proposal.

Representative Frank Pallone Jr., a New Jersey Democrat, pressed Mr. Zuckerberg on whether Facebook would agree or refuse to change Facebook’s default settings to minimize collection and use of users’ data.

“This is a complex issue that deserves more than a one word answer,” Mr. Zuckerberg answered.

“That’s disappointing to me,” Mr. Pallone responded.

The concern was echoed by Representative Bobby L. Rush, a Democrat of Illinois, who pointed a finger at Mr. Zuckerberg and asked: “Why is the onus on the user to opt in to privacy and security settings?”

But Mr. Zuckerberg also did not dismiss a proposal from Representative Raul Ruiz, a Democrat from California, to create a digital consumer protection agency that would subject Facebook and its peers to some degree of government involvement.

Mr. Zuckerberg called the idea one “that deserves a lot of consideration” but said that the “details on this really matter.”

 

Video

Zuckerberg’s Testimony, Explained

Senator John Kennedy told Mark Zuckerberg, the chief executive of Facebook, that his company’s user agreement “sucks.” Our reporter Sheera Frenkel explains the senator’s questions, Mr. Zuckerberg’s answers and what they really mean.

By SHEERA FRENKEL and GRANT GOLD on Publish DateApril 11, 2018. Photo by Tom Brenner/The New York Times. Watch in Times Video »

Could Europe’s privacy laws serve as a model?

Last week, Mr. Zuckerberg made a promise. He said that Facebook planned to give users worldwide the same privacy controls required by a tough new data protection law which will go into effect in the European Union next month.

This morning, Representatives Gene Green, a Texas Democrat, and Jan Schakowsky, an Illinois Democrat, pressed him repeatedly on the issue. And Mr. Zuckerberg repeated his commitment to give all users those controls.

But European regulators and privacy advocates said over the last week that a number of Facebook’s current practices seemed violate the new law, called the General Data Protection Regulation.

For one thing, the European law requires privacy by design and default. European experts said that, in their view, that would require Facebook turn off a number of advertising and privacy settings which are currently set to sharing and instead ask user permission to turn them on.

Mr. Zuckerberg answered the legislators’ questions by saying that the company plans to put a tool “at the top of everyone’s app” where users will be able to make privacy and sharing choices. But the company may not offer affirmative consent — asking users to explicitly opt-in — in every country, depending on legal issues, he said.

Facebook currently allows users to download a copy of their personal data like their messages, likes and posts.

But Mr. Green wanted to know if Facebook would comply with the European law — and extend those protections to users worldwide — by providing individuals with the complete records and profiles the Facebook has compiled on them. That would include any data the company collected about its users by tracking them on other websites, and any data the company bought or acquired from third parties about users, and any categorizations or algorithmic scores Facebook created about users, regulators said.

Mr. Zuckerberg said he believed all of the data is available.

That isn’t true for the moment — at least for a couple of reporters who recently downloaded their Facebook data. But Facebook has about six weeks to figure out how to give users a copy of their algorithmic scores, web tracking data and other records the social network has compiled before the law goes into effect in Europe.

The uses of facial recognition technology

Facial recognition — a technology that scans your face and converts into a mathematical code that can be used to identify you in any other facial photo or video still — is a hot-button topic on both sides of the Atlantic. That is because it involves measuring and collecting data about people’s unique physical attributes.

Facebook uses the technology in a name-tagging feature that can automatically suggest the names of people in users’ photographs. But regulators in Europe have cracked down on Facebook for rolling it out without users’ explicit opt-in consent. And privacy groups in the United States filed a complaint last week to the Federal Trade Commission saying Facebook’s recent expanded use of the technology violated a settlement the company made with the agency in 2011.

When legislators asked him about the tough new European privacy rules today, Mr. Zuckerberg said he was generally concerned that some constraints could restrict companies based in the United States from innovating with technologies like facial recognition — allowing China to take the lead in developing the technology.

Even so, Mr. Zuckerberg said, technologies like face recognition should require permission from users.

For sensitive technologies, he said, “I do think you want a special consent.”

Is Facebook a monopoly?

Mr. Zuckerberg pushed back against suggestions that Facebook is essentially a monopoly, “without any true competitor,” as put by Representative Fred Upton, Republican of Michigan.

Reiterating a point made Tuesday before the Senate, Mr. Zuckerberg said that there is a “lot of competition” that Facebook managers “definitely feel in running the company.” He mentioned, but did not name, eight apps that users rely on to communicate.

He left out that, according to comScore, Facebook owns three of the top ten mobile apps used in the United States: Facebook, Facebook Messenger and Instagram.

Of the remaining seven, Google owns five (YouTube, Google Search, Google Maps, Google Play and Gmail). Only Snapchat and Pandora are independent.

Cambridge Analytica and Russia’s election interference

Lawmakers pressed Mr. Zuckerberg on why Facebook didn’t inform users about the harvesting of user data by Cambridge Analytica, a political consulting firm with ties to the Trump campaign, in 2015, when it was informed of the data abuse.

Mr. Pallone, the New Jersey Democrat, chided Mr. Zuckerberg for his company’s naïveté in not realizing how Facebook data could be utilized.

“For all the good it brings, Facebook can be a weapon for those, like Russia and Cambridge Analytica, that seek to harm us and hack our democracy,” he said.

Several lawmakers have pointed out to Mr. Zuckerberg, repeatedly, that the Obama campaign used a Facebook app to also scrape data from users and their friends in 2012.

But those lawmakers have failed to mention one very important distinction between the Obama campaign’s app and Cambridge Analytica’s app: The Obama app was actually on Facebook itself, and it was very clear about who and what the data would be used for.

The app used to scrape data for Cambridge Analytica was accessed through a personality questionnaire hosted on a site outside of Facebook, and it appeared to users to be for academic research, not for a political data company owned by a wealthy Republican donor and dedicated to reshaping the American electorate.

Asked whether Facebook will sue the researcher who created the app, Aleksandr Kogan, or Cambridge Analytica, Mr. Zuckerberg said “it’s something we’re looking into.”

Partisan bias and Facebook’s responsibility as a publisher

Representative Joe Barton, Republican of Texas, zeroed in on a line of questioning that his Texas counterpart in the Senate, Ted Cruz, also asked, pressing Mr. Zuckerberg on why Facebook has been allegedly censoring content from conservative organizations and Trump supporters such as Diamond and Silk.

Mr. Barton also asked Mr. Zuckerberg if he would agree that Facebook would work to ensure it is “a neutral public platform,” a question also asked by Mr. Cruz.

“I do agree that we should give people a voice,” Mr. Zuckerberg said.

Republican lawmakers returned several times to the issue of bias on Facebook.

Representative Steve Scalise of Louisiana questioned whether Facebook’s newsfeed algorithms tamp down conservative news in favor of more left-leaning outlets, to which Mr. Zuckerberg responded that “there is absolutely no directive” to have “any kind of bias in anything we do.”

The proliferation of so-called fake news has put Mr. Zuckerberg in an awkward spot, as the company promises to do a better job of weeding out propaganda and falsehoods but insists it cannot police free speech.

Out in the hall during a break in the hearing, Representative Billy Long, a Republican from Missouri, also expressed frustration about Facebook’s treatment of Diamond and Silk, two pro-Trump video personalities who have complained about being censored by the platform.

“It seems like they take down a lot more conservative content than they do liberal,” he said.

Mr. Long said that he needed more answers about the Diamond and Silk situation, and that he hoped Mr. Zuckerberg could ensure that the company’s thousands of moderators weren’t biased against conservatives.

“He better hope he does it, not us,” Mr. Long added. “Or Congress is going to get involved, and regulate a private industry.”

What kind of company is Facebook?

Mr. Walden of Oregon foreshadowed a line of questioning for Mr. Zuckerberg on how Facebook works and if the social media site has become a publisher or utility service that deserves regulation.

“What exactly is Facebook?” Mr. Walden asked, listing industries like advertising, publishing and even telecom, or “common carrier in the information age.”

The definitions matter. If Facebook is viewed as a telecommunications service that is more like a utility, it may be regulated by the Federal Communications Commission. If lawmakers define Facebook as a publisher, it could also fall under regulations at that agency.

“I consider us to be a technology company,” Mr. Zuckerberg answered. “The primary thing we do is have engineers that write code and build services for other people.”

Facebook, he said, is not a software company, despite creating software. It is not an aerospace company, even though it builds planes. It is not a financial institution, although it offers payment tools for users.

“Do we have a responsibility for the content people share on Facebook? I think the answer to that question is yes,” Mr. Zuckerberg said.

https://www.nytimes.com/2018/04/11/us/politics/zuckerberg-facebook-cambridge-analytica.html

What You Don’t Know About How Facebook Uses Your Data

Facebook’s ads manager console allows marketers to target ads to specific audiences — such as the nearly 22 million Facebook users “who prefer mid and high-value goods in Mexico.”

While a series of actions by European judges and regulators are trying to curb some of the powerful targeting mechanisms that Facebook employs, federal officials in the United States have done little to constrain them — to the consternation of American privacy advocates who say Facebook continues to test the boundaries of what is permissible.

Facebook requires outside sites that use its tracking technologies to clearly notify users, and it allows Facebook users to opt out of seeing ads based on their use of those apps and websites.

That has not stopped angry users from airing their grievances over Facebook’s practices.

In 2016, for example, a Missouri man with metastatic cancer sued Facebook. The suit, which sought class-action status, accused the tech giant of violating the man’s privacy by tracking his activities on cancer center websites outside the social network — and collecting details about his possible treatment options — without his permission.

Facebook persuaded a federal judge to dismiss the case. The company argued that tracking users for ad-targeting purposes was a standard business practice, and one that its users agreed to when signing up for the service. The Missouri man and two other plaintiffs have appealed the judge’s decision.

Facebook is quick to note that when users sign up for an account, they must agree to the company’s data policy. It plainly states that its data collection “includes information about the websites and apps you visit, your use of our services on those websites and apps, as well as information the developer or publisher of the app or website provides to you or us.”

But in Europe, some regulators contend that Facebook has not obtained users’ explicit and informed consent to track them on other sites and apps. Their general concern, they said, is that many of Facebook’s 2.1 billion users have no idea how much data Facebook could collect about them and how the company could use it. And there is a growing unease that tech giants are unfairly manipulating users.

Photo

The console also allows marketers to target ads to an audience with a specific financial status, such as the 4.7 million Facebook users in households “likely to have a net worth” of $750,000 to $1 million.

“Facebook provides a network where the users, while getting free services most of them consider useful, are subject to a multitude of nontransparent analyses, profiling, and other mostly obscure algorithmical processing,” said Johannes Caspar, the data protection commissioner for Hamburg, Germany.

In 2015, for instance, the Belgian Privacy Commission ordered Facebook to stop systematically using “long-term and uniquely identifying” codes to track nonusers without their “unequivocal and specific consent.” The agency subsequently sued Facebook. In February, a judge in Brussels ordered Facebook to stop tracking “each internet user on Belgian soil” on other websites.

Facebook has appealed the decision. In his comments in the House hearing on Wednesday, Mr. Zuckerberg said Facebook tracked nonusers for security purposes — to ensure they could not scrape public data about Facebook users.

But, in one presentation on the case, Belgian regulators wrote: “Tracking nonusers for security purposes is excessive.”

And on Friday, the Italian Competition Authority said it was investigating Facebook for exercising “undue influence” by requiring users to let the company automatically collect all kinds of data about them both on its platform and off.

“Every single action, every single relationship is carefully monitored,” said Giovanni Buttarelli, the European data protection supervisor, who oversees an independent European Union authority that advises on privacy-related laws and policies. “People are being treated like laboratory animals.”

Photo

Employees work in Facebook’s European headquarters in Dublin. Privacy advocates are calling on lawmakers and regulators to ask tougher questions about what the company does with information about its users.CreditAidan Crawley/Bloomberg

Regulators have won some victories. In 2012, Facebook agreed to stop using face recognition technology in the European Union after Mr. Caspar, the Hamburg data protection commissioner, accused it of violating German and European privacy regulations by collecting users’ biometric facial data without their explicit consent.

Outside the European Union, Facebook employs face recognition technology for a name-tagging feature that can automatically suggest names for the people in users’ photos. But civil liberties experts warn that face recognition technology could threaten the ability of Americans to remain anonymous online, on the street and at political protests.

Now a dozen consumer and privacy groups in the United States have accused Facebook of deceptively rolling out expanded uses of the technology without clearly explaining it to users or obtaining their explicit “opt-in” consent. On Friday, the groups filed a complaint with the Federal Trade Commission saying that the expansion violated a 2011 agreement prohibiting Facebook from deceptive privacy practices.

Facebook sent notices alerting users of its new face recognition uses and said it provides a page where they can turn the feature off.

Facebook has other powerful techniques with implications users may not fully understand.

One is a marketing service called “Lookalike Audiences,” which goes beyond the familiar Facebook programs allowing advertisers to target people by their ages or likes. The look-alike audience feature allows marketers to examine their existing customers or voters for certain propensities — like big spending — and have Facebook find other users with similar tendencies.

Murka, a social casino game developer, used the feature to target “high-value players” who were “most likely to make in-app purchases,” according to Facebook marketing material.

Some marketers worry that political campaigns or unscrupulous companies could potentially use the same technique to identify the characteristics of, for instance, people who make rash decisions and find a bigger pool of the same sort of Facebook users.

Facebook’s policies prohibit potentially predatory ad-targeting practices. Advertisers are able to target users using the look-alike service, but they do not receive personal data about those Facebook users.

Jeffrey Chester, executive director of the Center for Digital Democracy, a nonprofit group in Washington, however, warned that this look-alike marketing was a hidden, manipulative practice — on a par with subliminal advertising — and said it should be prohibited.

https://www.nytimes.com/2018/04/11/technology/facebook-privacy-hearings.html

 

Facebook’s Deception of Deactivated Accounts

Updated on March 26, 2017
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Glenn Stok 

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With more people wanting to leave Facebook now in 2018, Glenn’s timely article offers a complete explanation about deleting your account.

When Facebook went public in 2012, they didn’t have as many active users as they claimed prior to the IPO.

Almost half the accounts were duplicates or fake, as well as abandoned because users couldn’t delete them. I’ll show you how to successfully remove your Facebook account.

The numerous abandoned accounts on Facebook, as well as the multiple accounts many people have, incorrectly inflated the figures that Facebook claimed to have as active users.

When Facebook filed its initial public offering on Feb 1st, 2012 with the Securities and Exchange Commission, they had to admit in the S-1 IPO filing papers that only about half of the 800 million subscribers they were claiming to have at the time were actually active daily users.

A CNBC article by Reuters references the IPO filing, where it states that Facebook only had 483 million daily active users as of December 31st, 2011.

I was counted as one of the users. But I wasn’t using it! Here’s my story. You may relate to it with your own experience. And I’ll tell you what to do about it.

When I signed up for a Facebook account and created a profile, in a very short time I started getting friend requests from people I didn’t know. This became so annoying I decided to cancel my account and delete my Facebook profile.

I have been struggling with that ever since and it became obvious to me that Facebook does not allow anyone to cancel their account and remove their data. Facebook continues to show user accounts as active members even though they are long gone and even though they have tried to cancel their accounts.

Many Facebook users have multiple accounts. Many accounts are abandoned. This changes the figures that are claimed as active users.
Many Facebook users have multiple accounts. Many accounts are abandoned. This changes the figures that are claimed as active users. Source

My Experience Trying to Delete My Facebook Account

There are two things one can do, neither of which helps.

  1. You can deactivate your account. Which still allows people to find your profile and people can still send requests to be friends. Deactivated Facebook accounts don’t really mean anything.
  2. You can request to cancel and completely remove your account data. But this is very tricky and difficult to achieve.

Here is what my experience has been with both of these cases…

At first I could not find any option to delete my profile. All I found was a way to deactivate the account. So I did that. I use Google alerts to monitor my name on the Internet and months later Google sent me an alert indicating that I was still being listed on Facebook. So I tried logging back in, only to discover a bunch of friend requests that were accumulating. That proved that people were still seeing my profile.

Logging back in had reactivated my account, so I deactivated it again. But that only put me back in the useless stage I was in before, with Facebook including me with their “active” accounts.

I wonder if they are doing this just to make themselves look bigger than they are in order to get a bigger sales price should they ever go public. Google and Yahoo both tried to buy Facebook. But Facebook didn’t sell. Are they holding out for more? Are they buying time to build an even bigger false image, fooling anyone who may still want to buy them out?

I had posted notices to Facebook requested to remove all my profile data and waited and waited. I even tried logging back in to search for a link that might allow complete removal. But every time I logged in, I found more friend requests. I even found some requests from people I knew. That bothered me because these people should be emailing me direct if they want to be in touch. After all, they knew me. How silly!

I tried changing all my profile info so that it would not match up if anyone tried to find me on Facebook. I didn’t think it was fair to let people request to be my friend if I wasn’t looking at it and responding anyway. Those who really know me can just email me. They have my email address.

When I tried to change the data, a notice indicated that the changes would take effect after a few days. But after many months, the changes I made to my city, state and other info all remained the same as I first entered it.

Okay, I realize that the Facebook privacy policy does say that any information you enter remains. But this is stupid. What if someone moves? Or did they refuse to allow my changes because they knew I was doing it to try to negate my profile? I wonder.

After many more months, I spent hours on Internet searches for help from other people in blogs and news columns. I discovered that this is a widespread problem. I tried going into the Facebook help section and entered the query “I want to permanently delete my account”. Aha! I found the following in the Help Center on Facebook’s website.…

Detailed Instructions To Delete Facebook Account
Detailed Instructions To Delete Facebook Account | Source

Note that they admit, “we do save your profile information (friends, photos, interests, etc.), and your account will look just the way it did when you deactivated if you decide to reactivate it.”

And their privacy policy, the way I interpret it, clearly indicates that you have no privacy. So I call it a non-privacy policy.

Anyway, I followed through with the request and waited another couple of months. My profile never disappeared. After several months I decided to try deleting my profile again. I tried to log in and my passcode was no good. I clicked on the “forgot passcode” option to reset my passcode, and got back an indication that my email address was not associated with any account. Of course not, they deleted my account! BUT THEY LEFT THE DATA THERE!

Facebook’s Privacy Policy

This behavior of keeping user data happens to be clearly explained in their privacy policy. All I can say is “Buyer Beware!” Or in this case, “Facebook Member Beware!”

In my Internet searches, I have found blogs where people’s lives were destroyed because of comments or other information they themselves posted, or that others have posted about them, true or not, that may jeopardize their future and that Facebook will never ever remove.

Once these people grow up and try to get their first job employment, it all comes back to haunt them.

Facebook’s Privacy Settings

In June 2009 Facebook added a feature to allow blocking various data by specifying what you want to make available and to whom. You can specify to just let friends see your data, or friends of friends, or everyone. Problem is, that when they implemented this, the default is “everyone” and most users don’t even know the feature is available to be changed.

Mark Zuckerberg, himself, had his profile publicly visible since October 2009. You could not request to be a friend. That was blocked. But you could still see his friends list and make requests to each of them to be your friend. Major privacy issue if you ask me!

On December 9th, 2009 Facebook introduced some new privacy settings. Their non-privacy policy still remains as I still see my “deleted” profile is still online and can be found with a Google search.

The new settings allow one to specify what parts of your profile are visible and to whom. You can now hide your friend list. But third party apps exist that can circumvent that and trace your friends. Facebook’s privacy policy still says “We are not responsible for third party circumvention of any privacy settings or security measures on Facebook.”

Facebook continues to introduce changes from time to time. In July 2010 Facebook redesigned their event pages to look more like the profile pages in an effort to make all of the site have a common look and feel. But one thing that never changes is that they continue to have the desire to hold on to old accounts that are long gone.

Later in 2010 they simplified the privacy page by including the ability to set privacy on everything you share. Okay, that may help. But deleting everything has always remained a mystery.

Facebook’s Privacy Violations

Facebook settled eight counts of privacy violations with the Federal Trade Commission according to a story in the Washington Post on Nov 29th 2011. Facebook has avoided monetary fines by agreeing to change certain aspects of its privacy policy.

I don’t see much improvement with this since they are still taking advantage of people who don’t read their privacy policy page before signing up.

The changes they made to settle with the FTC simply specify that they will ask users for permission before changing the way they share user data. This doesn’t help those who have lost their privacy rights because they signed up prior to this settlement. It will only require notification of changes to the present policy. How silly is that?

Why It’s So Difficult to Delete Your Facebook Account

Previously they just had a link that deactivates your account as I spoke about above. They never gave any way to delete anything since their privacy policy says they own anything you upload and all data you enter.

Facebook finally created a way to delete accounts. But they made it extremely complicated so the request tends to fail. But found out how to succeeded at it.

I found a link hidden away deep in the pages of Facebook that lets one permanently delete an account. But it involves all sorts of rules to follow after you submit your request. If you mess up, your request is canceled.

You also have to follow strict rules throughout a 14 day period. This I am sure was done to increase your chances of messing up during that time.

Okay, I know you are wondering what I am talking about. So let me tell you the details of what I went through. I followed the steps…and it said, “Your account will be removed in 14 days.” This is tricky. They obviously don’t want to make it easy.

If they truly wanted to allow people to delete their accounts, they would have simply let the request be performed immediately and be done with it. But by requiring a 14-day waiting period it gives you the opportunity to undo your request, which keeps your account intact and active. There are several ways you can easily mess up in those 14 days…

  • If you leave your Facebook app on your iPhone and your phone is turned on during that 14-day period, your request to delete your account will be canceled.
  • If you accidentally click a “like” button on any website that uses Facebook to register the “like” then your request to delete your account will be canceled.
  • If you log into any other social networking site that uses Facebook Connect, your request to delete your account will be canceled.

How to Really Delete Your FaceBook Profile

Okay. So here is the way to finally get yourself out of Facebook. Have fun finding this info on their site. It’s not prominently displayed. But you don’t need to look. I explain it all here.

I was actually able to get a new password to log on to my deactivated account. That was mandatory in order to get back in to delete it with their new method. I tried it in March 2011 and now I can’t find my profile. Finally really gone!

So if you can still log in, go to the following URL and carefully follow the instructions on that page.

https://www.facebook.com/help/contact.php?show_form=delete_account

If you did it all as they request, your account will be in a deactivated state for 14 days and will be permanently deleted after that 14 day period. But ONLY if you abide by all the following…

  • Remove any reference to your Facebook account from any other website that uses Facebook Connect logins.
  • Remove any Facebook apps from your iPhone.
  • Refrain from clicking any “Like” buttons on any sites if they use Facebook.

Now wait 14 days. Three weeks just to be sure because if you check on it before its done, you will have canceled your delete request. The same is true if any other service you use attempts to access your Facebook account within that 14 day period. The deletion process will be canceled and your account will remain activate.

You see? It’s still not easy. So what do you think? Is it a deception that Facebook is creating?

Facebook Trends from 2011 thru 2014

In the three years from 2011 through 2014, Facebook lost 3 million teens, but gained over 12 million adults over the age of 55.

There may be many reasons why teens are leaving Facebook, such as the frustrations listed in the next section below this chart. But it’s also possible that they don’t want to be on the same social network where their parents are on.

2011
2014
2017
Teens (13-17)
13 million
9.8 million
Adults 55+
15.5 million
28 million
Total
28.5 million
37.8 million
1.86 billion
Source: 2011 and 2014 Data from iStrategyLabs | 2017 Data From Zephoria.com

Frustrations with Facebook

I thought it would be helpful to include some questions people are asking. It’s a clear representation of the anguish people are feeling. I also include my answers to these questions.

  • Why am I still getting friend requests even though I deactivated my Facebook account?
    • ANSWER: Deactivating your account does not remove your profile, which is now owned by Facebook according to their privacy policy which most people don’t read when they sign up..
  • What info remains for friends to see when facebook account is deactivated?
    • ANSWER: Your deactivated profile remains available for search. I myself still got friend requests even though I deactivated my account. So that means they are finding me when they search.
  • Once I have deactivated my account why is it still showing in Google search?
    • ANSWER: Facebook leaves your profile online. Deactivated Facebook accounts still show up in searches because Google bots still find your Facebook profile.
  • Why do I still get friend requests after deactivating my Facebook profile?
    • ANSWER: As long as your profile remains and search engines find it, then other people can find you and send a friend request.

https://turbofuture.com/internet/Obsolete-Facebook-Profile-Charade

Read Facebook CEO Mark Zuckerberg’s planned testimony before Congress

The House Committee on Energy and Commerce released Facebook CEO Mark Zuckerberg’s remarksthat he plans to make Wednesday. They follow below in entirety. 

HEARING BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON ENERGY AND COMMERCE

April 11, 2018

Testimony of Mark Zuckerberg Chairman and Chief Executive Officer, Facebook

I. INTRODUCTION

Chairman Walden, Ranking Member Pallone, and Members of the Committee,

We face a number of important issues around privacy, safety, and democracy, and you will rightfully have some hard questions for me to answer. Before I talk about the steps we’re taking to address them, I want to talk about how we got here.

Facebook is an idealistic and optimistic company. For most of our existence, we focused on all the good that connecting people can bring. As Facebook has grown, people everywhere have gotten a powerful new tool to stay connected to the people they love, make their voices heard, and build communities and businesses. Just recently, we’ve seen the #metoo movement and the March for Our Lives, organized, at least in part, on Facebook. After Hurricane Harvey, people raised more than $20 million for relief. And more than 70 million small businesses now use Facebook to grow and create jobs.

But it’s clear now that we didn’t do enough to prevent these tools from being used for harm as well. That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy. We didn’t take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here.

So now we have to go through every part of our relationship with people and make sure we’re taking a broad enough view of our responsibility. It’s not enough to just connect people, we have to make sure those connections are positive. It’s not enough to just give people a voice, we have to make sure people aren’t using it to hurt people or spread misinformation.

It’s not enough to give people control of their information, we have to make sure developers they’ve given it to are protecting it too. Across the board, we have a responsibility to not just build tools, but to make sure those tools are used for good.

It will take some time to work through all of the changes we need to make, but I’m committed to getting it right. That includes improving the way we protect people’s information and safeguard elections around the world. Here are a few key things we’re doing:

II. CAMBRIDGE ANALYTICA

Over the past few weeks, we’ve been working to understand exactly what happened with Cambridge Analytica and taking steps to make sure this doesn’t happen again. We took important actions to prevent this from happening again today four years ago, but we also made mistakes, there’s more to do, and we need to step up and do it.

    A. What Happened

In 2007, we launched the Facebook Platform with the vision that more apps should be social. Your calendar should be able to show your friends’ birthdays, your maps should show where your friends live, and your address book should show their pictures. To do this, we enabled people to log into apps and share who their friends were and some information about them.

In 2013, a Cambridge University researcher named Aleksandr Kogan created a personality quiz app. It was installed by around 300,000 people who agreed to share some of their Facebook information as well as some information from their friends whose privacy settings allowed it. Given the way our platform worked at the time this meant Kogan was able to access some information about tens of millions of their friends.

In 2014, to prevent abusive apps, we announced that we were changing the entire platform to dramatically limit the Facebook information apps could access. Most importantly, apps like Kogan’s could no longer ask for information about a person’s friends unless their friends had also authorized the app. We also required developers to get approval from Facebook before they could request any data beyond a user’s public profile, friend list, and email address. These actions would prevent any app like Kogan’s from being able to access as much Facebook data today.

In 2015, we learned from journalists at The Guardian that Kogan had shared data from his app with Cambridge Analytica. It is against our policies for developers to share data without people’s consent, so we immediately banned Kogan’s app from our platform, and demanded that Kogan and other entities he gave the data to, including Cambridge Analytica, formally certify that they had deleted all improperly acquired data — which they ultimately did.

Last month, we learned from The GuardianThe New York Times and Channel 4 that Cambridge Analytica may not have deleted the data as they had certified. We immediately banned them from using any of our services. Cambridge Analytica claims they have already deleted the data and has agreed to a forensic audit by a firm we hired to investigate this. We’re also working with the U.K. Information Commissioner’s Office, which has jurisdiction over Cambridge Analytica, as it completes its investigation into what happened.

    B. What We Are Doing

We have a responsibility to make sure what happened with Kogan and Cambridge Analytica doesn’t happen again. Here are some of the steps we’re taking:

Safeguarding our platform. We need to make sure that developers like Kogan who got access to a lot of information in the past can’t get access to as much information going forward.

    •  We made some big changes to the Facebook platform in 2014 to dramatically restrict the amount of data that developers can access and to proactively review the apps on our platform. This makes it so a developer today can’t do what Kogan did years ago.

    • But there’s more we can do here to limit the information developers can access and put more safeguards in place to prevent abuse.

        • We’re removing developers’ access to your data if you haven’t used their app in three months.

        • We’re reducing the data you give an app when you approve it to only your name, profile photo, and email address. That’s a lot less than apps can get on any other major app platform.

        • We’re requiring developers to not only get approval but also to sign a contract that imposes strict requirements in order to ask anyone for access to their posts or other private data.

        •  We’re restricting more APIs like groups and events. You should be able to sign into apps and share your public information easily, but anything that might also share other people’s information — like other posts in groups you’re in or other people going to events you’re going to — will be much more restricted.

       • Two weeks ago, we found out that a feature that lets you look someone up by their phone number and email was abused. This feature is useful in cases where people have the same name, but it was abused to link people’s public Facebook information to a phone number they already had. When we found out about the abuse, we shut this feature down.

Investigating other apps We’re in the process of investigating every app that had access to a large amount of information before we locked down our platform in 2014. If we detect suspicious activity, we’ll do a full forensic audit. And if we find that someone is improperly using data, we’ll ban them and tell everyone affected.

Building better controls Finally, we’re making it easier to understand which apps you’ve allowed to access your data. This week we started showing everyone a list of the apps you’ve used and an easy way to revoke their permissions to your data. You can already do this in your privacy settings, but we’re going to put it at the top of News Feed to make sure everyone sees it. And we also told everyone whose Facebook information may have been shared with Cambridge Analytica.

Beyond the steps we had already taken in 2014, I believe these are the next steps we must take to continue to secure our platform.

III. RUSSIAN ELECTION INTERFERENCE

Facebook’s mission is about giving people a voice and bringing people closer together. Those are deeply democratic values and we’re proud of them. I don’t want anyone to use our tools to undermine democracy. That’s not what we stand for. We were too slow to spot and respond to Russian interference, and we’re working hard to get better. Our sophistication in handling these threats is growing and improving quickly. We will continue working with the government to understand the full extent of Russian interference, and we will do our part not only to ensure the integrity of free and fair elections around the world, but also to give everyone a voice and to be a force for good in democracy everywhere.

    A. What Happened

Elections have always been especially sensitive times for our security team, and the 2016 U.S. presidential election was no exception.

Our security team has been aware of traditional Russian cyber threats — like hacking and malware — for years. Leading up to Election Day in November 2016, we detected and dealt with several threats with ties to Russia. This included activity by a group called APT28, that the U.S. government has publicly linked to Russian military intelligence services.

But while our primary focus was on traditional threats, we also saw some new behavior in the summer of 2016 when APT28-related accounts, under the banner of DC Leaks, created fake personas that were used to seed stolen information to journalists. We shut these accounts down for violating our policies.

After the election, we continued to investigate and learn more about these new threats. What we found was that bad actors had used coordinated networks of fake accounts to interfere in the election: promoting or attacking specific candidates and causes, creating distrust in political institutions, or simply spreading confusion. Some of these bad actors also used our ads tools.

We also learned about a disinformation campaign run by the Internet Research Agency (IRA) — a Russian agency that has repeatedly acted deceptively and tried to manipulate people in the US, Europe, and Russia. We found about 470 accounts and pages linked to the IRA, which generated around 80,000 Facebook posts over about a two-year period.

Our best estimate is that approximately 126 million people may have been served content from a Facebook Page associated with the IRA at some point during that period. On Instagram, where our data on reach is not as complete, we found about 120,000 pieces of content, and estimate that an additional 20 million people were likely served it.

Over the same period, the IRA also spent approximately $100,000 on more than 3,000 ads on 5 Facebook and Instagram, which were seen by an estimated 11 million people in the United States. We shut down these IRA accounts in August 2017.

    B. What We Are Doing

There’s no question that we should have spotted Russian interference earlier, and we’re working hard to make sure it doesn’t happen again. Our actions include:

    • Building new technology to prevent abuse. Since 2016, we have improved our techniques to prevent nation states from interfering in foreign elections, and we’ve built more advanced AI tools to remove fake accounts more generally. There have been a number of important elections since then where these new tools have been successfully deployed. For example:

        • In France, leading up to the presidential election in 2017, we found and took down 30,000 fake accounts.

        • In Germany, before the 2017 elections, we worked directly with the election commission to learn from them about the threats they saw and to share information.

        • In the U.S. Senate Alabama special election last year, we deployed new AI tools that proactively detected and removed fake accounts from Macedonia trying to spread misinformation.

        •  We have disabled thousands of accounts tied to organized, financially motivated fake news spammers. These investigations have been used to improve our automated systems that find fake accounts.

       • Last week, we took down more than 270 additional pages and accounts operated by the IRA and used to target people in Russia and Russian speakers in countries like Azerbaijan, Uzbekistan and Ukraine. Some of the pages we removed belong to Russian news organizations that we determined were controlled by the IRA.

    • Significantly increasing our investment in security. We now have about 15,000 people working on security and content review. We’ll have more than 20,000 by the end of this year.

        •  I’ve directed our teams to invest so much in security — on top of the other investments we’re making — that it will significantly impact our profitability going forward. But I want to be clear about what our priority is: protecting our community is more important than maximizing our profits.

    • Strengthening our advertising policies. We know some Members of Congress are exploring ways to increase transparency around political or issue advertising, and we’re happy to keep working with Congress on that. But we aren’t waiting for legislation to act.

        • From now on, every advertiser who wants to run political or issue ads will need to be authorized. To get authorized, advertisers will need to confirm their identity and location. Any advertiser who doesn’t pass will be prohibited from running political or issue ads. We will also label them and advertisers will have to show you who paid for them. We’re starting this in the U.S. and expanding to the rest of the world in the coming months.

        • For even greater political ads transparency, we have also built a tool that lets anyone see all of the ads a page is running. We’re testing this in Canada now and we’ll launch it globally this summer. We’re also creating a searchable archive of past political ads.

        • We will also require people who manage large pages to be verified as well. This will make it much harder for people to run pages using fake accounts, or to grow virally and spread misinformation or divisive content that way. o In order to require verification for all of these pages and advertisers, we will hire thousands of more people. We’re committed to getting this done in time for the critical months before the 2018 elections in the U.S. as well as elections in Mexico, Brazil, India, Pakistan and elsewhere in the next year.

        • These steps by themselves won’t stop all people trying to game the system. But they will make it a lot harder for anyone to do what the Russians did during the 2016 election and use fake accounts and pages to run ads. Election interference is a problem that’s bigger than any one platform, and that’s why we support the Honest Ads Act. This will help raise the bar for all political advertising online.

    • Sharing information. We’ve been working with other technology companies to share information about threats, and we’re also cooperating with the U.S. and foreign governments on election integrity.

At the same time, it’s also important not to lose sight of the more straightforward and larger ways Facebook plays a role in elections.

In 2016, people had billions of interactions and open discussions on Facebook that may never have happened offline. Candidates had direct channels to communicate with tens of millions of citizens. Campaigns spent tens of millions of dollars organizing and advertising online to get their messages out further. And we organized “get out the vote” efforts that helped more than 2 million people register to vote who might not have voted otherwise.

Security — including around elections — isn’t a problem you ever fully solve. Organizations like the IRA are sophisticated adversaries who are constantly evolving, but we’ll keep improving our techniques to stay ahead. And we’ll also keep building tools to help more people make their voices heard in the democratic process.

IV. CONCLUSION

My top priority has always been our social mission of connecting people, building community and bringing the world closer together. Advertisers and developers will never take priority over that as long as I’m running Facebook.

I started Facebook when I was in college. We’ve come a long way since then. We now serve more than 2 billion people around the world, and every day, people use our services to stay connected with the people that matter to them most. I believe deeply in what we’re doing. And when we address these challenges, I know we’ll look back and view helping people connect and giving more people a voice as a positive force in the world.

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The Pronk Pops Show 755, Part 1 of 2, Story 1: President Trump’s Tax Speech — Very Light On Specifics — Let Congress Fill in The Details — Formula For Failure — Tax Rate Cuts Are Not Fundamental Tax Reform — A Broad Based Consumption Tax Such as The FairTax or Fair Tax Less Not Even Mentioned — What Good Is Dreaming It If You don’t actually do it! — Videos — Story 2: Revised Second Estimate of Real GDP Growth in Second Quarter of 2017 Is 3 Percent — Videos

Posted on August 31, 2017. Filed under: Blogroll, Breaking News, Budgetary Policy, Communications, Congress, Constitutional Law, Corruption, Culture, Defense Spending, Donald J. Trump, Donald Trump, Economics, Education, Elections, Empires, Employment, Energy, Federal Government, Fiscal Policy, Free Trade, Freedom of Speech, Government, Government Dependency, Government Spending, History, House of Representatives, Human, Human Behavior, Independence, Labor Economics, Law, Life, Media, Monetary Policy, Natural Gas, Natural Gas, Oil, Oil, People, Philosophy, Photos, Politics, Polls, President Trump, Progressives, Radio, Raymond Thomas Pronk, Regulation, Resources, Rule of Law, Security, Senate, Tax Policy, Taxation, Taxes, Technology, Trade Policy, Unemployment, United States of America, Videos, War, Wealth, Weather, Welfare Spending, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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Image result for branco cartoons on trump tax reformImage result for fairtax

Image result for branco cartoons on trump tax reform

Image result for branco cartoons on trump tax reform

Image result for branco cartoons on trump tax reform

Image result for branco cartoons on trump tax reform

 

Image result for average quarter to quarter real gdp growth

Image result for average quarter to quarter real gdp growth

Image result for annual real gdp growth 1950-2017

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Image result for annual real gdp growth 1950-2017 u.S. economy

Image result for annual real gdp growth 1950-2017 u.S. economy

Story 1: President Trump’s Tax Speech — Very Light On Specifics — Let Congress Fill in The Details — Formula For Failure — Tax Rate Cuts Are Not Fundamental Tax Reform — A Broad Based Consumption Tax Such as The FairTax or Fair Tax Less Not Even Mentioned — What Good Is Dreaming It If You don’t actually do it! — Videos —

FULL. President Trump speech on tax reform in Springfield, Missouri. August 30, 2017.

Special Report with Bret Baier 8/30/17 – Special Report Fox News August 30, 2017 TRUMP TAX REFORM

Destroy Trump Media – President Trump Pitches Tax Reform Plan – Kellyanne Conway – Hannity

President Trump’s tax plan

Will US Markets Finally Get Tax Reform – 29 Aug 17 | Gazunda

Keiser Report: The bizarre decade (E1117)

Dan Mitchell on GOP Tax Reform Wrangling, Part I

Dan Mitchell on GOP Tax Reform Wrangling, Part II

Dan Mitchell Discussing the Fate of Tax Cuts and Tax Reform

How Trump’s tax plan impacts average Americans

Trump’s Tax Cut Plan Alienates His Base

Cohn Says White House Is Concerned About U.S. Wages

Gary Cohn on the Trump administration taking on tax loopholes

As White House Cracks Show, Are Rex Tillerson and Gary Cohn Headed Out? | Morning Joe | MSNBC

Gary Cohn’s take on tax reform

Limbaugh Airs Montage Of The ‘3 LIES’ Media Said After Trump’s Tax Speech

Trump’s tax cuts will be done before Thanksgiving: Grover Norquist

Donald Trump Is To Give Speech On Tax Reform But He Has No Tax Reform Plan | The 11th Hour | MSNBC

Freedom from the IRS! – FairTax Explained in Detail

Mark Levin: Donald Trump gave a good speech on tax reform (August 30 2017)

Why U.S. Tax Reform Isn’t Likely in 2017

Milton Friedman – Why Tax Reform Is Impossible

Honda – “Impossible Dream” Power of Dreams Advert Full

 

Trump’s Tax Reform Plan Targets Middle-Class Tax Complexity

Policy director at Competitive Enterprise Institute

President Trump visited Missouri to talk about tax reform, stressing simplicity and middle-class tax relief and “plans to bring back Main Street by reducing the crushing tax burden on our companies and on our workers.”

Noting the elimination of “dozens of loopholes,” special interest carve-outs, and the reduction of brackets and rates that Congress achieved three decades ago, Trump said, “the foundation of our job creation agenda is to fundamentally reform our tax code for the first time in more than 30 years. I want to work with Congress, Republicans and Democrats alike, on a plan that is pro-growth, pro-jobs, pro-worker — and pro-American.”

We’re about to re-enter Obamacare repeal-style complexity and venom, but it’s important, I think, for the public to see the tax reform debate as something other than a campaign to benefit business. The U.S. does have comparatively high corporate tax rates. And the Econ 101 lesson on tax incidence shows that consumers pay much of the corporate tax, not the company.

It’s probable some Democrats would like to reform the tax code, especially come 2016, but the zero-tolerance of Trump, such as that seen at the Commonwealth Club when Sen. Diane Feinstein was barely favorable toward him, prevails.

But things can turn on a dime, as the response, likely bipartisan, to Hurricane Harvey may further show. And separately the controversial debt limit needs to be addressed no matter what (hopefully with parallel cuts in regulatory costs), and that debate will influence the trajectory of tax reform.

My broader point here though is is that taxation is just the beginning of the story when it comes to the complexity of regulatory compliance. The economy marinates in compliance burdens to service noble ends, but sometimes serve regulators instead. Trump characterized the Internal Revenue Service’s unfairness to the typical taxpayer like this:

The tax code is now a massive source of complexity and frustration for tens of millions of Americans.

In 1935, the basic 1040 form that most people file had two simple pages of instructions. Today, that basic form has one hundred pages of instructions, and it’s pretty complex stuff. The tax code is so complicated that more than 90 percent of Americans need professional help to do their own taxes.

This enormous complexity is very unfair. It disadvantages ordinary Americans who don’t have an army of accountants while benefiting deep-pocketed special interests. And most importantly, this is wrong.

There’s solid backup for what Trump’s talking about in terms of pubic burdens, even if some are disinclined  to reckon with it, or if their allegiances require professing public disdain for corporations (one of the great democratizing forces in human history, but that’s another story).

The Government Accountability Office (GAO) agrees, I think, that Trump’s example of the IRS is a good one. In the course of a project I have of compiling examples of government proclamationsthat are not laws from Congress, nor even formal regulations from agencies, but instead “memoranda” and “guidance,” the IRS emerged as a leading “offender.”

A September 2016 GAO report called  “Regulatory Guidance Processes: Treasury and OMB Need to Reevaluate Long-standing Exemptions of Tax Regulations and Guidance,” looked at the Internal Revenue Service’s hierarchy of law, regulations, guidance, and explanatory material with respect to communicating interpretation of tax laws to the public.

It’s an eye-opener.

A pyramid diagram presented by GAO was topped by the Internal Revenue Code, as passed by Congress. Beneath that, in widening stages, one finds “Treasury Regulations,” “Internal Revenue Bulletins,” (IRB), “Written Determinations,” and “Other IRS Publications and Information.” The IRS regards the bulletins as generally authoritative, while determinations tend to apply to individual taxpayers.

That’s a lot of public guidance, difficult to absorb.

As the GAO explains:

Treasury and IRS are among the largest generators of federal agency regulations and they issue thousands of other forms of taxpayer guidance. IRS publishes tax regulations and other guidance in the weekly IRB. Each annual volume of the IRB contains about 2,000 pages of regulations and other guidance documents.

From 2013 to 2015, each annual Internal Revenue Bulletin edition contained some 300 guidance documents; back in 2002-2008, about 500.

When one sees such document proliferation from the IRS, an impartial observer might surmise the time for tax reform and simplification has arrived.

Likewise, when regulatory guidance multiplies that applies to various sectors—like finance, Internet, health care—one might similarly conclude the time has come for Congress to enact regulatory liberalization. Trump mentioned cutting the overall federal regulatory burden in the Missouri speech, too.

We knew it all along, but paying taxes also requires paying a lot of attention to regulations. In more ways than one, tax reform and regulatory reform go hand in hand.

https://www.forbes.com/sites/waynecrews/2017/08/30/trumps-tax-reform-plan-targets-middle-class-tax-complexity/#31fda3736ef8

Ann Coulter goes off on Trump over taxes, saying he delivered his ‘worst, most tone-deaf speech’

Conservative author Ann Coulter rebuked President Donald Trump over his speech on Wednesday in which he rolled out the broad outline of his tax reform plan.

In a slew of tweets on Wednesday, the firebrand conservative pundit said the president’s focus on simplifying the tax code and lowering business taxes to 15% was missing an opportunity to prioritize some of his more incendiary, but unique, policy objectives, including building a southern border wall and deporting immigrants living in the US without permission.

This isn’t a “once in a lifetime” shot at tax cuts! EVERY GOP cuts taxes! This is “once in a lifetime” shot to save US: Wall & deportations!

Bush cut taxes! Did it create millions of jobs? Nope. The rich pocketed their tax cut & sent jobs abroad, hired guest workers. F– them.

It’s so obvious Trump’s only getting polite applause for tax cuts. Want to get the crowd hollering, @realDonaldTrump? Talk about THE WALL!

It’s like Night of the Living Dead watching our beloved @realDonaldTrump go to DC & start babbling the same old GOP nonsense on tax cuts.

Tax cuts are a 2d term issue. 1st term: BUILD THE WALL, End DACA, Deport Illegals, No Refugees, No Muslims, Immigrn Moratorium. SAVE USA!

Cutting taxes doesn’t do a damn thing for wages if you allow businesses to keep bringing in cheap foreign labor!

To create jobs for AMERICANS, no more cheap foreign workers, CUT REGULATIONS & cut corporate taxes. (NOT income taxes.)

Coulter particularly singled out the similarities between Trump’s plan and a hypothetical plan that other Republicans like former Florida Gov. Jeb Bush would’ve put forward.

This speech could have been given by Jeb! — except even he wouldn’t have talked about the govt helping yuppie women with child care costs.

Oh stop pretending this is about letting “families” keep more of their money. HALF OF AMERICANS DON’T PAY TAXES! This is for Wall Street.

Indeed, beyond the prominent former Wall Street figures playing key roles in overhauling the tax code, Trump’s administration has absorbed some financial figures from Bush’s policy world.

Notably, Bush’s former senior policy director Justin Muzinich joined the Treasury Department in March to work closely with Treasury Secretary Steve Mnuchin on “major policy initiatives” and on tax reform.

Over the past several months, Coulter has increasingly criticized Trump and mocked him on social media and in interviews, saying that he has not fulfilled his anti-immigration campaign promises.

“The millions of people who haven’t voted for 30 years and came out to vote for Trump, thinking, ‘Finally, here’s somebody who cares about us’ — Nope!” Coulter told The Daily Beast after former chief strategist Steve Bannon left the White House earlier this month. “Republicans, Democrats — doesn’t matter. Jeb exclamation point, Donald Trump, Hillary Clinton — doesn’t matter. Goldman Sachs is running the country.”

http://www.businessinsider.com/ann-coulter-trump-taxes-speech-2017-8

 

Who Pays Income Taxes?

The charts below illustrate the share of taxes paid by income percentiles for Tax Year 2014, the most recent set of data available from the IRS. NTUF has broken down the federal share of income taxes by gross income to show how much each bracket contributes yearly.

For more information:

 

https://e.infogr.am/38b876d9-6c59-4a84-8b02-1ed223f6a454?src=embed

https://www.ntu.org/foundation/page/who-pays-income-taxes

Trump Hits The Road To Promote Tax Cuts (Details To Come)

President Trump participates in a tax overhaul kickoff event at the Loren Cook Company in Springfield, Mo., on Wednesday.

Jim Watson/AFP/Getty Images

Updated at 5:25 p.m. ET

President Trump called for a major rewrite of the U.S. tax code during a visit to Springfield, Mo., on Wednesday afternoon. The speech came a day after Trump’s trip to Harvey-hit Texas and is the first in what is expected to be a series of traveling sales pitches on taxes from the president.

But the White House is not ready to spell out what the rewrite will look like or what kind of price tag it will carry. Trump spoke in broad terms about creating a tax system that favors middle-class Americans and keeps business in the U.S.

“First and foremost our tax system should benefit loyal, hardworking Americans and their families. That is why tax reform must dramatically simplify the tax code, eliminate special-interest loopholes,” he said.

Trump called on Congress to join him and “unite in the name of common sense and the name of common good” to create jobs and improve America’s “competitive advantage.”

“I am fully committed to working with Congress to get this job done, and I don’t want to be disappointed by Congress,” he said.

Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn have been meeting regularly with Republican congressional leaders to discuss tax policy. Thus far, though, they’ve committed only to a vague statement of principles that calls for lower tax rates on both individuals and businesses. Cohn said it will be up to lawmakers to fill in the details.

“We’ve got a great, I would say, skeleton,” Cohn told reporters earlier this month. “We need the Ways and Means Committee to put some muscle and skin on the skeleton and drive tax reform forward. And it’s our objective to do that between now and the end of the year.”

With Republicans in control of the House, Senate and the presidency, supporters have described this as a once-in-a-generation opportunity to overhaul the tax code in accordance with GOP principles. But after Trump’s insistence on swift, ultimately unsuccessful bids to repeal the Affordable Care Act, some observers are skeptical that Trump has the patience or discipline to see a tax overhaul through to completion.

Mnuchin insists tax cuts are now Trump’s No. 1 priority.

“He’s going to go on the road,” Mnuchin said. “The president is 100 percent supportive of us passing legislation this year.”

The White House has been promising such a sales campaign for weeks, only to see much of August consumed with controversy over the president’s Charlottesville, Va., remarks and his intraparty carping with fellow Republicans, including Senate Majority Leader Mitch McConnell, R-Ky.

Mnuchin conceded that rewriting the tax code is a taller order than he initially imagined.

“Earlier in the year I said I thought we’d get it done by August, and I was wrong,” the Treasury secretary said. “I am now going to say that I’m very hopeful, and I think we can get this done by the end of the year, but we will continue to revisit it.”

“The president’s leadership on this is critical,” said a senior White House official who briefed reporters on the Springfield trip. “Everybody involved understands that and believes that. And he is ready to really take this conversation where it belongs and that’s the heartland of America.”

The official spoke on condition of anonymity.

“The president now feels that it’s the right time to begin engaging directly with the American people on tax reform,” he said.

The administration argues the current tax code is too complicated and rates are too high to encourage investment in the U.S.

“We are not competitive with the rest of the world on the business tax and on the personal income tax,” Cohn said.

Neither the White House nor congressional leaders have spelled out how much lower tax rates should go, nor have they specified how the government would make up the lost revenue. They’re counting on faster economic growth to help close the gap. They’ve also promised to eliminate unspecified tax “loopholes,” which Trump called out multiple times in his speech on Wednesday.

Back in April, the White House proposed lowering the corporate tax rate from 35 percent to 15 percent while reducing the top individual tax rate from 39.6 percent to 35 percent. That’s broadly similar to a proposal Trump put forward during the presidential campaign. The nonpartisan Tax Policy Center said at the time 78 percent of the tax savings in Trump’s campaign plan would go to people on the top 20 percent of the income ladder. (Nearly a quarter would go to the top one-tenth of 1 percent.)

The campaign plan was also forecast to reduce government revenue by more than $6 trillion over a decade — a gap that would be difficult to erase through growth and loophole closings.

The White House has said it wants to preserve deductions for charitable contributions, retirement savings and mortgage interest.

One popular tax break that could be on the chopping block is the deduction for state and local taxes. That’s one of the biggest loopholes in the tax code. Eliminating it would boost federal revenues by an estimated $1.3 trillion over a decade. The tax break is particularly popular with residents in the Northeast and West Coast, typically blue states with relatively high tax rates.

House Speaker Paul Ryan, R-Wis., favored a so-called border adjustment tax on imports as another way to raise revenue and offset the cost of income tax cuts. But lawmakers ultimately scrapped that idea after consultation with the administration.

Senate Republicans plan to use a procedural tactic to prevent Democrats from blocking the tax overhaul with a filibuster. Under Senate rules, though, any measure passed with that tactic must not add to the federal deficit for more than 10 years.

This presents a choice for Republicans: Go with a more modest tax cut that can be offset by growth and closing loopholes, or opt for a more ambitious cut but allow it to sunset after a decade.

For all the challenges, GOP lawmakers are under political pressure to pass something they can brand as “tax reform.” Otherwise, they’ll have to face voters in 2018 with little to show for two years of single-party rule.

http://www.npr.org/2017/08/30/547114024/trump-hits-the-road-to-promote-tax-cuts-details-to-come

 

Trump’s Fill-in-the-Blanks Tax Reform Plan

The president is leaving the details to Republicans in Congress. Only they haven’t figured them out yet, either.

Alex Brandon / AP

notable

On Wednesday, President Trump traveled to Missouri to expand on the need for tax reform, to lay the groundwork for a major legislative push in Congress this fall. But more than anything else, what Trump’s speech revealed was that despite months of behind-the-scenes negotiations, Republicans aren’t much closer to enacting the most significant overhaul of the tax code in 30 years than they were back in April.

Trump was pitching a plan that doesn’t exist and demanding votes for a bill that hasn’t been written. If anything, the address the president delivered was even less detailed than the skimpy blueprint the White House issued in the spring. The most specific item Trump mentioned—a 15 percent corporate tax rate, down from the current 35 percent—is something that Republican tax-writers on Capitol Hill believe is impossible to achieve under the parameters with which they must work. He talked in broad terms about simplifying the code so that it’s easier for people to file their taxes, removing unspecified special interest loopholes, and encouraging businesses to bring back profits they’ve parked overseas—all policies that have been central to GOP proposals for years and offer little indication of the particular direction the party plans to go.

This was a bully pulpit speech. Having laid down his principles, Trump is once again leaving the dirty work to Congress, a strategy that even he seemed to acknowledge was as risky as it is politically necessary. “I don’t want to be disappointed by Congress, do you understand me? Do you understand?” he warned at one point, a none-too-subtle reference to his recent hectoring over the GOP’s failure to deliver on health care.

To the delight of Republican leaders, the one lawmaker Trump singled out for pressure was not one of their own; for the first time in weeks, the president picked on a Democrat, Missouri Senator Claire McCaskill, who is up for reelection in a state he won easily in November. If McCaskill doesn’t vote for tax reform—whatever it turns out to be—“you have to vote her out of office,” Trump demanded of the crowd.

Top Republicans were evidently pleased with the speech, or at least with the fact that the president stuck to the message they were told beforehand he would deliver. Within minutes after it ended, statements (undoubtedly prewritten) flowed in with glowing reviews. “President Trump is taking the case for tax reform straight to Main Street,” House Speaker Paul Ryan said. “We are united in our determination to get this done.” Representative Kevin Brady, the chairman of the Ways and Means Committee, said his remarks were “excellent.” Even members of Trump’s Cabinet that have no role in tax reform, like Health and Human Services Secretary Tom Price, or in domestic politics whatsoever, like Secretary of State Rex Tillerson, chimed in with praise.Yet while Trump talked at length about the need for tax reform, he said little about how Republicans would get it done. And that’s because they still don’t know themselves. GOP leaders haven’t made several crucial decisions. Will the legislation be a revenue-neutral tax reform that fully offsets the reduction in rates by eliminating costly—and popular—exemptions and deductions? Or will it be a more straightforward tax cut, that would likely have to expire within a decade to comply with Senate rules? How low will they try to push down the corporate rate? About all they’ve determined is that 15 percent is too low, but will it be closer to 20 percent or 25 percent? And on, and on.
The Ways and Means Committee is currently writing the tax bill, but the only timeline they’ve set is to get it done by the end of 2018. The longer they take to write it, however, the less realistic that deadline becomes. And as I explainedearlier this month, Republicans must first pass a budget before they can even get to tax reform, which, to this point, has been no easy task.These unresolved details have also tripped up Trump’s messaging toward Democrats. Does he want their support, or are Republicans planning to do it alone as they tried to do on health care? In his speech, the president started out by saying he wanted to work with both parties to enact tax reform. Later on, however, he attacked Democrats as “obstructionists” and called out McCaskill. By the end, he was back where he began, saying tax reform was an issue on which lawmakers should put aside partisanship.Democrats say there’s been no outreach from the administration on taxes, and they’ve noted that Republicans are, for now, planning to use the same budget reconciliation process on tax reform that they used in trying to repeal the Affordable Care Act. That would allow them to skirt a Democratic filibuster and pass tax reform with a simple majority of 51 votes in the Senate. Unlike Obamacare repeal, some Democrats have expressed a willingness to work with the administration on taxes, so long as the GOP plan is not skewed to benefit the wealthy. With so few details, they were unimpressed with Trump’s speech in Missouri. “Stepping to the podium to declare that we need tax reform does not signal leadership on this issue; rather, doing so without offering any proposals on how to achieve it is an abdication,” said Representative Steny Hoyer of Maryland, the second-ranking House Democrat. “If the president is serious about tax reform, he should focus on the how, not the why.”Trump is not a detail-oriented president. That much is clear. But while he may be able to stick to broad strokes in rally-the-public speeches and leave the rest to Congress, his party will eventually have to make the tough decisions about who’s going to pay more, who gets to pay less, and by how much. Until that happens, tax reform isn’t going anywhere.

https://www.theatlantic.com/politics/archive/2017/08/trumps-fill-in-the-blanks-tax-reform-plan/538509/

Trump’s populist message on taxes comes with heavy dose of corporate rate cuts

Trump’s speech didn’t mask the fact that lawmakers still face a wide range of knotty questions when they return to Washington next week.

08/30/2017 01:59 PM EDT

Updated 08/30/2017 04:08 PM EDT

Trump maintained that a new tax system was crucial to ushering in a new prosperity in the U.S., in a speech that White House officials acknowledged beforehand would be light on policy details.

“Instead of exporting our jobs, we will export our goods. Our jobs will both stay here in America and come back to America. We’ll have it both ways,” Trump said at a Springfield, Mo., manufacturer, adding that millions of people would move from welfare to work and “will love earning a big fat beautiful paycheck.”

“We believe that ordinary Americans know better than Washington how to spend their own money and we want to help them take home as much of their money as possible and then spend it,” he said. “So they’ll keep their money, they’ll spend their money, they’ll buy our product.”

But Trump’s speech also underscored just how big a challenge he and a Republican Congress will face in pulling off a true overhaul of the tax code. The president only briefly touched on policy details, saying that businesses would “ideally” be taxed at a top rate of 15 percent and that the tax code would contain incentives for child care — a top priority of his daughter, Ivanka Trump.

“I am fully committed to working with Congress to get this job done,” Trump said. “And I don’t want to be disappointed by Congress. Do you understand me?”

Trump’s speech was aimed at showing that Republicans have the message down on tax reform, but lawmakers have yet to confront the monumental task of turning the rhetoric into reality.

Senior White House officials this week repeatedly billed the president’s speech as an address focused on why tax reform needs to happen, not how it will materialize. That’s the sort of big-picture cover on taxes that Trump didn’t offer congressional leaders in their doomed efforts to repeal and replace Obamacare.

But while congressional leaders undoubtedly welcome the president making the broad case for a tax revamp, Trump’s speech doesn’t mask the fact that lawmakers still face a wide range of knotty questions when they return to Washington next week.

Republicans still have to figure out how to pass a budget this fall, a process that will play a big role in deciding how generous a tax plan they can write. They also have to decide whether tax changes should be permanent or temporary, or a mix of the two, and whether their plan should be a net tax cut that would add to the deficit.

And that’s before they will feel the full brunt of a massive lobbying push on what would be the first major tax overhaul in more than 30 years. Already, GOP lawmakers are starting to hear from industries that might be the losers in a tax overhaul, such as big corporations that don’t want a minimum tax on foreign earnings and a retirement sector wary of potential changes to savings plans.

The hurdles won’t be limited to policy, either, after a summer that saw both sides of Pennsylvania Avenue grow increasingly wary of the other as the GOP’s health care efforts imploded. Republicans on Capitol Hill steamed privately in July that Trump’s obsession with White House infighting and the Russia controversy was a major factor in the death of the repeal effort. They’re crossing their fingers that he won’t be so easily distracted on tax reform.

 

Fact-checking President Trump’s speech on his tax plan

 August 31 at 3:00 AM
The Fact Checker’s round-up of five fishy claims made by President Trump in his speech on Aug. 30. (Meg Kelly/The Washington Post)

President Trump on Wednesday delivered an address on his “principles” for a tax plan in Springfield, Mo., though he provided few details. He also shifted from extolling how well the economy is doing to language that suggested the United States was suffering terribly. As usual, some of the president’s  facts and figures were a bit fishy, so here’s a roundup of 10 of his claims.

“In the last 10 years, our economy has grown at only around 2 percent a year.”

This is misleading. By going back 10 years, Trump includes the worst recession since the Great Depression, which brings down the 10-year average. This chart shows that that quarterly average since the recession was well above 2 percent, even hitting 5 percent in the third quarter of 2014. The GDP growth rate for the United States averaged 3.22 percent from 1947 to 2017.


Source: Bureau of Economic Analysis via Federal Reserve Bank of St. Louis

“We just announced that we hit 3 percent in GDP. Just came out. And on a yearly basis, as you know, the last administration, during an eight-year period, never hit 3 percent.

Trump plays some sleight-of-hand with the numbers. He first cites an annualized quarterly figure — 3 percent GDP growth in the second quarter of 2017 — and then compares it to what appears to be calendar-year figures for former president Barack Obama.

As the chart above shows, the economy grew better than 3 percent in eight quarters during Obama’s presidency, most recently in the third quarter of 2016. (Technically, this is known as “annualized quarterly change” or SAAR — seasonally adjusted at annual rate.) Trump gets his terminology wrong, using the phrase “yearly basis,” which could mean from the third quarter of 2015 to the the third quarter of 2016, in which case Obama easily exceeded 3 percent numerous times. On an annual basis, Obama’s best year was 2015, when annual growth was 2.6 percent.

“If we achieve sustained 3 percent growth, that means 12 million new jobs and $10 trillion of new economic activity over the next decade. That’s some numbers.”

With this statement, Trump downgrades promises he made during the 2016 campaign — he said he would achieve 4 percent GDP growth and 25 million jobs over 10 years.

“In 1935, the basic 1040 form that most people file had two simple pages of instruction. Today, that basic form has 100 pages of instructions, and it’s pretty complex stuff.”

Trump is correct that in 1935, the basic 1040 individual income tax form had two pages of instructions, but this claim needs historical context.

There are many reasons the instructions were so simple back then — including that just about 4 percent of the population paid the federal individual income tax. In 1935, the individual income tax largely was a tax on the wealthy. In fact, the top rate in 1935 was 63 percent — and President Franklin D. Roosevelt raised it to 75 percent later that year.

This changed with World War II. “Driven by staggering revenue needs, lawmakers in both parties agreed to raise taxes on everyone: rich, poor, and — especially — the middle class,” wrote Joseph Thorndike, director of the Tax History Project.

“The tax code is so complicated that more than 90 percent of Americans need professional help to do their own taxes.”

This is misleading. The 90 percent figure he is referring to includes people using tax software, such as Turbo Tax, which helps people file their taxes on their own. According to the National Taxpayer Advocate’s 2016 report, 54 percent of individual taxpayers pay preparers and about 40 percent of individual taxpayers use software that costs about $50 or more.

Yet later during the speech, he made it sound as if the “professional help” is only referring to hired accountants: “That is why tax reform must dramatically simplify the tax code … and allow the vast majority of our citizens to file their taxes on a single, simple page without having to hire an accountant.”

“Our last major tax rewrite was 31 years ago. It eliminated dozens of loopholes and special interest tax breaks, reduced the number of tax brackets from 15 to two, and lowered tax rates for both individuals and businesses. At the time it was really something special … In 1986, Ronald Reagan led the world by cutting our corporate tax rate to 34 percent. That was below the average rate for developed countries at the time. Everybody thought that was a monumental thing that happened. But then, under this pro-America system, our economy boomed. It just went beautifully right through the roof. The middle class thrived, and median family income increased.”

Trump heaped praise on Reagan’s Tax Reform Act of 1986, which simplified tax brackets and eliminated tax shelters; it also lowered the top individual tax rate to 28 percent but raised the capital gains rate to the same level, giving them parity. But this is a rather strange flip-flop because Trump always has been a fierce critic of the bill, blaming it repeatedly for the savings and loan crisis, a decline in real estate investing and the 1990-1991 recession.

“This tax act was just an absolute catastrophe for the country, for the real estate industry, and I really hope that something can be done,” Trump told Congress in 1991. In a television interview with Joan Rivers, he said: “What caused the savings and loan crisis was the 1986 tax law change. It was a disaster. It took all of the incentives away from investors.”

Trump also frequently attacked one of the Democratic sponsors of the bill, Sen. Bill Bradley (D-N.J.), such as in a Wall Street Journal commentary in 1999. “Mr. Bradley’s last big idea to be enacted into legislation was also one of the worst ideas in recent history,” Trump wrote, saying Bradley was responsible for the elimination of a tax shelter for real estate investments. (He said the good parts of the bill could be attributed to Reagan.)

“We lost the jobs. We lost the taxes. They closed the buildings. They closed the plants and factories. We got nothing but unemployment. We got nothing.”

As Trump frequently notes, the unemployment rate in July was 4.3 percent — the lowest level in 16 years. So this overwrought language seems misplaced.

“We have gone from a tax rate that is lower than our economic competitors, to one that is more than 60 percent higher. … In other words, foreign companies have more than a 60 percent tax advantage over American companies.”

The United States certainly has one of the highest statutory corporate tax rates in the world, currently pegged as high as 39.1 percent when including state taxes. (The federal rate is 35 percent.) Trump says it is 60 percent higher than “our economic competitors,” comparing 39.1 percent to the average rate for the other members of the Organization for Economic Co-operation and Development, which is 25.5 percent when not weighted for GDP. (It is 29.6 percent when weighted for GDP.)

But the official rate does not necessarily tell the whole story. What also matters is the actual tax a company pays, after deductions and tax benefits. That is known as the effective tax rate, which can be calculated differently depending on the survey. According to the Congressional Research Service, the effective rate for the United States is 27.1 percent, compared to an effective GDP-weighted average of 27.7 percent for the OECD. “Although the U.S. statutory tax rate is higher, the average effective rate is about the same, and the marginal rate on new investment is only slightly higher,” the CRS says.

The Congressional Budget Office, when it examined the issue, said the U.S. effective tax rate was 18.6 percent, which it said was among the highest of the biggest economic powers, the Group of 20.

Trump, naturally, used the numbers that suggest the difference is really huge.

“Today, we are still taxing our businesses at 35 percent, and it’s way more than that. And think of it, in some cases, way above 40 percent when you include state and local taxes in various states. The United States is now behind France, behind Germany, behind Canada, Ireland, Japan, Mexico, South Korea and many other nations.”

As we noted, the statutory federal corporate tax rate in the United States is 35 percent, making the United States the highest among G-20 countries, including the countries Trump listed. But the effective corporate tax rate in the United States in 2012 was 18.6 percent, making it the fourth highest among G-20 countries, behind Argentina, Japan and Britain, according to the CBO.

“Because of our high tax rate and horrible, outdated, bureaucratic rules, large companies that do business overseas will often park their profits offshore to avoid paying a high United States tax if the money is brought back home. So they leave the money over there. The amount of money we’re talking about is anywhere from $3 trillion to $5 trillion.”

There are no official, current numbers on the profits held overseas by U.S. companies, just estimates. The White House would not respond to a query on where Trump is getting these numbers, but his high-end figure appears to be an exaggeration. The Internal Revenue Service in 2012 said the figure was $2.3 trillion, and the Joint Committee on Taxation estimated that it had risen to $2.6 trillion in 2015. There are other estimates as well, but none top $2.8 trillion, according to PolitiFact.

https://www.washingtonpost.com/news/fact-checker/wp/2017/08/31/fact-checking-president-trumps-speech-on-his-tax-plan/?utm_term=.8ea0dc0c4d24

973 oil crisis

From Wikipedia, the free encyclopedia

The 1973 oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo. The embargo was targeted at nations perceived as supporting Israel during the Yom Kippur War.[1] The initial nations targeted were CanadaJapan, the Netherlands, the United Kingdom and the United States with the embargo also later extended to PortugalRhodesia and South Africa. By the end of the embargo in March 1974,[2] the price of oil had risen from US$3 per barrel to nearly $12 globally; US prices were significantly higher. The embargo caused an oil crisis, or “shock”, with many short- and long-term effects on global politics and the global economy.[3] It was later called the “first oil shock”, followed by the 1979 oil crisis, termed the “second oil shock.”

Summary

The embargo was a response to American involvement in the 1973 Yom Kippur War. Six days after Egypt and Syria launched a surprise military campaign against Israel, the US supplied Israel with arms. In response to this, the Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of OPEC plus Egypt and Syria) announced an oil embargo against CanadaJapan, the Netherlands, the United Kingdom and the United States.[4]

The crisis had a major impact on international relations and created a rift within NATO. Some European nations and Japan sought to disassociate themselves from United States foreign policy in the Middle East to avoid being targeted by the boycott. Arab oil producers linked any future policy changes to peace between the belligerents. To address this, the Nixon Administration began multilateral negotiations with the combatants. They arranged for Israel to pull back from the Sinai Peninsula and the Golan Heights. By January 18, 1974, US Secretary of State Henry Kissinger had negotiated an Israeli troop withdrawal from parts of the Sinai Peninsula. The promise of a negotiated settlement between Israel and Syria was enough to convince Arab oil producers to lift the embargo in March 1974.[2]

Graph of oil prices from 1861–2015, showing a sharp increase in 1973 and again during the 1979 energy crisis. The orange line is adjusted for inflation.

Independently, OAPEC members agreed to use their leverage over the world price-setting mechanism for oil to stabilize their incomes by raising world oil prices after the recent failure of negotiations with Western oil companies.

The embargo occurred at a time of rising petroleum consumption by industrialized countries and coincided with a sharp increase in oil imports by the world’s largest oil consumer, the United States. In the aftermath, targeted countries initiated a wide variety of policies to contain their future dependency.

The 1973 “oil price shock”, with the accompanying 1973–74 stock market crash, was regarded as the first discrete event since the Great Depression to have a persistent effect on the US economy.[5]

The embargo’s success demonstrated Saudi Arabia‘s diplomatic and economic power. It was the largest oil exporter and a politically and religiously conservative kingdom.

Background

US oil production decline

In 1970, US oil production started to decline, exacerbating the embargo’s impact.[6] Following this, Nixon named James E. Akins as US Ambassador to Saudi Arabia to audit US production capacity. The confidential results were alarming—no spare capacity was available and production could only decrease.

USA oil production and imports. As shown, the import spike starts from the US production peak, and the embargo has little effect.

The oil embargo had little effect on overall supply, according to Akins.[7]

OPEC

The Organization of the Petroleum Exporting Countries (OPEC), which then comprised 12 countries, including Iran, seven Arab countries (IraqKuwaitLibyaQatarSaudi Arabia and the United Arab Emirates), plus VenezuelaIndonesiaNigeria and Ecuador, was formed at a Baghdad conference on September 14, 1960. OPEC was organized to resist pressure by the “Seven Sisters” (seven large, Western oil companies) to reduce oil prices.

At first, OPEC operated as an informal bargaining unit for resource-rich third-world countries. OPEC confined its activities to gaining a larger share of the profits generated by oil companies and greater control over member production levels. In the early 1970s it began to exert economic and political strength; the oil companies and importing nations suddenly faced a unified exporter bloc.

End of the Bretton Woods currency accord

On August 15, 1971, the United States unilaterally pulled out of the Bretton Woods Accord. The US abandoned the Gold Exchange Standard whereby the value of the dollar had been pegged to the price of gold and all other currencies were pegged to the dollar, whose value was left to “float” (rise and fall according to market demand).[8] Shortly thereafter, Britain followed, floating the pound sterling. The other industrialized nations followed suit with their respective currencies. Anticipating that currency values would fluctuate unpredictably for a time, the industrialized nations increased their reserves (by expanding their money supplies) in amounts far greater than before. The result was a depreciation of the dollar and other industrialized nations’ currencies. Because oil was priced in dollars, oil producers’ real income decreased. In September 1971, OPEC issued a joint communiqué stating that, from then on, they would price oil in terms of a fixed amount of gold.[9]

This contributed to the “Oil Shock”. After 1971, OPEC was slow to readjust prices to reflect this depreciation. From 1947 to 1967, the dollar price of oil had risen by less than two percent per year. Until the oil shock, the price had also remained fairly stable versus other currencies and commodities. OPEC ministers had not developed institutional mechanisms to update prices in sync with changing market conditions, so their real incomes lagged. The substantial price increases of 1973–1974 largely returned their prices and corresponding incomes to Bretton Woods levels in terms of commodities such as gold.[10]

Yom Kippur War

On October 6, 1973, Syria and Egypt, with support from other Arab nations, launched a surprise attack on Israel, on Yom Kippur.[11] This renewal of hostilities in the Arab–Israeli conflict released the underlying economic pressure on oil prices. At the time, Iran was the world’s second-largest oil exporter and a close US ally. Weeks later, the Shah of Iran said in an interview: “Of course [the price of oil] is going to rise… Certainly! And how!… You’ve [Western nations] increased the price of the wheat you sell us by 300 percent, and the same for sugar and cement… You buy our crude oil and sell it back to us, refined as petrochemicals, at a hundred times the price you’ve paid us… It’s only fair that, from now on, you should pay more for oil. Let’s say ten times more.”[12]

On October 12, 1973, US president Richard Nixon authorized Operation Nickel Grass, a strategic airlift to deliver weapons and supplies to Israel, after the Soviet Union began sending arms to Syria and Egypt.

Embargo

In response to American aid to Israel, on October 16, 1973, OPEC raised the posted price of oil by 70%, to $5.11 a barrel.[13] The following day, oil ministers agreed to the embargo, a cut in production by five percent from September’s output and to continue to cut production in five percent monthly increments until their economic and political objectives were met.[14] On October 19, Nixon requested Congress to appropriate $2.2 billion in emergency aid to Israel, including $1.5 billion in outright grants. George Lenczowski notes, “Military supplies did not exhaust Nixon’s eagerness to prevent Israel’s collapse…This [$2.2 billion] decision triggered a collective OPEC response.”[15] Libya immediately announced it would embargo oil shipments to the United States.[16] Saudi Arabia and the other Arab oil-producing states joined the embargo on October 20, 1973.[17] At their Kuwait meeting, OAPEC proclaimed the embargo that curbed exports to various countries and blocked all oil deliveries to the US as a “principal hostile country”.[15]

Price increases were also imposed greatly. Since short-term oil demand is inelastic, immediate demand falls little when the price rises. Thus, market prices rose from $3 per barrel to $12 per barrel to reduce demand to the new, lower level of supply.[18] The world financial system, which was already under pressure from the Bretton Woods breakdown, was set on a path of recessions and inflation that persisted until the early 1980s, with oil prices remaining elevated until 1986.

The price of oil during the embargo. The graph is based on the nominal, not real, price of oil, and so overstates prices at the end. However, the effects of the Arab Oil Embargo are clear—it effectively doubled the real price of crude oil at the refinery level, and caused massive shortages in the U.S.

Over the long term, the oil embargo changed the nature of policy in the West towards increased exploration, alternative energy research, energy conservation and more restrictive monetary policy to better fight inflation.[19]

Chronology

  • January 1973—The 1973–74 stock market crash commences as a result of inflation pressure and the collapsing monetary system.
  • August 23, 1973—In preparation for the Yom Kippur War, Saudi king Faisal and Egyptian president Anwar Sadat meet in Riyadh and secretly negotiate an accord whereby the Arabs will use the “oil weapon” as part of the military conflict.[20]
  • October 6—Egypt and Syria attack Israeli-occupied lands in the Sinai Peninsula and Golan Heights on Yom Kippur, starting the 1973 Arab–Israeli War.
  • Night of October 8—Israel goes on full nuclear alert. Kissinger is notified on the morning of October 9. United States begins to resupply Israel.
  • October 8–10—OPEC negotiations with major oil companies to revise the 1971 Tehran price agreement fail.
  • October 12—The United States initiates Operation Nickel Grass, a strategic airlift to provide replacement weapons and supplies to Israel. This followed similar Soviet moves to supply the Arab side.
  • October 16—Saudi Arabia, Iran, IraqAbu DhabiKuwait and Qatar raise posted prices by 17% to $3.65 per barrel and announce production cuts.[21]
  • October 17—OAPEC oil ministers agree to use oil to influence the West’s support of Israel. They recommended an embargo against non-complying states and mandated export cuts.
  • October 19—Nixon requests Congress to appropriate $2.2 billion in emergency aid to Israel, which triggers a collective Arab response.[15] Libya immediately proclaims an embargo on oil exports to the US.[16] Saudi Arabia and other Arab oil-producing states follow the next day.[16]
  • October 26—The Yom Kippur War ends.
  • November 5—Arab producers announce a 25% output cut. A further 5% cut is threatened.
  • November 23—The Arab embargo is extended to PortugalRhodesia and South Africa.
  • November 27—Nixon signs the Emergency Petroleum Allocation Act authorizing price, production, allocation and marketing controls.
  • December 9—Arab oil ministers agree to another five percent production cut for non-friendly countries in January 1974.
  • December 25—Arab oil ministers cancel the January output cut. Saudi oil minister Ahmed Zaki Yamani promises a ten percent OPEC production rise.
  • January 7–9, 1974—OPEC decides to freeze prices until April 1.
  • January 18—Israel signs a withdrawal agreement to pull back to the east side of the Suez Canal.
  • February 11—Kissinger unveils the Project Independence plan for US energy independence.
  • February 12–14—Progress in Arab-Israeli disengagement triggers discussion of oil strategy among the heads of state of Algeria, Egypt, Syria and Saudi Arabia.
  • March 5—Israel withdraws the last of its troops from the west side of the Suez Canal.
  • March 17—Arab oil ministers, with the exception of Libya, announce the end of the US embargo.
  • May 31—Diplomacy by Kissinger produces a disengagement agreement on the Syrian front.
  • December 1974—The 1973–74 stock market crash ends.

Effects

Immediate economic effects

A man at a service station reads about the gasoline rationing system in an afternoon newspaper; a sign in the background states that no gasoline is available. 1974

The effects of the embargo were immediate. OPEC forced oil companies to increase payments drastically. The price of oil quadrupled by 1974 to nearly US$12 per barrel (75 US$/m3).[3]

This price increase had a dramatic effect on oil exporting nations, for the countries of the Middle East who had long been dominated by the industrial powers seen to have taken control of a vital commodity. The oil-exporting nations began to accumulate vast wealth.

Some of the income was dispensed in the form of aid to other underdeveloped nations whose economies had been caught between higher oil prices and lower prices for their own export commodities, amid shrinking Western demand. Much went for arms purchases that exacerbated political tensions, particularly in the Middle East. Saudi Arabia spent over 100 billion dollars in the ensuing decades for helping spread its fundamentalist interpretation of Islam, known as Wahhabism, throughout the world, via religious charities such al-Haramain Foundation, which often also distributed funds to violent Sunni extremist groups such as Al-Qaeda and the Taliban.[22]

Control of oil became known as the “oil weapon.” It came in the form of an embargo and production cutbacks from the Arab states. The weapon was aimed at the United States, Great Britain, Canada, Japan and the Netherlands. These target governments perceived that the intent was to push them towards a more pro-Arab position.[23] Production was eventually cut by 25%.[24] However, the affected countries did not undertake dramatic policy changes.[25]

In the United States, scholars argue that there already existed a negotiated settlement based on equality between both parties prior to 1973. The possibility that the Middle East could become another superpower confrontation with the USSR was of more concern to the US than oil. Further, interest groups and government agencies more worried about energy were no match for Kissinger’s dominance.[26] In the US production, distribution and price disruptions “have been held responsible for recessions, periods of excessive inflation, reduced productivity, and lower economic growth.”[27]

The embargo had a negative influence on the US economy by causing immediate demands to address the threats to U.S. energy security.[28] On an international level, the price increases changed competitive positions in many industries, such as automobiles. Macroeconomic problems consisted of both inflationary and deflationary impacts.[29] The embargo left oil companies searching for new ways to increase oil supplies, even in rugged terrain such as the Arctic. Finding oil and developing new fields usually required five to ten years before significant production.[30]

Gas stealers beware, 1974

OPEC-member states raised the prospect of nationalization of oil company holdings. Most notably, Saudi Arabia nationalized Aramco in 1980 under the leadership of Saudi oil minister Ahmed Zaki Yamani. As other OPEC nations followed suit, the cartel’s income soared. Saudi Arabia undertook a series of ambitious five-year development plans. The biggest began in 1980, funded at $250 billion. Other cartel members also undertook major economic development programs.

US retail price gas prices rose from a national average of 38.5 cents in May 1973 to 55.1 cents in June 1974. State governments requested citizens not to put up Christmas lightsOregon banned Christmas and commercial lighting altogether.[18] Politicians called for a national gas rationing program.[31] Nixon requested gasoline stations to voluntarily not sell gasoline on Saturday nights or Sundays; 90% of owners complied, which produced long queues.[18]

The embargo was not uniform across Europe. Of the nine members of the European Economic Community (EEC), the Netherlands faced a complete embargo, the UK and France received almost uninterrupted supplies (having refused to allow America to use their airfields and embargoed arms and supplies to both the Arabs and the Israelis), while the other six faced partial cutbacks. The UK had traditionally been an ally of Israel, and Harold Wilson‘s government supported the Israelis during the Six-Day War. His successor, Ted Heath, reversed this policy in 1970, calling for Israel to withdraw to its pre-1967 borders.

The EEC was unable to achieve a common policy during the first month of the War. It issued a statement on November 6, after the embargo and price rises had begun. It was widely viewed as pro-Arab supporting the Franco-British line on the war. OPEC duly lifted its embargo from all EEC members. The price rises had a much greater impact in Europe than the embargo.

Despite being relatively unaffected by the embargo, the UK nonetheless faced an oil crisis of its own—a series of strikes by coal miners and railroad workers over the winter of 1973–74 became a major factor in the change of government.[32] Heath asked the British to heat only one room in their houses over the winter.[33] The UK, Germany, Italy, Switzerland and Norway banned flying, driving and boating on Sundays. Sweden rationed gasoline and heating oil. The Netherlands imposed prison sentences for those who used more than their ration of electricity.[18]

A few months later, the crisis eased. The embargo was lifted in March 1974 after negotiations at the Washington Oil Summit, but the effects lingered throughout the 1970s. The dollar price of energy increased again the following year, amid the weakening competitive position of the dollar in world markets.

Price controls and rationing

United States

Price controls exacerbated the crisis in the US. The system limited the price of “old oil” (that which had already been discovered) while allowing newly discovered oil to be sold at a higher price to encourage investment. Predictably, old oil was withdrawn from the market, creating greater scarcity. The rule also discouraged development of alternative energies.[31] The rule had been intended to promote oil exploration.[34] Scarcity was addressed by rationing (as in many countries). Motorists faced long lines at gas stations beginning in summer 1972 and increasing by summer 1973.[31]

In 1973, Nixon named William E. Simon as the first Administrator of the Federal Energy Office, a short-term organization created to coordinate the response to the embargo.[35] Simon allocated states the same amount of domestic oil for 1974 that each had consumed in 1972, which worked for states whose populations were not increasing.[36] In other states, lines at gasoline stations were common. The American Automobile Association reported that in the last week of February 1974, 20% of American gasoline stations had no fuel.[36]

Oregon gasoline dealers displayed signs explaining the flag policy in the winter of 1973–74

Odd–even rationing allowed vehicles with license plates having an odd number as the last digit (or a vanity license plate) to buy gas only on odd-numbered days of the month, while others could buy only on even-numbered days.[37]

In some states, a three-color flag system was used to denote gasoline availability at service stations—green for unrationed availability, yellow for restricted/rationed sales and red for out of stock.[38]

Gasoline ration stamps printed by the Bureau of Engraving and Printing in 1974, but not used.

Rationing led to violent incidents, when truck drivers chose to strike for two days in December 1973 over the limited supplies Simon had allocated for their industry. In Pennsylvania and Ohio, non-striking truckers were shot at by striking truckers, and in Arkansas, trucks of non-strikers were attacked with bombs.[36]

America had controlled the price of natural gas since the 1950s. With the inflation of the 1970s, the price was too low to encourage the search for new reserves.[39] America’s natural gas reserves dwindled from 237 trillion in 1974 to 203 trillion[clarification needed] in 1978. The price controls were not changed despite president Gerald Ford‘s repeated requests to Congress.[39]

Conservation and reduction in demand

United States

To help reduce consumption, in 1974 a national maximum speed limit of 55 mph (about 88 km/h) was imposed through the Emergency Highway Energy Conservation Act. Development of the Strategic Petroleum Reserve began in 1975, and in 1977 the cabinet-level Department of Energy was created, followed by the National Energy Act of 1978.[citation needed] On November 28, 1995, Bill Clinton signed the National Highway Designation Act, ending the federal 55 mph (89 km/h) speed limit, allowing states to restore their prior maximum speed limit.

Year-round daylight saving time was implemented from January 6, 1974, to February 23, 1975. The move spawned significant criticism because it forced many children to travel to school before sunrise. The prior rules were restored in 1976.[citation needed]

Gas stations abandoned during the crisis were sometimes used for other purposes. This station at Potlatch, Washington, was turned into a revivalhall.

The crisis prompted a call to conserve energy, most notably a campaign by the Advertising Council using the tagline “Don’t Be Fuelish”.[40] Many newspapers carried advertisements featuring cut-outs that could be attached to light switches, reading “Last Out, Lights Out: Don’t Be Fuelish.”[citation needed]

By 1980, domestic luxury cars with a 130-inch (3.3 m) wheelbase and gross weights averaging 4,500 pounds (2,041 kg) were no longer made. The automakers had begun phasing out the traditional front engine/rear wheel drivelayout in compact cars in favor of lighter front engine/front wheel drive designs. A higher percentage of cars offered more efficient 4-cylinder engines. Domestic auto makers also began offering more fuel efficient diesel powered passenger cars as well.

Though not regulated by the new legislation, auto racing groups voluntarily began conserving. In 1974, the 24 Hours of Daytona was cancelled and NASCAR reduced all race distances by 10%; the 12 Hours of Sebring race was cancelled.[citation needed]

In 1976, Congress created the Weatherization Assistance Program to help low-income homeowners and renters reduce their demand for heating and cooling through better insulation.[citation needed]

Alternative energy sources

A woman uses wood in a fireplacefor heat. A newspaper headline before her tells of the community’s lack of heating oil.

The energy crisis led to greater interest in renewable energynuclear power and domestic fossil fuels.[41] According to Peter Grossman, American energy policies since the crisis have been dominated by crisis-mentality thinking, promoting expensive quick fixes and single-shot solutions that ignore market and technology realities. He wrote that instead of providing stable rules that support basic research while leaving plenty of scope for entrepreneurshipand innovation, congresses and presidents have repeatedly backed policies which promise solutions that are politically expedient, but whose prospects are doubtful.[42]

The Brazilian government implemented its “Proálcool” (pro-alcohol) project in 1975 that mixed ethanol with gasoline for automotive fuel.[43]

Israel was one of the few countries unaffected by the embargo, since it could extract sufficient oil from the Sinai. But to supplement Israel‘s over-taxed power grid, Harry Zvi Tabor, the father of Israel’s solar industry, developed the prototype for a solar water heater now used in over 90% of Israeli homes.[44]

Macroeconomy

The crisis was a major factor in shifting Japan’s economy away from oil-intensive industries. Investment shifted to industries such as electronics. Japanese auto makers also benefited from the crisis. Increased fuel costs allowed their small, fuel-efficient models to gain market share from the “gas-guzzling” American competition. This triggered a drop in American auto sales that lasted into the 1980s.

Western central banks decided to sharply cut interest rates to encourage growth, deciding that inflation was a secondary concern. Although this was the orthodox macroeconomic prescription at the time, the resulting stagflationsurprised economists and central bankers. The policy is now considered by some to have deepened and lengthened the adverse effects of the embargo. Recent research claims that in the period after 1985 the economy became more resilient to energy price increases.[45]

The price shock created large current account deficits in oil-importing economies. A petrodollar recycling mechanism was created, through which OPEC surplus funds were channeled through the capital markets to the West to finance the current account deficits. The functioning of this mechanism required the relaxation of capital controls in oil-importing economies. It marked the beginning of an exponential growth of Western capital markets.[46]

Many in the public remain suspicious of oil companies, believing they profiteered, or even colluded with OPEC.[citation needed] In 1974, seven of the fifteen top Fortune 500 companies were oil companies, falling to four in 2014.[47]

International relations

United States

America’s Cold War policies suffered a major blow from the embargo. They had focused on China and the Soviet Union, but the latent challenge to US hegemony coming from the third world became evident.

In 2004, declassified documents revealed that the U.S. was so distraught by the rise in oil prices and being challenged by under-developed countries that they briefly considered military action to forcibly seize Middle Eastern oilfields in late 1973. Although no explicit plan was mentioned, a conversation between U.S. Secretary of Defense James Schlesinger and British Ambassador to the United States Lord Cromer revealed Schlesinger had told him that “it was no longer obvious to him that the U.S. could not use force.” British Prime Minister Edward Heath was so worried by this prospect that he ordered a British intelligence estimate of U.S. intentions, which concluded America “might consider it could not tolerate a situation in which the U.S. and its allies were at the mercy of a small group of unreasonable countries,” and that they would prefer a rapid operation to seize oilfields in Saudi Arabia and Kuwait, and possibly Abu Dhabi in military action was decided upon. Although the Soviet response to such an act would likely not involve force, intelligence warned “the American occupation would need to last 10 years as the West developed alternative energy sources, and would result in the ‘total alienation’ of the Arabs and much of the rest of the Third World.”[48]

NATO

Western Europe began switching from pro-Israel to more pro-Arab policies.[49][50][51] This change strained the Western alliance. The US, which imported only 12% of its oil from the Middle East (compared with 80% for the Europeans and over 90% for Japan), remained staunchly committed to Israel. The percentage of U.S. oil which comes from the nations bordering the Persian Gulf remained steady over the decades, with a figure of a little more than 10% in 2008.[52]

With the embargo in place, many developed countries altered their policies regarding the Arab-Israeli conflict. These included the UK, which refused to allow the United States to use British bases and Cyprus to airlift resupplies to Israel along with the rest of the members of the European Community.[53]

Canada shifted towards a more pro-Arab position after displeasure was expressed towards Canada’s mostly neutral position. “On the other hand, after the embargo the Canadian government moved quickly indeed toward the Arab position, despite its low dependence on Middle Eastern oil”.[54]

Japan

Although lacking historical connections to the Middle East, Japan was the country most dependent on Arab oil. 71% of its imported oil came from the Middle East in 1970. On November 7, 1973, the Saudi and Kuwaiti governments declared Japan a “nonfriendly” country to encourage it to change its noninvolvement policy. It received a 5% production cut in December, causing a panic. On November 22, Japan issued a statement “asserting that Israel should withdraw from all of the 1967 territories, advocating Palestinian self-determination, and threatening to reconsider its policy toward Israel if Israel refused to accept these preconditions”.[54] By December 25, Japan was considered an Arab-friendly state.

Nonaligned nations

The oil embargo was announced roughly one month after a right-wing military coup in Chile led by General Augusto Pinochet toppled socialist president Salvador Allende on September 11, 1973. The response of the Nixon administration was to propose doubling arms sales. As a consequence, an opposing Latin American bloc was organized and financed in part by Venezuelan oil revenues, which quadrupled between 1970 and 1975.

A year after the start of the embargo, the UN’s nonaligned bloc passed a resolution demanding the creation of a “New International Economic Order” under which nations within the global South would receive a greater share of benefits derived from the exploitation of southern resources and greater control over their self-development.[55]

Arab states

Prior to the embargo, the geo-political competition between the Soviet Union and the United States, in combination with low oil prices that hindered the necessity and feasibility of alternative energy sources, presented the Arab States with financial security, moderate economic growth, and disproportionate international bargaining power.[56]

The oil shock disrupted the status quo relationships between Arab countries and the US and USSR. At the time, Egypt, Syria and Iraq were allied with the USSR, while Saudi Arabia, Turkey and Iran (plus Israel) aligned with the US. Vacillations in alignment often resulted in greater support from the respective superpowers.

When Anwar Sadat became president of Egypt in 1970, he dismissed Soviet specialists in Egypt and reoriented towards the US. Concerns over economic domination from increased Soviet oil production turned into fears of military aggression after the 1979 Soviet invasion of Afghanistan, turning the Persian Gulf states towards the US for security guarantees against Soviet military action.

The USSR’s invasion of Afghanistan was only one sign of insecurity in the region, also marked by increased American weapons sales, technology, and outright military presence. Saudi Arabia and Iran became increasingly dependent on American security assurances to manage both external and internal threats, including increased military competition between them over increased oil revenues. Both states were competing for preeminence in the Persian Gulf and using increased revenues to fund expanded militaries. By 1979, Saudi arms purchases from the US exceeded five times Israel’s.[57]

In the wake of the 1979 Iranian Revolution the Saudis were forced to deal with the prospect of internal destabilization via the radicalism of Islamism, a reality which would quickly be revealed in the Grand Mosque seizure in Mecca by Wahhabi extremists during November 1979, and a Shiite Muslim revolt in the oil rich Al-Hasa region of Saudi Arabia in December of the same year, which was known as the 1979 Qatif Uprising.[58] Saudi Arabia is a near absolute monarchy, an Arabic speaking country, and has a Sunni Muslim majority, while Persian speaking Iran since 1979 is an Islamist theocracy with a Shiite Muslim majority, which explains the current hostility between Saudi Arabia and Iran.[59]

In November 2010, Wikileaks leaked confidential diplomatic cables pertaining to the United States and its allies which revealed that the late Saudi King Abdullah urged the United States to attack Iran in order to destroy its potential nuclear weapons program, describing Iran as “a snake whose head should be cut off without any procrastination”.[60]

Automobile industry

The oil crisis sent a signal to the auto industry globally, which changed many aspects of production and usage for decades to come.

Western Europe

After World War II, most West European countries taxed motor fuel to limit imports, and as a result most cars made in Europe were smaller and more economical than their American counterparts. By the late 1960s increasing incomes supported rising car sizes.

The oil crisis pushed West European car buyers away from larger, less economical cars.[61] The most notable result of this transition was the rise in popularity of compact hatchbacks. The only notable small hatchbacks built in Western Europe before the oil crisis were the Peugeot 104Renault 5 and Fiat 127. By the end of the decade, the market had expanded with the introduction of the Ford FiestaOpel Kadett (sold as the Vauxhall Astra in Great Britain), Chrysler Sunbeam and Citroën Visa.

Buyers looking for larger cars were increasingly drawn to medium-sized hatchbacks. Virtually unknown in Europe in 1973, by the end of the decade they were gradually replacing saloons as the mainstay of this sector. Between 1973 and 1980, medium-sized hatchbacks were launched across Europe: the Chrysler/Simca HorizonFiat Ritmo (Strada in the UK), Ford Escort MK3Renault 14Volvo 340 / 360Opel Kadett, and Volkswagen Golf.

These cars were considerably more economical than the traditional saloons they were replacing, and attracted buyers who traditionally bought larger vehicles. Some 15 years after the oil crisis, hatchbacks dominated most European small and medium car markets, and had gained a substantial share of the large family car market.

United States

Before the energy crisis, large, heavy, and powerful cars were popular. By 1971, the standard engine in a Chevrolet Caprice was a 400-cubic inch (6.5 liter) V8. The wheelbase of this car was 121.5 inches (3,090 mm), and Motor Trend‘s 1972 road test of the similar Chevrolet Impala achieved no more than 15 highway miles per gallon. In the fifteen years prior to the 1973 oil crisis, gasoline prices in the U.S. had lagged well behind inflation.[62]

The crisis reduced the demand for large cars.[39] Japanese imports, primarily the Toyota Corona, the Toyota Corolla, the Datsun B210, the Datsun 510, the Honda Civic, the Mitsubishi Galant (a captive import from Chrysler sold as the Dodge Colt), the Subaru DL, and later the Honda Accord all had four cylinder engines that were more fuel efficient than the typical American V8 and six cylinder engines. Japanese imports became mass-market leaders with unibody construction and front-wheel drive, which became de facto standards.

From Europe, the Volkswagen Beetle, the Volkswagen Fastback, the Renault 8, the Renault LeCar, and the Fiat Brava were successful. Detroit responded with the Ford Pinto, the Ford Maverick, the Chevrolet Vega, the Chevrolet Nova, the Plymouth Valiant and the Plymouth Volaré. American Motors sold its homegrown GremlinHornet and Pacer models.

Some buyers lamented the small size of the first Japanese compacts, and both Toyota and Nissan (then known as Datsun) introduced larger cars such as the Toyota Corona Mark II, the Toyota Cressida, the Mazda 616 and Datsun 810, which added passenger space and amenities such as air conditioning, power steering, AM-FM radios, and even power windows and central locking without increasing the price of the vehicle. A decade after the 1973 oil crisis, Honda, Toyota and Nissan, affected by the 1981 voluntary export restraints, opened US assembly plants and established their luxury divisions (Acura, Lexus and Infiniti, respectively) to distinguish themselves from their mass-market brands.

Compact trucks were introduced, such as the Toyota Hilux and the Datsun Truck, followed by the Mazda Truck (sold as the Ford Courier), and the Isuzu-built Chevrolet LUV. Mitsubishi rebranded its Forte as the Dodge D-50 a few years after the oil crisis. Mazda, Mitsubishi and Isuzu had joint partnerships with Ford, Chrysler, and GM, respectively. Later the American makers introduced their domestic replacements (Ford Ranger, Dodge Dakota and the Chevrolet S10/GMC S-15), ending their captive import policy.

An increase in imported cars into North America forced General Motors, Ford and Chrysler to introduce smaller and fuel-efficient models for domestic sales. The Dodge Omni / Plymouth Horizon from Chrysler, the Ford Fiesta and the Chevrolet Chevette all had four-cylinder engines and room for at least four passengers by the late 1970s. By 1985, the average American vehicle moved 17.4 miles per gallon, compared to 13.5 in 1970. The improvements stayed even though the price of a barrel of oil remained constant at $12 from 1974 to 1979.[39] Sales of large sedans for most makes (except Chrysler products) recovered within two model years of the 1973 crisis. The Cadillac DeVille and FleetwoodBuick ElectraOldsmobile 98Lincoln ContinentalMercury Marquis, and various other luxury oriented sedans became popular again in the mid-1970s. The only full-size models that did not recover were lower price models such as the Chevrolet Bel Air and Ford Galaxie 500. Slightly smaller models such as the Oldsmobile CutlassChevrolet Monte CarloFord Thunderbird and various others sold well.

Economical imports succeeded alongside heavy, expensive vehicles. In 1976 Toyota sold 346,920 cars (average weight around 2,100 lbs), while Cadillac sold 309,139 cars (average weight around 5,000 lbs).

Federal safety standards, such as NHTSA Federal Motor Vehicle Safety Standard 215 (pertaining to safety bumpers), and compacts like the 1974 Mustang I were a prelude to the DOT “downsize” revision of vehicle categories.[63] By 1977, GM’s full-sized cars reflected the crisis.[64] By 1979, virtually all “full-size” American cars had shrunk, featuring smaller engines and smaller outside dimensions. Chrysler ended production of their full-sized luxury sedans at the end of the 1981 model year, moving instead to a full front-wheel drivelineup for 1982 (except for the M-body Dodge Diplomat/Plymouth Gran Fury and Chrysler New Yorker Fifth Avenue sedans).

Decline of OPEC

Fluctuations of OPEC net oil export revenues since 1972[65][66]

OPEC soon lost its preeminent position, and in 1981, its production was surpassed by that of other countries. Additionally, its own member nations were divided. Saudi Arabia, trying to recover market share, increased production, pushing prices down, shrinking or eliminating profits for high-cost producers. The world price, which had peaked during the 1979 energy crisis at nearly $40 per barrel, decreased during the 1980s to less than $10 per barrel. Adjusted for inflation, oil briefly fell back to pre-1973 levels. This “sale” price was a windfall for oil-importing nations, both developing and developed.

The embargo encouraged new venues for energy exploration including Alaska, the North Sea, the Caspian Sea, and the Caucasus.[67] Exploration in the Caspian Basin and Siberia became profitable. Cooperation changed into a far more adversarial relationship as the USSR increased its production. By 1980 the Soviet Union had become the world’s largest producer.[68][69]

Part of the decline in prices and economic and geopolitical power of OPEC came from the move to alternate energy sources. OPEC had relied on price inelasticity[70] to maintain high consumption, but had underestimated the extent to which conservation and other sources of supply would eventually reduce demand. Electricity generation from nuclear power and natural gas, home heating from natural gas, and ethanol-blended gasoline all reduced the demand for oil.

The drop in prices presented a serious problem for oil-exporting countries in northern Europe and the Persian Gulf. Heavily populated, impoverished countries, whose economies were largely dependent on oil—including MexicoNigeriaAlgeria, and Libya—did not prepare for a market reversal that left them in sometimes desperate situations.

When reduced demand and increased production glutted the world market in the mid-1980s, oil prices plummeted and the cartel lost its unity. Mexico (a non-member), Nigeria, and Venezuela, whose economies had expanded in the 1970s, faced near-bankruptcy, and even Saudi Arabian economic power was significantly weakened. The divisions within OPEC made concerted action more difficult. As of 2015, OPEC had never approached its earlier dominance.

See also

References

https://en.wikipedia.org/wiki/1973_oil_crisis

 

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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Wednesday, August 30, 2017
BEA 17—42

* See the navigation bar at the right side of the news release text for links to data tables, contact personnel and their telephone numbers, and supplementary materials.

Lisa Mataloni: (301) 278-9083 (GDP) gdpniwd@bea.gov
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National Income and Product Accounts
Gross Domestic Product: Second Quarter 2017 (Second Estimate)
Corporate Profits: Second Quarter 2017 (Preliminary Estimate)
Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter of
2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the
first quarter, real GDP increased 1.2 percent.

The GDP estimate released today is based on more complete source data than were available for the
"advance" estimate issued last month.  In the advance estimate, the increase in real GDP was 2.6
percent. With this second estimate for the second quarter, the general picture of economic growth
remains the same; increases in personal consumption expenditures (PCE) and in nonresidential fixed
investment were larger than previously estimated. These increases were partly offset by a larger
decrease in state and local government spending (see "Updates to GDP" below).

Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 2.9 percent in the second quarter, compared with an
increase of 2.7 percent (revised) in the first. The average of real GDP and real GDI, a supplemental
measure of U.S. economic activity that equally weights GDP and GDI, increased 3.0 percent in the
second quarter, compared with an increase of 2.0 percent in the first quarter (table 1).

The increase in real GDP in the second quarter reflected positive contributions from PCE, nonresidential
fixed investment, exports, federal government spending, and private inventory investment that were
partly offset by negative contributions from residential fixed investment and state and local government
spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The acceleration in real GDP in the second quarter primarily reflected upturns in private inventory
investment and federal government spending and an acceleration in PCE that were partly offset by
downturns in residential fixed investment and state and local government spending and a deceleration
in exports.

Current-dollar GDP increased 4.0 percent, or $189.0 billion, in the second quarter to a level of $19,246.7
billion. In the first quarter, current-dollar GDP increased 3.3 percent, or $152.2 billion (table 1 and table
3).

The price index for gross domestic purchases increased 0.8 percent in the second quarter, compared
with an increase of 2.6 percent in the first quarter (table 4). The PCE price index increased 0.3 percent,
compared with an increase of 2.2 percent. Excluding food and energy prices, the PCE price index
increased 0.9 percent, compared with an increase of 1.8 percent (appendix table A).


Updates to GDP

The percent change in real GDP was revised up from the advance estimate, reflecting upward revisions
to PCE and to nonresidential fixed investment that were partly offset by a downward revision to state
and local government spending. For more information, see the Technical Note. A detailed "Key Source
Data and Assumptions" file is also posted for each release.  For information on updates to GDP, see the
“Additional Information” section that follows.

                                    Advance Estimate        Second Estimate
			           (Percent change from preceding quarter)
Real GDP                                  2.6                  3.0
Current-dollar GDP                        3.6                  4.0
Real GDI                                   …                   2.9
Average of Real GDP and Real GDI           …                   3.0
Gross domestic purchases price index      0.8                  0.8
PCE price index                           0.3                  0.3


For the first quarter of 2017, the percent change in real GDI was revised from 2.6 percent to 2.7 percent
based on revised first-quarter tabulations from the BLS Quarterly Census of Employment and Wages
program.

Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $26.8 billion in the second quarter, in contrast to a decrease of
$46.2 billion in the first quarter.

Profits of domestic financial corporations decreased $29.4 billion in the second quarter, compared with
a decrease of $40.7 billion in the first quarter. Profits of domestic nonfinancial corporations increased
$64.8 billion, compared with an increase of $3.8 billion. The rest-of-the-world component of profits
decreased $8.6 billion, compared with a decrease of $9.3 billion. This measure is calculated as the
difference between receipts from the rest of the world and payments to the rest of the world. In the
second quarter, receipts increased $8.5 billion, and payments increased $17.1 billion.





                                       *          *          *




                           Next release:  September 28, 2017 at 8:30 A.M. EDT
                     Gross Domestic Product:  Second Quarter 2017 (Third Estimate)
                      Corporate Profits:  Second Quarter 2017 (Revised Estimate)




                                       Additional Information

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•	For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
•	BEA's news release scheduleNIPA Handbook:  Concepts and Methods of the U.S. National Income and Product Accounts

Definitions

Gross domestic product (GDP) is the value of the goods and services produced by the nation’s economy
less the value of the goods and services used up in production. GDP is also equal to the sum of personal
consumption expenditures, gross private domestic investment, net exports of goods and services, and
government consumption expenditures and gross investment.

Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP.
In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ
because they are constructed using largely independent source data. Real GDI is calculated by deflating
gross domestic income using the GDP price index as the deflator, and is therefore conceptually
equivalent to real GDP.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is,
at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.”
Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.
The gross domestic purchases price index measures the prices of final goods and services purchased by
U.S. residents.

The personal consumption expenditure price index measures the prices paid for the goods and services
purchased by, or on the behalf of, “persons.”

Profits from current production, referred to as corporate profits with inventory valuation adjustment
(IVA) and capital consumption adjustment (CCAdj) in the NIPAs, is a measure of the net income of
corporations before deducting income taxes that is consistent with the value of goods and services
measured in GDP. The IVA and CCAdj are adjustments that convert inventory withdrawals and
depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic
measures used in the national income and product accounts.

For more definitions, see the Glossary: National Income and Product Accounts.


Statistical conventions

Annual rates. Quarterly values are expressed at seasonally-adjusted annual rates (SAAR), unless
otherwise specified. Dollar changes are calculated as the difference between these SAAR values. For
detail, see the FAQ “Why does BEA publish estimates at annual rates?”

Percent changes in quarterly series are calculated from unrounded data and are displayed at annual
rates, unless otherwise specified. For details, see the FAQ “How is average annual growth calculated?”

Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index
numbers with a specified reference year equal to 100 (currently 2009). Quantity and price indexes are
calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent
periods (quarters for quarterly data and annuals for annual data). “Real” dollar series are calculated by
multiplying the published quantity index by the current dollar value in the reference year (2009) and
then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels
are conceptually the same; any differences are due to rounding.

Chained-dollar values are not additive because the relative weights for a given period differ from those
of the reference year. In tables that display chained-dollar values, a “residual” line shows the difference
between the sum of detailed chained-dollar series and its corresponding aggregate.


Updates to GDP

BEA releases three vintages of the current quarterly estimate for GDP:  "Advance" estimates are
released near the end of the first month following the end of the quarter and are based on source data
that are incomplete or subject to further revision by the source agency; “second” and “third” estimates
are released near the end of the second and third months, respectively, and are based on more detailed
and more comprehensive data as they become available.

Annual and comprehensive updates are typically released in late July. Annual updates generally cover at
least the 3 most recent calendar years (and their associated quarters) and incorporate newly available
major annual source data as well as some changes in methods and definitions to improve the accounts.
Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major
periodic source data, as well as major conceptual improvements.
The table below shows the average revisions to the quarterly percent changes in real GDP between
different estimate vintages, without regard to sign.

Vintage                               Average Revision Without Regard to Sign
                                         (percentage points, annual rates)
Advance to second                                     0.5
Advance to third                                      0.6
Second to third                                       0.2
Advance to latest                                     1.1
Note - Based on estimates from 1993 through 2015. For more information on GDP
updates, see Revision Information on the BEA Web site.

The larger average revision from the advance to the latest estimate reflects the fact that periodic
comprehensive updates include major statistical and methodological improvements.

Unlike GDP, an advance current quarterly estimate of GDI is not released because data on domestic
profits and on net interest of domestic industries are not available. For fourth quarter estimates, these
data are not available until the third estimate.

https://www.bea.gov/newsreleases/national/gdp/2017/gdp2q17_2nd.htm

 

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The Pronk Pops Show 860, March 24, 2017, Story 1: Two Party Interference In Health Care Insurance Industry With Federal Regulation and Taxation Is A Big Government Failure — Time for New Independent Constitutional Limited Government Party — Bring Back Free Market Competition For Health Care and Insurance — Leave The American People and Business Alone! — Videos — Story 2: Obama Administration Criminal Activity in Misusing Intelligence Agencies and Mishandling National Security Documents — Who Authorized The Targeting of President-Elect Trump and Trump’s Transition Team for National Security Surveillance and The Unmasking of Their Names? — Watergate Redux — National Security Agency Surveillance of American People Using Stellar Wind — Videos

Posted on March 24, 2017. Filed under: American History, Blogroll, Breaking News, College, Communications, Congress, Constitutional Law, Corruption, Countries, Crime, Culture, Donald J. Trump, Donald J. Trump, Donald Trump, Donald Trump, Economics, Elections, Employment, Federal Government, Freedom of Speech, Government, Government Spending, History, House of Representatives, Human, Human Behavior, Illegal Immigration, Immigration, Insurance, Law, Legal Immigration, Life, Lying, Medicare, Mike Pence, News, Philosophy, Photos, Politics, Radio, Rand Paul, Rand Paul, Raymond Thomas Pronk, Regulation, Rule of Law, Scandals, Security, Senate, Social Security, Taxation, Taxes, Technology, Ted Cruz, Ted Cruz, Terror, Terrorism, United States of America, Welfare Spending | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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Story 1: Two Party  Interference In Health Care Insurance Industry With Federal Regulation and Taxation Is A Big Government Failure — Time for New Independent Constitutional  Limited Government Party — Bring Back Free Market Competition For Health Care  Insurance — Lower Premiums and Deductibles and More Choice of Plans With National Competition — Leave The American People and Business Alone! — Videos — 
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Gohmert: ObamaCare Replacement Bill Was ‘Based on a Lie’

WATCH LIVE Speaker Paul Ryan speaks after House pulls ‘Obamacare’ repeal bill before Friday’s planning

President Trump Speaks After Pulling Healthcare Bill plan 3/24/17 3/24/2017 video

Mark Levin interviews Sen. Mike Lee about the upcoming vote on Obamacare replacement (March 22 2017)

RAND PAUL REACTS TO THE GOP HEALTHCARE BILL GETTING PULLED

Mike Lee Says GOP Healthcare Bill will Fail. Rebuts Paul Ryan, Bigtime

Trump tastes failure as U.S. House healthcare bill collapses

By David Lawder and Steve Holland
ReutersMarch 25, 2017
Trump tastes failure as U.S. House healthcare bill collapses

By David Lawder and Steve Holland

WASHINGTON (Reuters) – President Donald Trump suffered a stunning political setback on Friday in a Congress controlled by his own party when Republican leaders pulled legislation to overhaul the U.S. healthcare system, a major 2016 election campaign promise of the president and his allies.

House of Representatives leaders yanked the bill after a rebellion by Republican moderates and the party’s most conservative lawmakers left them short of votes, ensuring that Trump’s first major legislative initiative since taking office on Jan. 20 ended in failure. Democrats were unified against it.

House Republicans had planned a vote on the measure after Trump late on Thursday cut off negotiations with Republicans who had balked at the plan and issued an ultimatum to vote on Friday, win or lose. But desperate lobbying by the White House and Republican House Speaker Paul Ryan was unable to round up the 216 votes needed for passage.

“We learned a lot about loyalty. We learned a lot about the vote-getting process,” Trump told reporters at the White House, although he sought to shift the blame to the Democrats even though his party controls the White House, the House and the Senate.

With Friday’s legislative collapse, Democratic former President Barack Obama’s signature domestic policy achievement, the 2010 Affordable Care Act – known as Obamacare – remains in place despite seven years of Republican promises to dismantle it.

The healthcare failure called into question not only Trump’s ability to get other key parts of his agenda, including tax cuts and a boost in infrastructure spending, through Congress, but the Republican Party’s capacity to govern effectively.

Neither Trump nor Ryan indicated any plans to try to tackle healthcare legislation again anytime soon. Trump said he would turn his attention to getting “big tax cuts” through Congress, another tricky proposition.

Republican supporters said the legislation would achieve their goal of rolling back the government’s “nanny state” role in healthcare. The White House made undoing Obamacare its top priority when Trump took office two months ago.

But the White House and House leaders were unable to come up with a plan that satisfied the clashing interests of moderates and conservatives, despite Trump’s vaunted image as a deal maker.

Amid a chaotic scramble for votes, Ryan, who championed the bill, met with Trump at the White House. Ryan said he recommended that it be withdrawn from the House floor because he did not have the votes to pass it, and Trump agreed.

“We were just probably anywhere from 10 to 15 votes short,” Trump said. “With no Democrat support we couldn’t quite get there.”

Senate Democratic leader Chuck Schumer said the bill failed “because of two traits that have plagued the Trump presidency since he took office: incompetence and broken promises.”

Democrats said the bill would take away medical insurance from millions of Americans and leave the more-than-$3 trillion U.S. healthcare system in disarray.

And some moderate Republicans opposed the bill because of worries that millions of America would be hurt.

“There were things in this bill that I didn’t particularly like,” Trump added, without specifying what those were, but expressed confidence in Ryan’s leadership.

“Perhaps the best thing that could happen is exactly what happened today, because we’ll end up with a truly great healthcare bill in the future after this mess known as Obamacare explodes,” said Trump, who had posted multiple tweets throughout March proclaiming that “Obamacare is imploding” and repeatedly saying that Republicans were coming together to pass the bill.

Friday’s events cast doubt on whether Ryan can get major legislation approved by fractious Republican lawmakers.

“I will not sugarcoat this. This is a disappointing day for us. Doing big things is hard,” Ryan said at a news conference, adding that his fellow Republicans are experiencing what he called “growing pains” transitioning from an opposition party to a governing party.

“Obamacare’s the law of the land,” Ryan added. “We’re going to be living with Obamacare for the foreseeable future.”

Members of the Freedom Caucus, the House’s most conservative members, were instrumental in the bill’s failure, opposing it among other reasons because they considered parts too similar to Obamacare.

Trump said he was disappointed and “a little surprised” with the Freedom Caucus opposition.

The nonpartisan Congressional Budget Office said under the Republican legislation 14 million people would lose medical coverage by next year and more than 24 million would be uninsured in 2026.

News that the bill had been pulled before a final vote was greeted initially with a small sigh of relief by U.S. equity investors, who earlier in the week had been fretful that an outright defeat would damage Trump’s other priorities, such as tax cuts and infrastructure spending.

Benchmark U.S. stock market indexes ended the session mixed after rallying back from session lows following the news. The S&P 500 Index ended fractionally lower, the blue chip Dow Jones Industrial Average slipped about 0.3 percent and the Nasdaq Composite Index rose about 0.2 percent.

Shares of hospital operators finished sharply higher, with the S&P healthcare facilities index up 2.7 percent, while the S&P 500 healthcare sector edged down 0.03 percent. The dollar strengthened modestly on the news, and U.S. Treasury bond yields edged up from session lows.

Trump said he would be “totally open” to working with Democrats on healthcare “when they all become civilized.” House Democratic leader Nancy Pelosi said working to lower prescription drug prices was one area of possible cooperation with Republicans.

Republican Representative Dana Rohrabacher said before the bill was pulled that voting it down would be “neutering Trump” while empowering his opponents.

“You don’t cut the balls off a bull and then expect that he can go out and get the job done,” Rohrabacher told Reuters. “This will emasculate Trump and we can’t do that. … If we bring this down now, Trump will have lost all of his leverage to pass whatever bill it is, whether it’s the tax bill or whatever reforms that he wants.”

Representative Joe Barton of Texas, when asked why his fellow Republicans were so united over the past seven years to dump Obamacare only to fall apart when they actually do something about it, said, “Sometimes you’re playing fantasy football and sometimes you’re in the real game.”

Obamacare boosted the number of Americans with health insurance through mandates on individuals and employers, and income-based subsidies. About 20 million Americans gained insurance coverage through the law.

The House plan would have rescinded a range of taxes created by Obamacare, ended a penalty on people who refuse to obtain health insurance, and ended Obamacare’s income-based subsidies to help people buy insurance while creating less-generous age-based tax credits

It also would have ended Obamacare’s expansion of the Medicaid state-federal insurance program for the poor, cut future federal Medicaid funding and let states impose work requirements on some Medicaid recipients.

House leaders agreed to a series of last-minute changes to try to win over disgruntled conservatives, including ending the Obamacare requirement that insurers cover certain “essential benefits” such as maternity care, mental health services and prescription drug coverage.

https://www.yahoo.com/news/trump-tastes-failure-u-house-healthcare-bill-collapses-150843163–business.html

Failure on health bill also hurts prospects for tax overhaul

FILE – In this Feb. 22, 2017, file photo photo, Treasury Secretary Steven Mnuchin listens at right… Read more

WASHINGTON (AP) — House Republicans’ failure to repeal Barack Obama’s health care law deals a serious blow to another big part of President Donald Trump’s agenda: tax reform.

Trump and House Speaker Paul Ryan, R-Wis., say they will soon turn their attention to the first major re-write of the tax code in more than 30 years. But they will have to do it without the momentum of victory on health care.

Just as important, the loss on health care will deprive Republicans of $1 trillion in tax cuts.

The GOP health plan would have repealed nearly $1 trillion in taxes enacted under Obama’s Affordable Care Act. The bill coupled the tax cuts with spending cuts for Medicaid, so it wouldn’t add to the budget deficit.

Without the spending cuts, it will be much harder for Republicans to cut taxes without adding to the federal government’s red ink.

“Yes this does make tax reform more difficult,” said Ryan. “But it does not in any way make it impossible.”

“That just means the Obamacare taxes stay with Obamacare. We’re going to go fix the rest of the tax code,” he added.

House Republicans couldn’t round up enough votes Friday to repeal and replace a law they despise, raising questions about their ability to tackle other tough issues.

“Doing big things is hard,” Ryan conceded as he vowed to press on.

Rep. Jodey Arrington, R-Texas, acknowledged that Friday’s turn of events made him doubtful about the Republicans’ ability to tackle major legislation.

“This was my first big vote and our first big initiative in the line of things to come like tax reform,” said the freshman. “I think this would have given us tremendous momentum and I think this hurts that momentum.”

Rep. Mike Kelly, R-Pa., said, “You always build on your last accomplishment.”

Nevertheless, Treasury Secretary Steven Mnuchin said Friday the administration plans to turn quickly to tax reform with the goal of getting an overhaul approved by Congress by August.

“Health care is a very complicated issue,” Mnuchin said. “In a way, tax reform is a lot simpler.”

Don’t tell that to House Republicans who have been struggling with the issue for years.

The general goal for Republicans is to lower income tax rates for individuals and corporations, and make up the lost revenue by reducing exemptions, deductions and credits.

Overhauling the tax code is hard because every tax break has a constituency. And the biggest tax breaks are among the most popular.

For example, nearly 34 million families claimed the mortgage interest deduction in 2016, reducing their tax bills by $65 billion.

Also, more than 43 million families deducted their state and local income, sales and personal property taxes from their federal taxable income last year. The deduction reduced their federal tax bills by nearly $70 billion.

Mnuchin said he had been overseeing work on the administration’s tax bill for the past two months. He said it would be introduced soon.

Mnuchin said the White House plan would cut individual and corporate tax rates, though he didn’t offer specifics.

House Republicans have released a blueprint that outlines their goals for a tax overhaul. It would lower the top individual income tax rate from 39.6 percent to 33 percent, and reduce the number of tax brackets from seven to three.

The House plan retains the mortgage interest deduction but repeals the deduction for state and local taxes.

On the corporate side, the plan would repeal the 35 percent corporate income tax and replace it with a 20 percent tax on profits from selling imports and domestically produced goods and services consumed in the U.S.

Exports would be exempt from the new tax, called a border adjustment tax.

The new tax has drawn opposition from Republicans in the Senate. Mnuchin would not reveal whether the administration will include the border adjustment tax in the White House proposal. He was speaking at a public interview event with the news site Axios.

Republicans often complained that they couldn’t do a tax overhaul when Obama was president. Now, Republicans control the House, the Senate and the White House, and they see a great opportunity.

They plan to use a complicated Senate rule that would prevent Democrats from blocking the bill. But there’s a catch: Under the rule, the package cannot add to long-term budget deficits.

That means every tax cut has to be offset by a similar tax increase or a spending cut. That’s why the loss on health care was so damaging to the effort to overhaul taxes.

Ryan made this case to fellow House Republicans in his failed effort to gain support for the health plan.

“That was part of the calculation of why we had to take care of health care first,” said Rep. Tom Reed, R-N.Y.

___

Associated Press writers Kevin Freking and Martin Crutsinger contributed to this report.

___

http://bigstory.ap.org/article/d6b3f963391a4b9486bc847a7f286a55/failure-health-bill-hurts-prospects-tax-overhaul

Mike Lee: Senate parliamentarian told me it’s possible to push harder on repealing Obamacare regulations

Sen. Mike Lee, R-Utah, said on Wednesday that the Senate parliamentarian has told him that it may be possible for Republicans to push harder on repealing Obamacare’s regulations than the current House bill, which contradicts the assertion by House leadership that the legislation goes after Obamacare as aggressively as possible under Senate rules.

“What I understood her to be saying is that there’s no reason why an Obamacare repeal bill necessarily could not have provisions repealing the health insurance regulations,” Lee said in an interview with the Washington Examiner, relating a conversation with parliamentarian Elizabeth MacDonough about reconciliation he had on Tuesday.

Lee also said that the parliamentarian told him it wasn’t until very recently, after the unveiling of the House bill, that any Republican even asked her about the possibility of repealing regulations with a simple majority.

With a House vote currently expected on Thursday, Republican leadership is scrambling for votes, trying to stave off a backlash from conservatives that could sink the bill. One of the issues conservatives have raised is that the House bill leaves most of the regulations in place, thus not combatting one of the main complaints about Obamacare – its skyrocketing premiums and limited choice.

Because Republicans don’t have 60 Senate seats to kill a filibuster, they have to pass a healthcare bill through a procedure known as reconciliation, which allows the majority party to pass legislation with a simple majority, assuming it meets a certain set of requirements, including that all provisions be primarily budgetary in nature.

Conservatives such as Lee have argued that Republicans should fight harder to argue that the regulations, which have a clear budgetary impact, can be passed through reconciliation. But House leadership and supporters of the bill have countered that the legislation already goes as far as possible. House Speaker Paul Ryan spokeswoman AshLee Strong, when asked about this by the Washington Examiner last week, said “We’ve worked closely with the Senate to carefully craft the bill to repeal and replace the law to the full extent allowed under the rules.”

But having met with the parliamentarian, who plays a key role in advising the presiding officer of the Senate over what’s in bounds during reconciliation, Lee is more convinced than ever that this is not true.

“One of the things we’ve been told over and over again is the bill was no more aggressive than it has been… in part because of Senate rules,” Lee said. “And the Senate rules are something those defending the bill have repeatedly pointed to in defense of why they wrote it the way they wrote it. The parliamentarian said, there’s not necessarily any reason that would categorically preclude you from doing more, both on the repeal front and the replacement front, all sorts of things are possible.”

He continued, “What matters is how it’s done, how it’s written up. There are ways it’s written up that perhaps make it not subject to passage through reconciliation, but there are other ways you could write it that might make it work.”

http://www.washingtonexaminer.com/article/2618154

On his radio show Wednesday evening, Conservative Review Editor-in-Chief Mark Levin interviewed Senator Mike Lee, R-Utah, about a recent conversation the lawmaker had with the Senate parliamentarian. The discussion: whether or not Obamacare’s regulations could be repealed via reconciliation, which only needs a simply majority to pass.

As previously reported by the Washington Examiner, Lee says that he was told by the parliamentarian (who interprets the rules of the Senate) that, despite claims from House leadership, the current “repeal and replace” legislation could do much more to undo Obamacare’s harmful mandates — if so desired.

 

“I honestly believe that the Republican establishment does not want to repeal the entirety of Obamacare,” Levin said. “I think you have Republican governors … who like the expanded Medicaid, so they’ve already sold out. There’s a lot of that going on.”

As it stands now, the current RINOcare version would repeal several taxes and mandates, but it leaves in place the major regulations that are the primary drivers of America’s skyrocketing health insurance premiums. One of the major reasons that these have been left in place, GOP leaders have said, is that the Byrd Rule in the Senate would prohibit them from repealing them in a budget bill.

But this doesn’t appear to be the case, Sen. Mike Lee says, who says he found out in his meeting with the parliamentarian that nobody from leadership so much as asked how much of Obamacare could be gutted in the budget process.

“She pointed out that it’s not necessarily true what we’ve been told [by leadership],” Lee said.

“I think this is very distressing,” Sen. Lee concluded. “Because a whole lot of congressmen have been told a whole lot of times that this is the best we can do under the Senate’s reconciliation rules. And it’s not true.”

https://www.conservativereview.com/commentary/2017/03/sen-mike-lee-puts-the-establishments-rinocare-lies-on-full-display#sthash.CjPMfFOw.dpuf

Story 2: Obama Administration Criminal Activity in Misusing Intelligence Agencies and Mishandling National Security Documents — Who Authorized The Targeting of President-Elect Trump and Trump’s Transition Team for National Security Surveillance and The Unmasking of Their Names? — Watergate Redux — National Security Agency Surveillance of American People Using Stellar Wind —  Videos

House Intelligence Chair News Conference – House Intelligence Committee Chair Devin Nunes (R-CA)

NSA Whistleblower: Trump Was Right On Wiretap Bill Binney – Tucker Carlson Tonight Fox News 3/24/17

NSA Whistleblower William Binney: The Future of FREEDOM

Nunes: Surveillance reports I’ve seen are ‘concerning’

Joe: Devin Nunes Blew Up Hopes Of Independent Russia Investigation | Morning Joe | MSNBC

Newt Gingrich on Nunes’ surveillance revelations

‘This Is All Political’ David Nunes Responds to Tapper- JAKE TAPPER 3/22/17

Breaking/ House intelligence committee chairman say’s Trump was wiretapped. 

Rep. Adam Schiff slams Rep. Devin Nunes’ comments on Trump intel

Nunes says information from Trump surveillance ‘concerned me’

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The Pronk Pops Show 732, August 8, 2016, Part 1– Story 1: Trump’s Economic Growth Plan Revealed — Much Better Than Hillary Clinton’s Tax Raising Recession Inducing Plan — But Not Bold — Rather Timid Congressional Republican Tax Reform Plan — It Is Time To Fire Up Our Economic Engine and Grow A Peace and Prosperity Economy With A Economic Boom Caused By Passing Fair Tax Less! — Videos

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Story 1: Trump’s Economic Growth Plan Revealed — Much Better Than Hillary Clinton’s Tax Raising Recession Inducing Plan — But Not Bold — Rather Timid Congressional Republican Tax Reform Plan — It Is Time To Fire Up Our Economic Engine and Grow A Peace and Prosperity Economy With A Economic Boom Caused By Passing Fair Tax Less! — Videos

 

General Election: Trump vs. Clinton vs. Johnson vs. Stein

Polling Data

Poll Date Sample MoE
Clinton (D)
Trump (R)
Johnson (L)
Stein (G)
Spread
RCP Average 7/25 – 8/7 43.8 36.7 8.3 3.8 Clinton +7.1
Monmouth 8/4 – 8/7 683 LV 3.8 50 37 7 2 Clinton +13
ABC News/Wash Post 8/1 – 8/4 815 RV 4.0 45 37 8 4 Clinton +8
IBD/TIPP 7/29 – 8/4 851 RV 3.4 39 35 12 5 Clinton +4
NBC News/Wall St. Jrnl 7/31 – 8/3 800 RV 3.5 43 34 10 5 Clinton +9
Rasmussen Reports 8/1 – 8/2 1000 LV 3.0 44 40 6 3 Clinton +4
McClatchy/Marist 8/1 – 8/3 983 RV 3.1 45 31 10 6 Clinton +14
Reuters/Ipsos 7/30 – 8/3 1072 LV 3.5 42 38 6 2 Clinton +4
Economist/YouGov 7/30 – 8/1 933 RV 4.1 41 36 8 4 Clinton +5
CNN/ORC 7/29 – 7/31 894 RV 3.5 45 37 9 5 Clinton +8
PPP (D) 7/29 – 7/30 1276 LV 2.7 46 41 6 2 Clinton +5
NBC News/SM 7/25 – 7/31 12742 RV 1.2 42 38 9 4 Clinton +4

All General Election: Trump vs. Clinton vs. Johnson vs. Stein Polling Data

http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton_vs_johnson_vs_stein-5952.html

Watch Donald Trump’s full speech on economic policy

Detroit highly populated with protesters… interrupting Donald Trump – Detroit Economic Club

Donald Trump: I will simplify tax code

Trump: No business to pay more than 15% of income in taxes

Donald Trump Attacks Hillary Clinton During Economic Address at Detroit Economic Club – 8/8/16

YIKES! Detroit Economic Club Apologizes to Donald Trump & Audience for Protesters

WSJ’s Henninger: Trump’s economic speech was ‘excellent’

Donald Trump Wants More Money In YOUR POCKET! Lower Taxes for EVERYONE!

Trump campaign adviser: New tax plan includes major cuts

Newsmax Prime | John Gizzi brings us the latest from Cleveland and the RNC convention

Chairman Brady on Need for Pro-Growth Tax Reform, Free Trade on CNBC

Speaker Paul Ryan And Chairman Kevin Brady Produce A Tax Blueprint To Make America Great Again

Chairman Kevin Brady Talks Tax Reform with CNBC’s John Harwood

Inside the GOP candidates’ tax reform plans

Art Laffer: You can’t tax an economy into prosperity

FairTax: Fire Up Our Economic Engine (Official HD)

Freedom from the IRS! – FairTax Explained in Detail

The FairTax: It’s Time

What is the FairTax legislation?

How does the “prebate” work?

Q&A on the FAIRTAX pt.1

The FairTax for Dummies – Simple to Understand

FAIRtax-What is It? Replaces income tax and payroll tax with sales tax

What is the Prebate?

Pence on the Fair Tax

G Edward Griffin “The Dangerous Servant – A Discourse on Government”

G. Edward Griffin: The Collectivist Conspiracy

People Who Control America ? Mind Blowing Documentary HQ

– AUGUST 08, 2016 –

AN AMERICA FIRST ECONOMIC PLAN: WINNING THE GLOBAL COMPETITION

Please read the transcript from Mr. Trump’s speech at the Detroit Economic Club.


Thank you for the invitation to speak to you today. It’s wonderful to be in Detroit.

We now begin a great national conversation about economic renewal for America. It’s a conversation about how to Make American Great Again for everyone, and especially those who have the very least.

The City of Detroit Is Where Our Story Begins

Detroit was once the economic envy of the world. The people of Detroit helped power America to its position of global dominance in the 20th century.

When we were governed by an America First policy, Detroit was booming. Engineers, builders, laborers, shippers and countless others went to work each day, provided for their families, and lived out the American Dream.

But for many living in this city, that dream has long ago vanished.

When we abandoned the policy of America First, we started rebuilding other countries instead of our own. The skyscrapers went up in Beijing, and in many other cities around the world, while the factories and neighborhoods crumbled in Detroit. Our roads and bridges fell into disrepair, yet we found the money to resettle millions of refugees at taxpayer expense.

Today, Detroit has a per capita income of under $15,000 dollars, about half of the national average. 40 percent of the city’s residents live in poverty, over two-and-half times the national average. The unemployment rate is more than twice the national average. Half of all Detroit residents do not work.

Detroit tops the list of Most Dangerous Cities in terms of violent crime – these are the silenced victims whose stories are never told by Hillary Clinton, but victims whose suffering is no less real or permanent.

In short, the city of Detroit is the living, breathing example of my opponent’s failed economic agenda. Every policy that has failed this city, and so many others, is a policy supported by Hillary Clinton.

She supports the high taxes and radical regulation that forced jobs out of your community…and the crime policies that have made you less safe…and the immigration policies that have strained local budgets…and the trade deals like NAFTA, signed by her husband, that have shipped your jobs to Mexico and other countries… and she supports the education policies that deny your students choice, freedom and opportunity.

She is the candidate of the past.

Ours is the campaign of the future.

This is a city controlled by Democratic politicians at every level, and unless we change policies, we will not change results.

Today, I will outline my economic vision. In the coming weeks, we will be offering more detail on all of these policies, and the ones we have already rolled out can be viewed on my campaign website.

Our opposition, on the other hand, has long ago run out of ideas. All Hillary Clinton has to offer is more of the same: more taxes, more regulations, more bureaucrats, more restrictions on American energy and American production.

If you were a foreign power looking to weaken America, you couldn’t do better than Hillary Clinton’s economic agenda.

Nothing would make our foreign adversaries happier than for our country to tax and regulate our companies and our jobs out of existence.

The one common feature of every Hillary Clinton idea is that it punishes you for working and doing business in the United States. Every policy she has tilts the playing field towards other countries at our expense.

That’s why she tries to distract us with tired political rhetoric that seeks to label us, divide us, and pull us apart.

My campaign is about reaching out to everyone as Americans, and returning to a government that puts the American people first.

Here is what an America First economic plan looks like.

First, let’s talk tax reform.

Taxes are one of the biggest differences in this race.

Hillary Clinton – who has spent her career voting for tax increases – plans another massive job-killing $1.3 trillion-dollar tax increase. Her plan would tax many small businesses by almost fifty percent.

Recently, at a campaign event, Hillary Clinton short-circuited again – to use a now famous term – when she accidentally told the truth and said she wanted to raise taxes on the middle class.

I am proposing an across-the-board income tax reduction, especially for middle-income Americans. This will lead to millions of new good-paying jobs.

The rich will pay their fair share, but no one will pay so much that it destroys jobs, or undermines our ability to compete.

As part of this reform, we will eliminate the Carried Interest Deduction and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers.

Tax simplification will be a major feature of the plan.

Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance.

My plan will reduce the current number of brackets from 7 to 3, and dramatically streamline the process. We will work with House Republicans on this plan, using the same brackets they have proposed: 12, 25 and 33 percent. For many American workers, their tax rate will be zero.

While we will develop our own set of assumptions and policies, agreeing in some areas but not in others, we will be focused on the same shared goals and guided by the same shared principles: jobs, growth and opportunity.

These reforms will offer the biggest tax revolution since the Reagan Tax Reform, which unleashed years of continued economic growth and job creation.

We will Make America Grow Again.

In the days ahead, we will provide more details on this plan and how it will help you and your family. It will present a night-and-day contrast to the job-killing, tax-raising, poverty-inducing Obama-Clinton agenda.

The State of New York has already lived through Hillary Clinton’s failed leadership. The Washington Post just published a devastating article on Hillary Clinton’s broken promises. She pledged 200,000 jobs for upstate New York as Senator. But what happened? The Washington Post writes, and I quote: “upstate job growth stagnated overall during her tenure, with manufacturing jobs plunging nearly 25 percent…the former first lady was unable to pass big ticket legislation… Many promised jobs never materialized and others migrated to other states as she turned to her first presidential run…data shows that upstate actually lost jobs during Clinton’s first term.”

Compare that to my record. In a recent New York Post article by Steve Cuozzo, “How Donald Trump Helped Save New York City,” the paper writes that I – and this is a direct quote – “waded into a landscape of empty Fifth Avenue storefronts, the dust-bowl mugging ground that was Central Park and a Wall Street area seemingly on its last legs as companies moved out…almost by force of will — [he] rode to the rescue. Expressing rare faith in the future, he was instrumental in kick-starting the regeneration of neighborhoods and landmarks almost given up for dead.”

This is what I want to do for our country – I want to jumpstart America.

Now let’s look at what the Obama-Clinton policies have done nationally.

Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression, and a doubling of the national debt.

There are now 94.3 million Americans outside the labor force. It was 80.5 million when President Obama took office, an increase of nearly 14 million people.

The Obama-Clinton agenda of tax, spend and regulate has created a silent nation of jobless Americans.

Home ownership is at its lowest rate in 51 years.

Nearly 12 million have been added to the food stamp rolls since President Obama took office. Another nearly 7 million Americans were added to the ranks of those in poverty.

We have the lowest labor force participation rates in four decades.

58 percent of African-American youth are either outside the labor force or not employed.

1 in 5 American households do not have a single member in the labor force. These are the real unemployment numbers – the five percent figure is one of the biggest hoaxes in modern politics.

Meanwhile, American households are earning more than $4,000 less today than they were sixteen years ago.

The average worker today pays 31.5 percent of their wages to income and payroll taxes. On top of that, state and local taxes consume another 10 percent.

The United States also has the highest business tax rate among the major industrialized nations of the world, at 35 percent. It’s almost 40 percent when you add in taxes at the state level.

In other words, we punish companies for making products in America – but let them ship products into the U.S. tax-free if they move overseas.

This is backwards. All of our policies should be geared towards keeping jobs and wealth inside the United States.

Under my plan, no American company will pay more than 15% of their business income in taxes. Small businesses will benefit the most from this plan. Hillary Clinton’s plan will require small business to pay as much as three times more in taxes than what I am proposing, and her onerous regulations will put them totally out of business. I am going to cut regulations massively.

Our lower business tax will also end job-killing corporate inversions, and cause trillions in new dollars and wealth to come pouring into our country – and into cities like Detroit. To help unleash this new job creation, we will allow businesses to immediately expense new business investments.

No one will gain more from these proposals than low-and-middle income Americans.

My plan will also help reduce the cost of childcare by allowing parents to fully deduct the average cost of childcare spending from their taxes.

We are also going to bring back trillions of dollars from American businesses that is now parked overseas. Our plan will bring that cash home, applying a 10 percent tax. This money will be re-invested in states like Michigan.

Finally, no family will have to pay the death tax. American workers have paid taxes their whole lives, and they should not be taxed again at death – it’s just plain wrong. We will repeal it.

Next comes regulatory reform

As with taxes, I will have one overriding goal when it comes to regulation: I want to keep jobs and wealth in America.

Motor vehicle manufacturing is one of the most heavily regulated industries in the country. The U.S. economy today is twenty-five percent smaller than it would have been without the surge of regulations since 1980.

It is estimated that current overregulation is costing our economy as much as $2 trillion dollars a year – that’s money taken straight out of cities like yours.

The federal register is now over 80,000 pages long. As the Wall Street Journal noted, President Obama has issued close to four hundred new major regulations since taking office, each with a cost to the American economy of $100 million or more.

In 2015 alone, the Obama Administration unilaterally issued more than 2,000 new regulations – each a hidden tax on American consumers, and a massive lead weight on the American economy.

It is time to remove the anchor dragging us down.

Upon taking office, I will issue a temporary moratorium on new agency regulations. My running mate, Mike Pence, signed a similar order when he became governor of Indiana. This will give our American companies the certainty they need to reinvest in our community, get cash off of the sidelines, start hiring for new jobs, and expanding businesses.

I will also immediately cancel all illegal and overreaching executive orders.

Next, I will ask each and every federal agency to prepare a list of all of the regulations they impose on Americans which are not necessary, do not improve public safety, and which needlessly kill jobs. Those regulations will be eliminated.

We are in a competition with the world, and I want America to win. When I am president, we will.

One of the most important reforms of all is trade reform

As Bernie Sanders has said, Hillary Clinton has bad judgment. We’ve seen this bad judgment overseas, in Libya, Iraq, and Syria. We’ve seen it in Iran. We’ve seen it from President Obama, when he gives $150 billion to Iran, the number one terror state, and even gives them $400 million in money-laundered cash as a ransom payment.

But we’ve also seen the terrible Obama-Clinton judgment right here in Detroit.

Hillary Clinton has supported the trade deals stripping this city, and this country, of its jobs and wealth.

She supported Bill Clinton’s NAFTA, she supported China’s entrance into the World Trade Organization, she supported the job-killing trade deal with South Korea, and she supports the Trans-Pacific Partnership.

Let’s talk about South Korea for a moment, because it so perfectly illustrates the broken promises that have hurt so many American workers.

President Obama, and the usual so-called experts who’ve been wrong about every trade deal for decades, predicted that the trade deal with South Korea would increase our exports to South Korea by more than $10 billion – resulting in some 70,000 jobs.

Like Hillary Clinton’s broken promises to New York, these pledges all turned out to be false. Instead of creating 70,000 jobs, it has killed nearly 100,000, according to the Economic Policy Institute. Our exports to South Korea haven’t increased at all, but their imports to us have surged more than $15 billion – more than doubling our trade deficit with that country.

The next betrayal will be the Trans-Pacific Partnership. Hillary Clinton’s closest friend, Terry McAuliffe, confirmed what I have said on this from the beginning: if sent to the Oval Office, Hillary Clinton will enact the TPP. Guaranteed. Her donors will make sure of it.

A vote for Hillary Clinton is a vote for TPP – and it’s also a vote for NAFTA.

Our annual trade deficit in goods with Mexico has risen from close to zero in 1993 to almost $60 billion. Our total trade deficit in goods hit nearly $800 billion last year.

This is a strike at the heart of Michigan, and our nation as a whole.

According to the Bureau of Labor Statistics, before NAFTA went into effect, there were 285,000 auto workers in Michigan. Today, that number is only 160,000.

Detroit is still waiting for Hillary Clinton’s apology. I expect Detroit will get that apology right around the same time Hillary Clinton turns over the 33,000 emails she deleted.

Hillary Clinton’s Trans-Pacific Partnership (TPP) will be an even bigger disaster for the auto industry. In fact, Ford Motor Company has announced its opposition to the deal.

According to the Economic Policy Institute, the U.S. trade deficit with the proposed TPP member countries cost over 1 million manufacturing jobs in 2015.

By far the biggest losses occurred in motor vehicles and parts, which lost nearly 740,000 manufacturing jobs.

Michigan ranks first for jobs lost as a share of state workforce due to the trade deficit with TPP members.

Just imagine how many more automobile jobs will be lost if the TPP is actually approved. That is why I have announced we will withdraw from the deal before that can ever happen. Hillary Clinton will never withdraw from the TPP. She is bought, controlled and paid-for by her donors and special interests.

Because my only interest is the American people, I have previously laid out a detailed 7-point plan for trade reform, available on my website. It includes strong protections against currency manipulation, tariffs against any countries that cheat by unfairly subsidizing their goods, and it includes a renegotiation of NAFTA. If we don’t get a better deal, we will walk away.

At the center of my plan is trade enforcement with China. This alone could return millions of jobs into our economy.

China is responsible for nearly half of our entire trade deficit. They break the rules in every way imaginable. China engages in illegal export subsidies, prohibited currency manipulation, and rampant theft of intellectual property. They also have no real environmental or labor protections, further undercutting American workers.

Just enforcing intellectual property rules alone could save millions of American jobs. According to the U.S. International Trade Commission, improved protection of America’s intellectual property in China would produce more than 2 million more jobs right here in the United States.

Add to that the saved jobs from cracking down on currency cheating and product dumping, and we will bring trillions of dollars in new wealth and wages back to the United States.

Trade has big benefits, and I am in favor of trade. But I want great trade deals for our country that create more jobs and higher wages for American workers. Isolation is not an option, only great and well-crafted trade deals are.

Also critical to our economic renewal will be energy reform

The Obama-Clinton Administration has blocked and destroyed millions of jobs through their anti-energy regulations, while raising the price of electricity for both families and businesses.

As a result of recent Obama EPA actions coal-fired power plants across Michigan have either shut down entirely or undergone expensive conversions. The Obama-Clinton war on coal has cost Michigan over 50,000 jobs. Hillary Clinton says her plan will “put a lot of coal companies and coal miners out of business.”

We will put our coal miners and steel workers back to work.

Clinton not only embraces President Obama’s job-killing energy restrictions but wants to expand them, including going after oil and natural gas production that employs some 10 million Americans.

According to the Heritage Foundation, by 2030, the Obama-Clinton energy restrictions will eliminate another half a million manufacturing jobs, reduce economic output by $2.5 trillion dollars, and reduce incomes by $7,000 dollars per person.

A Trump Administration will end this war on the American worker, and unleash an energy revolution that will bring vast new wealth to our country.

According to the Institute for Energy Research, lifting the restrictions on all sources of American energy will:

  • Increase GDP by more than $100 billion dollars annually, add over 500,000 new jobs annually, and increase annual wages by more than $30 billion dollars over the next 7 years;
  • Increase federal, state, and local tax revenues by almost $6 trillion dollars over 4 decades;
  • Increase totaleconomic activity by more than $20 trillion dollars over the next 40 years.

The reforms I have outlined today are only the beginning

When we reform our tax, trade, energy and regulatory policies, we will open a new chapter in American Prosperity.

We can use this new wealth to rebuild our military and our infrastructure.

As part of this new future, we will also be rolling out proposals to increase choice and reduce cost in childcare, offering much-needed relief to American families. I will unveil my plan on this in the coming weeks that I have been working on with my daughter Ivanka and an incredible team of experts.

Likewise, our education reforms will help parents send their kids to a school of their choice.

We will also give our police and law enforcement the funds and support they need to restore law and order to this country. Without security, there can be no prosperity. We must have law and order.

In the coming days, we will be rolling out plans on all of these items. One of my first acts as President will be to repeal and replace disastrous Obamacare, saving another 2 million American jobs.

We will also rebuild our military, and get our allies to pay their fair share for the protection we provide – saving us countless more billions to invest in our own country.

We also have a plan, on our website, for a complete reform of the Veterans Health Administration. This is something so desperately needed to make sure our vets are fully supported and get the care they deserve.

Detroit – the Motor City – will come roaring back. We will offer a new future, not the same old failed policies of the past.

Our party has chosen to make new history by selecting a nominee from outside the rigged and corrupt system.

The other party has reached backwards into the past to choose a nominee from yesterday – who offers only the rhetoric of yesterday, and the policies of yesterday.

There will be no change under Hillary Clinton – only four more years of Obama.

But we are going to look boldly into the future.

We will build the next generation of roads, bridges, railways, tunnels, sea ports and airports that our country deserves.

American cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas.

American steel will send new skyscrapers soaring.

We will put new American metal into the spine of this nation.

It will be American hands that rebuild this country, and it will be American energy – mined from American sources – that powers this country.

It will be American workers who are hired to do the job.

Americanism, not globalism, will be our new credo.

Our country will reach amazing new heights.

All we have to do is stop relying on the tired voices of the past.

We can’t fix a rigged system by relying on the people who rigged it in the first place.

We can’t solve our problems by relying on the politicians who created them.

Only by changing to new leadership, and new solutions, will we get new results.

We need to stop believing in politicians, and start believing in America.

Before everything great that has ever happened, the doubters have always said it couldn’t be done.

America is ready to prove the doubters wrong.

They want you to think small. I am asking you to think big.

We are ready to dream great things for our country once again.

We are ready to show the world that America is Back – Bigger, and Better and Stronger Than Ever Before.

Thank you, and God Bless You.

https://www.donaldjtrump.com/press-releases/an-america-first-economic-plan-winning-the-global-competition

Trump to Propose Moratorium on New Financial Regulations

In a speech Monday in Detroit, the Republican presidential nominee will also call for a repeal of the estate tax.

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The Pronk Pops Show 170, November 19, 2013, Segment 1: Harry Markopolos — No One Would Listen: A True Financial Thriller — Videos

Posted on November 21, 2013. Filed under: American History, Budgetary Policy, Business, College, Communications, Economics, Education, Employment, Fiscal Policy, Government, History, Investments, Labor Economics, Law, Media, Monetary Policy, Philosophy, Photos, Politics, Radio, Regulation, Securities and Exchange Commission, Success, Tax Policy, Taxes, Technology, Wealth | Tags: , , , , , , , , , , , , , , , , , , , |

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Pronk Pops Show 170: November 19, 2013

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Segment 1: Harry Markopolos — No One Would Listen: A True Financial Thriller — Videos

no_one_would_listen

Bernie Madoff: Thief

BernardMadoff

No One Would Listen, by Harry Markopolos

House+Finance+Group+Holds+Hearing+Madoff+Regulatory

The Man Who Knew

Book TV: After Words: Harry Markopolos, “No One Would Listen”

Madoff Whistleblower Speaks with ABC News Radios Aaron Kate

Ackerman Scolds SEC for Not Stopping Bernie Madoff Scheme Despite Being Told About It 10yrs Ago

Markopolos: I gift wrapped and delivered the largest Ponzi scheme in history to the SEC

Rep. Maloney on Madoff Fraud

Congressman Spencer Bachus questions at Madoff Ponzi Fraud Hearing

Congressman Sherman questions Harry Markopoulos

Ron Paul – Madoff Fraud Hearing – Congress – Big Ponzi Scheme 01-05-09

DP/30: Chasing Madoff, subject Harry Markopolos (pt 1 of 2)

DP/30: Chasing Madoff, subject Harry Markopolos (pt 2 of 2)

Background Articles and Videos

Bernie Madoff on the modern stock market

Bernie Madoff Reveals to Barbara Walters He Is ‘Happier in Prison’

Bernie Madoff’s Jail Cell and His Future Life in Prison, Levine: “He’s Worse Than a Child Molester.”

The Madoff Hustle – Part 1

The Madoff Hustle – Part 2

The Madoff Hustle – Part 3

The Madoff Hustle – Part 4

Part 1: The Hunt for Madoff’s Money

Part 2: The Hunt for Madoff?s Money

Too Good to be True- The Rise and Fall of Bernie Madoff Part 1

Erin Arvedlund first wrote about Bernie Madoff for Barrons in 2001 and published her book, Too Good to be True- The Rise and Fall of Bernie Madoff in August of 2009. In this episode of The Massachusetts School of Law’s Books of our Time, Dean Velvel, himself a Madoff victim, and Arvedlund discuss the history of the brokerage industry, the possible culpability of the entire Madoff family, the difference between Madoff’s legitimate brokerage firm and his illegitimate hedge fund and the steps that lead up to the largest Ponzi scheme in American History. Arvedlund tells the story of Madoff’s infamous Ponzi scheme with the knowledge and detail of an insider, and sheds new light on the greatest financial enigma of American History.

The Massachusetts School of Law also presents information on important current affairs to the general public in television and radio broadcasts, an intellectual journal, conferences, author appearances, blogs and books. For more information visit mslawledu.

Too Good to be True- The Rise and Fall of Bernie Madoff Part 2

[youtub4e=http://www.youtube.com/watch?v=8CdqYJZfyq0]

 

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Pronk Pops Show 36, July 13, 2011: Segment 1: Gretchen Morgenson & Joshua Rosner–Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led To Economic Armageddon–Videos

Posted on July 12, 2011. Filed under: Books, Business, Economics, Federal Government, Government, Government Spending, History, Housing, Investments, Regulation, Videos, Wisdom | Tags: , , , , |

Pronk Pops Show 36:July 13, 2011 

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Segment 1: Gretchen Morgenson & Joshua Rosner–Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led To Economic Armageddon–Videos

Charlie Rose – Gretchen Morgenson 06/03/11

Gretchen Morgenson & Joshua Rosner on Democracy Now! on the Causes of the Financial Crisis. 1 of 2

Gretchen Morgenson & Joshua Rosner on Democracy Now! on the Causes of the Financial Crisis. 2 of 2

BookTV: Gretchen Morgenson and Joshua Rosner, “Reckless Endangerment”

Rush on ‘Reckless Endangerment’

Background Articles and Videos

Gretchen C. Morgenson

“…Gretchen C. Morgenson (born January 2, 1956 in State College, Pennsylvania) is a Pulitzer Prize-winning journalist who writes the Market Watch column for the Sunday “Money & Business” section of the New York Times.[1][2]

Morgenson graduated in 1976 from Saint Olaf College in Northfield, Minnesota with a B.A. degree in English and history. She went to work as an assistant editor with Vogue magazine, eventually becoming a writer and financial columnist. In 1981 she co-authored the book The Woman’s Guide to the Stock Market and that same year joined the Wall Street stockbrokerage, Dean Witter Reynolds where she remained until January 1984. She returned to writing on financial matters at Money magazine and in late 1986 accepted an offer from Forbes magazine to work as an editor and an investigative business writer. In mid 1993, she left Forbes magazine to become the executive editor at Worth magazine but in September 1995 took on the job of press secretary for the Presidential election campaign of Steve Forbes following which she was appointed assistant managing editor at Forbes magazine.

She is married, has a son and lives in New York City.

In May 1998 Gretchen Morgenson became the assistant business and financial editor at the New York Times. She has written about the conflicts of interests between financial analysts and their employers who generate income money from the companies that the analysts assess.

Beginning in 2005, Morgenson has been focusing on executive compensation packages being paid by American companies that she asserts has reached levels far in excess of what can be justified to shareholders.

In 2006, Morgenson broke a story about a Wall Street analyst (Matthew Murray) who was fired shortly after he reported emails to Congress concerning potential violations of SEC regulation AC by the investment bank (Rodman & Renshaw) that he worked for at the time. The emails allegedly documented that the investment bank wouldn’t let the analyst lower his rating, or have his name removed from coverage, of an investment banking client. A subsequent article by Morgenson highlighted a letter she obtained from the Senate Finance Committee in which Senator Grassley stated that the investment bank’s Chairman (General Wesley Clark) had acknowledged to his staff that the analyst had been fired from the investment bank as a result of reporting the emails to Congress.[3]

In 2009, The Nation called her “The Most Important Financial Journalist of Her Generation”.[4] She has appeared on Bill Moyers Journal,[5] and Charlie Rose.[6] …”

http://en.wikipedia.org/wiki/Gretchen_Morgenson

“…Overview

The New York Times’s Pulitzer Prize-winning columnist reveals how the financial meltdown emerged from the toxic interplay of Washington, Wall Street, and corrupt mortgage lenders

In Reckless Endangerment, Gretchen Morgenson, the star business columnist of The New York Times,exposes how the watchdogs who were supposed to protect the country from financial harm were actually complicit in the actions that finally blew up the American economy.

Drawing on previously untapped sources and building on original research from coauthor Joshua Rosner—who himself raised early warnings with the public and investors, and kept detailed records—Morgenson connects the dots that led to this fiasco.

Morgenson and Rosner draw back the curtain on Fannie Mae, the mortgage-finance giant that grew, with the support of the Clinton administration, through the 1990s, becoming a major opponent of government oversight even as it was benefiting from public subsidies. They expose the role played not only by Fannie Mae executives but also by enablers at Countrywide Financial, Goldman Sachs, the Federal Reserve, HUD, Congress, the FDIC, and the biggest players on Wall Street, to show how greed, aggression, and fear led countless officials to ignore warning signs of an imminent disaster.

Character-rich and definitive in its analysis, this is the one account of the financial crisis you must read. …”

http://www.barnesandnoble.com/w/reckless-endangerment-gretchen-morgenson/1101105111

Fanniegate: Gamechanger For The GOP?

Walter Russell Mead
“…Democrats, watch out.The Republican Party and especially its Tea Party wing have just acquired a new weapon of mass destruction — and it has nothing to do with any of Congressman Wiener’s rogue body parts.  If they deploy this weapon effectively in the next election cycle — a big if — then they have the biggest opportunity to move the country rightward since Ronald Reagan took the oath of office back in 1981.The Tea Party WMD stockpile is currently stored in book form:  Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. By Gretchen Morgenson, one of America’s best business journalists who is currently at The New York Times, and noted financial analyst Joshua Rosner, Reckless Endangerment gives the best available account of how the growing chaos in the mortgage and personal finance markets and the rampant bundling of dubious loans into exotically toxic securities plunged the world, and millions of American families, into the gravest financial crisis since World War Two. It is gripping reading as well, and its explanations are clear enough that readers without any background in finance will have no trouble following the plot.  The villains?  An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros.  (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)

If the GOP can make this narrative mainstream, and put this picture into the heads of voters nationwide, the Democrats are toast.  The party will have to reinvent itself (or as often happens in American politics, be rescued by equally stupid Republican missteps) before it can flourish.

If Morgenstern and Rosner are to be believed, the American dream didn’t die of old age; it was murdered and most of the fingerprints on the corpse come from Democratic insiders.  Democratic power brokers stoked the housing bubble and turned a blind eye to the increasingly rampant corruption and incompetence at Fannie Mae and the associated predatory lenders who sheltered under its umbrella; core Democratic ideas may well be at fault.

This is catnip to Republicans, arsenic to Dems.  If Morgenson and Rosner are right, there is someone the American people can blame for our current economic woes and it is exactly the cast of characters that a lot of Americans love to hate.  Big government, affirmative action and influence peddling among Democratic insiders came within inches of smashing the US economy.

The Morgenson/Rosner story is a simple and easily grasped one. It is made for campaign ads.  The Great Villain, the man who almost ruined America according to the book, is James Johnson, long one of the most important members of the Democratic establishment.  He ran Walter Mondale’s campaign.  He chaired John Kerry’s search for a vice-president — the brilliantly executed search that chose the revered anti-poverty warrior John Edwards.

Barack Obama, impressed by this track record of discernment, reportedly asked him to lead Obama’s search in 2008 — though Johnson withdrew when word got out that he benefited from the disgraced and disgusting Angelo Mozilo’s corrupt program of ‘special’ mortgages for political friends.  (Mozilo was the head of Countrywide, a massively fraudulent and predatory lender which benefited hugely from its business connections with Fannie Mae.)  He is a director of the much hated Goldman Sachs, a former director of Lehman Brothers, has chaired the board of the Brookings Institution, is a major Democratic Party fundraiser who bundled several hundred thousand dollars for President Obama, helped bring old Clinton friends into the Obama organization, and has been at the center of Democratic finance and politics for a generation.

Named CEO of Fannie Mae (a government backed mortgage corporation) Johnson decided to make untold wealth by making and securitizing junk housing loans and by massaging the financial reports to ensure that he qualified for the obscenely generous maximum bonus no matter what was actually happening to the company under his care. …”

http://blogs.the-american-interest.com/wrm/2011/06/07/fanniegate-gamechanger-for-the-gop/

Home Truths

To keep itself politically bullet-proof, Fannie Mae paid competing lobbyists to sit on the sidelines.

By JAMES FREEMAN

“…’The American people realize they’ve been robbed. They’re just not sure by whom,” write Gretchen Morgenson and Joshua Rosner in “Reckless Endangerment.” But Americans who read this outstanding history of the financial crisis will know, by the end, exactly who created the meltdown of 2008 and how they did it. This is a story, the authors say, “of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.”

Gretchen Morgenson and Joshua Rosner, authors of Reckless Endangerment, explain the corrupt culture behind the housing crisis.

At the center of the drama is Fannie Mae, a private company that used its special government backing to dominate the mortgage market and become the nation’s second-largest debt issuer, after the U.S. Treasury itself. Encouraged by politicians to expand home lending—not least to minorities and to households with few assets—the company ignored reasonable standards of underwriting and piled up fugitive profits almost as fast as it increased risk to taxpayers.

The disaster is now measured in the hundreds of billions of dollars. As for the borrowers who were supposedly to benefit from Fannie’s mortgage-industrial complex, Ms. Morgenson and Mr. Rosner write that home ownership “put them squarely on the road to personal and financial ruin.”

The disaster would not have been possible, the authors make clear, without the early efforts of James Johnson, Fannie Mae’s chief executive in the 1990s and one of the Beltway’s most connected figures—at one time or other the chairman of the Brookings Institution and the Kennedy Center for the Performing Arts as well as a member of Goldman Sachs’s board of directors.

As an assistant to Vice President Walter Mondale, Mr. Johnson had little background in financial markets. When he was chosen to head up Fannie Mae, in 1991, he quickly grasped that the key to Fannie’s success, and to his own astronomical bonuses, was persuading Congress to maintain Fannie’s implicit government backing while preventing any bank-style regulation to interfere with the company’s operation.

That Fannie and its cousin, Freddie Mac, had been created by the government to provide a secondary market for mortgages allowed them to borrow more cheaply than potential competitors. Investors around the world assumed—correctly, as it turned out—that the U.S. government would bail them out in a crisis and therefore viewed investing in Fannie and Freddie’s debt as almost as safe as buying Treasurys. …”

http://online.wsj.com/article/SB10001424052702303745304576361531730887312.html

Book Review: Reckless Endangerment by Gretchen Morgenson and Joshua Rosner

“…The authors would of course have us believe that an unholy alliance of government and Wall Street was the driver of the boom, but the problem with this facile assertion is that skyrocketing home prices in the decade just passed were hardly unique to the United States. Housing boomed in Australia, Spain, and Ireland to name but three non-U.S. countries, plus it roared upward in Canada and England despite the fact that England abolished its mortgage deduction in the ‘80s (on page 3 the authors explained our deduction as a major driver of the boom), and in Canada it’s incredibly difficult to secure a loan to purchase a home.

What’s interesting is that while the authors at the book’s beginning laid out the ”cast of characters” that allegedly brought us to the brink, they oddly left out the man and his Treasury Department that played a bigger role than any of the admittedly worthless people that comprised their cast. Specifically, the authors left out President George W. Bush, and his Treasury Department that reversed the Reagan/Clinton strong-dollar policies in favor of extreme dollar weakness.

As history has regularly shown, from post-WWI Germany, to England and the U.S. in the ‘70s (despite skyrocketing rates of interest), to the decade just completed, when money loses value commodity-like assets including housing tend to rise, particularly in nominal terms. Housing is not gold-like in the sense that gold priced in all currencies tends to rise when currencies decline in value, but the historical correlation between commodity spikes and nominal housing health is very real, and was there during the Bush years for all to see.

Much as housing exploded during the devaluationist presidencies of Nixon and Carter, so did it boom during the Bush years when the dollar declined in value. And the reason the housing boom was global in nature has to do with the sad reality that when we devalue in the United States, it’s always and everywhere a worldwide event. Though the Euro, Aussie and Canadian dollars and the British Pound all rose against the greenback during Bush’s presidency, those increases masked the fact that the aforementioned currencies were in rapid decline against the most credible measure of value we have in the world: gold.

Morgenson and Rosner would have a point if the housing mania had been endemic to the United States, but with housing in nominal terms having skyrocketed around the world, we must look to currency policy for the answer. The dollar’s decline began not long after Bush reached office, and the dollar’s fall led to a fall in the value of nearly every other foreign currency, thus exporting our housing mania to the world. History merely repeated itself, though Reckless completely glossed over a global run on paper currencies that has always led to recessionary housing booms.

The strange thing is that not only was President Bush left out of the authors’ cast, but the book was mostly laudatory of a Bush administration that began casting a skeptical light on Fannie and Freddie early on. That the Bush administration did in fact look more askance at the GSEs that animate Reckless doesn’t erase the greater truth that absent a falling dollar that helped boost nominal home prices for a time (and which still props up their nominal value today), there’s no rush to housing during the Bush years, no subsequent market moderation for Washington to turn into a crisis, and there’s arguably no President Obama.

So while Reckless has some good facts, and some very damning quotes uttered by some extraordinarily objectionable people, it ultimately misses the mark and will only succeed insofar as it inflames the partisan extremes even more. In short, readers must continue to wait for the book that offers the true explanation of how we got here; an explanation that isn’t credibly found in Morgenson and Rosner’s Reckless.  …”

http://blogs.forbes.com/johntamny/2011/07/09/book-review-reckless-endangerment-by-gretchen-morgenson-and-joshua-rosner/

 

Gretchen Morgenson on Dialogue

Charlie Rose – Gretchen Morgenson and Allan Sloan

6/30/2007-Prt 1 Gretchen Morgenson Interviewed by Bill Moyer

6/30/2007-Prt 2 Gretchen Morgenson Interviewed by Bill Moyer

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Pronk Pops Show 26, May 3, 2011: Segment 2: President Obama Is The Reason Your Gasoline Prices Are Going Up!–American People Favor Drilling For Oil and Gas!–Drill Baby Drill–Videos

Posted on May 3, 2011. Filed under: American History, Budgetary Policy, Business, Climate Change, Coal, Economics, Federal Government, Fiscal Policy, Government, History, Monetary Policy, Oil, Philosophy, Politics, Private Sector Unions, Public Sector Unions, Resources, Tax Policy, Unions, Videos, Violence, War, Wisdom | Tags: , , , , , , , , , , , , , , , |

Pronk Pops Show 26:May 5, 2011

Pronk Pops Show 25: April 26, 2011

Pronk Pops Show 24: April 19, 2011

Pronk Pops Show 23: April 12, 2011

Listen To Pronk Pops Podcast or Download Shows 22 (Part 2)-26

Listen To Pronk Pops Podcast or Download Shows 16-22 (Part 1)

Listen To Pronk Pops Podcast or Download Shows 10-15

Listen To Pronk Pops Podcast or Download Shows 1-9

http://en.wikipedia.org/wiki/Price_of_petroleum

High fuel prices worry struggling Americans. Burberry.

Obama Weekly Address: Gas Prices

END FED: Oil Prices Rise Due To

1) Oil Companies Can’t Drill

2) Fed Money Printing

3) Wars & Instability

Fraud, Manipulation Driving up Oil Prices

Renewable Energy Subsidies+High Consumer Costs=?

Government Energy Subsidies

Obama Is Playing The Blame Game For Price Of Gas At the Pump

TheBigPictureRT: The Real reason why Gas Prices are going up

Mar. 10 – MSNBC Greenberger – Gas Speculation

Banksters & Speculation Behind High Food-Oil Prices

Chairman Doc Hastings talks rising gasoline prices on Your World with Neil Cavuto

Trying to bring down gas prices

Michael Moore’s ‘Capitalism: A Love Story’ — Goldman Sachs Obama’s #1 Private Contributor

Soaring Gas Prices Tank Obama’s Approval Rating

Oil speculation and oil prices

Survey Says – Speculators Dominate Interest in Oil Futures – Bloomberg

CFTC Proposes Limits for Energy Speculators

Gas Prices Continue to Climb

Obama Wants Gas Prices to Hit European Levels

Energy Problems are Obama Delivering on Campaign Promise

EPA Blocks Oil Drilling in Alaska – 4/25/2011

Obama New Task Force Will Examine Gas Prices

Gensler Says CFTC Needs More Staff to Implement Rules

Irresponsible Media Coverage of Oil & Gas Prices, Alyona Minkovski Interviewed

Bernard Whitman on Fox News Applauds Obama’s Decision to Investigate Oil Price Gouging, 4.22.11

Courtney calls for CFTC action to reduce high gas prices

TheAlyonashow: Big Oil Cashes in on Rising Gas Prices

Oil Speculator Gaming Palace

Playing the oil prices money game

Courtney calls on CFTC to issue rules limiting the role of oil speculators

Michael Greenberger Talks Speculation In Commodity Markets

Mike Masters on Regulating Commodities Speculation

Gas Prices Up Due to Wall Street Speculation, Not Supply & Demand

Glenn Beck: The Federal Reserve Is Looting America… Oil Isn’t Rising, The Dollar Is Dropping

Conspiracy Theorist Steve Forbes on high gas prices w/o Federal Reserve “economy would do just fine”

END FED Inflation Created By Gov Buying Bonds; QE2 ‘Wealth Effect’; Companies Game System; QE3

Peter Schiff on CNBC Fast Money 4/25/11: Unstoppable Silver

Peter Schiff On Silver and Inflation Lock In Your Food At Today’s Price Try It For Free Below!

CNN/Opinion Research Corporation: “69 percent of Americans favor increased offshore drilling”

WASHINGTON – Earlier today, a new CNN/Opinion Research Corporation poll was released, further underscoring the fact that an overwhelmingly clear majority of Americans support the responsible development of homegrown oil and natural gas offshore. According to the poll, “69 percent of Americans favor increased offshore drilling.” According to CNN’s polling director, Keating Holland, “Although support for increased drilling in U.S. waters is highest among Republicans, a majority of Democrats also favor it.”

Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA), issued this statement regarding these findings:

“America’s independent oil and natural gas producers play a leading role in responsibly producing the homegrown energy resources critical to meet the nation’s growing demands. In fact, according to a recent report, independents drill 95 percent of America’s onshore and offshore wells. Equally clear, as confirmed by this new survey, is the American people’s support for the responsible development of job-creating offshore energy exploration and production.

“Our economy is struggling, and many remain out of work along the Gulf Coast as a result of misguided Washington policies that continue to discourage access to reliable oil and natural gas supplies offshore. And with gas prices on the rise, hampering our economic recovering and stretching family budgets to the brink, the Obama Administration and leaders in Congress must act boldly and swiftly to streamline access to taxpayer-owned oil and natural gas resources offshore. Shirking this critical responsibly will only further weaken our nation’s energy security. The American people have spoken clearly. Inaction is not an option.”

http://www.ipaa.org/news/press_releases/2011/2011-04-19_139.php

Obama Wants US to Help Brazil Develop Oil Reserves

Obama’s $2B Payback to Soros: Drill in Brazil

Glenn Beck: Is Obama a George Soros Puppet?

Glenn Beck-Soros Petrobras & Obama giving 2 billion to him

Vitter Criticizes Obama’s Support for Brazil Oil Exploration

Gulf Oil Industry in Recovery

Year After Oil Spill, Obama Energy Policy Endangers Economy

Vitter Fights Moratorium as Gulf Coast Economy Struggles to Recover from Drilling Shutdown (WWL-TV)

Federal Judge Martin Feldman Rules Against Obama Oil Drilling Ban !!!

Myron Ebell on the Offshore Drilling Moratorium

Interior Secretary Ken Salazar seeks to reimpose drilling moratorium

Pence Discusses Need to End Offshore Drilling Moratorium

Drilling Moratorium May Imperil Louisiana’s Oil Industry

Obama Lifts Ban on Offshore Drilling

Obama Lift’s Moratorium on Offshore Drilling Part 1 – 4-01-2010 Democracy NOW!

Obama Lift’s Moratorium on Offshore Drilling Part 2 – 4-01-2010 Democracy NOW!

Obama Says NO Drilling In ANWR As It Could Be A Problem

Gov. Palin on Drilling in the ANWR

Shell Arctic Exploration Program: The Next Chapter in Alaska’s Oil and Gas History

Oil Supply and Demand and the Next Oil Price Spike – PeakOilProof.com

Background Articles and Videos

“Fuel for Thought: High Gas Prices and How They Got That Way”

Introduction to Commodity Futures Trading: Hedgers & Speculators
Introduction to Commodity Futures: Our Natural Instincts as Traders
183. Intro to Futrues Trading 4: Futures Contract Details

  

Commodity futures margin accounts

Blame High Oil Prices on Speculators and Bernanke

Ed Wallace

“…Goldman Outs the Speculators

Meanwhile, the media continue to say that gasoline prices are directly tied to oil pricing, which isn’t quite true. Oil and gasoline are sold to different sets of buyers. One needs to buy crude for refining and the other sells gasoline at retail; these are legitimate hedgers. Then there are speculators, who jump into the market in search of profits on all fuels. To prove once again that no one in the investment banking business actually knows anything about oil, Goldman Sachs (GS) advised its clients on Apr. 11 to get rid of their commodities holdings, including oil. The Guardian quoted Goldman’s advice as warning: “The record levels of speculative trading in crude have pushed their prices up so much in recent months that in the near term, risk reward no longer favors holding those commodities.”

“Record levels of speculative trading in crude” have pushed up oil prices? Funny, all we’ve been hearing is that today’s oil prices are justified because of abnormally large demand, owing to the world’s improving economy. …”

“…Now let’s look at the big picture to see why gasoline prices are so incredibly high. Remember that our refinery utilization a week ago was only 81.4 percent. In the same week in 2005 it sat at 93.7 percent, with 212.2 million barrels of gasoline on hand. Even at that exceptionally high refining rate, we were down by almost a million barrels three weeks later. By contrast, we have dropped our inventories of gasoline from 223.2 million barrels to 209.7 million barrels since the first of the year and we still have only slightly less gasoline on hand than we had at the same time in 2005, amid blistering economic growth. Our refineries then were running at nearly 10 percent greater utilization.

The Fed’s Cheap Liquidity Flood

The problem starts with Ben Bernanke, no matter how many of his Fed presidents claim they are not to blame for the high price of oil. The fact is that when you flood the market with far too much liquidity at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it’s still true today.

When Richard Fisher, president of the Dallas Federal Reserve, spoke in Germany late in March, Reuters quoted him as saying: “We are seeing speculative activity that may be exacerbating price rises in commodities such as oil.” Fisher added that he was seeing the signs of the same speculative trading that had fueled the first financial meltdown.

Here Fisher is in good company. Kansas City Fed President Thomas Hoenig, who has been a vocal critic of the current Fed policy of zero interest and high liquidity, has suggested that markets don’t function correctly under those circumstances. And David Stockman, Ronald Reagan’s former budget director, recently wrote a scathing article for MarketWatch, “Federal Reserve’s Path of Destruction,” in which he criticizes current Fed policy even more pointedly. Stockman wrote: “This destruction is namely the exploitation of middle-class savers; the current severe food and energy squeeze on lower income households … and the next round of bursting bubbles building up among the risk asset classes.”

Let’s not kid ourselves. Oil in today’s world is worth far more than the $25 a barrel it sold for over a decade ago. But the ability of markets to function properly, based on real supply and demand equations, has been destroyed by allowing ridiculous leverage and the unlimited ability to borrow the leverage at historically low interest rates. …”

http://www.businessweek.com/investor/content/apr2011/pi20110419_786652_page_2.htm

Priming the Pump: How Wall Street Boosts Gas Prices

By Alain Sherter

“…Plenty of research shows that speculation by hedge funds and other investors raises the cost of gas. Said U.S. Commodity Futures Trading Commissioner Bart Chilton in a speech last week that touched on how speculators drove up the price of oilin 2008:

While I am not saying that they were the cruise control on gas or oil prices, I do think they tapped the gas pedal and prices moved up. They were a part of the price rise. Similarly, when they did get out of the markets, as the economy was melting down, prices decreased.

Mohsin Khan of the Peterson Institute for International Economics estimates that three years ago, speculation pushed up oil prices by nearly $70 a barrel. Now that linkage between Wall Street and prices at the pump is more alarming than ever: Speculation on oil futures is at a record high. As Chilton said in another presentation, since June 2008 the number of energy contracts held by such investors has risen 64 percent.

This isn’t to say that speculation is inherently bad — it isn’t. It can add liquidity to markets. Short-sellers also sometimes provide an important counterpoint to the prevailing, and often irrational, bullish sentiment. But there is by now copious evidence to suggest that speculation really does boost oil and gas prices. As MIT researchers put it in examining the cause of the 2008 run-up:

The oil price is a speculative bubble…. Just ask a commuter, a trucker or an airline customer and many production and commercial firms. …”

http://www.bnet.com/blog/financial-business/priming-the-pump-how-wall-street-boosts-gas-prices/12055

Oil Speculation, Insider Trading, JPMorgan, AT&T: Compliance

By Ellen Rosen and Carla Main –

“…President Barack Obama said a Justice Department probe will examine the role of “traders and speculators” in oil markets and how they contribute to high gas prices.

“The attorney general’s putting together a team whose job it us to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators,” Obama said April 21 in Reno, Nevada. “We are going to make sure that no one is taking advantage of American consumers for their own short-term gain.”

The administration on April 21 created a working group to explore whether oil and gasoline prices are being driven higher by illegal manipulation.

The group, which includes representatives of federal agencies and state attorneys general, will check for fraud, collusion or misrepresentation at the retail and wholesale level, the Justice Department said in a statement last week. The group also will examine investor practices and the role of speculators and index traders in oil futures markets.

Obama faces political pressure over rising gasoline prices. Crude oil futures have increased 22 percent and gasoline surged 34 percent this year as Middle East unrest reduced supply and the global economic rebound bolstered fuel demand. Both futures contracts touched the highest levels this month since the records reached in 2008. …”

http://www.bloomberg.com/news/2011-04-25/oil-speculation-insider-trading-jpmorgan-at-t-compliance.html

Answers to Common Questions
  • What is a commodity?
    Commodities are raw materials purchased by manufacturers to make other products such as processed food, refined oil, jet fuel, automobiles and a host of consumer products and building materials.
  • What is the commodity futures market?
    It is a marketplace where traders or businesses can buy or sell commodities for future purchase or sale. Those deals to buy or sell commodities are called “contracts” and they set forth the amount of the commodity, a price and a future date for the purchase or sale. For example, businesses highly dependent on oil – refineries, heating oil dealers, airlines and trucking companies – can reduce their risk of significant price fluctuations by purchasing future delivery contracts at predetermined prices at a commodity futures market. The two largest U.S. commodity futures exchanges are the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYMEX).
  • What is the purpose of commodity futures markets?
    Commodity futures markets provide two critical functions for businesses such as airlines and trucking companies that use large amounts of commodities. First, these markets serve as a means for price discovery. Second, they help businesses control for price risk and price fluctuations.
  • Which federal agency regulates commodities trades?
    Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency. The CFTC regulates commodity futures and options markets in the United States and has authority to craft and enforce the regulatory framework that governs the trading of all commodity futures, including energy products such as crude oil.
  • Who participates in these markets?
    There are effectively two categories of participants: financial players and physical players. Financial players include individuals, pension funds, university endowments, sovereign wealth funds and others. Physical players are those who produce or use the commodity being traded, such as airlines, trucking companies, etc.
  • What is a speculator?
    Financial players with no intention of using the physical commodity often are referred to as “speculators.” In other words, they do not have a business need to buy or sell the commodity; they simply want to trade futures contracts to make a profit. Speculators, for example, could buy large numbers of oil contracts and then sell them to each other again and again. In 2008, on average, nearly 12 times the volume of oil was traded on futures exchanges as was consumed globally. Without proper oversight, transparency and limits on futures positions, speculative trading unjustifiably can increase the price of energy or other commodities – with businesses and consumers picking up the final tab.
  • What is a hedger?
    Hedgers use the futures markets to manage risk by minimizing their exposure to significant price swings in commodities. This means that they usually buy or sell contracts at an amount related to the volume of what they will produce or what they will need to sell or purchase (to use in their business). Businesses such as airlines, trucking companies, oil companies and refineries are examples of these forms of hedgers.
  • What does trading “on paper” mean?
    “Paper trading” is when speculators buy contracts for oil or other commodities with no intention of ever using, producing or taking delivery of the commodity. Speculators buy and sell these paper contracts to each other again and again. A barrel of oil may trade 20 times or more before it is delivered and used. The prices may go up with each trade.
  • Has speculation contributed to unwarranted oil price increases?
    From the beginning to the end of 2008, the price of a barrel of crude oil on the New York Mercantile Exchange (NYMEX) moved from $99.64 to $145.29 to $33.87. On the way up, it took just 103 days of trading for the price of crude to soar 67 percent (more than $58 per barrel) to its July 3 peak, followed immediately by a precipitous 77 percent decline (more than $111) in just 118 days of trading. It is difficult to explain that unprecedented price volatility by changes in supply and demand fundamentals. Fewer than six months after the December 2008 low of $33.87, oil prices settled north of $72 on June 11, despite adequate supplies and the sharpest year-over-year drop in global consumption in nearly 30 years.
  • Why has speculation increased in recent years?
    Institutional investors (corporate and government pension funds, sovereign wealth funds and university endowments) have poured billions of dollars into the commodities markets. These speculative trades have helped to drive up the price oil because the majority of new contracts are betting on increases, rather than decreases. In effect, this swell in “artificial demand” for oil is upsetting the balance between physical supply and demand and, once again, fueling a price “bubble.”
  • What is an index speculator?
    An index speculator is a financial player, such as a corporate or government pension fund, sovereign wealth fund, university endowments or other investor, that buys (invests in) the 25 commodities that compose the Standard & Poor’s-Goldman Sachs Commodity Index (S&P GSCI) and/or the Dow Jones-AIG Commodity Index (DJAIG). The value of the index depends on how well the commodities being “tracked” by the index perform in the futures markets.
  • Should institutional investors be prohibited (or limited) from investing in commodities futures?
    The effects of institutional investors have been so great that they have actually altered the price discovery dynamics of today’s futures markets. Index speculators buy without sensitivity for the supply and demand of individual commodities, which undermines the price discovery function of the markets. Active trading strategies should be allowed, but they need to be done in a transparent and limited way.
  • Why should the government intervene in free markets? Won’t the bubble just work itself out eventually?
    The markets will eventually work themselves out and this bubble will pop on its own accord, just like all other bubbles have in the past. Unfortunately, while we are waiting, the price of oil could easily double again. Businesses and consumers can’t afford to wait for that to happen. For decades, we have had speculative limits in the commodities markets to reduce manipulations and price bubbles. Simply reestablishing these limits will greatly help solve this problem without unintended consequences.
  • What are position limits?
    Currently, a handful of foreign exchanges, most notably the London Intercontinental Exchange (ICE), are trading energy contracts that are identical to those traded in the United States, but are not following U.S. regulations because they claim they are exempt from U.S. law. These exemptions should not exist because they are trading U.S. commodities using terminals based in the United States.
  • What are swaps trades?
    Swaps trades (also known as “over the counter” trades) are commodities transactions that take place between two separate parties outside of the traditional markets. Since they do not take place within regulated markets such as NYMEX, these often secret trades take place without regulatory oversight. We believe these trades should be transparent and under the same rules as traditional markets, so that no price manipulation takes place.
  • In addition to reducing speculation, what other actions does the Stop Oil Speculation Now Coalition support?
    We need to increase domestic supply, exploration, alternative energy sources and conservation to further reduce the price of oil. Unfortunately, these are all more long-term solutions. Working Americans and businesses need immediate relief.

http://www.stopoilspeculationnow.com/Pages/FAQs.aspx

http://www.stopoilspeculationnow.com/Pages/FAQs.aspx

‘Perhaps 60% of today’s oil price is pure speculation’

by F. William Engdahl

“…The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How?

First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex in New York and the ICE Futures in London today control global benchmark oil prices which in turn set most of the freely traded oil cargo. They do so via oil futures contracts on two grades of crude oil—West Texas Intermediate and North Sea Brent.

A third rather new oil exchange, the Dubai Mercantile Exchange (DME), trading Dubai crude, is more or less a daughter of Nymex, with Nymex President, James Newsome, sitting on the board of DME and most key personnel British or American citizens.

Brent is used in spot and long-term contracts to value as much of crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication, Platt’s. Major oil producers including Russia and Nigeria use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, for Asia.

WTI has historically been more of a US crude oil basket. Not only is it used as the basis for US-traded oil futures, but it’s also a key benchmark for US productionR