Facebook Shuts Down Disinformation Campaign

Facebook has turned off 32 pages it thinks are being run by the Russian troll farm known as the Internet Research Agency. This is the first confirmed evidence that the Russians are already busy hacking the 2018 election. The pages were discovered through a combination of manual labor, artificial intelligence, and help from law enforcement. No one has a clue whether Facebook has located 50% or 0.01% of the Russian activity. Most likely it is closer to the latter than the former, though.

While this may be only a drop in the bucket, at least Facebook is making an attempt at finding and stopping Russian interference in a U.S. election, which is more than it and other social media companies did in 2016. Unfortunately, it is very difficult to tell which posts are from Russians and which are from Americans. If someone posts something saying Trump is wonderful and Democrats suck, it could be from a Russian—or from any one of tens of millions of Americans who also feel that way. How does anyone tell?

Also an issue is that the Russians are now aware that companies are looking for them, so they are getting more sophisticated. For example, rather than only posting fake news, some Russian trolls are organizing and/or promoting Trump-oriented rallies, protests, or other events.

Government officials are very clear that a massive disinformation campaign run by the Russians is already underway. DHS Secretary Kirstjen Nielsen said: "This threat is very real, and Americans need to know that." Director of National Intelligence Dan Coats has expressed similar thoughts multiple times in multiple forums. The only top official who doesn't seem at all worried about the Russians is Donald Trump. (V)

Manafort's Trial Gets Underway

The trial of former Trump campaign chairman Paul Manafort began yesterday. Jury selection was completed early, with six men and six women selected along with four alternates. Then prosecutors made their opening statement. They portrayed Manafort as someone who thought tax and banking laws didn't apply to him. They said he opened over 30 foreign bank accounts and then stashed millions of dollars he earned from helping a Russian-puppet regime in Ukraine in them. According to lead prosecutor Uzo Asonye, Manafort then used this money to finance a lavish lifestyle and buy lots of expensive real estate, but then he neglected to mention any of his income on his tax returns, making him guilty of tax evasion. Asonye tried to make the jurors get a better feeling for Manafort's lifestyle by pointing out that he used his undeclared income to buy a $21,000 watch and a $15,000 ostrich jacket. Judge T.S. ELlis didn't like this line of reasoning so much and told Asonye that being rich is not a crime, so he should focus on how Manafort broke the law. Asonye then said that he will show that Manafort didn't pay the taxes he owed, and that was the crime. Asonye also said that Manafort pulled this off by lying to his bookkeeper, his tax preparer, the IRS, and his banks.

When the defense got its shot at an opening statement, Manafort's lawyers denied all the charges and said that Manafort was a victim of his employees, especially Rick Gates, who embezzled millions from him. Gates is expected to be a witness in the trial. The defense lawyers didn't point out that even if Gates did steal money from Manafort, that doesn't clear Manafort of tax evasion charges. However, by trying to paint Gates as a crook who will lie under oath to save his own neck, the defense is hoping to make the jury skeptical of what he is going to say later on.

Even if Manafort is found not guilty of all 18 charges against him in this trial, he is not off the hook. In September, he will go on trial in D.C. for money laundering, failing to register as a foreign agent, and witness tampering. (V)

Trump Wants to Give a Tax Cut to the Rich

"But he already gave them one," you say. That is true, but it would seem that in Donald Trump's world, that's not quite enough. And since even Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell would not have the...temerity to try it twice in one year, the President and his team are thinking seriously about pulling it off in backdoor fashion. "If it can't get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we'll consider that," Mnuchin said.

The potential plan would be to change the definition of "cost" for calculating capital gains, and allowing taxpayers to adjust the initial value of an asset for inflation when it sells. To give an example, imagine that someone bought a house for $100,000 in 1990 and sold it for $330,000 in 2018. Under current law, they would pay capital gains taxes on the increase in value, or $230,000. Under the new system, if it is implemented, that $100,000 would first be converted into 2018 dollars. That's roughly $198,000, and so the home seller would pay capital gains tax on $132,000 instead of $230,000. That would be a savings, to the taxpayer, of about $20,000. And since it is generally wealthy people who sell costly assets that appreciate greatly, most of the benefits would go to them. Specifically, it is estimated that the plan would reduce taxes by $102 billion over the next decade, with 86% of that going to the top 1 percent of households. People, in other words, like Steve Mnuchin and Donald Trump.

There are four very serious issues for Team Trump to consider before they decide if they want to hitch their wagons to this idea. The first is legal. It is not at all clear that a $100 billion tax cut by executive order is allowable under current law, and the attempt would undoubtedly lead to lawsuits. The Bush administration, where tax cuts were more beloved than mom, baseball, or apple pie, considered a similar scheme and decided there was simply no way it would fly. So, it's clearly a pretty high-risk maneuver.

The second issue is political. Trump, Mnuchin, and National Economic Council Chairman Larry Kudlow (a big advocate of the plan) have convinced themselves that another big tax cut for the rich will trickle down and will spur the economy to even greater heights. But the scholarly consensus on trickle-down economics is that it just doesn't work. And even if the scholars are wrong, the economy is already doing about as well as is possible right now. Any "better" and it will get overheated, which is prime time for a collapse. And even if the scheme does work and there's no meltdown, it would be a long time before the average citizen noticed any tangible benefits (macroeconomic policy changes usually take 12-24 months to manifest themselves). That is to say, long after the midterms are over. And that leads us to the other side of the equation: If Team Trump does this, they will be giving the Democrats a giant, gift-wrapped package for use in the midterms: "The wealthy plutocrats in Washington don't actually care about you, they just care about making themselves and their rich buddies richer." If a baldfaced, $100 billion cash grab that goes almost exclusively to the ultra-rich (following on the heels of a $1.3 trillion cash grab that also goes almost exclusively to the ultra-rich) can't sell that line, then nothing can.

The third issue is societal. Trump probably—and unwisely—cares very little about this, since he's a social Darwinist who basically thinks that poor people deserve to be poor because they are sad and weak. However, wealth inequality in the United States is already at its worst level since World War II. More precisely, the top 1% of households (the same folks who would benefit from the new plan) control 40% of the nation's wealth, which is exactly as much as the bottom 90% control. This is Gilded Age-level stuff. And the negative impacts of this kind of disparity are enormous: social upheaval, increases in crime, outbreaks of disease because people can't afford health care, crumbling infrastructure due to an inadequate tax base, declining educational performance because students also have to work or don't have proper nutrition, and so forth. Whether Trump & Co. believe it or not, these things will affect them negatively, too. Epidemic diseases do not stop at the gates of the gated community, nor do criminals, nor do urban riots. Rich people also need roads, and also rely on the middle- and working- classes to provide highly-educated tasks like accountancy and medical care and middle management. And that is before we talk about the fact that someone has to buy the products produced by the wealthy, and they can't do so if they don't have the money for it. One of the biggest black marks on Barack Obama's resumé is that even though he oversaw the resurgence of the U.S. economy, he wasn't able to do much about wealth inequality. It is looking more and more like this is one way that Donald Trump is determined to follow in his predecessor's shoes.

And finally, the fourth issue is also political, albeit of a more long-term nature. Historically, if you oppress the peasants long enough and hard enough, they get out their pitchforks. Just ask Louis XVI. Or in an American context, do the Republicans really want a new FDR to rein them in and have his party stay in power for decades? (Z)

Trump Attacks the Koch Brothers

Speaking of rich people, an unhinged Donald Trump lit into the Koch brothers yesterday, despite their spending billions of dollars over the years to elect Republicans at all levels of government. He tweeted:

The globalist Koch Brothers, who have become a total joke in real Republican circles, are against Strong Borders and Powerful Trade. I never sought their support because I don't need their money or bad ideas. They love my Tax & Regulation Cuts, Judicial picks & more. I made.....

— Donald J. Trump (@realDonaldTrump) July 31, 2018

....them richer. Their network is highly overrated, I have beaten them at every turn. They want to protect their companies outside the U.S. from being taxed, I'm for America First & the American Worker - a puppet for no one. Two nice guys with bad ideas. Make America Great Again!

— Donald J. Trump (@realDonaldTrump) July 31, 2018

Technically, this is known as "biting the hand that feeds you."

Trump is reacting to the news that the brothers and their network are unhappy with him generally, and that specifically they are not going to oppose Sen. Heidi Heitkamp (D-ND) or support Sen. Dean Heller (R-NV). In fact, they are likely to target only four Senate races, in Wisconsin, Missouri, Tennessee, and Florida. Their beef with Trump is on trade, immigration, and a number of other issues.

Trump wasn't the only one to go after the Koch brothers. Former White House strategist Steve Bannon told Politico that voters don't want free trade and the Kochs should shut up and get with the program. Bannon's comment led long-time conservative intellectual Jonah Goldberg to shoot back with this:

ICYMI. https://t.co/1LxXh0axFO it's really hard to imagine how the Kochs can withstand this kind of pressure. I mean a combined net worth of $80 billion in privately held companies leaves them so vulnerable to a dude with 5 shirts and fewer followers.

— Jonah Goldberg (@JonahNRO) July 31, 2018

Despite Trump's tweets, many Republicans owe their offices to the Kochs. They are not about to dump on their sponsors, no matter what Trump or Bannon think. But the fact that the Kochs are now holding Republicans accountable for how they voted is a change from the old days when all it took to get Koch money was an (R) after your name. (V)

Trump's Former Right-hand Woman Says Trump Knew about Meeting with Russians

Barbara Res, a former Trump Organization Executive who was effectively Trump's right hand for many years on practically every construction project he undertook, yesterday told Anderson Cooper that she is certain Trump knew in advance of the Trump Tower meeting with Russian lawyer Natalia Veselnitskaya:

"Impossible." Barbara Res, a former Trump Organization executive, says there is no chance Donald Trump would not have been informed of the Trump Tower meeting before hand https://t.co/qqKKCkHYy1 pic.twitter.com/6t9VlnmWKz

— Anderson Cooper 360� (@AC360) July 31, 2018

Res knows Trump extremely well and said Trump always wanted to be on top of things. To her, it is inconceivable that his son would not have instinctively told Trump Sr. about the planned meeting to get dirt on Hillary Clinton. In effect, Res has now seconded Michael Cohen's accusation that Trump knew about the meeting in advance. That makes two high-level insiders who are now on the record saying Trump knew all about it. If any more come forward, it is going to be increasingly difficult for Trump to get away with claiming they are all liars. If it's not already impossible, that is (see below). (V)

Giuliani Keeps Shooting His Client in the Foot

Rudy Giuliani, Donald Trump's television lawyer, is an out-of-practice prosecutor now trying to masquerade as a defense lawyer. And, by all indications, he's not doing a very good job of it. Who knows if he was the one responsible for the extremely dubious argument he made on Fox News and CNN on Monday that "collusion is not a crime." Maybe that's his handiwork, or maybe he was just the messenger. But Giuliani is definitely responsible for a digression during the CNN interview that, as TPM's Josh Marshall points out, was a huge gift to Special Counsel Robert Mueller.

Marshall was kind enough to tweet video of the key moment:

This is going to be a pretty problematic admission for Rudes and Trump. I'll explain in a moment. pic.twitter.com/fQkeMjdXVa

— Josh Marshall (@joshtpm) July 30, 2018

It's a bit hard to parse, as Rudy tends to ramble these days, and to talk over whoever is interviewing him. However, the thrust of his remarks is that there was a planning meeting on June 7, 2016, two days in advance of the big meeting with Russian lawyer Natalia Veselnitskaya. Trump Sr. was not there, according to Giuliani, but Donald Trump Jr., Jared Kushner, Paul Manafort, and Rick Gates were, possibly joined by former Trump fixer Michael Cohen.

Giuliani's purpose in revealing this, ostensibly, was to demonstrate how "out of the loop" Trump Sr. was on this matter. However, the counselor has now made the rest of us aware of three things that Team Trump should be worried about. The first is that gathering nearly all of the pooh-bahs of a campaign for a planning meeting suggests that the meeting itself (which also brought the pooh-bahs together) was seen as a big deal. That's much more consistent with "we're going to get some juicy dirt on Hillary" than with "we're going to talk about adopting Russian orphans." It's also consistent with, "This is something that Trump Sr. needs to know" and not "This isn't worth Trump Sr.'s time."

The second problem is that the planning meeting happened roughly six hours before Trump Sr. bragged to a rally crowd that some major dirt on Hillary Clinton was about to break—a promise that was quietly dropped. It would be a remarkable coincidence, indeed, if Trump just happened to make that threat on the day his team planned for the meeting, and then just happened to forget the threat two days later, when it turned out Veselnitskaya had nothing much to tell them.

And finally, the third problem is that Cohen may have been present for the planning meeting, and Rick Gates was definitely present. The latter has already turned state's evidence, and the former may soon do so. Which means we may soon have three Trump insiders willing to say "Of course Donald Sr. knew what was going on." (Z)

Kelly Will Remain Chief of Staff until 2020

At least, that is the plan right now. After months of reports that White House Chief of Staff John Kelly was out of favor, and that his relationship with Donald Trump had deteriorated to the point of no return, and weeks of reporting that the end of Kelly's time in the White House is nigh upon us, the former Marine general announced on Tuesday that the President asked him to stay on the job until 2020 and that he agreed.

What happened here? Did the rumor mill really miss so badly? It's possible, but not likely. First of all there was so much smoke about the poor relationship between Trump and Kelly that it's hard to believe there was zero fire. Further, there are external indicators that the stories about Kelly's alienation are true. For example, his morning gym workouts—taking place right in the middle of what should be his workday—are visible to the White House press corps. Similarly, his absence during some high-profile moments—the interview and appointment of John Bolton as NSA, for example—has been noticeable. There's also the fact that Kelly's #1 task when taking over from Reince Priebus was to rein in the President's Twitter behavior. That went pretty well for a month or two, but Trump has been on an absolute rampage since then. There is no way, for example, that Kelly had any oversight when it came to Tuesday's tweet about the Kochs (see above), or Monday's about shutting down the government, or—perhaps most obviously—the ALL CAPS tweet directed at Iran.

A much more plausible explanation is that Trump and Kelly have reached...an arrangement. Trump wants to do his own thing and to effectively act as his own chief of staff. By keeping Kelly on, he can avoid the embarrassment of yet another high-profile departure, and also uncomfortable questions about hiring chief of staff #3. Kelly, for his part, gets a nice, high-profile sinecure. He gets paid a six-figure salary to work out, and to work on whatever projects that interest him (for example, he is a big supporter of a harsh immigration policy). He can also tell himself that he's in a position to step in and to be the "grown up" in case it ever becomes really necessary (like, say, Trump orders a nuclear strike on Iran). So, it's sort of a dysfunctional win-win for both men.

It's also worth pointing out one more thing: Rex Tillerson was definitely staying on as Secretary of State right until he wasn't. The same was true of Priebus, Gary Cohn, Scott Pruitt, Tom Price, Hope Hicks, and a host of other Trump administration insiders for whom the end came quickly. So, just because Kelly is set to remain on the job for two more years today doesn't necessarily mean that will be be true tomorrow. (Z)

Cuomo Leads Nixon by 30 Points in New York Democratic Gubernatorial Primary

Actress Cynthia Nixon is challenging Gov. Andrew Cuomo (D-NY) in the blue team's gubernatorial primary. She is running way to Cuomo's left. The contest has the flavor of Hillary vs. Bernie, part 19. The first poll of the primary, done by Siena College, has Cuomo ahead 60% to 29%. Nixon has called herself a democratic socialist and likes to draw parallels with Alexandria Ocasio-Cortez, who has become the darling of the party activists. Nixon's problem, of course, is that winning a statewide election is a whole different ball of wax from winning a low-turnout election in a heavily Democratic and heavily Latino congressional district in the Bronx and Queens. (V)

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---The Votemaster and Zenger