Putin Ordered Russian Hacking to Help Trump

A report released yesterday by the U.S. intelligence community unambiguously states that Vladimir Putin ordered Russian hackers to execute an unprecedented campaign to interfere with the U.S. elections. Initially, the goal was to undermine public faith in the democratic process and smear Hillary Clinton, whom Putin personally dislikes. Later, it became more about helping Donald Trump.

The unclassified report contains a long and detailed account of how the Russians intervened in the election process on many fronts, including hacking and releasing Democratic emails, creating fake news, and trolling, among others. The report says that the "person" Guccifer 2.0, who claimed credit for some of the hacking, is actually not a person at all, but a creation of the Russian military intelligence, GRU. Trump was briefed on the report yesterday by DNI James Clapper, CIA Director John Brennan, Director of the NSA Michael Rogers, and FBI Director James Comey. Trump basically shrugged the report off as unimportant.

The fallout is only beginning. In an op-ed in the New York Times, former deputy director and twice acting director of the CIA Michael Morell said that Trump's repudiation of the CIA flows from his need to be right about everything all the time. Morell went on to say that Trump's behavior will weaken an agency that is central to the key issues of our times: terrorism, nuclear proliferation, cyberespionage, and dealing with rogue states. Without good intelligence, how will Trump know what the Iranians and North Koreans are up to? Morell expects Trump's behavior to have a disastrous effect on the CIA and on the country's security, as many agents will be disgusted that they have sacrificed so much only to be dismissed by the president. Morell pointed out that it will take years to recruit and train replacements and a decade before their experience matches the people who will soon leave. In addition, if the president has no faith in the CIA, foreign intelligence services won't either, and their cooperation is crucial in so many ways. In short, Morell is not optimistic about the future. (V)

Donald Trump is Elected President

The electoral votes were counted today in a joint session of Congress and although several representatives, including Barbara Lee (D-CA) and Sheila Jackson Lee (D-TX), objected to the count, no senator objected. By law, unless at least one representative and one senator object, the count is accepted. Consequently, Donald Trump has been elected President of the United States. All he has to do now is take the oath of office on January 20 at noon. (V)

Fourth GOP Senator Won't Vote for Repealing the ACA without a Replacement

Sen. Bob Corker (R-TN) has become the fourth Republican senator to voice concerns about repealing the Affordable Care Act before a replacement plan is ready to be approved. Three other Republican senators, Rand Paul (R-KY), Susan Collins (R-ME), and Tom Cotton (R-AR), have expressed the same view. If all four vote against the impending repeal bill, it will get only 48 votes and thus fail to pass the Senate.

The problem is that the Republicans have been trying—unsuccessfully—for about 6 years to come up with an alternative that they all agree on, and they can't do it. All Republicans want to get rid of the individual mandate to buy insurance. Most Republicans, including President-elect Donald Trump, want to keep the ban on companies' refusing to insure pre-existing conditions. The trouble is that these two desires are incompatible. If the individual mandate is killed and the ban on pre-existing conditions is kept, healthy people won't buy insurance until they get sick, then they will sign up. This collective behavior will cause the insurance industry to collapse. Republicans don't want that either. So unless they can convince two of the holdouts to vote for "repeal and delay," its chances are looking grimmer by the day. (V)

Obamacare Repeal Could Cost 3 Million Jobs

The George Washington University's Milken Institute School of Public Health has just released a new study on the impact of slashing Obamacare, and their conclusions are sobering. The study's authors say that, in the worst-case scenario, killing the program could kill 2.6 million jobs by 2019, and nearly 3 million by 2021.

The "worst case," for purposes of the study, is that the GOP cancels the subsidies that low- and moderate-income citizens rely on and then does not replace them with an alternative. This would trigger a ripple effect, in which health care providers would cut workforces and spend less on supplies. Then the suppliers would cut jobs, and their suppliers would do so, and so forth. At the same time, the now-unemployed workers would have less purchasing power, which would hurt income and jobs at whatever businesses they frequent (for example, the coffee shop across the street from the hospital, or the Target where they buy their clothes). As a "bonus," an estimated $48 billion in tax revenue would be lost.

The conclusions reached by the GWU study are not markedly different from those reached by the bipartisan Committee for a Responsible Federal Budget. Looking solely at economic impact, the Committee concluded that eliminating the coverage provisions, taxes and Medicare expansion implemented by Obamacare would cost the government $350 billion, and that's before any replacement program has been paid for. Certainly, analyses like these must be part of the reason that some in the GOP are beginning to balk at the repeal, particularly in the absence of a viable replacement. (Z)

Trump Slams Toyota

President-elect Donald Trump chose his latest Twitter target (Twarget?) on Thursday night, taking to the platform to declare:

Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.

The Donald is somewhat in error here; it's unclear whether he means the already-under-construction plant in Baja (which builds Tacoma trucks), or the soon-to-break-ground plant in Guanajuato (which will build Corollas). Trump is also assuming powers he will not actually have; taxes and tariffs are the province of Congress, and GOP leaders have indicated they do not support the President-elect's plans.

Still, just because Trump's threats are likely much ado about nothing, it doesn't mean that they have no impact. Toyota shares took a hit on Friday, dropping 3% early in the day. The Japanese government felt compelled to step in; Chief Cabinet Secretary Yoshihide Suga told reporters that Toyota is an "important corporate citizen," while Trade Minister Hiroshige Seko emphasized how much Japanese companies contribute to U.S. employment. They also observed that the new plant will not lead to elimination of any jobs in the United States.

This incident, which is hardly isolated, illustrates a significant problem that high-profile corporations and brands will have to be prepared for over the next four (or eight) years. Trump has already made clear that he has no qualms about attacking any company that raises his ire; he's already aimed his sights at Toyota, Boeing, Vanity Fair, H & R Block and others. These attacks have consequences; stock prices dip, and—in some cases—it could cause Trump supporters to take their business elsewhere.

The real challenge is figuring out exactly how to respond. On one hand, arguing with the President of the United States is generally a losing proposition. On the other hand, a rapid response of some sort is essential. And while a Japanese concern like Toyota can ask their government to do their fighting for them, an American company doesn't exactly have that option. Consequently, corporate branding and communications consultants are now doing a land-office business helping companies with the development of contingency plans in case they happen to be the next Twarget. "If you're a CMO, you need to put another filter on your plans," says consultant Andrew D. Gilman. "Normally you'd never have to worry about a president singling out your company before. Now you do." And there is no "one-size-fits-all" solution. Some companies have responded with snark (Vanity Fair), others by hiring third-party spokesmen (H & R Block, with actor Jon Hamm), still others by apologizing and promising to do better (Boeing). One imagines that they will all be remembering this when it comes time to make their financial contributions for the 2020 presidential cycle. (Z)

Trump Slams Schwarzenegger

It wasn't just Toyota that ended up in Donald Trump's crosshairs this week. The President-elect was underwhelmed by his replacement on "The Celebrity Apprentice," and also has not forgotten that Arnold Schwarzenegger (although a Republican) endorsed Hillary Clinton last year. So, on Friday, The Donald tweeted:

Wow, the ratings are in and Arnold Schwarzenegger got 'swamped' (or destroyed) by comparison to the ratings machine, DJT. So much for being a movie star--and that was season 1 compared to season 14.

It's nice that Trump saw fit to explain to us all what "swamped" means; perhaps someone should return the favor and explain to him that TV ratings from 2006 are not comparable to those from 2017, given changes in the business. In any case, it remains clear that The Donald does not forget when he has been slighted, and that no target is too inconsequential. The Terminator, for his part, took the high road:

There's nothing more important than the people's work, @realDonaldTrump. I wish you the best of luck and I hope you'll work for ALL of the American people as aggressively as you worked for your ratings.

For those who were not paying attention, that's the textbook definition of a backhanded compliment. And a reminder that one of these men is a seasoned politician, and one is not. (Z)

"Mad Dog" Mattis is Mad

Gen. James "Mad Dog" Mattis is Donald Trump's pick for secretary of defense, assuming he is confirmed (which will require a special waiver, since he's been on active duty in the last 7 years). But although Inauguration Day is still two weeks away (and confirmations are even further away than that), there's already trouble brewing. According to several insiders, Mattis was furious that he was not consulted in the selection of businessman Vincent Viola for secretary of the army. The General threatened to quit Team Trump, and Vice President-elect Mike Pence had to be dispatched to calm Mattis down.

The problem that this reveals, of course, is that Team Trump is largely made up of movers and shakers who are used to acting unilaterally—they give orders, and those orders are followed. Politics, by contrast, demands cooperation and teamwork. Will Trump and his lieutenants be able to make the adjustment? Your guess is as good as anyone's. (Z)

Trump Favorite Is Elected Ohio State GOP Chairwoman

Donald Trump is already remaking the Republican Party in his image, not only at the national level, but at the state level as well. There was a battle in Ohio over who would be the new chair of the Ohio Republican Party: Matt Borges, who was backed by Gov. John Kasich (R-OH), or Jane Timken, who was backed by Trump. Timken won. This election will no doubt serve as the prototype for other state party elections, as Trump-backed candidates are likely to take charge of many state parties. (V)

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---The Votemaster and Zenger