New Senate: DEM 49 GOP 51
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Dem pickups: (None)
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Trump Announces Tariffs, Market Responds by Tanking
Yesterday, Donald Trump announced a tariff of 25% on imported steel and a tariff of 10% on imported aluminum. Shortly thereafter, the stock market announced that it wasn't so keen on the idea, with the Dow Jones index down by 420 points at the end of trading. Investors and traders have two fears. First, economically, these tariffs hurt American businesses far more than they help since all the companies that use steel or aluminum in the products, from beer cans to cars, are going to face higher costs for their supplies. This will mean price increases and renewed inflation.
Second, if Trump thinks other countries won't respond in kind, he is extremely naive. As one example of this fear, Boeing's stock was off 3.5%, since China and other countries could easily slap a big tariff on products made by America's biggest exporter, or could simply cancel Boeing orders and switch to Airbus. If Trump responds to what other countries do by then imposing more tariffs, we could quickly have a full-blown trade war, and trade wars are generally not so good for business. Smoot-Hawley certainly wasn't.
Many of Trump's advisers bitterly opposed the tariffs. Gary Cohn, director of the National Economic Council, has been arguing for months that tariffs will hurt the economy. Defense Secretary James Mattis doesn't want tariffs on allies because it makes them less likely to cooperate on military and security matters. NSA Herbert McMaster (at least, NSA for now, see below) agrees with Mattis.
It would seem that Mattis and McMaster knew what they were talking about, because a number of important allies have already registered their outrage at the announcement. Canadian Foreign Minister Chrystia Freeland, for example, released a statement warning that, "Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers." European Commission President Jean-Claude Juncker said the EU would "react firmly and commensurately" to any new tariffs. Australian Trade Minister Steven Ciobo concurred, describing Trump's plan as "disappointing," while government officials from South Korea and China also sounded the alarm. That's four different continents already, for those keeping score at home. Nobody from Antarctica seems to be angry, at least.
Titans of finance also dislike the plan. Roy Hardy, president of the Precision Metalforming Association, said that companies that use steel in their products will be hurt and they employ far more people than the domestic steel industry. William Dudley, president of the New York Federal Reserve Bank said that the tariffs risk setting off a trade war, which would damage economic growth around the world. But what do experts know?
But surely (Republican) politicians are gung ho for tariffs, no? Well, Senate Finance Committee Chairman Orrin Hatch (R-UT) said: "Tariffs on steel and aluminum are a tax hike the American people don't and can't afford." Sen. Ben Sasse (R-NE) put it this way: "You'd expect a policy this bad from a leftist administration, not from a supposedly Republican one." Speaker Paul Ryan's (R-WI) spokesman said: "The Speaker is hoping the president will consider the unintended consequences of this idea and look at other approaches before moving forward." In short, it appears that Trump has managed to unify the country, and even the world. Unfortunately, it is in opposition to him. (V)
Ivanka Trump Being Investigated
You're nobody in the Trump White House if you're not being investigated by at least three federal agencies. And so, it's hardly a surprise that Ivanka Trump has officially joined the club, according to reporting from CNN. The FBI is taking a very close look at her involvement with Trump International Hotel and Tower in Vancouver, which includes among its amenities an Ivanka-branded spa.
Nobody who would talk to CNN knows exactly why the FBI is so interested in this particular property, or in the First Daughter's involvement with it. It could be because it's one of the few Trump projects to open since he was elected president. It could be because of the source of the money—the Trumps largely just provided their name; the funding came from one of the most prominent families in Malaysia.
Given how many unknowns there are, it is hard to know how this news might impact the Trump administration. Certainly, it could impact Ivanka's security clearance. It could also increase pressure on the Kushners to leave the White House, either because they've become too much of a liability, or because they are tired of being under the microscope. Finally, there is good reason to think this could put Ivanka on special counsel Robert Mueller's radar (if she wasn't there already). There's no indication that he's tried to interview her yet, but that could soon change. (Z)
Former CIA Chief Worried that Russia Could Destroy America
In a wide-ranging interview with Politico, Michael Hayden, a retired general who ran the NSA and the CIA under George W. Bush, talks about the eerie coincidence that Donald Trump's tweets, Fox News, the alt-right media, and the Russian bots all seem to align well. He isn't claiming they are colluding, but even though each one has different interests, the fact that they are all on the same page much of the time scares him.
He is also very concerned that the Russian interference in 2016 was simply a warm-up exercise. He said that in his 40 years in the Air Force he learned a lot about Russian military tactics. The Russian approach is to start with a broad probing attack to see where the enemy's weaknesses are, then hit that point hard with massive force. The Russians may have decided that military attacks on the U.S. are a very bad idea, although threats are fine (see below), but causing turmoil in society in general and elections in particular are far easier and more likely to be successful. We don't know what they concluded in 2016, but they may feel that the weak spot is voter registration databases, voting machines, social media, or something else, and he is sure they will be back in force this year and in 2020. Remember, Hayden is no granola-eating, sandal-wearing, pot-smoking, Prius-driving California hippie. He is a retired four-star Air Force general who ran the CIA in a Republican administration. The interview is worth reading. (V)
Warner Warns of New Cold War
Sen. Mark Warner (D-VA), the ranking member of the Senate Intelligence Committee, says the United States and Russia are in the opening stages of a new cold war. He added that the fight is now in the shadows, but that it needs to brought out in the open and we need to use new technology to fight back. Warner feels that America's current responses to Russian aggression in one form or another are typically one-off and they have little deterrence value. He said that if Russia wants to use cyberwarfare, the U.S. should punch back.
Warner outlined three fronts the Russians are fighting on. First is targeting the election infrastructure. Second is weaponizing information through selective leaks. Third is full-on information warfare using social media. He also said that Russia spends $68 billion per year on defense while the U.S. spends ten times that, but it is being spent preparing for a 20th century war, not a 21st century war, which will take place largely in cyberspace. (V)
Russians Nuke Florida
Not actually—that presumably would have been pretty big news. But in a video that Vlad Putin showed during his annual address to Russia's Federal Assembly on Thursday. Speaking very much like a 20th century Russian leader, Putin declared:
Any use of nuclear weapons against Russia or its allies, any kind of attack, will be regarded as a nuclear attack against Russia and in response we will take action instantaneously no matter what the consequences are. Nobody should have any doubt about that.
Then he broke out some of that fancy 21st century cyber-technology and showed this video (that actually kinda looks like it was rendered on a 1983 IBM PC-XT):
Although the portion where the nukes head toward Florida (it starts at 0:43) is brief, it's also unmistakable. Undoubtedly, it's not a coincidence that Florida is home to Mar-a-Lago, and is thus the place where Donald Trump spends much of his time. If the video had shown the nukes hitting Washington, it might have created an incident, but Florida allows the wily old KGB agent to needle The Donald while claiming that nothing at all was meant by the video. After all, you can't spell "plausible deniability" without p-u-t-i-n. (Z)
McMaster May Depart White House by the End of the Month
NSA Herbert McMaster has reportedly been a short-timer in the White House for a very long time. He clearly doesn't like working with and for Trump, doesn't fit in with the administration, and is clashing with at least three or four of his most important colleagues (particularly Sec. of Defense James Mattis and Chief of Staff John Kelly). The reports that he's on his way out have returned, and they have greater urgency to them. First, because he has now made it to the one-year mark (as of February 20). Second, because as a military man who came of age during the Cold War, he simply cannot bear to stand by and watch as Trump does little to nothing about Russia. Third, because the Russia situation, and the tariffs (see above), and the North Korea situation, and the move of the U.S. embassy from Tel Aviv to Jerusalem, and a host of other developments have made very clear that the President has little interest in McMaster's advice. He's more of a National Security Watcher than a National Security Adviser.
Even if the general makes it to April, and maybe even to May, he's going to be gone sooner rather than later. Who will replace him, when the time comes? Among the possible options under consideration:
- Safra Catz: She is the co-CEO of Oracle and the
highest-paid female executive in the United States. Her qualifications to be NSA
are that she was born in Israel, and, uh...that's pretty much it. However, she
was a Trump supporter and loyalist from the beginning, and that matters a great
deal to the President. She is zealously pro-Israel and anti-Palestine, and her
being considered may well be a sop to GOP megadonor (and MAGAdonor) Sheldon
Adelson.
- Stephen Biegun: He's a Ford executive, and former senior
staff member to then-national security adviser Condoleezza Rice. He's very right
wing, but is also not well known, and so is not likely to score big points with
the base or with any key supporters. Trump, of course, would prefer a splashy
hire, if possible.
- Robert L. Caslen Jr.: The superintendent of West
Point was considered the last time the job was open, too. However, Trump might
not want to go with a general again, given how badly the last two
generals-turned-NSAs worked out (albeit for different reasons in each case). It
is also the case that active-duty folks might be leery, given what happened to
McMaster. Beyond the fact that he had such a bad experience, he has become
politicized enough that he likely cannot return to his military career and will
have to retire. Reportedly, one active-duty officer has already declined to
interview for the job for that very reason.
- John Bolton: The former U.N. Ambassador's name always seems to come up in these circumstances. He's still well loved in conservative circles, and so appointing him would certainly please the Breitbart crowd. However, he is very hawkish, particularly on North Korea. So, getting him approved by the Senate could be tough, since he won't get any Democratic votes, and he may be a bridge too far for some Republicans. Further, Bolton is famously short-tempered. If the even-keeled Herbert McMaster couldn't co-exist with Trump, how well will it work when there are two hotheads in the conversation instead of just one?
These are the names that are being bandied about, but given the embarrassment involved in hiring a third NSA within a little more than a year, it would not be shocking if the President went with someone out of left field, so as to generate lots of headlines. To take one wild example, Trump recently met with Henry Kissinger, perhaps the most notable NSA in U.S. history. Would The Donald try to get a 94-year-old former public servant out of mothballs? Anything's possible. (Z)
A Third Poll Shows Generic House Democrat Leading by 15 Points
In the past week, two polls have shown the Democrats with a lead of 15 or 16 points on the generic House ballot. Now a third poll, released yesterday, confirms the first two. A USA Today/Suffolk University poll has the generic Democrat at 47% and the generic Republican at 32%. With three nearly-identical polls within a week, it is pretty sure that if the election were held tomorrow, the Democrats would capture the House. But the election isn't tomorrow, or even next month. It is ages away and a lot can change before November.
The poll shows that Congress is exceptionally unpopular. Three-quarters of the respondents think it is doing a bad job. Also of note is that 58% want Congress to stand up to Donald Trump. (V)
Democrat Enters the Mississippi Senate Race
Usually Democrats have a pretty hard time finding candidates to run in statewide races in the deep South, because that involves spending months begging for nickels and dimes, and then losing by 40 points. Tea partier Chris McDaniel may have changed that, at least in Mississippi. McDaniel ran for the Senate in 2014 and actually came in first in the initial round of voting, beating Sen. Thad Cochran (R-MS), before losing to him in the runoff. Now McDaniel is running against Sen. Roger Wicker (R-MS) and Republicans are scared that he could become the next Roy Moore and turn a completely safe seat into a competitive one.
Under these conditions, the minority leader of the Mississippi House, David Baria (D), has thrown his hat into the ring and announced that he will challenge whoever wins the Republican primary. Baria is a lawyer who has been in Mississippi politics for a decade. Given how Republican the South is, he has about as much chance as a Democrat in Alabama. Oh,wait... (V)
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