Musk Is King

Elon Musk, as you may recall, is not an elected official. Nor is he a Senate-confirmed appointee. He's not even an appointee to a job or a department that has been given Congressional approval. The only difference between him, and any reader of this site, governmentally speaking, is that he has the ear of the President, and the President is listening. And Musk, being a ruthless and power-obsessed kind of person, is quickly accruing power that is verging on king-like. Or duce-like, if you prefer.

Before we continue, let us note that the details here are... shaky, in some cases. Musk is trying to keep things under the radar as much as possible, and he is enabled in that by more than a few folks, including Donald Trump himself, who are more than willing to lie as needed. So, while we think we have a decent handle on what's going on, keep in mind that new details could emerge at any moment.

To start, it is now clear that the assault on USAID was just the opening volley, sort of a fiscal version of Pearl Harbor. There is still much wrangling going on, on that front, with Democratic politicians and USAID staffers trying to access USAID's offices, and Musk and his minions physically blocking them. Meanwhile, Secretary of State Marco Rubio announced yesterday that he is now the acting director of USAID. On whose authority he has gained that new title is not clear.

The USAID maneuvering is clearly illegal, and is clearly a direct assault on the authority of Congress, one that carries the message, "Oh, yeah? What're ya gonna do about it?" But that's not the worst of it. Not by a long shot. As we wrote yesterday, Musk and his DOGE underlings have apparently gained access to a number of critical federal computer systems. We specifically noted the Treasury's payment system, which is properly called the ACH Network and handles the government's financial transactions.

In addition, Musk and his team have access to the Office of Personnel Management's federal human resources databases, which contain all sorts of personal information about federal employees, from SSNs and addresses to personnel reviews and medical histories. If that is not enough, Musk has reportedly gained access to the FDIC system, which basically monitors bank deposits. If that system is altered, or shut down, it could be Wild West time for the banks. And we all know how well unencumbered banking worked out in 2008 (to take just one example).

At this point, let us note that the folks doing most of the hands-on work for Musk are a half-dozen young men best described as "hackers," and who all have pre-existing ties to either Musk, or Peter Thiel, or both. They are also quite young, ranging in ages from 18 to 25. It presumably goes without saying that tech-minded fellows who are that young are going to be blown away by Musk's charisma and wealth, and should be expected to remain fiercely loyal to him.

We will also point out that the Trump administration is still pretending that Musk and his minions have not been given any sort of serious access to the government's systems. For example, newly approved Treasury Secretary Scott Bessent promised Republican lawmakers yesterday that Musk & Co. do not have control over the ACH Network. Depending on how you interpret that, it's either an outright lie, or it's carefully chosen to be misleading (since you could have total access to a system without technically having "control" of it). In any event, WIRED has been all over this, since it's their jam (tech bros from Silicon Valley). And that outlet has reported that 25-year-old engineer Marko Elez most definitely has access to the ACH system, while current Cal undergrad Akash Bobba has access to the OPM databases. Others might well have access, too—these are just the ones that have been confirmed by multiple inside sources.

With the access that Musk has, there are all kinds of abuses he could commit. Among them:

• He could effectively impound any funds that he, or that Donald Trump, want to impound, simply by shutting down the relevant transaction(s).
  
  
• He could route money to himself, or to Trump, or to an offshore account.
  
  
• He could sell copies of valuable, and often highly classified, data to the highest bidder. You think China might like to know the identities of everyone being paid for work as a spy?
  
  
• He could keep a copy of the data for himself, to use for private business purposes.
  
  
• He could engage in campaigns of targeted harassment against federal employees, trying to get them to quit their jobs. For example, he might have daily e-mails sent to federal employees with chronic health conditions, warning them that if they get terminated from their jobs, they will lose their health insurance, so they better start looking elsewhere now, if they know what's best for them.
  
  
• He could blackmail federal employees. For example, "Don't blow the whistle on me, because I'd sure hate to have to tell your born-again-Christian wife and your evangelical pastor that you were busted for looking at porn while at work."

There is actually some circumstantial evidence that finding ways he can personally profit is at least a pert of the motive here. He's already been working to make eX-Twitter into a financial services hub, and he's already used his influence to make eX-Twitter an official platform for various government purposes (for example, it is now the exclusive platform for releases from the NTSB—no press releases, no e-mails, no fact sheets, just tweets). Some folks have guessed that we're not far off from a leap to "eX-Twitter takes over for ACH, and becomes the routing point for all federal transactions." If that thought doesn't scare you, we don't know what will.

It hardly needs to be said that there are all kinds of laws being broken here, by both Musk and by his techno-team. However, laws don't matter too much when: (1) a pliant DoJ has no interest in prosecuting, and (2) a pliant president is more than willing to issue a pardon, should it be needed. Or two pardons, or ten, even.

Those who are bothered by all of these developments are doing what they can to fight back. A couple of federal employees' unions have filed a lawsuit trying to get Musk's hands off the ACH system and the OPM database. Democratic officeholders are screaming bloody murder and are trying to get in front of cameras and microphones as much as they possibly can in order to get the message out. House Minority Leader Hakeem Jeffries (D-NY) unveiled a 10-point plan covering some of the ways that he and his colleagues will try to hold the administration's feet to the fire.

That said, Jeffries is not quite ready to play GOP-style hardball yet. Or, if he is, he's not saying so publicly. Most of what he lays out in his 10-point plan is mostly symbolic, like introducing messaging legislation that will never see the floor of the House. If and when the blue team decides to roll up their sleeves and get dirty, there ARE things they can do that will hurt the GOP a fair bit. For example, as long as Trump and Musk are doing end runs around the Impoundment Control Act, Senate Democrats could refuse unanimous consent for EVERYTHING, thus slowing the Senate down to a snail's pace. Similarly, when it comes time to deal with the budget and the debt ceiling, the Democrats could make clear that the price of even one vote from them is an agreement to pass whatever legislation is necessary to get Musk under control. Again, the Democrats don't much like to play ball that is quite this hard. But they may have no choice. (Z)

The Trade Wars Have... Been Paused

In case you were living life on the edge, and decided not to stock up on Nanaimo bars, Timbits, banderillas or cacahuates Japones, your devil-may-care attitude has been sustained—for now. That is because the trade war against Mexico and Canada has been paused for at least 1 month.

Let's begin with a basic chronology of events. This Saturday, as he had promised, Donald Trump slapped 25% tariffs on everything coming into the U.S. from Mexico and Canada, except Canadian energy, which was supposed to be hit with a 10% tariff. China was also hit with a 10% tariff. At that point, approximately 100.0% of people who follow politics sat back, bit down on a hard piece of wood, and braced themselves for bad news from Wall Street.

Trump's knowledge of macroeconomics is not exactly Nobel Prize-level, but even he clearly understood that the markets were in for a bumpy ride, going so far as to send out a message on his unsuccessful social media platform in which he asked (rhetorically) "WILL THERE BE SOME PAIN?" He answered his own question with a "YES," but promised that it would be worth it, because in the long run, "WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE—AND THE RESULTS WILL BE SPECTACULAR!!!"

Late Sunday, Dow Jones futures and other predictive indices suggested a bloodbath was coming. (Z) even made a bet with a reader that the Monday drop in the DJIA would be over 800 points. When the markets opened yesterday, things proceeded as expected:

As you can see, about an hour after the NYSE opened, the DJIA was down close to 500, and (Z)'s bet was looking very good. Then, very shortly thereafter, Trump announced that he'd reached an agreement with Mexico's Claudia Sheinbaum, and that he would pause the Mexican tariffs for 30 dyas. Thereafter, the markets bounced back. Later in the day, he announced an agreement with Canadian PM-for-now Justin Trudeau had also been reached. And so, at close, the DJIA was only down about 100 points. So, there goes $20 (Z) will never get back.

Thereafter, Trump claimed that he was not influenced by what was going on in the markets, telling reporters: "I don't know. I don't think about it." Pfft. Horse hockey. If he said, "I knew that would happen, and was determined not to set policy based on the vagaries of the stock market," that MIGHT be believable. But "I don't think about it"? Please. Every president thinks about it, with a focus that borders on obsessive. Remember back during Trump v1.0, when the DJIA kept breaking records, and Trump kept tweeting about it? OF COURSE he thinks about it.

You presumably don't need us to tell you that Trump took a victory lap yesterday, and that the MAGA crowd spent the day celebrating his "win" and laughing about how quickly Mexico and Canada surrendered to The Donald. What you might need us to tell you is exactly how reasonable this understanding of events is. The executive summary: Trump and his acolytes are full of it.

The concession that Sheinbaum gave, per Trump, is that Mexico would send 10,000 troops of the Mexican National Guard to help secure the Mexican-American border. The concessions that Trudeau gave, again per Trump, were that Canada would appoint a "fentanyl czar," set up a joint US-Canada border task force, and spend $1.3 billion on helicopters and technology to help secure the Canadian-American border. Here is a list of reasons to look askance at this "haul":

• What exactly does it mean to send 10,000 troops to help secure the Mexican-American border? Who counts to make sure it's 10,000, and not 9,800, or 8,333, or 7,871? Further, what exactly do they have to do for the promise to have been fulfilled? If they walk up to the border, and take a look around, and then go home, haven't they technically "helped secure the border"?
  
  
• Further, regardless of how substantive that promise actually is, Joe Biden persuaded Mexico (then led by AMLO) to send 10,000 National Guard troops to the border in April 2021, and without threatening a trade war. The Biden administration arranged similar maneuvers on several other occasions. And we would guess that it's the case that cooperation is much more enthusiastic when Mexico is treated as a partner, as opposed to a chico de los azotes.
  
  
• Trump also conveniently forgot to mention that he had to grant a concession to Sheinbaum, namely that the U.S. will work to stop the flow of guns across the Mexican border. We presume that the Trump administration will work about as hard on that as the Sheinbaum administration will work on the promise to secure the border. Still, the gun-loving parts of the MAGA base (which is pretty much all of them) may not be happy to learn of this part of the agreement.
  
  
• As to the $1.3 billion outlay, that sounds somewhat impressive, except... Canada had already agreed to make that investment, while Biden was in office.
  
  
• "Task force" is another name for "blue-ribbon panel." These entities never accomplish anything. We are academics. Trust us on this.
  
  
• The new Canadian fentanyl czar is either going to have the easiest or the hardest job in the world. Of all the fentanyl that comes into the United States from abroad, do you know how much comes across the Canadian border? That would be 0.2%. So, the new czar could very well sit back, and say, "I wasn't able to find any fentanyl smugglers, eh," and that would be pretty reasonable, because there basically aren't any. Or, he could actually try to find that 0.2%, which is like looking for a needle in a haystack the size of Manitoba. Either way, the Canadian fentanyl czar isn't going to make one bit of difference in the United States (or in Canada's) fentanyl epidemic.

So, Trump's "win" is that he got Mexico and Canada to agree to do some things they had already agreed to do prior to the trade war, and he also secured the creation of a meaningless task force and a meaningless fentanyl czar. Winning? We don't see any way you can answer that question with "yes."

Meanwhile, whether Trump knows it or not, and whether he cares or not, there are some prices to be paid for these shenanigans. Note that the market, while not down big yesterday, was still down. And the DJIA futures, as of 2:00 a.m. PT Tuesday, suggest it will be down again today. The markets do not like tariffs, and they really don't like uncertainty. Now those folks get to spend 30 days wondering what is coming down the turnpike. It could literally be anything, from "Trump conveniently forgets about the trade war" to "Trump announces that the 25% tariffs are in full effect, re-launching the trade war." Who knows?

In addition, the leaders of the world are watching. When Trump threatens tariffs, and then backs down immediately, after he's been given meaningless concessions, then everyone takes notice. Like the boy who cried wolf, every time The Donald goes to that well, he will be taken less seriously. He is rendering impotent his very favorite weapon.

Finally, Canada is in the running for the title of "America's closest ally," and the U.S. relies on that nation to be a partner in a great many ways. The more often that Trump decides to pi** on the folks in the Great White North, the less amenable to cooperation they become. To help illustrate, we thought we would share this message we received yesterday from reader D.J.M. in Salmon Arm, BC, Canada:

So Trump has "paused" tariffs. As Electoral-Vote.com has previously noted, TCF makes outrageous claims, backs off, and then eventually claims the greatest deal ever. However, I believe in this case, he is hurting Americans more than your friendly northern neighbors and the aftereffects will be enduring,

First, trade and tariffs are a two-way street. Each country has their own interests that have always been brought to the negotiating table and, following some give and take, an agreement is made. Oblivious to diplomacy, TCF unilaterally announces changes, based upon a number of blatant falsehoods, to an agreement that he previously negotiated. Of course, it will eventually work out to be the "best deal ever."

The difference this time is the fact that TCF is repeatedly insulting to Canadians in his rhetoric. His disrespect has not been taken kindly across the country and has quickly united Canadians in a response that will be outside of any trade agreement, and long lasting. Numerous articles in mainstream media, academia, and across all of social media are educating Canadians of the origins of the products we regularly buy. Many, including myself, are making permanent changes to our purchasing habits. Canadian companies are highlighting themselves on store shelves with "made in Canada" stickers:



Other reactions include booing the American national anthem at all professional games (basketball and hockey) played on the weekend, cancelling cross-border trips (Panama is looking like a nice winter getaway now), and re-directing goods and materials to alternate markets where possible.

While our cross-border trade differences will eventually work themselves out, the treatment of Canadians, and the consequences, will take much more time. Much of TCF's idiocy is hilariously illustrated by Canadian artist Michael de Adder. Sadly, many of TCF's insults will be reflected in Canadian attitudes to Americans in general. So, in true Canadian fashion, I will say I'm sorry for that, and Electoral-Vote.com will remain my primary source of rational American thought. However, we won't be invading any time soon, and we want Michael J. Fox back.

Thanks, D.J.M.! And let us point out that Canada has an election that will take place on or before October 20 of this year. In a climate like the one described above, the new party in power/the new PM could well be elected on a platform of "we will stand up to Donald Trump." So, the President could soon find that he's dealing with an even tougher opponent across the bargaining table. Not that he's ever had much luck getting anything out of Justin Trudeau, mind you.

Oh, and in case you are wondering, the trade war against China is still on. There have been no negotiations, apparently, and there has certainly been no pause announced. And the Chinese government has already announced retaliatory 15% tariffs on U.S. coal and liquified natural gas that will go into effect on Monday of next week. So, there's always that to keep the markets on edge, while we wait to see what happens with Mexico and Canada. (Z)

Only the Best People, Part I: The Den of Thieves

Two weeks in, give or take, and Donald Trump continues to shower his allies and lackeys with Get Out of Jail Free cards. First up, in the most predictable move ever, the acting U.S. Attorney for the Southern District of Florida, Hayden O'Byrne, dismissed the appeal of the classified documents case against Walt Nauta and Carlos De Oliveira. As readers will recall, Judge Aileen Cannon had dismissed the case against then-defendant Trump and his co-defendants, finding that Jack Smith's appointment as special counsel was unconstitutional. Smith appealed, but dropped Trump from the appeal after he was elected president. Smith maintained the appeal as to Nauta and De Oliveira.

Thereafter, Smith prepared his final report and organized it into two volumes, one for the documents case, one for the insurrection case. In a move that continues to baffle legal experts, in early January, Smith's team decided to show both volumes to Trump's attorneys and to attorneys for Nauta and De Oliveira, who immediately went running to Cannon to ask her to block the release of both volumes, even though she no longer had jurisdiction after dismissing the case. She happily obliged and issued a temporary restraining order preventing the report's release. The Eleventh Circuit effectively punted, and, as a result, Cannon was able to schedule a hearing on a more permanent injunction, causing more delay. Ultimately, Cannon ran out the clock and, on January 21, issued an order allowing Volume I's release but prohibiting the release of Volume II because of the pending appeal. At any time during this circus, Garland and the DOJ could have dropped the appeal and released Volume II. Instead, they dithered until it was too late.

Shortly after dropping the appeal, acting AG James McHenry announced that he simply had to do the right thing, and release Volume II of Smith's report to the public. Ha! Just kidding. In the announcement that the appeal had been dropped, there was no mention of Smith's report. How odd! Undoubtedly it will turn up... perhaps lining the bird cages of the local pet store.

But wait, there's more! The DOJ has dropped its case against former representative Jeff Fortenberry for receiving an illegal foreign campaign contribution and lying about it to the FBI. Fortenberry was convicted by a federal jury in 2022 but the conviction was overturned on venue grounds on appeal (by a panel of all Democratic appointees incidentally). The DOJ had renewed the case in D.C. and was awaiting a trial date.

Meanwhile, a bit further north, New York City Mayor Eric Adams (D)—that paragon of virtue, who was criminally indicted on bribery and other charges by the U.S. Attorney's office for the Southern District of NY—may also be getting off scot free. Adams is accused, among other crimes, of taking luxury travel benefits in exchange for helping expedite the opening of the Turkish consulate in Manhattan. He is alleged to have accepted more than $100,000 in improper benefits over nearly a decade, and using straw donors to funnel foreign funds to his mayoral campaign to secure $10 million in public matching funds. Adams, who is no dummy, said the magic words to Trump—"witch hunt" and "politically motivated"—during his pilgrimage to Mar-a-lago to grovel at the Dear Leader's feet. And now Adams is meeting with federal prosecutors to discuss dropping the case. One wonders if Bob Menendez' prostration can be far behind—maybe he still has a few gold bars lying around to sweeten the deal.

What we're seeing here is not equal justice under the law, but justice being meted out solely by Trump's whim, without regard to the facts, evidence or probable cause. We feel for those prosecutors who must be just sickened by this naked partisanship, which will taint everything coming out of this Department of Justice. Who will cooperate with these people, knowing they can't be trusted? Witnesses are going to clam up and evaporate. Not a great way to retain talent, but that doesn't seem to be what they're going for. (L)

Only the Best People, Part II: This Is Your Government

In case the previous item was not depressing enough, we move on to a rundown of some of the bright and shining pillars of humanity who will be serving, or who likely will be serving, in the Trump administration for the next 4 years.

To start, it looks like DNI-designate Tulsi Gabbard might make it over the finish line after all. Yesterday, Sen. Susan Collins (R-ME), who is still "concerned" about some aspects of Gabbard's past, announced that she would nonetheless vote for confirmation. The Senator's explanation for her decision was, in a word, gobbledegook:

There are a lot of obvious issues. Her answers to the written questions were very hedged on [Section 702]. I know there's been a lot of reporting that she's changed her position. That's not how I read her answers. I read them as, "I'll take a look at the reforms and see if they meet my concerns."

What does this even mean? We've read it multiple times, and still cannot parse it. It seems that Collins' conclusion is, "Yeah, she kind of lied on her paperwork, but she might change her mind about things, and she might not, and that's good enough for me." In any event, the Senator has once again shown why she will not be appearing in the next edition of Profiles in Courage. And because Collins is not only one of the few Republican votes that can be considered at all swingy, but is also one of the members of the Senate Intelligence Committee, her vote will go a long way to getting Gabbard over the hump.

Meanwhile, in the past few days, the White House has announced the appointment of some real gems to lower-level positions is the administration. First, there is new undersecretary of state for public diplomacy at the State Department Darren Beattie, who served in the first Trump White House until being fired for speaking at a conference of white nationalists. It would seem that, these days, that's no longer a problem. Of course, it's been 6 years since he was canned, so maybe he's turned over a new leaf? Ehhhh... not so much. This October, for example, Beattie fired up his eX-Twitter account to share this keen insight with the world: "Competent white men must be in charge if you want things to work. Unfortunately, our entire national ideology is predicated on coddling the feelings of women and minorities, and demoralizing competent white men." Beattie is also a crazypants conspiracy theorist. Whether it's deep states, or stolen elections, or Jewish space lasers, or any other nutty right-wing notion, he's on board.

And then there is Sean Parnell, who is a combat veteran, and who has run for office in Pennsylvania several times, and lost each of those elections. Most notably—and if the name rings a bell, this is why—Parnell was the Trump-endorsed candidate in the 2022 Senate race, until he lost custody of his kids following credible claims, in open court, that he had abused his ex-wife. Thereafter, Parnell had to drop out, leaving Mehmet Oz to lose to John Fetterman. But now, Parnell has a job; he will serve as assistant secretary and spokesperson for newly confirmed Secretary of Defense Pete Hegseth, another accused misogynist and spousal abuser.

There's also Andrew Kloster, who will be chief counsel for the Office of Personnel Management. Kloster is another "raging misogynist." Where did we get that description from? Kloster himself; he regularly uses that descriptor for himself on social media, since it'a apparently something to be proud of. Good luck if you are a federal employee, a woman, and you would like the OPM to consider a hostile workplace claim. Oh, and Kloster is another conspiracist, by the way.

As we put this item together, we could not help but visualize this, which you might call the Venn Diagram of MAGA:

Looked at through this lens, it's no wonder that the administration is ending up with a staff list like the one we describe above. (Z)

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