Good morning. Here’s your Early Warning for Friday, 19 April 2019.
Politics & Governance
Now that the redacted Mueller report has been released to the public, we’ve find out just how serious House Democrats are about pursuing impeachment. Yesterday, House Majority Leader Steny Hoyer (D-MD) said, “Based on what we have seen to date, going forward on impeachment is not worthwhile at this point. Very frankly, there is an election in 18 months and the American people will make a judgement.”
And House Speaker Nancy Pelosi (D-CA) maintains that she’ll avoid impeachment talks unless they have bi-partisan support, which is to say impeachment looks very unlikely over what we know now. Even House Judiciary Committee chairman Jerry Nadler (D-NY) said that it’s “too early to reach those [impeachment] conclusions.”
(Mia Culpa: I thought that Mueller would make a case for obstruction of justice. Last year, I said that, based on those findings, Democrats would ‘almost certainly’ pursue impeachment. I was surprised to read that even through ten ‘episodes’ of attempted obstruction, Mueller did not arrive at a conclusion; especially since Trump clearly intended to end the Russia investigation.)
My major takeaway from this is further proof that officials in the Trump administration seem to often ignore his orders and demands. Mueller pointed to several instances in which President Trump ordered officials to end the investigation, none of whom complied. Mueller described these instances as the reasons why he couldn’t arrive at a conclusion on obstruction, because there may not have been any clear obstruction. Pundits jumped on this, saying that an attempt to obstruct was still a crime, regardless of outcome. That’s something that Congress will take up.
House Democrats announced they’ll be issuing subpoenas for both special counsel Mueller and Attorney General Bill Barr to testify before House committees. Like we find out on Groundhog Day, expect to have six more weeks of Mueller.
ADDENDUM: Lastly, this morning you should know more about the Trump ‘f–ked’ comment. Here’s the quote from the Mueller report, in which President Trump complains to then-attorney general Jeff Sessions: “Oh my God. This is terrible. This is the end of my Presidency. I’m f–ked.” CNN ran with the quote, which they described as implying admission of guilt… but they completely removed the second part of this exchange which makes the first part clear:
“Everyone tells me that if you get one of these independent counsels it ruins your presidency. It takes years and years and I won’t be able to do anything. This is the worst thing that has ever happened to me.” Trump is clearly not admitting collusion guilt in the first comment when we add in the rest of the quote for context.
The New York Times reports that United Constitutional Patriots, a militia actively patrolling the border, interdicted some 200 illegal aliens this week before releasing them to Border Patrol. The American Civil Liberties Union (ACLU) is encouraging the governor and attorney general of New Mexico to investigate the group. Officials from New Mexico say that border vigilante groups “should not attempt to exercise authority reserved for law enforcement.” In other news, the next migrant caravan has reached 10,000 people, and is currently located in southern Mexico.
Far Left Daily
“Apparently it’s not criminal to help foreign agents carry out their plans to disrupt an election. I wish instead of just relitigating the past we would spend some time crafting laws to prevent this in the future.” – Robby Mook, former Hillary Clinton campaign manager
“You know, there’s so many movements that we’re all part of. It won’t take us getting them information from the subpoena only. You know what it’s going to take? Movements outside of the halls of Congress, movements outside of [the] White House… I want you all to shut [ICE] down. We can shut them down. Don’t wait for this Congress to act. Shut ’em down.” – Rep. Rashida Tlaib (D-MI)
Laurie Logan, an official from the New York Federal Reserve, warned on Wednesday that the Fed would likely have to expand its balance sheet to manage interest rates. While pointing out that bank reserves were healthy now, she added that, in the future, the “[U.S. Treasury] purchases will need to be larger than similar pre-crisis operations,” she said. [source] (Analyst Comment: For those scratching your heads, this means that the Fed’s previous plan to wind down their balance sheet — quantitative tightening — is officially over, and quantitative easing is back. In fact, quantitative easing, the policy of flushing the economy with cash to spur economic growth, is now expected become a permanent policy.)
Proof of the startup bubble? The Economist (magazine) takes aim at unicorns this week: “[A] dozen unicorns that have listed [initial public offerings], or are likely to, posted combined losses of $14bn last year. Their cumulative losses are $47bn.” [source] One central question is ‘How can “unicorns” — startups valued at $1bn or more — continue to lose so much money?’ This process is often referred to as “blitz-scaling,” wherein companies spend as much money as possible to scale very rapidly. They’re focused on attracting customers and growing top line revenues, as opposed to turning a profit. Through blitz-scaling, companies are able to develop million dollar revenues in a matter of months, instead of years (the old-fashioned way), and can then focus on becoming profitable. But how much longer will this model be sustainable?
Marketing and business guru Gary Vaynerchuk recently used a keynote speech to address what he sees as the core problem: many startups are grossly overvalued. During the next recession, he says, these massive startups won’t be able to secure bridge loans at their current valuations, and many will go bankrupt as a result. And I share Gary’s concerns that today’s venture capital climate is a result of easy money policies, low interest rates, and economic growth. Turn off the economic growth and the scheme eventually fails. Do we have a startup bubble? Yes, I believe so and I expect it to be every bit as painful for many startups as the Dot Com bubble.
Strategic/Defense Situational Awareness
“North Korea responds to pressure with pressure, and we’ve historically not understood that as a government. We essentially pressured our way into a crisis.” – Van Jackson, former Pentagon strategist