National Intelligence Bulletin for 06 July 2018 – Forward Observer Shop

National Intelligence Bulletin for 06 July 2018

The National Intelligence Bulletin is a weekly look at national security, domestic systems disruption, the risk of failing critical infrastructure, and threats to social, political, economic, and financial stability in the United States. This report is available each week for Intelligence subscribers.

In this National Intelligence Bulletin… (3,676 words)

  • Illegal alien arrested after starting several fires in Colorado
  • Second Civil War coming’ say one-third of Americans, triggering wartime letters on social media
  • Exodus from Seattle Police Dept. over disagreement with liberal city policies
  • Protests over Trump administration immigration policies rising
  • SEC joins other federal agencies in probe of Facebook
  • Bid to divide California into three states gains traction
  • Europe threatens U.S. with $300 billion worth of tariffs
  • Oil prices may be primed for ‘super spike’ to $150-plus per barrel
  • And more…

ADMIN NOTE: All reporting and analysis is from Jon Dougherty, unless otherwise marked “S.C.” for Samuel Culper.

InFocus: Though many acts of political discourse we see around the country are amplified beyond their real importance thanks to the echo chamber of social media,  we have seen several instances of anti-Trump harassment and violence that concern us. The most recent was the attack on a teenager wearing a Make America Great Again hat by 30-year old Kino Jiminez of San Antonio, which was only news because it was caught on video. While many people want to attribute the increase in incivility to our very unconventional president, our hyper-partisanship began during the Obama administration. Trump’s 2016 victory only amplified the effects, which has resulted in continued harassment against Trump supporters.

What are some of the signs indicating to me that these times are unprecedented in modern times? Veiled threats directed at POTUS himself by entertainers who ‘pretend’ to shoot him or behead him. Vile treatment of his family including his wife and children. Calls by sitting congresspeople to physically confront administration Cabinet officials and staffers. Actual public confrontations with Trump Cabinet officials and staffers. Death threats of Trump-aligned lawmakers. Actual murder attempts of Trump-aligned lawmakers (last summer’s shooting of House Majority Whip Steve Scalise comes to mind; attacks on Sen. Rand Paul, etc.).

Nearly one-third of us believe a new civil war is on the horizon (according to a recent survey mentioned in PIR2), while others believe the war has already begun. What’s clear is that there appears to be nothing that will heal the divisions or reverse our political divide. The hatred of Trump is visceral and it is causing otherwise rational people to behave in irrational ways. There doesn’t appear to be any unifying middle ground for a growing number of Americans. This is likely to worsen if Republicans make gains in the 2018 midterms and if Trump himself is reelected in 2020. (S.C.: The ironic thing, with regard to this week’s MAGA hat incident, is that Americans who wouldn’t typically wear MAGA hats in public are expressing their desire to now. Harassment and violence against Trump supporters is having the reverse intended effect, yet some academics among the Left have been warning of that potential since Trump was elected.)

Meanwhile, the Democratic Party is waging a sort of civil war itself. The party is in many way beings taken over by the radical Left of the sort not seen since the turbulent 1960s. Most are self-avowed ‘democratic socialists’, some of whom openly advocate or condone violence in order to obtain their political objectives. This kind of political movement is not conducive to a return to civility.

Welcome to this week’s National Intelligence Bulletin. Thank you for subscribing. — JD

Priority Intelligence Requirements

PIR1: What are the new indicators of systems disruption and threats to critical infrastructure?

PIR2: What are the new indicators of potentially disruptive social, cultural or political conditions or events?

PIR3: How are state and federal agencies preparing for domestic conflict, emergencies, or other instability?

PIR4: What are the new indicators of systems disruption and threats to the economic or financial industry?

PIR1: What are the new indicators of systems disruption and threats to critical infrastructure?

Illegal alien arrested after starting several fires in Colorado

An illegal alien started a series of fires that burned more than 50,000 acres and forced evacuations in Colorado. Jesper Joergensen, 52, was arrested and will face arson charges, then be handed over to U.S. immigration officials. The fires destroyed several structures in and around Fort Garland and La Veta in southern Colorado, about 13 miles (21 km) north of Durango in the southwest corner of the state. There are several wildfires throughout the West, where drought conditions have set in. They include New Mexico, Arizona, and Colorado. [source] Analyst comment: Usually drought season out west occurs a little later in the summer but an unseasonable lack of rain in the region has already produced very dry conditions. Some forecasters are seeing more of the same throughout July.

PIR2: What are the new indicators of potentially disruptive social, cultural or political conditions or events?

‘Second Civil War coming’ says one-third of Americans, triggering wartime letters on social media

A growing number of Americans — about one-third, or 31 percent — believe our country is headed for another civil war. They agreed with the statement, “It’s likely that the United States will experience a second civil war sometime in the next five years.” The percentage is essentially the same for Republicans and Democrats, according to the Rasmussen Reports survey. The issue has been trending on social media under the hashtag “#SecondCivilWarLetters,” with many of the postings appearing to be cynical and sarcastic. Liberals are depicted as the “blue hats” while supporters of President Trump and Republicans are “red hats.” [source]

Exodus from Seattle Police Dept. over disagreement with liberal city policies

In what is being described as a “mass exodus” by remaining officers, nearly four dozen cops with the Seattle Police Department have left this year, citing the city’s increasingly liberal and progressive policies that they say are leaving officers without support. This exodus comes as Seattle is experiencing massive growth due to large technology corporations and other employers. Despite the growth, the city’s police force has remained at 1970s levels, due in part to the departures. Many who left this year have retired, but about 20 left to work for other cities and other departments. “It’s just depressing to serve in a place where many City Council members who are coming out at times with negative comments about the police,” said Rich O’Neill, vice president of the Seattle Police Guild. [source] Analyst comment: We’ve been following the growing disconnect between liberal city administrators, prosecutors and city council members and their respective police departments. As a result of outsized and often unfair, biased media reporting of incidents involving police and citizens, the situation on the street for officers is becoming more dangerous and tenuous. Officers are now less willing to engage in legitimate law enforcement efforts over fears something bad will happen that will be taken out of context, leaving them alone, demonized, and on the defensive before any legal or departmental review proceedings are even launched. This is increasingly occurring without support from commanders and city officials. Nothing has helped alleviate these problems — not additional training, body cameras, racial sensitivity training — all things that liberal politicians and administrators have demanded.

Protests over Trump administration immigration policies rising

Last weekend tens of thousands of protestors took to the streets in scores of cities as part of an organized nationwide protest against Trump administration border enforcement and immigration policies. Protesters are demanding the reunification of parents and their children who were separated when they were apprehended crossing illegally into the country, as well as an end to the incarceration of all illegal aliens. The protests come even after President Trump issued an executive order halting most separations a week earlier. There were protests in an estimated 600 cities around the country. Marchers also included open-border advocates and people who are demanding that the Immigration and Customs Enforcement agency be disbanded. Democratic lawmakers used the events as fodder for their upcoming campaigns, while the White House insisted that its border enforcement efforts were not extraneous and were merely enforcement actions of existing laws. [source] Analyst comment: It appears as though Democrats will continue to make this an issue into the 2018 midterm elections in November as a means of energizing their base, but there is mounting evidence that this issue is a political loser for them. Two surveys [here and here] note that most Americans support Trump’s policies of incarcerating and prosecuting illegal border crossers versus President Obama’s ‘catch-and-release’ policy, and the most Americans blame migrant parents for crossing illegally into the U.S. with their children, not the government (respectively). Majorities of Americans have made it clear for years they are on the side of law and order when it comes to the enforcement of immigration laws and the integrity of U.S. borders. But whether the Democrats are on the wrong side of this issue or not, they are going to use it to continue ginning up division and creating unrest for at least the rest of this election cycle.  

SEC joins other federal agencies in probe of Facebook

The Securities and Exchange Commission has joined the Federal Trade Commission, the FBI, and the Justice Department in a federal probe of Facebook’s sharing of data with political consultancy Cambridge Analytica, which now broadens the focus of the alleged actions taken by the social media giant. At issue is Facebook’s sharing of personal information on 71 million Americans prior to the 2016 presidential election. The investigation is attempting to square or disprove public statements Facebook execs including CEO Mark Zuckerberg have said publicly about the sharing of data. In March, the FTC said it was looking into possible privacy violations. In addition to working on behalf of the Trump campaign, Cambridge Analytica also worked on behalf of other Republican candidates. [source] Analyst comment: This isn’t the first presidential election in which personal user data from Facebook was mined and utilized by a campaign. In 2012 the Obama campaign received a massive amount of data from Facebook. But whatever you think about either campaign or either president, personal data gathered by social media companies is a treasure trove of information that Facebook has appeared to be far too willing to provide. It’s safe to assume that something will come of this investigation — new regulations, new laws, and perhaps even fines and other actions against Facebook itself. 

Bid to divide California into three states gains traction

A ballot issue aimed at dividing the country’s most populous state into thirds is gaining traction ahead of the November election. Last month the California secretary of state’s office verified more than 500,000 signatures collected by Cal3 supporter Tim Draper, which qualified it for the ballot. Supporters of the measure believe that California, home to about 38 million people and the sixth-largest economy in the world, is too big to govern. “This is about people who want California to be fixed and saved and this is the way to do it,” Cal3 spokeswoman Peggy Grande said. “We have crumbling infrastructure, dirty water and failing schools. In almost every statistic, 49 states are doing better.” [source] Analyst comment: Even if the initiative passes, it’s likely to be litigated; someone or several someones will sue. Beyond that, there is the Constitution to consider. Article IV, Sect. 3 says that while Congress can admit states into the union, “no new states shall be formed or erected within the jurisdiction of any other state; nor any state be formed by the junction of two or more states, or parts of states, without the consent of the legislatures of the states concerned as well as of the Congress.” There are no provisions in the Constitution allowing states to decide their own status (secession) or to break up into parts. Now, would Congress and the California Legislature approve? That depends on what the political make-up may be after one state becomes three. That means several more seats in the House as well as an additional four seats in the Senate; lawmakers would vote their party’s interests. Historically, states have been admitted to the union on a majority vote of both chambers of Congress.

Survey: Record-low number say they are ‘extremely proud’ to be an America

Ahead of Independence Day, Gallup released an annual ‘patriotism’ survey in which the polling service asks respondents how proud they are to be Americans — “extremely proud, “very proud,” “moderately proud,” or “only a little proud.” This year a record low number of respondents said they were “extremely proud” or “very proud.” Only 47 percent said they are “extremely proud,” down from a high of around 70 percent in 2003. The numbers held steady through most of the Obama years, but began falling prior to the 2016 election and had dropped to 51 percent last year. [source] Analyst comment: As expected, Republicans and Democrats differ in their enthusiasm for their country depending on who is in the White House, but the overall number cannot be ignored. While support for one’s country is politically cyclical, the general downward trend is what is disturbing. It means Americans from both sides of the aisle are losing heart and faith in the country, but these results also mean differences between the Left and Right are becoming more irreconcilable.

Majority of Americans say U.S. headed in the right direction

According to a Gallup survey released this week, most Americans — 55 percent — say the country is headed the right way and they are optimistic about the country’s future. That compares with 41 percent of voters who believe our best days are “behind us.” The data, collected in a June 18-24 poll, also reflects an overall satisfaction rate of 38 percent, which is a 12-year high. Gallup said near-full employment and newly emerging opportunities are behind much of the optimism. By comparison, the last time Gallup conducted the poll — in December 2012 — only 23 percent were satisfied with the direction of the country, while just 19 percent said it was a good time to find a job. [source] Analyst comment: Gallup noted on truism that results are largely partisan. More Democrats approved when President Obama was in office and about the same number of Republicans approve now that President Trump’s in office and the GOP is in control of Congress. But I noticed something else that lends me to believe this survey may be more reflective of the country as a whole: While 69 percent of Republicans said our best years are ahead, more than half of Independents — 54 percent — agreed. Had more Independents agreed with Democrats that our best days were behind us, that would have been much more significant, politically. 

PIR3: How are state and federal agencies preparing for domestic conflict, emergencies, or other instability?

U.S. settles fewer refugees

The number of refugees resettled in the U.S. in 2017 fell more than any other country according to a new analysis, marking the first time since the 1980 U.S. Refugee Act that America has settled fewer refugees than the rest of the world. Since that year the U.S. took in some 3 million of the 4 million refugees resettled globally. Last year the U.S. only resettled about 33,000 refugees, our lowest total since the years after the Sept. 11, 2001, terrorist attacks. Meanwhile, non-U.S. countries resettled twice as many refugees in 2017 as the United States — about 69,000. Global resettlements outside of the U.S. last year nevertheless fell from 92,000 in 2016. [source] Analyst comment: True to his word, President Trump’s administration is so far reducing the number of people legally allowed to enter the U.S. Trump’s base will applaud this but it’s going to be political fodder for his detractors. That said, the global reduction in refugee resettlements last year comes as the most welcoming countries, especially those in Europe, become less welcoming due to an increase in anti-migrant- and refugee sentiment. Along with growing migrant communities has come increased levels of crime and the extra financial burden of caring for people who are very often low-skilled, uneducated, and difficult to assimilate socially and culturally. 

PIR4: What are the new indicators of systems disruption and threats to the economic or financial industry?

Another round of Trump tariffs went into effect this morning

President Trump’s tariffs on $34 billion worth of Chinese goods kicked in this morning amid an escalating war of words between the world’s two largest economies. Washington’s 25 percent duties went into effect at midnight EDT and affected products such as water boilers, X-ray machine components, airplane tires and various other industrial parts. China retaliated immediately with tariffs on $34 billion worth of U.S. goods including soybeans, pork and electric vehicles. Beijing is calling this “the biggest trade war in history.” Analyst comment: We’ll be following up on this in Monday’s Early Warning report.

Europe threatens U.S. with $300 billion worth of tariffs

In recent days President Trump threatened to slap a 20-percent tariff on European cars if the EU refuses to remove current import duties of between 10 and 25 percent on America cars and trucks, as well as other barriers to U.S. goods. But instead of finding ways to remove the levies, it appears as though the EU has decided to fight fire with fire. A letter sent last week to the U.S. Department of Commerce from the European Commission warned that Trump’s actions could trigger a global trade war. The European bloc threatened to slap duties on $300 billion worth of U.S. goods while claiming that the U.S. could not win a full-on trade war with its European allies. Trump’s move “will be harmful first and foremost for the U.S. economy,” and that “an additional import tariff of 25 percent, applied to automobiles and automotive parts, would in the first instance have a negative impact on U.S. GDP in the order of $13-14 billion, and the current account balance of the U.S. would be not affected positively.” In a recent interview with Fox News, Trump compared the Europeans to China, “just smaller,” when it comes to “the car situation.” He added: “It is terrible what they do to us.” [source] Analyst comment: The $300 billion figure identified by the EU is roughly equivalent to the value of US imports of automobiles and parts, which reached $330 billion in 2017. European car makers produced 2.9 million vehicles in the U.S. last year, or 26 percent of all vehicle production. The commission noted that even without Chrysler, formerly a U.S.-owned company and at one time the third-biggest automobile maker in the country that is now European-owned, Euro-makers accounted for 16 percent of the U.S. automobile production at 1.8 million vehicles. Those are the raw numbers. Now, whatever Trump decides to do — and I now we anticipate that he will impose those additional duties because both he and the Europeans know he’s right about the imbalances — relations between the U.S. and Europe will sour, and companies (and their workers) on both continents will pay an economic price. The equation comes down to more than just which continent can better weather the economic storm; there will be political implications as well, and in this realm, I think a stuttering economy going into the 2018 midterms hurts Trump and maybe beyond, even if he’s having success with his tariff policies. But that doesn’t appear likely to be factoring into his decision to move forward on this issue.

Automakers, U.S. companies say Trump tariffs could add thousands to the price of cars, trucks

A coalition of automakers and U.S. corporations say that if President Trump follows through on his threat to ramp up more tariffs, the cost of cars and trucks could rise by as much as $5,000. That’s true even if the vehicle is made in the U.S. because analysts think automakers would spread the cost of tariffs among many different vehicle models to avoid putting any one of them at a disadvantage. Prices could jump as high as 25 percent, they warn. “If you put that kind of a tariff on a vehicle or an industry, prices are definitely going to go up on average,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive, which tracks vehicle manufacturing. “There’s no way around that.” [source] Analyst comment: The U.S. has 45 automobile manufacturing plants and collectively they employ thousands of workers in 14 states. So any cost increases that are dramatic will impact sales and jobs. Trump campaigned on fixing our trade imbalances, though, and he remains true to those pledges. U.S. automakers know that their cars face unfair trade imbalances — in Europe alone, American cars face a 10 percent import duty (a tariff) and trucks 25 percent, versus a 2.5 percent duty when European countries export their vehicles to America — and so does Trump. We don’t expect him to back down on remaking these trade deals so there is likely to be some temporary economic pain. 

Oil prices may be primed for ‘super spike’ to $150-plus per barrel

A note sent to investors on Friday from financial analyst firm Sanford C. Bernstein & Co. warned that a “super spike” in oil prices may be on the horizon due in large part to shareholders’ demands that oil companies pay out earnings now rather than invest them in new oil exploration. Investors have compelled oil companies to boost returns and shareholder distributions ahead of capital expenditures to locate new sources of supply. As such, reserves at major producers are falling as is the industry’s reinvestment rate, which is set to fall to the lowest level in a generation. That very likely means not just higher oil prices but prices that are dramatically higher. “Investors who had egged on management teams to reign in capex and return cash will lament the underinvestment in the industry,” the analysts wrote. “Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.” When oil prices bottomed in 2014 many companies weathered the decline by cutting costs and selling assets along with taking on new debt as a means of satisfying investors. One major oil company, Exxon Mobil Corp., was punished by stockholders earlier this year after disappointing earnings were compounded with a massive spending plan and a dearth of buybacks. [source] Analyst comment: Oil prices have always risen steadily, as has the price of any commodity over time, but in recent years oil prices have been subject to dramatic shifts. Gasoline prices rose to more than $4.50 a gallon on average during the 2008 spike, then fell to below $2 during the 2014 glut, where they remained fairly constant until this year. Higher oil prices negatively affect the cost of just about everything because higher oil raises the cost of production and transportation of just about everything we consume. A worsening economy will also have political implications. Will President Trump and Republicans be blamed like President Bush was blamed in 2008? The Democrats will undoubtedly make an issue of it, especially if prices spike as high as this analysis predicts. Whether Trump’s supporters and backers of the Republican Party will buy into the political assault is another matter; thus far it’s been difficult for the president’s political enemies to separate him from his core supporters.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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