National Intelligence Bulletin for 08 March 2019

The National Intelligence Bulletin is a weekly look at threats to social, political, economic, and financial stability in the United States, and provides early warnings and indications of America’s volatile future. This report is available each week for Intelligence subscribers.


 

In this National Intelligence Bulletin

  • InFocus: Democratic court packing is just the start
  • Supreme Court could hear arguments on threats in rap music
  • WaPo: Time to get serious about Fox News
  • Far Left Politics Roll-Up
  • Yang: Automation is coming for U.S. jobs
  • Economic/Financial Watch commentary

 

In Focus: Court packing is a topic I’ve mentioned several times recently because it’s the only conceivable way for Democrats to gain parity in the U.S. Supreme Court. Speaking at Yale University Law School this week, former attorney general Eric Holder said that the next Democratic president should “seriously” consider adding justices to the Supreme Court. Holder’s spokesman later affirmed the remarks: “[W]hen Democrats retake the majority they should consider expanding the Supreme Court to restore adherence to previously accepted norms for judicial nominations,” In December, I wrote:

In an opinion piece published in the left wing Democracy Journal, progressive Ian Millhiser, justice editor at Think Progress, suggests that court packing, which he later euphemistically referred to as “court re-balancing,” is the “least-bad option” to counter a conservative court. The plan would first require Democrats to take over both the House and Senate, and then through legislation expand the size of the Supreme Court from nine seats to a larger number, allowing a Democratic president to nominate additional justices to cover the new vacancies. Millhiser does draw out some conclusions in this scenario.

“Red-state governors will refuse to obey Supreme Court decisions they disagree with, forcing the [Democratic] President to send federal marshals or even federal troops to enforce such decisions. Overzealous use of marshals and soldiers could easily trigger civil unrest,” Millhiser writes.

The Supreme Court contention began when Senate Majority Leader Mitch McConnel (R-KY) refused to hold a confirmation hearing on Merrick Garland, Obama’s pick to replace Antonin Scalia, before Obama left office. And then McConnell changed the Senate rules so he could push through a floor vote for Trump’s Supreme Court picks. That eventually set up the Democrats’ tooth-and-nail fight against Brett Kavanaugh, who was later confirmed as Trump’s second addition to the Supreme Court after Neil Gorsuch.

“More and more Democrats are becoming convinced that we cannot resign ourselves to the third branch of government being captive to partisan Republican forces for the next 30 years. Any progressive reforms that a Democratic president would pursue in 2021 would come under threat from the Supreme Court. Accepting the status quo on this issue is not going to fly and there is becoming a consensus that some type of reform needs to happen,” says Brian Fallon, who leads the progressive group Demand Justice.

In previous weeks, I’ve warned that once the Democrats get back into power, they want to erect guarantees to protect their rule in Washington. That could include statehood for Washington D.C. and Puerto Rico, which would produce reliably Democratic representatives and senators. Senator Elizabeth Warren (D-MA) recently endorsed statehood for D.C., and several other Democratic president candidates have left open the idea of statehood for Puerto Rico, vowing to support a statehood referendum if the island territory votes on it. That only happens, however, through a Democratic Senate.

Then there’s H.R. 1, the resolution passed by the Democratic House today. H.R. 1 not only includes support for D.C. statehood but, if it becomes a bill passed into law, it would also require states to adopt automatic and same-day voter registration. That would allow community organizers to bus voters into polling places to register and vote, thus boosting voter turnout and likely contributing to Democratic victories, especially in already close races.

Retaking the Senate is a high priority for Democrats. A Republican Senate would be as obstructionist towards a Democratic president as Democrats have been towards the Trump administration, and that’s what Democrats continue to fear. Regardless of what happens, we’re likely in for several more years of very toxic politics. And the more extreme the candidates who are elected, the worse the political instability will be.

And FoxNews is going to get a lot more scrutiny, too. That brief appears under PIR 1. – S.C.

 


  Priority Intelligence Requirements

PIR1: What are the new significant indicators of disruptive political, social, or cultural conditions or events?

PIR2: What are the new significant indicators of threats to economic or financial stability?


  PIR1: What are the new significant indicators of disruptive political, social, or cultural conditions or events?

Refugee Watch: Venezuela at risk of further collapse

In Senate testimony on Venezuela yesterday, Sen. Marco Rubio warned of worsening conditions.

“The suffering people of Venezuela are about to experience the most dramatic shortages they have ever faced… Venezuela is just a handful of days away from running out of basic staples, wheat and corn meal and cooking oil… All of the leaders of Venezuela are overweight, and yet the people, on average, are losing 24 pounds in a year.”

Rubio also described the fuel situation: “As of today, Venezuela has about six, seven days left of fuel supplies. This in the most oil-rich country in the world, and this is because they have destroyed the domestic production capacity.”  As for any chance of military action, special envoy to Venezuela, Elliot Abrams, said, “It certainly is not desirable, and it is not the path that this administration is taking.”

Yesterday evening, a power outage brought Caracas to a halt for a couple hours. Maduro blamed the outages on the U.S., and the power company blamed a cyber attack on a power-producing dam.

(Analyst Comment: President Trump has already broached the topic of taking in refugees from Venezuela. The latest news in yesterday’s Senate hearing makes the possibility of Venezuelan refugees more likely.)

Nadler pursuing impeachment?

Speaking on ABC’s “This Week” on Sunday, Rep. Jerry Nadler (D-CA) accused President Trump of obstruction of justice. “We are going to initiate investigations into abuses of power… and into obstruction of justice… It’s very clear that the president obstructed justice” when he fired former FBI director James Comey.

Nadler chairs the House Judiciary Committee, which is responsible for carrying out impeachment proceedings. While six Democrats have already filed articles of impeachment against President Trump — and another from Rep. Rashida Tlaib (D-MI) is in the works — Speaker Nancy Pelosi (D-CA) has complained several times of how destabilizing an impeachment would be. That’s why she’s remained reluctant to promote impeachment unless there’s bi-partisan support. And that’s the Democrats’ next step: proving a case of an impeachable offense serious enough to gain popular support.

Impeachment proceedings leading up to the 2020 election could be disastrous for Trump’s re-election, but here’s where impeachment becomes especially problematic. Whether it’s because Democrats don’t have enough House support or Pelosi wants to see if Trump is defeated, maybe Democrats don’t push impeachment prior to the election. But the re-election of Donald Trump could push the House to pursue impeachment to stave off ‘four more years.’ Where this could get particularly troublesome is if the Democrats re-take the Senate in 2020. Under those circumstances, Trump could be fated for impeachment by the House and removal by the Senate. This is just one possible scenario, but a survey of the possible scenarios shows that the 2020 election could bring about an “SHTF” event, in more ways than one.

Also: Democratic House committees sent out 81 letters this week requesting documents associated with the Trump campaign or administration. So far, the White House has refused to comply with the demands of 30 investigations. “[The White House] shouldn’t roll over [on House subpoenas]. This entire exercise is to paralyze the administration and grind it to a halt,” says Scott Jennings, a former George W. Bush staffer. Meanwhile, White House counsel Pat Cipollone argued that the House “has failed to point to any authority establishing a legitimate legislative purpose for [its] unprecedented and extraordinarily intrusive demands.” Prepare for this to drag on, especially because some Democrats want it to remain an issue going into 2020.

Supreme Court could hear arguments on threats in rap music

This week, rap and hip hop stars filed a brief to the Supreme Court to clear up issues surrounding rap music and hip hop. They’re also encouraging the Supreme Court to take up the case of Jamal Knox, who was sentenced to prison for threatening to murder police officers and informants in one of his rap songs, which he wrote after he was arrested by Pittsburgh police. Knox rapped the threats and called out his arresting officers by name, leading the Pennsylvania Supreme Court to uphold Knox’s conviction. According to the majority opinion of the court, “The song’s lyrics express hatred toward the Pittsburgh police. As well, they contain descriptions of killing police informants and police officers. They do not include political, social or academic commentary, nor are they facially satirical or ironic.”

Now a slew of rap stars are trying to convince the U.S. Supreme Court that in rap culture, threats are not meant literally, but rather poetically. “This is a work of poetry. It is not intended to be taken literally, something that a reasonable listener with even a casual knowledge of rap would understand,” the rappers wrote in their brief. The rappers also opined that racism was involved in Knox’s conviction. [source]

(Analyst Comment: Rap, hip hop, and “thug life,” which often portrays and encourages violence, exposes the dark underbelly of American culture. In their brief, the rappers argued that their music was the most dominant music in the country, which is alarming because so often that musical genre focuses on ideas and culture inimical to traditional American values. The rappers also argued that violent imagery portrayed in rap music is only part of the artist persona. I try not to editorialize too much in this report, however, rap and thug culture is a pathology that contributes to increased rates of gun violence and crime in America. Liberal proponents often point to America’s violence and crime rate of examples of how broken the country is; however, crime by race, per capita, varies widely. In the 75 largest counties in America, blacks, who are 15 percent of the population there, commit over 50 percent of all violent crime, according to Justice Department figures. Culture, and the music that helps sustain it, is the ignored culprit in America’s debate on violence and crime. If the Supreme Court takes up the case of Jamal Knox, they’d be ruling on whether or not threats communicated through music violated the law. If they rule that threats communicated via music are protected speech, then expect a lot more threats in rap music.)

WaPo: Time to get serious about Fox News

This week, the Washington Post ran an opinion piece entitled, “It’s time — high time — to take Fox News’s destructive role in America seriously”. Writer Margaret Sullivan complains, “What Fox News has become is destructive. To state the obvious: Democracy, if it’s going to function, needs to be based on a shared set of facts, and the news media’s role is to seek out and deliver those facts.” [source]

Greg Sargent, another WaPo columnist, writes, “Fox News is fundamentally in the business of spreading disinformation, as opposed to conservative reportage… [The disinformation] is plainly about deceiving millions into believing that core functionings of our government — whether law enforcement or congressional oversight — no longer have any legitimacy.” [source]

After a New Yorker Magazine exposé on the relationships between the Trump administration and Fox News (which are easily comparable to the Obama administration’s connections to mainstream media), Democratic National Committee chairman Tom Perez cancelled discussions for a Democratic presidential debate to be hosted on Fox News. (AC: It’s clear that some Fox News hosts have a clear preference for President Trump — no different from hosts at other media outlets who had a preference for Obama, or how they’ll have a preference for the next Democratic president. This is another instance of how even basic news reporting is getting swept up into politicization. There are hosts at Fox News who would be far more fair and impartial to Democratic candidates than Republicans have been treated by other media outlets.)

 

Far Left Roll-Up

“Shouting down political opponents, inflexible dogma, and the making of lists of the politically impure, unfavored classes, and offending businesses, has always been integral to socialism. History is utterly clear on this point. The list is always acted on.” – Independent presidential candidate Howard Schultz

“It’s a 45-55 against the president at this stage of the game.” – Peter Hart, Democratic pollster

“[W]e’ll have to look at future generations… retiring at a later age, paying a greater percentage of their income into Social Security and making other necessary adjustments”  – Beto O’Rourke, from an old campaign ad

“I know how to do what everybody’s talking about doing. They’re all talking about how to fly an airplane. None of them have flown. And that’s a big difference when you get in the seat and you buckle the seat belt. And we just had a guy who spoke about flying a plane. And never flew. It’s not as easy as it looks. I know how to do affordable housing. I know how to bring jobs to the middle class. I know how to build infrastructure.” – New York Governor Andrew Cuomo, who may be running for president

“He’s lost a lot [of supporters] who have lost faith in him. Once you lose faith in the person, the message loses credibility. It was a vision, and he came in credible. He was apparently a billionaire—who knows what he really is. He was a businessman, outsider, successful, articulate. And a fresh face. He had all that going for him. Now he is mercurial. Obnoxious. Alienating.” – Andrew Cuomo

“We recognized that we could center communities of color, marginalized communities, and talk about their needs without alienating the white community. That’s been a false narrative that’s been part of politics, especially in the South, for a very long time.” – Stacey Abrams, who says by April she’ll announce a run for the Senate, governor (again), or president

“This decision [to reject big donors’ outsized influence] will ensure I’m outraised in this race.” – Fundraising email from Sen. Elizabeth Warren who raised $300,000 her first 24 of announcing her run. Bernie Sanders raised $6 million in 24 hours.

“Operationally it’s going to be a really big challenge for them. It’s hard to put together a budget based on an unknown intake. It’s not just her losing a class of donors, she’s also pushing them to other operations and other campaigns. That in the long-term will be an issue.”- Former Obama campaign deputy finance director, on the Warren campaign’s fundraising challenges

“There have been some articles about this, a little bit of tension on the Democratic side: Are we going to veer to the far left or are we going to stay in the center? I don’t know where the Democratic Party will go, but I tell you what, I will stay in the center. People are going to have to take it or leave it.” – Freshman Congressman Ben McAdams (D-UT), when asked about the Far Left pull of freshman Democrats

“First, Democrats are more ideologically diverse than Republicans. Second, Democratic Party leaders are more divided on strategy than Republicans. [It’s a problem] especially if Democrats want to maintain their control of the legislative agenda and keep peace in the family.” – Matthew Green, political scientist at Catholic University

The reality is that the Democratic Party is a diverse entity, racially, ethnically and ideologically. It is burdened — some would say blessed — with the problems of varied, often conflicting, interests. The struggle to come to terms with these tensions is constant and inescapable.” – New York Times Opinion writer Thomas B. Edsall

“Getting to family members [in the Trump investigations] I think is dangerous. Only because it gets real personal, real fast. And it risks backfiring. Maybe at some point we have to call them in, but I’d rather let prosecutors look at that.” – Rep. Gerry Connolly (D-VA)

“[Biden’s] nucleus of advisers has begun offering campaign positions to seasoned Democratic strategists. They are eyeing a headquarters in Delaware or nearby Philadelphia and a launch date in the beginning of April. Mr. Biden’s family is on board — his wife, Jill, enthusiastically so.” – Jonathan Martin and Alex Burns writing at the NYT

“I am certainly not looking to be comfortable, and I don’t want everyone necessarily to feel comfortable around me. I think really the most exciting things happen when people are extremely uncomfortable.” – Ilhan Omar (D-MN)

“I think the vice president is more dangerous than the man who is running the circus [Trump]. So, impeachment is something that I think might become necessary—but I’m also afraid of it.” – Ilhan Omar (D-MN)

“It’s not just the divide in the freshman class, it’s the divide between the Democrats who just got elected from swing districts and the Democrats who were elected to committees and committee chairmanships who come from ultra-safe districts and are now under heavy pressure from activists to investigate 10,000 different things in the executive branch. It was only a matter of time before these fissures in the Democratic caucus emerged, and they’re emerging with a vengeance.” – Dave Wasserman, Cook Political Report

“The DNC is doing their best to accommodate a huge field, but this is going to be very unruly, and candidates will be lucky if they get a minute on a single question with so many people on stage. In the beginning, these debates are going to be useless, even fruitless.” – Democratic strategist Patti Solis Doyle

“I am certainly not looking to be comfortable, and I don’t want everyone necessarily to feel comfortable around me. I think really the most exciting things happen when people are extremely uncomfortable.” – Ilhan Omar (D-MN)

“I think the vice president is more dangerous than the man who is running the circus [Trump]. So, impeachment is something that I think might become necessary—but I’m also afraid of it.” – Ilhan Omar (D-MN)

“It’s not just the divide in the freshman class, it’s the divide between the Democrats who just got elected from swing districts and the Democrats who were elected to committees and committee chairmanships who come from ultra-safe districts and are now under heavy pressure from activists to investigate 10,000 different things in the executive branch. It was only a matter of time before these fissures in the Democratic caucus emerged, and they’re emerging with a vengeance.” – Dave Wasserman, Cook Political Report

“The DNC is doing their best to accommodate a huge field, but this is going to be very unruly, and candidates will be lucky if they get a minute on a single question with so many people on stage. In the beginning, these debates are going to be useless, even fruitless.” – Democratic strategist Patti Solis Doyle


PIR2: What are the new significant indicators of threats to economic or financial stability?

Yang: Automation is coming for U.S. jobs

A few weeks ago, I included a quote from Andrew Yang, the Silicon Valley venture capitalist and Democratic presidential candidate warning about impending economic dislocation from automation, robotics, and artificial intelligence. “The two historical time periods that are comparable to where we are now in terms of polarization and division are the French Revolution before the revolution and the United States before the civil war… Now we’re about to do the same thing [with automating] millions of retail jobs, call center jobs, fast food jobs and, most destructively, trucking jobs in the coming years … When I talked to other mainstream political candidates, no one seemed to want to focus on the enormity of the reality that’s ahead for America,” Yang explains.  A couple weeks ago, Yang warned that red states would be hit particularly hard by automated trucking, because so many truck drivers live in red states.

This week, the Guardian published an article about ‘Flippy,’ the robotic arm now cooking burgers at some California burger restaurants. Miso Robotics, Flippy’s creator, and Bear Robotics — both based in California — are focused on bringing cost-effective solutions to restaurants to want to increase production and profits. The Guardian also points out that McDonald’s kiosk screens that replaced humans in U.S.-based trials resulted in a 30 percent increase in order value. [source]

AC: Andrew Yang is pretty incredulous that few politicians are talking about or planning for this tsunami of job losses in America. The tsunami won’t happen overnight, however, it’s been estimated that somewhere between one quarter and two-thirds of current U.S. jobs could be filled by automated solutions, which include robots and artificial intelligence. Just like advances in electronics, automobiles, and the internet, automated solutions will become better and cheaper over time. The question is how will the U.S. government respond to these kind of technological advances that displace so many workers. Yang is a proponent of offering a $1,000-per-month universal basic income (UBI) credit, and other prominent Democrats have proposed the UBI scheme, as well. Something discussed at this year’s World Economic Forum in Davos is how to re-skill workers who’ve lost jobs. Some economists estimated that reskilling workers may end up costing $34 billion, but added that around 250,000 workers will not be economically viable to re-skill, leaving the government on the hook for economic assistance. There will clearly be challenges facing older Americans who are closer to retirement but who will lose their jobs to automation. They’re too young to retire early and too old to reskill, leaving those voters likely interested in what politicians have to promise them.

Chinese fiscal problems put global economy at risk

Last year, I wrote that China’s claim to six-plus percent GDP growth was likely untrue and real GDP growth was probably only half of that. Brookings recently published a paper that shows China’s GDP numbers were inflated by two points between 2008 and 2016, and that more recent years are likely inflated, as well. [source] (Analyst Comment: China has very real issues with debt that will likely increase going into this global slowdown. At the most recent National People’s Congress, Chinese Communist Party leaders decided to cut taxes and print money in response to ongoing financial and economic woes, but that hasn’t dented the steep rise in corporate bond defaults. China has trillions in off-the-books debt and the shadow banking system is posing a 2008-esque risk. Chinese Premier recently said, “We must be fully prepared for a tough struggle. The difficulties we face must not be underestimated, our confidence must not be weakened, and the energy we bring to our work must not be allowed to wane.” China could very well have a serious financial crisis within the next couple of years, which could affect global finance. Still, once China solves or hurtles its corporate debt problems, the Chinese Communist Party expects to hold enough economic power by 2035 to overthrow the U.S. as the world’s global economic superpower. Waning U.S. power and influence is likely to have a negative effect on the dollar and therefore U.S. living standards and the domestic economy.)

Economic/Financial Watch

Modern Monetary Theory (MMT) is embroiling economists and investors in debate. MMT says that deficit spending and the national debt don’t matter for countries who issue their own currency as long as inflation remains low. I first wrote about it back in January and then dedicated several hundred words to the topic last month. This week, BlackRock CEO Larry Fink said that MMT is “garbage”. Former Obama economic advisor Larry Summers warned that MMT could lead to hyperinflation. But that hasn’t stopped MMT from being adopted by far left politicians like Cory Booker, Kamala Harris, Elizabeth Warren, and Alexandria Ocasio-Cortez. [08 Mar]

Yesterday, the Federal Reserve published its Beige Book. Here’s an overview: “Economic activity continued to expand in late January and February, with ten Districts reporting slight-to-moderate growth, and Philadelphia and St. Louis reporting flat economic conditions. About half of the Districts noted that the government shutdown had led to slower economic activity in some sectors including retail, auto sales, tourism, real estate, restaurants, manufacturing, and staffing services.” Flat or slight-to-moderate growth would portend a halt in further interest rate hikes, but if inflation rises, the Fed could hike rates again, which would slow the economy further. [07 Mar]

U.S. private payrolls missed estimates today. This and other data leads Moody’s chief economist Mark Zandi to believe that job growth has hit its peak. “Job gains are still strong, but they have likely seen their high watermark for this expansion.” If accurate, that means an economic slowdown is in for 2019. [06 Mar]

China lowered its forecast for economic growth to between 6 and 6.5 percent, which, while it represents a mild slowdown, would be the lowest in nearly three decades. Chinese Premier Li Keqiang warned this morning that there’s a “tough economic battle ahead” for the country, as he announced tax cuts and more stimulus. [05 Mar]

Hedge fund manager Kyle Bass warned on CNBC yesterday that he expects interest rates to be cut down to zero in 2020. “Southeast Asia is headed for a recession in 2019. Europe is headed for a recession in 2019. The world is not just going to have a recession and the U.S. is going to keep growing.” [05 Mar]

U.S. and Chinese officials are reportedly closer to a trade deal, after Chinese committed to lower tariffs and purchase more U.S. goods. [04 Mar]

The Atlanta Fed’s GDPNow took a nose dive to 0.3 percent, which is its current forecast for Q1 2019 GDP growth. The Blue Chip consensus fell to just below 2 percent, but that hasn’t been updated since last month. The drops are due to the government shutdown, but some economists expect those numbers to pop back up. [04 Mar]

    These economic/financial briefs appear each morning in the Early Warning intelligence report. You can sign up for this email on your My Account page.

// END REPORT

S.C.

Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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