Jun 04 2018

Pondering the Pundits

Pondering the Pundits” is an Open Thread. It is a selection of editorials and opinions from> around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past “Pondering the Pundits”.

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Harry Litman: President Trump Thinks He Is a King

The president believes he is above the law. That’s the takeaway from the confidential 20-page memo sent by President Trump’s lawyers to the special counsel, Robert Mueller, published over the weekend by The Times. And it’s the same sentiment that Rudy Giuliani expressed on Sunday when he suggested that Mr. Trump has the power to pardon himself.

The central claim of the legal memorandum is that it is impossible for the president to illegally obstruct any aspect of the investigation into Russia’s election meddling. That’s because, as president, Mr. Trump has the constitutional power to terminate the inquiry or pardon his way out of it. Therefore — and this is the key and indefensible point — he cannot obstruct justice by exercising this authority “no matter his motivation.”

This understanding of presidential power is radical and absolutist. It is also unsound and almost certain to be sharply rejected should it ever be proffered in court.

Paul Krugman: A Trade War Primer

At the moment, the Trumpian trade war appears to be on. And I’ve been getting some questions from readers about how this is possible. Congress, after all, hasn’t voted to back out of our trade agreements, and one suspects that it wouldn’t even if Trump asked for such legislation: to all appearances, a lot of Republicans are pretty much OK with the near-certainty that he colluded with a hostile foreign power and is currently obstructing justice, but policy actions that might strand and devalue a lot of corporate assets are something else entirely.

So how does Trump have the authority to do this? And what are the consequences for the world? It seems to me that this might be a good time to write down a brief, non-scholarly primer on how the trading system – and U.S. trade policy within that system – work.

The key thing you need to understand about trade policy is that the Econ 101 case for free trade plays very little role in actual policy, certainly in trade negotiations. That’s not because policymakers either reject that case or fail to understand it; some do, some don’t, but either way it doesn’t make that much difference. (In fairness, there’s an academic literature arguing that the underlying economics matter more than I’m suggesting, work that I consider admirable but unpersuasive.)

Ruth Marcus: The Trump team’s chilling message to Mueller

L’etat, c’est Trump.

For months we’ve heard President Trump’s TV lawyers, as he calls them, bandy about the argument that he — or any president, for that matter — couldn’t have obstructed justice because justice is what he says it is.

In other words, that because, they claim, a president possesses absolute power to cut short a criminal investigation, he cannot by definition be guilty of obstructing it. Or, in the famous Nixonian formulation, as Richard M. Nixon told David Frost, “Well, when the president does it, that means that it is not illegal.”

But as much as the president’s legal team foreshadowed this contention, it was nonetheless breathtaking to see it spelled out, in uncaveated black and white, in a letter from Trump’s legal team to special counsel Robert S. Mueller III.

Larry Beinhart: Trump Might Be Leading the US to Another Meltdown

The US financial regulatory agencies have weakened banking rules.

Then in late May, Congress voted to weaken them even further.

They went after the Volcker Rule which prohibits banks from making risky investments with depositors’ money.

The Volcker Rule is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which then President Barack Obama signed in 2010 into law after the last crash. It was a response to what was considered the leading causes of the crash, the banks’ part in it, the banks’ failures, and the necessity for the massive bailout.

Congress also voted to change the threshold of “too big to fail” – those financial institutions which are deemed important to the system and which have to be put under stricter regulations.

Previously, the threshold was at $50bn in assets, which put 35 banks on the list. The new threshold is $250bn, with only 10 banks that make the list.

The bankers argue that Dodd-Frank “has impeded the efficient operation of the financial system, driving banks away from providing services valued by their customers, reducing competition in affected markets, and overall acting as a drag on the economy”. Yet, banks have done fabulously well after they were rescued and since the regulations were introduced. Their profits are at record levels.

Of course, they say that the changes are necessary to help the “small community banks,” suffering under the weight of regulations. Of course, the data contradicts that. Earnings of community banks are up and they make business loans at twice the rate of non-community banks.

We’ve seen this movie before.