Yesterday, Mike Cernovich published explosive claims that Obama’s National Security Adviser, Susan Rice, has been behind the “unmasking” of certain Trump advisors in relation to their conversations with foreign officials under routine surveillance. He noted:
The White House Counsel’s office identified Rice as the person responsible for the unmasking after examining Rice’s document log requests. The reports Rice requested to see are kept under tightly-controlled conditions. Each person must log her name before being granted access to them.
Upon learning of Rice’s actions, H. R. McMaster dispatched his close aide Derek Harvey to Capitol Hill to brief Chairman Nunes.
“Unmasking” is the process of identifying individuals whose communications were caught in the dragnet of intelligence gathering. While conducting investigations into terrorism and other related crimes, intelligence analysts incidentally capture conversations about parties not subject to the search warrant. The identities of individuals who are not under investigation are kept confidential, for legal and moral reasons.
When I first read the piece last night it caught my attention due to the very specific claims made by Cernovich not just related to Susan Rice, but also Maggie Haberman of The New York Times. Considering Cernovich had just been labeled CEO of America’s “fake news” empire during a 60 Minutes expose, I considered it unlikely that’d he’d go out with such claims unless he felt pretty confident in their validity. Then today, Eli Lake of Bloomberg News confirmed the main part of this story, and added some additional nuggets.
White House lawyers last month learned that the former national security adviser Susan Rice requested the identities of U.S. persons in raw intelligence reports on dozens of occasions that connect to the Donald Trump transition and campaign, according to U.S. officials familiar with the matter.
The pattern of Rice’s requests was discovered in a National Security Council review of the government’s policy on “unmasking” the identities of individuals in the U.S. who are not targets of electronic eavesdropping, but whose communications are collected incidentally. Normally those names are redacted from summaries of monitored conversations and appear in reports as something like “U.S. Person One.”
The intelligence reports were summaries of monitored conversations — primarily between foreign officials discussing the Trump transition, but also in some cases direct contact between members of the Trump team and monitored foreign officials. One U.S. official familiar with the reports said they contained valuable political information on the Trump transition such as whom the Trump team was meeting, the views of Trump associates on foreign policy matters and plans for the incoming administration.
Rice did not respond to an email seeking comment on Monday morning. Her role in requesting the identities of Trump transition officials adds an important element to the dueling investigations surrounding the Trump White House since the president’s inauguration.
Now here’s where it gets particularly problematic for Susan Rice.
Rice herself has not spoken directly on the issue of unmasking. Last month when she was asked on the “PBS NewsHour” about reports that Trump transition officials, including Trump himself, were swept up in incidental intelligence collection, Rice said: “I know nothing about this,” adding, “I was surprised to see reports from Chairman Nunes on that account today.”
Either Cernovich and Eli Lake are lying, or Susan Rice has a big fat problem. Perhaps 60 Minutes should do an expose on her penchant for her looseness with the truth, but I’m not holding my breath.
While all that’s interesting enough, I want to zero in on another claim made by Cernovich. He wrote:
This reporter has been informed that Maggie Haberman has had this story about Susan Rice for at least 48 hours, and has chosen to sit on it in an effort to protect the reputation of former President Barack Obama.
This line caught my attention as much as the Rice claims when I first read it. This is a very specific claim, about a very specific reporter, and if true, would be another major embarrassment for corporate media.
While it appears Haberman herself has been quiet on the subject, The Daily Caller reported the following:
Cernovich said in his report Sunday that New York Times reporter Maggie Haberman knew about the Rice requests, and “has chosen to sit on it in an effort to protect the reputation of former President Barack Obama.” A New York Times spokeswoman told The Daily Caller, “Cernovich’s claim regarding Maggie Haberman is 100 percent false.”
I don’t know what’s more embarrassing. The New York Times potentially sitting on this story, or that sources feel more comfortable going to a guy blogging his gym pants with scoops versus the “paper of record.”
In any event, this whole drama sets up the corporate media for more embarrassment going forward. All any source has to do to ruin 60 Minutes forever, is keep feeding Cernovich real news. We live in interesting times, and it’s only going to get more interesting.
Corporate media has no one to blame but themselves. It has completely failed the American public.
A pilot education programme in the US is training kids to spot the difference between fake and real news.
12-year-old students at Clemente Middle School in Germantown, Maryland is one of several schools worldwide which wants to train kids for the reality of living in an online world of fake news. It is not the only one. In the Czech Republic, high schools teach teens to identify propaganda from Russia and in Sweden, students as young as 10, are trained to spot the difference between news and Fox, er fake news.
In Pennsylvania, a state lawmaker wants mandatory media literacy classes in all public schools.
“The sophistication in how this false information is disguised and spread can make it very difficult for someone, particularly young people, to determine fact from fiction,” says Rep. Tim Briggs.
A survey by Common Sense Media said that while kids are good at consuming news they are rubbish when it comes to spotting what is real and what isn’t.
More than 44 percent of tweens and teens said they can tell the difference between fake news stories and real ones. But more than 30 percent admitted they shared a news story online — only to find out later that it was wrong or inaccurate.
The problem is that anyone can publish anything on the web and drilling the kids with a list of questions about a story could be the key.
One course created by the nonprofit, the News Literacy Project that teachers from California to Virginia are adding to their classrooms. It includes a 10-question checklist for identifying fake news.
Who made this?
Who is making money off it?
Who might help or be harmed by this message?
What is left out of this message that might be important?
Is this credible (and what makes you think that)?
Other red flags include the lack of a by-line. A headline which is ALL CAPS or has shedloads of exclamation marks.
A story which promising you something “the media” does not want you to know is almost certainly fake.
Teachers say it’s working. Part of the reason: Kids, particularly middle schoolers, are inherently cynical and once they know the rules they are not sucked in.
Penalties paid to the IRS nearly doubled since 2014.
Approximately 6.5 million taxpayers paid $3 billion in Obamacare penalties for not having health insurance in 2016, according to preliminary data from the Internal Revenue Service Commissioner John Koskinen.
Beginning in 2014, the Affordable Care Act’s individual mandate required that Americans purchase health care coverage or pay a penalty to the Internal Revenue Service.
While the number of taxpayers paying the penalty has declined since 2014, the total amount in penalties paid to the IRS has increased since then.
In 2014, individuals without insurance had to pay the greater penalty of either a flat fee of $95 or 1 percent of the household’s adjusted gross income in excess of the threshold for mandatory tax filing. In 2016, those penalties increased to a flat fee of $695 or 2.5 percent of the adjusted gross income.
In 2014, Koskinen’s preliminary data showed that there were 7.5 million taxpayers who paid a total of $1.5 billion in Obamacare penalties. Final data from the IRS, however, showed those numbers increase to 8.1 million taxpayers paying a total of $1.7 billion in Obamacare penalties.
Koskinen’s preliminary data from 2016 shows that there were 6.5 million taxpayers paying a total of $3 billion in Obamacare penalties, which is nearly double what the IRS collected in 2014. As in 2014, final IRS data may show an increase in these numbers when it is released.
In 2016, the IRS reports that the average penalty paid was around $470 and that about 70 percent of payments were $500 or less, while only 7 percent of payments were $100 or less. There were 117 million tax returns of individuals who had qualifying health care coverage all year and 12.7 million taxpayers claimed an exemption to get out of paying the mandate. According to the IRS, the most common exemption occurs when a household’s income is less than the tax-filing threshold.
This year, the IRS is easing requirements for Obamacare’s individual mandate, after President Donald Trump signed an executive order requiring that federal agencies reduce the burden of Obamacare. Now, the IRS will not require taxpayers to indicate whether or not they have health insurance.
Private Banks – Not the Government or Central Banks – Create 97 Percent of All MoneyWho creates money?
Most people assume that money is created by governments … or perhaps central banks.In reality – as noted by the Bank of England, Britain’s central bank – 97% of all money in circulation is created by private banks.Bank Loans = Creating Money Out of Thin AirBut how do private banks create money?We’ve all been taught that banks first take in deposits, and then they loan out those deposits to folks who want to borrow.But this is a myth …The Bank of England the German central bank have explained that loans are extended before deposits exist … and that the loans create deposits:\
The above is from an official video released by the Bank of England.The Bank of England explains:Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.
The reality of how money is created today differs from the description found in some economics textbooks:
Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.
One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them. In this view deposits are typically ‘created’ by the saving decisions of households, and banks then ‘lend out’ those existing deposits to borrowers, for example to companies looking to finance investment or individuals wanting to purchase houses.
In reality in the modern economy, commercial banks are the creators of deposit money …. Rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.
Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as ‘fountain pen money’, created at the stroke of bankers’ pens when they approve loans.
This description of money creation contrasts with the notion that banks can only lend out pre-existing money, outlined in the previous section. Bank deposits are simply a record of how much the bank itself owes its customers. So they are a liability of the bank, not an asset that could be lent out.
Similarly, the Federal Reserve Bank of Chicago published a booklet called “Modern Money Mechanics” in the 1960s stating:[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts.
Monetary expert and economics professor Randall Wray explained to Washington’s Blog that:Bank deposits are bank IOUs.
Economics professor Richard Werner – who obtained his PhD in economics from Oxford, was the first Shimomura Fellow at the Research Institute for Capital Formation at the Development Bank of Japan, Visiting Researcher at the Institute for Monetary and Economic Studies at the Bank of Japan, Visiting Scholar at the Institute for Monetary and Fiscal Studies at the Ministry of Finance, and chief economist of Jardine Fleming – was granted access to study a bank’s books, and confirmed that private banks create money when they simply create fictitious deposits into a borrower’s account.Werner explains:What banks do is to simply reclassify their accounts payable items arising from the act of lending as ‘customer deposits’, and the general public, when receiving payment in the form of a transfer of bank deposits, believes that a form of money had been paid into the bank.
No balance is drawn down to make a payment to the borrower.
The bank does not actually make any money available to the borrower: No transfer of funds from anywhere to the customer or indeed the customer’s account takes place. There is no equal reduction in the balance of another account to defray the borrower. Instead, the bank simply re-classified its liabilities, changing the ‘accounts payable’ obligation arising from the bank loan contract to another liability category called ‘customer deposits’.
While the borrower is given the impression that the bank had transferred money from its capital, reserves or other accounts to the borrower’s account (as indeed major theories of banking, the financial intermediation and fractional reserve theories, erroneously claim), in reality this is not the case. Neither the bank nor the customer deposited any money, nor were any funds from anywhere outside the bank utilised to make the deposit in the borrower’s account. Indeed, there was no depositing of any funds.
The bank’s liability is simply re-named a ‘bank deposit’.
Banks create money when they grant a loan: they invent a fictitious customer deposit, which the central bank and all users of our monetary system, consider to be ‘money’, indistinguishable from ‘real’ deposits not newly invented by the banks. Thus banks do not just grant credit, they create credit, and simultaneously they create money.
Instead of discharging their liability to pay out loans, the banks merely reclassify their liabilities originating from loan contracts from what should be an ‘accounts payable’ item to ‘customer deposit’ ….
How Can Banks DO This?Professor Werner explains the reason that banks – but no one else – can create money out of thin air is that they are the only institution exempted from normal accounting rules.Specifically, every other company would be busted for fraudulent accounting if they conjured new money out of thin air by reclassifying a liability (i.e. an accounts payable) as an asset (i.e. a deposit).But the banks have pushed through exemptions so that they don’t have to follow normal accounting rules:What enables banks to create credit and hence money is their exemption from the Client Money Rules. Thanks to this exemption they are allowed to keep customer deposits on their own balance sheet. This means that depositors who deposit their money with a bank are no longer the legal owners of this money. Instead, they are just one of the general creditors of the bank whom it owes money to. It also means that the bank is able to access the records of the customer deposits held with it and invent a new ‘customer deposit’ that had not actually been paid in, but instead is a re-classified accounts payable liability of the bank arising from a loan contract.
What makes banks unique and explains the combination of lending and deposit-taking under one roof is the more fundamental fact that they do not have to segregate client accounts, and thus are able to engage in an exercise of ‘re-labelling’ and mixing different liabilities, specifically by re-assigning their accounts payable liabilities incurred when entering into loan agreements, to another category of liability called ‘customer deposits’.
What distinguishes banks from non-banks is their ability to create credit and money through lending, which is accomplished by booking what actually are accounts payable liabilities as imaginary customer deposits, and this is in turn made possible by a particular regulation that renders banks unique: their exemption from the Client Money Rules. [Werner gives a concrete example on British law for banking and non-banking institutions.]
Sound fraudulent? Professor Werner thinks so, also:
But he also makes some more important points …What Does It All Mean? The Implications of Money Creation By Private BanksMainstream economists believe that private debt doesn’t even “exist“ as a force that acts on the economy. For example, Ben Bernanke and Paul Krugman assume that huge levels of household debt don’t hurt the economy because more debt among households just means that savers have loaned them money … i.e. that it is a net wash to the economy. To make this assumption, they rely on the myth debunked above … that banks can only loan as much money out as they have in deposits. In reality, 143 years of history shows that excessive private debt – in and of itself – can cause depressions.Moreover, Professor Werner points out that attempts to shore up the banking system with capital requirements (such as the Basel accords) are doomed to failure, since they don’t recognize that banks create money at will:Basel rules were doomed to failure, since they consider banks as financial intermediaries, when in actual fact they are the creators of the money supply. Since banks invent money as fictitious deposits, it can be readily shown that capital adequacy based bank regulation does not have to restrict bank activity: banks can create money and hence can arrange for money to be made available to purchase newly issued shares that increase their bank capital. In other words, banks could simply invent the money that is then used to increase their capital. This is what Barclays Bank did in 2008, in order to avoid the use of tax money to shore up the bank’s capital: Barclays ‘raised’ £5.8 bn in new equity from Gulf sovereign wealth investors — by, it has transpired, lending them the money! As is explained in Werner (2014a), Barclays implemented a standard loan operation, thus inventing the £5.8 bn deposit ‘lent’ to the investor. This deposit was then used to ‘purchase’ the newly issued Barclays shares. Thus in this case the bank liability originating from the bank loan to the Gulf investor transmuted from (1) an accounts payable liability to (2) a customer deposit liability, to finally end up as (3) equity — another category on the liability side of the bank’s balance sheet. Effectively, Barclays invented its own capital. This certainly was cheaper for the UK tax payer than using tax money. As publicly listed companies in general are not allowed to lend money to firms for the purpose of buying their stocks, it was not in conformity with the Companies Act 2006 (Section 678, Prohibition of assistance for acquisition of shares in public company). But regulators were willing to overlook this. As Werner (2014b) argues, using central bank or bank credit creation is in principle the most cost-effective way to clean up the banking system and ensure that bank credit growth recovers quickly. The Barclays case is however evidence that stricter capital requirements do not necessary prevent banks from expanding credit and money creation, since their creation of deposits generates more purchasing power with which increased bank capital can also be funded.
Moreover, Werner points out that banks create the boom-bust cycle by lending too much for speculative, non-productive purposes
By failing to take into account the fact that banks create money, economists and governments are sowing the seeds for future crashes.But the economics field is very resistant to change …Economics professor Steve Keen notes in Forbes:In any genuine science, empirical data like this would have forced the orthodoxy to rethink its position. But in economics, the profession has sailed on, blithely unaware of how their model of “banks as intermediaries between savers and investors” is seriously wrong, and now blinds them to the remedy for the crisis as it previously blinded them to the possibility of a crisis occurring.
A wit once defined an economist as someone who, when shown that something works in practice, replies “Ah! But does it work in theory?”
And a 2016 IMF paper notes:Around [the 1960s] banks began to completely disappear from most macroeconomic models of how the economy works.
This helps explain why, when faced with the Great Recession in 2008, macroeconomics was initially unprepared to contribute much to the analysis of the interaction of banks with the macro economy. Today there is a sizable body of research on this topic, but the literature still has many difficulties.
Virtually all recent mainstream neoclassical economic research is based on the highly misleading “intermediation of loanable funds” description of banking …
In modern neoclassical intermediation of loanable funds theories, banks are seen as intermediating real savings. Lending, in this narrative, starts with banks collecting deposits of previously saved real resources (perishable consumer goods, consumer durables, machines and equipment, etc.) from savers and ends with the lending of those same real resources to borrowers. But such institutions simply do not exist in the real world. There are no loanable funds of real resources that bankers can collect and then lend out. Banks do of course collect checks or similar financial instruments, but because such instruments—to have any value—must be drawn on funds from elsewhere in the financial system, they cannot be deposits of new funds from outside the financial system. New funds are produced only with new bank loans (or when banks purchase additional financial or real assets), through book entries made by keystrokes on the banker’s keyboard at the time of disbursement. This means that the funds do not exist before the loan and that they are in the form of electronic entries—or, historically, paper ledger entries—rather than real resources.
This “financing through money creation” function of banks has been repeatedly described in publications of the world’s leading central banks—see McLeay, Radia, and Thomas (2014a, 2014b) for excellent summaries. What has been much more challenging, however, is the incorporation of these insights into macroeconomic models [how true].
What’s the Solution?We’ve seen the problems created by failing to take into account the fact that private banks create money.But there are solutions …Initially, Professor Werner notes that preventing banks from creating new money to loan for speculation and mere personal consumption would prevent booms and busts:
Werner says that the “Asian Miracle” happened for exactly this reason:
Additionally, allowing small community banks to grow would cause the real economy to flourish … since small banks loan to small businesses (which create most of the jobs), while big banks only loan to giant companies and speculators:
We’re all used to having to identify ourselves as we enter a country. It is the only way we can hope to have any attempt at a secure border. But, so-called “exit controls,” where documents are checked as travelers are leaving the country, were popularized last century by Nazi Germany as a great way to ensure that they could control, round up, and exterminate the Jews and other “undesirables.” It can obviously serve no purpose of keeping terrorists out, because it only affects those who are already in. The U.S. has never had exit controls, although they remain popular in Europe, Russia, and China.
Last week, privacy advocate and blogger Jeffrey Tucker posted his experience before a flight from Atlanta to Mexico:
Halfway down the jetbridge, there was a new layer of security. Two US Marshals, heavily armed and dressed in dystopian-style black regalia, stood next to an upright machine with a glowing green eye. Every passenger, one by one, was told to step on a mat and look into the green scanner. It was scanning our eyes and matching that scan with the passport, which was also scanned (yet again).
As part of the testing, travelers will present their boarding pass while their digital photo is taken. The process will take less than three seconds before travelers proceed to the passenger loading bridge to board their flight. Travelers over the age of 14 and under 79 will be required to participate in the test. The test will evaluate CBP’s ability to successfully compare the image of a traveler taken during departure against an image the traveler previously provided, in an automated fashion and without impacting airport operations.
This was, apparently, announced sufficiently quietly that I had not before heard of the program. The 2 month window has expired, and there is no mention on their Web site, that I can find, of a new program between Atlanta and Mexico. But, it seems to me that the likely scenario is that CBP has re-started this program and Mr. Tucker confused U.S. Marshals with CBP officers, and retinal scanning with face recognition scanners (not that it makes a difference in terms of our privacy).
What exactly is the point of this? Are we hoping to catch someone who has overstayed their visa so that we can stop them from leaving, then take them into custody so that the taxpayer can fund their leaving? It may simply be a dumb idea, or it may be a far more sinister plan to further control the movements of everyone in the country, citizen or otherwise.
Either way, count me out, and I encourage you to refuse as well.