Moody's Blues

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.

Tony Romm,Andrew Duehren and Joe Rennison at NYT:

The credit rating of the United States received a potentially costly downgrade on Friday, as the ratings firm Moody’s determined that the government’s rising debt levels stood to grow further if Republicans enact a package of new tax cuts.

The downgrade, to one notch below the highest triple-A rating, amounted to a repudiation of Washington, where President Trump only hours earlier had pushed his party to adopt a legislative package that might add trillions of dollars to the nation’s fiscal imbalance.

The downgrade from Moody’s means that each of the three major credit rating agencies no longer gives the United States its best rating. Fitch downgraded the United States in 2023, citing fiscal concerns, and Standard & Poor’s downgraded the country in 2011.

The new rating decrease could send ripple effects throughout the economy if it prompts investors to demand higher payments on bonds, which in turn could raise consumers’ borrowing costs. So far, though, past downgrades have proved largely symbolic, as the American government’s debt remains the bedrock of the global financial system.

The Bill of Particulars Against Trump

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start

 J. Michael Luttig at The Atlantic:

As Trump turns the federal government of the United States against Americans and America itself, the bill of particulars against him is already longer than the Declaration of Independence’s bill of particulars against King George III and the British empire.

For not one of his signature initiatives during his first 100 days in office does Trump have the authority under the Constitution and laws of the United States that he claims. Not for the crippling global tariffs he ordered unilaterally; not for his unlawful deportations of hundreds of immigrants to the Terrorism Confinement Center (CECOT), El Salvador’s squalid maximum-security prison; not for his deportation of U.S. citizens to Honduras; not for his defiantly corrupt order from the Great Hall of the Department of Justice to weaponize the department against his political enemies; not for his evil executive orders against the nation’s law firms for their representation of his political enemies and clients of whom he personally disapproves; not for his corrupt executive orders against honorable American citizens and former officials of his own administration, Chris Krebs and Miles Taylor, a former Homeland Security chief of staff who dared to criticize Trump anonymously during his first term; not for his unlawful bludgeoning of the nation’s colleges and universities with unconstitutional demands that they surrender their governance and curricula to his wholly owned federal government; not for his threatened revocation of Harvard University’s tax-exempt status; not for his impoundment of billions of dollars of congressionally approved funds or his politically motivated threats to revoke tax exemptions; not for his attempt to alter the rules for federal elections; not for his direct assault on the Fourteenth Amendment’s birthright-citizenship guarantee; not for his mass firings of federal employees; not for his empowerment of Musk and DOGE to ravage the federal government; not for his threats to fire Federal Reserve Board Chairman Jerome Powell; not for his unconstitutional attacks on press freedoms; and finally, not for his appalling arrest of Judge Dugan.

Trump Is Soliciting Bribes

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.  The second Trump administration is off to an ominous start.  Its corruption is unprecedented.  Qatar's gift of a jet is just one example.

Dan Merica and Matthew Choi at WP:

Trump launched his meme coin — $Trump — just days before his inauguration and has not been shy about promoting it. The coin thrust the president into an unregulated and volatile world where public figures can launch a cryptocurrency, use their notoriety to draw attention to the coin and benefit when the price surges.

The coin has no intrinsic value and is instead seen as a sign of support for Trump — the people behind it openly say it is “not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type,” and Trump said when the coin launched that it was meant to “celebrate everything we stand for.” But The Washington Post has found that small-time buyers have seen their investments in the coin collapse, while Trump allies and his businesses have benefited from the project in a host of ways.

The coin is now being used to buy direct access to Trump. The group behind the coin — a Trump Organization affiliate and a company run by a Trump friend — has been encouraging purchases of the coin with the promise of an “intimate private dinner” with the president for the top 220 Trump-coin holders. Democrats and government ethics experts have expressed concerns that the meme-coin dinner could be used in a foreign influence scheme. After its promoters offered access to Trump, the coin’s price surged from around $9 to more than $14. Drew Harwell and Jeremy B. Merrill found that nearly two dozen crypto wallets acquired more than 100,000 meme coins, worth roughly $100 million.

David Yaffe-Bellany and Eric Lipton at NYT:

A struggling technology company that has ties to China and relies on TikTok made an unusual announcement this week. It had secured funding to buy as much as $300 million of $TRUMP, the so-called memecoin marketed by President Trump.

GD Culture Group, a publicly traded firm with a Chinese subsidiary, has only eight employees, its public filings show, and recorded zero revenue last year from an e-commerce business it operates on TikTok, the Chinese-owned video-sharing app.

But on Monday, GD Culture Group became the latest business with foreign ties to seize on Mr. Trump’s crypto venture, which channels profits directly to the Trump family and has generated conflicts of interest that have alarmed ethics experts. (Memecoins like $TRUMP are a type of cryptocurrency based on an online joke or celebrity mascot and have traditionally not had any utility beyond speculation.)

In its statement, GD Culture Group, which is traded on the Nasdaq, said it would spend $300 million on a stockpile of Bitcoin and $TRUMP, using proceeds from a stock sale to an unnamed entity in the British Virgin Islands, a popular tax haven. It confirmed that investment plan in a securities filing late Tuesday.

The purchase would create clear ethical conflicts, enriching Mr. Trump’s family at the same time that the president tries to reach a deal that would allow TikTok to keep operating in the United States rather than face a congressionally approved ban.

The announcement also shows how investors around the world, including some that have virtually no public footprint, have latched on to the president’s crypto ventures to boost their own business prospects.

Just asserting a connection to Mr. Trump’s business can quickly raise a company’s profile. GD Culture Group’s struggling stock rose 12 percent on Monday, before losing those gains the next day.

“Make no mistake. These foreign entities and governments obviously want to curry favor with the president,” said former Representative Charles Dent, a Pennsylvania Republican who was the chairman of the House Ethics Committee. “This is completely out of bounds and raises all sorts of ethical, legal and constitutional issues that must be addressed.”

 

DOGE Debacle

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.

 Jessica Riedl at The Atlantic:

These spending data do not flatter the Musk project. Total federal outlays in February and March were $86 billion (or 7 percent) higher than the levels from the same months a year ago, when adjusted for timing shifts. This spending growth—approximately $500 billion annually—continues to be driven by the three-quarters of federal spending allocated to Social Security, Medicare, Medicaid, defense, veterans’ benefits, and interest costs. These massive expenses have been untouched by DOGE’s focus on small but controversial targets such as DEI contracts and Politico subscriptions.

...

Cost reductions from laying off federal employees have been too small to show up in the data. This is not surprising, because even laying off one quarter of the 2.3 million federal civilian employees would shave off just 1 percent of federal spending. To be fair to DOGE, more savings will materialize in October, when the salaries of the 75,000 federal employees who took a buyout come off the books. That should save Washington $10 billion a year, or 0.1 percent of federal spending—except even that is an overestimate, because Washington will surely end up hiring contractors to perform at least some of the work previously handled by those civil servants, and many contractors cost more than employees.

That, by the way, is the good news for DOGE. The bad news is that the project seems quite likely to expand long-term budget deficits. Slashing IRS enforcement will embolden tax evasion and reduce revenues by hundreds of billions of dollars over the decade. Laying off Department of Education employees who ensure collection of student-loan repayments will increase the deficit. Illegally terminated federal employees are already being reinstated with full back pay, leaving the government with little to show for its trouble besides mounting legal fees.

Even if DOGE somehow manages to end up in the black, any modest savings it achieves will be completely overwhelmed by the GOP’s push to expand the 2017 tax cut at a cost of roughly $500 billion annually. Claims that Washington can no longer afford to spend 0.1 percent of its budget providing lifesaving HIV treatments to 20 million impoverished Africans cannot be taken seriously when the administration and Congress are preparing to cut taxes and expand other spending by trillions of dollars.

 

Why Qatar is Bribing Trump

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.  Its corruption is unprecedented.  Qatar's gift of a jet is just one example.

Judd Legum:

Appearing Monday on Fox News, White House press secretary Karoline Leavitt said that she was "absolutely" sure that Qatar did not "want something in return" for the $400 million 747 airplane because "because they know President Trump and they know he only works with the interests of the American public in mind."

This is not a credible position.

Qatar is the second-largest purchaser of U.S. military equipment, just behind Saudi Arabia, and has a keen interest in ongoing access to high-tech weaponry. In March, the Trump administration "approved the sale of eight MQ-9B Predator drones and a large package of bombs and missiles to Qatar in a deal valued at nearly $2 billion." Arming Qatar with advanced unmanned aircraft, a development that may not be welcomed by all of its neighbors, marked a policy shift for the United States. Included in the deal were "200 Joint Direct Attack Munitions, 300 500-pound general-purpose bombs, 110 Hellfire II missiles, [and] Seaspray 7500 maritime radars." These transfers can be controversial due to Qatar's ties with several radical groups, including political and financial support for Hamas.

Qatar is also home to Al-Udeid Air Base, "the largest U.S. military facility in the Middle East" with about 13,000 American troops. The presence of the base serves as a security umbrella for the country and enhances its diplomatic stature in the region. Qatar has spent about $1.8 billion to modernize the facility, reflecting its commitment to a long-term American presence.

Speaking to reporters on Monday, Trump acknowledged the relationship between Qatar's gift and security guarantees. He said that Qatar offered him the plane because the United States "kept them safe."

Open Corruption

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.  Its corruption is unprecedented.

Karen DeYoung, Natalie Allison and Mariana Alfaro at WP:

Qatar is discussing donating an aircraft to the U.S. government for President Donald Trump to use temporarily, but no final agreement has been reached, according to Qatar’s media attaché to the United States. The subject remains in talks between lawyers at the U.S. Defense Department and Qatar’s Defense Ministry.

While the deal is not final, ethics experts are raising concerns about the possible donation from a foreign government, which they say would be unconstitutional, violating the emoluments clause, which forbids U.S. officials from accepting gifts or other things of value from foreign officials without congressional approval.

Trump appeared to confirm the discussions in a social media post Sunday evening, criticizing those who say that Washington should pay for the plane. He said the Pentagon would be receiving the 747 aircraft free to use temporarily as an Air Force One plane.

Eric Lipton and David Yaffe-Bellany at NYT:

The sale of face-to-face access to President Trump using the Trump family’s own cryptocurrency has done more than benefit him financially, though it has certainly done that.

Mr. Trump announced last month that leading buyers of a digital coin his family is marketing would be rewarded with a private dinner with him at one of his golf courses and that the very top bidders would win a tour of the White House.

The auction, which ends Monday, has set off a spectacle that has drawn bipartisan criticism, triggered a suspicious trading pattern, and left a sitting United States president wide open to attempts to corruptly influence him.

Since the announcement, crypto investors around the world have raced to expand their holdings of $TRUMP — a digital currency called a memecoin, which is typically treated more as a novelty investment than an actual currency.

 Certain buyers, in interviews and statements, have said they bought the coins or entered the dinner contest with the intention of securing an action by Mr. Trump to affect United States policy.

...

The contest has presented a straightforward opportunity for foreign-based investors to interact with the president. Under federal law, noncitizens are barred from donating to political campaigns. But nothing stops them from buying a $TRUMP memecoin.

In Mexico, Javier Selgas, the chief executive of a transportation logistics company, announced last month that he intended to buy $20 million worth of $TRUMP tokens to try to convince Mr. Trump to lower tariffs targeting Mexico, which would benefit his company. (After the announcement drew international attention, a spokesman said the firm “currently does not have plans” to send a representative to Mr. Trump’s dinner.)

The Best People

 Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.  MAGA people (e.g., Hegseth) have replaced the normals (e.g., Mattis) that populated the first Trump administration.

Jessica Glenza at The Guardian:

Donald Trump nominated Casey Means, a wellness influencer and medical doctor with an inactive license for US surgeon general this week – his second nominee to serve as “the nation’s doctor”.

Trump abruptly withdrew his first nominee, Dr Janette Nesheiwat, before her Senate confirmation hearing, amid criticism from the right and confusion about her medical credentials.

His new nominee, Means, is a 37-year-old Los Angeles-based medical entrepreneur who shot to prominence in right-leaning wellness circles by criticizing mainstream medicine and advocating for a healthier food supply.

...

 “We should not toss out the window everything Casey is saying, but I would proceed with caution given her training,” said Prof Gabby Headrick, as assistant professor and director of nutrition programs at George Washington University’s Milken School of Public Health.

“Typically and historically, the person appointed to that role and confirmed is someone who has an active medical license, someone who has completed residency, and has held a leadership role in a medical institution. Casey Means does not have the resumé … She also is not trained in nutrition.”

Means also faces opposition from the far right. Activist Laura Loomer, who was critical of Trump’s first nominee, is skeptical of Means – calling her “unfit” for surgeon general and promoting events with Means’s critics.

Loomer previously described Nesheiwat as “a pro-Covid vaccine nepo appointee who is currently embroiled in a medical malpractice case”. Covid vaccines and the technology that underpins them have become a target of right-leaning politicians.

Paul Schwartzman, Spencer S. Hsu and Jeremy Barr at WP:

Jeanine Pirro, the Fox News host chosen by President Donald Trump to become interim U.S. attorney in D.C., is the archetype of what he has shown to prefer in his appointees: combative, camera-ready and loyal enough to have sought to discredit the results of the 2020 election that he lost.

Yet Pirro, a former New York judge and prosecutor, also possesses enough political baggage that she is sure to provoke fierce partisan debate if Trump nominates her as the permanent leader of the nation’s largest U.S. attorney’s office.

Less than 24 hours after Trump announced Pirro’s appointment, hailing her as “incredibly well qualified,” Democrats and Republicans staked out vastly divergent positions on her looming arrival in Washington. She’ll replace the president’s first interim choice, Ed Martin, who is departing after 15 turbulent weeks in office.

Rich Shapiro at NBC:

Long before she was a Fox News host who pushed pro-Trump election conspiracy theories, Jeanine Pirro was an ambitious New York politician whose career stalled after she was recorded plotting to bug her then-husband’s boat to catch him in an affair.

The revelation rocked Pirro’s campaign for New York attorney general nearly 20 years ago, resulting in days of front-page headlines in the city’s tabloids (“BUG THIS LOVE BOAT!” blared the Daily News cover).

The conversation took place in 2005 between Pirro and the former commissioner of the New York Police Department, Bernard Kerik, a close ally of Rudy Giuliani’s.

“What am I supposed to do, Bernie? Watch him f--- her every night?” Pirro said, according to a transcript obtained by WNBC-TV’s Jonathan Dienst in 2006. “What am I supposed to do? I can go on the boat. I’ll put the f-----g thing on myself.”

Peter Aitken at Newsweek:

Pirro is the 23rd current or former Fox News employee Trump has recruited for his administration since taking office earlier this year. However, his relationship with the network runs far deeper and longer than just this year nominees.

During his first administration, Trump regularly called Fox News hosts live on air to have impromptu, off-the-cuff interviews. He also allegedly would consult any number of hosts off the air, including Fox News powerhouse Sean Hannity.

Trump, however, decided to elevate that special relationship in his second administration by appointing hosts, many of whom have only ever had glowing praise for Trump during their broadcasts, to key Cabinet positions and high-profile roles. Comedian and TV host Bill Maher quipped on Friday night during Real Time with Bill Maher that "I've heard of state-run TV; this is TV run state."