TBR News November 7, 2017

Nov 07 2017

The Voice of the White House

Washington, D.C., November 7, 2017:”It is entertaining to listen to defeated Democrats wail about Fake News. The Internet is the greatest repository of news and historical writings since the lunatic Christians burned down the great library at Alexandria. It is also the nesting place for an enormous amount of bovine feces, personal opinions, political thrusts and baldfaced lies. The American print and television media are filled with examples of official propaganda. These, along with paid bloggers, are the ones who scream the loudest about Fake News. For an example of an officially approved view of what the government views as fake news, look at the description of it on Wikipedia. News is certainly available to the public but one has to ignore the bloggers from both sides of the aisle and pick the wheat from the chaff.”

Table of Contents

  • Mohammed Bin Salman: The Unlikely Anti-Oligarchic Bolshevik?
  • Saudi crown prince calls Iran supply of rockets ‘military aggression’
  • Saudi Arabia says Lebanon has declared war against it
  • Red Lines and Lost Credibility
  • 100 Years Since the October Revolution: Russia’s Unloved Anniversary
  • ‘U.S. department stores tap brakes on stocking for holiday season
  • Steven Mnuchin, Foreclosure King of America


Mohammed Bin Salman: The Unlikely Anti-Oligarchic Bolshevik?

In the heart of petro-capitalism, a revolution is not being televised.

November 7, 2017,

by Andrew Korybko

The Duran

The young leader devised a brilliant strategy to capture the corrupt Saudi elite and potentially seize billions of dollars’ worth of their assets in an historically unprecedented transfer of wealth from private pockets to public socio-economic programs on the centenary of the Russian Revolution.

What happened over the weekend in Saudi Arabia wasn’t just a “deep state” coup or counter-coup (depending on one’s angle), but a brilliant plan straight out of the movies where an up-and-coming young leader disrupts the entire power structure in his country by jailing its top oligarchs and then redistributing their wealth to the masses via ambitious socio-economic programs.

Crown Prince Mohammed Bin Salman had to make sure that all of the targeted individuals were in the capital at the same time, which would ordinarily be very difficult to do considering that most of them likely have foreign penthouses and other better priorities than to come together on a random occasion for a cup of tea in the Kingdom. Considering that he was dealing with oligarchs, however, Mohammed Bin Salman knew that the best way to get them all in one spot was to appeal to their inner greed, and that’s exactly what the recent tech-investment forum in Riyadh accomplished.

Now famous for having been the scene of such headline-grabbing news events as the Crown Prince’s promise to “return to moderate Islam” and “swiftly deal a blow to extremist ideologies”, his announcement of the half-a-trillion-dollar NEOM futuristic city project, and the quirky bestowment of citizenship to a talking female robot, this event also accomplished a more practical objective in drawing all of the country’s oligarchs to the capital where they evidently remained for the past two weeks to follow through on new business deals associated with Mohammed Bin Salman’s ambitious Vision 2030 socio-economic reform program.

The rest is history, but should be seen not only as a muscle-flexing power play by a young future ruler eager to prove his worth on the world stage and anxious to root out all possible internal plots against him, but also as an unprecedented act of populism in jailing some of the world’s most famous oligarchs.

With all due respect to Presidents Putin, Xi, and Trump, none of them have yet to give their masses what they’re craving for in the sense of arresting scores of presumably corrupt and filthy rich individuals, the freezing of their bank accounts, confiscation of their property, and possible redistribution of their wealth if the courts predictably find that some of it was illegally obtained.

Never before in history has one man stood up to so many oligarchs and threatened to take billions of dollars of their wealth, representing a modern-day Robin Hood of sorts regardless of the self-interested “Game of Thrones” reasons behind his decisive move.

In the course of just a few hours, untold billions of dollars effectively landed in Mohammed Bin Salman’s lap, which can be seen as either the world’s largest-ever robbery or its most renegade act of populism, but regardless of the interpretation, the presumed billions that the Crown Prince will likely end up seizing for his government will probably be reinvested in the country through Vision 2030 projects.

Looked at in this way, Mohammed Bin Salman is essentially trying to nationalize billions of dollars of private oligarch wealth in order to subsidize his socio-economic programs, which interestingly carries with it a whiff of communism on almost the exact centenary date of the Russian Revolution.

That’s not to say that the Crown Prince himself or the monarchic system that he presides over is communist, as they’re anything but, though just that it’s unavoidable to compare this in the structural sense to the many communist revolutions of the past century where the state took control of such large amounts of private wealth.

If anything, Mohammed Bin Salman’s forceful tactics and the looming threat that the detainees might be executed for what basically amounts to political and power-grabbing reasons strongly carry with them shadows of the Bolshevik takeover of Russia, with it beginning to look like the young Saudi is actually more of a young Stalin.

In all seriousness though, the Crown Prince is still the de-facto leader of an oil-exporting Gulf Monarchy that aspires to use seized oligarchic wealth to jumpstart a capitalist revolution in his feudal Kingdom, funded to a large degree by the $130 billion of deals clinched with the communist Chinese over the past year, but comparing his anti-oligarchic strategy and Bolshevik-like tactics to the Russian Revolution results in some thought-provoking, if not somewhat entertaining, imagery.


Saudi crown prince calls Iran supply of rockets ‘military aggression’

November 7, 2017


DUBAI (Reuters) – Saudi Arabia’s crown prince said Iran’s supply of rockets to militias in Yemen is an act of “direct military aggression” that could be an act of war, state media reported on Tuesday. Saudi crown prince calls Iran supply of rockets ‘military aggression

Prince Mohammed bin Salman’s comments were published after Saudi air defense forces intercepted a ballistic missile that Saudi Arabia said was fired toward Riyadh on Saturday by the Iran-allied Houthi militia, which controls large parts of neighboring Yemen.

Saudi-led forces, which back the internationally-recognized government, have been targeting the Houthis in a war which has killed more than 10,000 people and triggered a humanitarian disaster in one of the region’s poorest countries.

The supply of rockets to the Houthi movement could “constitute an act of war against the kingdom,” state news agency SPA on Tuesday quoted Prince Salman as saying in a call with British Foreign Minister Boris Johnson.

Iran has denied it was behind the missile launch, rejecting the Saudi and U.S. statements condemning Tehran as “destructive and provocative” and “slanders”.

In reaction to the missile, the Saudi-led military coalition said on Monday it would close all air, land and sea ports to the Arabian Peninsula country.

The United Nations on Tuesday called on the coalition to re-open an aid lifeline into Yemen, saying food and medicine imports were vital for 7 million people facing famine.

“The situation is catastrophic in Yemen, it is the worst food crisis we are looking at today,” Jens Laerke of the U.N. Office for the Coordination for Humanitarian Affairs (OCHA) told a briefing in Geneva.

The missile launch was “most likely a war crime” Human Rights Watch said on Tuesday but also urged Saudi Arabia against restricting aid access to Yemen, where the United Nations estimates nearly 900,000 people are infected with cholera.

“This unlawful attack is no justification for Saudi Arabia to exacerbate Yemen’s humanitarian catastrophe by further restricting aid and access to the country,” it said.

The coalition said aid workers and humanitarian supplies would continue to be able to access and exit Yemen despite the temporary closure of ports but the United Nations said it was not given approval for two scheduled humanitarian flights on Monday.

The United Nations and international aid organizations have repeatedly criticized the coalition for blocking aid access, especially to northern Yemen,which is held by the Houthis.

The Saudi-led coalition has been targeting the Houthis since they seized parts of Yemen in 2015, including the capital Sanaa, forcing President Abd-Rabbu Mansour Hadi to flee and seek help from neighboring Saudi Arabia.

In an interview with CNN television on Monday, Saudi Foreign Minister Adel al-Jubeir accused the armed Lebanese Hezbollah group of firing the missile at Riyadh from Houthi-held territory.

“With regards to the missile…that was launched on Saudi territory, it was an Iranian missile launched by Hezbollah from territory occupied by the Houthis in Yemen.”

He said the missile was similar to one launched in July at Yanbu in Saudi Arabia and was manufactured in Iran, disassembled and smuggled into Yemen, then reassembled by the operatives of the Iranian Revolutionary Guards and Hezbollah, “then it was launched into Saudi Arabia.”

Reporting by Sylvia Westall and Rania El Gamal in Dubai and Tom Perry in Beirut and Stephanie Nebehay in Geneva, Writing By Maha El Dahan; Editing by Matthew Mpoke Bigg/William Maclean


Saudi Arabia says Lebanon has declared war against it

The Saudi kingdom fears that Iran-backed Hezbollah is seeking to consolidate power in Lebanon. Saudi Arabia and Iran have also traded accusations over Saturday’s attempted missile strike on Riyadh by Yemeni rebels.

November 7, 2017


The resignation on Saturday of Lebanon’s Saudi-allied Prime Minister Saad al-Hariri has stepped up Saudi Arabia and Iran’s regional power struggle.

With Iran-backed Shiite militant group Hezbollah apparently seeking to gain from Lebanon’s political instability, Saudi Arabia responded on Monday by claiming that the new Lebanese powers that be had declared war on the oil-rich kingdom.

In an interview with Saudi state television, Riyadh’s Gulf affairs minister, Thamer al-Sabhan, said the Lebanese government would “be dealt with as a government declaring war on Saudi Arabia.”

Hezbollah’s acts of “aggression,” Sabhan added, “were considered acts of a declaration of war against Saudi Arabia by Lebanon and by the Lebanese Party of the Devil.”

Political crisis

The alleged declaration comes after Hariri, a Sunni ally of Riyadh who holds both Saudi and Lebanese citizenship, claimed that there had been an assassination plot against him in Lebanon, forcing him to flee to Saudi Arabia, from where he announced his resignation in a broadcast.

While the exact motive behind his resignation remained unclear, the move toppled Lebanon’s factious coalition government, which also included Hezbollah, and plunged the country into a political crisis.

It also brought Lebanon back to the forefront of Iran and Saudi Arabia’s regional rivalry, which has played out in Syria, Iraq, Bahrain and Yemen.

Iran-backed rebels launch missile at Saudi capital

Riyadh and Tehran’s strife was once again laid bare on Monday, as the two powers traded fierce accusations over last weekend’s attempted missile attack on the Saudi capital, which is believed to have been fired by Yemen’s Houthi rebel group.

The Saudi-led military coalition, which is combating the Iran-backed rebel faction in Yemen, said that it reserved the “right to respond” after Saudi forces on Saturday intercepted a ballistic near Riyadh’s international airport.

The Saudi-led military coalition called the attempted strike a “blatant military aggression by the Iranian regime which may amount to an act of war,” while Saudi Foreign Minister Adel al-Jubeir warned on Twitter that “Iranian interventions in the region are detrimental to the security of neighboring countries and affect international peace and security.”

Iran laments Saudi ‘aggression’

Tehran in turn responded by accusing its regional rival of “war crimes, regional bullying, destabilizing behavior.”

Iran’s foreign ministry spokesman Bahram Ghassemi was quoted of saying that Saturday’s missile attack was an “an independent action in response to (Saudi) aggression,” and that Iran had nothing to do with it.

Saudi Arabia has been accused of not doing enough to prevent civilian deaths in its war against the Houthi rebel group in Yemen.

Since Saudi’s military intervention in March 2015, more than 10,000 people have been killed.


Red Lines and Lost Credibility

November 7, 2017

by Patrick J. Buchanan


A major goal of this Asia trip, said National Security Adviser H. R. McMaster, is to rally allies to achieve the “complete, verifiable and permanent denuclearization of the Korean peninsula.”

Yet Kim Jong Un has said he will never give up his nuclear weapons. He believes the survival of his dynastic regime depends upon them.

Hence we are headed for confrontation. Either the U.S. or North Korea backs down, as Nikita Khrushchev did in the Cuban missile crisis, or there will be war.

In this new century, U.S. leaders continue to draw red lines that threaten acts of war that the nation is unprepared to back up.

Recall President Obama’s, “Assad must go!” and the warning that any use of chemical weapons would cross his personal “red line.”

Result: After chemical weapons were used, Americans rose in united opposition to a retaliatory strike. Congress refused to authorize any attack. Obama and John Kerry were left with egg all over their faces. And the credibility of the country was commensurately damaged.

There was a time when U.S. words were taken seriously, and we heeded Theodore Roosevelt’s dictum: “Speak softly, and carry a big stick.”

After Saddam Hussein invaded Kuwait in August 1991, George H.W. Bush said simply: “This will not stand.” The world understood that if Saddam did not withdraw from Kuwait, his army would be thrown out. As it was.

But in the post-Cold War era, the rhetoric of U.S. statesmen has grown ever more blustery, even as U.S. relative power has declined. Our goal is “ending tyranny in our world,” bellowed George W. Bush in his second inaugural.

Consider Rex Tillerson’s recent trip. In Saudi Arabia, he declared, “Iranian militias that are in Iraq, now that the fight against … ISIS is coming to a close … need to go home. Any foreign fighters in Iraq need to go home.”

The next day, Prime Minister Haider al-Abadi responded:

“We wonder about the statements attributed to the American secretary of state about the popular mobilization forces. … No side has the right to intervene in Iraq’s affairs or decide what Iraqis do.”

This slap across the face comes from a regime that rules as a result of 4,500 U.S. dead, tens of thousands wounded and $1 trillion invested in the nation’s rebuilding after 15 years of war.

Earlier that day, Tillerson made a two-hour visit to Afghanistan. There he met Afghan officials in a heavily guarded bunker near Bagram Airfield. Wrote The New York Times’ Gardiner Harris:

“That top American officials must use stealth to enter these countries after more than 15 years of wars, thousands of lives lost and trillions of dollars spent was testimony to the stubborn problems still confronting the United States in both places.”

Such are the fruits of our longest wars, launched with the neo-Churchillian rhetoric of George W. Bush.

In India, Tillerson called on the government to close its embassy in North Korea. New Delhi demurred, suggesting the facility might prove useful to the Americans in negotiating with Pyongyang.

In Geneva, Tillerson asserted, “The United States wants a whole and unified Syria with no role for Bashar al-Assad … The reign of the Assad family is coming to an end.”

Well, perhaps? But our “rebels” in Syria were routed and Assad not only survived his six-year civil war but with the aid of his Russian, Iranian, Shiite militia, and Hezbollah allies, he won that war, and intends to remain and rule, whether we approve or not.

We no longer speak to the world with the assured authority with which America did from Eisenhower to Reagan and Bush 1. Our moment, if ever it existed, as the “unipolar power” the “indispensable nation” that would exercise a “benevolent global hegemony” upon mankind is over.

America needs today a recognition of the new realities we face and a rhetoric that conforms to those realities.

Since Y2K our world has changed.

Putin’s Russia has reasserted itself, rebuilt its strategic forces, confronted NATO, annexed Crimea and acted decisively in Syria, re-establishing itself as a power in the Middle East.

China, thanks to its vast trade surpluses at our expense, has grown into an economic and geostrategic rival on a scale that not even the USSR of the Cold War reached.

North Korea is now a nuclear power.

The Europeans are bedeviled by tribalism, secessionism and waves of seemingly unassimilable immigrants from the South and Middle East.

A once-vital NATO ally, Turkey, is virtually lost to the West. Our major Asian allies are dependent on exports to a China that has established a new order in the South China Sea.

In part because of our interventions, the Middle East is in turmoil, bedeviled by terrorism and breaking down along Sunni-Shiite lines.

The U.S. pre-eminence in the days of Desert Storm is history.

Yet, the architects of American decline may still be heard denouncing the “isolationists” who opposed their follies and warned what would befall the republic if it listened to them.


100 Years Since the October Revolution: Russia’s Unloved Anniversary

It has been 100 years since the October Revolution that heralded the Bolshevik takeover of Russia and changed the world. Yet today, Russians have mixed feelings about the centenary and approach it with care.

November 7, 2017

by Christian Esch


Even revolutionaries have moments of doubt. Take Vladimir Ulyanov, a Russian emigré in Zurich during World War I whose nom de guerre was Lenin. We old ones, he said in a speech to Swiss socialists in 1917, might not experience the coming revolution. But you young Swiss, you will fight and win! It was January and Ullyanov-Lenin didn’t yet know that the czar would fall a mere seven weeks later. And that he himself would take the czar’s place by the end of the year.Or take Sergei Udaltsov, who is sitting in a Moscow café 100 years later, wearing the uniform of the professional revolutionary: black jacket with a shaved head. Udaltsov, who’s great-grandfather was a close companion of Lenin’s, is the leader of the radical left. Together with Alexei Navalny, he led the protests against Vladimir Putin’s return to the Kremlin in 2012, going on to spend four-and-a-half years under house arrest and in jail as a result. He says the people are tired, the politicians are clueless and a change of government is likely. But if everything falls apart, who will profit? Isn’t it more likely to be the right than the left?

This year, Russia is celebrating the anniversary of the Russian Revolution. One hundred years ago in March, the czarist monarchy was toppled. One hundred years ago in November, Vladimir Lenin and his followers grabbed power. It was, so to speak, two revolutions in one. And Nov. 7, 1917 – or October 25, according to the old calendar – went down in history as the October Revolution, as the birth of the first socialist state, a triumph of a new order.

“Celebration” is the wrong word for this anniversary. What is there to celebrate when so much blood was spilled? It is perhaps better to say: Russia is marking the anniversary. But that’s not quite right either. Because Russia is hardly paying any mind at all to the most consequential event of the 20th century, one that changed the entire world. Russia’s leadership is extremely uncomfortable with the anniversary; it has a kind of revolution-phobia.

To this day, Lenin remains on display in a glass coffin in Moscow – a small man in a suit with a red beard, his waxen right hand balled into a fist. But in truth, the Kremlin has a problem with the revolution. Nobody, said Vladimir Putin in December just before the anniversary year began, should use the historical tragedy “for political aims” or “pull the strife and hatred, injuries and rancor of the past into our current time.” It sounded like a warning: Keep your hands away from history!

What’s strange, though, is that the revolution is essentially omnipresent in Putin’s Russia. It is a ghost that the Kremlin needs, but also fears. Ever since a peaceful change of power through elections became largely inconceivable, Russian leadership began seeing every anti-Putin rally as a call to launch a violent revolt, driven by forces outside of the country. That’s not because it has any real reason to be afraid – the opposition is too weak for that – but because Putin’s power rests on protest remaining invisible. And the Kremlin has taken cautious note of the pro-Western revolutions that have taken place in its neighborhood: from the Orange Revolution in Kiev in 2004 to the toppling of Ukrainian President Viktor Yanukovych in 2014.

A Leadership Opposed to Revolutions

“Fear has big eyes,” according to a Russian proverb. To those full of fear, every street protest is a “color revolution” and every “color revolution” is a repeat of 1917. “We are the opposite of revolution,” is the central doctrine of Putinism. A quarter of a century after the downfall of the Soviet Union, the revolution is once again, paradoxically, at the center of the Russian leadership’s thinking.

That’s what makes the anniversary so difficult. Those in power have no option but to look into the mirror of the past and search for a reflection of themselves. Do they resemble the leadership of the Czarist empire, which was toppled to the cheers of the populace? Or perhaps the democrats of the so-called Provisional Government, which only lasted half-a-year between the February and October Revolutions? Or do they see themselves as being similar to Lenin and his comrades, who set up a brutal dictatorship?

Putin and the country’s leadership are opposed to revolutions, but they can’t simply reject the October Revolution. The Russia of today, after all, is its offspring. It may be a capitalist society of consumers in which solidarity is scarcer, but freedom more abundant, than during the Soviet era. But the Soviet experience is deep inside. It is a country in which members of the intelligence service still call themselves “Chekists,” after Lenin’s bloody secret police, except that they now pray to the murdered Czar Nicholas II.

If you want to tell the story of the revolution as the Kremlin sees it today, you need to start with Pyotr Stolypin, the most capable of the Czars’ prime ministers. Vladimir Putin had a monument to Stolypin erected in front of his seat of government when he was prime minister – and forced all of his cabinet members to donate one month of their salaries to fund it. There isn’t a single functionary in the Kremlin party who hasn’t once quoted the famous words Stolypin uttered to the opposition in 1907: “You want great upheaval, we want a great Russia!” It is a comfortable response to any protest.

Putin sees in Stolypin a kind of authoritarian modernizer who is misunderstood by the democrats, someone who wanted evolution instead of revolution – and a strong state. In other words: In Stolypin, Putin likes to see himself.

In 1906, Stolypin became the prime minister of a country that was both weak and strong. It was the largest country in the world, with population growing by 2 million people per year, of which 80 percent were peasants. It had the world’s largest standing army and a rapidly growing industry, but the army had to constantly maintain order inside of the country and half of the industrial sector belonged to foreigners. It had a secret police that infiltrated all revolutionary groups but also the world’s most dangerous terrorists, who killed or injured 17,000 people over the course of two decades. It was home to the oldest dynasty in Europe but had an outdated political system.

In 1905, a year before Stolypin took office, Russia went through its first revolution – a precursor to 1917. Unrest and general strikes had broken out, exacerbated by the war the country lost against Japan. The Czar gave in, and introduced a parliament – which Stolypin again quickly dissolved. But the prime minister also tried to give the Czarist system a new social base, with free farmers instead of the traditional village communes. It was an attempt at authoritarian modernization.

The February Revolution

Hated by liberals and unloved by the Czars, Stolypin was murdered in Kiev in 1911 by terrorists. But even he wouldn’t have been able to prevent the revolution, historian Orlando Figes argues. Figes claims that, like Mikhail Gorbachev, the reformer was worn down by the attempt to negotiate between the old elites and the radical opposition.

World War I began three years after Stolypin’s death, and another three years later, the Czarist empire collapsed like a house of cards.

It began on the International Women’s Day on February 23, according to the old calendar. In the capital of Petrograd – the name of Saint Petersburg had been changed at the start of the war because it sounded too German – women protested against bread shortages. Unlike Germany, which was starving because of the naval blockade, Russia had enough food, but it was poorly distributed. The long war required good organization, and in this, agrarian Russia was inferior to the modern industrialized countries.

In addition, trust in the Czar and his government had eroded. Rumors were circulating that he was actually allied with the Germans, that his German wife had been the lover of the miracle healer Rasputin and that food-supply problems had been created on purpose.

As the Czar was soon forced to realize, these forms of unrest couldn’t be suppressed with troops. The military refused to obey orders and both the parliament and the generals began pushing the Czar to step down.

“Slept long and deeply,” Nicholas II wrote in his diary on the morning after his abdication. It seemed as though he shared the people’s relief that he was no longer in power. From that point on, he spent time with his five children, shoveled snow in the garden and read Sherlock Holmes stories.

In the streets of Petrograd, a boistrous mob celebrated: Czarist emblems were torn down, strangers hugged one another and honking cars filled with armed men drove down Nevsky Prospect. People tacked red bands onto their coats and ran through the streets, looted and chased police officers. That’s no revolution, novelist Maxim Gorki claimed, it’s chaos. By the end of the February Revolution, hundreds of Petrograd residents were dead. They were buried on the Field of Mars, where they lie between cubical granite stones engraved with triumphant slogans: “Your seeds are ripening to a harvest for all people on Earth.”

One hundred years later, a new revolution is gathering at the graves of the old one. It’s not, of course, a real revolution, but it is a group of people protesting, which is quite a lot for Russia in 2017. It is early October, a chilly time of year when darkness falls quickly on the Neva River. Young Saint Petersburg residents warm themselves at the eternal flame for the victims of the February Revolution. They are supporters of opposition figure Alexei Navalny, though the fact that they are standing at the memorial for the Revolution is largely by chance. Indeed, some don’t even know what it commemorates. It just so happens that the Field of Mars is the most popular place for demonstrations in Saint Petersburg.

Navalny is currently trying to introduce himself across the country as a candidate for the presidential election in March – which is absurd given that only the Kremlin decides who gets to be on the ballot. But Navalny simply pretends that it’s a possibility – and that’s enough for the authorities to take him seriously.

Particuarly on this early October day and in this city. It is Putin’s 65th birthday, and St. Petersburg is Putin’s hometown – which is why Navalny selected this time and place. And the authorities, as it happens, are treating the protest like lèse majesté – when it comes to this kind of thing, Russia is once again like a monarchy. Because of the Saint Petersburg demonstration, they imprisoned Navalny, banned the rally, warned students to stay away and closed the Field of Mars for construction work.

Polina Kostyleva would like to have been at the demonstration. After all, the delicate-looking 40-year-old economist is its organizer, though the term organizer is a bit too innocuous in Putin’s Russia, where the opposition must again work as conspiratorially as the revolutionaries did in the Czarist era, constantly wary of the police and the intelligence services. Kostyleva spent the night away from home so that the police wouldn’t pick her up in the middle of the night, and she only communicates via the encrypted Telegram messaging app. That afternoon, she could be found sitting in the campaign office while helpers hectically try to keep 500 red balloons with the Navalny logo from the police. It’s enough to make a person wonder: Is this a children’s birthday party or a revolution?

‘One Needs to Take Responsibility’

But the balloons and the red Navalny signs are important to Kostyleva. She wants political discussions instead of revolution and public fights for power instead of secret ones – that’s what the balloons represent. “For me, the lesson of 1917 is that one needs to take responsibility,” she says. “The Czar back then didn’t want it, and the parties didn’t want it either. And then the Bolsheviks saw the power lying on the floor and they simply took it.” If decent people don’t grab power, it will fall into the hands of the indecent. Such is the worldview of many protesters: Navalny or Putin. Decent or indecent. Us or them.

Kostyleva has hardly walked out into the street to drive to the protest before she is stopped by the police. She will spend the next six hours at a police station, which is where the balloons end up too. At least the cardboard signs make it onto the Field of Mars, with the leaderless crowd waving them in front of the cameras before moving towards Nevsky Prospect.

The mood becomes more raucous. On narrow sidewalks, even 2,000-3,000 people look like a lot – and the chants, a “happy birthday!” for Putin or “You can’t arrest everyone” – echo loudly off the surrounding buildings.

The police arrest dozens of protestors and the march fizzles out, leaving a handful of people demonstrating outside the Galeria shopping mall with a few of the more passionate protesters wanting to spend the night in front of the Winter Palace. Ultimately, the march has descended into youths blowing off steam. And Kostyleva, who is at the end of her tether after thisi day, is no longer sure if the whole thing was a success or a failure.

Those few months between the February Revolution and the Bolsheviks’ October putsch had been Russia’s only experience of democracy until Mikhail Gorbachev introduced new freedoms in the 1980s. It was a few short months of intoxicating freedom, disappointments and anarchy.

A 300-year-old dynasty was replaced by a government, which shyly called itself “provisional.” Alongside there was a second center of power, the “Petrograd Soviet of Workers’ and Soldiers’ Deputies,” a revolutionary self-governing organ. The army would not carry out any orders without its approval.

At first the Provisional Government was dominated by the bourgeoisie, while the Soviet was left-wing. It was as if the revolution was following two tracks: The government represented the revolution of the privileged, while the Soviet represented the revolution of the masses. Those six months of democracy lasted for exactly as long as the Soviet backed the government. As soon as the Soviet abandoned it, it was over.

Threats from the Left and the Right

It’s hard to say if that first Russian democracy ever really had a chance. No one had any experience in exercising or sharing power while at the same time, a war had to be won and a multi-ethnic empire held together. Yet many trusted that the socialist prime minister, Alexander Kerensky, could tame a revolution that had spun out of control, much as Napoleon had in France.

The fact that the Provisional Government even lasted half a year was no mean achievement. It faced threats from the right and left, internally and externally. And then in mid-April, its greatest enemy arrived in Petrograd: Vladimir Lenin, the emigrant from Zurich. He was the leader of the Bolsheviks, the more radical of the two factions after the Russian Marxists split. It was a tightly controlled party of professional revolutionaries, who called for an immediate withdrawal from the “imperialist” war. This was what made Lenin’s train journey across Germany possible in the first place. The German Army’s general staff was more than happy to help Russian opponents of war.

Having just arrived at Petrograd’s Finland Station, Lenin set to work agitating. It was as if he hadn’t a moment to lose after all those years in exile.

The announcement he made the next day shocked even his closest comrades. The revolution, Lenin said, was only now beginning. It was not a question of defending the revolutionary government and building a parliamentary democracy. The war must end – right away. Land must be distributed to the peasants – right away. Government, parliament, war, none of that mattered. It was up to the German proletariat to bury German imperialism!

“I felt as though I had been hit over the head,” one of those who heard him speak recalled.

Looking back, this is perhaps what was most fascinating about this man and this revolution: how a new kind of politics was born that refused to bend to supposed practical constraints. And that also refused to bend to theory, as did other Marxists. The time was not ripe for the next revolution, Lenin’s left-wing opponents warned. It was God’s (or Marx’s) will that bourgeois democracy came prior to Socialism, please don’t rush things! Lenin was a man of action. He always bent his theories to ensure that what resulted was what he wanted: the grab for power.

He failed at first. After a half-hearted attempt to seize power in July, the Bolsheviks were banned and Lenin went into hiding and then fled to Finland. It was followed by an attempted right-wing coup, which brought the Bolsheviks back into the game. And the longer the much-promised victory in the war failed to materialize, the more popular they became.

On Nov. 7, 1917, the Provisional Government’s luck ran out and it was overthrown by the Bolsheviks. That day came to be celebrated by the Soviet Union as the dawn of a new era. Up until the Soviet Union’s demise, the anniversary was marked by marches ending up with the party leadership gathering at Lenin’s Tomb.

Generations of Soviet citizens grew up on films of the historic storming of the Winter Palace: Weapons clashing, canons thundering, furious masses forcing their way into the palace, where Kerensky’s Provisional Government has barricaded itself. The proletariat wins its most important battle.

‘Ten Days That Shook the World’

The truth was rather less dramatic. During the night, the Bolsheviks had already occupied the telegraph office and a few crossroads. But Petrograd was used to periodic movements of tanks, barricades and strident slogans. That afternoon the trams crossing Nevsky Prospect were still full of passengers and the Winter Palace was only carelessly guarded. “We showed our American passports, saying: ‘Official business!’ and shouldered through,” wrote the reporter John Reed, who visited the palace just hours before it was stormed.

The American writer wrote the most famous account of those days in October: “Ten Days That Shook the World.” It is still an exciting read, written by a party comrade of Lenin’s who still managed to maintain a reporter’s critical view and curiosity.

Liveried staff still took coats at the cloakroom, while in the salons there were dirty mattresses, empty wine bottles with expensive labels and a handful of unhappy officer cadets with good manners who welcomed any distractions.

Late at night, Reed and his colleagues were back on Palace Square to see the storming. The cadets had surrendered and there were no more shots fired. Reed and other curious onlookers stumbled over weapons that had been tossed aside, and walked through open doors. He wandered through the salons, witnessing the plundering and took a souvenir. It was a minister’s last scribble: “The Provisional Government calls on all classes to support the Provisional Government,” he had written before crossing it out again.

“It wasn’t at all necessary to storm the Winter Palace,” says Mikhail Piotrovsky, the director of the Hermitage Museum, which is housed in the former palace. “All the doors were open, you could have just walked in and arrested the ministers. But it had to all look like the French Revolution.” He is speaking in his enormous, dimly lit office. Faded Goeblins hang on the walls, there are stacks of paper everywhere and the window has a view of the Neva.

Piotrovsky’s view of the revolution is that of a museum man. In revolutions, things tend to get broken. That’s why he is against both of the two upheavals of 1917, the democratic one in February and the Bolshevik one in October. First came Kerensky, who had the double-headed eagles knocked down and moved into the Czar’s palace, which was a bad idea from a PR point of view. Piotrovosky sees the Provisional Government as generally inept. “Our sole government run by intellectuals,” he says, “and a good example of why one should not allow intellectuals to hold power.”

Then along came the Bolsheviks in October and decided to restage a scene from the French Revolution, since that was their greatest ideal. So, they stormed the palace as if it were the Tuileries in 1792 and then they let Sergei Eisenstein recreate the whole thing again for the cinema. However, unlike the French king, the Czar was far away by the autumn of 1917. He was in Siberian exile with his wife and children. “Another lovely day, light frost,” he wrote in his diary on November 7. “Sawed wood during the day.” Back in Petrograd they could only slice through his portraits with bayonets.

The Bolshevik ‘Red Terror’

What happened on November 7 was a bloodless coup, not a revolution. But the battle that was avoided then was made up for in the three years that followed. In March 1918, the Bolsheviks signed an armistice treaty with the Central Powers, allowing them to dedicate themselves to tackling their foes. It was the start of the civil war between the “Reds” (Bolsheviks) and the “Whites” (their enemies), a war that was brutally fought on both sides. It ended in 1920 with the evacuation of the last of the White troops from Crimea and an orgy of violence on the peninsula. The Bolsheviks openly declared “Red Terror” as their method of dealing with their enemies.

They succeeded in holding together the multi-ethnic empire. But they failed in exporting the revolution: The global revolution that they hoped for, the uprising of the European proletariat, did not occur. That, though, had been an important part of Lenin’s plan. Was it even possible to establish socialism in a single country surrounded by capitalist neighbors? Lenin’s successor Josef Stalin was convinced that it was, and at the end of the 1920s he unleashed the next revolution. This consisted of eliminating independent farmers and creating new industrial cities out of thin air. The Bolsheviks were a party of the urban proletariat and had little interest in the rural population. Using collectivization and Five Year Plans, they took the land away from the farmers, land that had been handed over to them just a decade earlier.

Those who chose to ignore the millions of victims saw this new revolution as a triumph of socialism over capitalism, which at the time was embroiled in a global economic crisis. And left-wingers across the world were prepared to look the other way. Moscow became the center of power, the place of pilgrimage, their Jerusalem, their Rome. The October Revolution had created a model that could be replicated. After Stalin’s victory over Hitler it spread rapidly. China and Eastern Europe became socialist, and many of those who fought against Europe’s colonial powers invoked communism. The Cold War divided the planet into spheres of influence. No one could avoid defining themselves in relation to Lenin’s revolution.

Who would have thought that the once-powerful Soviet Union would implode so suddenly in 1991, just as the 300-year Romanov dynasty had before it? That, too, was a kind of revolution, and Vladimir Putin took part in it. The intelligence officer who had so recently celebrated the 70th anniversary of the October Revolution with his Stasi colleagues began his political career in the summer of 1991 in Leningrad’s municiple administration.

It was a wild time, during which Russia wanted to shake off the legacy of the October Revolution all at once. Leningrad’s citizens renamed their city Saint Petersburg, a bold move that is hard to imagine today. Russia’s new flag was the white, blue and red tricolor of the Czarist era. The Communist Party was banned.

‘Damaging Fairy Tale’

The most prominent opponents of communism were Boris Yeltsin in Moscow and Anatoly Sobchak, Leningrad’s new mayor. Putin became his aide and in the same Smolny building that was once home to the Petrograd Soviet, he was now tasked with attracting Western capitalists to the city.

There is a TV interview with Putin in his office from that period, during which he is asked where his Lenin statue has disappeared to. “The more mature I become as a man,” Putin answers, “the clearer it was to me that Marxist-Leninism was a lovely but damaging fairy tale.”

Yet almost as soon as he became president in 2000, he reintroduced the old Soviet national anthem that Yeltsin had discarded. Putin hadn’t changed his opinion of the Soviet Union: He didn’t see the anthem as an ideological symbol but as a symbol of the Russian state. He also supported allowing the remains of the White Army general, Anton Denikin, and the monarchist philosopher, Ivan Ilyin, to be repatriated to Moscow.

Putin is what Russians call a “gosudarstvennik,” an adherent of the strong state. Whether that state is red or white is of secondary importance. When it comes to dealing with the legacy of the October Revolution, Putin has opted for the best of both worlds.

That would explain why, in December 2016, he warned against “strife” and “bitterness” during the coming centenary year. He also delegated the organization of the centenary to the Russian Historical Society. The message was clear: We at the Kremlin are keeping out of it.

It didn’t amount to much in the end. The overthrow of the Romanovs was not officially commemorated in February, and the culture minister’s plans to top off the year with the opening of a “Memorial to Reconciliation” in Crimea never really got off the ground. There is, though, a model of the memorial, in the typical triumphant realist style of the Putin era: classical columns, with the victorious mother representing the homeland standing above, while Red and White Army soldiers reconcile below. However, protests broke out in Sevastopol, the Crimean city where the memorial was supposed to be erected. “Why should we deny the victory of the Red Army?” the communists wanted to know. “How can there be reconciliation when Lenin’s Terror is still not atoned for?” countered the monarchists.

A Centenary Marked by Conflicts

Instead of celebrations, the centenary year has largely been marked by bitter arguments. One of the most bizarre has been over the film “Matilda,” in which German actor Lars Eidinger plays Nicholas II as a sympathetic but weak character, who falls in love with the ballerina Matilda Kshesinskaya as a young crown prince.

Before the film had even been released it was condemned as ungodly and sinful. The Duma deputy Natalia Poklonskaya called for the film to be banned because it was deemed an attack on the former Czar, a canonized saint of the Orthodox church. In September, a religious fanatic crashed a delivery truck filled with gas canisters into a cinema to try to stop its distribution. TV channels have refused to run ads for the film.

“Hysteria,” is how the Hermitage director Piotrovsky describes the “Matilda” controversy. He says he doesn’t understand all the fuss about the centenary year, even though he himself is on the organization committee. He would have preferred that his museum did nothing to mark the anniversary but his English colleagues said to him: “Are you mad? The entire world is doing something.” So he is planning exhibitions about the Winter Palace in 1917 and about the military hospital that was housed in the palace during the war.

The official motto for the centenary is “reconciliation,” something Putin has also emphasized. Piotrovsky finds the term counter-productive, preordained to cause conflict. “What is reconciliation supposed to mean? It makes everyone think they are the winners.”

But the emphasis on reconciliation shows how divided Russian society is. The nationalist-communist writer, Alexander Prokhanov, has described former Soviet society as having broken up into three “ice floes.” There are the liberals who triumphed in 1991, the Reds, who lost in 1991, and the White monarchists, who lost back in 1917. Since the end of the Soviet Union these three ice floes have floated around each other. In Prokhanov’s view, President Putin, who shares some sympathies with all three groups, is trying to prevent them crashing into one another.

The liberals are the only ones who have not forgotten that doomed summer of freedom in 1917. The liberal journalist Mikhail Zygar has used snippets of quotes – from diaries, newspaper reports, letters and memoirs – to reconstruct 1917 on the internet. Every day, quotes from contemporaries of the revolution are published online, as if they were posting their impressions on Facebook.

Then there are the monarchists, who oppose both the Reds and the liberals in equal measure. They include the church leadership. “In my view, Lenin was someone who served the devil,” says Metropolitan Hilarion, the spokesman for the Russian Orthodox Church. Father Tikhon, the bishop and bestselling author who is, it is said, Putin’s confessor, is in the process of opening history parks in many big cities designed to tell the sacred history of the Romanov dynasty. He explains the overthrow of the monarchy as the result of a conspiracy between the West and Russia’s eternally immature intellectual class. In this way, the Russian Revolution can be explained away as a Western plot, one that is also to blame for the Orange Revolution and the Maidan Revolution in Ukraine.

The third ice floe, the leftists, is probably the largest. According to opinion polls, most Russians think that Lenin played a largely positive role in history. But the left-wing has no convincing voice. The Communist Party, the unofficial administrator of Lenin’s legacy, has been reduced to a harmless club of old men.

That, at least, has been the painful experience of Sergei Udaltsov, the young leader of the radical left. He first voted in the 1996 presidential election. Then the man he voted for, the communist Gennady Zyuganov, betrayed his own voters by making a deal with the Kremlin that paved the way for Boris Yeltsin’s victory. Ever since, the Communist Party has been in a waking coma and no longer poses any danger to the Kremlin.

Soviet Nostalgia

Deeply disillusioned, Udaltsov formed his own left-wing organizations with revolutionary names. His “Left Front” took part in the protests of 2011 and 2012, but after he was released from jail in August, he saw that his right-wing rival, Navalny, had monopolized the street protests. The left is weak, even following the years of economic crisis, and Udaltsov is now attempting to unite it. He plans to organize a large march with the Communist Party to mark the anniversary of the October Revolution.

The problem for the left is that Putin has taken away its most important symbols of the past. He has given the impression that he wants to revive Lenin’s Soviet Union. “He has been very clever at playing upon society’s left-wing mood and Soviet nostalgia,” says Udaltsov. “Many see him as a Soviet Chekist who is standing up to the terrible pro-Western liberals. It works.”

And then there’s the war in Ukraine, which puts everything in a different light. Ever since the Crimean annexation, Russia suddenly looks as if it has slipped back into the old ways of the Soviet Union. Moscow has decided to risk a fundamental conflict with the West. Isolated and hit with sanctions, it nevertheless continues to up the ante. For the first time since the Afghanistan War of the 1980s, Moscow is waging war beyond the borders of the former Soviet Union, in Syria. It is building bases in the Arctic Circle and investing millions in Venezuela – and is trying to act as a counterweight not only to Washington, but to liberal democracy as a whole. Putin has turned into the role model that authoritarian rulers like to copy. Just like the Soviet Union before it, Moscow feels history is on its side.

It’s just the ideology that is different. Today patriarchal values are touted along with a vague “Russian civilization” in which there is no place for homosexuals or blasphemers, or for the exaggerated tolerance of the West. The Kremlin is suddenly sanctimonious. After the annexation, Putin claimed that for Russians, Crimea was “as holy as the Temple Mount in Jerusalem is for the Jews and Muslims,” because Prince Vladimir the Great, who Christianized Russia, was baptized there. In truth, Russians associate Crimea with beaches and childhood memories. They don’t need a Temple Mount.

Putin does not mourn the Soviet Union in which he grew up. He mourns an imperial greatness that is timeless. “His empire,” writes journalist Mikhail Zygar, “is an imagined, virtual empire, encompassing the traits of the Soviet Union, Russian Orthodox Christianity, sovereignty, populism, Josef Stalin, the victory in World War II, Yuri Gagarin’s journey into outer space and the palaces of Catherine the Great.”

He has no interest in either the social achievements or the political crimes of the Soviet Union. He’s only interested in the state as an abstract value, without the people who it serves. The empire that Putin mourns can only exist in one’s imagination, and only when one suppresses the actual memories of that epochal break of 1917.

But Putin is by no means the only one who mourns the empire. And there are many who share his dream of uniting the two halves of Russian history that broke apart in 1917. One of them is Nikolai Avraamov. The friendly man with sad eyes is a third-generation naval officer who is the director of the Aurora, perhaps the Soviet Union’s most famous ship. The warship with a red star on its bow is a symbol of the October Revolution and is anchored on the Neva, across from the Winter Palace. On November 7, a blank fired from the Aurora signaled the start of the assault on the palace. Today it is a museum.

A Fissure Runs through Russian Society

The year 1917 marked a sharp break in Avraamov’s family history. His grandfather, a noble Czarist naval officer, decided to fight with the Bolsheviks. During Soviet times, Avraamov assumed this had been the right thing to do. On the other hand, revolution is mutiny, something no naval officer can approve of. It’s a contradiction that is difficult to resolve.

His grandfather was loyal to the new navy, even after being imprisoned by Stalin. Then Avraamov’s own father became a rear admiral and, at the time of the break-up of the Soviet Union, Avraamov himself was serving as a naval officer in Baltiysk, a military port near Kaliningrad. He is happy that he missed most of the ugly new revolution. The communists want to celebrate the centenary of the October Revolution on his ship, but he has no interest in celebrating himself. “Perhaps I’m even a bit monarchist,” he says, hesitantly.

For now, there remains a fissure that runs through his own history and that of his country. But perhaps it will naturally disappear. Recently, Avraamov had some sixth graders on board the ship. The fatherland is not the same thing as the state, he told the children. He’s not sure if they understood. Young people lack sufficient patriotism, he thinks, and the know little about the past.

The schoolchildren couldn’t tell him who Lenin was. When he asked them if they knew the name of Russia’s last Czar they replied: “Putin.”


‘U.S. department stores tap brakes on stocking for holiday season

November 7, 2017

by Nandita Bose


CHICAGO (Reuters) – This holiday season, retailers are making a list, checking it twice, and then ordering less for U.S. shoppers. With foot traffic at their stores in decline, department stores that would have stocked up for the biggest shopping season of the year months ago are still in the process of placing new orders, according to nearly a dozen sources including company officials, vendors who work with the retailers and consultants who advise such chains.

The strategy is aimed to keep their inventory costs down and avoid the experience of previous holiday seasons, when large piles of unsold stock led to deep markdowns that eroded profits. But these retailers risk losing sales if supplies run out at a time when many are struggling to keep up with Amazon.com Inc and a steady shift towards online shopping.

Macy’s Inc, J.C Penney Co Inc Kohl’s Corp Nordstrom Inc, Dillard’s Inc and Hudson Bay Co’s Lord & Taylor are among the retailers buying in smaller batches with shorter lead times this year and relying on a more dynamic demand forecasting process than in the past, according to sources familiar with these companies’ practices.

Macy‘s, Kohl‘s, Nordstrom, J.C. Penney declined to comment. Lord & Taylor said it is working on preparing a carefully selected merchandise assortment for the holiday season but did not share anything specific. Dillard’s did not respond to a request for comment.

Keeping inventory levels low helps manage costs, and may also instill urgency in consumers to spend now rather than hold off on purchases in search of a better deal, according to the sources. But it also risks alienating customers who may end up having less choice, and is also putting strain on vendors to deliver on shorter lead times, the sources added.

The high-stakes strategy takes a page from the playbook of Inditex SA-owned Zara, Hennes & Mauritz AB (H&M) and other so-called “fast fashion” retailers that consistently keep low inventories of trendy clothes and try to win customers with cheap prices.

“I think in some sections the choice is limited this year like cashmere sweaters and sweaters in general,” said Dakota Whitlow, a 46 year old marketing executive as she shopped for winter clothing at Macy’s State Street store in Chicago.

“But limiting choice is in many ways better than overcrowding the store with clothes, which makes it harder to shop,” she added.

Traditionally, retailers lock in most of their purchases nine months to a year in advance. This year, retailers started placing a large portion of their holiday orders three to four months before the holiday season, and are refreshing fast-selling items within as little as six to eight weeks, vendors and consultants said.

“There is a big push from department stores across the board this year to cut down lead times and manage inventory tightly,” said Robert D‘Loren, chairman and CEO of U.S.-based Xcel Brands, which supplies branded apparel to chains like Lord & Taylor and Dillard’s and private label clothing to other department stores.

“We are delivering orders on weekly cycles with plans that are six weeks out.”

The risk for department stores is whether suppliers can keep up with the new approach.

Department stores rely on vendors whose traditional supply chains are not built for a fast turnaround, because they handle orders for several brands. Fast-fashion chains, on the other hand, have designed their supply chain to shift on a week to week basis versus the traditional four for department stores and work with vendors who can deliver quickly on private label items they stock.

As a result, some smaller vendors of traditional department stores struggle to adapt to request for shorter lead times.

“We are refusing to take (last-minute) orders. We just don’t have that kind of idle capacity in our factories, our production lines. Cargo delivery contracts are not built to react that way,” said a Bangladeshi supplier to J.C. Penney and Kohl‘s, who would only be quoted on condition of anonymity.


So far this year, retailers have been willing to sacrifice some orders for tighter inventory management.

“Between the risk of a lost sale and the risk of a loss of margin, department stores are willing to lose the sale this year,” said Greg Portell, a consultant with AT Kearney who advises retail chains on strategy.

Retailers are optimistic about their new strategy. Macy’s expects a ”marked difference this holiday versus last“ in the way it buys stock, Chief Executive Jeff Gennette said on an earnings conference call in August. ”We definitely are buying closer in… to make sure we have the right goods in time for holiday, but not too far in advance.

To be sure, ordering closer to demand can help a retailer cope with weak consumer spending, but it cannot offset its negative impact altogether.

While consumer confidence has improved overall, the National Retail Federation cautioned in October that U.S. consumers will remain hesitant to spend until there is more certainty about policy changes on issues such as taxes and trade. The trade group estimated holiday sales for the U.S. retail industry will grow between 3.7-4.2 percent in 2017, from 3.75 percent in 2016.

“(Retailers) simply don’t want to be stuck with excess stock. It takes up working capital and that was okay when times were good but not when things are this tough,” said Neil Stern, partner at McMillan Doolittle, a consultancy who works with retailers including department stores.

Reporting by Nandita Bose in Chicago, Additional Reporting by Richa Naidu in Chicago; Editing by Greg Roumeliotis and Edward Tobin


Steven Mnuchin, Foreclosure King of America

Secretary of the Treasury for the .01%

by Nomi Prins


Treasury Secretary Steven Mnuchin doesn’t exactly come across as the guy you’d want in your corner in a playground tussle. In the Trump administration, he’s been more like the kid trying to cop favor with the school bully. That, at least, is the role he seems to have taken in the Trump White House. When he isn’t circling the Sunday shows stooging for the president, he regularly plays the willing fall guy for tax policies guaranteed to stoke further inequality in America and for legislation that will remove just about any consumer protections against Wall Street.

Mnuchin, a former Goldman Sachs partner, arrived in Washington with a distinct reputation.  Back in 2009, he had corralled a bundle of rich financiers to take over California’s IndyMac bank, shut down amid the 2008 foreclosure crisis by the Federal Deposit Insurance Corporation (FDIC).  Bought for $13.9 billion (but only $1.3 billion in actual cash), Mnuchin turned it into a genuine foreclosure machine, in the process sealing his own fate when it came to his future reputation. At the time, he didn’t appear concerned about public approval. Something far more valuable was at stake: the $200 million that, according to Bloomberg News, he raked in personally, thanks to the deal.

No such luck, of course, for the bank’s ordinary borrowers. During Mnuchin’s reign, IndyMac carried out more than 36,000 foreclosures, tossing former homeowners (including active duty military servicemen and women) onto the street without hesitation or pity by any means necessary. According to a memo obtained by investigative reporter David Dayen, OneWest, the new name that Mnuchin and his billionaire posse coined for Indybank, of which Mnuchin was now CEO and chairman, “rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.”

Now, Mnuchin remains bitter and frustrated that he can’t kick the reputation he got in those days.  As he told a House Financial Services Committee Congressional hearing this July, “I take great offense to anybody who calls me the foreclosure king.”  Such indignation would ring truer if, in May, one of Mnuchin’s banking units, a company called Financial Freedom, hadn’t agreed to pay a more than $89 million settlement to the government for taking unreasonable advantage of thousands of seniors through reverse mortgages which convert equity in a home into a loan. (A few months later, in August, a watchdog group, Campaign for Accountability, called upon the Justice Department to investigate Mnuchin for allegedly making false statements under oath to Congress about his actions at OneWest between 2009 and 2015.)

Like Donald Trump, Mnuchin is a man intent on making the rich richer and to hell with everyone else. Continually channeling Trump’s ego, whatever his smoldering resentments may be, he soldiers on — and in the context of the Trump White House successfully indeed. After all, this administration has lost 14 key people in less than a year, including an FBI director, a national security adviser, a White House chief of staff, and a White House communications director. Through it all, Mnuchin has remained in place, one of the relatively few members of The Donald’s original team not related by blood or marriage who is seemingly thriving. (Admittedly, he and the president were linked in what CNN once called a “business capacity” even before he became Trump’s campaign finance director in May 2016.)

Hamilton, Trump, and a Playbill for the Economy

There’s a history of Treasury secretaries having a special rapport with presidents that snakes back to the founding of the Republic. Alexander Hamilton, the first of them, had the full confidence of the first president, George Washington. With such backing, he established federal taxes and came up with plans for real economic development. He understood federal taxes to be essential to building America. In contrast, Mnuchin thinks the stock market is the ultimate arbiter of economic health and appears to consider taxation without representation (by the wealthy) the order of the day.

Since Mnuchin bagged one of the most influential economic positions on the planet, he’s been remarkably consistent on just one thing: making sure he lends a helping hand to the world of big finance, his former universe. He has, for instance, pushed hard for more bank deregulation by claiming that it will help the smaller banks. Don’t believe it for a second.  His disdain for reenacting the Glass-Steagall Act, which once made the merging of commercial and investment banking operations illegal and so curtailed the too-big-to-fail status of the largest banks, tells you all you need to know.  It reflects his real thinking when it comes to banks and the stability of the economy. Emblematic of this has been the way he steered the Financial Stability Oversight Council that he chairs to give AIG, the insurance company at the core of the 2008 financial meltdown, a gateway back to prominence by removing its too-big-to-fail label.

He’s proven adept at blurring the lines between what effective banking regulation would actually involve and how he can wordsmith out of pushing for it. In May, testifying before the Senate Banking Committee, for example, he noted that “we do not support [the] separation of banks and investment banks.” When Senator Elizabeth Warren pointed out that this was hardly the position Donald Trump and his team had taken during campaign 2016 (or of the Republican platform, which had explicitly called for the reinstitution of the Glass-Steagall Act of 1933), he promptly waffled: “We, during the campaign… specifically came out and said we do support a twenty-first-century Glass-Steagall… That means there are aspects of it that we think may make sense, but we never said before that we supported a full separation of banks and investment banks.”

In June, when pressed on the matter by Senator Bernie Sanders, the Treasury secretary argued that Trump was not responsible for the language in the Republican party platform and remained opposed to breaking up the big banks. He added, “We think that that would hurt the economy, that would ruin liquidity in the market. What we are focused on is safe and prudent regulation for the large banks so we don’t have taxpayer risk.”

In other words, this is a man who has a real sense of the opportunity that’s embedded in this moment — for the large banks and their CEOs to make a bundle of money — but no appropriate sense of the risks involved or fear for a future in which he and his president might find themselves bailing out such banks, 2008-style.

Lessons unlearned? If that isn’t the Trump administration, what is?

Threatening the Market

Mnuchin may have little grasp of what constitutes real risk, but he can still make threats about it. In an October interview with Politico Money, he credited the stock market’s postelection rally to positive expectations that Congress would pass a major tax “reform” bill.  If that bill doesn’t go through, he warned, the markets will suffer big time — and so will everyone else.

Coming from a Goldman Sachs alum, that should have rung a few bells. After all, in the fall of 2008, with the stock market tanking and banks imploding, then-Treasury Secretary and former Goldman Sachs CEO Hank Paulson took a similar position with House Speaker Nancy Pelosi. Following that chamber’s initial rejection of a $700 billion bank bailout bill that sent the markets into a tailspin, he warned that, if she didn’t get it through, the big banks would stop providing money to the American public.  Sure enough, Congress complied. With 91 Republicans joining 172 Democrats, the bill passed by a vote of 263 to 171.

Nine years and a plethora of big bank subsidies later, Mnuchin conflated market levels with legislation in a similarly threatening manner. As he told Politico, “There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done.” He then added, “To the extent we get the tax deal done, the stock market will go up higher.” But with that, of course, went a warning: “There’s no question in my mind that if we don’t get it done you’re going to see a reversal of a significant amount of these gains.”

And speaking of reversals, the “Mnuchin Rule,” as it was dubbed in January, 2017, underscored the then-prevailing Trump administration position that the wealthy should not be afforded tax cuts. By October, however, Mnuchin had changed his rule. “When you’re cutting taxes across the board,” he explained to Politico, “it’s very hard not to give tax cuts to the wealthy with tax cuts to the middle class. The math, given how much you are collecting, is just hard to do.”

Actually, the math isn’t hard to do at all. My eight-year-old niece could do it.  If you make more than a certain amount, your tax rates shouldn’t get cut. That’s the only math that makes sense. But in the land of tax subterfuge, even if you leave a top tax bracket rate as it is, you can still ensure that the wealthy get all the breaks in other ways.

On November 2nd, the Republicans finally released their “Tax Cuts and Job Act,” which contained new blows to middle-class wellbeing, including the elimination of deductions for medical expenses, student loan interest, and state and local taxes. For corporations, already flush with cash, the plan calls for a significant, not to say staggering, tax break.  Their tax rate would be slashed from 35% to 20%.

And don’t forget repealing the estate tax, that other classic benefit for “the masses.” Count on one thing: there will be no reversals from Mnuchin or Trump on that because the math couldn’t be clearer.  Only the hyper-wealthy have estates big enough to reap rewards from such a change. At an Institute for International Finance conference, even Mnuchin had to agree that this was a benefit of the rich, by the rich, and for the rich: “Obviously, the estate tax, I will concede, disproportionately helps rich people.” Indeed, the heirs to the estates of fewer than 1 in 500 Americans who die each year would benefit in any way from such a repeal, though the children or other relatives of 13 of the 24 members of Donald Trump’s cabinet and the president himself would bag a collective estate tax break of about $1.5 billion.

Still, don’t think that everything’s coming up roses for our latest secretary of the Treasury.  Wall Street may now be king in Washington, but Mnuchin is not (though he is clearly a prince to the one man who truly matters right now, Donald Trump). In his efforts to promote the Trump vision (whatever that might be), the Treasury secretary seems to be coming up distinctly short, even with Republicans in Congress who have described his approach to lawmaking in terms ranging from “uncomfortable” to “intellectually insulting.”

Donald Trump, of course, campaigned as an anti-establishment candidate who would offer a hand to regular people, drain the Washington swamp, and have our backs. Then he promptly began filling his administration, especially when it came to the economy, with the richest of the rich, figures guaranteed to promote the dismantling of whatever tepid regulations remained to protect citizens from economic disaster while enriching the usual .01%.

Mnuchin has yet to even do something as simple and seemingly straightforward as posting a full-scale explanation of the tax plan he’s plugging so hard at the Treasury Department’s web page. Even though until November 2nd it remained a chimera, that hasn’t stopped him from rushing to its defense — the defense that is, of giving the extremely wealthy yet more of their money back. Welcome to the twenty-first-century American politics of the .01%.

Meanwhile, Mnuchin has noted that he’s a big fan of biographies, though his schedule doesn’t allow much time for “pleasure reading.” When asked about Alexander Hamilton, he said, “I have a beautiful painting of him in my office. He stares at me every day and I look at him for great advice.”

But Hamilton understood that, without adequate taxation, you couldn’t run a country, or pay its debts, a stance that informed how he implemented federal taxes in the new nation. As he said in 1801, “As to taxes, they are evidently inseparable from government. It is impossible without them to pay the debts of the nation, to protect it from foreign danger, or to secure individuals from lawless violence and rapine.” He also believed that those with more money should pay more taxes. His excise tax plan, for example, required the taxation of luxury items, bastions of the rich.

This government has, in fact, received more than $2.96 trillion in total tax revenues so far in the first 11 months of fiscal year 2017. That figure comes with a budget deficit of $673.7 billion, which means that if the rich or corporations were to cease to pay various taxes (at least at present rates), money would still have to come from somewhere. To begin to make up for the shortfall, the less wealthy will simply have to pay more in some fashion, as will states and cities, and cuts in social spending will undoubtedly follow as night does day.

The High-Flying Treasury Secretary Covers Trump’s Back

Mnuchin himself knows a situation ripe for the picking when he sees it, in government or out.  Take, for instance, his prodigious use of military planes for his personal travel, both on government business and for pleasure.  These flights have pushed the boundaries of judgement, if not legality.  According to a report from Rich Delmar, the counsel to the Treasury Department’s inspector general, Mnuchin took military aircraft on at least seven occasions without obtaining appropriate authorization, skirting a “rigorous” preapproval process established to avoid undue use of such expensive amenities.  And though he withdrew a request to take his wife on their honeymoon to Europe last summer by military aircraft, he did use an Air Force jet to fly to Kentucky with her to watch the solar eclipse and — he carefully added — to “review the gold” at Fort Knox. Unlike Health and Human Services Secretary Tom Price whose government aircraft fetish cost him his job, Fort Knox covered the solar eclipse for Mnuchin.

He classified each of those trips as a “White House support mission,” which sounds dramatic and is a category technically reserved for situations in which commercial flights aren’t available or there is a national security or other emergency. I checked, however.  There are several $200 economy flights from Washington to Kentucky, which more than beats the $10,000 per hour the Pentagon charges as its official aircraft expense when its planes are used in this way.

In addition to those flights, Mnuchin has been flying high as a kind of second Kellyanne Conway on all sorts of non-Treasury-related topics that threaten to eclipse his boss. With Trump embroiled in a bitter war of words with National Football League players taking a knee over racism, Mnuchin saw an opportunity and cruised the Sunday talk-show circuit attacking the players. He used his platform to insist that they should “do free speech on their own time” — “off the field,” not on it.

About a week later, he responded to the flak over the president’s lackluster support for Puerto Rican recovery after Hurricane Maria devastated that island. Defending his boss and his tweets in another circuit of those talk shows, he doubled down on White House criticisms of San Juan Mayor Carmen Yulin Cruz.  “When the president gets attacked, he attacks back,” he told Chuck Todd on NBC’s Meet the Press, adding, “I think the mayor’s comments were unfair given what the government has done.”

While the head of the Treasury isn’t an elected official, his words do hold considerable weight — and he is, after all, fifth in the line of succession for the presidency. The value, insights, and credibility of the Treasury Department impact economies, markets, investors, and confidence the world over.

Simply Swampy

Call it lying, misleading, flip-flopping, or the invocation of the “rights” of privilege, but Mnuchin has already amassed quite a catalogue of questionable statements in his brief career in public office and, while he’s been at it, he’s even made extra money along the way: at least $15 million and possibly as much as $53 million, reports Fortune, from “entertainment and real estate interests that he sold to comply with federal conflict of interest rules.”

For him, as for his boss, whatever anyone says, the bottom line and their allegiance remains simple and clear: it’s not to the middle class; it’s to their class, the half-billion and up folks.

Alexander Hamilton was no stranger to wealth either, but he understood that the nation’s wealth should be shared more evenly.  He attempted to use his office as a national unifier and a place to coordinate efforts to pay off debts from the Revolutionary War. Mnuchin’s doctrine is one of returning to a world of fewer rules for Wall Street and fewer taxes on corporations and the wealthy, which, in translation, means greater risks and costs for the rest of us and for the country as a whole. While President Trump isn’t exactly the cannot-tell-a-lie inheritor of the Washingtonian tradition, his Treasury Secretary, the foreclosure king of America, is distinctly no Alexander Hamilton.


One response so far

  1. You sure love your fake news meme about “Christians burning down the library at Alexandria”. Never mind the actual history which tells of at least two serious burnings of the library long before the advent of Christ. You left wing kooks love your delusions.
    And regarding recent BBC fake news of this past year being “one of the hottest blah blah blah”….. this is all bullshit. The real temperature logs don’t support it. Global warming is for lemmings without minds or souls. We could have REAL average temperature increases of 10 degrees centigrade {and not the laughable 0.1 degree centigrade} and it wouldn’t compare to the temp increases that we had for hundreds of years in the past thousand years [see years 1000-1400 AD]. But, I know, you love your delusions.

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