Author Archive: Stephen Green

BY THE NUMBERS: China (or Mexico) probably didn’t take your job.

At the high water mark in 1999, import competition was responsible for 2.3 percent of total annual job separations. In 2011, the last year of available data, only 0.1 percent of total separations were due to import competition. As a comparison, government regulation accounted for 1,500 separations (0.1 percent) and the end of seasonal work accounted for 393,000 (35.3 percent) in 2011.

Critics also worry that globalization incentivizes American companies to move overseas. This issue has been raised repeatedly during the election season. Donald Trump has repeatedly condemned U.S. firms like Ford and Carrier for opening production facilities in Mexico, while Hilary Clinton has criticized Trump for offshoring the production of his suits and ties. However, similar to import competition, offshoring does not have a large effect on overall job displacement.

Data in the above table was also taken from BLS’s Extended Mass Layoff Reports. Because BLS stopped collecting information on overseas job relocations in 2004, data is only available until 2003. However, the pattern is clear: overseas relocation is not a giant job killer. Even in the aftermath of NAFTA, which took effect in 1994, offshoring never displaced more than 20,000 workers annually. Furthermore, it only triggers around 1 percent of annual job separations.

Lots of data to soak up from Jacqueline Varas at the American Action Forum, although I’d have more confidence in the numbers if BLS hadn’t stopped collecting overseas relocations in 2004.

JOHN SCHINDLER: NSA ‘Shadow Brokers’ Hack Shows SpyWar with Kremlin Is Turning Hot.

For more than three years NSA has been subjected to an unprecedented stream of leaks about myriad Top Secret intelligence programs. Although Snowden claimed his motivation was to protect the civil liberties of fellow Americans by exposing secrets, it’s impossible to miss that well over 95 percent of the programs he’s compromised are purely involved with foreign intelligence. The impact of all this on agency morale has been devastating and NSA is in a state of crisis thanks to Snowden.

This week things took a marked turn for the worse, however, with the exposure of highly sensitive NSA hacking tools on the Internet by a murky group calling itself “The Shadow Brokers” which announced it planned to sell programs purloined from the agency. Like clockwork, NSA’s public website crashed and stayed down for almost a full day. Although there’s no indication this was linked to The Shadow Brokers, the optics for NSA were terrible.

First, some explanation is needed of what’s been compromised. The crown jewel here is a 300-megabyte file containing “exploits”—that is, specialized sophisticated cyber tools designed to burrow through firewalls to steal data. What The Shadow Brokers has, which it claims it stole from an alleged NSA front organization termed the Equation Group, appears to be legitimate.

We don’t appear to have so much as a fox guarding the henhouse.

QUESTION ASKED: Will Nick Denton have the last laugh?

A Fortune investigation into Gawker Media’s finances reveals that though Denton is down, he is not out. As the company’s websites assailed tech giants like Alphabet GOOGL -0.59% , Apple AAPL -0.26% , and Facebook FB -0.47% for byzantine schemes meant to reduce their tax burden, Gawker Media quietly played the same game. Our investigation reveals that Denton is as much a creature of the tech industry as he is a critic—and that Gawker’s slippery but legal tactics may, in the end, help Denton survive Thiel’s crusade with funds to spare.

Read the whole thing.

TWO MORE DETAILS on this morning’s Trump campaign reshuffle:

“I want to win,” Trump told the Wall Street Journal. “That’s why I’m bringing on fantastic people who know how to win and love to win.”

“Buckle up,” wrote a Trump strategist in a text message Wednesday to The Washington Post.

If this is the start of some professional, traditional campaigning, then that would be a welcome change.

CYBER SECURITY: U.S. government offers states help to fight voter fraud.

The government is offering to help states protect the Nov. 8 U.S. election from hacking or other tampering, in the face of allegations by Republican Party presidential candidate Donald Trump that the system is open to fraud.

Homeland Security Secretary Jeh Johnson told state officials in a phone call on Monday that federal cyber security experts could scan for vulnerabilities in voting systems and provide other resources to help protect against infiltration, his office said in a statement.

Paper ballots, anyone?

AMERICA FIRST: Manafort tied to undisclosed foreign lobbying.

Donald Trump’s campaign chairman helped a pro-Russian governing party in Ukraine secretly route at least $2.2 million in payments to two prominent Washington lobbying firms in 2012, and did so in a way that effectively obscured the foreign political party’s efforts to influence U.S. policy.

The revelation, provided to The Associated Press by people directly knowledgeable about the effort, comes at a time when Trump has faced criticism for his friendly overtures to Russian President Vladimir Putin. It also casts new light on the business practices of campaign chairman Paul Manafort.

Under federal law, U.S. lobbyists must declare publicly if they represent foreign leaders or their political parties and provide detailed reports about their actions to the Justice Department. A violation is a felony and can result in up to five years in prison and a fine of up to $250,000.

This may have something to do with Manafort’s de facto demotion earlier today.

RESET: Russian Military Forces Staging Near Ukraine.

As many as 40,000 Russian troops, including tanks, armored vehicles, and air force units, are now arrayed along Ukraine’s eastern border with Russia.

Additionally, large numbers of Russian military forces will conduct exercises in the coming days that Pentagon officials say could be used as cover for an attack on Ukraine.

“Russian units will likely practice reinforcing the [Crimean] peninsula through such activities as amphibious landings and air defense exercises, and this may involve the change out of equipment and long convoys of military vehicles,” one defense official said.

The military exercises are an ominous sign. Similar large-scale Russian exercises were conducted near Ukraine a month before Moscow carried out the covert military operation to take over the strategic Black Sea peninsula in March 2014.

Moving that many units around is expensive, even without a fight. Clearly Putin expects to get something out of the effort.

MEGAN MCARDLE: Aetna’s Retreat From Obamacare Is More Than It Seems.

The question is: What matters to regulators more? Blocking the mergers, or keeping the exchanges healthy? That’s not an easy question. As of this writing, it looks as if Aetna’s withdrawal will leave at least one county — Pinal, in Arizona — with no insurers at all selling exchange policies. And it seems unlikely that Pinal County will be the last to lose all its insurers unless something pretty drastic changes in these markets.

The state regulator has made hopeful noises about persuading someone to pick up the business. (Remember the regulatory goodwill we mentioned above?) But regulators in relatively small states don’t necessarily have that much clout with big insurers who can afford to keep taking these losses for years. California can plausibly say “Play ball with us or get ready to lose our nearly 40 million citizens as potential customers,” but a big corporation probably does not tremble in fear of the mighty market-shaking powers of the Vermont Department of Financial Regulation. And more locally concentrated firms cannot simply keep eating large losses for an indefinite period. It is obviously a problem — for politicians, as well as customers — if a growing number of people have a theoretical right to buy health insurance but cannot actually buy any.

People no longer have a “right” to buy health insurance; we have a legal obligation to do so. That’s going to be an increasingly difficult obligation to fulfill as insurers abandon one ObamaCare market after another.

TRANSPARENCY: Congress receives FBI material on Hillary Clinton emails.

In a statement, the FBI said the materials were provided to Congress consistent with the agency’s “commitment to transparency” in the Clinton case. The material contains classified information and was provided “with the expectation it will not be disseminated or disclosed” without the FBI’s agreement, the agency said Tuesday.

Furious the FBI didn’t press charges against their political rival, House Republicans pressed the agency to release notes from its agents’ July interview with Clinton. They claim the FBI notes, which are typically kept confidential after an investigation is closed, may show Clinton provided inconsistent answers to questions about her handling of emails containing classified information during testimony last year before the House Benghazi panel.

Republicans are also demanding that the Justice Department open a new investigation into whether Clinton lied to Congress.

That doesn’t really require an investigation, does it?

PRIORITIES: Turkey to Free 38,000 Prisoners as Coup Arrests Crowd Jails.

A government decree published in the Official Gazette on Wednesday allows the conditional release of prisoners with less than two years to parole. Justice Minister Bekir Bozdag said about 38,000 people will be set free “initially.”

As of last week, Turkey had formally arrested more than 17,000 people and was holding about 6,000 others suspected of links to the botched takeover.

It wasn’t a failed coup; it’s a successful purge.

Prisoners not being released include “those convicted of terrorist acts, sexual offenses and murder.”

CHANGE: Trump shakes up campaign, demotes top adviser.

Stephen Bannon, a former banker who runs the influential conservative outlet Breitbart News and is known for his fiercely anti-establishment politics, has been named the Trump campaign’s chief executive. Kellyanne Conway, a veteran Republican pollster who has been close to Trump for years, will assume the role of campaign manager.

Two Trump campaign aides confirmed the staff’s reshuffle early Wednesday, requesting anonymity to discuss personnel changes without permission.

The campaign also announced that “the first major TV ad buy of the general election [is] slated to start later this week.”

ESCAPE: Senior North Korean Diplomat Defects In London.

South Korea’s JoongAng Ilbo newspaper reported on Tuesday that a high-profile diplomat in the UK defected with his wife and son to a “third country”. The BBC named the defector as veteran diplomat Thae Yong Ho, a counselor at the North Korean embassy and deputy to the ambassador.

Quoting an unnamed source, JoongAng Ilbo said the diplomat embarked on a defection journey “following a scrupulous plan” and was in the process of “landing in a third country as an asylum seeker.”

It was not clear from the newspaper report whether the third country was the UK. The term is usually used in South Korean media to refer to a country which is neither North nor South Korea.

An official at the North Korean embassy in London would not confirm the defection, describing reports of the event as “quite sudden”.

Predicting the end of the Kim regime has been a fool’s game since 1950, but this has been a bad year for Kim Jong-un.

CONFIDENCE: Clinton Super PAC to suspend ads in Virginia, Colorado, Pennsylvania in mid-September.

Allahpundit:

Actually, they’re already off the air in Virginia. Why spend precious dollars in battlegrounds if they’re not really battlegrounds?

Resuming on September 20th is conditional, I assume. If any of those states have narrowed, the ads will go up. If they haven’t, the money is better spent in competitive states like Georgia, Arizona, and, er, maybe Utah. It’s conceivable that Priorities won’t air a single ad for the last two months of the race in three of the biggest purple-state targets for the GOP this year.

As I was saying…

RESET: Russia, for First Time, Uses Iranian Base for Syria Campaign.

Russian bombers launched attacks in Syria from an Iranian air base for the first time on Tuesday, potentially altering the political and military equation in the Middle East.

Long-range Tupolev-22M3 bombers, which would otherwise have to fly from Russia, used an Iranian base near Hamadan to hit a series of targets inside Syria, according to a brief statement from the Russian Defense Ministry.

The agreement to let Russia use the base significantly deepens the country’s military role in the region, most obviously in Iran. And it could help solidify Russia as the main broker of any future peace agreement in Syria.

I was writing almost a year ago about a developing Russo-Iranian Axis, hoping it wouldn’t seem too far-fetched. Eleven months later and it’s nearly a fait accompli.

CATCH, RELEASE, PRAY: 15 Guantanamo Detainees Sent to UAE in Major Transfer.

The transfer of 12 Yemeni nationals and three Afghans to the UAE comes amid a renewed push to whittle down the number of detainees held at the U.S. prison in Cuba that President Barack Obama aims to close.

The Pentagon says 61 detainees now remain at Guantanamo, which was opened in January 2002 to hold foreign fighters suspected of links to the Taliban or the al-Qaida terrorist organization. During the Bush administration, 532 prisoners were released from Guantanamo, often in large groups to Afghanistan and Saudi Arabia.

The latest batch of released prisoners had been held without charge at Guantanamo, some for over 14 years. They were cleared for release by the Periodic Review Board, comprised of representatives from six U.S. government agencies.

Once in the UAE, the terrorists will be “banned from traveling and any meaningful communication.”

JUSTICE: House Republicans detail perjury allegations against Clinton.

“The four pieces of sworn testimony by Secretary Clinton described herein are incompatible with the FBI’s findings,” House Oversight Committee Chairman Jason Chaffetz, R-Utah, and Judiciary Committee Chairman Bob Goodlatte, R-Va., wrote to U.S. Attorney Channing D. Phillips. “We hope this information is helpful to your office’s consideration of our referral.”

The Justice Department Assistant Attorney General for Legislative Affairs, Peter Kadzik, confirmed in an Aug. 2 letter to both committees they had the perjury investigation request and the department would “take appropriate action as necessary.”

The one-page response offered no timeline nor specific commitment to act on the allegations.

According to the Justice Department website, Kadzik, “led the successful effort to confirm Attorney General Loretta E. Lynch and Deputy Attorney General Sally Q. Yates.” Both women were central players handling the Clinton email matter.

It would seem the fix is in yet again.

SCIENCE: Simulated black hole experiment backs Hawking prediction.

Prof Jeff Steinhauer simulated a black hole in a super-cooled state of matter called a Bose-Einstein condensate.

In the journal Nature Physics, he describes having observed the equivalent of a phenomenon called Hawking radiation – predicted to be released by black holes.
Prof Hawking first argued for its existence in 1974.

“Classical” physics dictates that the gravity of a black holes is so strong that nothing, not even light, can escape. So Hawking’s idea relies on quantum mechanics – the realm of physics which takes hold at very small scales.

These quantum effects allow black holes to radiate particles in a process which, over vast stretches of time, would ultimately cause the black hole to evaporate.

But the amount of radiation emitted is small, so the phenomenon has never actually been observed in an astrophysical black hole.

On a long enough timeline, even the survival rate for black holes drops to zero.

THAT MEANS IT’S WORKING: Aetna to cut back 70 pct on Obamacare plans in 2017.

“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Marc Bertolini, Aetna chairman and CEO, said in a statement.

The insurance giant says it will offer ACA exchange plans in Delaware, Iowa, Nebraska and Virginia, slashing its Obamacare footprint by 70 percent next year. It will offer ACA plans in just 242 counties, nationally, down from nearly 780 this year.

Aetna’s announcement comes two weeks after the company booked $200 million in ACA-related pre-tax losses in its Q2 earnings report and nearly one month after the Department of Justice’s anti-trust division sued to block the health insurer’s acquisition of rival Humana.

Humana has also announced it will cut back sharply from the exchanges. Their pullback, in the wake of UnitedHealth’s departure from all but a handful of exchanges, means that hundreds of thousands of Obamacare plan members will no longer have access to plans from the nation’s three major insurers in 2017.

Customers “taxed” into buying insurance they can’t afford to use from insurers who can’t afford to sell it is a recipe for government-mandated failure.

Free markets will take the blame.