Chris Hedges's Blog, page 259

Invoking Privilege, Trump Blocks Access to Full Mueller Report

WASHINGTON—The White House invoked executive privilege Wednesday, claiming the right to block lawmakers from the full report from special counsel Robert Mueller on his Trump-Russia probe and escalating the battle between President Donald Trump and Congress.

The administration’s decision was announced just as the House Judiciary Committee was gaveling in to consider holding Attorney General William Barr in contempt of Congress over failure to release the full report.

Committee Chairman Jerrold Nadler of New York declared the action by Trump’s Justice Department was a clear new sign of the president’s “blanket defiance” of Congress’ constitutional rights. “Every day we learn of new efforts by this administration to stonewall Congress,” Nadler said. “This is unprecedented.”

White House Press Secretary Sarah Sanders said the action was rather a response to the “blatant abuse of power” by Democratic Rep. Nadler.

“Neither the White House nor Attorney General Barr will comply with Chairman Nadler’s unlawful and reckless demands,” she said.

In a letter Wednesday to Trump, Barr explained that the special counsel’s files contain millions of pages of classified and unclassified information. He said it was the committee’s “abrupt resort to a contempt vote” that “has not allowed sufficient time for you to consider fully whether to make a conclusive assertion of executive privilege.”

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The Ominous Implications of William Barr’s Testimony



by Bill Blum

Barr told Trump the president he should assert privilege now, “pending a full decision on the matter.”

Democrats on the committee said the Trump administration was trampling on Congress’s duty to conduct oversight.

“This is a moment in history,” said Rep. Sheila Jackson Lee of Texas. “The president now seeks to take a wrecking ball to the Constitution of the United States.”

But the top Republican on the panel, Rep. Doug Collins of Georgia, called the majority’s decision to push ahead with a contempt resolution “cynical, mean-spirited, counterproductive and irresponsible.”

Nadler said earlier Wednesday the Trump administration’s refusal to provide special counsel Robert Mueller’s full Russia report to Congress presents a “constitutional crisis,” leaving the panel no choice but to move forward with a contempt vote against Barr.

Talks with the Justice Department broke down late Tuesday over the committee’s subpoena for an unredacted version of the report.

House Speaker Nancy Pelosi suggested Democrats were surprised by the department’s decision as last-minute talks failed late Tuesday.

She said if the committee approves contempt resolution, as is expected, the “next step” would be eventual consideration by the full House.

Barr released a redacted version of Mueller’s report to the public last month, but Democrats said they want to see the full document, along with underlying evidence, and subpoenaed the full report. The department has rejected that demand, while allowing a handful of lawmakers to view a version of Mueller’s report with fewer redactions. Democrats have said they won’t view that version until they get broader access.

Executive privilege is the president’s power to keep information from the courts, Congress and the public to protect the confidentiality of the Oval Office decision-making process.

The top Republican on the panel, Rep. Doug Collins of Georgia, sharply criticized the Democrats’ plan to go ahead with the vote.

“I can’t imagine a more illogical hill for a legislator to die on,” Collins said in a statement.

If the committee holds Barr in contempt, it would be the first step in what could be a protracted, multipronged court battle between Congress and the Trump administration.

Trump has defied requests from House Democrats since the release of Mueller’s report last month, and Democrats are fighting the White House on several fronts as they attempt to learn more about the report, call witnesses and obtain Trump’s personal and financial documents.

In a related move, Nadler also threatened to hold former White House counsel Don McGahn in contempt of Congress if he doesn’t testify before the committee later this month. Nadler rejected a White House claim that documents McGahn refused to provide despite a subpoena are controlled by the White House and thus McGahn has no legal right to them.

On Monday, Justice spokeswoman Kerri Kupec said the department has “taken extraordinary steps to accommodate the House Judiciary Committee’s requests for information” regarding Mueller’s report, but that Nadler had not reciprocated. She noted that Democrats have refused to read the version of Mueller’s report with fewer redactions that has been provided to Congress.

A contempt vote against Barr would head to the full House for a vote. If the House were to pass the resolution, it would send a criminal referral to the U.S. attorney for the District of Columbia, a Justice Department official who is likely to defend the attorney general.

Democratic House leaders could also file a lawsuit against the Justice Department to obtain the Mueller report, though the case could take months or even years to resolve. Some committee members have suggested they also could fine Barr as he withholds the information.

Republicans have largely united behind the president, with Senate Majority Leader Mitch McConnell on Tuesday declaring “case closed” on Mueller’s Russia probe and potential obstruction by Trump. McConnell said Democrats are “grieving” the result.

Mueller said he could not establish a criminal conspiracy between the Trump campaign and Russia, but he did not reach a conclusion on whether Trump obstructed justice. Mueller didn’t charge Trump but wrote that he couldn’t exonerate him, either.

Pelosi and Senate Democratic leader Chuck Schumer issued a joint statement calling it “a stunning act of political cynicism and a brazen violation of the oath we all take.”

Joe Biden Might as Well Be a Republican

Recent criticism of Joe Biden for praising Dick Cheney as “a decent man” and Mike Pence as “a decent guy” merely scratches the surface of what’s wrong with the current frontrunner for the Democratic presidential nomination. His compulsion to vouch for the decency of Republican leaders — while calling Donald Trump an “aberration” — is consistent with Biden’s political record. It sheds light on why he’s probably the worst Democrat running for president.

After several decades of cutting corporate-friendly deals with GOP legislators — often betraying the interests of core Democratic constituencies in the process — Biden has a big psychological and political stake in denying that the entire GOP agenda is repugnant.

At the outset of his Senate career, Biden lost no time appealing to racism and running interference for huge corporate interests. He went on to play a historic role in helping to move the Supreme Court rightward and serving such predatory businesses as credit card companies, big banks and hedge funds.

Biden’s role as vice president included a near-miss at cutting a deal with Republican leaders on Capitol Hill to slash Medicare and Social Security. While his record on labor and trade has been mediocre, Biden has enjoyed tight mutual alliances with moneyed elites.

The nickname that corporate media have bestowed on him, “Lunch Bucket Joe,” is wide of the mark. A bull’s-eye is “Wall Street Joe.”

With avuncular style, Biden has reflexively used pleasant rhetoric to grease the shaft given to millions of vulnerable people, suffering the consequences of his conciliatory approach to right-wing forces. Campaigning in Iowa a few days ago, Biden declared that “the other side is not my enemy, it’s my opposition.” But his notable kinship with Republican politicians has made him more of an enabler than an opponent. Results have often been disastrous.

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My Letter From Joe Biden



by Scott Ritter

“In more than four decades of public service, Biden has enthusiastically championed policies favored by financial elites, forging alliances with Wall Street and the political right to notch legislative victories that ran counter to the populist ideas that now animate his party,” HuffPost senior reporter Zach Carter recounts. Biden often teamed up with Senate Republicans to pass bills at the top of corporate wish lists and to block measures for economic fairness.

In the mid-1970s, during his first Senate term, Biden repeatedly clashed with Sen. Edward Kennedy, the chair of the Judiciary Committee, who wanted to rein in runaway corporate power. “Biden became an advocate for corporate interests that had previously been associated with the Republican Party,” Carter reports. As he gained seniority, Biden kept lining up with GOP senators against antitrust legislation and for bills to give corporations more leverage over consumers and workers. “By 1978, Americans for Democratic Action, the preeminent liberal watchdog group of the time, gave Biden a score of just 50, lower than its ratings for some Republicans.”

Opposing measures for racial equity and economic justice, Biden’s operational bonds with GOP leaders continued. Carter reports that “on domestic policy — from school integration to tax policy — he was functionally allied with the Reagan administration. He voted for a landmark Reagan tax bill that slashed the top income tax rate from 70 percent to 50 percent and exempted many wealthy families from the estate tax on unearned inheritances, a measure that cost the federal government an estimated $83 billion in annual revenue. He then called for a spending freeze on Social Security in order to reduce the deficits that tax law helped to create.”

Biden came through for corporate power again in November 1993 when he joined with 26 other Democrats and 34 Republicans to win Senate passage of NAFTA, the trade agreement strongly opposed by labor unions and environmental groups. In mid-1996, when Congress approved President Clinton’s “welfare reform” bill, Biden helped to vote the draconian measure into law. It predictably had devastating effects on women and children.

Throughout the 1990s — from tax-rate changes that enriched the already-rich to deregulating banks with repeal of the Glass-Steagall Act to loosening government curbs on credit default swaps — Biden stood with the Senate’s Republicans and the most corporate-aligned Democrats. Carter sums up: “Biden was a steadfast supporter of an economic agenda that caused economic inequality to skyrocket during the Clinton years. . . . Biden voted for all of it.”

Biden led the successful push to pass the milestone 1994 crime bill, engaging in racist tropes on the Senate floor along the way. By then, he had become a powerful lawmaker on criminal-justice issues.

In 1991, midway through his eight years as chair of the Senate Judiciary Committee, Biden ran the hearings for Supreme Court nominee Clarence Thomas that excluded witnesses who were prepared to corroborate Anita Hill’s accusations of sexual harassment. “Much of what Democrats blame Republicans for was enabled, quite literally, by Biden: Justices whose confirmation to the Supreme Court he rubber-stamped worked to disembowel affirmative action, collective bargaining rights, reproductive rights, voting rights,” feminist author Rebecca Traister writes.

Early in the new century, Biden wielded another weighty gavel, with momentous results, as chair of the Senate Foreign Relations Committee. In 2002, congressional Democrats were closely divided on whether to greenlight the invasion of Iraq, while Republicans overwhelmingly backed President George W. Bush’s mendacious case for invading. Biden didn’t only vote for the Iraq invasion on the Senate floor in October 2002. Months earlier, he methodically excluded dissenting voices about the looming invasion at key hearings of the Foreign Relations Committee.

While his impact on foreign policy grew larger, Biden’s avid service to financial giants never flagged. One of his top priorities was a crusade for legislation to undermine bankruptcy protections. Biden was a mover and shaker behind the landmark 2005 bankruptcy bill. Before President Bush signed it into law, Biden was one of just 14 out of 45 Democratic senators to vote for the legislation.

The bankruptcy law was a monumental victory for credit-card firms — and a huge blow to consumers, including students saddled with debt. As happened so often during Biden’s 36 years in the Senate, he eagerly aligned himself with Republicans and a minority of Democrats to get the job done.

Now, running for president, Biden has no use for candor about his actual record. Instead, he keeps pretending that he has always been a champion of people he actually used his power to grievously harm.

In ideology and record on corporate power, the farthest from Biden among his competitors is Bernie Sanders. No wonder Biden has gone out of his way to distance himself from Sanders while voicing high regard for the wealthy. (I was a Sanders delegate to the 2016 Democratic National Convention and continue to actively support him.)

Biden’s ongoing zeal to defend and accommodate Republicans in Congress is undiminished, as though they should not be held accountable for President Trump even while they aid and abet him. Days ago on the campaign trail — while referring to Trump — Biden asserted: “This is not the Republican Party.” And he spoke warmly of “my Republican friends in the House and Senate.”

All in all, it’s preposterous yet fitting for Joe Biden to claim that Republicans like Dick Cheney and Mike Pence are “decent.” He’s not only defending them. He’s also defending himself.

The Unproven Stem Cell Industry’s Shameless Profiteering

Their shoulders and backs and knees were giving out. Pills and steroid injections hadn’t eased their pain. They were scared of surgery. So, one afternoon last October, two dozen men and women, many of them white-haired, some leaning on canes, shuffled into a meeting room at Robson Ranch, a luxury retirement community in Denton, Texas. Sipping iced tea and clutching brochures that promised a pain-free tomorrow, they checked off their ailments on a questionnaire.

They were there to see a presentation by Dr. David Greene, who was introduced as a “retired orthopedic surgeon.” Atlas Medical Center, a local clinic that specializes in pain treatment, hosted the event. Greene, a short, trim man with his hair slicked up, ignored the stage and microphone and stood close to his audience. After warming up the crowd with a joke about his inept golf skills, Greene launched into his sales pitch. A tiny vial no larger than the palm of his hand, he told the group, contains roughly 10 million live stem cells, harvested from the placenta, amniotic fluid, umbilical cord or amnion, the membrane that surrounds the fetus in the womb. Injected into a joint or spine, or delivered intravenously into the bloodstream, Greene told his listeners, those cells could ease whatever ailed them.

On a screen behind him, Greene displayed a densely printed slide with a “small list” of conditions his stem cell product could treat: arthritis, tendinitis, psoriasis, lupus, hair loss, facial wrinkles, scarring, erectile dysfunction, heart failure, cardiomyopathy, chronic obstructive pulmonary disease, asthma, emphysema, stroke, Alzheimer’s disease, multiple sclerosis, ALS, neuropathy, pelvic pain, diabetes, dry eye, macular degeneration, kidney failure. And that was just a sample. “I need to add a couple more slides,” Greene said with a laugh.

Greene said that amniotic stem cells derive their healing power from an ability to develop into any kind of tissue, but he failed to mention that mainstream science does not support his claims. He also did not disclose that he lost his license to practice medicine in 2009, after surgeries he botched resulted in several deaths. Instead, he offered glowing statistics: amniotic stem cells could help the heart beat better, “on average by 20%,” he said. “Over 85% of patients benefit exceptionally from the treatment.”

“Patients come back to the center saying, ‘I can walk farther, I can breathe easier, I can sleep better,’ ” he proclaimed. “It’s remarkable the outcomes we’ve been seeing for the last few years.”

In the second row, a slender woman in a striped jacket, who had hobbled into the meeting on a wooden cane, pumped her fists in the air. “Stem cells!” she cheered.

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Big Pharma Sells Risky Meds We Don't Need for Disorders It Made Up That We Don't Have

For more than half a century, the regenerative possibilities of stem cells — which the body stores to repair damaged tissue and organs and restore blood supply — have tantalized the medical community. Bone marrow transplants for cancer patients, which rely on blood stem cells, fulfill this potential. But alongside legitimate, scientifically proven treatments, an industry has sprung up in which specialized clinics offer miracle remedies from poorly understood stem cell products.

These clinics are multiplying in the United States. According to a tally by Leigh Turner, an associate professor of bioethics at the University of Minnesota, there were 12 such clinics advertising to consumers in 2009; in 2017, there were more than 700. Unproven cellular therapies are a $2 billion global business, according to a recent paper co-authored by Massimo Dominici, the lead investigator at the cellular therapy lab at the University of Modena and Reggio Emilia, in Italy.

This burgeoning business is largely unregulated. Technically, manufacturers are required to submit stem cell therapies for review as a drug, and to provide evidence of their safety and efficacy, but the U.S. Food and Drug Administration hasn’t enforced the rule consistently. The former FDA commissioner Dr. Scott Gottlieb acknowledged in an interview that the agency’s laissez-faire attitude has made it easier for stem cell clinics to proliferate. “This is an example where the FDA, for a long period of time, took enforcement discretion, then the field grew,” he said. “Then it becomes hard to step in and actually apply the regulation.”

Many clinics offer stem cells taken from a patient’s own bone marrow or fat. But they’re being challenged by a newer technology: amniotic stem cells.

Greene’s company, R3 Stem Cell, was established in 2013. It distributes amniotic stem cells to about 30 clinics nationwide, which have administered them to 10,000 patients, according to an R3 brochure. It also handles marketing for the clinics. In an interview, Greene acknowledged that the benefits of amniotic stem cells that he touted at the Robson Ranch seminar are based on “a lot of success stories,” rather than on clinical trials. “I don’t claim anything,” he added. “I don’t claim that this is a treatment. I don’t claim that it cures anything. I don’t claim that it’s a permanent fix. All I discuss is maybe, potentially, people can get some improvements from stem cell care.”

One appeal of amniotic stem cell treatments is convenience. They don’t require patients to undergo liposuction or bone marrow extraction; instead, manufacturers harvest the cells from tissues donated by women who have recently given birth, and the cells are then frozen and shipped to clinics. There’s no special training needed to administer amniotic treatments, either — a nurse practitioner on staff can give injections — so chiropractors, beauticians and sports medicine doctors can enter the field with relative ease. A procedure such as an injection into a joint might take about 10 minutes and cost between $5,000 and $10,000. For systemic diseases such as lupus, some clinics also administer the cells intravenously, which can cost more than $10,000 per session.

Because amniotic stem cell treatments don’t undergo the clinical trials required for FDA approval, there’s little data or research on them. Their efficacy is highly questionable and, in one case where bacteria contaminated the supply, the lack of accountability in the industry has led to serious infections for a dozen patients. An investigation by ProPublica and The New Yorker found disgraced doctors who were recast as salespeople, manufacturers that cloaked themselves in pseudoscience and had few scientists on staff, and clinics that offer to treat conditions like multiple sclerosis or kidney disease without specialized training. Unscientific methods, deceptive marketing, price gouging and disregard for patients’ well-being were rampant across the amniotic stem cell therapy industry.

The supply chain for amniotic therapy starts and finishes with people who are at vulnerable times in their lives: the cells come from new mothers and go to chronically ill patients. Women who undergo cesarean sections are often asked to donate their birth tissue shortly before the procedure. By law, they can’t be compensated for it. Mothers who donated their tissue told ProPublica and The New Yorker that they assumed, or were assured, that it would be used for a worthy cause — and that otherwise it would be disposed of as medical waste. But they couldn’t recall the details of the donation process, owing to the haze of childbirth.

“Someone walked in with a form while I was in labor and asked if I wanted to donate” the umbilical cord, said Julie Menge, who gave birth in Pittsburgh in 2015. “I said, ‘Sure!’ And I have no idea what happened to it.”

Tissue banks do collect birth tissue for important medical reasons. For instance, blood stem cells from umbilical cords can be used in the treatment of some blood disorders, such as leukemia. Placentas can be turned into wound dressings, including surgical grafts and bandages for people who have had ocular surgery. Other donations, though, find their way to commercial amniotic stem cell manufacturers, which sell them at a steep markup.

The patients are taking an expensive gamble. A 66-year-old insurance auditing specialist, who asked not to be named for privacy reasons, suffered constant pain from arthritis in both knees but wanted to avoid replacement surgery. After attending a seminar in Irving, Texas, hosted — like the one at Robson Ranch — by Atlas Medical Center, she booked an appointment at Atlas in November 2017.

There, the staff told her that the supplier was offering a discount that would lower her cost to $7,300 for injections in both knees. “They were just acting so shocked, one of them said, ‘I’ve never seen a discount this high before,’” she recalled. “I was so gullible.”

She received an injection in each knee and returned every two months for a checkup. “They had me fill out this form every time to record my pain level, and it was close to 10 every time,” she said. The staff assured her that she would improve within six months, but her knees did not get better.

Alexandra Schnee, a chiropractor from Atlas who introduced Greene at the Robson Ranch event, defended the treatment. “As with any procedure, there will be patients who have success and others that don’t,” she said in an email. “We have many more patients who have experienced improvement with this therapy.”

The patient canceled her last appointment. “After six months, I was pretty ticked off,” she said.

When most people hear the words “stem cell,” the first thing that often comes to mind is embryos. Embryonic stem cells are truly wondrous: They can evolve into all types of cells in the body. But their power is fleeting. By the time a fetus is fully formed, its stem cells are stratified: blood-forming stem cells can make both white and red blood cells, for example, but they won’t naturally turn into skin. Skin stem cells can regenerate the various layers of skin, but they won’t give rise to a new brain cell. Only in a lab, with genetic modifications, can scientists get differentiated stem cells to regain embryonic capabilities.

Amniotic stem cell products are made solely from tissues related to childbirth, not from embryonic cells. The scientific consensus is that they may be able to turn into a limited range of tissue types — namely bone, fat and cartilage — but they can’t turn into liver, heart or brain cells, for example. Even if such a transformation were possible, scientists don’t know how it could happen or what would trigger it. Until this regenerative capacity is proved, some researchers say, these birth-tissue cells shouldn’t be called stem cells at all.

Yet providers of amniotic stem cell treatments often attribute to their products all the powers of embryonic stem cells, minus the ethical issues associated with deriving cells from early-stage embryos. In his talk at Robson Ranch, Greene blurred the distinction between embryonic and amniotic stem cells, saying, “I think of a stem cell as a blank slate, a master cell that has not made the decision of what it wants to specialize in.” The cells he markets “can turn into anything we clinically need them to become,” he said.

That assertion is “simply not true,” said Jeanne Loring, the director of the Center for Regenerative Medicine at the Scripps Research Institute and chief scientific officer at Aspen Neuroscience. “If a stem cell from one organ is put into another, like a placenta or umbilical cord cell into a knee, it will die. It can’t become something else.”

Greene acknowledged that most patients don’t understand the difference between embryonic and other types of stem cells, and that the language he uses in his seminars is largely guided by market research. “When you look at what people are typing on the web, ‘stem cell’ is the No. 1 key phrase,” he told me. “That is the key word that the public in America understands.”

Greene later cited a 2017 paper from a Chilean study as evidence that amniotic stem cells could help patients with heart failure. In the trial, 15 patients received umbilical cord-derived cells and saw improvement in the amount of blood pumped with each heartbeat. Dr. Steven Nissen, chairman of the department of cardiovascular medicine at the Cleveland Clinic, reviewed the study at ProPublica and The New Yorker’s request and noted that the trial was “tiny” and “is so preliminary (and frankly limited in quality) that no conclusions are possible.” He added that the Chilean findings had not been reproduced, while other studies had been negative. “This is NOT a justification for commercial administration of stem cells,” he said.

At the Robson Ranch seminar, Schnee, the Atlas chiropractor, played a news clip about a two-part study at Stanford and the University of Pittsburgh in which stem cells were used to treat stroke patients. It showed a woman who had lost much of her limb function raising her arm above her head with a look of awe. But the cells used in the Stanford trial — which the clip referred to as “modified adult stem cells” — weren’t taken from amniotic tissue. Instead, the study used bone marrow cells that had been cultivated in a lab, genetically modified to be more potent and then delivered with a needle into a precisely selected spot in the brain.

Dr. Gary Steinberg, the chair of neurosurgery at Stanford University, ran the trials and has been developing stem cell therapies for stroke patients for two decades. When he was told how the clip about his study was used, he said that there is no evidence to show that products made from amniotic cells are beneficial. “I have no control over how these clips get used, unfortunately,” Steinberg said. “I’m not happy about it.” He added, “I’m an advocate for thoughtful, controlled trials, and they will never know, unless we do controlled trials, if it works.”

Steinberg isn’t the only academic whose work has been distorted to promote Greene’s products. A video on YouTube by R3 Stem Cell includes clips of David Schaffer, the director of the Stem Cell Center at the University of California, Berkeley, talking about regenerative medicine. Schaffer told ProPublica and The New Yorker that he has never heard of R3 and does not work with amniotic tissue. “That footage was not included with my consent,” he said. “I would be suspicious of the business.”

Greene’s main supplier is the Utah Cord Bank, in Sandy, Utah, which was established in 2005 as a private facility where customers paid to store umbilical cord blood and other birth tissue taken from their babies to be used, among other reasons, if the child or a sibling had a blood disorder. For years, the bank’s website boasted of “bottom line prices,” advertising the “lowest yearly storage fee in the nation.”

Around 2016, the bank began making two amniotic stem cell products, called StemShot and StemVive. (StemShot was later renamed Stemii.) Although the bank continued to store birth tissue, amniotic stem cells soon became its biggest moneymaker.

The Utah Cord Bank was co-founded by a man named Eliott Spencer, who holds a doctorate in biochemistry from Brigham Young University. When the bank started producing StemShot and StemVive, Spencer was the only scientist on the company’s management team and the only person who knew the recipe for making the products, according to two former employees who spoke on condition of anonymity. Spencer said in an email that the bank now has “more than one scientist and many technicians, as well as multiple people who know how to safely procure, process and package our products.”

Spencer said that he and his wife, Carlee, “currently work side by side as co-founders and presidents of the company.” According to her LinkedIn page, Carlee has a degree in design graphics. A former volunteer youth religion teacher, she originally joined Spencer’s company as a lab support worker and, the next year, rose to executive vice-president and director of procurement. The bank’s chief executive officer, Leigh Kimball, says on his LinkedIn page that the company makes “100% organic stem cells” and is “on track to double in size in 2019 to $20M.” He has a bachelor’s degree in journalism.

Friends and former employees described Spencer as a computer whiz who mined bitcoin in his spare time. They also portrayed him as a libertarian who dislikes government regulation and can be thrifty to a fault. Last November, he pleaded guilty to a misdemeanor charge of criminal mischief after trying to exit an airport parking lot without paying an $18 parking fee. According to a court filing, he caused $3,755 worth of damage to the parking-lot gate, which he agreed to pay for. He said in his email that he doesn’t believe he was responsible for the damage and that the incident “is in no way indicative of major flaws in my character.”

Industry insiders and the two former employees said that one placenta should yield between two and four hundred vials of amniotic stem cells. The Utah Cord Bank would harvest as many as 800, the ex-employees said. Also according to the former employees, it costs less than $50 to make a single vial, which is then sold to a clinic or a distributor for about $1,000.

Spencer also used expired chemicals and reagents in his lab, according to two former employees. In January 2018, the FDA sent an inspector to the Utah Cord Bank to audit it for compliance with regulations on laboratory operations, according to the FDAzilla database, which tracks inspections. After the inspector notified the company that she would arrive on a Monday, workers spent the previous weekend getting rid of expired materials, two former employees said. Spencer didn’t respond to a request to comment on this incident. The bank passed the audit.

Spencer said that the Utah Cord Bank has a perfect safety record and has never been cited for deficiencies by the FDA. “With tens of thousands of treatments shipped worldwide, and with no serious adverse events reported, UCB has helped a lot of people overcome their health challenges,” he said. “Sadly, this cannot be said for so many others in this space.”

On its website, the Utah Cord Bank touts its products as containing “young multipotent cells” that can turn into many kinds of tissue. It and other manufacturers typically ship amniotic stem cells cryogenically preserved to a doctor’s office, where they’re thawed before they are injected into a patient. But despite the effort to preserve the cells, research suggests that many of them do not survive. Dead cells, once injected, have no effect; the body breaks them down.

“For most of these products, there’s not many healthy cells left,” said Daniel Kuebler, the dean of the School of Natural and Applied Sciences at Franciscan University of Steubenville, Ohio. Kuebler has tested amniotic products for manufacturers including the Utah Cord Bank, but he declined to comment on any specific product, saying that his contracts bound him to confidentiality. Even if there are some cells that are still alive post-thaw, “I have a hard time getting them to grow,” Kuebler said. “Just because they’re alive doesn’t mean they’re not in the process of dying.”

Dr. Lisa Fortier, a researcher at Cornell University and a consultant for a company that sells birth-tissue products, tested nine of them from four manufacturers — Utah Cord Bank was not one of them — and also found no live cells. It is “very unlikely” that the amniotic membrane “works as a stem cell product,” she said. Fortier and Kuebler said that there may be other proteins in the products that could somehow wake up the immune system or restore tissue, which might account for the benefits reported by some patients, but there’s not enough data to know for sure.

Greene supplied ProPublica and The New Yorker with two lab analyses of Utah Cord Bank products. Both showed that up to 42% of the cells in the tested vials were alive. One analysis, done by Kuebler, counted roughly 600,000 live cells in the vial. That’s far less than the 10 million live stem cells that Greene cited at the seminar. The testing also didn’t indicate whether the living cells were stem cells or another type of tissue. “There’s a good chance most of these cells are not stem cells,” Paul Knoepfler, professor of cell biology and human anatomy at the University of California, Davis, said, after reviewing the reports sent by Greene. “The majority could be fibroblasts” — connective tissue cells — “or other unhelpful cells.”

In its advertising, the cord bank features employee testimonials about the excellence of its products. Eliott Spencer said that “nearly all” of the bank’s employees “have used our products to treat shoulder pain, knee pain and more” and have “experienced the benefits.” The two former Utah Cord Bank employees described “shoot-up parties” where the staff were given vials of the product for personal use. According to one former employee, Spencer’s brother “would come in and do IV pushes on people.” The other former employee said that he became concerned about Spencer’s secretive production methods and worried that the amniotic cells weren’t being properly tested for disease. He said he’d take his dose to the bathroom and trash it.

On an overcast day in November 2017, a 90-year-old man named Norman Graf, one of 27 million Americans who suffer from arthritis, attended a seminar at the Holiday Inn in Bismarck, North Dakota, hosted by West2North Medical Solutions. West2North is not part of Greene’s network, but it is also supplied by Utah Cord Bank. Dean Jones, a chiropractor who co-owns West2North, assured the audience at the seminar that amniotic stem cells alleviate arthritic pain. Graf later told his daughter, Libby Graf, that he had planned to go home and think about a stem cell injection, but the clinic’s staff convinced him to have it done immediately.

“He was telling me he went and got an injection for $5,400 and I was, like, What?” Libby recounted. Her father’s cognitive abilities have diminished with age, and “it’s obvious that he doesn’t have enough wherewithal to make this decision,” she said.

Jones said in an email that, while confidentiality prevents him from commenting on specific patients, the clinic “does not ‘convince’ anyone to do a procedure immediately. We fully explain the different options and benefits, and allow the patient to decide.” All patients sign consent forms and are told there’s no guarantee that the therapy will help them, Jones said.

Graf told his daughter that his condition hadn’t improved. Yet he was planning to go back, because the clinic had promised him a discount — to $3,600 — for a second shot. Libby persuaded him not to go. Graf’s other daughter, Jodi Jacobson, complained to the North Dakota attorney general, as did other patients, prompting a state investigation. In May, West2North agreed to repay $19,733 to Graf and three other patients, and to be “permanently enjoined from engaging in any stem cell injections” that don’t comply with FDA rules, but denied any violation of state law.

Spencer said that Utah Cord Bank was contacted by the North Dakota attorney general about one physician but wasn’t a target of the investigation. “We have been burdened and troubled by claims made by some physicians that use our products,” he said.

West2North couldn’t stay away from the lucrative stem cell market. As of February 2019, the clinic’s website said, “Bone marrow stem cells coming soon.” Jones said that the state attorney general has been informed of this plan and hasn’t objected.

North Dakota is still reviewing the matter, according to assistant attorney general Parrell Grossman. “We have approved nothing,” he said.

Jones faced tougher regulation from the state of North Dakota than he did from the FDA. Nearly 15 years ago, the FDA established rules on the use of human tissue. If the tissue was “minimally manipulated” and used in the same way it originally functioned in the body, it didn’t need FDA approval as a drug. However, if the cells were modified in a lab or were given a new purpose — such as using placenta cells to treat a brain disease — they would be considered a drug and would have to undergo FDA review.

The problem is that the agency left it up to manufacturers to decide which group their products belonged to. Seeking FDA approval entails running multiple human trials, which can cost hundreds of millions of dollars. There was no incentive for the stem cell manufacturers to put their treatments through this process, so they took the position that their products didn’t count as drugs.

The FDA rarely disagreed with their stance. From 2010 to 2017, the agency sent warning letters to only seven of the hundreds of companies that made or marketed stem cell treatments, according to a tally of letters in the FDA database. The agency said it could not confirm the exact number because it “does not maintain lists of actions by product.”

In the early 2010s, the agency decided it should issue stricter guidelines on the use of human tissue. But it wasn’t until November 2017 that the guidelines were updated, clarifying that many tissue products, including amniotic stem cells, must be characterized as drugs. The FDA gave the clinics another three years — until 2020 — to comply. (In the meantime, the agency continues to send warning letters to more companies.)

Gottlieb, the former FDA commissioner, said he is disappointed that, during this interim period, few firms have submitted their products to the FDA for approval as drugs. “There are literally hundreds of clinics, and some of them are engaging in very risky actions,” he said. “They’re crossing the line.”

Gottlieb acknowledged that the agency doesn’t have the resources to go after them all at once. He said that the FDA will prioritize the clinics that offer the riskiest procedures, such as injections into the eye and spinal cord. On March 5, a few weeks after our interview, Gottlieb announced his resignation. It’s not clear yet if his successor will maintain his commitment to cracking down on the stem cell industry.

Greene, who is 50, travels the country to deliver seminars, drawing in patients with his friendly patter. His website, R3stemcell.com, connects patients to clinics, referred to as “Centers of Excellence,” that have signed contracts with him.

Greene enlists doctors at those clinics to offer amniotic stem cell treatments. The clinics pay Greene at least $495 to join his network, another $495 per month and $75 for each prospective patient that comes to them through his website, according to a brochure.

Greene regularly holds training sessions in Las Vegas for potential providers. On another R3 website, eight “top providers and industry thought leaders” are listed as trainers. They included a “Functional Oriental Medicine Expert” who doesn’t have a medical degree, a “biologics expert” who is the president of a surgical supplies consulting company and has no scientific training, and a pain doctor who was once disciplined by the Texas Medical Board for inadequate care of two patients who received spinal cord stimulators.

Among the most recent doctors to join Greene’s network is Dr. Prabhat Soni, who runs a private practice out of a townhouse in Brooklyn, New York. In the clinic’s waiting area, banners advertise the “O-shot” and “P-shot” for erectile dysfunction, promising to “rejuvenate your sex life and your marriage.” Another banner, which carries Greene’s logo, advertises “cosmetic stem cell therapies: effective regenerative procedures for facelift, hair restoration and scar improvement!”

Soni told me that he has been offering procedures using fat stem cells for about a decade. He joined Greene’s network, at the end of 2018, because amniotic treatments were a better value proposition, he said. “For fat cells, you have to numb the patient, do the liposuction to take fat, and then process the fat. It can take three hours. For amniotic cells, you just take the vial between your hands and warm it up, then you can go. It takes 10 minutes.” Either way, Soni charges $5,000 for one injection and $10,000 for intravenous treatment.

He told me that he sees patients for stem-cell treatments about once a day and that stem cells can work for any ailment known to mankind. “They do everything,” Soni said, “because stem cells are our friend.” When asked why they hadn’t replaced all other medicines, Soni blamed a conspiracy by the pharmaceutical industry, saying, “because then the pharmaceutical companies will die.”

Soni put me in touch with Joseph Longo, a 72-year-old who developed arthritis in his knees after decades of working as a ballroom dancer and instructor. Last December, Longo paid Soni $12,000 for two injections, one in each knee. When he woke up the next morning, he said, he felt “a little different. Not so stiff, not so much pain.” When we met, two months later, Longo was limping slightly but said that his left knee continued to feel somewhat better.

Soni told Longo that three more injections were required for him to feel a significant difference, but, by early May, Longo had decided not to seek further treatment, saying that his left knee hadn’t improved any more. “I don’t think the regenerative properties were happening,” Longo said.

Earlier this year, Soni’s Web site displayed the names and faces of a team of clinicians, including a cardiologist, a cosmetologist, a neurologist, and a urologist. None of them were listed on New York State’s license look-up page, and their photos were traced back to stock photo websites.

When initially asked about these specialists, Soni said, “They are all seeing patients for me” and changed the subject. After ProPublica and The New Yorker expressed doubts about the clinicians’ existence to Soni, the names and photos vanished from the website.

In a biography on his website, Soni said that he is an assistant clinical professor at NewYork-Presbyterian/Weill Cornell Medical Center. When asked if he was still affiliated with the hospital, Soni said he was in the pulmonary division, asserting inaccurately, “I’m the chief of department.”

The hospital said that Soni’s assistant professorship ended in December 2017, and he no longer has a position there. After ProPublica questioned him, Soni updated his website to reflect that he no longer works at the hospital. Greene said he dropped the doctor from the R3 network.

Soni expressed confidence that his stem cell practice is poised to grow. “Someday I will be on TV,” he said. “So many people will come.”

For some patients, stem cell treatments have been disastrous. Last July, Dorothy O’Connell, an 89-year-old grandmother living in Brazoria, Texas, went to see Sammy Tao, a chiropractor offering stem cell therapy. She had read about him in a newspaper piece by Gin Crawford, a local columnist who, when not sharing recipes for strawberry sheet cakes or tips for opening pickle jars, regularly extolled amniotic stem cell treatments and recommended Tao’s clinic as a local option for her readers.

Tao assured O’Connell that stem cells could help her arthritic shoulders and back, said O’Connell’s daughter Elaine Dilley, who took her to the appointment. “He told her that her life would change, that she could go back to being herself again,” Dilley recalled. That prospect seemed worth the $12,250 price.

On Aug. 9, a nurse practitioner at the clinic injected stem cells in both of O’Connell’s shoulders, according to her daughter and court documents. The following month, O’Connell returned for injections in her spine. Three days later, she called the clinic complaining of severe back pain and muscle spasms. Dr. Omar Vidal, a pain management physician who worked with Tao, prescribed a muscle relaxant and Tylenol.

Tao had said that O’Connell might feel under the weather for a few days. But she kept getting worse. “I was scared I was hurting her when I moved her, because, every time you would touch her, she would scream, she was in so much pain,” Dilley said.

Finally, Dilley called an ambulance. The local hospital had her mother flown to Baylor St. Luke’s Medical Center in Houston, because blood tests showed that she had sepsis. O’Connell’s kidneys were failing and her body was shutting down.

Amniotic stem cells are unlikely to cause major complications if they’re clean, but the ones injected into O’Connell were contaminated with bacteria, according to the U.S. Centers for Disease Control and Prevention. The product Tao’s team used was made from umbilical cord blood and came from a privately held distributor in California, called Liveyon. At least 11 other patients across Texas, Florida and Arizona were also infected with various strains of bacteria, including E. coli and E. cloacae, and hospitalized after being treated with contaminated cells from Liveyon. Under pressure from the FDA, Liveyon recalled the product.

Liveyon’s ads feature a dignified looking doctor with graying hair and piercing blue eyes telling patients about the benefits of stem cells. He shows one woman a glowing blue vial, and a narrator declares that the stem cells will provide “a new standard of living, free of pain and limitation.”

The doctor is Dr. Alan Gaveck, the company’s director of education. Gaveck used to work as a podiatrist, in Arizona, but, in 2007, the state’s medical board put him on probation after he bungled a foot surgery and the patient had to have a toe amputated. “I felt horrible at the time and still do to this day that the patient suffered such a loss,” Gaveck said. He acknowledged that he is not trained in stem cell biology. His “relevant experience,” he said, “has been learned through eight years of being immersed in the industry and daily reading of journal articles related to regenerative medicine.”

Liveyon’s founder and chief executive officer, John Kosolcharoen, pleaded guilty in 2016 to paying illegal kickbacks as part of a scheme to steer prescriptions for military members covered by TRICARE, the U.S. military’s health care program, to specific pharmacies. He is awaiting sentencing.

Kosolcharoen readily acknowledged the felony conviction, saying that he got tripped up by a change in the law. He blamed the contaminated stem cells on his supplier, a San Diego-based manufacturer called Genetech. Once the FDA contacted Liveyon, it immediately cut ties with Genetech, he said. Genetech’s president, Edwin Pinos, could not be reached. His company’s San Diego office has been closed.

O’Connell spent two weeks at St. Luke’s and five more in a rehabilitation center. “My mother used to be able to wash her car, mow the yard, cook,” Dilley said. “Now she can barely get down the steps.” O’Connell has a lawsuit against Liveyon, Genetech, Vidal and Tao pending in a Texas district court. Tao and Vidal denied all allegations in court filings and said that they weren’t responsible for O’Connell’s injuries. Tao’s lawyer declined to comment and Vidal didn’t respond to a request for comment.

Crawford, the local newspaper columnist, said she was upset to hear of O’Connell’s infection. “I’ve been sick about this whole thing,” she said. “My whole intent was to help people, not harm people.” In a March column, Crawford told her readers that she no longer recommends Tao’s clinic.

Now Liveyon is making its own product, from umbilical cords that it buys from a public cord bank, Kosolcharoen said. The bank, which he declined to identify, sells donated cords that don’t meet FDA standards. He called the new treatment “clinical trial grade” and said that Liveyon plans to start trials to prove its safety and benefits. But, even before conducting trials, Liveyon is already marketing the product, which it calls Pure, with the tagline “The Pure Feeling of Healing.”

In his talk at Robson Ranch, Greene assured his listeners that the FDA supports regenerative medicine. “They’ve realized that there are clinical uses now,” he said. He also warned against what he called “endgame surgery,” telling his audience, “You can’t go back from a spinal fusion or knee replacement.”

Greene knows firsthand how dangerous surgery can be. After earning his bachelor’s and medical degrees, at the University of Virginia, Greene began working as an orthopedic surgeon, in Arizona, in 2004. By 2007, he was earning more than $400,000 a year, but the outcomes of his surgeries were dire. From 2005 to 2007, he botched at least a dozen of them, the Arizona Medical Board later found.

In April 2005, a 35-year-old U.S. Air Force master sergeant, James DeJong, came to Greene complaining of back pain, according to court filings. DeJong left Greene’s operating room as a paraplegic. “I wouldn’t buy a bottle of water from him if I was lost in the Sahara Desert,” DeJong said in a recent email.

In January 2006, Greene operated on 78-year-old Lola Ollerton for what was supposed to be a routine surgery. Her five daughters sat in the waiting room with their father, joking and “talking about history, about when our parents started dating,” until they were called into a conference room, said one of Ollerton’s daughters, Peggy Archuleta. Greene then told them that “there was a complication,” another daughter, Susan Fuller, recounted. “He then said that she had died. My eldest sister, Pam, said — and I will never forget this — ‘You mean to tell me that our mother’s death was a complication?’” Besides her husband and daughters, Ollerton left behind 28 grandchildren and 46 great-grandchildren.

Four more of Greene’s patients died in that two-year period. Others suffered from infections, meningitis, excessive bleeding and permanent injuries such as a dropped foot. Alarmed by the “sheer volume of cases” and Greene’s “continued insistence that he made no mistakes in the care of his patients,” the Arizona Medical Board revoked his license in 2009.

Inundated with 14 malpractice lawsuits, Greene filed for bankruptcy that year. His insurance settled most of the cases. The Ollerton family received a six-figure settlement, the filings show.

Greene said he had “great outcomes” as a surgeon and the same rate of complications as other doctors who haven’t been sanctioned. He also said that he settled the lawsuits because he couldn’t afford to fight them in court. “I had a disagreement with the medical board that went on, and I ran out of money.” Greene said that several board certified doctors testified on his behalf, and these incidents are not relevant to his work today.

He defended his continuing use of the honorific “Dr.,” likening himself to a television personality. “Well, what about Dr. Phil?” he asked. The loss of his license, he said, “doesn’t take away the fact that I did a fellowship and a six, seven year residency. … But I just hate that we’re even talking about this because I’ve been through it, all these malpractice things, but, you know, my life is very, very different now.” He asserted that none of the stem cell patients in his network have suffered major complications from their treatments.

After the lawsuits, Greene returned to school and got an MBA at Arizona State University. Then he launched his second act, in stem cells. He was barred from practicing medicine, but he could still profit from it.

Schnee, the chiropractor who introduced Greene at Robson Ranch, said that she was unaware of Greene’s disciplinary record when he spoke there. After learning of it from ProPublica and The New Yorker, Atlas cancelled all seminars with him, she said.

Archuleta, whose mother died in Greene’s operating room, was quiet on the phone as she heard about his new business. “I hope he is remorseful and he’s taking decent care of people in some other line of work,” she said. “But if he’s not changed, if he still disregards the truth and is harming people, then he needs to be stopped. Someone needs to stop him again.”

 

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8 Hurt, 2 in Custody After School Shooting Outside Denver

HIGHLANDS RANCH, Colo. — Gunfire erupted Tuesday inside a suburban Denver middle school not far from Columbine High School, wounding eight people before two students were taken into custody, authorities said.

Douglas County Sheriff Tony Spurlock said two students walked into the school and opened fire in two classrooms. He said only students ages 15 and older were wounded.

Deputies responded within minutes from a nearby sheriff’s department substation, entering the school as gunfire rang out. Police took the two suspects, one adult and one juvenile, into custody with no injuries.

“We did not have them on any radar,” Spurlock said of the suspects. “I have to believe that the quick response of the officers that got inside that school helped save lives.”

Spurlock said at least a handgun was recovered, but he didn’t release more information on weapons.

The shooting occurred at the middle school at STEM School Highlands Ranch, a public charter school with more than 1,850 students in kindergarten through 12th grades. The Highlands Ranch community is about 15 miles (24 kilometers) south of Denver.

Deputies responded around 1:50 p.m. to the school, which is near a sheriff’s department substation, and officers got there almost immediately, Nicholson-Kluth said.

“As officers were arriving at the school, they could still hear gunshots,” she said.

Rocco DeChalk, who lives near the school, told television station KUSA that he saw so many students running past his house that at first he thought it was a gym class. He went outside and saw a teenage boy who had been shot in the back being helped by a teacher and another student.

They brought the boy into his kitchen and alerted a police officer, who sent for an ambulance.

“He made a comment, ‘Oh, I’m starting to feel it now,'” DeChalk said. “I told him that was probably the adrenaline kicking in and he was going into shock.”

Three area hospitals reported treating eight people in connection with the attack. Two were listed in serious condition, two were listed as stable, one was in good condition and three were released.

Lines of firetrucks, ambulances and law enforcement vehicles from multiple agencies were at the school, and medical helicopters landed on a grassy field.

The sheriff’s office directed parents to a nearby recreational center to pick up their children. A fleet of school buses arrived and dropped off students, some of whom were crying and holding hands with their classmates as they were helped off. An ambulance also pulled up and let out a half-dozen children, none of whom appeared to be physically injured.

“We know this is a very worrisome situation for parents,” Nicholson-Kluth said. “Relatives are worried, and we are trying to get them back together as soon as possible.”

Gov. Jared Polis said in a statement that he was making state public-safety resources available to help secure the site and evacuate students.

“The heart of all Colorado is with the victims and their families,” he said.

The shooting comes nearly three weeks after neighboring Littleton marked the grim 20th anniversary of the Columbine school shooting that killed 13 people. The two schools are separated by about 7 miles in communities south of Denver.

Democratic Rep. Jason Crow, a gun-control supporter whose congressional district includes STEM, said the gun violence cannot continue.

“It is not enough to send thoughts and prayers. It is empty. It is weak, and it does an injustice to our children who are on the front lines of this violence,” he said.

U.S. Pregnancy Deaths Are Up, Especially Among Minorities

Pregnancy-related deaths are rising in the United States and the main risk factor is being black, according to new reports that highlight racial disparities in care during and after childbirth.

Black women, along with Native Americans and Alaska natives, are three times more likely to die before, during or after having a baby, and more than half of these deaths are preventable, Tuesday’s report from the Centers for Disease Control and Prevention concludes.

Although these deaths are rare — about 700 a year — they have been rising for decades.

“An American mom today is 50% more likely to die in childbirth than her own mother was,” said Dr. Neel Shah, a Harvard Medical School obstetrician.

Separately, the American College of Obstetricians and Gynecologists released new guidelines saying being black is the greatest risk factor for these deaths. The guidelines say women should have a comprehensive heart-risk evaluation 12 weeks after delivery, but up to 40% of women don’t return for that visit and payment issues may be one reason.

Bleeding and infections used to cause most pregnancy-related deaths, but heart-related problems do now.

“Pregnancy is really a stress test” because of the extra blood the heart is moving for mom and child, said the head of the guidelines panel, Dr. James Martin. That can reveal previously unknown problems or lead to new ones.

The CDC report found that about one third of maternal deaths happened during pregnancy, a third were during or within a week of birth, and the rest were up to a year later.

Globally, maternal mortality fell about 44% between 1990 and 2015, according to the World Health Organization. But the U.S. is out of step: Moms die in about 17 out of every 100,000 U.S. births each year, up from 12 per 100,000 a quarter century ago.

Possible factors include the high C-section rates in the U.S. and soaring rates of obesity, which raises the risk of heart disease, diabetes and other complications.

Black women in the U.S. are about three times as likely to die from a pregnancy-related cause as others, partly because of racial bias they may experience in getting care and doctors not recognizing risk factors such as high blood pressure, said Dr. Lisa Hollier, the obstetrician group’s president.

Stacy Ann Walker may be an example. She was 29, healthy and excited to be expecting her first child eight years ago “when the unimaginable happened and left both of us fighting for our life.”

The Hartford, Connecticut, woman said her doctor brushed off her complaints of shortness of breath, exhaustion and swelling in her legs as normal aches and pains of pregnancy. Her baby developed life-threatening complications requiring an emergency cesarean section, and weighed less than 3 pounds at delivery.

But her ordeal wasn’t over. After the birth, she developed heart valve problems and heart failure, requiring surgery.

“Never did I think my life would be in danger,” said Walker, who is black. She spoke at a news conference the obstetricians group held on the guidelines.

The CDC looked at about 3,000 pregnancy-related deaths from 2011 through 2015, using death certificates. Researchers also looked at more intensive investigations of about 250 deaths done in 13 states.

The latter review determined that 60% of deaths were preventable. Often, three or four problems contributed to a death, ranging from doctors’ mistakes to the difficulty some women had getting housing and healthy food.

The report shows the need to educate doctors and patients about risks for new moms, and to expand Medicaid health coverage in all states so that postpartum care is available for all moms up to a year after giving birth, said Dr. Alison Stuebe of the University of North Carolina.

“We as a society do a terrible job of taking care of mothers after the baby comes out,” she said.

“It’s like the baby is the candy and the mama is the wrapper,” she added. “Once the baby is out of the wrapper, the wrapper is tossed aside.”

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

U.S.-China Talks Are About Much More Than Trade

This article was produced by Economy for All , a project of the Independent Media Institute.

Just when it appeared that Washington and Beijing were inching closer to concluding their trade negotiations (thereby bringing a cessation in the ongoing and escalating conflict), the U.S. president has thrown a new grenade in China’s direction. Trump “threatened to raise tariffs on all Chinese imports to 25 per cent, sharply ratcheting up pressure on Beijing to make concessions in trade talks and sending global equities markets sliding,” write James Politi, Courtney Weaver, Tom Mitchell and Yuan Yang of the Financial Times.

Win or lose, anything that creates the perception that the administration is standing up for the rights of American workers (even at a cost of repudiating decades of free trade ideology) could cement Trump’s growing popularity within a traditional Democratic Party constituency. Many blue-collar voters tried to send a message of change in 2016 when they voted for Trump. These voices are particularly germane in Midwestern states, which basically secured the necessary Electoral College votes required to put Trump in the White House.

Politics aside, the trade talks create dilemmas for both sides: capital markets in both countries have revived, as expectations have grown that the two nations would resolve this increasingly acrimonious dispute, albeit on terms that largely retain the status quo.

Trump in particular has done much to elevate those expectations in his Twitter account, even as it became increasingly apparent that the nature of the deal was unlikely to do anything more than induce Beijing to make further large-scale purchases of American exports, as opposed to undertaking structural reforms of the kind that would likely rectify some longstanding U.S. grievances, such as the appropriation of intellectual property (IP), cyber-theft, and inadequate access to Beijing’s domestic markets, to cite a few prominent examples.

Similarly, President Xi Jinping is looking for a deal that gets rid of the tariffs and avoids a new shock to a Chinese economy, which is now recovering from last year’s tariff-induced trauma via a significant new credit provision from the government.

The problem, as Trump seems to appreciate (albeit belatedly, if one is to judge from the timing of his latest tweet storms), is that he can’t afford to be perceived as weak on trade. It’s been one of his signature issues since his 2016 campaign. But confronting Beijing on the structural issues, and concomitantly causing a breakup of the supply chains that are the foundation of today’s “Chimerica” nexus, likely entails creating transitory economic dislocation in the United States (as well as further major setbacks in the stock market), hardly the sort of thing that the U.S. president would like to see happen in the run-up to the 2020 election campaign. As New York magazine’s Intelligencer columnist Josh Barro starkly puts it:

“One, [Trump] wants to be seen to be ‘tough’ on China trade, and two, he wants the stock market to go up. The problem is, the stock market hates trade wars, and when the president threatens (or actually imposes) higher tariffs on Chinese goods, stock prices fall.”

Any dislocation, financial or economic, would also constitute a political gift to the Democrats.

So the essence of the conundrum is this: is Trump willing to take a short-term hit among certain traditional GOP constituencies in order to secure the longer-term changes that his chief U.S. trade adviser, Robert Lighthizer, has long advocated as essential to preserve the livelihoods of American workers? Not only is there a political hit, but the very magnitude of the potential retaliation Trump and Lighthizer have proposed—vastly increased tariffs, along with the aggressive use of various World Trade Organization (WTO) sanctions to counter Beijing—also constitutes a repudiation of over half a century of American trade policy and ideology, as well as disrupting traditional political alliances with key Republican constituencies.

In regard to the latter, Trump’s actions could well herald the start of a major political realignment. This may already be starting. In response to the Republican Party’s increasing embrace of Trumpian-style populism, for example, the U.S. Chamber of Commerce is now looking to “disentangle its brand from the GOP,” writes the Washington Post. It has spoken about rebuilding the center, ironically echoing the language of the self-proclaimed progressive, Speaker of the House Nancy Pelosi, who has similarly warned Democrats to hew to the center in order to beat Trump next year. Barring a Sanders or Warren nomination, therefore, the Democrats could well find themselves with an unlikely new champion in the form of a Chamber of Commerce endorsement next year.

This wouldn’t trouble many of the non-traditional Republicans, who currently dominate trade policy in the administration. As far as trade itself goes, Trump seems to be inching toward the kind of right-wing populism initially advocated by figures like Steve Bannon and self-proclaimed “blue collar conservatives,” such as Rick Santorum or Pat Buchanan. These figures (and many others) have long sought to reconfigure the GOP as the party for American workers, even at a cost of closing off portions of the American economy via protectionism, if it means more jobs at home for U.S. workers. Rightly or wrongly, this kind of political recalibration could well be one of the by-products of the prospective trade agreement with China. It would therefore have significant electoral implications in 2020, where the Midwest Rust Belt is likely to remain the key battleground region that will likely determine the winner of the presidency.

On the other hand, even if the talks do break down (this now appears more likely), and Trump follows through on his threat to raise tariffs on all Chinese goods to 25 percent, such overt protectionism could well reinforce the GOP’s working-class support, especially if such tariffs are accompanied by other forms of direct state intervention and more restrictionist immigration policies that would structurally tighten up the labor market (and enhance workers’ bargaining power as a result). True, a stock market fall could well hurt those at the top tier, but that could actually reinforce the optics of Trump’s populist message if he simply makes the case that he is going to the mat for U.S. workers, even if means some short-term pain for the investor class.

The corollary also could work toward furthering this realignment: if the Democrats were to nominate an old guard “Free Trade” candidate who represented a proxy for the status quo ante, one who still largely champions standard trade agreements of the kind secured over the past 40 years or so (such as current front-runner Joe Biden), this could well widen the political gap between the Democratic Party and some of its historically loyal constituencies.

Even if Trump settles for a traditional bilateral deal in which Beijing pledges to buy more U.S. goods, it could well catalyze this political reconfiguration to the extent that it reinforces his “America First” nationalism vs. the traditional multilateral liberal order that is perceived as more friendly to existing American elites. Why? Because one outcome of a U.S.-China trade agreement is that it will likely penalize some of Beijing’s other major trade partners if China’s ultimate concessions simply redistribute purchases away from other countries (e.g., Brazil, which is also a major exporter of soybeans to China, or member states of the European Union). A new bilateral U.S.-China trade deal could also increasingly marginalize the World Trade Organization, particularly if (as is rumored) the agreement contains bilateral resolution provisions that effectively sideline the multilateral trade body, as well as disrupting today’s global supply chains that, as the Financial Times’ Edward Luce argues, are largely predicated on the existence of a stable trade regime with a clearly defined set of politically neutral regulations.

That would be political gold to Trump, and his America First agenda. In fact, it will likely be a feature of any proposed new agreement rather than a bug. Both Trump and Lighthizer are keen to re-domicile as many manufacturing supply chains as possible back to the American heartland (which also happens to be one of the key constituencies of Trump’s base, the multi-decade losers of globalization, whose concerns have traditionally been ignored by both parties, except during election season). If this antagonizes America’s traditional trade partners, so be it. Trump has not hitherto proven himself to be particularly solicitous to the views of Washington’s historic friends and allies.

Of course, all of this posturing by Trump may be another sign of the proverbial carnival barker at work, but in the absence of a compelling alternative narrative from the Democrats, it could well prove to be a powerful elixir in the president’s efforts to secure a second term in office.

Ride-Hailing Drivers Strike, as Execs Stand to Make Millions in IPOs

Lyft and Uber drivers are planning to strike on Wednesday, turning off their apps and protesting at company offices to demand better wages, job security, benefits and transparency around pay structures.

“We don’t know if we will have a job from one day to the next,” Lyft driver Henry Rolands said in a statement released by the New York City Taxi Workers Alliance. “We make pennies while the app companies make billions off the backs of drivers who suffer and suffer.”

The action, which is to take place in at least eight cities, will involve thousands of drivers and comes just two days before Uber is expected to take the company public. Uber’s IPO, CNBC reports, is “expected to be the largest among new tech stock debuts this year with an expected valuation of $80.53 billion to $91.51 billion.”

Some workers will not drive that day; others will stop for a few hours. In New York City, the strike is expected to last two hours during the heart of the morning commute. “This is an act of solidarity with drivers across the country, and really across the world, who are suffering with poverty wages,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, told The Washington Post.

In Virginia, Henock Wonderse will be turning off his app all day, because, as he explained to The Washington Post, “The wages are so unpredictable and so low, it’s very difficult to make a living.” Los Angeles drivers, who, as the Post points out, were the first to propose a strike, will also be off work all day, according to a release from Rideshare Drivers United.

A spokeswoman for Uber told the Post in a statement that “Drivers are at the heart of our service—we can’t succeed without them—and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road.”

She added, “Whether it’s more consistent earnings, stronger insurance protections or fully-funded four-year degrees for drivers or their families, we’ll continue working to improve the experience for and with drivers.” Lyft declined to comment.

Drivers for Lyft (it went public in March) and Uber are unconvinced. They say the companies’ massive financial success comes at the expense of workers. Drivers are classified as independent contractors, which allows the ride-hailing companies to forgo employee benefits like health insurance and impacts job security. Despite multiple lawsuits attempting to make ride-hailing services classify drivers as employees, the services have not done so.

In March, as TechCrunch reports, Uber paid $20 million to settle a class action lawsuit brought by drivers in California and Massachusetts challenging their independent contractor status. In New York, as the Post reports, “drivers won a recent battle when the city enacted a law that mandates ride-hail companies pay them at least $17.22 an hour after expenses,” although “organizers said the rates across the board are below a living wage.”

Both the $20 million settlement and the increase in New York City wages were apparently less expensive for ride-hailing companies than granting their drivers employee status. As CNBC reports, “Uber and Lyft both acknowledged in their IPO prospectuses that reclassifying its drivers as employees would negatively impact their businesses.”

Instead of benefits, both companies have instead used bonuses for individual drivers who complete a certain number of miles or rides, or drive at particularly busy times of day. Those bonuses can reach up to $10,000, but as Mostafa Maklad, an Uber driver in Los Angeles told Fortune, “It’s nothing compared to the billions [the executives] are going to make.”

According to CNBC, Uber founder and former CEO Travis Kalanick stands to gain $5.3 billion from the IPO; his co-founder, Garrett Camp, is expected to receive approximately $3.7 billion.

Worsening U.S.-China Trade Tensions Rattle Financial Markets

The Dow Jones Industrial Average tumbled more than 470 points Tuesday amid a broad sell-off on Wall Street as the U.S. and China moved closer to an escalation of their already costly trade war.

The U.S. was set to impose higher tariffs on China on Friday, a day after representatives from both nations are scheduled to resume trade talks in Washington. Trump administration officials accused China of reneging on commitments made during weeks of negotiations.

Both sides had signaled progress was being made toward a resolution in recent weeks. Buoyed by those signs, as well as a more dovish stance on interest rates by the Federal Reserve and better signs on the economy, investors had furiously bought stocks and pushed the S&P 500 and Nasdaq to all-time highs last week. All major indexes still have double-digit gains for the year.

Analysts said the market was vulnerable to any reversals in the trade talks. This week investors have dumped shares of companies that bring in significant revenue from China, such as those in the technology and industrial sectors. Banks have also taken heavy losses.

“This is a game of poker and the U.S. is playing their hand,” said Doug Cote, chief market strategist at Voya Investment Management. “Let’s say the worst happens and they raise tariffs on Friday, well you’re going to get another buying opportunity.”

Every sector fell. Utilities, normally safe-play holdings for investors, fared better than the rest of the market. Bond prices also rose as investors sought out other ways to reduce risk.

The S&P 500 index slumped 48.42 points, or 1.7%, to 2,884.05. The Dow lost 473.39 points, or 1.8%, to 25,965.09. The index had been down 648. The Nasdaq composite, which is heavily weighted with technology stocks, fell 159.53 points, or 2%, to 7,963.76.

The Russell 2000 index of small company stocks gave up 32.66 points, or 2%, to $1,582.31. Major indexes in Europe also finished lower.

The rout is the first big jolt for stocks since the turn of the year, when fear began draining out of the market and the S&P 500 started its march back to record heights.

The U.S. and China have raised tariffs on tens of billions of dollars of each other’s goods in their dispute over U.S. complaints about Chinese technology ambitions.

Washington has accused Beijing of reneging on its commitments and is preparing to raise import taxes on $200 billion of Chinese goods to 25% from 10%, and to impose tariffs on another $325 billion in imports, covering everything the country ships annually to the United States.

The possibility that the trade dispute could escalate represents a marked shift from just a few weeks ago, when talks between the U.S. and China appeared to be on track for an agreement.

The big rise in stocks since the beginning of the year partly reflects complacence among investors, said Mark Hackett, chief of investment research for Nationwide Investment Management.

“We’ve basically flipped from being too pessimistic to perhaps being too optimistic,” he said.

The trade dispute between China and the United States is nothing new, and it had been hanging over the market even as the S&P 500 made its run to a record this year. But investors had been willing to push stocks higher despite it because they largely assumed a deal would eventually get done. That showed in share prices of U.S. companies that get big portions of their sales from China, which had done better than the rest of the market, according to analysts at Jefferies.

Trump’s threat of additional tariffs is forcing investors to reassess those expectations. One measure of fear in the market, which tracks how much traders are paying to buy protection from price swings in the S&P 500, had its biggest jump Tuesday in nearly seven months. It remains low by historical standards, though, after earlier in the year dropping by more than half since the end of 2018.

It’s yet to be determined whether the brinksmanship tactics from the Trump administration will help or hurt the prospects of a deal getting done quickly, something that investors want.

“This is such a short period of time that it’s hard to speculate whether this will cause something to get done quickly or whether it will drag on for months,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute.

Energy futures closed mostly lower. Benchmark U.S. crude fell 1.4% to settle at $61.40 per barrel. Brent crude, the international standard, lost 1.9% to close at $69.88.

Wholesale gasoline fell 2.4% to $1.95 per gallon. Heating oil lost 1.5% to $2.04 per gallon. Natural gas rose 0.5% to $2.54 per 1,000 cubic feet.

Gold gained 0.1% to $1,285.60 per ounce, silver was little changed at $14.93 per ounce and copper fell 1.6% to $2.79 per pound.

The dollar fell to 110.27 Japanese yen from 111.90 yen. The euro weakened to $1.1183 from $1.1203.

___

AP Business Writers Stan Choe and Damian J. Troise contributed to this report.

The Pentagon’s Trillion-Dollar Boondoggle

In its latest budget request, the Trump administration is asking for a near-record $750 billion for the Pentagon and related defense activities, an astonishing figure by any measure. If passed by Congress, it will, in fact, be one of the largest military budgets in American history, topping peak levels reached during the Korean and Vietnam Wars. And keep one thing in mind: that $750 billion represents only part of the actual annual cost of our national security state.

There are at least 10 separate pots of money dedicated to fighting wars, preparing for yet more wars, and dealing with the consequences of wars already fought. So the next time a president, a general, a secretary of defense, or a hawkish member of Congress insists that the U.S. military is woefully underfunded, think twice. A careful look at U.S. defense expenditures offers a healthy corrective to such wildly inaccurate claims.

Now, let’s take a brief dollar-by-dollar tour of the U.S. national security state of 2019, tallying the sums up as we go, and see just where we finally land (or perhaps the word should be “soar”), financially speaking.

The Pentagon’s “Base” Budget: The Pentagon’s regular, or “base,” budget is slated to be $544.5 billion in Fiscal Year 2020, a healthy sum but only a modest down payment on total military spending.

As you might imagine, that base budget provides basic operating funds for the Department of Defense, much of which will actually be squandered on preparations for ongoing wars never authorized by Congress, overpriced weapons systems that aren’t actually needed, or outright waste, an expansive category that includes everything from cost overruns to unnecessary bureaucracy. That $544.5 billion is the amount publicly reported by the Pentagon for its essential expenses and includes as well $9.6 billion in mandatory spending that goes toward items like military retirement.

Among those basic expenses, let’s start with waste, a category even the biggest boosters of Pentagon spending can’t defend. The Pentagon’s own Defense Business Board found that cutting unnecessary overhead, including a bloated bureaucracy and a startlingly large shadow workforce of private contractors, would save $125 billion over five years. Perhaps you won’t be surprised to learn that the board’s proposal has done little to quiet calls for more money. Instead, from the highest reaches of the Pentagon (and the president himself) came a proposal to create a Space Force, a sixth military service that’s all but guaranteed to further bloat its bureaucracy and duplicate work already being done by the other services. Even Pentagon planners estimate that the future Space Force will cost $13 billion over the next five years (and that’s undoubtedly a low-ball figure).

In addition, the Defense Department employs an army of private contractors — more than 600,000 of them — many doing jobs that could be done far more cheaply by civilian government employees. Cutting the private contractor work force by 15% to a mere half-million people would promptly save more than $20 billion per year. And don’t forget the cost overruns on major weapons programs like the Ground-Based Strategic Deterrent — the Pentagon’s unwieldy name for the Air Force’s new intercontinental ballistic missile — and routine overpayments for even minor spare parts (like $8,000 for a helicopter gear worth less than $500, a markup of more than 1,500%).

Then there are the overpriced weapons systems the military can’t even afford to operate like the $13-billion aircraft carrier, 200 nuclear bombers at $564 million a pop, and the F-35 combat aircraft, the most expensive weapons system in history, at a price tag of at least $1.4 trillion over the lifetime of the program. The Project On Government Oversight (POGO) has found — and the Government Accountability Office recently substantiated — that, despite years of work and staggering costs, the F-35 may never perform as advertised.

And don’t forget the Pentagon’s recent push for long-range strike weapons and new reconnaissance systems designed for future wars with a nuclear-armed Russia or China, the kind of conflicts that could easily escalate into World War III, where such weaponry would be beside the point. Imagine if any of that money were devoted to figuring out how to prevent such conflicts, rather than hatching yet more schemes for how to fight them.

Base Budget total: $554.1 billion

The War Budget: As if its regular budget weren’t enough, the Pentagon also maintains its very own slush fund, formally known as the Overseas Contingency Operations account, or OCO. In theory, the fund is meant to pay for the war on terror — that is, the U.S. wars in Afghanistan, Iraq, Somalia, Syria, and elsewhere across the Middle East and Africa. In practice, it does that and so much more.

After a fight over shutting down the government led to the formation of a bipartisan commission on deficit reduction — known as Simpson-Bowles after its co-chairs, former Clinton Chief of Staff Erskine Bowles and former Republican Senator Alan Simpson — Congress passed the Budget Control Act of 2011. It officially put caps on both military and domestic spending that were supposed to save a total of $2 trillion over 10 years. Half of that figure was to come from the Pentagon, as well as from nuclear weapons spending at the Department of Energy. As it happened, though, there was a huge loophole: that war budget was exempt from the caps. The Pentagon promptly began to put tens of billions of dollars into it for pet projects that had nothing whatsoever to do with current wars (and the process has never stopped). The level of abuse of this fund remained largely secret for years, with the Pentagon admitting only in 2016 that just half of the money in the OCO went to actual wars, prompting critics and numerous members of Congress — including then-Congressman Mick Mulvaney, now President Trump’s latest chief of staff — to dub it a “slush fund.”

This year’s budget proposal supersizes the slush in that fund to a figure that would likely be considered absurd if it weren’t part of the Pentagon budget. Of the nearly $174 billion proposed for the war budget and “emergency” funding, only a little more than $25 billion is meant to directly pay for the wars in Iraq, Afghanistan, and elsewhere. The rest will be set aside for what’s termed “enduring” activities that would continue even if those wars ended, or to pay for routine Pentagon activities that couldn’t be funded within the constraints of the budget caps. The Democratic-controlled House of Representatives is expected to work to alter this arrangement. Even if the House leadership were to have its way, however, most of its reductions in the war budget would be offset by lifting caps on the regular Pentagon budget by corresponding amounts. (It’s worth noting that President Trump’s budget calls for someday eliminating the slush fund.)

The 2020 OCO also includes $9.2 billion in “emergency” spending for building Trump’s beloved wall on the U.S.-Mexico border, among other things. Talk about a slush fund! There is no emergency, of course. The executive branch is just seizing taxpayer dollars that Congress refused to provide. Even supporters of the president’s wall should be troubled by this money grab. As 36 former Republican members of Congress recently argued, “What powers are ceded to a president whose policies you support may also be used by presidents whose policies you abhor.” Of all of Trump’s “security”-related proposals, this is undoubtedly the most likely to be eliminated, or at least scaled back, given the congressional Democrats against it.

War Budget total: $173.8 billion

Running tally: $727.9 billion

The Department of Energy/Nuclear Budget: It may surprise you to know that work on the deadliest weapons in the U.S. arsenal, nuclear warheads, is housed in the Department of Energy (DOE), not the Pentagon. The DOE’s National Nuclear Security Administration runs a nationwide research, development, and production network for nuclear warheads and naval nuclear reactors that stretches from Livermore, California, to Albuquerque and Los Alamos, New Mexico, to Kansas City, Missouri, to Oak Ridge, Tennessee, to Savannah River, South Carolina. Its laboratories also have a long history of program mismanagement, with some projects coming in at nearly eight times the initial estimates.

Nuclear Budget total: $24.8 billion

Running tally: $752.7 billion

“Defense Related Activities”: This category covers the $9 billion that annually goes to agencies other than the Pentagon, the bulk of it to the FBI for homeland security-related activities.

Defense Related Activities total: $9 billion

Running tally: $761.7 billion

The five categories outlined above make up the budget of what’s officially known as “national defense.” Under the Budget Control Act, this spending should have been capped at $630 billion. The $761.7 billion proposed for the 2020 budget is, however, only the beginning of the story.

The Veterans Affairs Budget: The wars of this century have created a new generation of veterans. In all, over 2.7 million U.S. military personnel have cycled through the conflicts in Iraq and Afghanistan since 2001. Many of them remain in need of substantial support to deal with the physical and mental wounds of war. As a result, the budget for the Department of Veterans Affairs has gone through the roof, more than tripling in this century to a proposed $216 billion. And this massive figure may not even prove enough to provide the necessary services.

More than 6,900 U.S. military personnel have died in Washington’s post-9/11 wars, with more than 30,000 wounded in Iraq and Afghanistan alone. These casualties are, however, just the tip of the iceberg. Hundreds of thousands of returning troops suffer from post-traumatic stress disorder (PTSD), illnesses created by exposure to toxic burn pits, or traumatic brain injuries. The U.S. government is committed to providing care for these veterans for the rest of their lives. An analysis by the Costs of War Project at Brown University has determined that obligations to veterans of the Iraq and Afghan wars alone will total more than $1 trillion in the years to come. This cost of war is rarely considered when leaders in Washington decide to send U.S. troops into combat.

Veterans Affairs total: $216 billion

Running tally: $977.7 billion

The Homeland Security Budget: The Department of Homeland Security (DHS) is a mega-agency created after the 9/11 attacks. At the time, it swallowed 22 then-existing government organizations, creating a massive department that currently has nearly a quarter of a million employees. Agencies that are now part of DHS include the Coast Guard, the Federal Emergency Management Agency (FEMA), Customs and Border Protection, Immigration and Customs Enforcement (ICE), Citizenship and Immigration Services, the Secret Service, the Federal Law Enforcement Training Center, the Domestic Nuclear Detection Office, and the Office of Intelligence and Analysis.

While some of DHS’s activities — such as airport security and defense against the smuggling of a nuclear weapon or “dirty bomb” into our midst — have a clear security rationale, many others do not. ICE — America’s deportation force — has done far more to cause suffering among innocent people than to thwart criminals or terrorists. Other questionable DHS activities include grants to local law enforcement agencies to help them buy military-grade equipment.

Homeland Security total: $69.2 billion

Running tally: $1.0469 trillion

The International Affairs Budget: This includes the budgets of the State Department and the U.S. Agency for International Development (USAID). Diplomacy is one of the most effective ways to make the United States and the world more secure, but it has been under assault in the Trump years. The Fiscal Year 2020 budget calls for a one-third cut in international affairs spending, leaving it at about one-fifteenth of the amount allocated for the Pentagon and related agencies grouped under the category of “national defense.” And that doesn’t even account for the fact that more than 10% of the international affairs budget supports military aid efforts, most notably the $5.4 billion Foreign Military Financing (FMF) program. The bulk of FMF goes to Israel and Egypt, but in all over a dozen countries receive funding under it, including Jordan, Lebanon, Djibouti, Tunisia, Estonia, Latvia, Lithuania, Ukraine, Georgia, the Philippines, and Vietnam.

International Affairs total: $51 billion

Running tally: $1.0979 trillion     

The Intelligence Budget: The United States has 17 separate intelligence agencies. In addition to the DHS Office of Intelligence and Analysis and the FBI, mentioned above, they are the CIA; the National Security Agency; the Defense Intelligence Agency; the State Department’s Bureau of Intelligence and Research; the Drug Enforcement Agency’s Office of National Security Intelligence; the Treasury Department’s Office of Intelligence and Analysis; the Department of Energy’s Office of Intelligence and Counterintelligence; the National Reconnaissance Office; the National Geospatial-Intelligence Agency; Air Force Intelligence, Surveillance and Reconnaissance; the Army’s Intelligence and Security Command; the Office of Naval Intelligence; Marine Corps Intelligence; and Coast Guard Intelligence. And then there’s that 17th one, the Office of the Director of National Intelligence, set up to coordinate the activities of the other 16.

We know remarkably little about the nature of the nation’s intelligence spending, other than its supposed total, released in a report every year. By now, it’s more than $80 billion. The bulk of this funding, including for the CIA and NSA, is believed to be hidden under obscure line items in the Pentagon budget. Since intelligence spending is not a separate funding stream, it’s not counted in our tally below (though, for all we know, some of it should be).

Intelligence Budget total: $80 billion

Running tally (still): $1.0979 trillion

Defense Share of Interest on the National Debt: The interest on the national debt is well on its way to becoming one of the most expensive items in the federal budget. Within a decade, it is projected to exceed the Pentagon’s regular budget in size. For now, of the more than $500 billion in interest taxpayers fork over to service the government’s debt each year, about $156 billion can be attributed to Pentagon spending.

Defense Share of National Debt total: $156.3 billion

Final tally: $1.2542 trillion

So, our final annual tally for war, preparations for war, and the impact of war comes to more than $1.25 trillion — more than double the Pentagon’s base budget. If the average taxpayer were aware that this amount was being spent in the name of national defense — with much of it wasted, misguided, or simply counterproductive — it might be far harder for the national security state to consume ever-growing sums with minimal public pushback. For now, however, the gravy train is running full speed ahead and its main beneficiaries — Lockheed Martin, Boeing, Northrop Grumman, and their cohorts — are laughing all the way to the bank.

Trump Launches New Assault on the Working Poor

The Trump administration on Monday moved to change the definition of “poverty” in the United States in a proposal which combines the president’s attempts to portray the U.S. economy as strong with his repeated attacks on the working poor and their access to government services.

In a regulatory filing, President Donald Trump’s Office of Management and Budget (OMB) wrote that it may change how inflation is calculated in order to reduce the number of Americans who are living below the federally-recognized poverty line and are therefore eligible for certain government support services and social programs.

As Melissa Boteach, who oversees income security programs at the National Women’s Law Center (NWLC), wrote on Twitter, the change “seems technical, but it’s actually a big attack on working people.”

Seems technical, but it’s actually a big attack on working people. In short, Trump wants to weaken how our poverty definition keeps pace with cost of living. So each year, as costs go up, many working people w/low pay would gradually be stripped of WIC, Medicaid & other basics 3/

— Melissa Boteach (@mboteach) May 7, 2019

Under the administration’s proposal, which was first reported by Bloomberg News, the government would shift to a system known as “Chained CPI,” which assumes consumers will change what they buy as items grow more expensive through inflation, suggesting that they are not struggling to afford necessities.

The definitional change would result in a slower inflation rate, which is used to determine how many Americans are eligible for programs like Medicaid, SNAP benefits, and other federal assistance.

As of 2018, a family of four making $25,900 per year was considered to be living in poverty, based on the necessities they could afford with the current inflation rate.

Under the new system, OMB officials wrote in the proposal, “changes to the poverty thresholds, including how they are updated for inflation over time, may affect eligibility for programs that use the poverty guidelines.”

Boteach wrote that the proposal demonstrates “how out of touch Trump is with lives of working-class people,” noting that even the current poverty line does little to reflect the amount of money an American family actually needs to live comfortably in the wealthiest country on the planet.

In fact, wrote Boteach, the new standards will make the government’s understanding of poverty and inequality even less accurate.

This proposal shows how out of touch Trump is with lives of working-class ppl. “Americans on average report that it would take more than $55,000 in annual income to be considered out of poverty.” That’s more than TWICE our current threshold https://t.co/4HuvnkCY64

4/

— Melissa Boteach (@mboteach) May 7, 2019

This is a cynical attempt to squeeze working-class people. Their incomes will STILL be too low to make ends meet, but Trump’s decree would make it harder for them to qualify for help. 7/

— Melissa Boteach (@mboteach) May 7, 2019

Some critics on social media denounced the proposal as Trump’s latest “cruel” measure aimed at weakening the systems meant to support the poorest Americans and struggling working class families.

Trump is going to change how poverty is measured, with the intent of rendering a bunch of people ineligible for social assistance. His base will support this arbitrary cruelty b/c even though it hurts them, it also hurts brown people. https://t.co/iE3SfSnZnh

— David Roberts (@drvox) May 6, 2019

This appears to be the latest cruel and incompetent effort by the Trump administration to make it harder to access welfare programs.#ShitholePresidenthttps://t.co/AKqd2FSRNh

— Democratic Coalition (@TheDemCoalition) May 6, 2019

For the moment, Republicans have mostly stopped pretending to care about deficits. But they’re still eager to cut aid to the poor 1/ https://t.co/Nk7vOrDK7z

— Paul Krugman (@paulkrugman) May 7, 2019

The OMB’s proposal follows multiple attacks on social welfare programs by the Trump administration as it attempts to keep families from accessing SNAP benefits, commonly known as food stamps, and Medicaid. The administration and the Republican Party have pushed in 2018 to require people who use food stamps to work at least 20 hours per week, a move which would push at least one million Americans out of the program.

The federal budget proposal unveiled in March also included more than $1 trillion in cuts to Medicaid, threatening the healthcare of tens of millions of Americans.

The administration has spent much of the last two years insisting that the American economy is thriving—frequently pointing to the  GDP, the stock market, and low unemployment rates as evidence.

But studies have shown that low unemployment numbers offer a misleading picture of how American families are actually coping in the economy, as the Bureau of Labor Statistics (BLS) does not count “600,000 ‘discouraged workers’ who say they are no longer looking because they don’t think they can find a job,” according to Quartz.

Critics have pointed out that 40 percent of families are unable to save enough money to pay for a $400 emergency; 137 million American households struggle to pay health care costs; and nearly 80 percent of workers live paycheck-to-paycheck—regardless of the GDP or the stock market.

The OMB’s proposal, wrote Georgetown University and public policy researcher Joan Alker, is “a novel way to take healthcare, etc., away from people AND make it look like there are fewer poor people.”

A novel way to take health care etc. away from people AND make it look like there are fewer poor people – change the formula…

Trump may alter how the national poverty threshold is set, putting Americans at risk of losing benefits https://t.co/HInzRuKIUE via @bpolitics

— Joan Alker (@JoanAlker1) May 6, 2019