Hey Mahmood, let’s try Zoom next time. Law firms vs Trump. CNN. Section 122

Hey Mahmood, let’s try Zoom next time

It is almost inconceivable that Iranian leadership would physically meet again given the attack that killed Khamanei and members of his leadership team. I wondered if they had ever heard of Zoom and that they had to be the dumbest people on the planet. It is evident that the Israelis have compromised Iran’s leadership. Well it happened again. Iran’s Assembly of Experts actually physically gathered in Qom Tuesday to select a new supreme leader. Israeli warplanes struck the Assembly killing and wounding many of those present. One report said that “Israel struck while they were counting the votes for the appointment of the supreme leader.” The strike underscored the depth of Israeli intelligence penetration inside Tehran. No fooling.

Trump loses another one

The president testing the limits of the executive, just found out that he cannot shut down law firms he doesn’t like. Recall I had earlier reported that the president was issuing executive orders ending all government business with law firms that had argued against actions taken by the administration. Those orders would also have the government not do business with any company that engaged those same law firms – sounds like the “supply chain risk” designation for Claude AI. Well lo and behold, the “Justice” Department lawyers told the U.S. Court of Appeals for the District of Columbia that they were no longer interested in pursuing the cases and were asking the court to dismiss them. When the president issued the threat nine firms capitulated and reached deals with the administration. Four firms did not and sued instead and received favorable rulings from district court judges.

When the president issued the orders it was first against the firm defending Jack Smith and the second was against a firm involved in the Russia hoax. I was appalled saying that the right to counsel was guaranteed by the Constitution and Trump was trying to silence the opposition. Although I am not a lawyer, it was not surprising that a district judge agreed. She said “The executive order sends little chills down my spine,” and the administration had sent a clear message, “Lawyers must stick to the party line, or else.” The orders, she wrote, were “an unprecedented attack” on foundational constitutional principles.

Netflix bows out, CNN freaks out

Netflix just told Paramount that it can buy Warner Bros. Discovery. One very interesting sidebar is the question “Will this affect CNN?” CNN is part of Warner Bros. Discovery. It also owns CBS. When Paramount bought CBS last year, it instituted all sorts of changes in leadership and in staffing. Paramount is headed by David Ellison, Larry Ellison’s son, and an ally of Donald Trump. The new head of CBS leadership is Bari Weiss a long-standing critic of progressive politics. Weiss’s first decisions made headline news. She pulled a report harshly critical of Trump’s anti-immigrant crackdown hours before it was scheduled to broadcast on 60 Minutes. It was later aired with a revised introduction. As a result there was an exodus of personnel from 60 Minutes. CBS is in turmoil with journalists resigning and interviews being blocked. And insiders say that its being done to aid Trump. Well don’t you think its about time? Many at CBS say that there is now a “climate of fear” at the network. Anna M Gomez, a democrat commissioner at the Federal Communications Commission (FCC) said “This is yet another troubling example of corporate capitulation in the face of this Administration’s broader campaign to censor and control speech.”

So this question is now “Is CNN next?” Yes the old “Clinton News Network” is said to be in panic mode and “freaking out.” Like what happened at CBS, will the same happen at CNN? Will it modify its far left, anti-Trump posture and move more toward the center? Stay tuned.

Are Trump’s new illegal tariffs illegal too?

After his loss in court, the president invoked a universal 15 percent tariff for 150 days under Section 122 which allows the tariffs under “large and serious United States balance-of-payments deficits.” Oops, there is no such thing as a “balance of payments deficit.” The balance of payments is always in balance because of double entry accounting. There can be deficits and surpluses in the components of the balance of payments. Hence the balance of trade (between goods and services) can be in deficit but not the balance of payments. Section 122 was written when there were fixed exchange rates (gold standard) and has not been relevant since the US went to flexible exchange rates after Bretton Woods in 1973.

When the US dollar was pegged to gold and foreign currencies were pegged to the dollar, surpluses and deficits can occur because currency prices are fixed and not determined by the market. So when there is a deviation in the price set by the market from the price set by governments, there can be imbalance in the balance of payments deficit. So for instance, if the mispricing caused countries to convert dollars into gold it could seriously drain US gold reserves creating a deficit in the balance of payments. But again that can no longer happen under a regime of flexible exchange rates. So if there cannot be a deficit in the balance of payments then Trump’s actions under Section 122 are also illegal.