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“For years, immigrants have looked to America as a place where their standard of living was bound to improve,” McConnell said. “We’re going to change that.”

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We will name the 2030 immigration subsidies after Mitch McConnell.
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18 days ago
Between Trump's plague and the systematic undermining of our institutions, they might finally achieve their dream of turning the US into a cesspool that nobody wants to live in. That will turn the immigration problem into an emmigration problem.
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To improve the US coronavirus response, Donald Trump should resign

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Illustration by James Bareham / The Verge | Photo of Donald J. Trump by Timothy A. Clary / Getty Images

He’s only making the crisis worse

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19 days ago
President Plague
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America Is Broken.

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The rot was deep.
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19 days ago
Our nation is in a dire situation. We have been divided by constant internal crises for the last three years and now we have been woefully unprepared to face a new external crisis which is disrupting our lives on a scale we have not seen before in our lifetimes.

But societies do not follow neat trajectories of triumph, decadence, and failure. Every society has the seeds of its own destruction, but also the seeds of its own flourishing. There is no aging of society, no senescence, no point of no return.

We have the opportunity to eject the cronies from power and revitalize our public life. We can chop away the dead oak and plant new saplings. And we can turn away from the easy lies that prosperity and safety comes cheap and that we can just wall ourselves off from the problems we face.

Our society is worth defending and we can defend it. And we must defend it, not from 'outsiders' but from the insiders who are sawing the supports out from underneath all of us. A vote for Trump is a vote for corruption and plague. And we must put our country before party and eject him and any cronies who do not stand up to him.
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Trump’s Company Paid Bribes to Reduce Property Taxes, Assessors Say

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Stay up to date with email updates about WNYC and ProPublica’s investigations into the president’s business practices.

The Trump Organization paid bribes, through middlemen, to New York City tax assessors to lower its property tax bills for several Manhattan buildings in the 1980s and 1990s, according to five former tax assessors and city employees as well as a former Trump Organization employee.

Two of the five city employees said they personally took bribes to lower the assessment on a Trump property; the other three said they had indirect knowledge of the payments.

The city employees were among 18 indicted in 2002 for taking bribes in exchange for lowering the valuations of properties, which in turn reduced the taxes owed for the buildings. All of the 18 eventually pleaded guilty in U.S. District Court in Manhattan except for one, who died before his case was resolved.

No building owners were charged, though the addresses of some of the properties involved became public. Trump Organization buildings were not on that list. No evidence has emerged that Donald Trump personally knew of or participated in the alleged bribery.

Trump denied any wrongdoing at the time, and the Trump Organization reiterated that position in response to questions for this article. “To be clear, at no time did the Trump Organization or any of its employees or principals ever pay anyone for the purpose of unlawfully obtaining a lower tax valuation,” Alan Garten, the Trump Organization’s chief legal officer, wrote in a statement. “This was corroborated by multiple investigations which found no evidence of any wrongdoing by the company or any of its principals. ... If anything, the Trump Organization was a victim of the scandal.”

Asked to provide evidence or name the agencies that allegedly cleared the company, Garten did not provide additional details, saying, “I was referring to the different investigations conducted by the state and federal authorities at the time.” (Here is the company’s full statement.)

The moment that corrupt assessors told their co-conspirators that the Trump Organization had agreed to pay bribes was memorable, said Frank Valvo, a former city assessor who served a year and a half in prison for his role in the scheme.

The excitement was palpable in the office, Valvo recalled, as one of the assessors broached the news. “He says, ‘We got Trump!’” Valvo recalled. “Wow. Holy Smokes.”

Two former city employees, speaking on the condition of anonymity, told ProPublica and WNYC that they accepted money from middlemen representing the Trump Organization to lower assessments on 40 Wall St. after Trump took over the skyscraper in 1995.

The assessors’ scandal burst into the news just months after the Sept. 11 attacks, revealing deep-seated corruption in the city’s sprawling bureaucracy with potential fallout for some of Manhattan’s wealthiest landholders. A joint city and federal investigation found that the assessors took more than $10 million in bribes over 35 years and changed the assessed value of at least 562 properties.

Valvo told ProPublica and WNYC, “I’m guilty of what I did. I’m not going to hide that.” He said he’s speaking because he’s now 88, and he “wants the truth to come out” about the property owners. (To hear more from Valvo, listen to this week’s episode of “Trump, Inc.”

Listen to the Episode

The two employees of the assessors office who said they personally received bribes for Trump properties said they met with middlemen, or bag men, for various property owners, who would hand them envelopes of cash. In exchange, the city employees treated the middleman’s clients favorably when calculating the buildings’ tax assessments. One such middleman, they said, was a tax consultant, Thomas McArdle, whose name later surfaced in connection with the bribery scheme.

One of the two assessors recalled receiving a list of about 20 properties from McArdle; 40 Wall St. was on it, he said.

Another said that at one meeting, he looked in the envelope and asked for more money. The middleman responded by telling him that Donald Trump thought the employee should be making the assessment changes for free.

Apart from the two employees who say they took bribes, and Valvo, a fourth former assessor said he could confirm that Trump Organization property was involved but declined to provide additional details. A fifth former assessor said he remembers Trump Organization properties being talked about in the office as among those whose assessments were lowered in exchange for bribes.

Another convicted assessor, Joe Iovino, said he “did not know of any Trump Properties” paying bribes. The remaining living assessors either declined to comment or did not respond to multiple requests for interviews.

The former Trump Organization employee said that when he worked at the company, Donald Trump arranged for an employee to meet with McArdle, the alleged middleman. (The extent of Trump’s knowledge, if any, as to the ultimate purpose of this alleged meeting is unknown.)

During the subsequent alleged meeting, which Trump did not attend, McArdle received a check, and the employee passed along what the former employee said he knew to be “bogus information” to McArdle. The false information was intended to be passed on to the assessors, according to the former employee, to give them a pretext to lower the tax valuation for the Plaza Hotel, which the Trump Organization then owned.

McArdle, who was a cooperating witness in the bribery case, died in 2013 and was never charged. When the scandal erupted, according to the former Trump Organization employee, Trump expressed concern that he had signed checks payable to McArdle. His staff told him not to worry because executives of the Plaza had signed the checks, the employee said.

On Tuesday evening, the Trump Organization’s Garten sent an email stating, “We reviewed our accounting records and we have no record of any payment ever being made to Tom McArdle.”

ProPublica asked whether the records search included those from the Plaza Hotel, as well as whether the records indicated if the company had paid McArdle’s firm rather than McArdle personally. Garten replied, “Regarding Trump Plaza, as I said, we have no records of any payments to Mr. McArdle.”

Historical tax assessment data for the Plaza shows its valuation dropping noticeably during the Trump Organization’s seven-year ownership. But it’s hard to discern whether the changes in valuation were due to any assessors’ scheme or changes in market conditions — or both. The Plaza’s valuation dropped by about 40% over two years, for example, but that also coincided with the hotel’s 1992 entry into bankruptcy. The assessments began rising again on its 1994 tax bill, when the hotel was back on the market. It sold in 1995.

In the case of 40 Wall St., the assessment also dropped. The decrease actually began before Trump took control of the building, which was then in distress, after he retroactively appealed the tax bill for what the Trump Organization said were fully legitimate reasons. The valuation stayed low, then climbed markedly beginning in 2000 — the same year the investigation into the bribery scheme began gaining traction.

The Trump Organization, in its statement for this article, attributed the Plaza’s rise to fluctuations in the city’s economy at the time. At 40 Wall St., the rise in valuations in the 2000s occurred after the building was renovated and signed a slew of new deep-pocketed tenants, which would be expected to drive up the assessment.

In 2007, Trump was questioned under oath about McArdle in an unrelated deposition for a lawsuit he filed against journalist Timothy O’Brien. Here’s the full exchange between a lawyer for O’Brien and Trump, according to a transcript of the deposition:

Q. Ever heard the name McCardle?
A. No. Who is McCardle?
Q. Thomas McCardle.
A. It sounds vaguely familiar, but I don’t remember.
Q. Former New York City tax assessor’s office, then tax consultant?
A. I don’t know the name.
Q. Was caught up in a scandal in the early 2000s regarding tax assessors?
A. I think he is a man that represented many, many real estate people in New York. He represented some of the biggest real estate companies in New York. I don’t know if he represented us or not, but I don’t remember that.
Q. Did you ever make any payments to Mr. McCardle?
A. I don’t even remember ever — I don’t even know that name. I think I read the name because there was some kind of tax scandal going on, and he was involved with various real estate people. I don’t know the name. I don’t know that we ever used him.
Q. Do you recall —
A. He was a consultant of some kind.
Q. Yeah.
A. No, I don’t remember ever having used him. But he was used by many major real estate companies in New York.

Prosecutors never pursued property owners over the bribes. One of the alleged architects of the scheme, an 85-year-old former assessor named Albert Schussler, who had become a middleman between assessors and owners, had a fatal stroke the night before he was scheduled to talk to prosecutors. His death hampered the case against owners, lawyers said.

“You’d love to follow the rainbow to the very end and get every person along the way who has been committing crimes, but unfortunately it’s not possible,” said Sharon McCarthy, the assistant U.S. attorney who led the prosecution of the case, in an interview with academic researchers in 2014. “The person who dealt directly with the property owners is Albert Schussler, and he passed away, so we lost the ability to go after anyone else.”

McCarthy told ProPublica and WNYC that she could not discuss any part of the case that isn’t in the public record.

After the devastation wrought in lower Manhattan by the 9/11 attack, fighting terrorism became the urgent focus. City Hall, worried about lower Manhattan, tried to prop up developers.

The federal and state statutes of limitations for bribery have expired, so no property owners face any risk of prosecution.

After the indictments, two Trump entities sued New York City, claiming that he had not paid bribes to lower assessments and thus the Trump World Tower near the United Nations was unfairly valued by assessors higher than it should have been.

When Trump filed the suit, he was quoted in The New York Times saying, “It is impossible for any one of those property owners who used Schussler not to have known what was going on.”

The entity that owned the Trump World Tower separately sued the city seeking a tax break for creating affordable housing, and the city ultimately settled both suits together. Trump’s company received a tax break worth more than $100 million. The 13-page agreement did not mention or address the merits of Trump’s claims that the Trump World Tower suffered because of Trump’s asserted unwillingness to pay any bribes.

The assessors each pleaded guilty and most of them served between one to three years in prison. The Finance Department said that they had deprived the city of $160 million in tax revenue over the four years prior to the indictments and millions more in the decades before that. They are still paying restitution.

Help Us Investigate

Do you have information about the bribery scandal? Email heather.vogell@propublica.org and ksullivan@nypublicradio.org.

Here’s how to send tips and documents to ProPublica securely.

You can also always email us at tips@trumpincpodcast.org.

And finally, you can use the postal service:

Trump, Inc. at ProPublica
155 Ave of the Americas, 13th Floor
New York, NY 10013

Doris Burke and Lydia DePillis, ProPublica, and Andrea Bernstein, WNYC contributed reporting.

“Trump, Inc.” is a production of WNYC Studios and ProPublica. Support our work by visiting donate.propublica.org or by becoming a supporting member of WNYC. Subscribe here or wherever you get your podcasts.

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21 days ago
Don't worry. We didn't need the tax money for anything useful anyhow. He just cut waste and corruption at the CDC by 80% and I'm sure it will be just as effective.
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ZIRP explains the world

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Ranjan here, writing about how low-interest rates have distorted everything about our economy.

I know there is not just one simple, overarching explanation for all the weirdness in the world, but, for me, when I see a bunch of scooters strewn about a sidewalk, the first thing that goes through my head is ZIRP.

For the uninitiated, ZIRP stands for zero-interest-rate policy. I will assume most Margins' readers are peripherally familiar with the term, but to clarify, it’s when a nation's central bank pushes nominal interest rates to 0% using monetary policy. There are a million complexities to how it's executed, and nowadays rates can even go negative (NIRP), but for this piece, I'll just refer to all exceptionally low-interest-rate policies as ZIRP.

My co-host Can recently introduced me to the physics concept of a 'theory of everything':

a hypothetical single, all-encompassing, coherent theoretical framework of physics that fully explains and links together all physical aspects of the universe.

That's how I feel about ZIRP and all things business today. To understand why let's first talk about money.


Maybe it's because I was an economics major or a currency trader, but I think of money as a living thing. Not as a sentient, conscious being, but more like one of those prehistoric, single-celled organisms. Or maybe sperm swimming towards an egg. Just millions and trillions of tiny little living things driven solely on biology towards some unforeseen source of nourishment; some instinctual goal. 

Money is always swimming towards yield. Millions of investment professionals are taking tens of millions of actions, every day, to help drive capital to its sustenance. The entire global capitalist economy rests on this constant flow.

So what happens when you lower interest rates (especially to zero)? All those millions of little dollar-organisms have to change course. They need to find a new source of life.

open knowledge footage GIF


All investment decisions are, in theory, an evaluation of risk versus reward. The US Treasury 3 Month Bill is often thought of as a "risk-free rate of return", or the yield you deserve for effectively assuming zero risk. It's called "zero risk" because we're assuming the U.S. Government will not default on their debt in the next 3 months. For reference, this currently gives you 0.71% (and was 1.25% when I started writing this on Monday 🥶).

That's your starting point. The more risk you take, the more yield you should get. If we're just looking at U.S. treasuries, the longer the maturity, the more yield you should get because there's more time that the U.S. government could default (note: at the moment, this is not the case because of an inverted yield curve, which is a whole other thing).

Then you start looking at U.S. investment-grade corporate debt, like a bond issued by Apple. It's a tiny bit riskier, so you should get a tiny bit more return. Then you move out to high-yield corporate debt which is a bit riskier. You keep moving out the curve, getting to hedge funds, private equity, venture capital, and real estate, and on and on. For each additional increment of risk you take, you get a bit more yield.

The image below from KKR, is the closest thing that represents what I’m talking about. The whole 80-page report is very good on this topic if you’re interested.

Image result for kkr risk curve


The thing is, money has expectations. At an individual level, most of us have become accustomed to bank savings accounts effectively returning zero. That wasn't enough for us though. Our money felt antsy, so it found index funds and other passive funds, to once again, find a bit of yield. They are certainly riskier than a bank savings account (where your only risk is the bank going under), but hey, no one has ever really lost in a Wealthfront account. Money swims towards yield.

That same, tiny behavioral shift takes place at every level of the risk curve, from your savings account to the trillions of dollars managed by large pension funds. That's exactly how it's supposed to work; rather than that money sitting in your 0.01% savings account, you put it to work somewhere else. For a pension fund, they might even have a prescribed expectation of yield (to match expected liabilities), meaning, to maintain a consistent return, they have to move up the risk curve.


So all these dollar-organisms all start swimming towards riskier waters. Treasury investors shift to corporate debt. Public equity hedge funds shift to late-stage private equity. Late-stage private equity shifts to mid-stage, mid-stage to early stage. Seed rounds become bigger. Angel investors become a thing. Unicorns, unicorns, and more unicorns. Ashton Kutcher.

And that's how we end up where we are. In the past, if somewhat risky corporate debt got you 10%. It now gets you 7% (I'm making up numbers here) so you start taking meetings with late-stage growth companies. The Saudi SWF wants to modernize their economy, but they are also looking to achieve returns once found in public equities, so they have to get creative. Blackrock gets jealous of KKR who gets jealous of a16z who gets jealous of YC. There is just so much money looking to do so many new, riskier things.  

And again, that's exactly how it's supposed to work. Cutting interest rates spurs demand and risk-taking. The changed denominators of a million financial models make every investment idea look more enticing. If an interest rate is the cost of money, ZIRP means capital is now free.


This gets us back to those scooters on the sidewalk or a bike graveyard.

Image result for bike graveyward

When that much money finds its way into places not used to that much money, weird things happen. It's how we got to Community-Adjusted EBITDA and sleep economies. You don't create a ridesharing service, but a service that oddly loses money on every ride with a promise to figure out some future business [Tough, but fair -Can]. The distortions live at the valuation level, but also the communications and expectations level. Things just get weird.

It's why, if you want to start a scooter rental business, you don't just buy some scooters and rent them out. You take hundreds of millions of dollars in venture and rapidly expand across cities. Money finds its way. Maybe it’s in the guise of an eccentric Japanese investor teaming up with a lavishly wealthy young monarch, but it finds the place that might give it that return, and where it ends completely changes things.

Image result for white walkers rise gif

And boy, does it change things. We’ve certainly dabbled in the debate of “what is a tech company” but what we never addressed was why do companies do mental gymnastics to call themselves a tech company. It’s because venture as an asset class traditionally invested in technology because that is what presented the growth and return characteristics that matched their risk profile. So you try to call a desk rental or mattress seller a tech company. 

Then, for the companies that attracted the money had to spend it. Salaries inflate. Cultures change. Consumers are subsidized. Sure, some technology is created, but overall, nothing operates as it would without that thirsty capital. It changes the economics for competitors that do not welcome in the dollars. The second and third-order effects are difficult to comprehend. Facebook’s advertising revenue has exploded thanks to heavily-funded companies acquiring customers, allowing the platform to resist any financial pressure which could force them to address fundamental platform issues. Uber made rides seem cheaper so we stopped taking public transportation. All this capital completely distorts things at the micro and macro level.

My co-host Can previously wrote how much of what we consider technological innovation is, in fact, business model innovation. I’d add that a lot of what is perceived as innovation is also some form of ZIRP-fueled arbitrage. Everything is ZIRP.


I’ve brought this theory up over the years and friends have provided reasonable rebuttals. This could just be the evolution of capital allocation. The traditional IPO has a ton of problems. Public market investors are too short-term oriented. Software is only eating more of the world, meaning there will be many other Facebooks. They are all good rebuttals. 

But ravenous money searching for something to satiate its hunger is not a thoughtful rethink of flawed institutions. Things like the Long-Term Stock Exchange are working on solving these problems. AirBnB trying to time its IPO sitting on a $35 billion valuation with a money-losing, recession-prone business, assuming they could delay further with another huge private round, is not.

The thing that’s always been missing is this only works when there is a buyer. If you want to keep avoiding public market scrutiny, then you need Fidelity coming in for your Series R. If you want that $20mm cap convertible, you need a rich ex-Facebook employee looking for some angel investing social capital. If Softbank wants to raise Vision Fund 3, there’s only so many oil-rich nations looking to modernize themselves. That’s the thing about huge amounts of money swimming their way into uncharted waters. It all sounds good until it doesn’t.

Can’s Corner

Hi! Can here! This is a thing we are trying out, responses to each others’ pieces at the end.

Evolutionary algorithms were all the rage a couple of decades ago, but since then they have lost much of their luster. As Peter Norvig once said, the fascination with things like genetic algorithms was driven more by a Renaissance-esque attempt at bridging unrelated fields, rather than delivering results. Alas, I’ve always thought of ZIRP as a giant pool of money sloshing around and eventually pooling wherever has the lowest path of resistance. But maybe, biology can help us come up with a better analogy. Certain types of slime mold can apparently traverse complicated mazes to get to the food, casually solving the path-finding problem in the process. ZIRP is similar, except it is money traversing a giant maze of pension funds to LPs to impressionable VCs to charismatic leaders. Molds get their food, and us, scooters on the sidewalks. If that’s not a grand unifying theory on how we end up scooters on the sidewalks, I don’t know what is.

Ranjan’s Closing Notes

There will be lots of talk in the coming months about central banks cutting rates as a response to the coronavirus impact. This entire piece is about how rate cuts spur demand, which has been shown to work exactly as it should over the past decade. The scarier part of our current environment is that the initial shock would be a supply-side one, i.e. Apple can’t make its iPhones and people can’t go to work. All the funding of Usain Bolt scooter startups in the world won’t solve that.

And in kind of funny, personal pandemic anecdotes (c’mon, we have to try to laugh):

  • I was studying abroad in Rome in 2000 when Mad Cow became a thing. The McDonald’s near our apartment in Piazza Della Rotunda stopped serving any beef products. They replaced the Big Mac, with a pork sandwich named…the McPink. Still my favorite named fast food product of all time.

  • I lived in Beijing for a few months in the summer of 2009, as Swine Flu was raging. The first thing that happened when I landed was two people boarded the plane with white guns and put them directly to your forehead. They didn’t speak any English and I had no idea what was happening. For a moment, I thought it was all over.

  • I was taking a Mandarin class while there, and one of the nights I went out pretty hard with some classmates. I called my tutor/teacher the next day and said I had a fever and was too sick to go to class (hungover). Someone knocked on my door a few hours later and it turned out he had called the local hospital.

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22 days ago
Pre-modern economic history was one of stagnation. Per-capita growth was often a few percent per century. There were rare boom times when a particular area saw sustained economic growth for a while, but often it was the wages of empire and eventually the 'golden age' ended after a few decades.

So when I am pessimistic, I wonder about what happens when we situate our modern era into that context. A couple hundred years of 'golden age' which has acclimated us all to constant growth and change. This could be the new normal, but it could also be another temporary thing and we will revert back to the stagnation of prior centuries.

What are the warning signs? What would things look like today if we see stagnating real wealth? ZIRP and 'secular stagnation' and the like seem probable. As does a return of real estate as the main kind of investing people worry about.
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Trump admin: “Centers for Disease Control and Prevention is dramatically downsizing its epidemic prevention activities in 39 out of 49 countries because money is running out”

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His first year.
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23 days ago
If the disease continues to have its current mortality rate, and if it does spread uncontained in the US, we are looking at more than 6 million deaths because the GOP let the clown run the circus. And that is assuming that the republic survives his autocratic incompetency.
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