Democrats warily eye Avenatti’s flirtation with 2020 bid
By JULIE PACE, KEN THOMAS and STEVE PEOPLES
Wednesday, October 10
WASHINGTON (AP) — Michael Avenatti held court last month with a dozen Democratic strategists in the main dining room at The Palm — a see-and-be-seen table at one of Washington’s most prominent power lunch spots.
Avenatti did most of the talking. While he offered few details about how he planned to raise enough money or hire the staff to run a presidential campaign, one participant and another person briefed on the lunch said he cast himself as one of the few Democrats who knows how to go head-to-head with President Donald Trump. The sources requested anonymity because they weren’t authorized to publicly discuss details of the meeting.
Avenatti’s brash confidence is being closely watched by Democrats in Washington and key political battleground states with a mix of intrigue and trepidation. Trump’s victory over more experienced politicians in the 2016 campaign has reshaped traditional views of who would make a viable presidential candidate. Yet some party leaders are worried about trying to replicate Trump’s approach by backing another untested and unpredictable candidate — a concern that was heightened after Avenatti’s involvement in the recent Supreme Court confirmation fight.
Still, Avenatti has so far managed to stand out among the senators, governors and mayors expected to vie for the Democratic presidential nomination. Early state operatives are offering him advice, and he’s sold out Democratic Party dinners in Iowa and New Hampshire. He’s scheduled to be in South Carolina this weekend, and has another trip to New Hampshire planned on Oct. 22.
Raymond Buckley, a veteran New Hampshire Democratic strategist, said ticket sales for a recent Hillsborough County Democratic Party fundraiser tripled within 48 hours after Avenatti was announced as the featured guest.
“There is great interest in him,” said Buckley, who met with the high-profile attorney. “I take everybody seriously. Donald Trump has taught us all a lesson. It is a mistake to be dismissive of anybody.”
But Avenatti has suddenly found himself on the defensive over his role in the acrimonious Supreme Court confirmation fight for Brett Kavanaugh, raising questions about whether his relentless self-promotion could backfire before a presidential campaign ever gets off the ground.
After two women came forward with allegations of sexual misconduct against Kavanaugh, Avenatti revealed that he was representing a third accuser, Julie Swetnick. In a signed declaration, Swetnick said she witnessed Kavanaugh engage in sexually inappropriate behavior.
In the same statement, Swetnick said she had been the victim of gang rape — an explosive allegation that garnered significant attention, even though she never accused Kavanaugh of the crime. Avenatti’s promise to provide people to corroborate Swetnick’s account never materialized. He says he tried to bring more information to the FBI, but the bureau never investigated.
Republican congressional aides say Avenatti’s involvement helped turn momentum back toward Kavanaugh. When the deciding vote on the nomination, Republican Sen. Susan Collins of Maine, announced that she was supporting Kavanaugh, she cited Swetnick’s “outlandish allegation” and said it was “put forth without any credible supporting evidence.”
Democrats quickly found themselves having to answer for Avenatti’s actions. During an early-voting rally in Iowa Monday, New Jersey Sen. Cory Booker responded to questions about Avenatti’s client by stressing the validity of the other two accusers, Christine Blasey Ford and Deborah Ramirez.
“What is obvious to most Americans, I think, is you have Dr. Ford and Ramirez come forward with credible claims,” said Booker, another Democratic weighing a presidential run.
Avenatti said he’s seen no drop in interest in his potential presidential prospects since he jumped into the confirmation fight, and cast the criticism of him as an inevitable response to his presidential prospects.
“It is being stoked by the Republicans and establishment Democrats that are very nervous about what my intentions are,” Avenatti said. “This is a direct response to individuals coming to the conclusion that I am a threat.”
To questions about his fundraising and planning, Avenatti said that he has not been providing details at introductory meetings, but stressed that he has donors lined up should he run and said that “we are going to have no problem raising money.” He also said he is hearing from people who are “very enthusiastic” about joining the campaign.
Avenatti’s uneven handling of the Kavanaugh allegations was a stark contrast to his role representing Stormy Daniels, the porn star who says she had sex with Trump and was paid by the president’s lawyer to keep quiet. While Trump and attorney Michael Cohen initially denied Daniels’ claims, details of the payment have been verified during court proceedings. Avenatti became a media fixture in the process, spending hours a day racing from one television studio to the next.
His interest quickly shifted from taking on Trump in the courtroom to challenging him in the presidential election. On Monday, Avenatti formally launched a federal political action committee, The Fight PAC, giving him the ability to support Democratic candidates up and down the ballot, pay for political travel and build a list of supporters. The PAC will not accept money from corporate PACs.
Avenatti’s PAC is being advised by Tracy Austin, a Los Angeles-based fundraiser who has helped several California Democrats, including Gavin Newsom, Antonio Villaraigosa and Xavier Becerra; Stephen Solomon, a digital media strategist; and Adam Parkhomenko, an aide to Hillary Clinton’s 2016 campaign and the Ready for Hillary PAC that preceded her campaign.
During his visits to Iowa and New Hampshire, the first two contests on the presidential calendar, Avenatti has also sought out local consultants and party leaders familiar with the caucus and primary races. During a trip to Iowa in August, Avenatti was joined by Matt Paul, an Iowa-based former strategist to Clinton, and Jeff Link, a longtime adviser to former Sen. Tom Harkin.
Avenatti’s handling of the Kavanaugh confirmation fight was met with a mixed reaction in the early presidential voting states.
Steve Shurtleff, the top Democrat in the New Hampshire state house, said Avenatti’s promotion of his client may have undermined the credibility of Kavanaugh’s other accusers.
“If there was any other attorney connected to that woman, it might have helped avoid the three-ring circus it became,” said Shurtleff, who said he doesn’t see Avenatti as a viable presidential contender.
But Iowa Democrat Randy Brown, who hosted Avenatti at a Democratic fundraiser in August, said the prominent lawyer’s involvement may have helped energize some voters who may not have normally paid attention to the confirmation process.
“It fired them up more,” said Brown, chairman of the Iowa Wing Ding fundraiser.
As for the impact on Avenatti’s presidential prospects, Brown said the lawyer was simply “doing what he does best — getting his name out there.”
Peoples reported from Manchester, New Hampshire. Associated Press writers Thomas Beaumont in Des Moines, Iowa, and Catherine Lucey in Washington contributed to this report.
Follow Julie Pace at http://twitter.com/jpaceDC, Ken Thomas at http://kthomasDC and Steve Peoples at http://twitter.com/sppeoples
Bloomberg becomes Democrat again, looks at presidential run
Wednesday, October 10
WASHINGTON (AP) — Former New York City mayor Michael Bloomberg is officially a Democrat again.
The global media company founder on Wednesday said he has registered as a Democrat, which would be especially significant if he decides to challenge President Donald Trump in 2020. Bloomberg says on social media he did so “because we need Democrats to provide the checks and balance our nation so badly needs.”
Bloomberg did not say when he might make a decision on running for president. He served three terms as New York City mayor and has variously been a Democrat, a Republican and an independent. He twice flirted with running for president as an independent candidate.
Bloomberg has thrown money and support behind Democrats and is attacking Republicans on abortion and gun policies.
Opinion: It Is Italy’s Economic Growth, Stupid
By Desmond Lachman
Faster economic growth is a necessary condition for a country with as large a public debt mountain as Italy has if it is to reduce its vulnerability to a less favorable global liquidity environment. This makes the anti-economic growth policy stance of the new Italian government all the more difficult to understand.
By eschewing budget discipline and by being intent on reversing the modest pension and labor market reforms of its predecessor, just as global liquidity conditions are becoming more challenging, the Italian populist coalition government risks compromising Italy’s economic growth prospects and inviting the return of the international bond market vigilantes.
To say that the Italian government has little room for economic policy error would be an understatement. With a public debt level now in excess of 130 percent of GDP, markets are already expressing uneasiness about the country’s public debt sustainability. With a banking system that is saddled with 400 billion euros in Italian public debt and that has non-performing loans well in excess of 10 percent of their balance sheets, questions are also being asked about whether Italy’s banks will not soon need a government bailout.
Yet, despite this lack of room for policy error, the new Italian government has made the cardinal mistake of flouting the Eurozone’s rules on budget discipline by presenting an expansionary budget for the next fiscal year. Making matters worse it has premised this budget on a highly rosy economic scenario. That makes it all too likely that the budget deficit in 2019 will well exceed the government’s already high 2.4 percent of GDP deficit target, which will keep Italy’s public debt on an ever-increasing path.
Far from promoting economic growth as the Italian government believes, there are several reasons to think that an expansive fiscal policy, just as the European Central Bank is getting ready to end its bond buying program, risks pushing the Italian economy back into recession.
The first is that the announcement of the government’s budget plans has already led to a sharp increase in Italian long-term interest rates to their present level of around 3.4 percent. This represents a near doubling of these interest rates since the Italian elections in March. This rise will necessarily involve an increase in borrowing costs for both Italian investors and consumers that must be expected to reduce Italian aggregate demand.
The second is that falling Italian government bond prices risk causing a credit squeeze in the Italian banking system. With the Italian banks holding an excessive amount of these bonds, a fall in their prices impairs these banks’ capital base. In so doing it impairs their ability to lend, which is the very lifeblood for an economy to grow.
The third is that by flouting the Eurozone’s rules, the Italian government risks undermining both domestic and investor confidence. It does so by putting into question the new Italian government’s long-term commitment to have Italy remain in the Euro. As if to underline this point, since the March elections, foreigners have been repatriating capital out of Italy at a troublingly rapid rate.
Italy’s recent experience with a triple-dip economic recession following the 2008 Lehman bankruptcy should be reminding policymakers how damaging an economic recession can be to a country’s public finances. That experience also should be reminding them how difficult it is for a country to improve its public finances within a Euro straitjacket. These considerations would underline how dangerous an economic recession would be for Italy at this time.
It is hoped the new Italian government will heed the loud and clear signals being sent to it by the markets in response to their recent budget announcement and back off from their confrontational stance towards their European partners. If not, we should brace ourselves for yet another painful chapter in the Eurozone’s sovereign debt crisis.
ABOUT THE WRITER
Desmond Lachman is a resident fellow at the American Enterprise Institute. He was formerly a deputy director in the International Monetary Fund’s Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney. He wrote this for InsideSources.com.
Opinion: Laity Is Key to Catholic Church’s Restitution
By Stephen F. Gambescia
Historians will remind us that the Roman Catholic Church has been beleaguered over the centuries by many unsavory and unorthodox acts by individuals and their leadership, and it has managed to heal. Acts of materialism, mixing of church affairs with government, political infighting, bigotry, and the selling of salvation, among others, have been on their confessional cards. However, the unfolding reports of child sex abuse by priests in the United States, and beyond, qualifies as such abject wrongdoing that radical reform is needed.
What is the church to do?
Periodically synods and councils are organized by the church to consider important matters. Leaders of the church, at least in the United States, could set up several councils to investigate, mitigate and recommend swift and appropriate restitution for these depraved acts by men of the cloth. Such intercession is long overdue.
These councils should not comprise only the religious. To have any credibility and a modicum of faith from the people of the church that something will be done to repent, repair and rebuild the Catholic Church, the laity must be intimately involved and treated primus inter paris (first among equals) in the healing process.
One council could focus on the victims and their families and what to do to make amends for these wrongdoings. The psycho-social needs of the victims must be vast. How to determine any monetary awards and from whom will be painful, especially considering at some level the purse of the church was filled by the good graces and charity of the people who were not complicit in these acts. The concern that damages brought by the justice system or settlements outside the courts will bankrupt the church deserves consideration. The awards could be so staggering that church after church and school after school could be shuttered.
A second council could focus on the perpetrators’ wrongdoings from a legal perspective. What legal actions should be taken and what public policies need to be changed to assist in both adjudicating past sins and building guards against future bad acts.
Another council could focus on the church bureaucracy and the decision makers who knew or should have known about the illicit acts of these men. Their job is to investigate and explain the people involved and the chain of events of the signs, incidents, reactions, communications, sanctions and any cover-ups related to child sex abuse. This includes the many stories of good priests and people of the church who brought this to the attention of the leaders, and yet no serious action was taken. The revelations to this group will be quite disturbing, outdone only by a few adjudicating bodies having to deal with such heinous acts.
A final council could focus on an area that has not been discussed: Understanding the pathology of the priest pedophile. Exposing the scandal and asking for justice naturally hits the headlines. What we also need to understand is that these men not only committed a crime but are very sick. What is the nature of this sickness? How much of it is “hard wired”? Who else has it, and who is likely to have it? How did it develop in the individual? If the priestly environment encouraged it, in what ways? What other environments encourage this aberrant behavior? Can such men be rehabilitated?
The work of this council, as with the others, will be painful and the findings will rock our senses to the core, as it will have to address the enduring and still delicate question of nature versus nurture in the development of humans. For example, the assertion that men did bad things to boys because they could not marry is naive. The knee jerk response that men abused their power to get what they want does not validate the seriousness of these offenses.
These were unconscionable acts that only those who are skilled enough and willing to be open to learning about a very dark place in humanity can bring insight and — it is hoped — some resolution. Aside from the religious members, each council would be made up of combinations of lawyers, judges, child psychologists, social workers, psychiatrists, physicians, criminologist, financiers, ethicists, theologians, those expert in organizational governance, and the victims and their families, among others.
Hanging in the balance when addressing this scandal is more than the future of the Catholic Church; these next steps put to the test for all to make the commitment: “Never again.”
ABOUT THE WRITER
Stephen F. Gambescia is professor of health services administration at Drexel University in Philadelphia. He wrote this for InsideSources.com.
Opinion: Why Do We Want Canadians to Pay More for Prescription Drugs?
By Dean Baker
Imagine we caught a burglar breaking into our neighbor’s house. As we call the police, the burglar tells us it’s OK because he was going to spend a part of his loot at our restaurant down the street.
That is pretty much what the pharmaceutical industry is telling us about provisions in Donald Trump’s new trade deal that will make people in Canada pay more for their drugs. The agreement has a variety of measures that will make patent monopolies and related protections longer and stronger. This is being presented as somehow a win for the United States.
To set the table, like every wealthy country other than the United States, Canada restricts what drug companies can charge for their drugs. While the United States hands the drug companies patent monopolies and lets them charge whatever they want, Canada negotiates the prices that drug companies can charge. As a result, prices in Canada for many important drugs are 40 percent, 50 percent or 60 percent less than in the United States.
Several provisions in the new United States, Mexico, Canada Agreement (USMCA) will strengthen the bargaining power of the U.S. drug industry, likely reducing the gap between U.S. prices and Canadian prices. For example, it requires a 10-year period of exclusivity for biological drugs before a biosimilar can be introduced in the market. It also lengthens the normal 20-year period of patent monopoly in instances where drug companies argue there were unreasonable delays in issuing the patent.
These and other provisions have the intended effect of increasing the price that Canadians will pay for their drugs. While it is obvious why Pfizer, Merck and other big U.S. drug companies want to be able to charge Canadians higher prices for their drugs, it is not obvious what the rest of us gain if these companies earn higher profits at the expense of our neighbors.
The answer is pretty much the same as the one the burglar gave. They will spend some of their additional profits on new research. While that may be good for us, just as we might appreciate the burglar patronizing our restaurant, it would be a much better story if both us and the Canadians paid lower drug prices.
The Trump administration’s efforts in the USMCA are about exporting our higher drug prices to the rest of the world. This is bad for other sectors of the economy and terrible for our long-term health cost picture.
In terms of other sectors, the basic story is that if Canadians have to pay more to Pfizer and Merck for drugs, they have less money to buy our cars, steel or milk. Other things being equal, a larger trade surplus on prescription drugs means a larger trade deficit on everything else.
However, the more important part of the story is that the Trump administration is helping the pharmaceutical industry lock in its pattern of charging incredibly high prices for drugs. These drugs would almost invariably be cheap in a free market.
Drugs are almost invariably cheap to manufacture. What makes them expensive are the patent monopolies. When someone is facing a life-threatening illness, they will pay tens or hundreds of thousands of dollars, if they have the money or get their insurer or the government to pay for the drugs. In many cases, the generic version of these drugs is available for less than 1 percent or even 0.1 percent of the patent-protected price.
While we do have to finance research, there is good reason for believing that patent monopolies are very inefficient mechanism for do so. According to the National Science Foundation, the pharmaceutical industry is spending $70 billion a year on research. The gap between the patent-protected price and the free-market price comes to around $350 billion a year in the United States alone. The industry gets hundreds of billions in additional revenue from Europe, Canada and other countries.
In addition to the tradeoff of $5 in higher drug spending for every dollar of research, we also have the perverse incentives created by patent monopolies. The sky-high margins on drugs gives pharmaceutical companies an incentive to push their drugs for uses where they may not be appropriate and to conceal harmful side effects. They do both all the time.
We should be looking to alternative mechanisms for financing research. Several prominent senators, such as Bernie Sanders and Elizabeth Warren, have proposed legislation that would directly fund the research and development of new drugs. This would allow new drugs to be sold at generic prices from day one. No one would then have to struggle to find a way to get $150,000 to keep their spouse or parent from dying of cancer.
But Donald Trump wants us to celebrate a big step in the opposite direction. The Canadians will have to pay Pfizer more for their drugs. What a great victory!
ABOUT THE WRITER
Dean Baker is a macroeconomist and senior economist at the Center for Economic and Policy Research in Washington. He wrote this for InsideSources.com.