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**JANUARY 12, 2024**
On the Prospect website
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President Biden's Speech to Black Americans Won't Bring Them
Home-Yet
Is it time for Biden to be Biden? BY STANLEY B. GREENBERG
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Ten Percent of the Way to a Deal on the Child Tax Credit
The minor tweak proposed to the CTC is less important than what the
Democrats want to do after the Trump tax cuts expire in 2025. BY
DAVID DAYEN
The Great Medicare Advantage Marketing Scam
How for-profit health insurers convince seniors to enroll in private
Medicare plans BY MATTHEW CUNNINGHAM-COOK
Kuttner on TAP
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**** Regulatory Fiascos
Shame on Gary Gensler. And the coup against Katherine Tai.
Normally, SEC Chair Gary Gensler is one of Biden's tougher regulators.
But on Wednesday, he voted with the two Republican SEC commissioners to
bring crypto back from the dead. He did it over the dissents of the two
other Democratic commissioners.
The vehicle for crypto's resurrection is a newly invented device
called an exchange-traded Bitcoin fund. An investor, rather than buying
Bitcoins directly, can purchase shares in a fund backed by Bitcoin.
Eleven of Wall Street's largest financial firms requested and received
SEC approval to operate such funds.
With the SEC's green light, they wasted no time launching the funds.
Yesterday, the first day of trading, $4 billion changed hands. Unlike
stocks and bonds and even derivatives, which are backed by actual
assets, Bitcoin is backed by nothing at all other than expectations of
other speculators' behavior.
Gensler voted to approve these funds out of fear of being sued and
losing, because a federal appeals court last summer
sided with another financial firm that had sued the SEC because of the
commission's refusal to grant it permission to launch a Bitcoin fund.
But in fact, the court merely remanded the case to the SEC asking for
better explanation of its policy.
In a brave and eloquent dissent
,
Commissioner Caroline Crenshaw wrote that the commission's action
violated the SEC's core mandate of investor protection. One example:
One form of manipulation that appears to be pervasive in the crypto
markets (and specifically bitcoin markets), is wash trading, a practice
whereby traders seek to increase the appearance of high trading interest
by both selling and buying the same products at the same time, often
driving up prices, and then selling to unwitting third party market
participants at inflated values.
Crenshaw's dissent, which you should read in full, should have been
Gensler's statement for a 3-2 majority disallowing these products.
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The Coup at USTR. Katherine Tai, the U.S. trade representative, has been
pursuing President Biden's worker-first trade agenda despite a fierce
undertow of pressure from an old guard inside and outside the
administration trying to resurrect the corporate trade agenda that
dominated under previous Democratic administrations, most destructively
under Clinton and Obama.
This has been fought out in several policy areas, most recently the
details of the proposed Indo-Pacific Economic Framework
.
Tai has been hobbled by the fact that she doesn't have direct access
to the president that previous trade reps have enjoyed, and because
other top trade officials in her own agency have been imposed on her by
corporate allies at the White House. Temperamentally, she has tried to
be a team player rather than playing hardball.
Yesterday, the corporate crowd succeeded in inserting the worst
appointment yet, assuming he can get confirmed by the Senate. President
Biden nominated Nelson Cunningham
to be deputy U.S. trade rep. Cunningham for most of two decades was
president of McLarty Associates
, which was previously
Kissinger McLarty. Yes, that Kissinger.
McLarty is Mack McLarty, formerly Clinton's chief of staff and a
counselor to him on trade. McLarty Associates consults on trade, and
boasts 300 corporate clients . In
terms of the revolving door, it doesn't get any worse.
Earlier in his career, Cunningham worked as a staffer for Biden on the
Senate Judiciary Committee. That burnished his connections to the White
House. Biden, who often seems out of touch, is clueless if he thinks
Cunningham will carry out his trade agenda.
And it gets still worse. Tai had advance notice that Cunningham was
under consideration and raised no objections. So this coup against Tai
is partly self-inflicted. Because of his web of contacts, he is likely
to have more influence at USTR than Tai herself, and is already being
touted as her replacement in a second Biden term.
Can Cunningham get confirmed? Maybe not. Sen. Ron Wyden, often an ally
of bad trade deals that help Big Tech, put out a statement criticizing
the nomination. He chairs the Finance Committee, which must approve the
appointment.
Wyden, reflecting his new alliance with Sen. Sherrod Brown, warned
:
"Experience representing the interests of multinationals is not the
same as considering the views of workers in Toledo and small business
owners in Medford. While I'm looking forward to fully vetting this
nomination and considering how the Finance Committee will proceed, I
would like to see candidates with more diverse and representative
experience."
Amen. Biden should pull this nomination to spare himself further
embarrassment.
~ ROBERT KUTTNER
Follow Robert Kuttner on Twitter
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