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WILBUR ROSS, SECRETARY OF STATE

July 9, 2017

WILBUR ROSS, SECRETARY OF COMMERCE

Those who criticize Trump’s cabinet picks (and I am one of them) usually target the more flamboyant ones such as Betsy DeVos, Tom Price and others, and deservedly, since they oppose the objectives of the agencies they are appointed to supervise. It’s as though one would pick convicted bank robbers to supervise banks in handing such supervisors the keys to banks’ lockboxes in which you and I have deposited our money and other valuables (including in the case of Betsy) our children’s futures and (in the case of Tom) our nation’s health.

There is one such Trump appointment, however, that is a rather quiet one by contrast, an appointment that was confirmed by a relatively bipartisan Senate vote of 72-27, one that you read and hear little about in the print and electronic media. I refer to Wilbur Ross, Secretary of Commerce, who is now empowered to supervise acceleration of the American economy’s descent into oligarchical control and/or ownership, depending upon which in a given industry is more profitable as determined by the oligarchs. Ross is not in control of handing out bags of money to senators on their desks as did the zillionaires during the Gilded Age, but he is in control of smoothing the way for the superrich to finally and perhaps irrevocably remove you and me from having anything of substance to say about the fate of our economy, as I will note later in this post.

The summer edition of The American Prospect, my favorite political magazine, contains a piece entitled “Who is Wilbur Ross?” written by Rosemary Batt and Eileen Appelbaum, Cornell professor and senior economist, respectively, who together authored a book entitled “Private Equity at Work; When Wall Street Manages Main Street,” from which this summary is drawn. It is an excellent summary of just who Wilbur Ross is, but one which for some reason (and perhaps set out more fully in the book they co-authored) omits the fact that Ross was a co-director of the Bank of Cyprus before Trump appointed him Secretary of Commerce.

Such an omission in and of itself doesn’t tell us much until we come to know that the other director of the Bank of Cyprus was a Kremlin-connected Russian and that the bank was and is widely known as a means for Putin and Russian oligarchs to launder their plunder of Russian resources into Western investments via laundering of rubles into dollars, real estate and other such investments.

While a suspicious circumstance, that still doesn’t prove anything though it might be an interesting situation bearing further investigation, as does Trump’s sale of a piece of property in Florida worth $40 million for $80 million or more to a Russian, speaking of money laundering. Proof requiring a grand jury to convene and consider indictments? Not yet; we await the findings of Mr. Mueller, and I hope that he is looking into this Bank of Cyprus connection and just how far its corrupt if not criminal tentacles have penetrated the American political process via the likes of Ross, Trump and others, if at all.

Ross made his billions via buying up struggling or bankrupt companies on the cheap, paying pennies on the dollar to bond holders and dumping health and pension benefits for workers via a Chapter 11 process, among other such profiteering. Per Batt and Appelbaum, “He has relied on NAFTA and the WTO to offshore manufacturing jobs to Mexico and Asia; and has taken advantage of tax laws that privilege debt-financing and allow private-equity returns to be taxed at the low capital gains rate.” (Mitt Romney, another vulture capitalist, did the same thing in enjoying the redefinition of ordinary income as “carried interest,” paying taxes on more than 21 million dollars in income in 2010 at a rate of 13.7 percent, a rate less than that paid by those who trimmed the hedges of his estates.)

Ross (per Batt and Appelbaum) has posed as a friend of labor, a savior of bankrupt companies, a creator of jobs, a turnaround wizard. Such pretense is, of course, all designed to fatten his bottom line as he has been utterly ruthless in destroying the health and pension benefits of workers in corporations he has bought out of bankruptcy court at pennies on the dollar (and even those pennies with borrowed money and little of his own). He learned that a lot of money could be made as a bottom-feeder in the so-called art of distressed investing.

Ross in 1990 represented creditors in the bankruptcy case against Trump’s Taj Mahal casino when it went bankrupt after borrowing $675 million in high-risk junk bonds. He brokered the deal that allowed Trump to keep a major stake in the property. (This has all the markings of our bailout of insolvent Wall Street banks which left their banks and even their executives, shareholders, insurers and vendors intact – an even better deal than Ross engineered earlier with Trump when Trump’s casino failed.) One has to wonder (and I do) if Trump’s appointment of Ross to Secretary of Commerce is not in gratitude for how Ross arranged for Trump to hold “a major stake in the property” earlier in the bankruptcy of Trump’s casino, or for his help in laundering rubles at the Bank of Cyprus, or both, or for other such favors to which we are not privy. When driven by profit-making, ethics are in short supply and mum’s the word.

Perhaps the worst is yet to come. Trump wants to rebuild our infrastructure, a project I have favored for years, but guess what? He and Ross want to bring in a trillion dollars from Wall Street funders such as Ross in what amounts to privatization of much of our transportation system, or at least those parts that will be profitable to not all Americans but to those corridors where they can be repaid from tolls and other fees which you and I will have to pay. They are also inventing new tax dodges for such investors to protect what will be extracted from you and me in making their investments and collecting their tolls and fees; they are also inventing a runaround of Davis-Bacon prevailing wage rules and environmental protections by providing “maximum flexibility” to the states, all of which would increase profitability to the Wall Street investors where the oligarchy makes policy by contract while you and I are left out of the decision-making process. (Expect less renewal of rural roads and bridges, for instance, not because such roads and bridges do not need such attention but because such renewal is not profitable.) Blackstone, the largest private equity firm in the world, is already talking of raising as much as $40 billion for such a project, and its president has raised the possibility of achieving returns of as much as 40 percent. That is a great return on a riskless investment; compare it with your return at the bank and credit union.

I have blogged for years in favor of desperately needed repair and renewal of our infrastructure, our roads, bridges, airports, public buildings, ports etc., but now as presently to be proposed by Ross and Trump, I am against it. Increasingly and at an accelerating rate, our economy, our educational system, our national parks and (you name it) are owned or controlled by oligarchical interests in this country free of interference by the public they pretend to serve, and I don’t want to add public transportation to the list. Let’s have the public refurbish and control our infrastructure. So it costs money? It certainly does, but not nearly as much as it would if Wall Street builds it for us what with their 40 percent return on investment, tax free and prevailing wage dodges, post-renewal tolls and fees etc., not to mention exclusion of the public from any voice in the decision-making of how, where, when and how much.

We badly need to work on our infrastructure, but need to do it right. The Ross-Trump tax giveaway and surrender of public control proposal to the oligarchs is not right.     GERALD      E

 

 

 

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