Posts Tagged ‘Barack Obama’

The Russian Indictments — Where were James Clapper and John Brennan and the American intelligence community when the Kremlin was meddling?

February 17, 2018

 

Russian President Vladimir Putin in Moscow, Jan. 29.
Russian President Vladimir Putin in Moscow, Jan. 29. PHOTO: ALEXEI NIKOLSKY/ASSOCIATED PRESS

The Justice Department on Friday indicted three Russian companies and 13 individuals for interfering in the 2016 U.S. presidential election, and the man who should be most upset is Donald J. Trump. The 37-page indictment contains no evidence of collusion between Russia and the Trump campaign, but it does show a systematic effort to discredit the result of the 2016 election. On the evidence so far, President Trump has been the biggest victim of that effort, and he ought to be furious at Vladimir Putin.

The indictment documents a broad social-media and propaganda campaign operating out of Russia and involving hundreds of people starting in 2014 that “had a strategic goal to sow discord in the U.S. political system.” It certainly succeeded on that score, as Democrats and the media have claimed that Mr. Trump’s election is illegitimate because he conspired with Russia to defeat Hillary Clinton. The charge has roiled American politics and made governing more difficult.

The good news for Mr. Trump is that the indictment reveals no evidence of collusion. The Russians “posted derogatory information about a number of candidates,” the indictment says, and by 2016 “included supporting the presidential campaign of then-candidate Donald J. Trump” and “disparaging Hillary Clinton.” But it adds that the Russians “communicated with unwitting individuals associated with the Trump Campaign,” and it offers no claims of a conspiracy.

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Readers of the indictment will be amused at the comic opera details. In or around June 2016, for example, Russians posing online as Americans “communicated with a real U.S. person affiliated with a Texas-based grassroots organization.” This “real U.S. person” vouchsafed the deep political secret that the Russians “should focus their activities on ‘purple states like Colorado, Virginia & Florida.’” Sure enough, the Russians thereafter referred to targeting “purple states.” Someone actually paid Russians to collect this insight.

The indictment also contains no evidence that Russia’s meddling changed the electoral results. A U.S. presidential campaign is a maelstrom of information, charges and counter-charges, media reports and social-media chatter. The Russian Twitter bursts became part of this din and sought to reinforce existing biases more than they sought to change minds. Their Twitter hashtags included “#Hillary4Prison,” for example, which you could find at the souvenir desk at the GOP convention.

Yet none of this should let Twitter, Facebook or Google off the hook for being facilitators of this disinformation. The social-media sites and search engines clearly did far too little to police their content for malicious trolls and in the process misled millions of Americans. They need to do more to take responsibility for the content they midwife.

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James Clapper

The indictment also makes us wonder what the Obama Administration was doing amid all of this. Where were top Obama spooks James Clapper and John Brennan ? Their outrage became public only after their candidate lost the election. If they didn’t know what was going on, why not? And if they did, why didn’t they let Americans in on the secret? President Obama sanctioned Russia for its meddling only after the election.

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John Brennan. Photo by J. Scott Applewhite, The Associated Press.

The indictment’s details underscore Russia’s malicious anti-American purposes. An authoritarian regime spent tens of millions of dollars to erode public trust in American democracy. As Senator Ben Sasse (R., Neb.) put it Friday, “Putin’s shadow war is aimed at undermining Americans’ trust in our institutions. We know Russia is coming back in 2018 and 2020—we have to take the threat seriously.”

All of which makes the White House reaction on Friday strangely muted. Its statement understandably focused on the lack of collusion evidence and made one reference to “the agendas of bad actors, like Russia.” But given how much Russia’s meddling has damaged his first year in office, Mr. Trump should publicly declare his outrage at Russia on behalf of the American people. The Kremlin has weakened his Presidency. He should make Russia pay a price that Mr. Obama never did.

https://www.wsj.com/articles/the-russian-indictments-1518825574

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FBI Director James Comey and U.S. Attorney General Loretta Lynch attend a news conference at the Justice Department in Washington June 18, 2015. REUTERS/Yuri Gripas 

FBI Director James Comey and U.S. Attorney General Loretta Lynch attend a news conference at the Justice Department in Washington June 18, 2015. REUTERS/Yuri Gripas

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Eric Holder Warns Trump Risks Long-Term Damage to FBI, Justice Department (While The Swamp is Being Drained, Rats Try To Protect Each Other…)

February 8, 2018

Longtime Obama attorney general says the credibility of law-enforcement agents could be undermined in criminal cases

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Eric Holder. Getty Images

Former Attorney General Eric Holder warned that President Donald Trump’s attacks on top officials at the Federal Bureau of Investigation and Justice Department are undermining the credibility of law-enforcement agents investigating and prosecuting criminal cases.

Mr. Holder, who spent six years as attorney general under Democratic President Barack Obama, said that rank-and-file FBI agents testifying in court cases could face undue skepticism following the scorn aimed at the nation’s top law-enforcement agencies.

“I would hope that the president would rethink the way in which he has attacked career people in the FBI, career people at the Justice Department, the career people in our intelligence community, and think about the way in which he has spoken about his attorney general,” Mr. Holder said Wednesday.

The White House didn’t immediately respond to a request for comment.

Speaking to reporters at a Christian Science Monitor breakfast, Mr. Holder also talked about his own future, which could include a bid for elective office.

“I think I’ll make a decision by the end of the year about whether there is another chapter in my government service,” he said.

Possibly the presidency? a reporter asked.

“We’ll see,” said Mr. Holder.

Mr. Holder now chairs the National Democratic Redistricting Committee, a group supported by Mr. Obama that aims to produce what it says would be fairer electoral districts.

In the past year, Mr. Trump has lodged repeated attacks on leaders of the FBI and Department of Justice. White House aides said he was infuriated by Attorney General Jeff Sessions’s decision to recuse himself from the investigation into Russian interference in the 2016 election and possible collusion with the Trump campaign. Mr. Trump has also faulted Mr. Sessions for not aggressively investigating his 2016 opponent, Democrat Hillary Clinton.

In July, Mr. Trump tweeted that “Attorney General Jeff Session has taken a VERY weak position on Hillary Clinton crimes (where are E-mails & DNC server) & Intel leakers!”

In another tweet that month, Mr. Trump called Mr. Sessions “beleaguered” and again prodded him to look into what he called “Crooked Hillary’s crimes.”

After an extended investigation into Ms. Clinton’s use of a private email server while serving as secretary of state, the Justice Department declined to prosecute her in the summer of 2016.

Mr. Trump has also taken aim at the FBI leadership. In December, he tweeted that bureau’s reputation was in “tatters—the worst in History!”

A favorite target of the president has been ex-Deputy FBI Director Andrew McCabe, who stepped down last month. Mr. Trump had sought to focus attention on what he said was a conflict of interest involving Mr. McCabe’s wife, who ran unsuccessfully as a Democrat for a Virginia state Senate seat and received financial support from former Virginia Gov. Terry McAuliffe, an ally of Bill and Hillary Clinton.

Mr. Holder said that the “long-term negative, collateral consequences” of such messages from the president “are substantial.”

“They’re real,” he continued, “and I hope the president would pull back.”

Write to Peter Nicholas at peter.nicholas@wsj.com

 https://www.wsj.com/articles/eric-holder-warns-trump-risks-long-term-damage-to-fbi-justice-department-1518031844
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Who ruined the credibility of who?
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The Trump Panic

February 8, 2018

It was the belief that the elected president was unacceptable and had to be stopped.

FBI Director James Comey and U.S. Attorney General Loretta Lynch attend a news conference at the Justice Department in Washington June 18, 2015. REUTERS/Yuri Gripas 

FBI Director James Comey and U.S. Attorney General Loretta Lynch attend a news conference at the Justice Department in Washington June 18, 2015. REUTERS/Yuri Gripas

It is a historic spectacle. Washington is transfixed by dueling “memos” between Republicans and Democrats on the House Intelligence Committee over an FBI application to the Foreign Intelligence Surveillance Court to surveil Carter Page of the Trump presidential campaign.

The application included a 35-page “dossier” on Donald Trump prepared by former British spy Christopher Steele.

Donald Trump prepared by former British spy Christopher Steele.

The Washington press corps has kept the Trump-Russia collusion story before the American public for a year, and the president himself, speaking through his Twitter account, says he is the victim of a “witch hunt.”

How did this spectacle happen? Two salient and related events occurred on Nov. 8, 2016. Donald Trump defeated Hillary Clinton for the U.S. presidency. Within hours, the Trump Panic went viral.

The Trump Panic of 2016-17 was the belief that the U.S. presidency had fallen into the hands of an unacceptable person—who had to be stopped, or resisted by any means.

Historians will record that the Trump Panic gripped all Democrats, some Republicans, scores of intellectuals (such as those who signed documents declaring their refusal to work in the Trump foreign-policy agencies), foreign leaders, journalists, and members of U.S. security agencies.

On election day, two FBI officials— Peter Strzok of the bureau’s counterintelligence division and Lisa Page —exchanged text messages.

Page: “OMG THIS IS F***ING TERRIFYING.” Strzok: “Omg, I am so depressed.”

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Recall how routine it was then to hear or read that the new U.S. president resembled Hitler or Mussolini. Democracy was “at risk”—even as such non-Hitlerian pillars as Jim Mattis, Rex Tillerson and Gary Cohn joined the government.

Let us stipulate it is not beyond imagining that individuals at the FBI’s Washington headquarters or at the Justice Department are Democrats. This is Washington, and the sky is blue. Historically, though, it has been possible to believe a functional distinction existed in these sensitive bureaucracies between political impulse and professional responsibility.

Because of the Trump Panic, professional discipline eroded. Exhibit A will always be the Steele dossier. Spend 15 minutes reading it, and you will recognize a textbook example of the Russian Cold War art form of assembling published facts, half-truths, untruths and conspiracies into an eye-popping narrative that would embarrass Frederick Forsyth.

From page 33: “Referring back to the (surprise) sacking of Sergei IVANOV as Head of PA in August 2016, his replacement by Anton VAINO and the appointment of former Russian premier Sergei KIRIYENKO to another senior position in the PA, the Kremlin insider repeated that this had been directly connected to the TRUMP support operation and the need to cover up now that it was being exposed by the USG and in the western media.”

The Steele dossier is factoids on steroids. In normal times, the FBI would not include it in a submission to the FISA court. The Trump Panic wasn’t normal times. Decisions outside normal boundaries were considered justified.

Recall Sally Yates. After President Trump’s legally vulnerable travel-ban order, acting Attorney General Yates wrote, “For as long as I am the acting Attorney General, the Department of Justice will not present arguments in defense of th[is] executive order.” You won’t what?

By comparison, it is well known that during Barack Obama’s presidency, much of the U.S. military leadership abhorred his policies and directives. It is inconceivable that any of them would have refused to execute a similar order from Mr. Obama.

But this was the Trump Panic, and Ms. Yates’s act of professional insubordination elicited approval in an email from Andrew Weissman, head of the Justice Department’s criminal fraud section: “I am so proud. And in awe. Thank you so much.”

This doesn’t mean the FBI is off the rails. It means a handful of people in Director James Comey’s orbit at 935 Pennsylvania Avenue—products of an insular, inbred Beltway village—lost their professional bearings and succumbed to the zeitgeist of panic over the Trump presidency. Righting that ship is crucial.

We wrote at the outset that this is a spectacle. Which brings us, necessarily, to one of its ringmasters— Donald J. Trump.

Controversies come and go for any presidency. Some, such as Watergate and Whitewater, kept going because it was possible to report events that truly advanced the story. The Russian collusion story went moribund months ago, with Rep. Adam Schiff reduced this week to waving the Steele dossier as if it were the second coming of the Pumpkin Papers, which revealed Alger Hiss as a Russian dupe.

Anyone else in politics would have let the fires under the collusion issue burn down. Is it a potential legal problem? Sure. Should it be a destructive daily bonfire? No.

Mr. Trump is combative not for political reasons but because he’s been combative all his life. In the Washington Swamp he has found the ultimate Trumpian arena. The Swamp is his sparring partner. Don’t let the raging tweets fool you. He loves it.

Write henninger@wsj.com.

Appeared in the February 8, 2018, print edition as ‘The Trump Panic.’

https://www.wsj.com/articles/the-trump-panic-1518047183

See also:

http://dailycaller.com/2018/02/07/fbi-clinton-emails-marked-classified/

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More Emails Between FBI Agent Peter Strzok and Attorney Lisa Page Seem To Implicate Obama: “Potus wants to know everything we’re doing.”

February 7, 2018

By John Gibson
Fox News

Newly revealed text messages between FBI paramours Peter Strzok and Lisa Page include an exchange about preparing talking points for then-FBI Director James Comey to give to President Obama, who wanted “to know everything we’re doing.”

The message, from Page to Strzok, was among thousands of texts between the lovers reviewed by Fox News. The pair both worked at one point for Special Counsel Robert Mueller’s probe of alleged collusion between the Trump campaign and Russia.

Image result for Peter Strzok and Attorney Lisa Page, photos

Page wrote to Strzok on Sept. 2, 2016, about prepping Comey because “potus wants to know everything we’re doing.” According to a newly released Senate report, this text raises questions about Obama’s personal involvement in the Clinton email investigation.

In texts previously revealed, Strzok and Page have shown their disdain for Republicans in general, as well as Trump, calling him a “f—ing idiot,” among other insults.

Among the newly disclosed texts, Strzok also calls Virginians who voted against then-FBI Deputy Director Andrew McCabe’s wife for a state Senate seat “ignorant hillbillys.” (sic)

That text came from Strzok to Page on Nov. 4, 2015, the day after Jill McCabe lost a hotly contested Virginia state Senate election. Strzok said of the result, “Disappointing, but look at the district map. Loudon is being gentrified, but it’s still largely ignorant hillbillys. Good for her for running, but curious if she’s energized or never again.”

Sen. Ron Johnson, R-Wis., along with majority staff from the Senate Homeland Security and Governmental Affairs Committee, is releasing the texts, along with a report titled, “The Clinton Email Scandal and the FBI’s Investigation of it.”

The newly uncovered texts reveal a bit more about the timing of the discovery of “hundreds of thousands” of emails on former Congressman Anthony Weiner’s laptop, ultimately leading to Comey’s infamous letter to Congress just days before the 2016 presidential election.

On Sept. 28, 2016, Strzok wrote to Page, “Got called up to Andy’s [McCabe] earlier.. hundreds of thousands of emails turned over by Weiner’s atty to sdny [Southern District of New York], includes a ton of material from spouse [Huma Abedin]. Sending team up tomorrow to review… this will never end.” According to the Senate report, this text message raises questions about when FBI officials learned of emails relevant to the Hillary Clinton email investigation on the laptop belonging to Weiner, the husband to Clinton aide Huma Abedin.

It was a full month later, on Oct. 28, 2016, when Comey informed Congress that, “Due to recent developments,” the FBI was re-opening its Clinton email investigation.

“In connection with an unrelated case, the FBI has learned of the existence of emails that appear to be pertinent to the investigation. I am writing to inform you that the investigative team briefed me on this yesterday…” Comey said at the time.

The question becomes why Comey was only informed by his investigative team on Oct.  27, if the Clinton emails on Weiner’s laptop were discovered by Sept. 28, at the latest.

Other texts show more examples of the officials’ opposition to Trump.

On Election Day 2016, Page wrote, “OMG THIS IS F***ING TERRIFYING.” Strzok replied, “Omg, I am so depressed.” Later that month, on Nov. 13, 2016, Page wrote, “I bought all the president’s men. Figure I need to brush up on watergate.”

The next day, Nov. 14, 2016, Page wrote, “God, being here makes me angry. Lots of high fallutin’ national security talk. Meanwhile we have OUR task ahead of us.”

Page’s meaning here is unclear, but Senate investigators say, coupled with Strzok’s Aug. 15 text about an “insurance policy,” further investigation is warranted to find out what actions the two may have taken.

The last text is from Page to Strzok, and comes on June 23, 2017, when she wrote, “Please don’t ever text me again.”

It’s unclear whether she was mad at her friend, or if she suddenly became aware that they, and their thousands of texts, had been discovered.

http://www.foxnews.com/politics/2018/02/07/more-texts-between-strzok-and-page-uncovered-lead-to-more-questions.html

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GOP memo proves the ‘deep state’ is real

February 4, 2018

By Michael Goodwin
The New York Post
February 3, 2018

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James Comey. Credit Getty Images

Now that we know what the declassified House memo says about government misconduct, we also know what it means: The Washington swamp — the deep state — is bigger, more vicious and more dangerous to American liberty than even a cynic could have imagined.

Because of the memo and previous revelations, we know that swamp creatures are embedded in the top of the FBI and the Department of Justice. Some used their power to try to tip a presidential campaign based on their personal politics.

They conducted a sham investigation of the Democratic candidate and misled federal judges to spy on at least one associate of her Republican challenger.

To block exposure of their misdeeds, these officials falsely claimed that national security would be damaged. Add that despicable lie — issued in the name of the FBI itself — to their shameful records.

Thanks to the battle over the memo, we also know with 100 percent certainty that the mainstream media is part of the swamp. The efforts by The New York Times and The Washington Post, among others, to keep the memo from ever seeing sunshine were appalling.

Before it saw the memo, the Times’ editorial page called it proof of “The Republican Plot Against the FBI.” A Washington Post columnist warned President Trump he would be making a historic mistake in releasing it.

“Presidents don’t win fights with the FBI,” Eugene Robinson wrote, seemingly endorsing the blackmailing habits of the disgraced J. Edgar Hoover.

Oddly, the campaign by those papers coincided with the celebration of their roles in releasing the Pentagon Papers nearly 50 years ago, as heroically depicted in the movie “The Post.”

Then, those papers took great risks in standing up for the First Amendment in the face of government threats and financial pressures. Now, those same papers take the side of butt-covering secrecy and demonize those who demand transparency.

Those organizations are betraying their legacies and their duties as journalists. They share with corrupt officials a hatred of Donald Trump and believe that ending his presidency justifies any and all means.

Their motives are as partisan as that of the Democrats who fought tooth and nail to scuttle the memo.

alk about being on the wrong side of history.

The details of the memo make a strong case that current and former officials committed crimes by misleading FISA court judges in seeking four surveillance warrants against Carter Page, a bit player in the Trump campaign ­orbit.

Those details seal the sordid legacy of former FBI Director James Comey. He signed off on three warrant requests, reportedly without informing the judges that the essential piece of evidence against Page was the infamous Russian dossier paid for by Hillary Clinton’s campaign and the Democratic National Committee.

Months later, Comey himself told Congress the dossier was “salacious and unverified,” yet was secretly willing to use it in court against Page.

Its author, Christopher Steele, a former British spy, never went to Russia to interview his paid sources, some of whom were Kremlin officials. Did the judges know any of that before letting the FBI read Page’s e-mails and listen to his phone calls?

Steele was hired by the FBI, then fired when he shared his dossier with the press and lied about it. He also confided to an agent that he loathed Trump and “was passionate about him not ­being president.”

Did the agent, Bruce Ohr, whose wife worked for the same firm as Steele, Fusion GPS, tell the judges that? Did Comey? The memo says no.

Without knowing that partisan link, the court was deprived of evidence that would have called into question the surveillance request. Indeed, the memo claims that Andrew McCabe, the former deputy FBI director removed for his conduct during the separate Clinton investigation, testified that no warrant would have been sought “without the Steele dossier information.”

Not incidentally, current FBI Director Christopher Wray and his team read the memo before it was released, and did not dispute ­McCabe’s claim.

To the Trump haters, these facts don’t matter. He is, in their minds, unfit to be president, so nothing short of assassination is out of bounds.

Yet it is a mistake to view the memo’s revelations through the lens of whether you like Trump, or what you think of Carter Page. The ultimate issues are no more limited to them than were other landmark moments in American history limited by the personal ­interests of the parties involved.

The case in which Nazis were permitted to march in the Jewish neighborhood of Skokie, Ill., was not an approval of Nazis. The issue was whether repugnant speech has the same rights as popular speech.

The Supreme Court effectively said it did in a 1977 ruling that strengthened First Amendment rights for all Americans.

Similarly, the “Miranda warning” that allows a suspect in police custody to remain silent to avoid self-incrimination stems from a case involving a hideously violent criminal. Ernesto Miranda ultimately was convicted of kidnapping and rape, yet all suspects, innocent and guilty, benefit from the 1966 Supreme Court ruling in his favor.

Rulings like those weave the Founders’ ideals of equality into the fabric of contemporary life and make America the beacon of hope to the world.

Something even larger is now at stake. Trump is the great disrupter who has overthrown the established political order like no one in modern history, and many opponents have lost their bearings in resisting his presidency.

In their rage and bigotry, they are willing to abandon fundamental principles. We only know this because he won the election; none of this shocking misconduct would have been revealed under a Hillary Clinton presidency.

The claims in the memo that FBI and Justice officials acted corruptly should concern all fair-minded Americans, regardless of political preference. Those claims force us to ask whether we are a nation of laws that apply equally to all.

If not, we are no longer America. We are a banana republic where it’s acceptable for the government to use its police powers against political opponents.

The choice we face is especially stark given that the case at hand potentially implicates other top aides to former President Barack Obama. Recall that Page and others linked to Trump were accused of having ties to Russia, then their names were leaked to the media in a bid to sway the election and then to topple the president. There may be other flimsy FISA applications covering other Trump associates we don’t yet know about.

The memo is a giant step in ­uncovering what appears to be an unprecedented conspiracy, but it is not the endgame. More documents, congressional hearings, investigations and criminal prosecutions are unavoidable.

Hysterical Trump haters greeted the memo’s release by declaring that we face a constitutional crisis. They are right — and they are creating it.

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https://nypost.com/2018/02/03/the-gop-memo-proves-the-deep-state-is-real/?utm_campaign=iosapp&utm_source=mail_app

The Antitrust Case Against Facebook, Google and Amazon

January 17, 2018

Facebook, Google and Amazon dominate their worlds just as Standard Oil and AT&T once did. Critics say they should get the same treatment. The answer to the antitrust question depends on a narrow test:

By Greg Ip
The Wall Street Journal
Jan. 16, 2018 11:52 a.m. ET

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Standard Oil Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.

Today’s tech giants are just as dominant: In the U.S., Alphabet Inc.’s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren’t monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.

A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns’ shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?

By that standard, there isn’t a clear case for going after big tech—at least for now. They are driving down prices and rolling out new and often improved products and services every week.

That may not be true in the future: If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department’s antitrust division under Barack Obama.

Google which has spent the past eight years in the sights of European and American antitrust authorities, is hardly a price gouger. Most of its products are free to consumers and the price advertisers pay Google per click has fallen by a third the past three years. The company remains an innovation powerhouse, investing in new products such as its voice-activated assistant Google Home.

Google’s booth at the 2018 Consumer Electronics Show in Las Vegas.Photo: David Paul Morris/Bloomberg News

Yet Google’s monopoly means some features and prices that competitors offered never made it in front of customers. Yelp Inc., which in 2004 began aggregating detailed information and user reviews of local services, such as restaurants and stores, claims Google altered its search results to hurt Yelp and help its own competing service. While Yelp survived, it has retreated from Europe, and several similar local search services have faded.

“Forty percent of Google search is local,” says Luther Lowe, the company’s head of public policy. “There should be hundreds of Yelps. There’s not. No one is pitching investors to build a service that relies on discovery through Facebook or Google to grow, because venture capitalists think it’s a poor bet.”

There are key differences between today’s tech giants and monopolists of previous eras. Standard Oil and AT&T used trusts, regulations and patents to keep out or co-opt competitors. They were respected but unloved. By contrast, Google and Facebook give away their main product, while Amazon undercuts traditional retailers so aggressively it may be holding down inflation. None enjoys a government-sanctioned monopoly; all invest prodigiously in new products. Alphabet plows 16% of revenue back into research and development; for Facebook it’s 21%—ratios far higher than other companies. All are among the public’s most loved brands, according to polls by Morning Consult.

Yet there are also important parallels. The monopolies of old and of today were built on proprietary technology and physical networks that drove down costs while locking in customers, erecting formidable barriers to entry. Just as Standard Oil and AT&T were once critical to the nation’s economic infrastructure, today’s tech giants are gatekeepers to the internet economy. If they’re imposing a cost, it may not be what customers pay but the products they never see.

In its youth Standard Oil was as revered for its technological and commercial brilliance as any big tech company today. John D. Rockefeller began with a single refinery in Cleveland in 1863 and over the next few decades acquired other, weaker refineries. Those that wouldn’t sell, he underpriced and drove out of business. By 1904, companies controlled by Standard Oil produced 87% of refined oil output, according to Mike Scherer, a retired Harvard economist who has written extensively on antitrust.

This wasn’t superficially bad for consumers. The price of kerosene, the principal refined product from oil, fell steadily as Standard Oil’s market share expanded, thanks to falling crude oil prices and Standard Oil’s economies of scale, bargaining power with suppliers such as railroads, and innovation, such as the Frasch-Burton process for deriving kerosene from high-sulfur oil in Ohio.

Standard Oil’s refinery in Richmond, Calif., in 1911.Photo: Library of Congress/Corbis/VCG/Getty Images

When the federal government sued to break up Standard Oil, the Supreme Court acknowledged business acumen was important to the company’s early success, but concluded that was eventually supplanted by a single-minded determination to drive others out of the market.

In a 2005 paper, Mr. Scherer found that Standard Oil was indeed a prolific generator of patents in its early years, but that slowed once it achieved dominance. Around 1909 Standard’s Indiana unit invented “thermal cracking” to improve gasoline refining to meet nascent demand from automobiles, but the company’s head office thought the technology too dangerous and refused to commercialize it. After the Indiana unit was spun off when the company was broken up in 1911, it commercialized the technology to enormous success, Mr. Scherer wrote.

The story of AT&T is similar. It owed its early growth and dominant market position to Alexander Graham Bell’s 1876 patent for the telephone. After the related patents expired in the 1890s, new exchanges sprung up in countless cities to compete.

Competition was a powerful prod to innovation: Independent companies, by installing twisted copper lines and automatic switching, forced AT&T to do the same. But AT&T, like today’s tech giants, had “network effects” on its side.

“Just like people joined Facebook because everyone else was on Facebook, the biggest competitive advantage AT&T had was that it was interconnected,” says Milton Mueller, a professor at the Georgia Institute of Technology who has studied the history of technology policy.

Early in the 20th century, AT&T began buying up local competitors and refusing to connect independent exchanges to its long-distance lines, arousing antitrust complaints. By the 1920s, it was allowed to become a monopoly in exchange for universal service in the communities it served. By 1939, the company carried more than 90% of calls.

Though AT&T’s research unit, Bell Labs, became synonymous with groundbreaking discoveries, in telephone innovation AT&T was a laggard. To protect its own lucrative equipment business it prohibited innovative devices such as the Hush-a-Phone, which kept others from overhearing calls, and the Carterphone, which patched calls over radio airwaves, from connecting to its network.

After AT&T was broken up into separate local and long-distance companies in 1982, telecommunication innovation blossomed, spreading to digital switching, fiber optics, cellphones—and the internet.

Just as AT&T decided what equipment could be used on the nation’s telephone systems, Google’s search algorithms determine who can be found on the internet. If you searched for a toaster online in the mid 2000s, Google would probably have taken you to comparison shopping sites such as Nextag. They pioneered features such as showing consumer ratings in search results, how popular a product was and how prices had changed over time, recalls Gary Reback, an antitrust lawyer who represented several competitors against Google.

Google’s Eric Schmidt testifying at a Senate Judiciary Committee antitrust hearing in September 2011.Photo: Chip Somodevilla/Getty Images

But when Google launched its own comparison business, Google Shopping, those sites found themselves dropping deeper into Google’s search results. They accused Google of changing its algorithm to favor its own results. The company responded that its algorithm was designed to give customers the results they want. “If consumers don’t like the answer that Google Search provides, they can switch to another search engine with just one click,” Executive Chairman Eric Schmidt told Congress in 2011.

At that same hearing Jeffrey Katz, then the chief executive of Nextag, responded, “That is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”

In 2013 the U.S. Federal Trade Commission concluded that even if Google had hurt competitors, it was to serve consumers better, and declined to bring a case. Since then, comparison sites such as Nextag have largely faded.

Last year the European Commission went in the other direction and fined the company $2.9 billion and ordered it to change its search results.

The different outcomes hinge in part on different approaches. European regulators are more likely to see a shrinking pool of competitors as inherently bad for both competition and consumers. American regulators are more open to the possibility that it could be natural and benign.

In new industries, smaller players are frequently bought up or vanquished by deeper-pocketed, more-innovative rivals. Google’s general counsel, Kent Walker, wrote in response to the European Commission decision that even as smaller sites have retreated, Amazon has grown to become a huge player in comparison shopping.

Internet platforms have high fixed and minimal operating costs, which favors consolidation into a few deep-pocketed competitors. And the more customers a platform has, the more useful it is to each individual customer—the “network effect.”

But a platform that confers monopoly in one market can be leveraged to dominate another. Facebook’s existing user base enabled it to become the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014. It is also muscling into virtual reality through its acquisition of Oculus VR in 2014 and anonymous polling with its purchase of TBH last year.

Facebook founder Mark Zuckerberg speaks at a developers conference last year in San Jose, Calif.Photo: Stephen Lam/REUTERS

What Facebook doesn’t acquire, it copies. Snap Inc.’s Snapchat, a fast-disappearing photo and video sharing app hugely popular with teenagers, was widely seen as a challenger to Facebook. But in 2016, Facebook introduced its own Snapchat-like feature, Stories, on Instagram, which now has more users and advertisers than Snapchat. That has undercut Snap’s growth and profits by reducing the number of new users “interested in trying Snap for the first time,” says Peter Stabler, an analyst at Wells Fargo.

There’s nothing wrong with copying, especially if the copy is better than the original. Snapchat’s app was originally difficult to use, says Mr. Stabler, and “you can’t discount [Facebook’s] quality of execution.” Moreover, even as Facebook copies its competitors, it continues to expand and enhance its own services such as Pages, which 70 million businesses world-wide have used to design their own webpages on Facebook.

Snap’s shares have sunk below the price at which the company went public last March as losses have mounted, which won’t encourage new entrants. Once a company like Google or Facebook has critical mass, “the venture capital looks elsewhere,” says Roger McNamee of Elevation Partners, a technology-focused private-equity firm. “There’s no point taking on someone with a three or four years head start.”

Amazon hasn’t yet reached the same market share as Google or Facebook but its position is arguably even more impregnable because it enjoys both physical and technological barriers to entry. Its roughly 75 fulfillment centers and state-of-the art logistics (including robots) put it closer, in time and space, to customers than any other online retailer.

The company says size makes it possible to deliver millions of items free of shipping charges to isolated communities with little retail presence. Amazon makes that network available to third-party merchants who pay a 15% commission and, typically, a $3 pick-pack-and ship-fee, says Greg Mercer, founder of Jungle Scout Inc. which advises third-party merchants how to sell on Amazon. “We have tons of examples of small entrepreneurial-type people who are really good at creating new inventions but have no idea how to distribute to the masses,” he says. “They create products and Amazon can take care of the rest.”

An Amazon warehouse in Britain.Photo: Jane Barlow/PA Images/Getty Images

As the dominant platform for third-party online sales, Amazon also has access to data it can use to decide what products to sell itself. In 2016 Capitol Forum, a news service that investigates anticompetitive behavior, reported that when a shopper views an Amazon private-label clothing brand, the accompanying list of items labeled “Customers Who Bought This Item Also Bought,” is also dominated by Amazon’s private-label brands. This, it says, restricts competing sellers’ access to a prime marketing space

Mr. Mercer says he doesn’t see Amazon favoring its own products, and indeed his own firm helps merchants target profitable niches on Amazon. Nonetheless, he says many would prefer to sell through their own sites, but with so many shoppers searching first on Amazon, they feel they have little choice.

In the face of such accusations, the probability of regulatory action—for now—looks low, largely because U.S. regulators have a relatively high bar to clear: Do consumers suffer?

“We think consumer welfare is the right standard,” Bruce Hoffman, the FTC’s acting director of the bureau of competition, recently told a panel on antitrust law and innovation. “We have tried other standards. They were dismal failures.”

Still, Ms. Scott Morton notes, “the consumer welfare standard covers today and tomorrow,” and the potential loss of innovation is something both the law and the courts can and have weighed in an antitrust case. The Justice Department sued Microsoft to ensure that an innovation, the internet browser, remained a potential competitor to Microsoft’s monopoly over the user’s interface with the personal computer.

Microsoft Chairman Bill Gates appeared at an antitrust hearing in Washington federal court in 2002.Photo: STEPHEN JAFFE/AFP/Getty Images

What would remedies look like? Since Big Tech owes its network effects to data, one often-proposed fix is to give users ownership of their own data: the “social graph” of connections on Facebook, or their search history on Google and Amazon. They could then take it to a competitor.

A more drastic remedy would be to block acquisitions of companies that might one day be a competing platform. British regulators let Facebook buy Instagram in part because Instagram didn’t sell ads, which they argued made them different businesses. In fact, Facebook used Instagram to engage users longer and thus sell more ads, Ben Thompson, wrote in his technology newsletter Stratechery. Building a network is “extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention.” Thus, maintaining competition on the internet requires keeping “social networks in separate competitive companies.”

How sound are these premises? Google’s and Facebook’s access to that data and network effects might seem like an impregnable barrier, but the same appeared to be true of America Online’s membership, Yahoo ’s search engine and Apple’s iTunes store, note two economists, David Evans and Richard Schmalensee, in a recent paper. All saw their dominance recede in the face of disruptive competition. If someone launched a clearly superior search engine, social network or online store, consumers could switch more easily than they could telephone or oil companies a century ago. Microsoft has long dominated desktop operating systems but has failed to extend that dominance to internet search or to mobile operating systems.

It’s possible Microsoft might have become the dominant company in search and mobile without the scrutiny the federal antitrust case brought. Throughout history, entrepreneurs have often needed the government’s help to dislodge a monopolist—and may one day need it again.

Write to Greg Ip at greg.ip@wsj.com

https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561

US task force to probe Hezbollah ‘narcoterror’

January 11, 2018

AFP

© AL-MAYADEEN/AFP/File | Hezbollah, whose leader Hassan Nasrallah is pictured here during a recent television interview, is one of the dominant forces in Lebanese politics

WASHINGTON (AFP) – 

The US Justice Department announced Thursday creation of a special task force to investigate what it called “narcoterrorism” by the powerful Lebanese movement Hezbollah.

The unit will comprise specialists on money-laundering, drug trafficking, terrorism and organized crime, targeting Iran ally Hezbollah’s sprawling network, whose reach extends across Africa and into Central and South America, the department said.

“The Justice Department will leave no stone unturned in order to eliminate threats to our citizens from terrorist organizations and to stem the tide of the devastating drug crisis,” said Attorney General Jeff Sessions.

“The team will initiate prosecutions that will restrict the flow of money to foreign terrorist organizations as well as disrupt violent international drug trafficking operations.”

The move comes amid a stepped-up effort to battle Iran’s growing influence in the Middle East and the expanded military capabilities of Hezbollah, a dominant force in Lebanese politics.

But Sessions said the creation of the Hezbollah Financing and Narcoterrorism Team was also a response to criticisms that former president Barack Obama held back from cracking down on Hezbollah’s global networks, investigated under the previous Project Cassandra, in order to achieve the nuclear deal with Iran.

“The HFNT will begin by assessing the evidence in existing investigations, including cases stemming from Project Cassandra, a law enforcement initiative targeting Hezbollah’s drug trafficking and related operations,” the department said.

Officials in Washington and US allies Saudi Arabia and Israel, have increasingly raised the alarm over Hezbollah’s growing power in Lebanon and around the world.

On Wednesday, former top Treasury Department sanctions official Juan Zarate told Congress that Hezbollah’s drug smuggling and money laundering operations are global in scale.

“Recent actions by the Drug Enforcement Administration (DEA) and Treasury to dismantle networks of Hezbollah’s ‘Business Affairs Component’ have exposed financial and trade nodes that the Hezbollah operates and led to arrests and enforcement actions around the world,” he told a hearing of the House Foreign Affairs Committee.

– Obama accused of holding back –

The US has long targeted Hezbollah with sanctions. A 2007 presidential order allowed the seizure of property of “persons undermining the sovereignty of Lebanon,” not naming the group but clearly aimed at it.

In 2011 the Obama administration unleashed a crackdown on the group’s far-flung associates, designating Beirut-based Lebanese Canadian Bank a “primary money laundering concern” for handling the funds of alleged Hezbollah drug kingpin Ayman Joumaa.

The US Treasury and Drug Enforcement Administration later described a massive operation involving Colombia and Panama-based drug traffickers shipping multi-tonne amounts of cocaine to the United States, Europe and elsewhere.

The network laundered billions of dollars of their own money and that of other traffickers through Panama shell companies, various banks in Lebanon and elsewhere, and an operation that exported tens of thousands of used cars from the United States for sale in West Africa.

According to former DEA official Derek Maltz, Hezbollah most recently used the proceeds to buy weapons for the group’s operations in Syria, and some of the funds have also made their way to Yemen, where Iran-backed rebels are battling Saudi-supported government forces for control of the country.

However, Maltz and others in the law enforcement community have accused Obama of refraining from taking action against certain figures and entities in the Hezbollah network while he sought with five other world powers to complete the 2015 deal with Iran to curb its nuclear program.

Netanyahu Asked Obama to Consider Giving Palestinians Land in Sinai, Former U.S. Officials Say

January 11, 2018

Former U.S. officials say Netanyahu floated idea in exchange for annexing swaths of the West Bank, but it was non-starter for Palestinians ■ Prime Minister’s Office denies the account

By Amir Tibon (Washington) Jan 11, 2018 1:09 PM
Haaretz
Barack Obama, Benjamin Netanyah and Abdel Fattah al-Sisi.

Barack Obama, Benjamin Netanyah and Abdel Fattah al-Sisi. REUTERS/Mark Makela, Dario Pignatelli/Bloomberg, REUTERS/Alexander Zemlianichenko
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WASHINGTON – Prime Minister Benjamin Netanyahu asked the Obama administration in late 2014 to consider a plan in which Israel would annex large parts of the West Bank, and the Palestinians would in return receive land from Egypt in the northern part of Sinai, according to four former senior U.S. officials. The Prime Minister’s Office denied the account, stating that “this story is not true.”

The officials, all of whom spoke on condition of anonymity and had direct knowledge of the relevant conversations, told Haaretz that Netanyahu raised the idea with U.S. President Barack Obama and Secretary of State John Kerry on a number of occasions.
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The officials also said that Netanyahu told Obama and Kerry that in his view, it was possible to convince Egyptian President Abdel Fatah al-Sissi to accept the idea. The Obama administration heard directly from Egypt, however, that it wouldn’t accept such an idea, and came to a conclusion that neither would the Palestinians.

Netanyahu’s idea, according to the officials, wasn’t to set up a Palestinian state in Sinai instead of in the West Bank – as some Israeli officials have suggested in recent years – but rather to create a Palestinian state in some parts of the West Bank and “compensate” the Palestinians for massive Israeli annexation in and around the settlements by attaching lands in northern Sinai to Gaza.

The idea which the officials say was raised by Netanyahu in 2014 is somewhat similar to those mentioned in a number of recent news reports about the Trump administration’s peace plan, which is currently in the process of being drafted. Last month, The New York Times reported that Saudi Arabia’s Crown Prince Mohammed bin Salman presented a plan along those lines to Palestinian President Mahmoud Abbas during a meeting in Riyadh.

On Monday, Israeli journalist Ben Caspit wrote in the newspaper Maariv that the plan Jared Kushner’s team is working on would include land swaps in the Sinai.

Kushner is the president’s son-in-law and senior adviser. Among his many roles in the White House is heading peace efforts in a bid to resolve the Israeli-Palestinian conflict.

The White House, however, has strongly and consistently denied such reports, calling them “a mix of ill-informed speculation and utter nonsense” and far from the actual content of the peace plan. Their plan, they said, “will benefit Israelis and Palestinians and will be revealed when it is done and the time is right.”

The Times report about a Sinai-based land swap was also denied by Saudi Arabia and the Palestinian Authority.

But according to the officials who spoke with Haaretz, back in 2014 it was Netanyahu himself who raised a similar idea with the Americans. “It started shortly after the 2014 Gaza war,” one of the officials said. “Netanyahu came to meet Obama in the fall of 2014, and his pitch was basically: ‘John Kerry’s peace talks fell apart a few months ago, we just had a war, and now the peace process is stuck. So I want to offer you a different kind of idea.’”

Netanyahu, according to this former official and three others who participated in the relevant discussions, told Obama and Kerry that under his new plan, Israel would annex a large part of West Bank. “He used the term ‘settlement blocs’ but didn’t provide a map that actually defines those blocs,” one of the officials said. But the idea was the majority of the West Bank would still eventually become a future Palestinian state. The “compensation” given to the Palestinians for the land annexed by Israel would come not in the form of a land swap with Israel itself, but instead, through Egypt ceding territory in northern Sinai and attaching it to Gaza.

“We all thought this idea was a waste of time,” one of the officials said. “We knew it would be a complete non-starter for the Palestinians – why would they trade agricultural lands in the West Bank, close to their largest cities, for sand dunes in Sinai?”

Another official said that “Northern Sinai is home to one of the most powerful ISIS-inspired insurgencies in the world. Why would the Palestinians agree to take responsibility for it, in return for Israel getting to keep more of its settlements? It didn’t make sense to us.”

When the Obama administration reached out to Egyptian officials to ask them if they had discussed the idea with Israel, the reply was negative. “The first time I heard Netanyahu talking about this was in late 2014,” said one of the officials. “By the time Netanyahu, Kerry and Sissi met at the secret Aqaba summit [in January 2016], this idea was already off the table. No one talked about it in Aqaba.”

The Prime Minister’s Office, as mentioned above, denied the former officials’ account.

As to whether or not this idea is in fact part of the Trump administration’s peace plan, all the officials said they did not have enough information about Kushner’s work in order to answer that question.

“I wish them luck,” one of them said, “and I hope their plan is better than what is being written about it in the papers.”

Amir Tibon
read more: https://www.haaretz.com/israel-news/.premium-1.834035

The Non-Accidental Presidency

January 7, 2018

Donald Trump didn’t want to be president. History had another idea.

Donald Trump in New York on election night, 2016.

Donald Trump in New York on election night, 2016. PHOTO: MARK WILSON/GETTY IMAGES

If this column had a hobby horse through 2016, it was that Donald Trump didn’t want to be president. Our fear, after the election, was that he would basically refuse to take the job fully on.

Whatever its flights of fancy, Michael Wolff’s new book documents this most interesting reality, from which all the administration’s early chaos flowed. His entourage, right up to election night, believed “not only would Trump not be president, almost everyone in the campaign agreed, he should probably not be.”

This was obvious at the time except to Never Trumpers who were too busy trying to protect their reputations from a Trumpism that didn’t exist, from a guy who represented much less than they imagined, malign or otherwise.

One sorry upshot is that a significant part of the conservative commentariat is missing the great political story of our time because they can’t stop writing about themselves.

Along the way they also muffed what parties are for. In a two-party system, they aren’t, and can’t be, vessels of immutable principle.

The parties—specifically the Republican Party—turn out to be one more American institution capable of bending without breaking, affording (in this case) a way for voters to register exhaustion with the political status quo, even if the end result has the flavor of an accident.

Though, when an accident has so many authors it begins to seem like something more. Hillary Clinton and her Democrats whiffed on the biggest hanging curve in history. Barack Obama, after the 2008 financial crisis, chose to focus on redistribution rather than restoring the economy’s dynamism. If this had been anything resembling the wise choice, Mr. Trump would not be president now.

Even FBI chief James Comey admitted to a mild case of nausea due to the likelihood that the bureaucracy’s (foolish and improper) intervention on Hillary’s behalf helped elect Mr. Trump.

Meanwhile, the press still looks for the Russia collusion narrative somehow to repair matters. Coverage of Mr. Wolff’s book dwells inordinately on a Steve Bannon quote calling Don Jr.’s meeting with a Kremlin lobbyist “treasonous.”

Read on, and by “treasonous” Mr. Bannon means “stupid.” The Trump campaign should have sent a cutout to meet a Russian emissary far from Trump Tower. Any “dirt” on Hillary should have been quietly channeled to Breitbart “or maybe some other more legitimate publication.”

In other words, the campaign should have played the Russia angle the way those pros at the Hillary Clinton campaign did.

Now a 70-year-old grandfather with a 10-figure stake in our status quo world (even if it’s not as big a 10-figure stake as he likes to pretend) is president despite himself.

His violations of the “norms” are perhaps not as apocalyptic as the Chicken Littles say. They are certainly unlikely to be emulated by whoever comes along next. In the meantime, he’s playing his role usefully.

His corporate tax reform was overdue. His curbing of Washington’s regulatory excesses leaves the country better off. There is movement on North Korea’s nukes, a problem that four presidents conspired to dump in Mr. Trump’s lap. His immigration and trade actions are more difference-splitting than the press likes to admit.

Apparently we are meant to learn from this episode that a president can find his way without being a scholar of public policy.

Yes, Mr. Trump’s fibbing is annoying although it allows him to unload stances by denying he ever took them. The many now calling him an idiot fail to perceive how completely they would appear to be idiots if they left their cozy, familiar, reinforcing milieus and landed themselves over their heads in a job like the presidency.

Mr. Trump still has a problem with women. His sexual attitudes, which he once flaunted for branding purposes, are basically those celebrated in the mass media circa 1979, though the same attitudes apparently still have a hold on many middle-aged male journalists, judging from recent scandals.

But voters knew about Mr. Trump’s past and elected him anyway. He can always claim that, in his experience, women considered it flattering when a celebrity billionaire made a pass at them. He’ll have a microscopic point and need it, because Democrats are sizing up his sexual past as the next battering ram now that Russia is not panning out.

And then, poof, his presidency will be over before you know it, and will be looked back on (like every presidency) as a mixed bag. Yet here’s betting Mr. Trump will leave in his wake a political world more open to hopeful possibility than the world that, during 16 years of Bush-Obama, showed itself mainly capable of doing one stupid, or at least ultimately unproductive, thing after another.

Appeared in the January 6, 2018, print edition.

Make Iran Great Again

January 4, 2018

Like Barack Obama, Iran’s leaders don’t know how a real economy works.

U.N. Ambassador Samantha Power, National Security Advisor Susan E. Rice, Secretary of State John Kerry and President Obama at the United Nations in New York City, Sept. 25, 2014.
U.N. Ambassador Samantha Power, National Security Advisor Susan E. Rice, Secretary of State John Kerry and President Obama at the United Nations in New York City, Sept. 25, 2014. PHOTO: ANTHONY BEHAR-POOL/GETTY IMAGES

Iran erupted last Thursday. By Friday, the protests against the government, which began in Mashhad near the Afghan border, had spread to dozens of cities. So when we traveled on Saturday to a movie theater on Manhattan’s Lower East Side to see “Darkest Hour,” Gary Oldman’s portrayal of Winston Churchill, imagine the jarring dislocation when the theater’s previews included a trailer for an admiring documentary of Barack Obama’s foreign-policy making, “The Final Year.”

The preview screen filled with expressions of earnest intent from Mr. Obama, Susan Rice, Samantha Power, Ben Rhodes and the Iran nuclear deal’s handmaiden, John Kerry. About 100 minutes later, we were watching Churchill shout at his war cabinet that you cannot do deals with dictators. That would have been about the time this weekend that protesters in Iran were shouting “Death to Khamenei !” It’s nice to see the Iranian people have a sense of humor.

Producing the past week’s protests against the Iranian regime was not the goal of the six-party Iran nuclear deal. Back then, the Khamenei-Rouhani regime was represented as America’s partner in a good cause. Now the governments of the U.S., U.K., France and Germany (Russia is a Khamenei ally, and China only supports crackdowns) have to decide whether their Iranian partner is the people in the streets or the government that is shooting them.

In the preview of “The Final Year,” the Obama team members convey confidence in the rightness of everything they did. But as we learned in November 2016, there was one big thing the Obama people never understood: how a real economy works. By real economy, I mean the private economy, not the economy of public spending.

A central element of the nuclear deal was that it would “help” the Iranian people by lifting sanctions and injecting $100 billion of unfrozen assets into Iran’s economy. This was much the same economic theory behind the Obama administration’s 2009 injection of $832 billion into the U.S. economy. Both flopped because both made the real economy essentially a bystander to state guidance.

The Obama $832 billion went up the government’s fireplace flue. The Iranian $100 billion went into ballistic missile production and for Iran’s proxies in Syria, Yemen, Lebanon and the Gaza Strip.

The moment has arrived for invidious comparisons.

Donald Trump is president because the Obama-Clinton Democrats forgot about hard-pressed voters in Pennsylvania, Wisconsin and Michigan. The Khamenei-Rouhani regime is under assault because working-class Iranians began this week’s revolt in cities beyond the capital.

Come to think of it, isn’t that disconnect between the people running governments and the people trying to make a living in the real economy the core reason behind the world-wide burst of populism?

It’s the reason France’s working-class voters and young, underemployed college graduates sent Emmanuel Macron and a heretofore nonexistent party into the French presidency. It’s the reason working-class Brits lunged for Brexit. This new global reality—perform or get shoved aside—is the reason Saudi Arabia’s Prince Mohammed bin Salman imposed reforms.

The Iranians shouting, “Leave Syria, think of us!” are the West Virginia coal miners shouting, “Make America Great Again.” That’s not yahooism. It is anxiety directed at incumbent elites who tell the public that reduced levels of economic growth are the new normal. The world’s populations will not accept that.

Iran—like North Korea—has taken its best and brightest and stuck them inside a mountain to build atomic bombs, leaving the economy in the hands of Brussels-grade technocrats.

Besides calling for higher taxes in its recent budget, even as prices have spiked for basic foodstuff, Hassan Rouhani’s government has pursued import-substitution policies by imposing high tariffs on many imported goods. Needless to say, Iranians can’t get the clothing, appliances and electronics they want.

To combat a massive cellphone-smuggling operation, Iran recently slapped a 5% duty on them atop the 9% value-added tax and required registration with Iran’s telecom user database. Now, millions of smuggled phones will make it harder for the ayatollahs to kill texting among protesters. The bazaar may prove stronger than the theocracy.

A theme now emerging in Western media is that if Europe’s leaders support President Trump’s “aggressive” posture toward Tehran, that will undermine both the sanctified Obama nuclear deal and support for “liberals” in the Rouhani government. This is where we came in, watching Winston Churchill convince a timid British establishment that an outward-moving dictatorship won’t stop at anyone’s border.

The moment has arrived to admit that Iran’s missiles, nuclear technology and armies won’t stay inside its borders until the people getting shot in the streets are recognized and supported by a too-timid world.

Write henninger@wsj.com.

Appeared in the January 4, 2018, print edition.

https://www.wsj.com/articles/make-iran-great-again-1515025470