Did Putin just blink?

February 15, 2022

[Audio edition here]

          Did Putin just blink? Trying to read Vladimir Putin’s mind is a fool’s errand. But Putin staged a live discussion on Russian television on Monday that seemed like a scripted excuse to de-escalate the crisis on the Ukrainian border. As explained in the NYTimes, Foreign Minister Lavrov told Putin there was still a diplomatic path to avoid military confrontation. Lavrov said, “I believe that our [negotiation] possibilities are far from exhausted. I would propose continuing and intensifying them.” Shortly thereafter, the Russian Defense Minister told Putin that “large-scale drills” around Ukraine were coming to an end.

          That all sounds swell, right? Maybe. Or maybe not. As Putin’s telenovela was being broadcast live on Russian television, the Russian Duma was considering a proposal to “recognize” two Ukrainian provinces (Luhansk and Donetsk) as independent states. Those provinces just happen to sit on the border with Russia. See TAAS, State Duma to consider two competing appeals to president on Donbass. The provinces are currently under the control of “separatist” forces, but every member of the United Nations—including Russia—currently recognizes those provinces as part of Ukraine. If the Russian Duma “recognizes” those provinces as independent states, we should expect that they will be annexed as Russian vassals within hours of being recognized—exactly what happened with the Crimean Peninsula in 2014.

          So, Russia’s plan to “de-escalate” the crisis may involve taking over two Ukrainian provinces. Only in Russia would the annexation of another country’s territory be described as “de-escalation.” The last time a similar “annexation” happened in Europe (with Austria), it was a prelude to WWII.

          A reader with the background to comment knowledgeably sent the following analysis:

          Putin has decided to annex officially the Luhansk and Donetsk republics, which Ukrainian “separatists” have controlled for nearly eight years. I see [the annexation] as his way of defusing the current crisis while enabling him to declare victory. He undoubtedly calculates that the West will huff and puff but do nothing more; the Germans will veto tough sanctions . . . and Kyiv will be enjoined to do nothing more than lodge formal protests in the UN.

          Notably, the reader also predicted that Putin would use the “de-escalation” to occupy Belarus (an independent country formerly part of the USSR). The reader says,

          While Putin will probably pull back significant numbers of his forces from the Ukrainian border, he will leave them in Belarus, thereby in effect taking control of that country and adding to his ability to boast that he is making Russia great again.

          If the reader’s observation is correct, Putin will have used this crisis to occupy two sovereign countries—Ukraine and Belarus.

          But, as I noted at the outset, trying to predict what Putin will do is a fool’s errand. By the time you read this newsletter, Russian tanks may be rolling towards Kyiv . . . . The one thing we can say with certainty is that we can trust nothing that Vladimir Putin says.

The accounting firm for the Trump Organization withdraws its opinions on ten years of financial statements.

          This is a big story that will have ramifications for Trump for many years to come. For nearly two decades, the accounting firm, Mazars, reviewed the statements of financial condition of Donald J. Trump and the Trump Organization. Mazars issued “opinions” that said those financial statements were prepared in accordance with certain accounting principles and reviewed in accordance with certain auditing standards. (For practitioners, Mazars did not perform GAAS audits on GAAP financial statements.) When an accounting firm issues opinions on a client’s financial statements, the accounting firm must rely on the integrity of the client (here, Donald Trump) to accept representations from the client about the financial statements.

          On Monday, Mazars sent a letter withdrawing ten years of opinions on the statements of financial condition for Donald J. Trump, saying, (a) the financial statements should no longer be relied upon, and (b) that Mazars had an “unwaivable conflict of interest” that prohibited Mazars from continuing to represent Trump. Both reasons spell trouble for Trump.

          The most likely reasons for Mazars’ statements are the following: Mazars can no longer rely on Trump’s representations because it found evidence that Trump (or others at the Trump organization) lacked integrity or had engaged in illegal conduct, raising questions about the reliability of the financial statements. As to the “unwaivable conflict of interest,” Mazars is likely providing testimony or documents to investigators that will hurt Trump in some way.

          As usual, Trump seized on a comment in the Mazars’ letter to claim exoneration. The letter said Mazars “had not concluded that the financial statements, as a whole contain material discrepancies.” Those words were carefully crafted by Mazars’ lawyers and can cover a multitude of sins. For example, what if only two of three dozen financial statements contain material discrepancies? Does that mean that the financial statements “as a whole” do not contain material discrepancies? As I said, the words were carefully crafted.

          Mazars is in a difficult situation and the more that it criticizes the financial statements, the more difficult position Mazars puts itself in. So Mazars said what it had to say, tried to do some damage control, and cut ties with Trump. Mazars’ withdrawal will make it difficult for Trump or the Trump Organization to obtain financing in the future. Few commercial lenders will deal with applicants who cannot produce financial statements reviewed by a reputable accounting firm.

Yes, Virginia, Republicans do want to drag America back to the 1950s.

          There is an open question of whether the Equal Rights Amendment has been ratified by the legislatures of 38 states—the final step in ensuring that an amendment guaranteeing equal rights for women is included in the Constitution. That open question is worth a separate discussion, but for today, let’s focus on the fact that the GOP-controlled West Virginia legislature rescinded its prior ratification of the ERA. See Above the Law, West Virginia Legislature Confirms Women Are Second Class Citizens.

          As noted in the article linked above, West Virginia rescinded its ratification because abortion opponents feared that the Equal Rights Amendment would provide women with an argument that prohibiting them from making medical decisions about their bodies violates the Constitution. Which, of course, highlights one of the many reasons we need an Equal Rights Amendment . . . .

It’s not your imagination. Facebook is making you feel bad.

          When readers send emails saying that they are experiencing feelings of frustration and despair, they frequently cite two sources that provoke those feelings: the news media and Facebook. I have discussed the biased coverage in the news media at length. But a recent study of Facebook shows that it is not your imagination: The messaging on Facebook is dominated by a few thousand toxic “super-users” who promote hate, misogyny, racism, and antisemitism. See The Atlantic, Facebook Has a Superuser-Supremacy Problem.

          As explained by the researchers, Facebook uses “engagement” as the most important indicator of what information will be served up to other users. The researchers found that the information flow on Facebook is driven by engagement generated by an elite class of super-users “that produce more likes, shares, reactions, comments, and posts than 99 percent of Facebook users in America. Those super-users skew “white, older, and—especially among abusive users—male.”

          In a review of the content spread by a sampling of abusive super-users, the researchers found that

68 percent spread misinformation, reposted in spammy ways, published comments that were racist or sexist or anti-Semitic or anti-gay, wished violence on their perceived enemies, or, in most cases, several of the above. Even with a 6 percent margin of error, it is clear that a supermajority of the most active users are toxic.

          The researchers note that Facebook could suspend the abusive super-users, but it has failed to do so. Of 150 toxic super-users identified by the researchers, only seven had been suspended after a year. If Facebook suspended the abusive super-users, that would have a major impact on Facebooks overall engagement—and its profitability.

          So, a group of abusive super-users who spread hate and lies have an outsized effect on what you see on Facebook—and Facebook knows it but refuses to do anything about it. So, if you feel like you have been assaulted by hate, conspiracy theories and lies after a session on Facebook, that is Facebook’s business model in action. In short, don’t rely on Facebook as a news source. It is telling you what a few thousand abusive super-users want you to hear. Read the article for a more detailed explanation. (Facebook claims that the researchers don’t understand how its secret algorithms work—a result that Facebook works hard to achieve.)

Interview with New Faces of Democracy.

          Over the weekend, I interviewed Nancy Bynum of New Faces of Democracy, which produces podcast interviews with “ordinary people doing extraordinary things to stand up for our democracy.” Listen here: New Faces of Democracy | Today’s Edition with Robert Hubbell. The content on the New Faces of Democracy website is inspiring and worth a listen standing alone. The interview with Nany Bynum is helpful to anyone who is leading an organization that is considering launching its own podcast. Nancy has succeeded in creating a professional product and shares her insights about podcasting.

Concluding Thoughts.

          After my discussion in yesterday’s newsletter about readers seemingly feeling worse now than during Trump’s tenure, a reader sent a portion of a speech by John Lewis that deserves to be posted on everyone’s refrigerator:

Ours is not the struggle of one day, one week, or one year. Ours is not the struggle of one judicial appointment or presidential term. Ours is the struggle of a lifetime, or maybe even many lifetimes, and each one of us in every generation must do our part.

Nothing can stop the power of a committed and determined people to make a difference in our society.

Take a long, hard look down the road you will have to travel once you have made a commitment to work for change. Know that this transformation will not happen right away. Change often takes time. It rarely happens all at once. In the movement, we didn’t know how history would play itself out. When we were getting arrested and waiting in jail or standing in unmovable lines on the courthouse steps, we didn’t know what would happen, but we knew it had to happen.

          Words to live by. Let’s do it.

          Talk to you tomorrow.