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Today’s Anti-Capitalists Ignore the Fundamental Problems of Socialism

Bernie Sanders

JULY 27, 2015

Jonathan Newman

Anti-market and pro-socialist rhetoric is surging in headlines (see alsohere, here, and here) and popping up more and more on social media feeds. Much of the time, these opponents of markets can’t tell the difference between state-sponsored organizations like the International Monetary Fund and actual markets. But, that doesn’t matter because the articles and memes are often populist and vaguely worded — intentionally framed in such a way to easily deflect uninformed attacks and honest descriptions of what they are actually saying. In the end, they can all be boiled down to one message: socialism works and is better than capitalism.

While most of it comes from the Left, the Right is not innocent, since the Right appears to be primarily concerned with promoting its own version of populism, which apparently does not involve a defense of markets. “Build bigger walls at the border,” for example, is not a sufficient response to “All profits are evil!”

Instead of stooping to this level or simply resorting to “Read Mises!” (a more fitting response), we must show, yet again, that socialism — even under well-meaning political leaders — is impossible and leads to disastrous consequences.

The Necessity of Profits, Prices, and Entrepreneurs

Socialism is the collective ownership (i.e., a state monopoly) of the means of production. It calls for the abolition of private ownership of factors of production. Wages and profits are two parts of the same pie, and socialism says the profit slice should be zero.

The inherent theoretical problems of socialism all emanate from its definition, and not the particulars of its application. However, the supporters of socialism define “collective,” as no exchange of the factors of production. And without exchange, there can be no prices, and without prices there is no way to measure the costs of production.

In an unhampered market economy, the prices of the factors of production are determined by their aid in producing things that consumers want. They tend to earn their marginal product, and because every laborer has some comparative advantage, there is a slice of pie for everybody.

If technological changes make certain factors more productive, or if education and training makes a laborer more productive, their prices or wages may be bid up to their new, higher marginal product. An entrepreneur would not like to hire or buy any factor at a price that exceeds its marginal product because the entrepreneur would then incur losses.

Entrepreneurial losses are more important than many realize. They aren’t just hits to the entrepreneur’s bottom line. Losses show that on the market, the resources used to produce something were more highly valued than what they were producing. Losses show that wealth has been destroyed.

Profits give the opposite signal. They represent economic growth and wealth creation. A profitable line of production is one in which the stuff that goes into producing some consumer good costs less than what consumers are willing to pay for the consumer good.

As such, profits and losses are more than just important incentives, or cover in a conspiratorial capitalist class system; they are the only way to know that wealth is being created instead of destroyed in any line of production.

Under socialism, there is a single owner that does not bid factors away from some lines of production and toward others. Nobody is able to say, with any shred of certainty, that a particular tool or machine or factory could be used to produce something else in a more effective way. Nobody knows what to produce or how much to produce. It’s economic chaos.

Without Markets, We Can’t Know What or How to Produce

Profits and losses guide and correct entrepreneurs in the process of producing things they expect consumers will demand. Without this information, including the costs of production specifically, entrepreneurs cannot engage in economic calculation, the estimation of the difference between future revenues and the costs of production necessary to gain those future revenues.

Laborers are put to work in areas where they don’t have a comparative advantage. Farmers are sent to factories, and tailors are sent to the mines. Workers are in the wrong lines of production and have the wrong tools. Every morning, the economy looks like Robert Murphy’s capital rearranging gnomes just ransacked it.

The Polish film Brunet Will Call lampooned situations like this throughout the movie, with consumer and capital goods in the most unlikely places. A butcher pulls an automobile’s clutch cable out of his freezer, and gives it to the main character, who pays for it with information on the whereabouts of a double buggy for someone’s newborn twins (at the flower shop, obviously).

So the failure of socialism is not conditional on the culture, time, or place of the victims. Socialism is flawed at its core: the “collective” ownership of the means of production. As such, there is no way to enact a functioning, growth-inducing version of socialism anywhere. In practice, however, the theoretical problems of socialism give way to civil unrest, which is met with state force and results in a death toll higher than any official war ever fought.

Without profit motives to produce, quotas must be put in place. With quotas, even in the cases where workers don’t lie about their production, chaos still reigns. For example, if a nail production quota is based on the number of nails, workers produce a lot of tiny, unusable nails. A nail quota based on weight would encourage workers to produce massive, but still unusable nails — a situation lampooned by this cartoon in Krokodil during the 1960s.

Endless queues stretched across the USSR, filled with people looking for shoes even though shoe production in the USSR exceeded that of the US. The problem was all the shoes were too small, because shoe production was measured by number, with no regard for the sizes or designs consumers demand.

The Wake of Socialism

Some cases are funny; others are not. About seven million people died of starvation in the USSR just in 1932–33 (middle-of-the-road estimate based on manipulated data). The authors of The Black Book of Communism (1999) estimate the deaths of close to 100 million people are attributable to communist and socialist regimes. That’s more than 200 times the number of US deaths in WWII (and a case could be made that their deaths are attributable to socialism, too).

Even today, in Cuba, the average wage is about $20 a month. In North Korea civilians are routinely rounded up by the dozens for public execution for the crime of watching South Korean TV smuggled into the country.

When people are hungry and unhappy, the state cannot survive if the people know others are better off. The state uses propaganda, misinformation, and censorship to make an already captive citizenry even more confused and submissive.

So count me surprised to hear fresh calls for socialism in 2015 — if the strong economic calculation argument and astronomical death toll haven’t turned the Left off of socialism, I don’t know what will. The idea is both bankrupt and deadly in both theory and practice.

https://mises.org/library/todays-anti-capitalists-ignore-fundamental-problems-socialism

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Gowdy: Fired Benghazi panel staffer decided to ‘run to the press’ after failed effort to get money

Trey Gowdy

Published October 12, 2015
FoxNews.com

The leader of the Republican-led special Benghazi committee tried Sunday to discredit a former staffer’s claim that he was fired for not joining in a partisan-driven effort to tarnish Hillary Clinton, saying he never even spoke to the ex-staffer.

South Carolina GOP Rep. Trey Gowdy, chairman of the House Select Committee on Benghazi, said he never met with the staffer, investigator and Air Force Reserves officer Bradley F. Podliska, and that Podliska was, in fact, warned about his own efforts to discredit Clinton, who was secretary of state from 2009 to 2013.

“Because I do not know him, and cannot recall ever speaking to him, I can say for certain he was never instructed by me to focus on Clinton, nor would he be a credible person to speak on my behalf,” Gowdy said.

He also said Podliska has never mentioned Clinton — from when he was counseled about his “deficient performance” to when he was fired and through the entire legal mediation process.

Furthermore, Gowdy said, Podliska has “run to the press with his new salacious allegations” after failing to get money from the committee.

https://www.foxnews.com/politics/2015/10/12/gowdy-fired-benghazi-panel-staffer-decided-to-run-to-press-after-failed-effort/?intcmp=hpbt2

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What Was a Member of Clinton’s ‘Secret Spy Network’ Doing While Working for CBS News?

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4:10 PM, SEP 29, 2015 • BY MARK HEMINGWAY

In March, an investigation by ProPublica and Gawker revealed that a “secret spy network” that was not on the State Department payroll, run by longtime Clinton aide Sidney Blumenthal, was “funneling intelligence about the crisis in Libya directly to the Secretary of State’s private account starting before the Benghazi attack.” Now the WEEKLY STANDARD has learned that Tyler Drumheller, the former chief of the CIA’s clandestine service in Europe who was working directly with Blumenthal as a member of Clinton’s spy network, was concurrently working as a consultant to CBS News and its venerable news program 60 Minutes.

https://www.weeklystandard.com/blogs/member-clintons-secret-spy-network-worked-cbs-news-helped-shape-benghazi-coverage_1034186.html

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Aronsohn absent from local $2700 a plate Clinton fundraiser?

Paul_Aronsohn_theridgewood blog

file photo by Boyd Loving

Clinton raises about $350,00 at campaign stop in Cresskill

SEPTEMBER 25, 2015, 6:52 PM    LAST UPDATED: FRIDAY, SEPTEMBER 25, 2015, 7:31 PM
BY DUSTIN RACIOPPI
STATE HOUSE BUREAU |
THE RECORD

Presidential candidate Hillary Clinton stopped in North Jersey on Thursday night and left having raised about $350,000 for her campaign from a crowd that included some of the state’s most powerful Democrats.

Clinton, a former Secretary of State, was hosted by Michael Kempner and his wife, Jacqueline, at their Cresskill home. Michael Kempner heads East Rutherford-based MWW Public Relations, one of the largest marketing and public relations firms in the state, and was a top fundraiser for Clinton’s failed 2008 campaign for the White House. The Kempners also hosted President Obama in 2010 and Vice President Joseph Biden in 2011.

On Thursday night, Clinton mingled with the crowd and posed for photos with about 50 guests. She then spoke for about 20 to 30 minutes, touching on a wide range of issues – education, the environment, drug addiction, transportation and issues affecting women and children. She also took a shot at Republicans, telling donors and guests that the GOP is “going from the party of Lincoln to the party of Trump,” Kempner said, referring to the businessman-cum-Republican frontrunner Donald Trump.

https://www.northjersey.com/news/clinton-raises-about-350-00-at-campaign-stop-in-cresskill-1.1418961

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Poll: Sharp erosion in Clinton support among Democratic women

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By Karen Tumulty September 14 at 12:56 PM

Democratic presidential candidate Hillary Rodham Clinton speaks at the University of Wisconsin at Milwaukee last week. (Morry Gash/Associated Press)

COLUMBUS, Ohio — Hillary Rodham Clinton is suffering rapid erosion of support among Democratic women — the voters long presumed to be her bedrock in her bid to become the nation’s first female president.

The numbers in a new Washington Post-ABC News poll are an alarm siren: Where 71 percent of Democratic-leaning female voters said in July that they expected to vote for Clinton, only 42 percent do now, a drop of 29 percentage points in eight weeks.

The period since the last survey coincides with the news that the FBI is looking into the security of e-mails sent over a private server Clinton used when she was secretary of state, as well as an intense media focus on her response to the controversy. The episode has raised questions about her judgment and revived memories of the scandals that plagued the presidency of her husband, Bill Clinton, in the 1990s.

https://www.washingtonpost.com/politics/poll-sharp-erosion-in-clinton-support-among-democratic-women/2015/09/14/6406e2a0-58c3-11e5-b8c9-944725fcd3b9_story.html

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Martin O’Malley Rails at Democrats for Debate Schedule ‘Rigged’ to Aid Hillary Clinton

martin_omalley_theridgewoodblog

5:41 PM ET5:41PM ET
By Patrick Healy and Maggie Haberman

MINNEAPOLIS – Martin O’Malley had one clear chance to make waves within the Democratic National Committee, and he seized it, delivering a fiery speech Friday that condemned his party’s leadership for what he called a process “rigged” to help Hillary Rodham Clinton — namely, curtailing the number of presidential primary debates.

Accusing party leaders of trying to keep Democratic ideas hidden as the Republican presidential candidates spew “racist hate” from their debate lecterns, Mr. O’Malley, the former Maryland governor and mayor of Baltimore, questioned the decision to hold “four debates and four debates only” before the first four states finish voting.

“This is totally unprecedented in our party’s history,” Mr. O’Malley said. “This sort of rigged process has never been attempted before. Whose decree is it exactly? Where did it come from? To what end? For what purpose? What national or party interest does this decree serve? How does this help us tell the story of the last eight years of Democratic progress?”

While Mr. O’Malley never named the party’s chairwoman, Representative Debbie Wasserman Schultz of Florida, his remarks about the debates were clearly aimed at her – and she sat looking grim throughout, barely clapping, and appeared angry when she shook his hand once he finished.

He did not name Mrs. Clinton in his speech, either, but Mr. O’Malley was asked afterward if he thought the debate schedule had been arranged for her benefit. “Yes, I think so. Don’t you?” he replied.

https://www.nytimes.com/politics/first-draft/2015/08/28/martin-omalley-rails-at-democrats-for-debate-schedule-rigged-to-aid-hillary-clinton/?_r=1

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Donald Trump trounces GOP field, Biden leads general election match-ups

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By Theodore Schleifer, CNN

shington (CNN)Vice President Joe Biden fares better against top GOP candidates in hypothetical general election match-ups than Hillary Clinton, according to a new national survey.

The Quinnipiac University poll, released Thursday, also shows Donald Trump smashing the GOP presidential competition garnering 28% support from registered Republican voters in the 17-member field. The real estate mogul’s closest competitor is retired neurosurgeon Ben Carson, who tallies 12%.

Just 7% said they would vote for former Florida Gov. Jeb Bush, a record low since November 2013.

Those results show just how far both Trump — now the Republican front-runner — and Bush — the old one — have come. Bush led national polls for much of the first half of 2015, but was quickly dislodged by Trump, after he announced his presidential ambitions this June.

Sens. Ted Cruz of Texas and Marco Rubio of Florida both are tied with Bush at 7%, the polls shows, with Wisconsin Gov. Scott Walker at 6% and former tech CEO Carly Fiorina and Ohio Gov. John Kasich tied at 5%.

“Donald Trump soars; Ben Carson rises; Jeb Bush slips and some GOP hopefuls seem to disappear,” said Tim Malloy, assistant director of the survey. “Trump proves you don’t have to be loved by everyone, just by enough Republicans to lead the GOP pack.”

And Trump certainly isn’t loved by everyone, the survey shows. About 1-in-4 GOP voters say they would never vote for Trump, topping the field. Bush comes in second with 18%.

Clinton still leads the Democratic race at 45% support from registered Democrats, followed by Vermont Sen. Bernie Sanders at 22% and Biden — who is currently mulling a 2016 bid — at 18%.

But Biden, currently sporting the highest favorability rating among any 2016 candidates polled of either party, tops Trump 48% to 40%, compared to Clinton, who beats Trump 45% to 41%. Biden also beats Bush, 45% to 39%, compared to Clinton, who beats Bush 42% to 40%.

https://www.cnn.com/2015/08/27/politics/donald-trump-jeb-bush-poll-quinnipiac/index.html

 

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What Does Joe Biden Know?

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As the vice president edges toward a presidential run, is he banking on further public disclosures to discredit the frontrunner?

YONI APPELBAUM

AUG 26, 2015

As Joe Biden edges closer to a presidential run, there’s no shortage of theories as to what he’s up to. Former secretary of state Hillary Clinton has built a commanding lead in the national polls, giving Biden little apparent space to gain traction. Perhaps he’s counting on the early-primary state of South Carolina to provide a critical boost. He might be banking on appearing as a stronger general-election candidate than any of his potential rivals in the primary race. Maybe after spending the past 42 years of his life running for elective office, he just can’t stop.

But there’s one intriguing theory that has so far garnered little attention: What if Biden knows something about Democratic frontrunner Hillary Clinton that the rest of us don’t?

After jumping to what seemed a prohibitively large early lead, Clinton has stumbled in recent months. Vermont Senator Bernie Sanders, hardly the most charismatic politician, has emerged as a viable challenger, generating enormous enthusiasm on the campaign trail, and surging ahead in polling averages in New Hampshire.

https://www.theatlantic.com/politics/archive/2015/08/joe-biden-hillary-clinton-email/402448/

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Clinton Pressured at Press Conference on Emails

hillary-clinton-what-difference-does-it-make

Clinton pulls plug on testy presser over server questions
August 18, 2015, 06:22 pm
By Ben Kamisar

Hillary Clinton dismissed the controversy surrounding her private email server and defended her conduct as legal during a press conference Tuesday in Las Vegas.

A visibly aggravated Clinton repeatedly insisted that she had done nothing wrong and seemed frustrated by questions about the issue.

“What I did was legally permitted, number one, first and foremost,” the Democratic presidential candidate said in response to a question from Fox News reporter Ed Henry. “We turned over everything that was work-related, every single thing.”

She added that in “retrospect,” it had not turned out to be convenient to have the private server during her years as secretary of State.

“I regret that this has become a cause celebre. But that does not change the facts, and no matter what anybody tries to say, the facts are stubborn,” she said.

“I know there is a certain level of anxiety or interest in this, but the facts are the facts.”

Asked if the server, which has been turned over to the Department of Justice, had been wiped clean, Clinton initially shrugged and later joked: “Like with a cloth or something?”

https://thehill.com/blogs/ballot-box/presidential-races/251413-clinton-pulls-plug-on-testy-presser-over-server-questions

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Hillary’s email firm was run from a loft apartment with its servers in the BATHROOM, raising new questions over security of sensitive messages she held

hillary-clinton-what-difference-does-it-make

Democratic White House front-runner used Platte River Networks of Denver, Colorado, to maintain her controversial ‘home brew’ server
Up to 60 emails with classified material have been found in a sample of those she did not delete – meaning there could be many more
Now Daily Mail Online reveals new questions over security of her emails when Platte River was involved in maintaining server
‘Mom and pop’ firm used converted residential apartment and had its own servers in a bathroom closet
Links between ‘local’ IT company and Clinton remain unclear but its VP of sales and marketing, who was sued for ‘fraud’ is said to be ‘big Democrat’

By HUGO DANIEL IN DENVER, COLORADO, FOR DAILYMAIL.COM

PUBLISHED: 08:12 EST, 18 August 2015 | UPDATED: 12:03 EST, 18 August 2015

The IT company Hilary Clinton chose to maintain her private email account was run from a loft apartment and its servers were housed in the bathroom closet, Daily Mail Online can reveal.

Daily Mail Online tracked down ex-employees of Platte River Networks in Denver, Colorado, who revealed the outfit’s strong links to the Democratic Party but expressed shock that the 2016 presidential candidate chose the small private company for such a sensitive job.

One, Tera Dadiotis, called it ‘a mom and pop shop’ which was an excellent place to work, but hardly seemed likely to be used to secure state secrets. And Tom Welch, who helped found the company, confirmed the servers were in a bathroom closet.

It can also be disclosed that the small number of employees who were aware of the Clinton contract were told to keep it secret.

The way in which Clinton came to contract a company described as a ‘mom and pop’ operation remains unclear.

However Daily Mail Online has established a series of connections between the firm and the Democratic Party.

Read more: https://www.dailymail.co.uk/news/article-3201367/Hillary-s-email-firm-run-loft-apartment-servers-BATHROOM-raising-new-questions-security-sensitive-messages-held.html#ixzz3jD6fAUn5

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Mark Cuban pans Clinton college plan

Mark-Cuban_Dallas-Mavericks_HD_768x432-16x9

August 17, 2015, 04:47 pm
By Bradford Richardson

Billionaire businessman Mark Cuban says Hillary Clinton’s plan to curb growing student-loan debt will actually make attending college more expensive.

“[Hillary’s plan] stands a better chance of increasing the amount of money students owe than decreasing it,” Cuban said on his Cyber Dust app on Friday.

“Just as easy money led to the real estate bubble a few years ago, the easier it is to borrow money for college the easier it is for colleges to raise tuition. Tuition keeps going up because no matter how high they raise it, students can still borrow more to pay for it,” Cuban continued.

Cuban, who stars on ABC’s “Shark Tank” and owns the Dallas Mavericks, has for years warned of a “student loan bubble.”

“At some point, it’s going to pop,” Cuban told Business Insider in March.

https://thehill.com/blogs/blog-briefing-room/251321-mark-cuban-pans-clinton-college-plan

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Bob Woodward: Clinton emails ‘reminds me of the Nixon tapes’

bob-woodward-political-books

By EDDIE SCARRY • 8/17/15 7:50 AM

Veteran Washington Post reporter Bob Woodward on Monday compared the email controversy engulfing Democratic presidential candidate Hillary Clinton to the downfall of President Richard Nixon.

On MSNBC’s “Morning Joe,” Woodward, who through his reporting helped break open the Watergate scandal, said it’s at least suspicious that Clinton’s emails from her tenure as secretary of state were wiped away from a server she owned privately.

“Follow the trail here,” Woodward said. “There are all these emails. Well, they were sent to someone or someone sent them to her. So, if things have been erased here, there’s a way to go back to these emails or who received them from Hillary Clinton. So, you’ve got a massive amount of data in a way, reminds me of the Nixon tapes: Thousands of hours of secretly recorded conversations that Nixon thought were exclusively his.”

News broke earlier this year that Clinton relied on a private email address and server, rather than a government-owned one, when she served at the State Department. Subsequent reports said that she received classified and top secret information through that system. Federal officials have since taken Clinton’s server and are continuing an investigation into whether its security was compromised.

https://www.washingtonexaminer.com/bob-woodward-clinton-emails-reminds-me-of-the-nixon-tapes/article/2570299

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Hillary Clinton’s Mega-Donors Are Also Funding Jeb Bush

hillary-clinton-what-difference-does-it-make

Racetrack owners, bankers, and chicken kings: Meet the ultra-rich bankrolling the Bush and Clinton dynasties. A special report by Vocativ and The Daily Beast.

For some wealthy donors, it doesn’t matter who takes the White House in 2016—as long as the president’s name is Clinton or Bush.

More than 60 ultra-rich Americans have contributed to both Jeb Bush’s and Hillary Clinton’s federal campaigns, according to an analysis of Federal Election Commission data by Vocativ and The Daily Beast. Seventeen of those contributors have gone one step further and opened their wallets to fund both Bush’s and Clinton’s 2016 ambitions.

After all, why support just Hillary Clinton or just Jeb Bush when you can hedge your bets and donate to both? This seems to be the thinking of a group of powerful men and women—racetrack owners, bankers, media barons, chicken magnates, hedge funders (and their spouses). Some of them have net worths that can eclipse the GDPs of small countries.

https://www.thedailybeast.com/articles/2015/08/04/hillary-clinton-s-mega-donors-are-also-funding-jeb-bush.html

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Hillary Clinton Loses Ground With White Women — WSJ/NBC Poll

hillary-clinton-what-difference-does-it-make

By PETER NICHOLAS

Many Democrats have long hoped that Hillary Clinton might expand Barack Obama‘s electoral coalition by drawing in more white women voters.

A new Wall Street Journal/NBC News poll suggests she may have a tough time pulling it off. Mrs. Clinton is losing ground with white women and many other important slices of the electorate, the poll shows, amid a spate of reports about her email practices, speaking fees and foreign donations to the Clinton Foundation.

Click to see more charts and articles from the July poll.

In June, 44% of white women had a favorable view of Mrs. Clinton, compared to 43% who didn’t. In July, those numbers moved in the wrong direction for Mrs. Clinton: Only 34% of white women saw her in a positive light, compared to 53% who had a negative impression of her, the poll found.

Mr. Obama fared poorly with white women voters in the 2012 election, losing them to Republican challenger Mitt Romney by 14 points.

For Team Clinton, the latest poll numbers are a worrisome development. Mrs. Clinton is unlikely to match the African-American turnout that propelled Mr. Obama to two presidential victories, so she has to make up the difference somewhere else. Women eager to see a woman in the White House is a logical group to target.

Mrs. Clinton, of course, is a white woman. She was raised in the suburbs and earned both college and law degrees. She’s fared well among voters with a similar background in past polls, but this month’s survey  shows that’s no longer the case.

https://blogs.wsj.com/washwire/2015/08/04/hillary-clinton-loses-ground-with-white-women-wsjnbc-poll/

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Data in Clinton’s ‘secret’ emails came from 5 intelligence agencies

hillary-clinton-what-difference-does-it-make

BY MARISA TAYLOR, GREG GORDON AND ANITA KUMAR

McClatchy Washington Bureau

WASHINGTON

The classified emails stored on former Secretary of State Hillary Clinton’s private server contained information from five U.S. intelligence agencies and included material related to the fatal 2012 Benghazi attacks, McClatchy has learned.

Of the five classified emails, the one known to be connected to Benghazi was among 296 emails made public in May by the State Department. Intelligence community officials have determined it was improperly released.

Revelations about the emails have put Clinton in the crosshairs of a broadening inquiry into whether she or her aides mishandled classified information when she used a private server set up at her New York home to conduct official State Department business.

While campaigning for the 2016 Democratic presidential nomination, Clinton has repeatedly denied she ever sent or received classified information. Two inspectors general have indicated that five emails they have reviewed were not marked classified at the time they were stored on her private server but that the contents were in fact “secret.”

The email issue, however, has distracted from Clinton’s campaign for days and already has hurt her in public opinion polls. Besieged with questions, she has found herself caught in a murky dispute between State Department and intelligence officials over whether emails on her server were classified.

Read more here: https://www.mcclatchydc.com/news/politics-government/article29519419.html#storylink=cpy