Judge Willett and Justice Sotomayor Attack Qualified Immunity for Cops

What do liberal Supreme Court Justice Sonia Sotomayor and libertarian-leaning 5th Circuit Judge Don Willett have in common? They both despise the modern SCOTUS doctrine of qualified immunity, which shields police officers and other government officials from being sued over violations of constitutional rights.

In Harlow v. Fitzgerald (1982), the U.S. Supreme Court held that government officials are entitled to immunity from civil suits so long as the conduct that they’re being sued over “does not violate clearly established statutory or constitutional rights.”

What that means in practice, Judge Willett observed in a 2018 opinion, is that “public officials [can] duck consequences for bad behavior—no matter how palpably unreasonable—as long as they were the first to behave badly.” Justice Sotomayor has offered a similar view. The Supreme Court’s “one-sided approach to qualified immunity,” she wrote in a 2018 case, “transforms the doctrine into an absolute shield for law enforcement, gutting the deterrent effect of the Fourth Amendment.”

Case in point: In its 2017 decision in Latits v. Phillips, the U.S. Court of Appeals for the 6th Circuit concluded that a Michigan police officer violated the Fourth Amendment when he shot and killed a fleeing suspect. But the court then proceeded to award qualified immunity to the officer anyway for his unconstitutional use of deadly force. “Although we now hold that [Officer Lowell] Phillips’s conduct fell outside the bounds of the Fourth Amendment,” the 6th Circuit said, “controlling authority at the time of the events had not clearly established the rights we identify today.”

“The majority spends the bulk of its opinion explaining how Officer Phillips’ use of deadly force was objectively unreasonable,” responded 6th Circuit Judge Eric Clay in dissent. “In the final stretch, however, the majority abruptly shifts gears to hold that [the plaintiff’s] constitutional rights were not clearly established…. In so holding, the majority has created a nearly impossible barrier for plaintiffs seeking to vindicate their rights against government officials.”

Something has gone seriously wrong in our criminal justice system when the courts are running this kind of interference on behalf of blatantly unconstitutional police conduct. Here’s hoping that the legal position championed by Sotomayor, Willett, and Clay eventually triumphs over today’s destructive and preposterous qualified immunity regime.

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Breslow: “I’ve Noticed A Strange New Dynamic When Talking To Traders”

Via Bloomberg’s Richard Breslow,

This is take-no-prisoners time for the markets…

Before I tell you my latest theory, it’s worth mentioning this hasn’t been a normal day. Because in many ways, despite holidays in China, Hong Kong and Australia, along with storms besetting Japan and the aftermath of the natural disasters in Indonesia sounding worse with every update, it has, in many ways, been a very normal day.

Ordinarily, with all that is going on in Asia, I would have forced myself to, mostly, ignore the early price action as unrepresentative. But between a healthy amount of news, a host of economic numbers and the reality of it being the first day of the year’s last quarter, volumes have been very robust. And that’s seen in all the right places, where real or hoped for new developments are being debated.

Volumes in U.S Treasury, S&P 500, bund and BTP futures are all running well above average. And while I could quibble with the magnitude of some moves, there isn’t anything that stands out as a stinker of an idea. Maybe not what I’d be doing, but well within the realm of reasonableness.

While some of the early buoyancy of Asian currencies ended with a mostly flat close, Europe is trying to put a bravely positive spin to things. Hope does spring eternal. And I’d be loathe to pull out my extrapolating calculator. But traders are being a little more clever than it looks on the face of things. While Italian equities are up and BTPs are trying to stabilize, calls on the German Schatz — the most straightforward hedge for Italian troubles — continue to be bought in size… As they were during the worst of Friday’s panic.

I’ve noticed a strange dynamic when talking to traders…

When European assets go down, no one professes to believe anything being officially said.

But when traders want to buy, they seem to be willing to take everything at face value.

So much for having perspective. Or maybe just weighing what price level will set the ECB into “whatever it takes” mode.

On the week, obviously Italy and U.K. news will dominate early. No one, but me, seems to have put the latest Catalonia protests nor the Bavarian elections in two-weeks time back on their radar screens. Trade and diplomatic tensions with China have been short-sightedly pushed off the page by USMCA.

But that aside, and some global meh numbers over the weekend and today, sovereign yields are very much in play. For whatever it’s worth, I cite support and resistance levels and get back, “Yes but where will they go when they break higher”? This is going to be a major theme that could carry through for the whole of the quarter.

And now my theory for understanding price action for the quarter.

Hedge funds are once again under-performing their benchmarks. The HFR indexes don’t make for pretty reading. There has been a lot of speculation that realized volatility will be headed higher. I think that’s correct because this is the last gasp to salvage a lot of people’s years and that makes for manic market chasing, back and forth. It’s a very difficult period to keep any powder dry and the appetite for losses will be extremely low.

Imagine the agony of walking in and seeing the S&P futures up over one-half percent. The dollar is torturing people. The Bloomberg Commodity Index is up hard on a move I’m not sure a lot of people caught. And bond yields are a tough way to make money fast.

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ISM Prices Paid Plummets As Managers Warn “Market Is In A State Of Chaos”

Following slight disappointment in Europe, and a collapse in Canada, Markit’s US Manufacturing PMI printed, as expected at 55.6 (highest since May) even as Services collapsed. ISM’s Manufacturing survey – which soared in August – was expected to drop, and did but more than expected (59.8 vs 60.0 from 61.3 in August)

  • Markit Manufacturing PMI rose from 54.7 to 55.6 (same as flash and expected level)

  • ISM Manufacturing fell from 61.3 to 59.8 (below expected 60.0)

Despite the ongoing slump in real ‘hard’ economic data, surveys continue to hope for the best…

 

The overall performance was driven by sharper rises in output and new orders, though new business from abroad continued to expand at only a marginal pace. Markit’s report shows employment drop to 53.6 vs 54.2 in August, the lowest reading since August 2017…

Chris Williamson, Chief Business Economist at IHS Markit said:

US manufacturing showed resilience in the face of storms in September, with output rising at one of the fastest rates seen so far this year. New orders growth has lifted to the highest since May and is being boosted in particular by strong domestic demand, especially in consumer markets. In contrast, export orders grew only very modestly again.

Worries about trade wars and tariffs continued to dominate, pushing business confidence in the outlook down to its lowest for a year.

Tariffs, alongside higher oil prices, were meanwhile a key factor reportedly driving input costs higher. Almost two-third of all companies reporting higher input prices ascribed the increase to tariffs.

Worries about the impact of tariffs on prices also led to increased incidences of stock building, exacerbating existing supply chain delays and driving prices further higher. Raw material inventories rose at one of the steepest rates seen this side of the global financial crisis.

“While stock building boosts current sales at suppliers it poses downside risks to growth in future months.

ISM painted a different picture:

Prices Paid and New Orders tumbled…

As Respondents noted…

The market is in a state of chaos with the latest round of tariffs. As an electronics original equipment manufacturer, our component prices have been impacted almost across the board. The tariffs have caused a mass rush to buy up inventories of affected products in order to minimize the long-term financial impact. This, in turn, is causing market constraints, which further drive up the cost and increase lead times.” (Computer & Electronic Products)

“Tariffs starting to take a bite out of profitability.” (Chemical Products)

So take your pick – ISM bad (but prices down and employment up), PMI good (but prices up and employment down).

 

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Nomura: The October Melt-Up Begins With A Bang

With hedge funds painfully lagging the market, as shown by the HFRX Equity Hedge Fund index, which remains not only red for the year, but is near its 2018 lows…

… performance panic is starting to set in as we enter the last quarter of the year. Bloomberg’s Richard Breslow put it best earlier this morning: “Imagine the agony of walking in and seeing the S&P futures up over one-half percent. The dollar is torturing people. The Bloomberg Commodity Index is up hard on a move I’m not sure a lot of people caught. And bond yields are a tough way to make money fast.”

So what happens next? Well, according to Nomura’s head of X-asset strategy Charlie McElligott the pieces are now in place for the tactical October “Cyclical Melt-up 2.0” that he has been anticipating, with this morning’s action a harbinger of what is coming as USTs and USD are on their back-foot post Canada / NAFTA 2.0, while Commodities and EMFX are rallying to multi-week highs.

Meanwhile, within risk assets, break outs are everywhere:

Within Equities, we see Materials-, Financials- and Energy- sectors leads Eurostoxx performance tables on the quarter-opening session, while from a Factor-perspective, we see “Beta” and “Default Risk” strategies perform well in Europe and Japan markets overnight.

The breakout in Crude is also notable, as Brent moves towards its 100-month MA and WTI cracks its May resistance back towards re-testing July highs.

This morning’s “up-in-risk” dask comes despite disappointing Asian & Euro-Area Manu PMIs (China Caixin Manu PMI specifically at 50, the lowest level since Mar ’17), as well as a weaker Japanese Tankan print, which to McElligott confirms his view that risk-assets are “trading short” (“low nets,” “grossed-down” or simply “too defensive” positioning) as we begin the annual Q4 “performance anxiety” phenomenon.

Menawhile, with both the ECB and Fed either accelerating tapering (ECB’s bond purchases are cut in half again to just €15BN/month while the Fed’s balance sheet shrinkage rises to $50/month) Into October’s imminent “QT Impulse,” the Bond Bears continue to grow further emboldened, according to the Nomura strategist with Friday’s CoT report showing not only the biggest net short position on 10-year notes on record…

… but additional net selling of -$15mm/01 across the UST futures complex (biggest sales came via TU -$3.3mm/01, TY -$5.2mm/01, and US -$6.4mm/01), “as all segments of the futures market saw spec selling with the exception of Eurodollars, which saw +$2.5mm/01 of buying.

More rates bearishness emerged out of Japan this morning, where the ongoing “bear-steepening” in JGBs continues as BoJ efforts to widen the YCC band seem to be working, helping the TOPIX Banks rise +6.5% in three weeks and the Nikkei hitting the highest level in 27 years on the back of the weaker yen.

Meanwhile, McElligott notes that back in the US, Eurodollar calendar spreads in ’19 are jumping higher over the course of Sep / EDZ9Z0 reversing the multi-month inversion to again trading “positive” over the past two weeks, the buyside is seemingly “upgrading” their view of the U.S. Economy by delaying the “end of Cycle” trade, which aligns with the repricing of a “higher” Neutral Rate.

Putting all that in context and summarizing what happens next according to the Nomura strategist, here is McElligott’s “view”:

Expecting a strong move for “risk-assets” throughout October on

  1. U.S. EPS-season “macro blinders” for Equities managers
  2. “weak Dollar” perpetuating risk “virtuous cycle” (+++ for Commods & EM and broad “Inflation Expectations”) and
  3. big “Quantitative Tightening” -> “Bearish Rates” flows (“hawkish pivot” / “supply shock” / inflation trajectory) keeping pressure on UST yields (higher)—thus making “Cyclicals over Defensives” / TIPS over Nominals as the top tactical positioning for the month.

Finally, there is the seasonality factor, which – according to data since 1994 – suggests that October is the month most bullish for risk:

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Supreme Court to Consider Tree Frogs, Liquor Licensing, Criminals With Dementia, and More This Fall: Reason Roundup

As the open spot on their team devours U.S. news, politics, and culture whole, the eight existing justices of the Supreme Court return to work today for the start of a new legal year and a return to 43 pending cases. This month, justices will hear arguments in 11 cases. The issues involved include whether smaller government employers can be guilty of age discrimination; how to treat convicted criminals whose dementia has left them with no memory of their crimes; and what happens when Homeland Security forgets to detain “criminal aliens.”

You can see a full list here of the cases slated to come before the court in October and November.

To kick things off today, SCOTUS will ponder the plight of a Florida tree frog in Weyerhauser Co. v. Fish and Wildlife Service. The case, explains Constitution Daily, “is about the federal government’s power to prevent tree-cutting on 1,500 acres of land that could be home to an endangered species, the dusky gopher frog”; it “involves important principles of environmental and property law.”

Or, as our Reason headline puts it: “Should Dried Up Tree Frog Sex Ponds Limit Property Rights?

A few notable cases have not yet had a date set for argument. Among them:

  • Apple Inc. v. Pepper, which looks at “whether consumers may sue anyone who delivers goods to them for antitrust damages, even when they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense” (via SCOTUSblog);
  • Timbs v. Indiana, which considers “whether the Eighth Amendment’s excessive fines clause is incorporated against the states under the Fourteenth Amendment”;
  • Nieves v. Bartlett, which is related to probable cause, retaliatory arrest, and the First Amendment; and
  • Tennessee Wine & Spirits Retailers Association v. Byrd, which looks at state regulation of retail or wholesale liquor licenses.

The court “has not yet added any blockbuster cases to its nine-month calendar,” notes Axios. But the pending cases include some with “major ramifications, and a confirmation of Trump’s nominee would solidify a conservative majority and ultimately hand Republicans major wins.” And should Trump’s embattled first pick, Brett Kavanaugh, fail to be confirmed, we could have to wait well past this November’s midterm elections for the next nominee.

If Republicans fail to hold the Senate, Axios‘ sources claim, Trump may stall for years on nominating someone new. This would leave the Court to decide cases with four liberal-leaning justices and four conservative-leaning justices.

FOLLOW UP

“I was the proudest, drunkest virgin you have ever seen…” In its recent season premiere, Saturday Night Live tackled Brett Kavanaugh’s Friday testimony before the U.S. Senate. Kate McKinnon’s impression of Lindsey Graham alone makes the clip worth it, but Matt Damon isn’t half bad as the judge either.

Were but that the only Kavanaugh-confirmation circus development of note in the past few days! Instead, the weekend brought a barrage of new statements from Kavanaugh friends and foes—”when Brett got drunk, he was often belligerent and aggressive,” one former Yale classmate said—and updates on the FBI’s investigative efforts.

Meanwhile, outside the most conservative circles, the lastest commentary on Kavanaugh has largely coalesced around the idea that even if he isn’t guilty of sexual assault, his stalling, haughty, conspiratorial, and non-sequitur- and falsehood-filled performance last week presents its own case for canceling Kavanaugh’s ascendance.

FREE MARKETS

Washington takes aim at state “net neutrality.” The Department of Justice filed a lawsuit yesterday to stop the State of California’s new “net neutrality” law, which was ostensibly passed to prevent internet traffic discrimination.

“States do not regulate interstate commerce—the federal government does,” Jeff Sessions declared in a statement. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy.”

In other California and markets news, a measure Gov. Jerry Brown signed into law over the weekend attempts to regulate the sex and gender makeup of corporate boards.

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Another Trillion-Dollar Unfunded Liability: Running The Hurricane Numbers

Authored by John Rubinho via DollarCollapse.com,

The idea that as more people move to Hurricane Alley and other storm-prone places, the future cost of those storms will rise – and that we’re not accounting for that future cost and are therefore likely to be shocked by it – makes intuitive sense.

Now some recent studies have fleshed out the numbers, making it possible to tell this story visually (courtesy of yesterday’s Wall Street Journal). So here goes:

We’ve been encouraging people (through Federal Flood Insurance, artificially-low interest rates and state/local greed) to move from the interior of the country to the coasts, raising the population density of sunny but stormy locales like the Carolinas and South Florida:

All these new people need houses, stores, roads, etc., which means the cost of rebuilding after future storms is rising as well. Note on the following chart that completely rebuilding Naples, FL would for some reason cost 250% of municipal GDP:

Meanwhile, it turns out that a hurricane’s impact has less to do with the speed of its winds than with how long it sticks around, dropping rain and causing floods. So the important number is a storm’s “forward speed,” with slower being more damaging. And lately – perhaps due to warming ocean waters – storms have been slowing down:

So: Add more people to places that are seeing bigger, slower-moving storms, and the equation spits out higher damages per storm:

The conclusion? Rising storm damage for as far as the eye can see, with a real chance of a monster storm hitting a big city like Miami or New York and giving us a trillion-dollar summer, bankrupting some major insurance companies, depleting Federal Flood Insurance and forcing the federal government into yet another massive bail-out – just as federal deficits are exploding, public sector pensions are imploding, and student loans are defaulting en masse.

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Gartman Defies Wall Street, Goes Long US Stocks, Short Europe

With virtually every bank now urging their clients to fade the rally in US stocks, and instead take advantage of the gaping chasm that has opened up between US and European stocks to put on a pair trade that is long Europe and short the US, “renowned commodity investor” Dennis Gartman has defied the sellside again, and in his latest note writes that he “officially” bought US stocks while selling Europe “generally via the Euro Stoxx 50 Index.” So far, the trade appears to be working, to wit:

The US equity market futures are soaring on [the Nafta] news with the Dow futures trading approximately 200 points higher… or about 0.7% higher… and with the S&P futures trading 17- 18 “handles” higher o4 +0.5%.

On Friday… finally… after discussing the idea at some length for some rather long while we actually and “officially” did buy US  stock indices while selling Europe generally via the EURO STOXX 50 Index and we got very, very lucky for as we write we are nearly 1% higher on the US side of the trade and nearly 1% better on the European side of the trade. The only question now is when to add to the trade and we shall wait to see how far this initial trade moves before adding to the position on the inevitable correction.

We may scoff at President Trump’s insistence that the new agreement not be called the NAFTA and must henceforth be referred to as the USMC but the fact that agreement has been reached is hugely positive news and has sent US stock index futures soaring. Canada’s stock market shall follow suit, and so too should Mexico’s.

As for our retirement account we’ve done nothing for the third or fourth day in a row, remaining long of gold and remaining long of bond and/or bond-like funds, most of which went ex-dividend on Friday. We’ll be looking to swap out of the funds we have for funds that go ex-dividend in the next week or two, but otherwise we are very likely to sit tight and do nothing else.

As an added bonus, here is Gartman discussing the SEC’s settlement with Elon Musk…

Finally, the SEC has proven itself to be emasculated in its decision to fine Elon Musk and Tesla a scant $40 million… $20 million for both… and to have Tesla remove Mr. Musk from his position as Chairman but allowing him to remain as the company’s CEO. This is comically insufficient punishment as far as we are concerned given the seriousness of the offenses. Shame upon the SEC for this diminished decision.

… and his take on the ongoing Kavanaugh nomination drama:

We feel again compelled to discuss the events of last week as Judge Kavanaugh’s and Dr. Ford’s appearances made the most compelling television we’ve witnessed since the Watergate hearings nearly four decades ago. Let us be quite honest here: we were stunned by the sincerity and compelling nature of both Judge Kavanaugh and Dr. Ford. As we said here on Friday, there is no question in our mind but that something horrible happened to Dr. Ford that night in ’82. Her story was real; her appearance compelling. Her desire initially to have remained anonymous was obvious and just as obvious was the vile nature of the Left’s use of her as an attack point against Judge Kavanaugh. Initially, and before her appearance, we thought of her as a Left-wing partisan. Clearly, she was not and is not. We are convinced that was not her intention.

Shame then upon Sen. Feinstein for having rather withheld Dr. Ford’s letter to her until so late in the proceedings and nothing shall ever convince us that someone in her office… or perhaps even she…had leaked Dr. Ford’s letter to the press. That was a  shameful act of partisanship on Sen. Feinstein’s part and she should be ashamed of herself. Obviously, however, she’s not only not even slightly ashamed, and we suppose she now sees herself as an icon of the Left. We are all diminished for her actions and what we’ve been forced to witness.

Indeed, what last week and what this week shall be about was and is the fear on the part of the Left that it is about to lose control of the Supreme Court for decades into the future with the appointment of Judge Kavanaugh. The Left has viciously sacrificed Dr. Ford, her family, Judge Kavanaugh and his family for that fear and they are willing to embarrass the US in front of the world to stem that fear. Shame upon Sen. Feinstein; shame upon Sen. Booker; shame upon Sen. Coon et al. Who, after this shameful scenario forced upon us by the Left, shall ever allow his or her name to be put into the nomination process for any ranking government position? Who… really, who?

Barring some further salacious rumors regarding Judge Kavanaugh’s past this week, when this is done, Judge Kavanaugh’s nomination to the Supreme Court will pass through the Senate with more than 50 votes. When the vote counting is done, but before the vote is actually taken and when Sen. McConnell quietly reports to his fellow Senators that he has the votes to win, Senators Manchin and Heitkamp will vote for his nomination too giving the vote a clearer majority of perhaps 53-47. Judge Kavanaugh will become Justice Kavanaugh but the smell… the stench… of what the Left has done shall linger for years into the future. Again, shame upon them. We are disgusted, and we are embarrassed.

 

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Pound Surges On Report UK Plans Irish Border Compromise To Get Brexit Deal

With just six months left before Britain is due to leave the EU in the country’s biggest shift in foreign and trade policy in more than 40 years, and with the Brexit drama ongoing without a clear resolution, moments ago Bloomberg reported that U.K. Prime Minister Theresa May is preparing to make a significant new Brexit offer to the European Union in an attempt to open the door to a deal.

Brexit negotiations have stalled on the question of how to avoid the need for police and customs checks on the border between the U.K. and Ireland, but the British side now sees a path to reaching an agreement, a senior British official told Bloomberg.

The U.K.’s offer applies to the so-called Irish backstop, a legal guarantee to ensure that the border between Northern Ireland and the Irish Republic remains open and free for travel and trade after Brexit. It would only apply as a last resort in case an overarching trade deal doesn’t address the issue.

Under the plan, which is expected to be proposed later this month, the U.K. would back down on its opposition to new checks on goods moving between the British mainland and Northern Ireland. In exchange, May’s team would need the EU to compromise and allow the whole of the U.K. including Northern Ireland to stay in the bloc’s customs regime.

Although the picture is detailed and complex, the outline of a deal — as the British see it — would potentially unlock negotiations which have been in virtual stalemate since March.

The EU says without agreement on the backstop, there can’t be an exit deal. That would mean Britain crashing out of the bloc in March, and no transition period before future trading arrangements take effect.

As previously explained, the Irish border problem arises because after Brexit, the U.K. will no longer be part of the EU’s customs union and single market. The EU says this will mean goods moving into Ireland will need to be checked to ensure they comply with safety and quality standards rules and that the correct tariffs are paid.

Both sides want to avoid imposing security and customs checks at the frontier between Ireland and the British province – which would revive memories of the sectarian conflict that gripped the region for decades until a peace deal was reached 20 years ago. In order to avoid these checks taking place at the Irish border with Northern Ireland, the EU has proposed keeping the region inside its customs territory.

That would require checks to take place instead at a notional border down the Irish Sea – between Northern Ireland and the British mainland. May has flatly rejected this option – warning it would divide the U.K. constitutionally into two separate customs territories, something she said no prime minister could ever contemplate.

So what is the solution?

The proposed compromise revolves around the distinction between customs checks and regulatory checks. May wants to keep the whole U.K. – including Northern Ireland – inside the EU tariff regime as part of the backstop plan. The EU is currently opposed to allowing this, and wants only Northern Ireland to remain inside its customs territory after Brexit. That will need to change if there is to be a deal.

Under the British plan — which has not yet been announced and could change — the U.K. would keep goods regulations in Northern Ireland closely aligned with the EU rules applying in the Irish Republic. But new regulatory checks would be implemented on goods passing between Northern Ireland and the British mainland, where different rules could apply once the country is outside the EU.

* * *

Following the news, the pound jumped, rising as high as 1.3116 against the dollar before paring some gains. As Bloomberg’s Richard Jones notes, “we’ve been here before.” He adds that obviously the devil is in the details, “so the reaction will probably remain muted. Any compromise still has to get through Parliament (not to mention Conservative party conference) and the EU will need to approve it as well. Pitfalls remain and a deal is still not nailed on.” Still, at the margin this does move the situation away from a no-deal Brexit.

 

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The Inconvenient Realities Of America’s Labor ‘Shortage’

Authored by Charles Hugh Smith via OfTwoMinds blog,

Few conventional-media commentators are willing or able to discuss these factors in the labor shortage / declining participation trends.

Is there a labor shortage in the U.S.? Employers are shouting “yes.” Economists keep looking for wage increases as evidence of a labor shortage, and since wage increases are still relatively modest, the argument that there are severe labor shortages in parts of the U.S. is unpersuasive to many conventional economists.

But if we look at “we’re hiring” signs and billboards, it’s clear employers are having trouble filling available positions. Longtime correspondent Harvey D. recently submitted this list of billboards advertising job openings in South Carolina:

“Here’s a sample of billboards in upstate South Carolina, a heavily industrialized area along I-85:

Michelin – $16.50 & up to start, depending on experience.

BMW – $18.50 & up (not to mention that they’re going to build the 23,000 Amazon delivery vans there.)

MAU (staffing firm) – $18.50 & up for forklift operators; they have 3,000+ students in industrial skill training courses in GA/SC/NC/AL 

DHL (staffing) – need forklift & general machinists, $20 & benefits

Greenville Tech (vo-tech school) – recruiting students for master welding classes, you can make $80K w/ 5 yrs experience.

Even Chick-Fil-A is offering $13 w/ bennies for full/part-time if you can pass a drug test and are 18+…

every trucking firm & almost every business has a banner in their front yard saying “WE’RE HIRING”.

There are numerous theories about the causes of labor shortages and the lack of wage pressure. One reality Harvey described in his email is the difficulty small businesses have in raising wages as 1) the cost of benefits such as healthcare insurance skyrocket, pushing total compensation costs higher even if the wages employees see remain the same and 2) the difficulty in passing on higher labor costs.

Few small businesses are monopolies; if prices move up, customers go elsewhere or put off the purchase. Even corporations’ ability to raise prices without losing sales is limited, hence the popularity of reducing quantity (the ever-shrinking serving size) or quality (appliances with inferior components that fail in a few years, etc.)

Let’s look at the labor participation rates for the populace at large, women and men. The labor participation rate reflects the percentage of the population that’s in the workforce, either working or actively looking for work.

That the number of people in the workforce has declined significantly is well-known. The US Census pegs the number of people ‘not in the labor force’ at 95 million.This includes people who are disabled, in school, etc., so the number should be taken with a grain of salt. But the decline in the relative size of the labor force is stunning:

Interestingly, the labor participation rate for women has held steady compared to the entire populace.

Now compare it to the labor participation rate for men, which has absolutely cratered:

Labor Force Statistics from the Current Population Survey (Bureau of Labor Statistics)

It’s hard to find statistics for many of the dynamics behind the sharp decline of male participation in the official workforce, as few institutions track such trends such as the number of men making a living in the black market. It’s hard to estimate this number and hard to get those engaged in the black market to answer honestly to questions about activities that break laws requiring the reporting of all income, regardless of source.

Despite the lack of statistics, we can assemble some anecdotal factors:

1. Failing the standard employment drug test. Should marijuana use bar all employment? Employers are beginning to question this Drug Gulag Inquisition assumption. Anecdotally, up to 70% of all applicants fail these drug tests.

2. Felony conviction for non-violent (i.e. drug-related) crime. Once again, Employers are beginning to question this Drug Gulag Inquisition assumption, as felony convictions are excluding millions of otherwise employable people from the conventional job market.

3. Pay not worth the trouble. As difficult as this might be for many to accept, a job paying X dollars per hour can be viewed as not worth the trouble if the commuting costs are high, the cost of living near the job is higher, and some other source of lower but still adequate income is available: disability, parents, girlfriend, dealing drugs, working informally for cash, the gig economy, etc.

4. Informal / black-market income. $15 per hour after deductions equals $11 per hour, while $15 in cash is still $15. Over the course of a year, that’s the difference between $30,000 and $22,000. That $8,000 represents a 36% “raise.”

5. Misplaced sense of pride / dignity. Many tradecraft jobs (welding, construction, etc.) have traditionally provided male workers with strong identities and sources of pride and dignity. That even these jobs are going begging suggests the possibility that at least some males no longer gain the pride / dignity they desire from work, or they’ve surrendered the desire for earning pride / dignity in the workplace: work is for chumps,etc.

This also suggests that some percentage of the male workforce no longer feels the same need as females do to take jobs in the formal economy regardless of the costs and indignities that go with the territory of commoditized work / employment. In other words, opting out of formal employment appears to be much less of an option for women than for men.

Few conventional-media commentators are willing or able to discuss these cultural / financial factors in the labor shortage / declining participation trends. As with so much of American life, the inconvenient realities may upset somebody, so better to stick with magical-thinking or politically-correct truisms that are completely out of touch with reality but oh-so-acceptable to the status quo.

Maybe it’s time for a real discussion of work and employment in a system dominated by mobile capital and self-serving insiders.

*  * *

My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free in PDF format. My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.

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Rachel Mitchell Memo Highlights Weaknesses In Ford Testimony

Rachel Mitchell, the veteran sex crimes prosecutor who was chosen by the GOP to question Christine Ford and Brett Kavanaugh, sent a memo to Republican senators calling Ford’s allegations a “he said, she said” case that “is even weaker than that.”

In her 5-page memo (at the bottom of this article), Mitchell wrote that she was presenting her “independent assessment” of the allegations. She said this was based on her independent review of the evidence and her nearly 25 years of experience. She alleged in the document that “the activities of Congressional Democrats and Dr. Ford’s attorneys likely affected Dr. Ford’s account.”

Mitchell, who worked in the Maricopa County Attorney’s Office in Phoenix as the chief of the Special Victims Division, which covers sex crimes and family violence, said she was not pressured to write the memorandum and it did not necessarily reflect the views of any other senator or committee member. “While I am a registered Republican, I am not a political or partisan person,” she wrote and added that  “There is no clear standard of proof for allegations made during the Senate’s confirmation process. But the world in which I work is the legal world, not the political world. Thus, I can only provide my assessment of Dr. Ford’s allegations in that legal context.”

Noting the obvious, Mitchell wrote that a “‘he said, she said’ case is incredibly difficult to prove. But this case is even weaker than that. Dr. Ford identified other witnesses to the event, and those witnesses either refuted her allegations or failed to corroborate them….I do not think that a reasonable prosecutor would bring this case based on the evidence before the Committee. Nor do I believe that this evidence is sufficient to satisfy the preponderance-of-the-evidence standard.”

Mitchell listed several reasons for that conclusion. Courtesy of Heavy.com, these included:

  • Dr. Ford “has not offered a consistent account of when the alleged assault happened.”

Under this header, Mitchell listed different accounts she says Ford gave, ranging from “mid 1980s” in a text to the Washington Post to “early 80s” in a letter to Sen. Dianne Feinstein, among other things.

  • Dr. Ford “has struggled to identify Judge Kavanaugh as the assailant by name.”

According to Rachel Mitchell, no name was listed in 2012 and 2013 individual and marriage therapy notes. She did note that Ford’s husband “claims to recall that she identified Judge Kavanaugh by name in 2012” and added “in any event, it took Dr. Ford over thirty years to name her assailant. Delayed disclosure of abuse is common so this is not dispositive.”

  • “When speaking with her husband, Dr. Ford changed her description of the incident to become less specific.”

Mitchell stated that Ford told The Washington Post that she told her husband she was the victim of “physical abuse,” whereas she has now testified that she told her husband about a “sexual assault.”

  • “Dr. Ford has no memory of key details of the night in question – details that could help corroborate her account.”

Among the lack of details, Mitchell said that “she does not remember who invited her to the party or how she heard about it. She does not remember how she got to the party.” Mitchell continued: “She does not remember in what house the assault allegedly took place or where that house was located with any specificity. Perhaps most importantly, she does not remember how she got from the party to her house.” The memo then continued listing more details.

Mitchell pointed out that Ford “does, however, remember small, distinct details from the party unrelated to the assault. For example, she testified that she had exactly one beer at the party and was taking no medication at the time of the alleged assault.”

  • “Dr. Ford’s Account of the Alleged Assault Has Not Been Corroborated by Anyone She Identified as Having Attended – Including Her Lifelong Friend.”

Mitchell wrote that Dr. Ford has named three people other than Judge Kavanaugh who attended the party – Mark Judge, Patrick PJ Smyth, and her lifelong friend Leland Keyser, formerly Ingham. She said another boy attended but she couldn’t remember his name, but Mitchell pointed out that “no others have come forward.”

“All three named eyewitnesses have submitted statements to the Committee denying any memory of the party whatsoever,” Mitchell wrote. She stated that Keyser stated through counsel in her first statement that “Keyser does not know Mr. Kavanaugh and she has no recollection of ever being at a party or gathering where he was present with, or without, Dr. Ford.”

In a later statement, Keyser’s lawyer said, “the simple and unchangeable truth is that she is unable to corroborate [Dr. Ford’s allegations] because she has no recollection of the incident in question.”

Ford testified that Leland did “not follow up with Dr. Ford after the party to ask why she had suddenly disappeared.”

  • “Dr. Ford has not offered a consistent account of the alleged attack.”

Mitchell wrote that Ford wrote in her letter to Sen. Dianne Feinstein that she had heard Kavanaugh and Mark Judge talking to other partygoers downstairs while hiding in the bathroom after the alleged assault but testified that she could not hear them talking to anyone.

  • Her “account of who was at the party has been inconsistent.”

Mitchell said The Washington Post’s account of Dr. Ford’s therapist notes say there were four boys in the bedroom when she was allegedly assaulted. Ford told The Post the notes were erroneous because there were four boys at the party but only two in the bedroom.

In her letter to Feinstein, she said “me and 4 others” were at the party but in her testimony she said there were four boys in additional to Leland Keyser and herself. She listed Smyth as a bystander in a text to The Post and to a polygrapher and then testified it was inaccurate to call him a bystander. “She did not list Leland Keyser even though they are good friends. Leland Keyser’s presence should have been more memorable than PJ Smyth’s,” wrote Mitchell.

  • “Dr. Ford has struggled to recall important recent events relating to her allegations, and her testimony regarding recent events raises further questions about her memory.”

Mitchell said that Ford doesn’t remember if she showed a full or partial set of therapy notes to the Washington Post. She doesn’t remember if she showed the Post the notes or her summary of the notes.

Mitchell stated that Ford refused to provide her therapy notes to the Senate Committee.

  • “Dr. Ford’s explanation of why she disclosed her allegations the way she did raises questions.”

Mitchell says that Ford wanted to remain confidential but called a tipline at the Washington Post. She testified that she had a “sense of urgency to relay the information to the Senate and the president.” But she also said she did not contact the Senate because she claimed she “did not know how to do that.”

Mitchell also noted that Ford “could not remember if she was being audio or video-recorded when she took the polygraph. She could not remember whether the polygraph occurred the same day as her grandmother’s funeral or the day after her grandmother’s funeral. It would also have been inappropriate to administer a polygraph to someone who was grieving.” (Ford’s attorneys have said she took and passed a polygraph.)

  • “Dr. Ford’s description of the psychological impact of the event raises questions.”

According to Mitchell, the date of the hearing was delayed because the Committee was told that Ford’s symptoms prevented her from flying, but she agreed during testimony that she flies “fairly frequently.” She also flew to Washington D.C. for the hearing. Mitchell noted that Ford testified that she was not “clear” whether investigators were willing to travel to California to interview her.

She said she struggled academically in college, but she didn’t make the claim about the last two years of high school.

  • “The activities of Congressional Democrats and Dr. Ford’s attorneys likely affected Dr. Ford’s account.”

Under the above header, Mitchell referred to an additional timeline. You can read it at the end of the document embedded at the bottom of this article.

* * *

The above is a partial summary of the conclusions in the memo; in numerous instances Mitchell provided additional examples to back up her claims.

In his statement appointing Mitchell, Chuck Grassley praised Rachel Mitchell’s career. Grassley said that Mitchell has “decades of experience prosecuting sex crimes,” calling her a “career prosecutor.”

Although critics have alleged the GOP Senators just don’t want the bad optics of an all-male panel questioning Ford, Grassley gave another motive. “The goal is to de-politicize the process and get to the truth, instead of grandstanding and giving senators an opportunity to launch their presidential campaigns,” Grassley said.

“I’m very appreciative that Rachel Mitchell has stepped forward to serve in this important and serious role. Ms. Mitchell has been recognized in the legal community for her experience and objectivity. I’ve worked to give Dr. Ford an opportunity to share serious allegations with committee members in any format she’d like after learning of the allegations. I promised Dr. Ford that I would do everything in my power to avoid a repeat of the ‘circus’ atmosphere in the hearing room that we saw the week of September 4. I’ve taken this additional step to have questions asked by expert staff counsel to establish the most fair and respectful treatment of the witnesses possible.”

Rachel Mitchell has donated to the campaign of Mark Brnovich, Arizona’s Republican attorney general, according to The Post. The County Attorney’s newsletter also mentions that Mitchell was part of a team that won an award for dealing with a “sex assault backlog.”

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