Should All Drugs Be Legal? A Soho Forum Debate

Except for laws prohibiting the sale of drugs to minors and driving while impaired, all laws that penalize drug production, distribution, possession, and use should be abolished, along with special “sin” taxes on drugs.

That was the resolution of a public debate hosted by the Soho Forum in New York City on October 7, 2019. It featured Jacob Sullum, a senior editor at Reason magazine, and former New York Times reporter Alex Berenson. Soho Forum Director Gene Epstein moderated.

It was an Oxford-style debate, in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. This was the Soho Forum’s first tie, as the debaters each convinced 9.76 percent of the audience to come over to their side. 

Arguing for the affirmative was Sullum, who is the author of Saying Yes: In Defense of Drug Use (2003) and For Your Own Good: The Anti-Smoking Crusade and the Tyranny of Public Health (1999). He was the 2004 recipient of the Thomas S. Szasz Award for Outstanding Contributions to the Cause of Civil Liberties. 

Berenson, who argued for the negative, is the author most recently of Tell Your Children: The Truth About Marijuana, Mental Illness, and Violence (2019). Berenson is also a best-selling spy novelist. His popular titles include The Deceivers, The Silent Man, and The Ghost War.

The Soho Forum, which is sponsored by the Reason Foundation, is a monthly debate series at the SubCulture Theater in Manhattan’s East Village.

Produced by John Osterhoudt.

Photo credit: Brett Raney

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If There Is A Trade Deal, When Will The Global Economy Recover

If There Is A Trade Deal, When Will The Global Economy Recover

Authored by Morgan Stanley’s chief economist, Chetan Ahya

Trade tensions between the US and China have been the single biggest source of uncertainty for the global economy over the past 18 months. After a protracted period of negotiations, some progress has been made towards a deal, with a potential Phase 1 to be signed in mid-November. How much of a difference will this make for the global economy?

To start with, we estimate that trade tensions and their impact on corporate confidence and capex have cost the global economy about 90-100bp of growth momentum. Studies by the Fed staff and the IMF suggest a similar impact. Global growth has decelerated close to a post-crisis low of 2.9%Y in 3Q19 from its peak of 4.1%Y in 1Q18.

Second, trade tensions have renewed the structural risk of secular stagnation. As we’ve highlighted before, the global capex cycle has essentially ground to a halt since mid-2018, when tensions emerged. Just as it seemed that years of policy support had finally restored the capex cycle in 2017-1H18, trade tensions have snuffed this recovery out. A capex revival is the key to lifting the global economy out of a stagnation-like environment.

Some might argue that the role of trade tensions in shaping the global outlook has diminished now that central banks are back in the business of providing monetary accommodation. We’ve noted that 20 central banks globally are now easing, and there’s more in the pipeline. By early 2020, the weighted average global monetary policy rate will be tracking fairly close to post-crisis lows. Nevertheless, we think that trade tensions will still determine how early and how strong the recovery will be.

If the current pause turns out to be durable, we believe that the global economy can recover from 1Q20. It’s likely that global consumer spending would improve, and corporate confidence would stabilise. However, we’re sceptical that businesses will resume capex spending in the near term, considering the fall-off in demand and declining utilisation ratios. Moreover, despite recent progress in trade negotiations, the way forward to signing Phase 1 remains somewhat ambiguous. While further tariff increases have been suspended for now, there is no immediate plan to roll back the existing tariffs. The deal is also being structured in phases, leaving us some distance away from the comprehensive agreement that we think is a prerequisite for a robust recovery. In short, uncertainty is likely to linger for a while, leading us to expect only a weak recovery, to still below-trend growth.

If tariffs should rise on December 15, we would expect weakness in global growth to continue for the next two quarters (4Q19/1Q20). We also think that a further increase in tariffs could increase the risk of non-linearity kicking in. The corporate sector could abandon any hope of a recovery and start firing workers, a decision they have not taken so far. Should this scenario unfold, it would overwhelm the effects of the monetary easing now under way, triggering a much deeper slowdown and raising global recession risks significantly.

In sum, trade tensions still matter a great deal to the outlook for the global economy. In the four weeks until the proposed APEC meeting between the two presidents, we will watch the commentary and progress in negotiations closely (particularly the draft agreement) to assess if a durable pause materialises.


Tyler Durden

Mon, 10/21/2019 – 11:10

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Should All Drugs Be Legal? A Soho Forum Debate

Except for laws prohibiting the sale of drugs to minors and driving while impaired, all laws that penalize drug production, distribution, possession, and use should be abolished, along with special “sin” taxes on drugs.

That was the resolution of a public debate hosted by the Soho Forum in New York City on October 7, 2019. It featured Jacob Sullum, a senior editor at Reason magazine, and former New York Times reporter Alex Berenson. Soho Forum Director Gene Epstein moderated.

It was an Oxford-style debate, in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. This was the Soho Forum’s first tie, as the debaters each convinced 9.76 percent of the audience to come over to their side. 

Arguing for the affirmative was Sullum, who is the author of Saying Yes: In Defense of Drug Use (2003) and For Your Own Good: The Anti-Smoking Crusade and the Tyranny of Public Health (1999). He was the 2004 recipient of the Thomas S. Szasz Award for Outstanding Contributions to the Cause of Civil Liberties. 

Berenson, who argued for the negative, is the author most recently of Tell Your Children: The Truth About Marijuana, Mental Illness, and Violence (2019). Berenson is also a best-selling spy novelist. His popular titles include The Deceivers, The Silent Man, and The Ghost War.

The Soho Forum, which is sponsored by the Reason Foundation, is a monthly debate series at the SubCulture Theater in Manhattan’s East Village.

Produced by John Osterhoudt.

Photo credit: Brett Raney

Subscribe to our YouTube channel.

Like us on Facebook.

Follow us on Twitter.

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Nick Cave Slams ‘Woke’ Culture as ‘Self-Righteous’ and Suppresive

Australian musician and writer Nick Cave—best known as the genre-bending Goth heartthrob leader of the Bad Seeds—has had enough of “woke culture.” A fan recently asked the 62-year-old Cave about his political leanings, and another inquired: “How ‘woke’ are you?” His answer, posted at his blog The Red Hand Files, is as lapidary and memorable as the theme song he composed for Peaky Blinders.

I tend to become uncomfortable around all ideologies that brand themselves as ‘the truth’ or ‘the way’. This not only includes most religions, but also atheism, radical bi-partisan politics or any system of thought, including ‘woke’ culture, that finds its energy in self-righteous belief and the suppression of contrary systems of thought. Regardless of the virtuous intentions of many woke issues, it is its lack of humility and the paternalistic and doctrinal sureness of its claims that repel me.

Antifa and the Far Right, for example, with their routine street fights, role-playing and dress-ups are participants in a weirdly erotic, violent and mutually self-sustaining marriage, propped up entirely by the blind, inflexible convictions of each other’s belief systems. It is good for nothing, except inflaming their own self-righteousness.

Cave reminds his readers that

Some of us…are of the generation that believed that free speech was a clear-cut and uncontested virtue, yet within a generation this concept is seen by many as a dog-whistle to the Far Right, and is rapidly being consigned to the Left’s ever-expanding ideological junk pile.

Indeed. One of the most amazing things about the current moment is the rapidity with which hard-fought battles to clear a space for free speech have been forgotten and replaced by a new censoriousness. It was only 50 years ago that we really won the right to talk and speak freely about all sorts of topics and ideas. Do we really want to return to an older time when speech and culture were constipated?

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UK Parliament Speaker Bercow Blocks New Vote On Johnson’s Brexit Deal

UK Parliament Speaker Bercow Blocks New Vote On Johnson’s Brexit Deal

With cable reversing all weekend losses, and spiking overnight on “optimism” that a Brexit vote could be held as soon as today, moments ago House of Commons speaker John Bercow blocked the government’s bid to hold a meaningful vote, thwarting Boris Johnson in his latest attempt to put his Brexit deal to a fresh vote in Parliament after suffering a defeat for his strategy on Saturday.

In rejecting BoJo’s submission for a meaningful vote Monday, notorious Bremainer Bercow cited a parliamentary rule dating back to 1604 under which the government cannot repeatedly ask Parliament to vote on the exact same motion.

“It is clear that the motions are in substance the same,” Bercow said. “My ruling is therefore that the motion will not be debated today as it would be repetitive and disorderly to do so.”

While cable rebounded earlier on hopes of a substantial vote to be held today, it has failed to slide, and traded just shy of the key 1.3000 level …

… perhaps because on Sunday, ministers said the government has enough support in Parliament to get Johnson’s Brexit deal ratified. They may be in for a major surprise as the one thing UK parliament has demonstrated, is it is completely unpredictable.

 


Tyler Durden

Mon, 10/21/2019 – 10:55

Tags

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Nick Cave Slams ‘Woke’ Culture as ‘Self-Righteous’ and Suppresive

Australian musician and writer Nick Cave—best known as the genre-bending Goth heartthrob leader of the Bad Seeds—has had enough of “woke culture.” A fan recently asked the 62-year-old Cave about his political leanings, and another inquired: “How ‘woke’ are you?” His answer, posted at his blog The Red Hand Files, is as lapidary and memorable as the theme song he composed for Peaky Blinders.

I tend to become uncomfortable around all ideologies that brand themselves as ‘the truth’ or ‘the way’. This not only includes most religions, but also atheism, radical bi-partisan politics or any system of thought, including ‘woke’ culture, that finds its energy in self-righteous belief and the suppression of contrary systems of thought. Regardless of the virtuous intentions of many woke issues, it is its lack of humility and the paternalistic and doctrinal sureness of its claims that repel me.

Antifa and the Far Right, for example, with their routine street fights, role-playing and dress-ups are participants in a weirdly erotic, violent and mutually self-sustaining marriage, propped up entirely by the blind, inflexible convictions of each other’s belief systems. It is good for nothing, except inflaming their own self-righteousness.

Cave reminds his readers that

Some of us…are of the generation that believed that free speech was a clear-cut and uncontested virtue, yet within a generation this concept is seen by many as a dog-whistle to the Far Right, and is rapidly being consigned to the Left’s ever-expanding ideological junk pile.

Indeed. One of the most amazing things about the current moment is the rapidity with which hard-fought battles to clear a space for free speech have been forgotten and replaced by a new censoriousness. It was only 50 years ago that we really won the right to talk and speak freely about all sorts of topics and ideas. Do we really want to return to an older time when speech and culture were constipated?

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Is Buttigieg An Agent Of Facebook? New Emails Show Zuck Advised Campaign Of Harvard Buddy

Is Buttigieg An Agent Of Facebook? New Emails Show Zuck Advised Campaign Of Harvard Buddy

Facebook CEO Mark Zuckerberg has been quietly advising Pete Buttigieg’s presidential campaign through staff hires, according to a new Bloomberg report. Campaign spokesman Chris Meagher confirmed that Zuckerberg and his wife Priscilla Chan sent several emails to Mike Schmuhl, Buttigieg’s campaign manager, detailing a list of names that they would like to see the campaign hire. Meagher said the campaign chose two from the list. 

Eric Mayefsky, now a senior digital analytics adviser for the Buttigieg campaign, and Nina Wornhoff, an organizing data manager for Buttigieg, were the two recent highers suggested by Zuckerberg and Chan. 

Mayefsky worked at a startup founded by former Facebook employees for a decade, then worked at Facebook for four years starting in 2010. 

Wornhoff, the other campaign hire, worked as a machine learning engineer at the Chan Zuckerberg Initiative.

While Zuckerberg and Buttigieg had the same friends circles at Harvard, they were only introduced years later through a mutual Harvard buddy.

Zuckerberg’s communication trail with Buttigieg is a “rare example of direct political involvement from one of tech’s most powerful executives,” said Bloomberg.

The email interactions between Zuckerberg and Buttigieg’s campaign have surfaced as Washington politicians have slammed Facebook on privacy, election interference, and other issues dealing with misinformation. 

While Zuckerberg has had very few political allies in Washington, perhaps, Buttigieg is now one of them; as such Buttigieg’s recent surprise ascent in the poll and online betting markets…

… should make the Facebook CEO quite happy.

The good news is that there “clearly” is no conflict of interest here; after all as the 2016 election showed, Facebook has virtually no influence on the outcome of the presidential election. Or maybe it does, but only when Russians buy a few thousands dollars worth of ads; but surely none of that is of any interest if its CEO has an undisclosed relationship with one of the candidates.


Tyler Durden

Mon, 10/21/2019 – 10:39

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Can a “federal agency’s policy can pre-empt state law?

Today the Supreme Court denied review in Lipschultz v. Charter Advanced Services (MN). This petition considered whether state law could be pre-empted by a federal agency’s policy. Here, the Federal Communications Commission adopted a “policy of nonregulation” of Voice over IP services.

Justice Thomas, joined by Justice Gorsuch, concurred in the denial of certiorari. They flagged an issue that the parties did not brief: is an executive-branch policy “Law” for purposes of the Supremacy Clause.

First, Thomas and Gorsuch explain that a “policy of nonregulation” should not be considered “Law,” because it is not final agency action:

At the time of the founding, this Clause would have been understood to pre-empt state law only if the law logically contradicted the “Constitution,” the “Laws of the United States,” or “Treaties.”

It is doubtful whether a federal policy—let alone a policy of nonregulation—is “Law” for purposes of the Supremacy Clause. Under our precedent, such a policy likely is not final agency action because it does not mark “the consummation of the agency’s decisionmaking process” or determine Charter’s “rights or obligations.”

Second, even if the policy resulted from a final agency action, it is still not necessarily “Law.”

Even if it were final agency action, the Supremacy Clause “requires that pre-emptive effect be given only to those federal standards and policies that are set forth in, or necessarily follow from, the statutory text that was produced through the constitutionally required bicameral and presentment procedures.” Wyeth v. Levine, 555 U. S. 555, 586 (2009) (THOMAS, J., concurring in judgment).

Third, they explain that the allowing preemption in this case permits the aggrandizement of executive and judicial power, at the expense of the states:

Giving pre-emptive effect to a federal agency policy of nonregulation thus expands the power of both the Executive and the Judiciary. It authorizes the Executive to make “Law” by declining to act, and it authorizes the courts to conduct “a freewheeling judicial inquiry” into the facts of federal nonregulation, rather than the constitutionally proper “inquiry into whether the ordinary meanings of state and federal law conflict,” Wyeth, supra, at 588 (THOMAS, J., concurring in judgment) (alteration and internal quotation marks omitted).

Alas, this issue was not raised in the cert petition. Therefore, the question was not before the Court:

Because this petition does not clearly challenge the underlying basis of the pre-emption theory, how- ever, I concur in the denial of certiorari.

Note to practitioners: raise this issue in the future. You have at least two votes.

A similar issue was raised in Arizona Dream Act Coalition v. Brewer. The Ninth Circuit concluded that DACA preempted an Arizona law that denied drivers licenses to deferred action recipients. Arizona’s cert petition raised the exact question Justice Thomas flagged:

Did the Ninth Circuit err in assuming that the Deferred Action for Childhood Arrivals (DACA) program, an executive-branch policy of non- enforcement, was valid “federal law” capable of preempting a state police power regulation?

Cert was denied in March 2018.

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Can a “federal agency’s policy can pre-empt state law?

Today the Supreme Court denied review in Lipschultz v. Charter Advanced Services (MN). This petition considered whether state law could be pre-empted by a federal agency’s policy. Here, the Federal Communications Commission adopted a “policy of nonregulation” of Voice over IP services.

Justice Thomas, joined by Justice Gorsuch, concurred in the denial of certiorari. They flagged an issue that the parties did not brief: is an executive-branch policy “Law” for purposes of the Supremacy Clause.

First, Thomas and Gorsuch explain that a “policy of nonregulation” should not be considered “Law,” because it is not final agency action:

At the time of the founding, this Clause would have been understood to pre-empt state law only if the law logically contradicted the “Constitution,” the “Laws of the United States,” or “Treaties.”

It is doubtful whether a federal policy—let alone a policy of nonregulation—is “Law” for purposes of the Supremacy Clause. Under our precedent, such a policy likely is not final agency action because it does not mark “the consummation of the agency’s decisionmaking process” or determine Charter’s “rights or obligations.”

Second, even if the policy resulted from a final agency action, it is still not necessarily “Law.”

Even if it were final agency action, the Supremacy Clause “requires that pre-emptive effect be given only to those federal standards and policies that are set forth in, or necessarily follow from, the statutory text that was produced through the constitutionally required bicameral and presentment procedures.” Wyeth v. Levine, 555 U. S. 555, 586 (2009) (THOMAS, J., concurring in judgment).

Third, they explain that the allowing preemption in this case permits the aggrandizement of executive and judicial power, at the expense of the states:

Giving pre-emptive effect to a federal agency policy of nonregulation thus expands the power of both the Executive and the Judiciary. It authorizes the Executive to make “Law” by declining to act, and it authorizes the courts to conduct “a freewheeling judicial inquiry” into the facts of federal nonregulation, rather than the constitutionally proper “inquiry into whether the ordinary meanings of state and federal law conflict,” Wyeth, supra, at 588 (THOMAS, J., concurring in judgment) (alteration and internal quotation marks omitted).

Alas, this issue was not raised in the cert petition. Therefore, the question was not before the Court:

Because this petition does not clearly challenge the underlying basis of the pre-emption theory, how- ever, I concur in the denial of certiorari.

Note to practitioners: raise this issue in the future. You have at least two votes.

A similar issue was raised in Arizona Dream Act Coalition v. Brewer. The Ninth Circuit concluded that DACA preempted an Arizona law that denied drivers licenses to deferred action recipients. Arizona’s cert petition raised the exact question Justice Thomas flagged:

Did the Ninth Circuit err in assuming that the Deferred Action for Childhood Arrivals (DACA) program, an executive-branch policy of non- enforcement, was valid “federal law” capable of preempting a state police power regulation?

Cert was denied in March 2018.

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Trader: “Asset Bubbles No Longer Work As A Cure For Growth”

Trader: “Asset Bubbles No Longer Work As A Cure For Growth”

Authored by Richard Breslow via Bloomberg,

If there was one message that resonated from the IMF meetings, it was that what we are doing isn’t working. Acknowledging that fact is every bit as important as the forecasts of dour prospects for global growth and the risks of excess leverage. You have to start somewhere. Or maybe we should think of it as, you have to stop at some point.

It’s an understandable human tendency for central bankers to worry that something bad might happen “on their watch.” But it has. Too many economies are merely limping along. And no amount of asset bubbles will halt that fact. Every time someone argues that providing less liquidity will cause pain, the counterargument has to be, not for savers and future generations. What we can tolerate now isn’t some radical reversal of policy. That probably would be too much of a shock. And, at this point counterproductive.

What we need is a time cure. A long period of letting things heal on their own. Emergencies can be dealt with as needed. Patience is indeed a virtue and further monetary policy activism is dangerous. This is true with or without the appropriate kind and level of fiscal spending. The world has collectively reached its reversal rate. It’s presumably too late for the Fed to reconsider its October rate cut plans. But it would be a policy error to tee up anything for December and beyond. I do like the blackout periods.

If central banks can bring themselves to be less intrusive, they will unavoidably have to deal with the fallout from some of the over-leverage they have encouraged. Undoubtedly, some borrowers and lenders will experience the pain. But that’s a different task than just throwing money at the entire system. Which merely exacerbates the problem.

Equity indexes are mostly up so far today. That’s nice. And if it’s actually based on trade optimism, all the better. But what actually could exude optimism is the fact that global bond yields are modestly higher across the board. We, obviously, don’t need a bond tantrum, but a gentle trend higher would be remarkably healthy. More and more policy makers are beginning to realize this fact. It’s certainly not something central banks, or political candidates, should try to resist. Yields, let alone negative ones, aren’t this low because of crisis conditions. They are a major cause of the problem.

The dollar is under pressure. The technical picture looks like this could potentially be a sustained move. Emerging markets like it. All that dollar denominated debt they’ve borrowed looks to be just a little bit less of a threat. Would that mean that they used this period to reduce their exposure to dollar liquidity issues? That’s probably asking too much. But it would be a prudent idea for them and their investors to keep checking on the status of the Fed’s currency swap lines.

Source: Bloomberg

Developed market central banks should resist the urge to push back on currencies. And when the FOMC meets, they would better serve the domestic and global economies by sorting out money-market stress issues than debating 25 basis points one way or the other.

We’ve dug a deep hole for the global economy. But doing more of the same isn’t the solution. And, frankly and emphatically, this isn’t the time or place to be pursuing trade and tariff fights. Even if you think they have some merit. Read the latest economic forecasts. We simply can’t afford it. As inexplicable as it is, we are unwilling to bring ourselves to do the right things. At least, we need to stop doing the wrong ones.


Tyler Durden

Mon, 10/21/2019 – 10:22

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