New Jersey Is Becoming The Most Hated State As Households Flee In Record Numbers

New Jersey Is Becoming The Most Hated State As Households Flee In Record Numbers

Tyler Durden

Mon, 08/31/2020 – 19:05

A new tax on millionaires, a 22.5% gas tax hike  (bringing the total increase to 250% in 4 years), and now a tax on high frequency trades: it is becoming obvious to most – except perhaps the state’s democratic leadership – that New Jersey is now actively trying to drive out its tax-paying population and top businesses with a series of draconian measures to balance its deeply underwater budget, instead of slashing spending. The state-imposed limitations on commerce, mobility and socialization due to the covid pandemic have also not helped. And in case it is still unclear, the trend of New Jersey’s ultra wealthy residents fleeing for more hospitable tax domiciles which started with David Tepper years ago, is now spreading to members of the middle class.

According to the latest data from United Van Lines and compiled by Bloomberg, people have been flooding into Vermont, Idaho, Oregon and South Carolina, eager to flee such financially-challenged, high-tax, protest-swept, Democrat-controlled states as Connecticut, Illinois and New York. But no other state has seen a greater exodus than New Jersey, where out of every 10 moves, 7 have been households leaving the state, or nearly three times as many moved out than moved in.

On the opposite end were bucolic, pastoral states such as Vermont and Idaho, which have seen between 70% and 75% of all inbound moves.

Ina world

A hypothetical move from New York City to Vermont is priced at $773 compared to $236 for the reverse trip, according to a Bloomberg analysis of U-Haul pricing. This price differential is due to numerous variables, one being that more people are moving out of a city than into it

Those claiming this record exodus from the Tri-State area is purely a result of Covid, think again: as United Van Lines reported back in its latest Annual Movers Study held before the coronavirus pandemic struck, the exodus was already present, as New Jersey (68.5 percent), New York (63.1 percent) and Connecticut (63 percent) were all included among the top 10 outbound states for the fifth consecutive year. Primary reasons cited for leaving the Northeast back in January were retirement (26.85 percent) and new job/company transfer (40.12 percent). To that we can now add soaring taxes and stifling covid-linked mandates.

How long will this exodus persist is unclear: at some point the recipient states will realize they too have to follow with similar fiscal policies or else they too risk becoming the next New Jersey. However until then, one thing is clear: the more New Jersey and its tri-state peers seek to impose every possible form of tax on their rapidly diminishing residents, the fewer people will actually stick around to pay those taxes.

 

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Watch As Democrats Spend Four Years Fantasizing About Riots, Assassination And Violent Chaos

Watch As Democrats Spend Four Years Fantasizing About Riots, Assassination And Violent Chaos

Tyler Durden

Mon, 08/31/2020 – 18:45

As Joe Biden and the rest of the Democrats attempt to place blame for the ongoing riots on President Trump, here’s a two-minute clip of prominent Democrats, pundits, and actors calling for civil unrest, assassination, and violence against conservatives.

They got what they very clearly asked for:

Except, it’s gone too far

As we noted earlier today, JP Morgan’s Marko Kolanovic nailed it when he highlighted the ‘Wasow effect’ – named after Omar Wasow, who noted after studying historical impacts of various demonstration that peaceful protests by the left typically help Democrats by 2-3%, “while violent pro-Democrat demonstrations helped Republicans by 2-8%.”

Kolanovic continues:

We believe that momentum related to the Wasow effect will continue in favor of Trump, unless Democrats pivot away from their stance regarding demonstrations. This may not be easy however, given that top Democrats have called for daily demonstrations (e.g. Kamala Harris) and rallied their base around the theme of defunding police and would need to effectively adopt Trump’s policy after 3 months as a reaction to polls. Some party officials already rationalized or promoted the behavior (see here, here). Moreover, turnout strongly depends on the left wing of the party (‘Bernie bros’, Marxist elements, etc.), which would be alienated by such a shift.

Wasow effect is basically who is helped by protesting: if peaceful, it’s Dems, if violent, it’s Republicans.

It should come as no surprise that Democrats and associated media outlets portray protests as mostly peaceful, while Republicans highlight the violent aspects of demonstrations.

However, there is an important difference between the current environment and historical results, in that social media plays a significant transmission role: voters can see for themselves if the protests are peaceful or violent. It is highly likely that social media distribution of videos of looting in Chicago, L.A. and NYC, arson in Minneapolis, Wisconsin, Portland, Seattle, etc. have led to a significant shift in election odds in favor of Republicans. Furthermore, by doing statistical simulation of the 1968 election, the author concluded that 1968 demonstrations directly resulted in the election of a Republican president. The impact of protest violence on the 2020 elections may be even larger. The reason is the broad online availability of violent footage (everyone can record and share in real time), but also the ability to influence social media to amplify this message (e.g. similar to the social media spread of Wikileaks emails in 2016). While it may be hard to compare the impact on 1968 elections vs. now, a number of indicators suggest it should be bigger now (e.g. record purchase of firearms, migration from large cities like NYC, etc

Good job Nancy and crew. You played yourselves, and now at least 30 people are dead

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Judge Justin Walker on Bar Bureaucracies, Mental Illness, and More

From Friday’s decision in Doe v. Supreme Court of Kentucky; Judge Walker (known in part for the coronavirus / drive-in church services / Free Exercise Clause decision) is a federal judge in the Western District of Kentucky, but has been confirmed for the D.C. Circuit:

Courts, journalists, and scholars have extensively documented the mental health issues that afflict lawyers. The problems begin in law school, where “law students have disproportionate levels of stress, anxiety, and mental health concerns compared with other populations.” After graduation, lawyers suffer from depression at higher rates than non-lawyers. Not long ago, the Kentucky Bar Association President described a spike in Kentucky lawyers dying by suicide as “disproportionate” and “disconcerting.”

Jane Doe was a lawyer in Florida. She moved to Kentucky. She wanted to practice law here. Bureaucrats didn’t want her to. They thought her mental disability [apparently depression or Bipolar I Disorder or both] made her unfit. For over two years, they stopped her. But she didn’t give up. And they eventually relented.

Then Doe sued them, alleging they had illegally asked about her mental health history and treatment, illegally forced her to turn over her medical records and her therapists’ notes from their counseling sessions, and illegally treated her like a criminal because of her disability.

This case is not only about Jane Doe. It’s also about the lawyers who decide who else can be a lawyer.

Under the Kentucky Constitution, that power belongs to the Supreme Court of Kentucky. The court, in turn, delegates that job to its Bar Bureaucracy:

  • The Character and Fitness Committee and Board of Bar Examiners comprise the Office of Bar Admissions.
  • The Character and Fitness Committee prohibits people from practicing law if the committee thinks they are immoral or unfit.
  • The Board of Bar Examiners prohibits people from practicing law if they can’t pass a timed exam that tests their ability to memorize whole areas of the law they will never again need to know anything about.
  • The Kentucky Bar Association decides who gets to stay a lawyer.
  • The Kentucky Lawyer Assistance Program keeps tabs on lawyers and aspiring lawyers who have mental health issues by monitoring their medications, counseling, where they live, and where they travel.

Anyone with any power in this Bar Bureaucracy is a lawyer. So, just like an oil or drug cartel, those who are already selling something get to decide who else may sell that same thing. Of course, unlike most cartels, this one is legal. In fact, the Kentucky Constitution requires it.

If Doe had sued the Bar Bureaucracy back when it stopped her from entering the market, she would have had standing to ask the Court to block it from treating her like it did. But you can’t blame Doe for waiting to sue. If your goal is to persuade the Bar Bureaucracy’s lawyers to let you join their club, it isn’t a good strategy to poke them in the eye with a lawsuit that accuses them of violating the Americans with Disabilities Act and the United States Constitution.

Because the Bar Bureaucracy (finally) allowed Doe to practice law, she lacks standing for prospective relief. And because legislative and judicial immunity protect Bar Bureaucracies from money damages arising from the promulgation of bar rules and the adjudication of bar applications, the Court will dismiss Doe’s federal claims. In addition, the Court declines to exercise supplemental jurisdiction over Doe’s state-law claims.

The Bar Bureaucracy won this round against an applicant it deemed suspect and undesirable. But there will be more applicants—and more lawsuits. Some of those plaintiffs will have standing to seek prospective relief. And when they do, the Bar Bureaucracy will have to answer for a medieval approach to mental health that is as cruel as it is counterproductive….

Several federal and state courts have held that the Americans with Disabilities Act prohibits Bar Bureaucracies from unnecessarily interrogating applicants about their mental health. So too did the Department of Justice. In 2014, it concluded that questions about applicants’ mental health do “not provide an accurate basis for predicting future misconduct.” Instead, they likely “deter applicants from seeking counseling and treatment for mental health concerns, which fails to serve the Court’s interest in ensuring the fitness of licensed attorneys.” In other words, according to the Department of Justice, a Bar Bureaucracy’s decision to ask applicants about their mental health status makes aspiring lawyers less fit to practice law.

{To be clear, neither Doe nor the Department of Justice has argued that Bar Bureaucracies cannot ask about an applicant’s relevant past conduct, regardless of whether mental disability had a role in that conduct. Rather, they argue that Bar Bureaucracies cannot ask about an applicant’s status as a person with a mental disability, and they cannot treat an applicant differently based on that status. So, for example, it’s fair game to ask, “Have you ever been fired?” Or, “Have you ever robbed a bank?” Applicants’ mental health provides no escape from the questions, even if they had a mental disability when they were fired (or robbed the bank).} …

[Doe, who was a member of the Florida bar, applied to join the Kentucky bar.] [S]hortly before Doe took the February 2016 bar exam, the Character and Fitness Committee refused to approve her application. Instead, in March, the Bar Bureaucracy proposed, and Doe signed, a “consent agreement” for conditional admission. 23 It required 1) a Kentucky Contract (more on that later); 2) compliance with Florida’s rules and Kentucky’s rules and reporting requirements; and 3) “residency in Kentucky … unless” Doe was relocating for work and the Bar Bureaucracy approved.

The consent agreement did not provide details about the Kentucky Contract. Yvette Hourigan, Director of the Kentucky Lawyer Assistance Program, said the contract would mirror the monitoring arrangement Doe had with the Florida Lawyers’ Assistance Program, which was tailored to Doe’s diagnosis.

Doe passed the bar exam. She paid the dues and swearing-in fee.

Although Hourigan had promised to send a proposed contract, she didn’t. Instead, she arranged to meet with Doe the morning of the new lawyers’ swearing-in ceremony at the State Capitol. That day, Hourigan “texted that she was running late and they would meet on the steps of the Capitol” minutes before the swearing-in.

At this point, you might be thinking that a public place with many of Doe’s peers isn’t an ideal place to discuss private medical issues. (It isn’t.)

You might also wonder if other bar applicants could overhear their discussion.26 (They could.)

Instead of the personalized contract Hourigan had promised, she presented a boilerplate contract. It included a host of medically unnecessary requirements, including random drug and alcohol testing. When Doe told Hourigan she had never had drug or alcohol problems, Hourigan told her the provisions were standard. Hourigan, who is not a doctor but plays one on the Capitol steps, also said Doe’s medications required abstinence from alcohol. (They don’t.)

Doe refused to sign the contract. She told Hourigan it violated the Americans with Disabilities Act, and “the ADA does not permit the disabled to be treated like criminals.” (It doesn’t.) …

There’s much more; if you’re interested, read the whole opinion. A bit more from the end:

By this point, you might be wondering how a plaintiff could ever challenge the way a Bar Bureaucracy asks applicants about their mental health and puts them through the ringer if they truthfully disclose a mental disability. The answer is that a plaintiff could sue for prospective relief—a declaration that the questions violate federal law and an injunction prohibiting the Bar Bureaucracy from asking them. To have standing, the plaintiff would need to be a bar applicant, not an unconditionally licensed lawyer like Doe was when she filed this suit….

Let’s recap. For her federal-law claims, Doe lacks standing for prospective relief. She also lacks standing to sue the institutional defendants other than the Supreme Court of Kentucky and the Character and Fitness Committee because the others didn’t cause her injuries. Judicial immunity and legislative immunity shield the Supreme Court of Kentucky and Character and Fitness Committee from damages.

Doe’s federal claims must therefore be dismissed. And the Court declines to exercise jurisdiction over her state-law claims….

Law school is hard. The stress, rigor, and competition can lead to depression, anxiety, and substance abuse. Many students who start school healthy are far from it by the time they graduate. Some kill themselves.

Aspiring lawyers should seek the health care they need. But if Kentucky continues to punish people who get help, many won’t. And one day, a law student will die after choosing self-help over medical care because he worried a Character and Fitness Committee would use that medical treatment against him—as Kentucky’s did against Jane Doe.

It is not a matter of if, but when.

I’m not sure whether all this analysis is sound—it’s not quite my field—but I thought it was quite interesting. (Note also that there is some doubt about whether lawyers are any more likely to suffer from mental illness than other professionals, see Yair Listokin & Ray Noonan, Measuring Lawyer Well-Being Systematically: Evidence from the National Health Interview Survey.)

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Deflation Of The Citizenry’s Hard Assets Will Be A Huge Buying Opportunity For Insider Power Elites

Deflation Of The Citizenry’s Hard Assets Will Be A Huge Buying Opportunity For Insider Power Elites

Tyler Durden

Mon, 08/31/2020 – 18:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

The gravy train will have to stop at some point, but right now the global elites have pushed their chips on to the U.S. dollar and stocks.

Editor’s note: This is a guest post by my friend and colleague Zeus Yiamouyiannis, Ph.D., who has contributed essays to Of Two Minds since 2009.

This is part 2 of a 5 part series entitled When the World Market Itself Is Fake, Economic “Value” Loses Any Real Meaning.

Read Part 1 here…

I believe there will be a massive contraction/deflation in the near term in certain sectors of the U.S. and world economy as demand flees from commercial real estate, as jobs do not come back full force, small businesses close down, and/or people migrate to home offices. Demand for residential real estate will also likely contract in the short term as people are forced to go into living with family or shared housing. Even with the money-pump operating at full speed, flooding the market with cash (which should cause inflation), there will be an opposite effect for the ordinary person.

Why? There are tons of people with no actual money to buy up, lease, or rent real estate assets. Cash and borrowing collateral is tilted so much to super-wealthy, that the vast majority of people will not have access to cash to invest in real estate and other durable goods. Far fewer ACTUAL PEOPLE can pursue certain goods even if the SYSTEM is flooded with cash. It’s not in their pockets!

Now this might be partially corrected by some form of Universal Basic Income (UBI), but this will take time, and people will initially use it to shore up their survival. I look at what happened in real estate after 2006, where it crashed and was successfully hyperinflated again. Ordinary people lost their homes, and private equity firms bought them up with cash and re-inflated the real estate bubble. Look at what has happened to gold, which should be $4,000 to $5,000/ounce right now, but manipulation of gold paper (and selling gold “assignments” over actual gold) has kept a kibosh on its meteoric rise.

One should not underestimate how much the global elite has tied the welfare of a fearful global populace into their own program and benefit. They are using an intensely immoral extortion (and should be illegal, but it is in fact rewarded) that says, “We get ours first, and you might get some scraps… We don’t get ours first (and most) and you get NOTHING! Yes, it is a bullying tactic that would create revolution if they ever acted upon, or we ever called them on it (and I hope we do) but current retirees are also very powerful and they firmly toe the line with the status quo. They have enough of the loot to want to protect it and keep a broken system going.

Witness Joe Biden’s nomination to see how people are ideologically and politically drawn to symbols of their own self-interest. Biden did not lift a finger to gain the nomination (he had a few campaign offices, never really campaigned, raised little significant money, and drew pitiful crowds). Biden set a record that I doubt will ever be beaten in winning the nomination after placing fourth in the first nominating state, Iowa, and FIFTH in New Hampshire. He would have been toast in any fair contest, except for older suburbanites who still feel they can ride the system of graft, aligned with the Power Elite, into retirement and eventually a comfortable grave.

People under 50 were 70% for Bernie Sanders, and people over 50 were 70% for Joe Biden. No more stark a contrast and commitment to completely different regimes can you see. The first is geared toward riding the system and resisting change, the second is in transforming and doing away with system as a threat to a future survival that those who support the current system will never see (unless you believe in reincarnation).

Is this sustainable? No way. Can it be pursued for another ten to twenty years in defiance of reality while the beneficiaries die off? We shall see. Young people have NOT been exercising their political power, not even voting in decent numbers, but rather adapting to and tolerating whatever is thrown their way. That may change, especially as conditions get both worse and more globally distributed.

There are some signs as very young progressive Democratic candidates (Cori Bush, Jamaal Bowman, etc.) are actually winning races against heavily-favored and funded incumbents. De-growth and distribution of productivity gains will emerge as new war cries, both to save the environment and to make a living possible, as harsh and unequal realities deepen.

That may be the future, but there are no current sufficiently strong political, social, or economic barriers to this rank abuse of fiduciary trust and dignity. The government will be forced to subsidize underwater mom and pop America with a UBI type infusion, but that won’t be enough even to survive amid deflated relative wages and inflated assets, not to mention a continuing Covid-19 shutdown that sees no end in sight until at least January 2021 because of a completely absent federal coordinated response.

This ennui and anxiety, this rudderless and leaderless and morality-free ship cannot simply drift hither and thither, or have some brigand seize the wheel and drive it towards his own private beach, forever. But it will happen in the short term, as it is now.

This year, dividends have NEVER been lower in the history of the stock market, yet the S&P 500 hit a new high? Billionaires are making tens of billions of dollars more!

The tsunami has not hit yet, and it will come falling on Joe Biden’s head if he gets elected, and no corporate apparatchik will have a solution.

The solutions Charles Smith has mentioned in his books and essays will be the only real solutions– radical community reliance, localization, and decentralization, because these are the only things that can put food in your mouth and these are the only things you will be able to rely upon.

Multinational corporations seek only to leverage rent, not to fix the proverbial toilets. U.S. currency already has a built in defense– it is the reserve currency of the world’s economic elite. It will not be allowed to fail easily, no matter how irresponsibly domestic policies are conducted– including endless money printing and using the Fed to buy up equities.

The global elite are all invested in U.S. currency and stocks, and they know if the world’s largest consumer economy goes down, THEY go down (including Putin, by the way–what would happen to his petro industry if U.S. demand and dollar collapsed?). Not so with just about anything else. Zero to negative interest rates will continue to “benefit” them and their interests, because it will artificially goad stock prices higher and create a dominance for the U.S. dollar.

These guys WANT inflation, because inflated markets (especially in oil, real estate, and equities) means increasing value on the money they already invested in these assets. These global elites are by far the biggest borrowers, buyers, AND debtors. What better way to solve that problem then to make interest rates zero or negative!

The gravy train will have to stop at some point, but right now the global elites have pushed their chips on to the U.S. dollar and stocks. We should use that breathing room to make our choice away from this rigged game.

copyright 2020 Zeus Yiamouyiannis

Part 3 of this series will explore where we are right now and what to look for in the tough times ahead.

Parts 4 and 5 will discuss healthy, pro-democratic, creative alternatives to the current rigged system.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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Daily Briefing – August 31, 2020

Daily Briefing – August 31, 2020


Tyler Durden

Mon, 08/31/2020 – 18:10

How is it that the real economy can be so weak while the asset markets continue to fly? Real Vision managing editor Ed Harrison explores this and more with senior editor Ash Bennington. Ed and Ash discuss the ever-widening chasm between Wall Street and Main Street and use Hyman Minsky’s “two-price model” as a framework to understand this dichotomy, and they analyze how asset markets have responded differently to interest rate cuts than the markets for goods and services. In that context, they explain how the sinking labor force participation rate reveals a hidden unemployment which will keep inflation subdued. In the intro, Ash and Jack Farley discuss Jack’s recent interview with Jason Buck on the Real Vision blog, and they also interpret the re-opening woes of airlines and colleges.

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As US Warship Again Transits Taiwan Strait, Taipei & Beijing Warn Each Other: ‘Risk Of Accidental Conflict Likely’

As US Warship Again Transits Taiwan Strait, Taipei & Beijing Warn Each Other: ‘Risk Of Accidental Conflict Likely’

Tyler Durden

Mon, 08/31/2020 – 18:05

For the second time in two weeks, the US Navy has sent a warship through the Taiwan Strait in what the Pentagon dubbed a “routine Taiwan Strait transit”.

It happened Sunday, also confirmed by Taiwan’s Defense Ministry, just over a week following a reported Chinese PLA military build-up and war games in the area, especially on the mainland coast.

The Arleigh Burke-class guided-missile destroyer USS Halsey sailed through without incident, though however “routine” the US might want to frame the mission, the potential for an unintended incident or clash with Chinese forces remains high, especially given the recent U-2 spy plane incident, which Beijing said breached a ‘no fly zone’ over PLA live fire drills. 



US Navy file image, via Facebook/Taiwan News

China warned of the breach a week ago that the US risked causing an “unexpected incident” through its “naked provocation” and unsafe flights in the region of the South China Sea. It fired four cruise missiles into the South China Sea in a rare, significant warning in the form of a “test”.

Concerning the latest US warship transit, US Seventh Fleet representative Reann Mommsen said, “The ship’s transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific. The U.S. Navy will continue to fly, sail and operate anywhere international law allows,” according to Reuters.

It took a southerly path and made its way further south, according to Taiwan defense officials. 

Given the increased military “traffic” in the tense region, we should note that Beijing and Taipei actually agree on one thing, as related by Reuters: “Taiwan President Tsai Ing-wen warned last week of the risk of accidental conflict from the rise in military activities.”

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“This Is Real… There’s Going To Be A F**king War In November” – Dem Operative Admits Voter Fraud

“This Is Real… There’s Going To Be A F**king War In November” – Dem Operative Admits Voter Fraud

Tyler Durden

Mon, 08/31/2020 – 17:45

Authored by Jennie Taer via SaraACarter.com,

An anonymous Democratic operative admitted to the New York Post his role in committing voter fraud for decades and says it should concern Americans in the upcoming November election, according to a New York Post exclusive.

“An election that is swayed by 500 votes, 1,000 votes — it can make a difference,” the source told the Post.

“It could be enough to flip states.”

The source added,

“This is a real thing. And there is going to be a f–king war coming November 3rd over this stuff … If they knew how the sausage was made, they could fix it.”

With the epidemic of COVID-19, many state and local leaders aren’t so keen on their residents going to the polls to vote in the 2020 presidential election. In fact, some states have said they’re providing mail-in ballots to all registered voters to mitigate the spread of the novel virus.

President Donald Trump and other Republicans have warned that the process for sweeping mail-in voting could disenfranchise voters because, unlike absentee ballots, which are requested by voters and are only granted for those with legitimate reasons to not vote in person, vote by mail involves sending ballots to all eligible voters without any explanation from the voter.

Many Democrats, however, argue that voter fraud is a myth. And House Speaker Nancy Pelosi earlier suggested it’s Trump’s strategy to ‘suppress’ voters.

The Trump Campaign and the Republican National Committee are fighting legal battles with many states to restore election integrity in November. Moreover, they’ve already won in seven states, including New Mexico and Pennsylvania.

“…the political insider, who spoke on condition of anonymity because he fears prosecution, said fraud is more the rule than the exception.

His dirty work has taken him through the weeds of municipal and federal elections in Paterson, Atlantic City, Camden, Newark, Hoboken and Hudson County and his fingerprints can be found in local legislative, mayoral and congressional races across the Garden State.

Some of the biggest names and highest office holders in New Jersey have benefited from his tricks, according to campaign records The Post reviewed,” New York Post reports.

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J.C. Penney On Verge Of Liquidation After Mall Talks Collapse

J.C. Penney On Verge Of Liquidation After Mall Talks Collapse

Tyler Durden

Mon, 08/31/2020 – 17:25

In a few short years, Gen-Zers and younger generations watching this iconic scene from Spike Like Us will have no clue what this “JC Penney” is that Chevy Chase was referring to.

The reason for that is because the iconic retailer which recently filed for bankruptcy, appears to be headed for liquidation with 70,000 jobs hanging in the balance.

According to Reuters, the company’s talks with landlords for a rescue from bankruptcy proceedings reached an impasse, pushing the department store to the brink of collapse unless it can reach a deal within days to be taken over by lenders at which point the company will simply be unwound.

The discussions between the Plano, TX-based retailer and mall owners Simon Property Group and Brookfield Property Partners stalled over the weekend, said the company’s lawyer Joshua Sussberg during a Monday court hearing which revealed that the negotiations have dragged on over lease terms.

While Sussberg said lenders were still prepared to rescue the 118-year-old company – and its more than 70,000 workers – depending on negotiations over the next 10 days, a lawyer for the lenders, Andrew Leblanc of Milbank, countered that there were “lots of hurdles” to reaching such a deal, describing negotiating an agreement on a short timeframe as a “heavy lift” ahead of the Sept. 10 deadline.

According to Reuters, J.C. Penney, which filed for Chapter 11 protection in May after the coronavirus pandemic forced it to temporarily shutter its nearly 850 stores at the time, is racing to reach a deal that would carve it into three parts: one would be an operating company housing its retail business, including intellectual property and hundreds of stores. Lenders would forgive portions of J.C. Penney’s $5 billion debt load to take control of two real estate investment trusts. One would hold 160 properties, with the other controlling the company’s distribution centers.

J.C. Penney had hoped to reach a deal with Simon and Brookfield to take over the company’s retail operations, but negotiations with the two malls were in the “red zone” earlier this month before hitting roadblocks, including an offer from the company submitted to the landlords over the weekend that received no response. The development would force J.C. Penney to close additional stores that at one point might have been saved, Sussberg said.

U.S. Bankruptcy Judge David Jones had previously urged parties to set aside what he labeled egos and negotiating postures to get a deal done.

“I hope everyone realizes how serious I am about this. I know where this is headed,” Jones said during Monday’s hearing.

He told a shareholder that declining to allow J.C. Penney to continue talks with lenders would result in all the company’s stores closing and “the death of an entity.”

The company’s lenders, which include hedge funds and private-equity firms financing its bankruptcy case, have agreed to explore forgiving debt to also take control of the company’s retail operations in addition to the two real estate investment trusts they envisioned owning.

“Our lenders are no longer going to be held hostage,” Sussberg said. “Time is not our friend.”

Previously, LBO giant Sycamore Partners and Saks Fifth Avenue owner Hudson’s Bay also held discussions with JC Penney to take control of its retail business but were unable to reach a deal. The company continued talks with those suitors over the weekend, Sussberg said, though they did not reach any agreement.

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Judge Justin Walker on Bar Bureaucracies, Mental Illness, and More

From Friday’s decision in Doe v. Supreme Court of Kentucky; Judge Walker (known in part for the coronavirus / drive-in church services / Free Exercise Clause decision) is a federal judge in the Western District of Kentucky, but has been confirmed for the D.C. Circuit:

Courts, journalists, and scholars have extensively documented the mental health issues that afflict lawyers. The problems begin in law school, where “law students have disproportionate levels of stress, anxiety, and mental health concerns compared with other populations.” After graduation, lawyers suffer from depression at higher rates than non-lawyers. Not long ago, the Kentucky Bar Association President described a spike in Kentucky lawyers dying by suicide as “disproportionate” and “disconcerting.”

Jane Doe was a lawyer in Florida. She moved to Kentucky. She wanted to practice law here. Bureaucrats didn’t want her to. They thought her mental disability [apparently depression or Bipolar I Disorder or both] made her unfit. For over two years, they stopped her. But she didn’t give up. And they eventually relented.

Then Doe sued them, alleging they had illegally asked about her mental health history and treatment, illegally forced her to turn over her medical records and her therapists’ notes from their counseling sessions, and illegally treated her like a criminal because of her disability.

This case is not only about Jane Doe. It’s also about the lawyers who decide who else can be a lawyer.

Under the Kentucky Constitution, that power belongs to the Supreme Court of Kentucky. The court, in turn, delegates that job to its Bar Bureaucracy:

  • The Character and Fitness Committee and Board of Bar Examiners comprise the Office of Bar Admissions.
  • The Character and Fitness Committee prohibits people from practicing law if the committee thinks they are immoral or unfit.
  • The Board of Bar Examiners prohibits people from practicing law if they can’t pass a timed exam that tests their ability to memorize whole areas of the law they will never again need to know anything about.
  • The Kentucky Bar Association decides who gets to stay a lawyer.
  • The Kentucky Lawyer Assistance Program keeps tabs on lawyers and aspiring lawyers who have mental health issues by monitoring their medications, counseling, where they live, and where they travel.

Anyone with any power in this Bar Bureaucracy is a lawyer. So, just like an oil or drug cartel, those who are already selling something get to decide who else may sell that same thing. Of course, unlike most cartels, this one is legal. In fact, the Kentucky Constitution requires it.

If Doe had sued the Bar Bureaucracy back when it stopped her from entering the market, she would have had standing to ask the Court to block it from treating her like it did. But you can’t blame Doe for waiting to sue. If your goal is to persuade the Bar Bureaucracy’s lawyers to let you join their club, it isn’t a good strategy to poke them in the eye with a lawsuit that accuses them of violating the Americans with Disabilities Act and the United States Constitution.

Because the Bar Bureaucracy (finally) allowed Doe to practice law, she lacks standing for prospective relief. And because legislative and judicial immunity protect Bar Bureaucracies from money damages arising from the promulgation of bar rules and the adjudication of bar applications, the Court will dismiss Doe’s federal claims. In addition, the Court declines to exercise supplemental jurisdiction over Doe’s state-law claims.

The Bar Bureaucracy won this round against an applicant it deemed suspect and undesirable. But there will be more applicants—and more lawsuits. Some of those plaintiffs will have standing to seek prospective relief. And when they do, the Bar Bureaucracy will have to answer for a medieval approach to mental health that is as cruel as it is counterproductive….

Several federal and state courts have held that the Americans with Disabilities Act prohibits Bar Bureaucracies from unnecessarily interrogating applicants about their mental health. So too did the Department of Justice. In 2014, it concluded that questions about applicants’ mental health do “not provide an accurate basis for predicting future misconduct.” Instead, they likely “deter applicants from seeking counseling and treatment for mental health concerns, which fails to serve the Court’s interest in ensuring the fitness of licensed attorneys.” In other words, according to the Department of Justice, a Bar Bureaucracy’s decision to ask applicants about their mental health status makes aspiring lawyers less fit to practice law.

{To be clear, neither Doe nor the Department of Justice has argued that Bar Bureaucracies cannot ask about an applicant’s relevant past conduct, regardless of whether mental disability had a role in that conduct. Rather, they argue that Bar Bureaucracies cannot ask about an applicant’s status as a person with a mental disability, and they cannot treat an applicant differently based on that status. So, for example, it’s fair game to ask, “Have you ever been fired?” Or, “Have you ever robbed a bank?” Applicants’ mental health provides no escape from the questions, even if they had a mental disability when they were fired (or robbed the bank).} …

[Doe, who was a member of the Florida bar, applied to join the Kentucky bar.] [S]hortly before Doe took the February 2016 bar exam, the Character and Fitness Committee refused to approve her application. Instead, in March, the Bar Bureaucracy proposed, and Doe signed, a “consent agreement” for conditional admission. 23 It required 1) a Kentucky Contract (more on that later); 2) compliance with Florida’s rules and Kentucky’s rules and reporting requirements; and 3) “residency in Kentucky … unless” Doe was relocating for work and the Bar Bureaucracy approved.

The consent agreement did not provide details about the Kentucky Contract. Yvette Hourigan, Director of the Kentucky Lawyer Assistance Program, said the contract would mirror the monitoring arrangement Doe had with the Florida Lawyers’ Assistance Program, which was tailored to Doe’s diagnosis.

Doe passed the bar exam. She paid the dues and swearing-in fee.

Although Hourigan had promised to send a proposed contract, she didn’t. Instead, she arranged to meet with Doe the morning of the new lawyers’ swearing-in ceremony at the State Capitol. That day, Hourigan “texted that she was running late and they would meet on the steps of the Capitol” minutes before the swearing-in.

At this point, you might be thinking that a public place with many of Doe’s peers isn’t an ideal place to discuss private medical issues. (It isn’t.)

You might also wonder if other bar applicants could overhear their discussion.26 (They could.)

Instead of the personalized contract Hourigan had promised, she presented a boilerplate contract. It included a host of medically unnecessary requirements, including random drug and alcohol testing. When Doe told Hourigan she had never had drug or alcohol problems, Hourigan told her the provisions were standard. Hourigan, who is not a doctor but plays one on the Capitol steps, also said Doe’s medications required abstinence from alcohol. (They don’t.)

Doe refused to sign the contract. She told Hourigan it violated the Americans with Disabilities Act, and “the ADA does not permit the disabled to be treated like criminals.” (It doesn’t.) …

There’s much more; if you’re interested, read the whole opinion. A bit more from the end:

By this point, you might be wondering how a plaintiff could ever challenge the way a Bar Bureaucracy asks applicants about their mental health and puts them through the ringer if they truthfully disclose a mental disability. The answer is that a plaintiff could sue for prospective relief—a declaration that the questions violate federal law and an injunction prohibiting the Bar Bureaucracy from asking them. To have standing, the plaintiff would need to be a bar applicant, not an unconditionally licensed lawyer like Doe was when she filed this suit….

Let’s recap. For her federal-law claims, Doe lacks standing for prospective relief. She also lacks standing to sue the institutional defendants other than the Supreme Court of Kentucky and the Character and Fitness Committee because the others didn’t cause her injuries. Judicial immunity and legislative immunity shield the Supreme Court of Kentucky and Character and Fitness Committee from damages.

Doe’s federal claims must therefore be dismissed. And the Court declines to exercise jurisdiction over her state-law claims….

Law school is hard. The stress, rigor, and competition can lead to depression, anxiety, and substance abuse. Many students who start school healthy are far from it by the time they graduate. Some kill themselves.

Aspiring lawyers should seek the health care they need. But if Kentucky continues to punish people who get help, many won’t. And one day, a law student will die after choosing self-help over medical care because he worried a Character and Fitness Committee would use that medical treatment against him—as Kentucky’s did against Jane Doe.

It is not a matter of if, but when.

I’m not sure whether all this analysis is sound—it’s not quite my field—but I thought it was quite interesting. (Note also that there is some doubt about whether lawyers are any more likely to suffer from mental illness than other professionals, see Yair Listokin & Ray Noonan, Measuring Lawyer Well-Being Systematically: Evidence from the National Health Interview Survey.)

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