February 2021 – Page 243

San Francisco Schools Renamed the Arts Department Because Acronyms Are a Symptom of White Supremacy

The San Francisco United School District isn’t quite finished with its renaming binge: The district’s arts department, previously titled VAPA (Visual and Performing Arts), will now be known as the SFUSD Arts Department.

This change has been made in accordance with “antiracist arts instruction,” according to ABC-7 News.

“It is a very simple step we can take to just be referred to as the SFUSD Arts Department for families to better understand who we are,” Sam Bass, director of the SFUSD Arts Department, explained in a memo obtained by the local news network.

Bass did not immediately respond to a request for comment, and the memo isn’t widely available. But ABC-7 reported that the decision was made to eliminate VAPA because the department realized acronyms are a symptom of “white supremacy culture.”

The New York Post reported that the memo cites a 1999 paper by Tema Okun. That paper does not specifically say that acronyms are racist, though it does label “worship of the written word” as an aspect of white supremacy. Other purported characteristics of white supremacy are “perfectionism,” a “sense of urgency,” “individualism,” and “objectivity.” (If this list sounds familiar, it’s because the National Museum of African American Arts and Culture got in trouble last year for promoting similar nonsense.) While some acronyms may be confusing to non-native English speakers, it’s quite a stretch to describe them as a function of white supremacy.

Ironically, Okun’s paper lists memos as characteristic of white supremacy, so the department should probably fire Bass for racism. And at risk of stating the obvious, the new name—SFUSD Arts Department—contains an acronym just as surely as the old one did. White supremacy is just that insidious; even an arts department dedicated to antiracism can’t seem to rid itself of the stain.

This development follows the controversial decision by San Francisco’s school board to formally rename 44 schools that currently honor George Washington, Abraham Lincoln, and even Sen. Dianne Feinstein (D–Calif.). As Reason‘s Elizabeth Nolan Brown noted earlier this week, the decision to prioritize this effort at a time when schools aren’t even open strikes many people as embarrassing. “[It’s] a caricature of what people think liberals in San Francisco do,” one parent, a self-described Elizabeth Warren Democrat, told The New York Times.

San Francisco school officials sure seem to enjoy humiliation. When asked about the significant learning losses among students of color who have now been kept at home for nearly a year, School Board President Gabriela Lopez essentially shrugged.

“They’re just having different learning experiences than the ones we currently measure, and the loss is a comparison to a time when we were in a different space,” she told the San Francisco Chronicle.

The arts department’s badly explained name change isn’t nearly as consequential, but it’s still emblematic of a school district caught in the throes of far-left orthodoxy. If VAPA was a confusing name, then the district was perfectly justified in changing it. There’s no need to cloak this mundane and reasonable decision in social justice gobbledygook.

In any case, San Francisco students won’t be doing any art—antiracist or otherwise—until officials bow to the scientific consensus and actually reopen the schools.

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‘See Something, Say Something Online Act’ Punishes Big Tech for Not Snitching

A new bill revitalizes the war on terror’s favorite slogan in service of forcing tech companies to turn over more user data to the government. The “See Something, Say Something Online Act of 2020,” introduced by Sen. Joe Manchin (D–W.Va.) and co-sponsored by Sen. John Cornyn (R–Texas), is the latest attack on the federal communications law known as Section 230 as well as freedom of speech and online privacy.

The legislation says any interactive computer service provider—that means social media giants, small blogs, podcast hosting services, app stores, consumer review platforms, independent political forums, crowdfunding and Patreon-style sites, dating apps, newsletter services, and much more—will lose Section 230 protections if they fail to report any known user activity that might be deemed “suspicious.”

“Suspicious” content is defined as any post, private message, comment, tag, transaction, or “any other user-generated content or transmission” that government officials later determine “commits, facilitates, incites, promotes, or otherwise assists the commission of a major crime.” Major crimes are defined as anything involving violence, domestic, or international terrorism, or a “serious drug offense.”

For each suspicious post, services must submit a Suspicious Transmission Activity Report (STAR) within 30 days, providing the user’s name, location, and other identifying information, as well as any relevant metadata.

Those submitting the user surveillance reports would henceforth be barred from talking about or even acknowledging the existence of them. STARs would also be exempt from Freedom of Information Act (FOIA) requests.

The bill, which comes amid renewed calls to stamp out domestic terrorism after the Capitol riot, is impressive in managing to be both completely invasive and utterly unconcerned with even appearing to be about protection, since the remedy—report within 30 days—would hardly help stop the commission of crimes. If we were talking about the Capitol riot, for instance, companies who still hadn’t reported posts about it would be OK.

The bill would set up a massive new system of intense user monitoring and reporting that would lead to more perfectly innocent people getting booted from internet platforms. It would provide the government with a new tool to punish disfavored tech companies, and it would enlist all digital service providers to be cops in the failed post-9/11 war on terror and the drug war.

The bill states that some posts facilitating crimes require a STAR to be filed immediately, though it’s vague about what these are (any “suspicious transmission that requires immediate attention” requires being reported immediately). The first example it provides is “an active sale or solicitation of sale of drugs.”

A new federal agency would handle the suspicious activity reports—which could also be submitted by any individual, not just tech companies.

An easy, anonymous, online way for people to flag each other’s social media accounts for the Department of Justice—what could go wrong? (Insert all the eye rolls here.)

Anyone with experience on social media now knows how hyperbolic people can be in describing threatening behavior, how gleeful folks can be in snitching on those they deem unenlightened, and how easy it can be for trolls, abusers, and other ne’er-do-wells to weaponize reporting systems against disliked individuals or marginalized groups. The See Something, Say Something Online Act would put this on steroids—all while ensuring such a glut of reports, including many that are frivolous, politically motivated, or otherwise disingenuous, that federal agents would still be searching for needles in haystacks.

Worse than simply overloading the system, it would make federal agents investigate all sorts of ordinary Americans for harmless comments. It also seems likely to make finding actual terrorists and violent criminals even more difficult.

FREE MINDS

Drug decriminalization takes effect in Oregon. Residents of the state voted in November to decriminalize small amounts of drugs including heroin, LSD, and meth. “Today, the first domino of our cruel and inhumane war on drugs has fallen, setting off what we expect to be a cascade of other efforts centering health over criminalization,” Kassandra Frederique, executive director of Drug Policy Alliance, said in a statement, continuing:

For the first time in at least half a century, one place in the United States—Oregon— will show us that we can give people help without punishing them. This law is meant to protect people against persecution, harassment and criminalization at the hands of the state for using drugs and instead given access to the supports they need. Over the last year, we have been painfully reminded of the harms that come from drug war policing and the absence of necessary health services and other support systems in our communities. Today, Oregon shows us a better, more just world is possible.

FREE MARKETS

Kroger closes two grocery stores in Long Beach, California, after the city instituted a new hazard pay rule. “Kroger, which owns several supermarket chains, said Monday it would close two stores in Long Beach in response to city rules mandating an extra $4 an hour in ‘hero pay’ for grocery workers during the COVID-19 pandemic,” reports the Los Angeles Times. The Ralphs and Food 4 Less stores that will be closed now employ about 200 people, it says.

Here’s Kroger’s statement:

This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city. The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers, is deeply unfortunate. We are truly saddened that our associates and customers will ultimately be the real victims of the city council’s actions.

Other cities in California, including Los Angeles, Santa Monica, and Oakland, are considering hazard pay proposals similar to the one in Long Beach.

QUICK HITS

• Brown University cryptographers envision a gun registry system “that can be deployed nationally while also being fully encrypted and decentralized.”

• Reasons for environmental optimism?

• Black Lives Matter has been nominated for a Nobel Peace Prize.

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The Red Hot Chilli Preppers

by Michael Every of Rabobank

So John (and Jack2343 and Jane1928273) went long, and silver went up, and physical silver split from paper – because if you are going to nail yourself to a cross of precious metal then do it properly, right?

At least it made a change from the social media meme of Fry from Futurama holding out (paper) money and saying: “Shut up and tell me which stocks to buy to punish rich people.” And did we achieve a global reflation as a result?

Ironically, Bloomberg crows that, yes, reflation trades are indeed back on, with the US Treasuries 5s-30s spread widening out to 143bp on Monday, the widest since 2016. All I can say is that those buying that particular market trend are like Fry from Futurama holding out (newly printed central-bank paper) money and saying: “Shut up and tell me which commodities to buy to punish poor people.”

What we see all round us is global billionaire after billionaire getting more billionaire-y, and their pet projects to match: overnight Hollywood genius, galactic explorer – how long until one decides to turn the moon into cheese? Hedge funds would buy it; and if it were shorted by them then Redditors would, so cheesy moons are surely a win-win. Or how about just wiring up a monkey brain to play video games? But rather than gargling such central-bank bong water, let’s recall markets are allegedly trading for The Great Reflation, and not The Great Gatsby, because we are going to see joined up fiscal and monetary policy.

Now this would be a real game-changer. Really. Except it isn’t happening.

On the central-bank side, rates will stay at zero or below (or perhaps even lower in Europe?) for as far as the eye can see. But there is no change there from a few months ago. If anything, at the margin rate cut bets are being wound back outside Europe. Likewise, QE is going to continue for a long, long time. But that has sat alongside zombification and financialisation and immiseration, not inflation, for years and years. Importantly, despite central banks, developed and emerging, having printed enough money to cover the enormous fiscal deficits run in 2020, none will admit they did this and that they are happy to play that new role going forwards. They do not publicly accept that they will be returning to the subordinated monetary policy position they held from post-WW2 to the late 1970s or early 1980s so successfully to middle-class growth; and in Europe and Japan from the mid-19th century until 1914, so successfully to middle-class growth; and in China today, so successfully to middle-class growth. With a track record like that, one can understand why! Yes, there is talk about the climate challenge, and equality. Yet have we seen a ‘we just printed our way through Covid so let’s do some more!’ moment? We have not. Central bankers are clinging to their independent sage-like status; and the 1980’s-era political model of targeting inflation (meaning wages and not asset prices) that has seen just a slice of the middle class accelerate upwards in wealth, and the rest crushed, while a select few gaze up at the moon and say “I bet I could turn THAT into cheese.”

More pertinent for markets trying to show that they aren’t “Snake-oil? I will take two!” Redditors is that even if central banks were secretly prepared to go back to their secondary position of helping to finance industrial policy (with all the adversarial geopolitics that comes with it, by the way!) we still see no sign whatsoever of governments stepping up to the plate fiscally. Read the newspaper. It’s not hard to do:

In the US, Republicans are offering President Biden only a slimmed down fiscal package that is vastly short of any “Build Back Better” schemes; where are the votes for a multi-trillion “Green New Deal” going to emerge from?
The US Congressional Budget Office just said: “Over the course of the coming year, vaccination is expected to greatly reduce the number of new cases of COVID-19….As a result, the extent of social distancing is expected to decline. [The] new economic forecast, which covers the period from 2021 to 2031,…therefore projects that the economic expansion that began in mid-2020 will continue. Specifically, real (inflation-adjusted) GDP is projected to return to its pre-pandemic level in mid-2021 and to surpass its potential (that is, its maximum sustainable) level in early 2025. In CBO’s projections, the unemployment rate gradually declines through 2026, and the number of people employed returns to its pre-pandemic level in 2024.” In other words, perfect political cover to do nothing and wait for nature to heal – and to talk about the need for medium-term tightening of policy(!);
In Europe, the ‘Rubicon-crossing’ fiscal package isn’t enough, but almost certainly won’t be extended given the Pandora’s box involved. There is no German appetite for un-Germanic fiscal policy into the 2020s;
China is giving signals that is going to try to delever again, or at least not lever up so rapidly. There will be fiscal consolidation of sorts at the local government level – and keep an eye on the China Credit Impulse as it may start to turn down;
The UK Chancellor can’t stop dropping hints about tax hikes ahead; and
The Aussie PM, on the back of some bonza housing numbers that will have the RBA chortling its way through the Encyclopaedia Britannica that is the property supplement in the daily paper, has just said he isn’t “running a blank cheque budget”.

If you wanted to see fiscal-monetary policy coordination, governments would say they are going to allow the economy to “run hot” in the same way central banks uselessly pledge to. BUT THEY AREN’T. They are talking about tax hikes and spending cuts alongside the therefore meaningless mantra of “Build Back Better”. And central banks would cap yields anyway so steepening couldn’t happen.

If one does want to see a go-for-growth budget, look at India – and hurrah for that. (Yet note that in the best traditions of industrial policy, the gains are being ring-fenced internally, the same way that China plans to with “dual circulation”.) But what’s this? Long Indian yields jumped 13bp on the view that the central bank won’t be helping too much with the near-record borrowing to be done. So yet again, no magical fiscal-monetary policy fusion to keep yields low and growth high.

So is the US Treasury curve now trading on the back of Indian stimulus? Or are the ‘Frys’ who don’t read the paper, can’t understand how Covid-19 has changed society and the economy, and who won’t read any 1920’s history before shouting out “Roaring!”, simply get confused by low H1 2020 inflation base effects, commodity prices as a new asset class to speculate on (while wages stay flat), and the simplest of spin from governments? I leave you all to decide. The band might be warming up for a fiscal-monetary jam: but I would strongly suspect what we have are needless preparations for things being on fire when they are still quite cold in all the key areas. Or, ‘The Red Hot Chilly Preppers’. Call me when they play “Give it away now”

Tyler Durden
Tue, 02/02/2021 – 09:45

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Uber To Acquire Alcohol Delivery Service Drizly For $1.1 Billion

Good news for everyone who uses the Uber Eats app for at-home food deliveries. The company announced Tuesday it is acquiring alcohol-delivery service Drizly for $1.1bln in stock and cash.

Once the transaction is complete, Drizly will be integrated into the Uber Eats app. Drizly is an on-demand alcohol delivery service available in 1,400 cities across the US.

Uber Eats has seen increasing volumes during the pandemic.

“During this time our delivery business has been growing at extraordinary rates,” Uber CEO Dara Khosrowshahi told CNBC on Tuesday.

Merchants on Drizly will be able to benefit from Uber’s top-notch technology and massive customer base. Drizly plans to keep a standalone app.

“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Uber CEO Dara Khosrowshahi.

“Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve. It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision. With this in mind, we are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” said Drizly co-founder and CEO Cory Rellas.

The deal is expected to close within the first half of 2021. After the news broke this morning, Uber’s stock jumped.

So, what will Uber acquire next? A marijuana delivery service? We suspect that could be the case…

Tyler Durden
Tue, 02/02/2021 – 09:37

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‘See Something, Say Something Online Act’ Punishes Big Tech for Not Snitching

A new federal agency would handle the suspicious activity reports—which could also be submitted by any individual, not just tech companies.

An easy, anonymous, online way for people to flag each other’s social media accounts for the Department of Justice—what could go wrong? (Insert all the eye rolls here.)

FREE MINDS

For the first time in at least half a century, one place in the United States—Oregon— will show us that we can give people help without punishing them. This law is meant to protect people against persecution, harassment and criminalization at the hands of the state for using drugs and instead given access to the supports they need. Over the last year, we have been painfully reminded of the harms that come from drug war policing and the absence of necessary health services and other support systems in our communities. Today, Oregon shows us a better, more just world is possible.

FREE MARKETS

Here’s Kroger’s statement:

This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city. The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers, is deeply unfortunate. We are truly saddened that our associates and customers will ultimately be the real victims of the city council’s actions.

Other cities in California, including Los Angeles, Santa Monica, and Oakland, are considering hazard pay proposals similar to the one in Long Beach.

QUICK HITS

• Brown University cryptographers envision a gun registry system “that can be deployed nationally while also being fully encrypted and decentralized.”

• Reasons for environmental optimism?

• Black Lives Matter has been nominated for a Nobel Peace Prize.

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Tesla Officially Recalls 134,951 Vehicles, Musk Says He’s “Off Twitter” For A While

Tesla has officially finally agreed to recall 134,951 Model S and Model X vehicles due to touchscreen display failures. The displays can fail, resulting in a number of potential problems for Tesla owners, according to Reuters.

The move begrudgingly comes after U.S. auto safety regulators sought the recall a month ago, as we noted on Zero Hedge last month.

Analyst Gordon Johnson of GLJ Research said on Tuesday morning that the total charge for Tesla could be around $213 million in Q1 2021. He also thinks there is a major story in the many customers who had to pay $1,500 out of pocket to have their screens repaired prior to the recall.

Johnson wrote in a note Tuesday:

However, given TSLA denied this for years, customers who had problems, historically, with their MCUs in the Model S/X cars had to pay around $1.5K out of pocket to have them fixed. In our view, this is the real story here. Also, the question is will there be recalls in the EU and China, as well as other countries, and will the numerous other issues with TSLA’s cars require additional recalls – i.e., suspension issue, unintended acceleration, battery issues, etc.?

He also focuses on whether there will be additional coming recalls, specifically in China, as we have written about in the past.

In January, the NHTSA asked the automaker to recall about 158,000 Model S and Model X units that could potentially suffer from failing display consoles. When a display console in a Tesla fails, drivers can experience “loss of audible and visual touchscreen features, such as infotainment, navigation, and web browsing and loss of rear camera image display when in reverse gear.”

The issues were categorized as safety issues. The culprit, as characterized by The Verge, is “worn-out flash memory chips used in the displays of 2012-2018 Model S sedans and 2016-2018 Model X SUVs.”

The report noted that “each time an owner turns on one of these Teslas, it eats away at the total capacity of the the 8GB eMMC NAND flash memory chip onboard the NVIDIA Tegra 3 processor that powers the displays. When that capacity is reached — usually about five to six years later, the agency says — the displays become bricked.”

The NHTSA wrote to Tesla in January: “Failure of the MCU results in loss of the rearview/backup camera2 and loss of HVAC (defogging and defrosting setting controls (if the HVAC status was OFF status prior to failure). The failure also has an adverse impact on the Autopilot advanced driver assistance system (“ADAS”), as well as turn signal functionality due to the possible loss of audible chimes, driver sensing, and alerts associated with these vehicle functions.”

“The lack of a functioning windshield defogging and defrosting system may decrease the driver’s visibility in inclement weather, increasing the risk of a crash,” the letter said. “If Tesla decides not to conduct the requested recall, it must provide ODI with a full explanation of its decision, including any additional analysis of the problem beyond Tesla’s past presentations.”

The agency also said Tesla’s over-the-air fixes for the problem weren’t enough. “[T]hese updates are procedurally and substantively insufficient,” the NHTSA concluded.

Back in January, recall, Tesla had “balked” at moving forward with the recall, according to NBC, who said: “Experts say the letter means that Tesla has resisted doing a recall that NHTSA feels is necessary.”

Now, it looks as though the automaker has finally caved. Perhaps in related news, Tesla CEO Elon Musk Tweeted on Tuesday morning he would be “off Twitter for a while”.

Off Twitter for a while

— Elon Musk (@elonmusk) February 2, 2021

We first reported last summer that the NHTSA had opened the investigation, which covered 2012-2015 model year vehicles and came after the NHTSA received 11 complaints alleging failures.

Tyler Durden
Tue, 02/02/2021 – 09:24

via ZeroHedge News https://ift.tt/3rdodUp Tyler Durden

When the Solicitor General Changes His Position “Upon Further Reflection”

Yesterday, Adam Liptak wrote about how the Biden Administration may reverse positions taken by the Trump Administration:

Chief Justice John G. Roberts Jr. was annoyed. “The position that the United States is advancing today is different from the position that the United States previously advanced,” he told a lawyer in the solicitor general’s office, the elite unit of the Justice Department that represents the federal government in the Supreme Court. The Obama administration had filed a brief disavowing a position taken by its predecessor, saying it was the product of “further reflection.” “That is not the reason,” Chief Justice Roberts said. “It wasn’t further reflection.” The new position, he said, was prompted by a change in administrations. The rebuke was in 2012, but its memory lingers in the solicitor general’s office, where the Biden administration will soon have to decide whether to disavow positions taken by its predecessor in major cases, including ones on health care and voting. In an office that prizes its reputation for credibility, consistency and independence, solicitors general of both parties have said they are wary of veering from positions staked out by their predecessors.

Adam wrote a very similar column for years ago, about how the Trump administration may reverse positions of the Obama administration. He cited my then-draft article, titled Presidential Maladministration.

In a new law review article, Josh Blackman, a professor at South Texas College of Law, considered earlier changes in the government’s legal positions, finding them “increasingly problematic.”

On the one hand, he wrote, elections have consequences.

“There is nothing nefarious when a new administration disagrees with a previous administration,” he wrote. “Indeed, it is quite natural that presidents see things differently. The only question that remains is how should courts treat this reversal.”

If two administrations manage to read the same federal statutes in opposite ways, he wrote, something may be amiss.

“Where an incoming administration reverses a previous administration’s interpretation of statute simply because a new sheriff is in town,” he wrote, “courts should verify if the statute bears such a fluid construction.”

In that article, I tracked many of the instances where the Solicitor General has changed position “upon further reflection.” Here is an excerpt that discusses reversals in three cases: Kiobel v. Royal Dutch Petroleum, Levin v. United States, and US Airways v. McCutchen:

I was not able to locate any usages of the phrase “further reflection” from the Solicitors General in the Bush, Clinton, or Bush Administrations. For three cases argued during the October 2012 Term, however, the Obama Administration engaged in some deep reflection. In Kiobel v. Royal Dutch Petroleum, a group of Nigerian nationals living in the United States brought suit “alleging that the corporation [defendant] aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria.”89 . . .

After the change in administration, however, that position flipped. In his Kiobel brief, Solicitor General Donald Verrilli explained that “on further reflection, and after examining the primary documents,” the State Department “acknowledges that [Bradford’s] opinion is amenable to different interpretations.” 95 Now, the government concluded that the ATS “could have been meant to encompass . . . conduct” outside the United States.96

During oral arguments, when Solicitor General Verrilli articulated that extraterritorial “ATS causes of action should be recognized,” Justice Scalia interjected. 97 “That is a new position for the . . . State Department, isn’t it?”98 Verrilli replied, “[i]t’s a new—.”99 Justice Scalia interrupted him midsentence. “Why should we listen to you rather than the solicitors general who took the opposite position . . . not only in several courts of appeals, but even up here.”100 The United States has “multiple interests,” Verrilli answered, including “ensuring that our Nation’s foreign relations commitments to the rule of law and human rights are not eroded.”101 He continued, “[i]t’s my responsibility to balance those sometimes competing interests and make a judgment about what the position of the United States should be, consistent with existing law. . . . And we have done so.”102

Justice Scalia once again interrupted the Solicitor General. “It was the responsibility of your predecessors as well, and they took a different position. So . . . why should we defer to the views of the current administration?”103 With a dash of humor, Verrilli answered, “because we think they are persuasive, Your Honor.”104 Over laughter, Scalia answered, “Oh, okay.”105 Chief Justice Roberts was not persuaded. Reaffirming Scalia’s position, Roberts warned, “whatever deference you are entitled to is compromised by the fact that your predecessors took a different position.”106 Ultimately, agreeing with the government’s new position, the Court determined that “Attorney General Bradford’s opinion defies a definitive reading and we need not adopt one here.”107 No deference was granted to the reversal, however.

In Levin v. United States, the second case in this reflection trilogy, the petitioner suffered an injury at a Naval Hospital and sued the United States for a battery.108 The Federal Torts Claim Act (“FTCA”) generally waives the government’s sovereign immunity for claims of negligence, but exempts intentional torts.109 Levin claimed that the Medical Malpractice Immunity Act, commonly known as the Gonzalez Act, permitted him to sue the United States for a battery. 110 In the 1990 case of United States v. Smith, the Bush Administration rejected this construction of the Gonzalez Act.111 Solicitor General Kenneth W. Starr’s brief contended that the FTCA was the exclusive remedy for such claims, and suits in federal court were not available.112 The Supreme Court in Levin noted that its prior “decision in Smith was thus informed by the Government’s position.”113 After several changes in administration, however, that position flipped. In 2012, the government “disavow[ed] the reading of [the statute] it advanced in Smith.”114 In a footnote, Solicitor General Verrilli expressly stated, “[t]he government does not adhere to the statements in that brief,” which was filed in 1990.115 Amicus curiae—appointed by the Court because the United States agreed with the lower court’s judgment—flagged this sudden reversal: “When every reader comes away with the same understanding of a provision,” amicus wrote, “it is powerful evidence that the shared understanding is the provision’s natural meaning.”116 The friend-of-the-court added, “[t]he government offers very little in response” to explain the change after “remain[ing] consistent for many years.”117

During oral arguments, Justice Kennedy asked the Government about changing its position concerning a “central theory for your interpretation of the Act.”118 He joked, “I know you would have been disappointed if we didn’t ask you about this.”119 Deputy Solicitor General Pratik A. Shah replied, “[y]es, you are correct . . . . This is a change of position. We revisited it.”120 Unlike in Kiobel, the Levin Court “agree[d] with the Government’s earlier view” of the FTCA “and not with the freshly minted revision.”121

The final case in this triad was US Airways, Inc. v. McCutchen. The appeal considered whether an employee who recovered damages from a tortfeasor was required to reimburse his health benefits plan for the entire amount it had previously paid out, including attorney’s fees.122 The employee argued that the socalled “common-fund doctrine” would override the express terms of the policy and allow him to withhold his attorney’s fees from the reimbursable amount. In 2003, the Solicitor of Labor filed an amicus brief with the Supreme Court expressly rejecting this equitable defense, urging the Court to enforce the terms of the plan.123 After the change in administrations, that position flipped. In the government’s 2012 brief in McCutchen, the Solicitor General explained that “upon fur-ther reflection, and in light of this Court’s discussion” in a 2011 Employee Retirement Income Security Act (“ERISA”) decision, “the Secretary [of Labor] is now of the view that the common-fund doctrine is generally applicable in reimbursement suits” under ERISA.124 This is the exact opposite argument the Labor Department advanced nine years earlier.

During oral arguments, Chief Justice Roberts criticized Deputy Solicitor General Joseph R. Palmore about this reversal. “The position that the United States is advancing today,” Roberts said, “is different from the position that the United States previously advanced.”125 The Chief, with a tinge of annoyance in his voice, said that “further reflection” was “not the reason” why the position changed.126 He added for emphasis, “it wasn’t further reflection.”127 Roberts, who had served in the Reagan and Bush Administrations decades ago, rhetorically asked whether the real reason was that “we have a new secretary now under a new administration, right?”128 Palmore attempted to answer, “[w]e do have a new secretary under a new administration,” but Roberts interrupted him.129 “I think it would be more candid for your office to tell us when there is a change in position, that it’s not based on further reflection of the Secretary. It’s not that the Secretary is now of the view—there has been a change.”130

Kiobel, Levin, and McCutchen, each raising the same issue, were argued during a span of four months. Sensing a disquieting trend, Chief Justice Roberts sent a message of sorts to the Obama Administration: “We are seeing a lot of that lately. It’s perfectly fine if you want to change your position, but don’t tell us it’s because the Secretary has reviewed the matter further, the Secretary is now of the view. Tell us it’s because there is a new secretary.”131 Palmore responded that since the earlier brief was filed, the “law has changed.”132 The Chief Justice replied, “[t]hen tell us the law has changed. Don’t say the Secretary is now of the view. It’s not the same person. You cite the prior Secretary by name, and then you say, the [new] Secretary is now of the view. I found that a little disingenuous.”133 The Chief had openly rebuked the Solicitor General’s office for using this malapropism to justify maladministration. Supreme Court advocate Roy Englert Jr., who worked in the Solicitor General’s office, observed that Chief Justice Roberts was “making a broader point” with his criticism, referring to the recent string of cases where the Obama Administration had reversed prior positions.134

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When the Solicitor General Changes His Position “Upon Further Reflection”

Yesterday, Adam Liptak wrote about how the Biden Administration may reverse positions taken by the Trump Administration:

Chief Justice John G. Roberts Jr. was annoyed. “The position that the United States is advancing today is different from the position that the United States previously advanced,” he told a lawyer in the solicitor general’s office, the elite unit of the Justice Department that represents the federal government in the Supreme Court. The Obama administration had filed a brief disavowing a position taken by its predecessor, saying it was the product of “further reflection.” “That is not the reason,” Chief Justice Roberts said. “It wasn’t further reflection.” The new position, he said, was prompted by a change in administrations. The rebuke was in 2012, but its memory lingers in the solicitor general’s office, where the Biden administration will soon have to decide whether to disavow positions taken by its predecessor in major cases, including ones on health care and voting. In an office that prizes its reputation for credibility, consistency and independence, solicitors general of both parties have said they are wary of veering from positions staked out by their predecessors.

In a new law review article, Josh Blackman, a professor at South Texas College of Law, considered earlier changes in the government’s legal positions, finding them “increasingly problematic.”

On the one hand, he wrote, elections have consequences.

“There is nothing nefarious when a new administration disagrees with a previous administration,” he wrote. “Indeed, it is quite natural that presidents see things differently. The only question that remains is how should courts treat this reversal.”

If two administrations manage to read the same federal statutes in opposite ways, he wrote, something may be amiss.

“Where an incoming administration reverses a previous administration’s interpretation of statute simply because a new sheriff is in town,” he wrote, “courts should verify if the statute bears such a fluid construction.”

I was not able to locate any usages of the phrase “further reflection” from the Solicitors General in the Bush, Clinton, or Bush Administrations. For three cases argued during the October 2012 Term, however, the Obama Administration engaged in some deep reflection. In Kiobel v. Royal Dutch Petroleum, a group of Nigerian nationals living in the United States brought suit “alleging that the corporation [defendant] aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria.”89 . . .

After the change in administration, however, that position flipped. In his Kiobel brief, Solicitor General Donald Verrilli explained that “on further reflection, and after examining the primary documents,” the State Department “acknowledges that [Bradford’s] opinion is amenable to different interpretations.” 95 Now, the government concluded that the ATS “could have been meant to encompass . . . conduct” outside the United States.96

During oral arguments, when Solicitor General Verrilli articulated that extraterritorial “ATS causes of action should be recognized,” Justice Scalia interjected. 97 “That is a new position for the . . . State Department, isn’t it?”98 Verrilli replied, “[i]t’s a new—.”99 Justice Scalia interrupted him midsentence. “Why should we listen to you rather than the solicitors general who took the opposite position . . . not only in several courts of appeals, but even up here.”100 The United States has “multiple interests,” Verrilli answered, including “ensuring that our Nation’s foreign relations commitments to the rule of law and human rights are not eroded.”101 He continued, “[i]t’s my responsibility to balance those sometimes competing interests and make a judgment about what the position of the United States should be, consistent with existing law. . . . And we have done so.”102

Justice Scalia once again interrupted the Solicitor General. “It was the responsibility of your predecessors as well, and they took a different position. So . . . why should we defer to the views of the current administration?”103 With a dash of humor, Verrilli answered, “because we think they are persuasive, Your Honor.”104 Over laughter, Scalia answered, “Oh, okay.”105 Chief Justice Roberts was not persuaded. Reaffirming Scalia’s position, Roberts warned, “whatever deference you are entitled to is compromised by the fact that your predecessors took a different position.”106 Ultimately, agreeing with the government’s new position, the Court determined that “Attorney General Bradford’s opinion defies a definitive reading and we need not adopt one here.”107 No deference was granted to the reversal, however.

In Levin v. United States, the second case in this reflection trilogy, the petitioner suffered an injury at a Naval Hospital and sued the United States for a battery.108 The Federal Torts Claim Act (“FTCA”) generally waives the government’s sovereign immunity for claims of negligence, but exempts intentional torts.109 Levin claimed that the Medical Malpractice Immunity Act, commonly known as the Gonzalez Act, permitted him to sue the United States for a battery. 110 In the 1990 case of United States v. Smith, the Bush Administration rejected this construction of the Gonzalez Act.111 Solicitor General Kenneth W. Starr’s brief contended that the FTCA was the exclusive remedy for such claims, and suits in federal court were not available.112 The Supreme Court in Levin noted that its prior “decision in Smith was thus informed by the Government’s position.”113 After several changes in administration, however, that position flipped. In 2012, the government “disavow[ed] the reading of [the statute] it advanced in Smith.”114 In a footnote, Solicitor General Verrilli expressly stated, “[t]he government does not adhere to the statements in that brief,” which was filed in 1990.115 Amicus curiae—appointed by the Court because the United States agreed with the lower court’s judgment—flagged this sudden reversal: “When every reader comes away with the same understanding of a provision,” amicus wrote, “it is powerful evidence that the shared understanding is the provision’s natural meaning.”116 The friend-of-the-court added, “[t]he government offers very little in response” to explain the change after “remain[ing] consistent for many years.”117

During oral arguments, Justice Kennedy asked the Government about changing its position concerning a “central theory for your interpretation of the Act.”118 He joked, “I know you would have been disappointed if we didn’t ask you about this.”119 Deputy Solicitor General Pratik A. Shah replied, “[y]es, you are correct . . . . This is a change of position. We revisited it.”120 Unlike in Kiobel, the Levin Court “agree[d] with the Government’s earlier view” of the FTCA “and not with the freshly minted revision.”121

The final case in this triad was US Airways, Inc. v. McCutchen. The appeal considered whether an employee who recovered damages from a tortfeasor was required to reimburse his health benefits plan for the entire amount it had previously paid out, including attorney’s fees.122 The employee argued that the socalled “common-fund doctrine” would override the express terms of the policy and allow him to withhold his attorney’s fees from the reimbursable amount. In 2003, the Solicitor of Labor filed an amicus brief with the Supreme Court expressly rejecting this equitable defense, urging the Court to enforce the terms of the plan.123 After the change in administrations, that position flipped. In the government’s 2012 brief in McCutchen, the Solicitor General explained that “upon fur-ther reflection, and in light of this Court’s discussion” in a 2011 Employee Retirement Income Security Act (“ERISA”) decision, “the Secretary [of Labor] is now of the view that the common-fund doctrine is generally applicable in reimbursement suits” under ERISA.124 This is the exact opposite argument the Labor Department advanced nine years earlier.

During oral arguments, Chief Justice Roberts criticized Deputy Solicitor General Joseph R. Palmore about this reversal. “The position that the United States is advancing today,” Roberts said, “is different from the position that the United States previously advanced.”125 The Chief, with a tinge of annoyance in his voice, said that “further reflection” was “not the reason” why the position changed.126 He added for emphasis, “it wasn’t further reflection.”127 Roberts, who had served in the Reagan and Bush Administrations decades ago, rhetorically asked whether the real reason was that “we have a new secretary now under a new administration, right?”128 Palmore attempted to answer, “[w]e do have a new secretary under a new administration,” but Roberts interrupted him.129 “I think it would be more candid for your office to tell us when there is a change in position, that it’s not based on further reflection of the Secretary. It’s not that the Secretary is now of the view—there has been a change.”130

Kiobel, Levin, and McCutchen, each raising the same issue, were argued during a span of four months. Sensing a disquieting trend, Chief Justice Roberts sent a message of sorts to the Obama Administration: “We are seeing a lot of that lately. It’s perfectly fine if you want to change your position, but don’t tell us it’s because the Secretary has reviewed the matter further, the Secretary is now of the view. Tell us it’s because there is a new secretary.”131 Palmore responded that since the earlier brief was filed, the “law has changed.”132 The Chief Justice replied, “[t]hen tell us the law has changed. Don’t say the Secretary is now of the view. It’s not the same person. You cite the prior Secretary by name, and then you say, the [new] Secretary is now of the view. I found that a little disingenuous.”133 The Chief had openly rebuked the Solicitor General’s office for using this malapropism to justify maladministration. Supreme Court advocate Roy Englert Jr., who worked in the Solicitor General’s office, observed that Chief Justice Roberts was “making a broader point” with his criticism, referring to the recent string of cases where the Obama Administration had reversed prior positions.134

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Crypto Extends Gains, Ethereum Near Record High After Musk Musings

Cryptos are up significantly this morning, as heavily-shorted stocks and silver take a beating.

Bitcoin is back above $35,000 this morning…

Source: Bloomberg

And Ethereum is testing back up towards its record highs around $1450…

Source: Bloomberg

Various catalysts for the most recent move have been suggested from Elon Musk’s supportive comments to ongoing institutional interest, and from ‘bullish’ Coinbase outflows to suggestions that the Reddit/WSB crowd are showing some interest.

“With investment and trading platform Robinhood halting trading of certain assets like GameStop and Nokia, and NASDAQ president and CEO Adena Friedman calling for regulations to prevent retail investors from coordinating on social media, the case for cryptocurrencies only grows stronger,” Nicholas Pelecanos, head of trading at NEM Ventures, told CoinDesk.

The CEO of CryptoQuant says a recent 15,200 BTC outflow at Coinbase is a sign that institutions are accumulating for the next Bitcoin bull break.

“Since the price is eventually determined on exchanges, massive non-exchange transaction volume is considered as a bullish signal. These transactions include OTC deals.”

Additionally, as CoinTelegraph notes, the world’s richest man, Elon Musk, openly confirmed that he was a “supporter” of Bitcoin during an interview with Clubhouse aired late Sunday,

“I’ve gotta watch what I say here; some of these things can really move the market,” he began.

Musk revealed that even his friends had tried to onboard him over the years, even feeding him a slice of a Bitcoin cake in 2013. Nonetheless, having held off on closer involvement, he now admits that he is “late to the party.”

“So I was a little slow on the uptake there, my apologies,” he continued.

“I had to think about it for a bit, but I do at this point think that Bitcoin is a good thing and so I am a supporter of Bitcoin, like I said — late to the party but I am a supporter of Bitcoin.”

As Cointelegraph reported, last week, the Tesla and SpaceX CEO added Bitcoin as the only content on his Twitter biography. Amid suspicions that it was a hoax, Musk nonetheless sent BTC/USD skyrocketing for a brief period, the pair adding $5,000 in minutes as users caught on.

Finally, CoinTelegraph notes that, investment firm ARK Invest said in its latest report, “Bitcoin: Preparing for Institutions,” that even a 1% allocation from S&P 500 companies would be enough to increase BTC/USD spot prices by $40,000.

Their conclusion, as the chart above suggests,Bitcoin could fetch at least a $535,000 price tag if corporate buyers convert 10% of their cash reserves to the largest cryptocurrency.

Tyler Durden
Tue, 02/02/2021 – 09:08

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Paper Silver Slammed, Erases Most Of Monday’s Gains; Physical Premium Remains Extreme

After getting a lot of attention over the last few days thanks to the so-called Reddit Raiders, topping $30 during yesterday’s trading, (paper) silver prices are fading fast this morning – following CME’s margin hike overnight – erasing almost all of the Monday’s gains.

Monday saw another massive inflow of funds into the SLV (Silver ETF), but we note that the value of the ETF is significantly discounted to its NAV…

And physical premia remain extremely high.

Source: APMEX

But as Peter Schiff pointed out in a recent podcast, silver is a fantastic buy right now even absent the attention of message board investors. In fact, silver was poised to go up even before the Reddit crowd looked its way.

Overall, SchiffGold.com says that the fundamentals are extremely bullish for silver in the long-term, without or without a push from the Reddit Raiders.

Silver the Monetary Metal

In the first place, silver is at its core a monetary metal. Silver has been used as money for thousands of years. As government fiat currencies devalue, silver and gold both tend to hold their value as the prices increases in dollar-terms. Currently, the Federal Reserve and other central banks are creating money like never before. The money supply increased at a record pace last year as the Federal Reserve responded to the COVID-19 pandemic. And there is no sign that the money printing will abate.

In fact, the Fed can’t exit from this extraordinary monetary policy. It has to continue monetizing the ever-incrasing government debt and hold interest rates artificially low. If it were to back off quantitative easing and allow interest rates to rise, it would collapse the debt-ridden US economy. On the other hand, if it continues this reckless money creation, it will eventually crash the dollar.

Either scenario is bullish for silver.

Fundamentally, central banks destroy the value of fiat money by printing more and more and more of it. On the other hand, real money cannot be created out of thin air. Its value is intrinsic. Since silver and gold are scarce resources, the marketplace ultimately determines their underlying value – not political calculations or central planning manipulation. You can’t print silver. As a result, in times of great economic turmoil, and inflationary central bank policy, silver and gold tend to maintain their purchasing power, while fiat money can potentially become worthless.

While the Reddit Raiders could create a short squeeze in silver futures and drive the price higher, ultimately, silver will stand on its underlying value. Looking long-term, buying silver at $27 an ounce is a bargain – with or without the attention of Reddit investors.

The Fed’s expansionary monetary policy has already driven investment demand for silver to five-year highs. Silver coin and silver bar sales in the US have helped push the big gains in investment demand. Retails sales were projected to rise by 62% on the year.

Silver Is Undervalued

Second, silver remains historically undervalued compared to gold. Even with the recent run-up in the silver price, the silver-glold ratio is still over 60-1. This is historically high.

The silver-gold ratio simply tells you how many ounces of silver it takes to buy 1 ounce of gold. The average in the modern era has been between about 40:1 and 50:1.

Geologists estimate that there are approximately 19 ounces of silver for every ounce of gold in the earth’s crust, with a ratio of approximately 11.2 ounces of silver to each ounce of gold that has ever been mined. Interestingly, the silver-gold ratio in ancient Egypt was 1:1.

In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1. France mandated a ratio of 15.5:1 in 1803. Faced with the challenges of a bi-metallic monetary system with fixed exchange rates and the aftermath of a worldwide financial crisis, the US Congress passed the Coinage Act of 1873. Following the lead of other Western nations, including England, Portugal, Canada, and Germany, this act formally demonetized silver and established a gold standard for the United States.

With silver playing a smaller role as a monetary metal, the silver-gold ratio gradually spread. The modern average over the last century has been around 40:1.

Since the world went to a total fiat money system, there seems to be some correlation between the silver-gold ratio and central bank money-creation. During periods of central bank money-printing, the gap tends to shink. In fact, it plummeted in the aftermath of the 2008 financial crisis as the Fed engaged in extreme monetary policy.

Looking at the current silver-gold ratio indicates that silver is still undervalued. That means, in effect, we have silver on sale.

Supply and Demand

Third, supply and demand dynamics look good for silver moving forward.

While silver is fundamentally a monetary metal, more than half of global demand comes from industrial and technological applications. In the 20th century, photography was the primary industry using silver. That changed with the advent of digital photography. But silver’s unique chemical properties make it indispensable in all sorts of modern applications and demand is no longer supported by just one or two industries. In the first decade of the 21st century, silver demand for electronics, computers, healthcare and other hight-tech industries expanded dramatically. This reflects two of the metal’s key characteristics — it has the highest thermal and electrical conductivity of any metal, and it is widely available. It also has anti-bacterial properties.

As you might expect, non-investment silver demand dropped in 2020 due to the economic contraction sparked by government response to the COVID-19 pandemic. March and April saw precipitous drops in demand, but the market has shown signs of recovery since. Analysts expect industrial demand will rebound further as the global economy begins to recover from the impacts of the coronavirus pandemic.

Silver demand will likely get a boost from the push toward solar power and other green energy initiatives in the coming years. Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute. Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.

On the supply side, mine output fell sharply in 2020. Production was projected to fall by 6.3% to about 780.1 million ounces. The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.

When you look at all the dynamics, the future looks bright for silver. As Peter Schiff emphasized in his podcast, silver is a good quality investments. Silver is cheap. Silver stocks are a bargain.

So, rather than buying overpriced stocks supposedly to make a point and a political statement, you can make a much better political statement, a much better point by buying some physical silver and buying some silver stocks, because then you could stick it to the billion dollar banks who are short and also make some money for yourself. That is a much better outcome.”

Tyler Durden
Tue, 02/02/2021 – 08:49

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