China Warns Of ‘Counter-Measures’ After Biden Approves $1.1bn Arms Sales To Taiwan
China is “firmly opposed” to the Biden administration’s approval of more than $1.1 billion in armssales to Taiwan, and says to expect “counter-measures” in response.
Chinese embassy spokesman Liu Pengyu said on Saturday that the sales “severely jeopardize China-US relations and peace and stability across the Taiwan Strait,” and has called on Washington to “immediately revoke” them.
#Taiwan is an inalienable part of the #Chinese territory. The United States interferes in #China’s internal affairs and undermines China’s sovereignty and security interests by selling arms to the Taiwan region. It runs counter to international law and basic principles in international relations, and violates the one-China principle and provisions of the three China-US joint communiques, especially the August 17 Communique.
It sends wrong signals to “Taiwan independence” separatist forces, and severely jeopardizes China-US relations and peace and stability across the Taiwan Strait. China is firmly opposed to this.China urges the US side to honor its commitment, earnestly abide by the one-China principle and the three China-US joint communiques,stop arms sales to and military interactions with Taiwan, and immediately revoke relevant arms sales to Taiwan, lest it should cause more damages to China-US relations and peace and stability across the #TaiwanStrait.
China will resolutely take legitimate and necessary counter-measures in light of the development of the situation.
Tensions between Washington and Beijing have intensified since House Speaker Nancy Pelosi’s visit last month, which China had warned against – and responded to by ordering military drills around the island nation after she had left.
On Saturday, Taiwan said it “highly welcomes” the arms, and thanked the Biden administration for “continuing to implement its security commitments to Taiwan.”
“In response to China’s recent continuous military provocations and unilateral changes in the status quo and creating crises, Taiwan’s determination to defend itself is extremely firm,” Taiwan’s Ministry of Foreign Affairs said in a statement, adding “This batch of arms sales includes a large number of various types of missiles that are needed to strengthen Taiwan’s self-defense, which fully demonstrates that the great importance the US government attaches to Taiwan’s defense needs, assisting our country to obtain the equipment needed for defense in a timely manner and to enhance our national defense capabilities.”
On Thursday, Taiwan’s military shot down a drone near one of its island outposts near the Chinese coast, which happened just one day after Taiwan was able to repel drones hovering over three of the islands it occupies near the Chinese port city of Xiamen.
OPEC is meeting on September 5 to discuss the state of the oil market.
The cartel is considering slashing oil production.
Reports of where oil demand is heading remain mixed.
Saudi Arabia’s signal from two weeks ago that OPEC+ could decide to cut production at any time, in any form, managed to lift Brent oil prices to above $100 per barrel for around a week.
But this week, fresh lockdowns in China, intensified fears of recession, and guidance that the Fed will continue with the large key rate hikes sent oil prices tumbling to the low $90s.
While OPEC insists that oil demand is robust and will be so through the end of the year, data suggests that demand in the world’s top oil importer, China, has been weak this summer amid COVID lockdowns and slowing factory activity.
Overall Asian crude imports are estimated to have slowed in August from July, with imports in India, the world’s third-largest crude importer, also down month on month, according to Refinitiv Oil Research data cited by Reuters’ Asia Commodities and Energy Columnist Clyde Russell.
OPEC+ is meeting on September 5 for its regular monthly gathering to assess market conditions and decide how to proceed with the pact which currently expires in December this year. The group, in theory, rolled back by the end of August all the massive cuts from May 2020, but it’s estimated to be 2.9 million barrels per day (bpd) below the collective target.
Now the million-dollar question is: Will there be new cuts? And will cuts help support what looks like a softening physical crude market?
Per a Bloomberg survey of 19 industry analysts, OPEC+ is expected to keep the oil output target for October at the same level as in September when they meet next week.
Moreover, refiners in Asia expect Saudi Arabia to slash the price of its flagship grade to Asia for October amid lackluster fuel demand and increased competition from crude from other regions. If next week Saudi Aramco indeed slashes its prices, it would be an admission of a weakening demand for Middle Eastern crude in the key oil importing region, Asia.
OPEC insists that oil demand is strong. Global oil demand is still robust and will be such through the end of this year, OPEC Secretary General Haitham al-Ghais told Reuters last month, noting that the recent sell-offs didn’t reflect fundamentals and were driven by fear.
But the latest data compiled by Refinitiv paints a different picture.
Chinese imports in August are expected to be only slightly above the July arrivals, and the June-August overall imports are estimated at around 1.5 million bpd below the 2021 average rate of purchases, Reuters’ Russell notes.
In July, crude throughput at Chinese refineries slumped to the lowest level since the height of the pandemic in March 2020, amid unplanned facility outages and lower processing rates at independent refiners due to declining refining margins. A new round of tax probes on private refiners, the so-called teapots, could slow down further the crude processing rates at the world’s top crude oil importer, while this week’s new lockdowns in several large cities are not helping demand, either.
Fears of demand destruction with slowing industrial activity not only in China, but also in Europe and the U.S., sent this week oil prices down to the levels from before August 21 when Saudi Energy Minister, Prince Abdulaziz bin Salman, said that OPEC+ was ready to cut production at any time in any form if it believes it would bring stability to the “schizophrenic” oil market.
If OPEC+ surprises most market observers and does announce cuts on September 5, it could support oil prices for some time. However, the more likely outcome of Monday’s meeting could be a wait-and-see approach and a vague statement of readiness to do whatever it takes to “stabilize” oil prices, which in OPEC+’s parlance typically means “lift” oil prices.
Two large uncertainties are hanging over the market apart from where demand will go from here, and they could prompt OPEC+ to wait for more clarity ahead of announcing possible production cuts. These are the so-called Iranian nuclear deal and the oil supply from key OPEC+ member Russia, which could dip from very resilient current levels once the EU embargo on seaborne Russian crude and fuel imports comes into full force in early 2023 and countries announce a price cap on Russian oil.
Buffett’s BYD Sales Add To Chinese Stock “Pain Trades”
By George Lei and Ye Xie, Bloomberg Markets live commentators and reporters
Three things we learned last week:
1. There have been strong inflows into China’s stock market, despite the nation’s economic challenges. Chinese equity funds, led by ETFs, received $3 billion in the week through Aug. 31, in contrast to an outflow of $9 billion from global equity funds, according to EPFR Global and Citigroup. Foreign investors appear to be unfazed by the weak market performance, as renewed Covid outbreaks sent Chinese stocks to a three-month low.
In August, long-only managers added bets on consumer-service names as part of the “reopening trade” as well as electric- vehicle makers, such as BYD Co., to gain exposure to the growth factor, according to Morgan Stanley. But their timing wasn’t particularly good. Warren Buffett’s Berkshire Hathaway started trimming its massive stake in BYD, putting the shares under pressure.
Meanwhile, restaurant and traveling names such as Yum China, H World and Trip.com aren’t performing well amid the spreading Covid cases. “The recent lockdown in some China major cities and investors’ transactions on BYD imply a prolonged wait for these trades to add values,” Morgan Stanley’s analysts led by Gilbert Wong wrote in a note.
2. The number of Chinese cities grappling with virus outbreaks is now almost as high as it was at the peak of the Omicron wave earlier this year. The southwestern metropolis of Chengdu locked down its 21 million residents, and Shenzhen’s 17.5 million inhabitants now fear a second city-wide shutdown this year.
Since May, China has adopted a mass-testing strategy, setting up tens of thousands of testing booths across major cities. Authorities hoped frequent testing would help them avoid lockdowns and enable most business activities to carry on. The highly- transmissible BA.5 variant, however, has left the strategy increasingly ineffective and economic pains are mounting.
3. Policy divergence is putting the yuan under pressure, but the People’s Bank of China has resisted the currency’s depreciation. Friday’s US jobs report is unlikely to prompt the Federal Reserve to change its hawkish message. It’s a coin toss between a 75-bp or a 50-bp rate hike at the Fed meeting later this month. This week, the European Central Bank is likely to raise rates by 75 bps. Facing depreciation pressure, the PBOC has set the yuan fixing stronger than expected. It has slowed the yuan’s decline, at least for now.
Every young person moving into adulthood faces the great question of whether to buy or rent their primary residence. That question just became much more complicated.
The ratio between the two just expanded to the greatest gap since 2008, and it does not favor buying. Mortgage rates have made buying completely unaffordable even for those who can get a mortgage. That’s why housing demand has suddenly fallen off a cliff.
The Mortgage Bankers Association reports that before lockdowns, median mortgage payments and asking rents were equal at $1,200. The choice was really about making the best choice to fit with career plans and duration of residency. Since lockdowns, rents have risen 10 percent to $1,314 while mortgage payments have risen 58 percent to $1,893. Now it is a different matter. It is about figuring out how to avoid being pillaged.
Maybe the answer seems to favor renting. But not so fast: rental vacancies are now lower as a percentage of overall units on the market than they have been since 1983. That means it’s not so easy to get a place to live. The sheer number of applications means that renters can be extremely fussy about whom they accept or reject. A sketchy job history, an uncertain living situation, a ding on your credit report can all lead to a turndown. Plus the terms can be egregious: long leases, huge upfront payments, and strict terms for breaking them.
Meanwhile, we’ve not seen this much upward price pressure on rents in nearly 40 years.
But put yourself out there in the home-buyer’s market and prepare yourself for sticker shock. The median home price has doubled since 2007. And it’s not just the price of homes. It’s the stringent credit conditions plus stunning mortgage rates that mean paying far more for far less. Once you add in the homeowners association fees, plus property taxes, it starts to feel utterly crazy, to say nothing of maintenance.
Just since January, the number of homes sold in the United States has fallen 26 percent. One might suppose that this would lead to dramatic downward price pressure. But that’s not what happened in an economy with unrelenting currency devaluation. Prices have softened, to be sure, but we won’t see a crash like 2008. That’s because the purchasing power of money in general is falling.
The inflation virus strikes in ways that are impossible to predict. Housing has cooled and so has jet fuel. There are no bargains in housing but you can fly coast to coast now for about $150. September flights from New York to Miami are at rock-bottom prices not seen in decades. This is because airlines have so tightly managed bookings that even small changes in consumer demand reflect very quickly in wonderful bargains.
So while the flights are cheap, the hotels, food, and entertainment once you get to your destination are not. And this is why so many consumers today are rethinking travel plans.
But staying home is no great shakes either because electricity and other utility bills are right now absorbing the highest levels of inflationary energy. Real-time year-over-year increases are running 14.6 percent. Those prices hit renters and buyers equally.
So much for the old saw that buying a home is an investment while renting is just throwing money away. In today’s market, the opposite seems true. The more you save by renting instead of buying is money that you can invest.
Of course it would be nice to have a good investment at hand. Nearly half of American households have nothing left after paying the bills for investment. Saving rates keep falling and have hit 5 percent. And credit card debt is rising. Among those who can afford to invest, getting a return above inflation is nearly impossible.
The Fed seems determined to deliver unrelenting bad news to the stock market, even regarding bear markets as a sign of success. This is because current Fed policy isn’t really about sponging up the liquidity it dumped by the many trillions during 2020 and 2021.
Instead it is about cooling off economic output, which these aging Keynesians believe bears the main responsibility for inflation. That means orchestrating something approximating a recession. The White House is on notice that this is happening and is preparing every manner of messaging to get people not to notice that they are getting poorer by the day.
Meanwhile, the latest employment report offers only more confusion. More jobs, yes, but labor force participation is still stuck far below pre-lockdown levels. Worker to population levels are the same. The unemployment rate is ticking up, nowhere near alarming levels but the trend is only going to get worse over the months as we all settle into the reality that the recession is real.
In my last post about President Biden’s plan to cancel hundreds of billions of dollars in student loan debt, I criticized the administration’s claims that the policy is authorized by an emergency power provision of the 2003 HEROES Act. But there is an alternative potential legal justification for the policy: Section 432(a) of the Higher Education Act of 1965, (now codified as 20 U.S.C. Section 1082(a)(6), which authorizes the Secretary of Education to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption” related to loans authorized by the Federal Direct Loan Program.
Fordham law Professor Jed Shugerman, who is highly critical of the administration’s HEROES Act theory, argues that the Higher Education Act (HEA) provides a much stronger rationale for Biden’s plan. Earlier, Sen. Elizabeth Warren and others argued that Section 432(a) could even justify a much larger debt cancellation program. Last year, the administration viewed this theory with skepticism. But should Biden’s plan be challenged in court, they could potentially still resort to it.
In some ways, the HEA argument is indeed superior to the HEROES Act theory. Taken in in isolation from the rest of the Act, Section 432(a) does appear to grant the executive the power to cancel as much student loan debt as it wants. That can be extrapolated from the power to “waive…or release any right, title, claim, lien, or demand” (emphasis added). Moreover, unlike the HEROES Act theory, the HEA justification isn’t confined to emergency situations or to borrowers who can plausibly claim that an emergency or disaster has made it more difficult for them to pay their debts. If the argument is correct, the administration can cancel any amount of federal student loan debt, at any time, for virtually any reason.
But a closer look suggests that the HEA theory is flawed for may of the same reasons as the HEROES Act rationale. Indeed, its breath-taking scope contributes to its undoing.
The HEA rationale was examined in some detail in a January 2021 memorandum written by then-Education Department Deputy General Counsel Reed Rubinstein, for outgoing Trump Administration Education Secretary Betsy DeVos (Secretary DeVos actually resigned in protest of Trump’s role in the January 6, 2021 attack on the Capitol a few days before the memo was officially submitted to her; but I don’t think this changes its status). I don’t agree with everything Rubinstein says. But he does make several strong points against the idea that Section 432(c) gives the Secretary of Education a blank check to cancel student loan debt.
As Rubinstein points out, “reading 20 U.S.C. § 1082(a)(6) to permit the Secretary [of Education], on a blanket or mass basis, to cancel, compromise, discharge, or forgive student loan principal balances” would render superfluous various other provisions of the HEA and later statutes, which give the Secretary the power to cancel or limit debt in more limited circumstances. And, as he rightly explains, there is a longstanding presumption against interpreting statutes in a way that renders parts of them superfluous. The Supreme Court has repeatedly reaffirmed this principle.
To avoid this and other problems, Rubinstein suggests that it makes more sense to construe Section 432(c) as only giving the Secretary the authority to waive or release student loan debt “on a case-by-case basis and then only under those circumstances specified by Congress.” In such situations, the provision serves to eliminate any ambiguity about the Education Department’s ability to forego any rights in question and to do so in whatever way the Department sees fit.
Like the HEROES Act theory, the HEA rationale for Biden’s plan is vulnerable to attack under the “major questions” and nondelegation doctrines. The former requires Congress to “speak clearly when authorizing an [executive branch] agency to exercise powers of vast economic and political significance.” If a statute is ambiguous, courts must presume that Congress have not given the agency the power in question.
Jed Shugerman rightly argues that the HEROES Act argument runs afoul of the Supreme Court’s recent major questions rulings. The authority to forgive hundreds of billions of dollars in student loan debt under an expansive definition of what qualifies as an “emergency” surely qualifies as a power of “vast economic and political significance.” But that’s even more true of the HEA theory, which would give the executive the power to cancel any amount of student loan debt at any time, for any reason.
Under the HEA approach, there would essentially be no limit to the executive’s power to cancel student loan debt. If the major questions doctrine applies anywhere, it surely does here. And Rubinstein’s analysis suggests there is at least some significant ambiguity about whether Section 432(c) – read in conjunction with the rest of the Higher Education Act – actually gives the administration such vast power. If so, the major questions doctrine requires federal courts to rule against the executive.
What is true of the major questions doctrine is also true of nondelegation. In my earlier post, I explained why, if there are meaningful constitutional limits to Congress’ power to delegate its authority to the executive, the HEROES Act theory likely runs afoul of them. That reasoning applies with even greater force to the HEA rationale, which would give the executive still greater discretionary authority. The Constitution gives Congress, not the president, the power to allocate federal funds. Giving the president unfettered authority to deprive the treasury of hundreds of billions of dollars in student loan debt is a truly enormous delegation.
At the very least, as the Rubinstein Memorandum points out, courts must apply the Supreme Court’s longstanding canon against interpreting federal statutes in ways that raise constitutional problems. In his controlling opinion in NFIB v. Sebelius (2012), Chief Justice John Roberts famously emphasized that this rule requires courts to reject “the most natural” reading of a statute if there is any “fairly possible” interpretation that would avoid the risk of rendering it unconstitutional. Rubinstein’s interpretation of Section 432(c) is at least a “fairly possible” one, and it would enable courts to avoid confronting a massive constitutional nondelegation problem.
I’m no great fan of the constitutional avoidance canon, especially Roberts’ very broad view of it. But the Supreme Court doesn’t seem likely to curb it anytime soon, and lower courts are required to follow it.
In sum, the HEA rationale for Biden loan cancellation plan has some advantages over the HEROES Act theory advanced by the administration. But the enormous scope of the power the theory gives the executive should lead courts to reject it.
UPDATE: I plan to write one more post in this series, addressing the question of whether anyone has standing to sue to challenge the loan debt cancellation policy.
Trump Says November Election’s A “Referendum” On “Enemy Of The State” Biden
At his first rally since the FBI’s raid on Mar-a-Lago, former President Trump took aim at President Biden and the Democrat’s recent warnings about “MAGA Republicans”, calling the current president an “enemy of the state.”
Speaking to supporters in Wilkes-Barre, Pennsylvania on Saturday, the former president addressed Biden’s primetime speech by deeming it the “most vicious, hateful, and divisive speech ever delivered by a [U.S.] president.”
Trump claimed Biden was “vilifying 75 million citizens, plus another probably 75 to 150 [million], if we want to be accurate about it, as threats to democracy and as enemies of the state.”
“You’re all enemies of the state,” he told the crowd to boos against Biden.
“He’s an enemy of the state if you want to know the truth. The enemy of the state is him and the group that control him, which is circling around him. ‘Do this, do that, Joe.’”
At another point during the Save America rally, Trump addressed the Mar-a-Lago raid, calling the investigation into whether he mishandled classified documents “one of the most shocking abuses of power by any administration in American history.”
“Another one of our highest priorities under a Republican Congress will be to stop left-wing censorship and to restore free speech in America,” Trump continued.
“We don’t have free speech. Go out and sign up now, by the way, for Truth Social. Anybody on Truth Social? It’s hot. And it’s much better than Twitter.”
Finally, Trump urged Americans to vote for Republican candidates in November, saying the midterm election results will serve as a referendum on the Biden administration.
“This election is a referendum on skyrocketing inflation, rampant crime, soaring murders, crushing gas prices, millions and millions of illegal aliens pouring across our border, race and gender indoctrination, converting our schools,” Trump said on Sept. 3.
“And above all, this election is a referendum on the corruption and extremism of [President] Joe Biden and the radical Democrat Party.”
“If you want to stop this destruction of America, you must vote Republican, you must go out and vote,” Trump added.
“We are just two months away from the most important midterm election in American history,” Trump continued, “We need a landslide so big that the radical left just cannot rig it.”
A “historic victory” for the Republican Party in November would pave the way for GOP lawmakers to tackle issues currently plaguing the nation, according to Trump.
“Among our highest priorities must be to end the nightmare Joe Biden and congressional Democrats have created on our southern border,” he said.
According to a recent USA TODAY/Ipsos poll (pdf), 59% of Republican voters said Trump should be the GOP nominee in 2024 and he “deserves reelection.” What’s more, 82 percent of Republican voters believe Trump can win the 2024 election. In contrast, only 44 percent said Biden should be the Democratic nominee in 2024 and deserves reelection. Only 60 percent of Democratic voters believe Biden could win in 2024.
Trump Rally v Biden Rally
It’s crystal clear who the majority of American people would rather have as their president. pic.twitter.com/fE85ztq9FE
On July 2, Martín Guzmán, Argentina’s Minister of Economy, finally resigned. Guzmán, who holds a PhD in economics from Brown University and studied under Joseph Stiglitz, had originally been introduced as the “rational” element of the left-wing coalition that came to office three years ago. But there is only so much time that can pass until inconsistent policies produce undesirable outcomes, something about the United States needs to learn in order to avoid Argentina’s mistakes. Indeed, it is probably a good idea to avoid 7.4 percent monthly inflation figures, like the one Argentina just released.
Argentina’s Guzmán had been appointed by President Alberto Fernández in December 2019 with the impossible task of expanding the size of government and simultaneously bringing down poverty and inflation. This recipe is the same that former presidents Néstor and Cristina Kirchner tried between 2003 and 2015, which in the end caused annual deficits of about 8 percent of the gross domestic product (GDP) and inflation to soar to 40 percent. From 2015 to 2019, former president Mauricio Macri reduced the deficit but failed to achieve a fiscal surplus. Even so, the unpopular effects of fiscal adjustment, plus a combination of clumsiness and bad timing during his entire tenure cost him reelection.
The pandemic, which caught the new government by surprise only three months after it took office, seemed like an opportunity for Kirchnerists to engage in modern monetary theory–style policies and mock those who warned about their consequences. Though Guzmán raised taxes, most government spending was financed through an increase in the money supply, the effects of which were bound to be delayed because of lockdowns.
But in 2020, economists who were close to the administration were writing op-eds in which they suggested explanations as to why increasing the monetary supply not only did not cause inflation, but actually decreased it. The country was once again running high deficits, but Guzmán did not seem to care about them and contended that these were temporary measures.
After the pandemic was over, instead of returning toward a path of fiscal balance and debt reduction, Guzmán accelerated the path toward high deficits, which can only be sustained by money printing, since markets did not trust Argentina’s government bonds. As a result, public spending currently is increasing more rapidly than revenue, and it is uncertain whether the country will meet the deficit target that was agreed with the IMF only last year in order to avoid defaulting on its debt. Meanwhile, annual inflation has risen to 70 percent and since Guzmán’s resignation, the peso fell more than 20 percent against the dollar.
In this context, it may be surprising that markets interpreted Guzmán’s exit as bad news. Yet the fall of Guzmán and the arrival of new minister Silvina Batakis, who only lasted a few weeks and has already been replaced by “superminister” Sergio Massa, symbolized the victory of the “irrational” wing of the government led by Vice President (and former president) Cristina Kirchner, who is actually the one who selected President Fernández as her running mate back in 2019. In the past, Kirchner has argued that economic theories do not work in Argentina, and she is known for advocating permanent economic stimulus even if this means excessive money printing.
If we are to believe insiders, Guzmán and Batakis both tried to correct the course of the economy and Massa will continue to pursue that goal, with the vice president as the main source of opposition. But if Massa fails and government policies on public spending stay the same, they will drive Argentina’s economy toward hyperinflation, which is the only possible outcome for a country with perpetually high deficits and no access to debt markets.
This is not the first time that Argentina’s economy has been on the verge of collapse. In the minds of the public, the hyperinflations of 1975 and 1989–90 are still remembered. But the very policies that underlie these crises, which are related to extravagant levels of public spending, high deficits, and ultimately an excessive increase in the monetary supply, are yet to be repudiated by a majority of voters, as exemplified by Fernández and Kirchner’s win in 2019. History seems to have a way of repeating itself.
Argentina’s example should serve as a warning to other countries of what can happen if the populist fantasy of creating money out of thin air clings onto the minds of key public officials and voters for too long. In the United States, for example, the Biden administration is showing signs of adhering to delusional theories about the economy that resemble those of Argentine Kirchnerism.
Indeed, President Biden believes that one of his tweets can bring down gas prices, Senator Warren keeps blaming corporate greed for inflation, Democratic legislators praise acts to reduce inflation as though if monetary policy was just wishful thinking. But ignoring the fact that excessive money printing has an effect on price levels, or arguing that companies charge more because they are evil, are excuses that we have seen in Argentina at the beginning of inflationary processes, and we know what comes next. We do not want to end in that path.
In my last post about President Biden’s plan to cancel hundreds of billions of dollars in student loan debt, I criticized the administration’s claims that the policy is authorized by an emergency power provision of the 2003 HEROES Act. But there is an alternative potential legal justification for the policy: Section 432(a) of the Higher Education Act of 1965, (now codified as 20 U.S.C. Section 1082(a)(6), which authorizes the Secretary of Education to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption” related to loans authorized by the Federal Direct Loan Program.
Fordham law Professor Jed Shugerman, who is highly critical of the administration’s HEROES Act theory, argues that the Higher Education Act (HEA) provides a much stronger rationale for Biden’s plan. Earlier, Sen. Elizabeth Warren and others argued that Section 432(a) could even justify a much larger debt cancellation program. Last year, the administration viewed this theory with skepticism. But should Biden’s plan be challenged in court, they could potentially still resort to it.
In some ways, the HEA argument is indeed superior to the HEROES Act theory. Taken in in isolation from the rest of the Act, Section 432(a) does appear to grant the executive the power to cancel as much student loan debt as it wants. That can be extrapolated from the power to “waive…or release any right, title, claim, lien, or demand” (emphasis added). Moreover, unlike the HEROES Act theory, the HEA justification isn’t confined to emergency situations or to borrowers who can plausibly claim that an emergency or disaster has made it more difficult for them to pay their debts. If the argument is correct, the administration can cancel any amount of federal student loan debt, at any time, for virtually any reason.
But a closer look suggests that the HEA theory is flawed for may of the same reasons as the HEROES Act rationale. Indeed, its breath-taking scope contributes to its undoing.
The HEA rationale was examined in some detail in a January 2021 memorandum written by then-Education Department Deputy General Counsel Reed Rubinstein, for outgoing Trump Administration Education Secretary Betsy DeVos (Secretary DeVos actually resigned in protest of Trump’s role in the January 6, 2021 attack on the Capitol a few days before the memo was officially submitted to her; but I don’t think this changes its status). I don’t agree with everything Rubinstein says. But he does make several strong points against the idea that Section 432(c) gives the Secretary of Education a blank check to cancel student loan debt.
As Rubinstein points out, “reading 20 U.S.C. § 1082(a)(6) to permit the Secretary [of Education], on a blanket or mass basis, to cancel, compromise, discharge, or forgive student loan principal balances” would render superfluous various other provisions of the HEA and later statutes, which give the Secretary the power to cancel or limit debt in more limited circumstances. And, as he rightly explains, there is a longstanding presumption against interpreting statutes in a way that renders parts of them superfluous. The Supreme Court has repeatedly reaffirmed this principle.
To avoid this and other problems, Rubinstein suggests that it makes more sense to construe Section 432(c) as only giving the Secretary the authority to waive or release student loan debt “on a case-by-case basis and then only under those circumstances specified by Congress.” In such situations, the provision serves to eliminate any ambiguity about the Education Department’s ability to forego any rights in question and to do so in whatever way the Department sees fit.
Like the HEROES Act theory, the HEA rationale for Biden’s plan is vulnerable to attack under the “major questions” and nondelegation doctrines. The former requires Congress to “speak clearly when authorizing an [executive branch] agency to exercise powers of vast economic and political significance.” If a statute is ambiguous, courts must presume that Congress have not given the agency the power in question.
Jed Shugerman rightly argues that the HEROES Act argument runs afoul of the Supreme Court’s recent major questions rulings. The authority to forgive hundreds of billions of dollars in student loan debt under an expansive definition of what qualifies as an “emergency” surely qualifies as a power of “vast economic and political significance.” But that’s even more true of the HEA theory, which would give the executive the power to cancel any amount of student loan debt at any time, for any reason.
Under the HEA approach, there would essentially be no limit to the executive’s power to cancel student loan debt. If the major questions doctrine applies anywhere, it surely does here. And Rubinstein’s analysis suggests there is at least some significant ambiguity about whether Section 432(c) – read in conjunction with the rest of the Higher Education Act – actually gives the administration such vast power. If so, the major questions doctrine requires federal courts to rule against the executive.
What is true of the major questions doctrine is also true of nondelegation. In my earlier post, I explained why, if there are meaningful constitutional limits to Congress’ power to delegate its authority to the executive, the HEROES Act theory likely runs afoul of them. That reasoning applies with even greater force to the HEA rationale, which would give the executive still greater discretionary authority. The Constitution gives Congress, not the president, the power to allocate federal funds. Giving the president unfettered authority to deprive the treasury of hundreds of billions of dollars in student loan debt is a truly enormous delegation.
At the very least, as the Rubinstein Memorandum points out, courts must apply the Supreme Court’s longstanding canon against interpreting federal statutes in ways that raise constitutional problems. In his controlling opinion in NFIB v. Sebelius (2012), Chief Justice John Roberts famously emphasized that this rule requires courts to reject “the most natural” reading of a statute if there is any “fairly possible” interpretation that would avoid the risk of rendering it unconstitutional. Rubinstein’s interpretation of Section 432(c) is at least a “fairly possible” one, and it would enable courts to avoid confronting a massive constitutional nondelegation problem.
In sum, the HEA rationale for Biden loan cancellation plan has some advantages over the HEROES Act theory advanced by the administration. But the enormous scope of the power the theory gives the executive should lead courts to reject it.
BLM Chapters Accuse Parent Organization’s Leader Of Millions In Fraud: Lawsuit
A lawsuit filed on Thursday in Los Angeles Superior Court accuses Black Lives Matter (BLM) and its leader, Shalomyah Bowers, of using foundation funds as his “personal piggy bank” and acting as a “rogue administrator” and a “middle man turned usurper.”
Bowers, who became head of the Black Lives Matter Global Network Foundation in April, and is accused of paying millions to his own Bowers Consulting Firm, as well as diverting funds from a new group called Black Lives Matter Grassroots, Inc. – a coalition of BLM chapters.
In total, over $10 million of donors’ money was siphoned by Bowers, including $2,167,894 paid to Bower’s firm in 2021, the lawsuit alleges.
The lawsuit seeks damages and restitution, as well as a temporary restraining order to block the foundation from using BLM accounts, or its website.
Bowers told the NY Post that the lawsuit is nothing more than a power grab by disgruntled activists who want to wrest control of the movement, including California State University Pan-African Studies professor Melina Abdullah.
“The assets that we built, the financial resources, the social media platforms and the name ‘Black Lives Matter’ have been taken from us and are under the control of consultants,” said Abdullah, BLM Grassroots director and a co-founder of the BLM Los Angeles chapter.
BLM Grassroots was launched three months ago, records show. It claims to represent BLM chapters across the country.
The new group was founded in California in May by Walter Mosley, the lawyer who also drafted the lawsuit against Bowers, according to court papers. Mosley formerly represented Black Chyna in a law suit against Kim Kardashian in 2018. -NY Post
In court papers, Abdullah is described as having been “engaged in intuitive protest simultaneous to the online activism of the three co-founders,” whatever that means.
“It’s the most insane thing I’ve read in a court pleading, and it’s signed under penalty of perjury when they know it’s a lie,” said Bowers, who told the Post that the Foundation has recently undergone audits which don’t show $10 million going to him or his firm.
“We are in the process of correcting things, of fixing things and dealing with disgruntled people who want to take over the group,” he continued.
The lawsuit comes months after BLM founder Patrice Cullors stepped down amid reports of extensive real estate purchases, as well as internal criticism over the foundation’s operations. She named two organizers as interim executives – however months later both individuals said they never actually acted in those roles due to an inability to reach an agreement over the scope of their positions.
What is Black Lives Matter doing with all the money they’re accumulating if not helping their local chapters and Black-owned businesses to advance?
They seem to be fundraising for the sake of fundraising.
According to the BLM Grassroots lawsuit, Bowers – who had been handling the administration under Cullors, took control of the operation, shutting out the grassroots chapters.
“We’re asking for accountability,” said BLM Grassroots director of operations, Angela Austin, who added that the local chapter was locked out of its social media accounts after the killing of Patrick Lyoya in Grand Rapids, and that they had been given no commitment from BLM for continuing funding.
“We’re fighting for the soul of Black Lives Matter,” said Abdullah. “Black Lives Matter belongs to the people who birthed and built it.”
While Bowers is claiming innocence, it would not be surprising if he did indeed profit from BLM. Despite their claims, BLM seems to me founded for solely pecuniary gains.
BLM is a perfect instance of how modern liberalism functions as an extremely lucrative business model. BLM merely expanded on the extortion business model of veteran race hustler Al Sharpton, which is ‘give us your money else we’ll brand you racist,’ but did it on a much larger scale. Al Sharpton must feel like a worn-out pair of shoes in the bottom drawer of a shoe case.
“Black Lives Matter” began as a trend on social media, in 2013 following Trayvon Martin’s death. Soon it evolved into a slogan used by ‘protestors’ across the US.
In the death of George Floyd in 2020, BLM saw their biggest opportunity to take the ‘movement’ to the next level and become the sole arbiters in matters of race. In parallel, BLM carried out ‘protests’, which were actually riots all over America.
Axios revealed that the total insured property losses incurred during the riots are between $1 to $2 billion dollars. The actual number including losses of uninsured property must be considerably higher.
That must not have mattered to BLM. For BLM, the riots were a promotional event that caused their coffers to be overflowing.
BLM was supported by the Democrats and their propagandists in the media because they could blame the riots on Trump and benefit from it politically. The Democrats, too, saw this as an opportunity to raise funds.
The noise created such a frenzy that anybody who was anybody began donating to BLM
Hollywood stars such as Angelina Jolie, Steve Carell, Seth Rogen, Kate Beckinsale, Jennifer Lopez, Ryan Reynolds, etc. donated to BLM.
Big tech firms such as Google committed $12 million. Facebook and Amazon donated $10 million. Apple pledged $100 million, and so did Walmart. Target pledged $10 million while Home Depot announced $1 million.
BLM didn’t make any verifiable promises; their goal was unstated, esoteric, and symbolic which ensured they could keep collecting without any oversight.
Rich donors didn’t verify how their donations were spent. Their sole purpose of donating was to be regarded as among ‘the good ones’. It was also like protection money to prevent BLM thugs from banging at their doors.
The American Library Association (ALA) destroyed a webpage that taught librarians how to secretly promote pro-LGBT messaging.
The original page, written by Maryland librarian Tess Goldwasser, told librarians how to sneak pro-LGBT books into towns that don’t want them.
“Do you work for a library in a small, rural, conservative community? Are you a frontline staff member there, with no managerial or administrative authority? Do you wish you could do more to make your library more inclusive to the LGBTQIA++ community, but meet with resistance?” the post about LGBT book month read. “I hope it’s not just me!”
Now, the link to the page leads to an error message. A search of ALA’s website doesn’t show the original page, although it does show the page’s old entry on search results.
The error message on the American Library Association’s website at the page that once displayed advice on how to secretly promote pro-LGBT programming. Screenshot taken Sept. 3, 2022. (The Epoch Times)
The Epoch Times contacted the ALA but has yet to hear back.
Articles Removed
According to Dan Kleinman, the leader of the library watchdog group Safe Libraries, the ALA has a long history of actions like these.
“This is an established pattern by the American Library Association of hiding things from the public,” he said.
“When the public sees what they’re doing and becomes aware of it and they realize how embarrassing it looks, they take it down.”
Kleinman added that on numerous occasions, he has seen the ALA remove articles from its site.
Safe Library leader Dan Kleinman visiting New York City, New York. (Photo courtesy of Dan Kleinman)
In one instance, Kleinman publicized an ALA page that insisted that librarians can’t determine whether something is child pornography because they aren’t judges.
Then the ALA changed the page, he said. After the controversial claim was gone, the ALA’s Office for Intellectual Freedom director Jamie LaRue mocked him for saying it was there without proof, Kleinman said.
The ALA’s dabbling in drag queen story hour started with San Francisco librarian Michelle Tea, Kleinman said. From there, it became a global phenomenon.
In its rush to popularize radical gender activism, the ALA put safety on the back foot, Kleinman said. In one case, child sex offender drag queens were allowed to read to children at a Houston, Texas library.
“The reason why they didn’t follow their policy to vet people before they let them go see children is because the librarians felt that it would have been a microaggression to assume the drag queen had a criminal record,” said Kleinman.
Far-Left Ideology on Gender
The ALA originally began promoting far-left gender ideology five decades ago under the leadership of Judith Krug, the director of the American Library Association’s Office for Intellectual Freedom, Kleinman said.
Krug shifted libraries to oppose censoring information to children, he said.
“No longer would they keep them from inappropriate material. Now, they would make sure that they got that inappropriate material. And they would leave it up to the parents to decide to stop it,” Kleinman said.
“And at the same time, they would mislead parents so the parents couldn’t stop or weren’t aware that they should be.”
To oppose this spread of radical sexual material to young children, parents need to get informed and run for office on school and library boards, Kleinman said.
“So many people are just simply not aware of this issue. That’s why it goes on. That’s why these librarians get to screw people over,” he said.
