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Here Are 4 Policing Reforms Cities and States Are Considering Right Now

Policing critics, Black Lives Matters activists, and a smattering of elected officials around the country want to pass significant policing reforms following George Floyd’s death at the knee of Minneapolis police officer Derek Chauvin. Right now, the biggest proposals are getting the most attention.

Rep. Justin Amash (L-Mich.) is in the middle of crafting a bill that would eliminate qualified immunity, assuming the Supreme Court doesn’t do it first. Qualified immunity is the legal doctrine that protects police officers and prosecutors from being sued for violating people’s rights.

Other big ideas include limiting the power and influence of police unions, who use collective bargaining not just to negotiate wages and benefits but also to control the disciplinary and appeal processes that make it next to impossible to fire bad cops. Reform advocates also want to build a national registry of police officers fired for misconduct and to repeal state laws that shield police discipline records from public view in order to keep bad cops from moving to new jurisdictions.

While many of these policies seem obvious, they will require an incredible amount of political will to implement. In the meantime, here are four more incremental reforms being considered in communities around the U.S.

In San Diego: No more “carotid restraints.” Police in San Diego are permitted to use a type of neck hold that cuts off blood to the brain and quickly renders people unconscious. Officers used these holds 70 times in 2019, according to the San Diego Union-Tribune.

Yesterday, San Diego Police Chief David Nisleit ordered a stop to their use, given the potential for harm. Nisleit told the Union-Tribune that he had been considering this change since 2018. The Union-Tribune reports that many cities prohibit chokeholds because they are dangerous and are disproportionately used against minorities. After Floyd’s death, a review of Minneapolis police tactics found that when officers used neck restraints to render somebody unconscious, half of the people they used them against were injured.

San Diego City Council members spoke positively about the change, but the San Diego County Sheriff’s Department is refusing to follow suit. Deputies will still be permitted to use the carotid restraints.

In New York City: Standardize police discipline and ban police chokeholds. In New York City, where police unions are powerful and Mayor Bill de Blasio is so weak that it took five years just to fire the NYPD officer who killed Eric Garner, it will likely take the city council to actually force changes.

After Garner’s death from a chokehold in 2014, a New York City council member introduced a measure that would criminalize the use of choke holds by police. De Blasio responded by threatening a veto. Now de Blasio says he’d approve the measure so long as it provides an exception if the officer is in a “life or death situation.”

In addition, another council member is proposing a “disciplinary matrix” to create a standard of discipline when officers engage in misconduct. Council Member Donavan Richards told NY1, “There is no written instruction on what a disciplinary action should be if an officer commits an infraction. This will set an example.”

New York’s lack of public transparency about police discipline contributes to the problem. New York state law shields police discipline records from public view. This can also lead to manipulation within the discipline system itself. When BuzzFeed journalists got their hands on secret New York Police Department disciplinary files, they found both cases where officers received slaps on the wrists for serious misconduct and cases where officers were harshly punished for minor infractions. One internal affairs investigator told BuzzFeed, “If 10 cops did the same exact thing that was bad, the outcome is different every time.”

In Colorado: Require police to intervene when fellow officers act out. Police unions are often quick to run to the defense of officers when they’re accused of misconduct. But when Minneapolis Police Officer Derek Chauvin was caught on video kneeling on Floyd’s neck for more than eight minutes, many unions made it clear they found Chauvin’s conduct indefensible.

In Colorado, three law enforcement groups—the County Sheriffs of Colorado, the Colorado Fraternal Order of Police, and the Colorado Association of Chiefs of Police—put out a joint statement Tuesday calling for state lawmakers to require that other officers intervene when they see something like what happened to Floyd.

The groups note that it’s already a duty for officers to intervene when he or she witnesses a fellow officer engaged in unreasonable force. They’re asking for state lawmakers to make it a statutory requirement, leaving officers who don’t intervene (like the three cops who stood by while Chauvin slowly suffocated Floyd) possibly facing criminal charges.

Democratic lawmakers in Colorado are working on a sweeping police reform bill intended to hit some of those big picture ideas to fight police misconduct: getting rid of qualified immunity, requiring body cameras for all officers, changes in use of force rules against suspects attempting to escape police, and a rule forbidding cops fired for excessive force from getting work in other cities’ police departments in Colorado. Maybe adding a component the unions actually support might help deal with the inevitable resistance.

In New Jersey: Launch a statewide use-of-force database. One of the challenges when fighting for reform is the general lack of data about how frequently police use force, under what circumstances, and what the justifications were. Heck, simply tracking who police officers kill in the line of duty is not easy, and efforts by the FBI to track that information nationally have been woefully inadequate.

In New Jersey, data journalists at NJ Advance Media put together their own database of use-of-force incidents within the state covering five years and collating more than 70,000 documents. There was no other statewide collection of use-of-force data and little analysis. After the NJ Advance Media “Force Report” database was released in 2018, state officials started a pilot project to launch an official government database to track the use of force in selected police departments. On Tuesday, New Jersey Attorney General Gurbir Grewal said that starting on July 1, all police departments in the state will be able to participate.

None of these smaller actions should be seen as substitutes for more sweeping reforms. But those are going to be big, long political battles against entrenched police unions with deep pockets. If reformers can convince legislators to implement incremental improvements right now, they should.

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Does That Malaria Medicine Work on COVID-19 After All?

On May 22, the medical journal The Lancet published a study that aimed to figure out how effective chloroquine and hydroxychloroquine, anti-malarial drugs, are in combination with certain anti-bacterial drugs for treating hospitalized COVID-19 patients. The researchers concluded that “each of these drug regimens was associated with decreased in-hospital survival.” In other words, patients treated with the drugs were more likely to die than those who were not. That study was based on data supplied by the medical data aggregation company Surgisphere which claims to have assembled a database of tens of thousands of COVID-19 patient records from hundreds of hospitals across the globe.

Almost immediately other researchers began questioning the accuracy of the Surgisphere database and therefore the accuracy of the study’s finding that the anti-malarials are ineffective—or worse, dangerous—at treating hospitalized COVID-19 patients. For example, an open letter signed by scores of outside researchers points out that Surgisphere has not released the code or data used in The Lancet study although the journal is a signatory to the Wellcome open research data guidelines. The outside researchers note further possible problems with Surgisphere’s reported data for COVID-19 patients: The data were not properly adjusted for confounders such as disease severity and doses used to treat patients. Researchers also suggest that Surgisphere is reporting data from implausibly high numbers of COVID-19 patients in Australia and parts of Africa.

The researchers are particularly concerned because several randomized placebo-controlled clinical trials of the drugs that could more clearly show the benefits or dangers of such treatments have been derailed in the wake of The Lancet study.

As a result of this storm of criticism, the editors at The Lancet have issued “an Expression of Concern to alert readers to the fact that serious scientific questions have been brought to our attention” about the article. The editors further note that “an independent audit of the provenance and validity of the data has been commissioned by the authors not affiliated with Surgisphere and is ongoing, with results expected very shortly.” The journal has also posted a minor correction to the article with respect to misclassifying Australian data, adding a supplemental table.

Surgisphere has now attracted the attention of data sleuths who are turning up oddities about the company including that its purportedly vast database does not appear to have been used in prior peer-reviewed studies and that it has a suspiciously low number of employees for a company that claims to have relationships with hundreds of hospitals.

For its part, Surgisphere maintains that its database is scientifically sound. “Mandatory audits happen at least four times a year, and everything from data acquisition to data reporting is independently reviewed by an external third-party auditor,” claims the company in an online statement. “Surgisphere has passed all of its prior audits with no major or minor nonconformities.”

In response to its critics, Surgisphere says that it is pursuing an independent academic audit of where its data come from, the database, and its statistical analysis “with all due haste.”

Given the severity of the coronavirus pandemic, the results of a truly thorough and transparent audit cannot come fast enough. The possibility that clinicians have been misled by shoddy research into avoiding the use of an effective drug to treat COVID-19 patients borders on scandalous.

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Another way to think about South Bay: Why Allow Protest, But Not Prayer?

Earlier today, I blogged about Corona-cases that were mooted while Supreme Court review was pending. Towards the end of the post, I offered another way to think about South Bay United Pentecostal Church. (I wrote about that case here and here).

First, the Court approached that case with the wrong frame. It is a mistake to simply assess how “comparable” businesses are treated. This method reminds me of a routine feature of employment law. For example, a hispanic female alleges that she was denied a promotion because of her ethnicity. However, the employer responds that a similarly-situated hispanic female was given a promotion; therefore, the argument goes, the plaintiffs was denied the promotion for legitimate reasons. The parties will invariably dispute about whether the individuals are similarly situated: they have different roles, different levels of experience, etc. The Free Exercise Clause should not turn on this sort of ad hoc balancing test. Cases like Masterpiece Cakeshop suggest a far more skeptical standard of review is appropriate. Comparing churches to nail salons is a red herring.

Second, I drew a comparison between how governors have treated religious gatherings and how they have treated recent demonstrations. I wrote:

Governors labelled a constitutionally enumerated right, which was subject to the whims of an eleventh-hour change, as non-essential. They did not think prayer was life-sustaining or soul-sustaining. Do it on Zoom! But we know they labelled demonstrations as essential. That cannot be done on Zoom! They also labelled mundane commercial activities, which were open from day-one, as essential, even where the risk of spread was high.

New York Mayor Bill De Blasio articulated this perspective with candor. Reuvain Borchardt from the Jewish newspaper Hamodia asked De Blasio about this disparate treatmetn:

“The retail store owners have been closed for two months… People from attending houses of worship, our regular part of life, have been banned from doing so with more than 10 people. Now you’ve expressed solidarity with this particular protest cause, is that why it’s been given dispensation to disregard epidemic guidelines?” Borchardt asked. “Are we in a pandemic or not? And do we have one set of rules for protesters and another for everyone else?”

De Blasio admitted there was disparate treatment:

“When you see a nation, an entire nation simultaneously grappling with an extraordinary crisis seeded in 400 years of American racism, I’m sorry, that is not the same question as the understandably aggrieved store owner or the devout religious person who wants to go back to services. This is something that’s not about which side of the spectrum you’re on. It’s about a deep, deep American crisis… Sorry guys, there’s a world outside New York City. So we’re dealing with this.”

I think De Blasio’s statements make the case for viewpoint discrimination under the Free Speech Clause. But I also think his position undermines any pretense of neutrality with respect to the Free Exercise Clause.  When Jewish people gathered to celebrate a funeral, NYPD broke up the assembly, and the Mayor publicly criticized those groups. The risk of public gatherings is real

Robby Soave offers this commentary:

As a reminder, here was what de Blasio had to say to New Yorkers who had gathered to mourn a Hasidic rabbi last month: “My message to the Jewish community, and all communities, is this simple: the time for warnings has passed. I have instructed the NYPD to proceed immediately to summons or even arrest those who gather in large groups. This is about stopping this disease and saving lives. Period.”

This is not just hypocritical—it’s odious. Protesting against police violence is extremely important, and the unprecedented public outcry over Floyd’s death is a critical opportunity to send a message that reforms are needed. But to say that this cause, and only this cause, should be exempt from the lockdown is, at the very least, remarkably callous. Mourning a deceased person is no less important to that person’s loved ones than ending police brutality is for the thousands of people engaged in protest. (This should be doubly obvious, since in both cases we are talking about a person’s death as the root issue.)

The Governor of New Jersey offered a similar criticism:

“I don’t want to make light of this, and I’ll probably get lit up by everyone who owns a nail salon in the state,” Murphy said during his coronavirus briefing in Trenton on Monday. “But it’s one thing to protest what day nail salons are opening, and it’s another to come out in peaceful protest, overwhelmingly, about somebody who was murdered right before our eyes.”

New Jersey currently limits gatherings to 25 people in outdoor settings and 10 people indoors. Organizers of protests calling for reopening have been charged in recent weeks with violating Murphy’s executive orders.

“I put those into different orbits,” said Murphy, a Democrat who has said Floyd’s death “highlights systemic racism and the stain that slavery still leaves in our country today.”

This double-standard demonstrates hostility towards religion, at a far greater level than the errant comments in Masterpiece Cakeshop. The Free Exercise of religion simply isn’t as important to these governors and mayors. And that fact ought to move the case from Smith‘s rational basis test to Lukumi‘s strict scrutiny.

 

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Here Are 4 Policing Reforms Cities and States Are Considering Right Now

Policing critics, Black Lives Matters activists, and a smattering of elected officials around the country want to pass significant policing reforms following George Floyd’s death at the knee of Minneapolis police officer Derek Chauvin. Right now, the biggest proposals are getting the most attention.

Rep. Justin Amash (L-Mich.) is in the middle of crafting a bill that would eliminate qualified immunity, assuming the Supreme Court doesn’t do it first. Qualified immunity is the legal doctrine that protects police officers and prosecutors from being sued for violating people’s rights.

Other big ideas include limiting the power and influence of police unions, who use collective bargaining not just to negotiate wages and benefits but also to control the disciplinary and appeal processes that make it next to impossible to fire bad cops. Reform advocates also want to build a national registry of police officers fired for misconduct and to repeal state laws that shield police discipline records from public view in order to keep bad cops from moving to new jurisdictions.

While many of these policies seem obvious, they will require an incredible amount of political will to implement. In the meantime, here are four more incremental reforms being considered in communities around the U.S.

In San Diego: No more “carotid restraints.” Police in San Diego are permitted to use a type of neck hold that cuts off blood to the brain and quickly renders people unconscious. Officers used these holds 70 times in 2019, according to the San Diego Union-Tribune.

Yesterday, San Diego Police Chief David Nisleit ordered a stop to their use, given the potential for harm. Nisleit told the Union-Tribune that he had been considering this change since 2018. The Union-Tribune reports that many cities prohibit chokeholds because they are dangerous and are disproportionately used against minorities. After Floyd’s death, a review of Minneapolis police tactics found that when officers used neck restraints to render somebody unconscious, half of the people they used them against were injured.

San Diego City Council members spoke positively about the change, but the San Diego County Sheriff’s Department is refusing to follow suit. Deputies will still be permitted to use the carotid restraints.

In New York City: Standardize police discipline and ban police chokeholds. In New York City, where police unions are powerful and Mayor Bill de Blasio is so weak that it took five years just to fire the NYPD officer who killed Eric Garner, it will likely take the city council to actually force changes.

After Garner’s death from a chokehold in 2014, a New York City council member introduced a measure that would criminalize the use of choke holds by police. De Blasio responded by threatening a veto. Now de Blasio says he’d approve the measure so long as it provides an exception if the officer is in a “life or death situation.”

In addition, another council member is proposing a “disciplinary matrix” to create a standard of discipline when officers engage in misconduct. Council Member Donavan Richards told NY1, “There is no written instruction on what a disciplinary action should be if an officer commits an infraction. This will set an example.”

New York’s lack of public transparency about police discipline contributes to the problem. New York state law shields police discipline records from public view. This can also lead to manipulation within the discipline system itself. When BuzzFeed journalists got their hands on secret New York Police Department disciplinary files, they found both cases where officers received slaps on the wrists for serious misconduct and cases where officers were harshly punished for minor infractions. One internal affairs investigator told BuzzFeed, “If 10 cops did the same exact thing that was bad, the outcome is different every time.”

In Colorado: Require police to intervene when fellow officers act out. Police unions are often quick to run to the defense of officers when they’re accused of misconduct. But when Minneapolis Police Officer Derek Chauvin was caught on video kneeling on Floyd’s neck for more than eight minutes, many unions made it clear they found Chauvin’s conduct indefensible.

In Colorado, three law enforcement groups—the County Sheriffs of Colorado, the Colorado Fraternal Order of Police, and the Colorado Association of Chiefs of Police—put out a joint statement Tuesday calling for state lawmakers to require that other officers intervene when they see something like what happened to Floyd.

The groups note that it’s already a duty for officers to intervene when he or she witnesses a fellow officer engaged in unreasonable force. They’re asking for state lawmakers to make it a statutory requirement, leaving officers who don’t intervene (like the three cops who stood by while Chauvin slowly suffocated Floyd) possibly facing criminal charges.

Democratic lawmakers in Colorado are working on a sweeping police reform bill intended to hit some of those big picture ideas to fight police misconduct: getting rid of qualified immunity, requiring body cameras for all officers, changes in use of force rules against suspects attempting to escape police, and a rule forbidding cops fired for excessive force from getting work in other cities’ police departments in Colorado. Maybe adding a component the unions actually support might help deal with the inevitable resistance.

In New Jersey: Launch a statewide use-of-force database. One of the challenges when fighting for reform is the general lack of data about how frequently police use force, under what circumstances, and what the justifications were. Heck, simply tracking who police officers kill in the line of duty is not easy, and efforts by the FBI to track that information nationally have been woefully inadequate.

In New Jersey, data journalists at NJ Advance Media put together their own database of use-of-force incidents within the state covering five years and collating more than 70,000 documents. There was no other statewide collection of use-of-force data and little analysis. After the NJ Advance Media “Force Report” database was released in 2018, state officials started a pilot project to launch an official government database to track the use of force in selected police departments. On Tuesday, New Jersey Attorney General Gurbir Grewal said that starting on July 1, all police departments in the state will be able to participate.

None of these smaller actions should be seen as substitutes for more sweeping reforms. But those are going to be big, long political battles against entrenched police unions with deep pockets. If reformers can convince legislators to implement incremental improvements right now, they should.

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Does That Malaria Medicine Work on COVID-19 After All?

On May 22, the medical journal The Lancet published a study that aimed to figure out how effective chloroquine and hydroxychloroquine, anti-malarial drugs, are in combination with certain anti-bacterial drugs for treating hospitalized COVID-19 patients. The researchers concluded that “each of these drug regimens was associated with decreased in-hospital survival.” In other words, patients treated with the drugs were more likely to die than those who were not. That study was based on data supplied by the medical data aggregation company Surgisphere which claims to have assembled a database of tens of thousands of COVID-19 patient records from hundreds of hospitals across the globe.

Almost immediately other researchers began questioning the accuracy of the Surgisphere database and therefore the accuracy of the study’s finding that the anti-malarials are ineffective—or worse, dangerous—at treating hospitalized COVID-19 patients. For example, an open letter signed by scores of outside researchers points out that Surgisphere has not released the code or data used in The Lancet study although the journal is a signatory to the Wellcome open research data guidelines. The outside researchers note further possible problems with Surgisphere’s reported data for COVID-19 patients: The data were not properly adjusted for confounders such as disease severity and doses used to treat patients. Researchers also suggest that Surgisphere is reporting data from implausibly high numbers of COVID-19 patients in Australia and parts of Africa.

The researchers are particularly concerned because several randomized placebo-controlled clinical trials of the drugs that could more clearly show the benefits or dangers of such treatments have been derailed in the wake of The Lancet study.

As a result of this storm of criticism, the editors at The Lancet have issued “an Expression of Concern to alert readers to the fact that serious scientific questions have been brought to our attention” about the article. The editors further note that “an independent audit of the provenance and validity of the data has been commissioned by the authors not affiliated with Surgisphere and is ongoing, with results expected very shortly.” The journal has also posted a minor correction to the article with respect to misclassifying Australian data, adding a supplemental table.

Surgisphere has now attracted the attention of data sleuths who are turning up oddities about the company including that its purportedly vast database does not appear to have been used in prior peer-reviewed studies and that it has a suspiciously low number of employees for a company that claims to have relationships with hundreds of hospitals.

For its part, Surgisphere maintains that its database is scientifically sound. “Mandatory audits happen at least four times a year, and everything from data acquisition to data reporting is independently reviewed by an external third-party auditor,” claims the company in an online statement. “Surgisphere has passed all of its prior audits with no major or minor nonconformities.”

In response to its critics, Surgisphere says that it is pursuing an independent academic audit of where its data come from, the database, and its statistical analysis “with all due haste.”

Given the severity of the coronavirus pandemic, the results of a truly thorough and transparent audit cannot come fast enough. The possibility that clinicians have been misled by shoddy research into avoiding the use of an effective drug to treat COVID-19 patients borders on scandalous.

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Another way to think about South Bay: Why Allow Protest, But Not Prayer?

Earlier today, I blogged about Corona-cases that were mooted while Supreme Court review was pending. Towards the end of the post, I offered another way to think about South Bay United Pentecostal Church. (I wrote about that case here and here).

First, the Court approached that case with the wrong frame. It is a mistake to simply assess how “comparable” businesses are treated. This method reminds me of a routine feature of employment law. For example, a hispanic female alleges that she was denied a promotion because of her ethnicity. However, the employer responds that a similarly-situated hispanic female was given a promotion; therefore, the argument goes, the plaintiffs was denied the promotion for legitimate reasons. The parties will invariably dispute about whether the individuals are similarly situated: they have different roles, different levels of experience, etc. The Free Exercise Clause should not turn on this sort of ad hoc balancing test. Cases like Masterpiece Cakeshop suggest a far more skeptical standard of review is appropriate. Comparing churches to nail salons is a red herring.

Second, I drew a comparison between how governors have treated religious gatherings and how they have treated recent demonstrations. I wrote:

Governors labelled a constitutionally enumerated right, which was subject to the whims of an eleventh-hour change, as non-essential. They did not think prayer was life-sustaining or soul-sustaining. Do it on Zoom! But we know they labelled demonstrations as essential. That cannot be done on Zoom! They also labelled mundane commercial activities, which were open from day-one, as essential, even where the risk of spread was high.

New York Mayor Bill De Blasio articulated this perspective with candor. Reuvain Borchardt from the Jewish newspaper Hamodia asked De Blasio about this disparate treatmetn:

“The retail store owners have been closed for two months… People from attending houses of worship, our regular part of life, have been banned from doing so with more than 10 people. Now you’ve expressed solidarity with this particular protest cause, is that why it’s been given dispensation to disregard epidemic guidelines?” Borchardt asked. “Are we in a pandemic or not? And do we have one set of rules for protesters and another for everyone else?”

De Blasio admitted there was disparate treatment:

“When you see a nation, an entire nation simultaneously grappling with an extraordinary crisis seeded in 400 years of American racism, I’m sorry, that is not the same question as the understandably aggrieved store owner or the devout religious person who wants to go back to services. This is something that’s not about which side of the spectrum you’re on. It’s about a deep, deep American crisis… Sorry guys, there’s a world outside New York City. So we’re dealing with this.”

I think De Blasio’s statements make the case for viewpoint discrimination under the Free Speech Clause. But I also think his position undermines any pretense of neutrality with respect to the Free Exercise Clause.  When Jewish people gathered to celebrate a funeral, NYPD broke up the assembly, and the Mayor publicly criticized those groups. The risk of public gatherings is real

Robby Soave offers this commentary:

As a reminder, here was what de Blasio had to say to New Yorkers who had gathered to mourn a Hasidic rabbi last month: “My message to the Jewish community, and all communities, is this simple: the time for warnings has passed. I have instructed the NYPD to proceed immediately to summons or even arrest those who gather in large groups. This is about stopping this disease and saving lives. Period.”

This is not just hypocritical—it’s odious. Protesting against police violence is extremely important, and the unprecedented public outcry over Floyd’s death is a critical opportunity to send a message that reforms are needed. But to say that this cause, and only this cause, should be exempt from the lockdown is, at the very least, remarkably callous. Mourning a deceased person is no less important to that person’s loved ones than ending police brutality is for the thousands of people engaged in protest. (This should be doubly obvious, since in both cases we are talking about a person’s death as the root issue.)

The Governor of New Jersey offered a similar criticism:

“I don’t want to make light of this, and I’ll probably get lit up by everyone who owns a nail salon in the state,” Murphy said during his coronavirus briefing in Trenton on Monday. “But it’s one thing to protest what day nail salons are opening, and it’s another to come out in peaceful protest, overwhelmingly, about somebody who was murdered right before our eyes.”

New Jersey currently limits gatherings to 25 people in outdoor settings and 10 people indoors. Organizers of protests calling for reopening have been charged in recent weeks with violating Murphy’s executive orders.

“I put those into different orbits,” said Murphy, a Democrat who has said Floyd’s death “highlights systemic racism and the stain that slavery still leaves in our country today.”

This double-standard demonstrates hostility towards religion, at a far greater level than the errant comments in Masterpiece Cakeshop. The Free Exercise of religion simply isn’t as important to these governors and mayors. And that fact ought to move the case from Smith‘s rational basis test to Lukumi‘s strict scrutiny.

 

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White House Picks 5 ‘Finalists’ For Vaccine Candidate Trials

White House Picks 5 ‘Finalists’ For Vaccine Candidate Trials

Tyler Durden

Wed, 06/03/2020 – 13:28

Despite a paucity of scientific evidence that has prompted many experts to warn that these decisions are dangerously premature, the White House has reportedly selected five companies as “the most likely candidates to produce a vaccine”, in keeping with “Project Warpspeed”, Trump’s White House-based initiative to start mass-innoculation by the end of the year.

The five companies mentioned are Moderna, AstraZeneca, J&J, Merck, and Pfizer. The decision will reportedly be made over the next few weeks.

The Trump administration has selected five companies as the most likely candidates to produce a vaccine for the coronavirus, senior officials said, a critical step in the White House’s effort to deliver on its promise of being able to start widespread inoculation of Americans by the end of the year.

By winnowing the field in a matter of weeks from a pool of around a dozen companies, the federal government is betting that it can identify the most promising vaccine projects at an early stage, speed along the process of determining which will work and ensure that the winner or winners can be quickly manufactured in huge quantities and distributed across the country.

The announcement of the decision will be made at the White House in the next few weeks, government officials said. Dr. Fauci apparently hinted at the coming action on Tuesday when he told a medical seminar that “by the beginning of 2021 we hope to have a couple of hundred million doses,” according to the NYT, though this isn’t the first time Dr. Fauci has made that claim. It is, after all, the stated goal of “Project Warp Speed”.

This leak is just the latest attempt by the White House to keep pumping market confidence with overhyped vaccine-linked headlines.

Hot biotech stocks like Inovio and Novavax sold off after they weren’t mentioned in the NYT report.

via ZeroHedge News https://ift.tt/3eG99IK Tyler Durden

Why The Recovery Will Fall Short Of Forecasts

Why The Recovery Will Fall Short Of Forecasts

Tyler Durden

Wed, 06/03/2020 – 13:25

Authored by Michael Lebowitz and Jack Scott via RealInvestmentAdvice.com,

Market pundits seem to have strong opinions about how fast or slow the economic recovery will be once it starts. Such clairvoyance is stunning given the uncertainty of the current GDP forecast, which is already two-thirds in the books.

If the world’s leading economists cannot come to any consensus about today, why should we assume anyone has clarity for tomorrow?

We do not have great clarity either, but we can provide guidance using what we know about the past and present. Our logic presented here is grounded in optimistic assumptions and historical data. The result is an outcome that is well below the hope-based forecasts of most economists. 

Quite frankly, what we present today may be the best possible scenario. It strays far from the popular narrative but deserves serious consideration.

Alphabet Economy

Will the economy recover in “V”, “U” or “L” – shaped fashion?

We hope for a speedy “V”-shaped recovery, but we are realists and understand that the odds of quickly rekindling the economic growth rates from the prior decade are poor. Our stark assessment is due to numerous factors that existed well before the virus and the extreme fiscal and monetary policy responses to the virus.

The last sentence is loaded. We will follow it up in future articles explaining why a full recovery is so difficult. In the meantime, we present a simple economic model, using very optimistic assumptions showing why this recovery is likely to be measured in years, not months.

It is important to stress; the assumptions in our model are the best case. It is easy to come up with more severe scenarios.

GDP

Gross domestic product (GDP) is how economic activity and growth are quantified. GDP is the sum of personal consumption expenditures (PCE), gross business investment, net government spending, and the amount of exports less imports.

The most substantial weighting in GDP is personal consumption expenditures (PCE). Over the prior economic expansion, lasting a decade, PCE constituted 74% of GDP. Since 1948, it has averaged 65%.

The outsized significance of consumption and the secondary effect it has on the other contributors to GDP, allows economists to use PCE as a proxy to forecast economic growth. Statistically, using three-year moving averages, PCE and Real GDP have a correlation of .7789.

Jobs > PCE > GDP

As PCE drives GDP, labor drives PCE. The vast majority of families in the U.S. work to consume. Some wealthy households can rely on investments and savings, and some poor citizens depend on the government. However, the large majority of citizens must consume its wages. Accordingly, PCE is mostly a function of employment and the size of our paychecks.

The graph below shows the year over year change in the number of employed versus the year over year change in PCE. When averaged over two years, as the darker lines show, the correlation is clear.

Forecasting Employment

Given the strong relationship between the labor market and consumption, we can use labor forecasts to arrive at PCE estimates. This is a two-step process.

First, current data and near-term expectations afford a forecast for when and at what level the labor market may trough. Second, we use prior recession data to calculate the rate at which the labor market may recover from the trough.

Step 1– As of the April 2020 BLS jobs report, the number of people counted as employed fell 13.5% to 131 million. Economists expect it to fall another 6% to 123 million when the May report is released this Friday. We aggressively presume that the May report will mark the low point in jobs and that the number of employed will increase going forward.

Step 2– The graph below helps illustrate the rate in which job growth might return to its prior peak. The orange bars show the depth of employment losses in terms of number and time. We invert the second y-axis for comparative purposes.

The most recent, 2008/09 recession, took 76 months for the number of jobs to go from peak to trough and back to the prior peak.

2008

When considering the last three recessions, the recession of 2008/09 is the best proxy to model future expectations. Not only was it the most recent recession, but it best captures our current mindset and economic standing.

  • The recession was broader based, and affected more industries, citizens, and nations, than the prior recessions of 1990 and 2001.

  • The 2008/09 recession and recovery also required significantly more fiscal and monetary policy to boost economic activity.

  • The amount of federal, corporate, and individual debt was significantly lower in 1990 and 2001 then 2008/09.

  • The natural economic growth rate for 1990 and 2001 was higher than the rate going into the 2008/09 recession.

Our current economy is saddled with more debt than the last recession, and the natural rate of growth has diminished over the previous ten years. As we will share in a future article, the economic growth rate going forward may be half of the already weak pace heading into the current recession.

As has progressively been the case, new debt issuance to fight the current recession will cost us in the future.  Accordingly, we think the 2008 experience is an optimistic proxy to analyze the time and rate at which the labor market might recover. In fact, The 2008/09 scenario may likely be the absolute best-case scenario. The number of job losses is already much more severe than that seen in the financial crisis, and the duration of the recovery seems certain to be longer than that episode.

In the 2008/09 recession, the payrolls number troughed two years after the recession started, falling 6.3% from the prior peak. From that low point, it took over four years for the labor market to fully regain the losses. In total, the labor market required six years to recover the pre-recession peak.  

2020

The number of people the BLS considers employed peaked in February 2020 at 156.463 million. It dipped by a little less than one million in March and then plummeted in April by over 25.4 million to 131.045 million.

Today, the range of estimates for the number of current employees is wide. For our analysis, we assume that the May jobs report will mark the trough. The current estimate for the number of employed is 123 million.  

Putting 2 and 2 Together

To review, our forecast assumes that jobs will trough in May. From June going forward, jobs will recover at the same rate and duration as in the aftermath of 2008. Using this assumption we create the PCE forecast shown below.  

If the historical relationship between labor and PCE holds up, and consumption continues to be the predominant contributor to GDP, we should not expect GDP to regain prior highs until 2025.

Summary

The recovery we laid out above is not a “V” or “U” shape. It resembles the Nike swoosh logo with a sharp decline and a long period of recovery. 

Interestingly, the Congressional Budget Office (CBO) agrees with us in that recovery will be much longer than most economists forecast. The CBO’s Nike swoosh forecast below shows the economy will not fully recover for at least a decade.

As mentioned, this analysis assumes a recovery akin to what the economy experienced in 2008. While 2008 was tough, the natural rate of economic growth at the time was more robust and the amount of debt was less.

Since 2008, the ratio of Federal debt to GDP has almost doubled. It now sits close to 120%, well beyond the rate that many economists consider sustainable. Corporate debt to GDP and profits are also growing at unsustainable rates, as shown below.

The simple takeaway is that debt will weigh even more heavily on the current path of growth as the economy recovers.

Economists, when forecasting economic activity, often fail to account for the existing headwinds fully and rarely the new ones. Are they willfully ignorant, or might their employers have a vested interest in portraying a favorable outcome?

via ZeroHedge News https://ift.tt/2XuqSgA Tyler Durden

Snapchat Will No Longer Promote Trump’s Account For Inciting ‘Racial Violence And Injustice’

Snapchat Will No Longer Promote Trump’s Account For Inciting ‘Racial Violence And Injustice’

Tyler Durden

Wed, 06/03/2020 – 13:12

Snapchat – whose employees were busted spying on users sexting each other – has joined the digital resistance, announcing that they will no longer promoting President Trump’s account on its “Discover” page of curated content, according to Axios – which couldn’t make their disdain for Trump any more transparent if they tried.

“We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover,” the company said on Wednesday.

The ‘meddling’ move comes after Trump tweeted comments which were interpreted by some to glorify violence during protests over racial injustice.

Meanwhile:

Via Axios:

Why it matters: Snapchat is taking action on the president’s account for comments he made elsewhere. That’s going farther than other big tech firms and signals a commitment to aligning content served to users with core values, rather than making moderation decisions based narrowly on each post made on its own platform.

What they’re saying: “We are not currently promoting the President’s content on Snapchat’s Discover platform,” a spokesperson for Snapchat parent Snap tells Axios. The company made the decision over the weekend.

  • “We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover,” the spokesperson added.
  • “Racial violence and injustice have no place in our society and we stand together with all who seek peace, love, equality, and justice in America.”

Yes, but: This doesn’t mean Trump’s account is being taken down. It will remain fully accessible to the public, so people who subscribe to his Snapchat account or search for his account will still be able to find his content.

Snapchat says it will no longer promote accounts belonging to people who ‘incite racial violence and injustice, even if its done off of their platform.‘

In a Sunday memo, Snap CEO Evan Spiegel signaled his virtue, writing “Our Discover content platform is a curated platform, where we decide what we promote. We have spoken time and again about working hard to make a positive impact, and we will walk the talk with the content we promote on Snapchat.”

He added that Snapchat “may continue to allow divisive people to maintain an account on Snapchat, as long as the content that is published on Snapchat is consistent with our community guidelines, but we will not promote that account or content in any way.“

Just in time for election season to heat up…

Meanwhile, virtue signaling can be expensive:

via ZeroHedge News https://ift.tt/2XYsHRP Tyler Durden

Fed Expands Muni Bailout Facility

Fed Expands Muni Bailout Facility

Tyler Durden

Wed, 06/03/2020 – 13:11

While municipalities around the nation are demanding more ‘free money’ helicopter drops from the government, The Fed has just stepped up its efforts to bailout America’s states and cities.

Just as The Fed tapers its buying program in US Treasuries, it appears to be dropping down the risk spectrum dramatically by offering to directly monetize primary issuance from states (and up to two cities from each state).

The Federal Reserve Board on Wednesday announced an expansion in the number and type of entities eligible to directly use its Municipal Liquidity Facility (MLF).

Under the new terms, all U.S. states will be able to have at least two cities or counties eligible to directly issue notes to the MLF regardless of population. Governors of each state will also be able to designate two issuers in their jurisdictions whose revenues are generally derived from operating government activities (such as public transit, airports, toll facilities, and utilities) to be eligible to directly use the facility.

In addition to the expanded terms outlined above, the MLF continues to be directly open to U.S. states, the District of Columbia, U.S. cities with a population of at least 250,000 residents, U.S. counties with a population of at least 500,000 residents, and certain multistate entities.

The MLF was established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary. It will offer up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.

Of course, this “loan” from The Fed is not as much fun to spend on frivolous shit as “free money” from the government but it is clear that State finances are bad and getting bad-er…

And now is not the time to cut the pay of the police force, right?

via ZeroHedge News https://ift.tt/2zW3H5K Tyler Durden