The Faux Federalism of the Chaffetz-Graham-Adelson Online Gambling Ban

As Scott Shackford
a couple of weeks ago, Rep. Jason Chaffetz (R-Utah)
and Sen. Lindsey Graham (R-S.C.) recently
a bill that would rewrite the Wire Act of 1961 to
include “any bet or wager” placed via the Internet. Chaffetz and
Graham, who were recruited by casino magnate and GOP mega-donor
Sheldon Adelson to help squash his online competitors, call the
bill the Restoration of America’s Wire Act. I think they (or
Adelson’s lobbyist, who
co-wrote the bill
) meant to say the Restoration of America’s
Wire Act Act, since the bill aims to “restore the
long-standing interpretation of the Wire Act.”

The problem, as the Justice Department finally
in December 2011, is that the interpretation Adelson
and his pet legislators prefer is plainly at odds with the text of
the statute, which refers to “bets or wagers on any sporting
event or contest
“—language that the Chaffetz-Graham-Adelson
H.R. 4301
, would excise. Furthermore, since the Wire Act was
passed decades before the Internet existed, it is rather
problematic to say that Congress intended to ban online gambling.
H.R. 4301 addresses that difficulty with new language referring to
“any transmission over the Internet carried interstate or in
foreign commerce, incidentally or otherwise.” The bill does not
“restore” anything; it imposes a brand new ban on Internet
gambling. That includes online poker, which undeniably involves
betting even if you consider it mainly a game of skill.

admitting that the Wire Act applies only to sports
betting—a conclusion endorsed
by the U.S. Court of Appeals Court for the 5th Circuit back in
2002—is “yet another example of the Holder Justice Department
and Obama Administration ignoring the law.” If you pay close
attention to a statute’s actual words, according to Graham, you are
ignoring the law. Being true to the law evidentally requires
excising the inconvenient parts.

Equally risible is Graham’s claim that his legislation, which
would block moves toward legalizing online gambling in states such
as Nevada
and New
, is necessary to protect state autonomy.:

In 1999, South Carolina outlawed video poker and removed over
33,000 video poker machines from within its borders. Now, because
of the Obama Administration’s decision, virtually any cell phone or
computer can again become a video poker machine. It’s simply not

Texas Gov. Rick Perry, quoted in the
press release
announcing the bill, this argument: 

When gambling occurs in the virtual world, the ability of states
to determine whether the activity should be available to its
citizens and under what conditions—and to control the activity
accordingly—is left subject to the vagaries of the technological
marketplace. This seriously compromises the ability of states to
control gambling within their borders.

Since Perry is known as a
10th Amendment enthusiast
, his support for the  bill may
carry weight among federalists. It shouldn’t. Contrary to Perry’s
implication, H.R. 4301 would not let states decide whether Internet
gambling is permitted within their borders. It would ban online
gambling throughout the country, even in states that want to allow
it. This is a strange sort of federalism.

from Hit & Run

Saudi Arabia Passes New Law that Declares Atheists “Terrorists”

Nothing like being close allies with one of the most despotic, Medieval and backwards societies on planet earth.

Never forget, the USA brings democracy to the world!

With the exception of puppet governments sitting on billions of barrels of oil reserves and disturbing ties to the 9/11 attacks. Those governments we love.

From the UK Independent:

Saudi Arabia has introduced a series of new laws which define atheists as terrorists, according to a report from Human Rights Watch.

In a string of royal decrees and an overarching new piece of legislation to deal with terrorism generally, the Saudi King Abdullah has clamped down on all forms of political dissent and protests that could “harm public order”.

Article one of the new provisions defines terrorism as “calling for atheist thought in any form, or calling into question the fundamentals of the Islamic religion on which this country is based”.

continue reading

from A Lightning War for Liberty

Neo-Con Republicans Make Pilgrimage to Vegas to Kiss the Ring of Oligarch Sheldon Adelson

Oligarchs are ruining America. They are ruining the economy through their rampant theft and corporate welfare handouts. They are ruining our social structure with their billions used to buy and sell politicians as well as entire Presidential elections. They represent an existential threat to the Republic and the cancer needs to be addressed at once.

Oligarchs now control both phony political parties. On the Democratic side, we have Warren “tax loophole” Buffett and George Soros. On the Republican side, we must become increasingly aware of casino mogul Sheldon Adelson, who boasts an estimated net worth of around $37 billion.

For those still daydreaming that the GOP may nominate a more libertarian-leaning candidate in 2016, rather than the typical big government, warmongering neo-con, the biggest obstacle in your way is Sheldon Adelson and his billions. This threat was on clear display this past weekend in Vegas when Chris Christie, Paul Walker and Jeb Bush all made the pilgrimage to “kiss his ring.”

The serious threat to our political system posed by Adelson was covered by both “left-leaning” and “right-leaning” commentators (although I hate those terms). First, Juan Cole writes at Bill Moyers that:

A series of pro-corporation Supreme Court decisions and the latter’s disingenuous equation of money with speech, including Citizens United, have turned the United States from a democracy to a plutocracy. It is not even a transparent plutocracy, since black money (of unknown provenance) has been allowed by SCOTUS to flood into elections. These developments are not only deadly to democracy, they threaten our security. It is increasingly difficult to exclude foreign money from US political donations. We not only come to be ruled by the billionaires, but even by foreign billionaires with foreign rather than American interests at heart.

The perniciousness of this growing plutocracy was on full display on Saturday, as GOP governors Scott Walker, Chris Christie and John Kasich trekked off to Las Vegas in an attempt to attract hundreds of millions in campaign donations from sleazy casino lord Sheldon Adelson. Since Adelson is allegedly worth $37 billion, he could fund the Republican side of a presidential election (which costs $1 billion) all by himself. In the last presidential election he is said to have donated $100 million.

One important thing he thing he failed to mention was that Jeb Bush was also there, featuring prominently at a private dinner with Adelson and others.

The case of Adelson exhibits all these issues of corruption and eccentricity. Much of his current fortune is recent and derives from the Macao casino, and Adelson has admitted to “likely” breaking Federal rules against using bribes to do business in other countries. (A reference to allegations that his company was involved in rewarding legislators of the Chinese Communist Party for supporting his Macao project.) There was a time when this admission alone would put the donor off limits for mainstream politicians.

 Adelson has a right to vote and advocate for his candidates. But the idea that he and his like should choose the next president is too awful to contemplate. One person, one vote isn’t one person, $100 million worth of votes. That isn’t democracy…

CBS has also chimed in with some interesting commentary:

Both Christie and Bush are cut from the same mainstream Republican cloth: well liked by the donor class and viewed suspiciously by conservative activists. If they both compete in 2016 — and to be clear, neither has decided on a bid — they’ll be fighting for the roughly same slice of the Republican pie, and perhaps more importantly, many of the same donors.

But as Christie stumbled, Bush soared. The former governor was feted at a private dinner on Thursday to kick off the weekend. The dinner was held at Adelson’s private airplane hangar.

Bush delivered brief remarks at the dinner, and after one attendee urged him to run for president, the crowd of donors burst into applause, according to a report in the Washington Post.

continue reading

from A Lightning War for Liberty

Is Jay Carney The New Tom Stolper?

With Goldman’s Thomas Stolper having gone the way of JPMorgan’s Tom Lee, we thought it worth tracking the performance of the other market “seer” that reared his ugly head recently. Since the Crimea Referendum, Russian stocks are up over 16% (greatly outperforming US) but as investors began their great rotation back into EM, The White House’s Jay Carney issued a “strong sell” recommendation on Russian stocks… since his suggestion, Russian stocks have risen over 6%…



Chart: Bloomberg


via Zero Hedge Tyler Durden

Obamacare’s Enrollment Numbers Mask a Grim Reality

President Bill Clinton famously predicted that “Obamacare” would
start getting popular the day after it was signed into law.
obamacareBut even
thought the program reached its seven million-enrollment target
yesterday, Americans are not celebrating. In fact, support for the
program is at an all-time low.

Reason Foundation Senior Analyst Shikha Dalmia explains in a
piece on Al Jazeera’s opinion pages that this might be because
Americans’ experience with the program is not comporting with the
administration’s hype. The seven million figure sounds impressive,
but many of the folks included in it are insurance refugees whose
coverage Obamacare abolished, not the previously uninsured. These
folks are being forced to buy plans that cost more for benefits
they don’t want — while denying them the benefits they need.

“Obamacare promised to cut the ranks of the uninsured and offer
those already covered a better deal while bending the cost curve,
but such rosy predictionsare not panning out,” she notes.

to read the whole thing.

from Hit & Run

Three Gaping Holes In the EU “Recovery” Story That Could Cost Investors Millions

The whole “recovery” in Europe never made much sense to us.


We are told repeatedly that Europe has passed through the storm, that the EU economy and financial system are on the mend, and that Europe is now the place to be investing.


However, the fact of the matter is that economic data can be fudged for political reasons (e.g. Angela Merkel’s re-election bid in Germany), riots/ protests can be ignored or marginalized by the media, and the real state of bank balance sheets can be hidden as long as you avoid major margin calls or funding stressors.


Indeed, considering that Europe’s problems took years to unfold, despite the clear evidence that its banking system was virtually insolvent, the fact that things appear calm in Europe today doesn’t really say much about the true state of affairs over there.


So what truly has improved in Europe?


Bonds yields have fallen… but when you’ve got sovereign governments (via social security funds), the ECB, and bank of international settlements all buying your bonds… odds are they’ll fall in yield.


What about corporate earnings and revenues? Well if you are comparing your results to 2012 when the entire EU banking system almost imploded, chances are they’ll look pretty good. If you compare your physique to a dead guy, you’ll look healthy no matter how out of shape you are.


And then of course there are European stocks, which have been roaring higher ever since ECB President Mario Draghi stated he would do “whatever it takes” to keep the EU financial system afloat (somehow this claim is more relevant than the actual monetary or banking laws of the EU).




Indeed, EU financials have not only more than doubled since the dark days of 2012… they’ve in fact exceeded their pre-crisis 2011 highs!


But then again, when your Central Bank gives banks access to unlimited capital in exchange for totally garbage collateral priced at 100 cents on the Euro (despite it being worth at most half of that), you’re likely going to see a lot of liquidity move into stocks.


At the end of the day, all of the data points used to claim that things have improved are largely accounting gimmicks. The people claiming that all is well are the same folks who denied there was a problem to begin with… and who, not coincidentally, draw the vast majority of their political and social capital from perpetuating this claim.


So here are some rather staggering data points Europe needs to confront before stating “all clear.”


  1. As of 2012, an incredible 25% of the total EU population (120 MILLION people) was living in poverty or social exclusion (the number has since increased by four million more… so much for things improving).
  2. In 2011, child poverty in Spain was an incredible 30%. That was before things got ugly in 2012.
  3. Youth unemployment in Europe is an amazing 22% with troubled countries like Spain and Greece showing levels more than twice that.


The solution to these problems? Continue to claim that the crisis is over… and put into place various schemes to steal citizens’ money if things get worse again (Cyprus snatched over 40% of all deposits over €100,000 during its recent banking issues).


When you are actively promoting plans to snatch deposits to prop your banking system up (see the recent IMF proposal), you are not in “recovery.”


We don’t know if things will erupt tomorrow, next week or next year. But we do know that the “recovery” is largely a work of fiction… and that the crisis will erupt again at some point.


Swing by for a number of FREE investment reports including Protect Your Portfolio, How to Buy Gold at $273 per Ounce, and What Europe’s Crisis Means For You and Your Savings.


Best Regards


Phoenix Capital Research



via Zero Hedge Phoenix Capital Research

This Is Where Today’s Buying Deluge Came From

Many are scratching their heads wondering how it is possible that with all of today’s economic data misses the stock market not only ignored all the relentless bad data, as it has for the past 5 years (yes, yes, the weather, we know) but managed to surge to a new all time high. Not us: we forecast precisely what would happen yesterday when we brought our readers’ attention to what was a record Fed-assisted window dressing operation in the form of some $242 billion in revere repoed Treasurys being provided to dealer banks in order to make their books look attractive for quarter end. Specifically we noted yesterday that “one should consider that tomorrow – with their books well padded for the March 31 daily security “holdings” – the banks will almost certainly unwind over $100 billion if not more of today’s reverse repo, an amount that is now equal to nearly two full months of QE. Where that money will go, only the (NY) Fed and a few bank CEOs know.”

Today we know not only where that money went as was implied, it went in risky assets i.e., the S&P500, but more importantly we also got the number right: today’s reverse repo was amounted to just $113 billion, a $130 billion liquidity release from the Fed’s reverse repo operation in one day!

So while QE may have tapered to a “measly” 55 billion per month, on just the first day of April risk assets experienced the additional benefit of over two full months of QE injected into the stock market in one single day!

And now you know where today’s buying deluge came from.

The flipside, the easy money for the month of April, which as we also noted previously has historically been the best performing month of the year, has now been used up.


via Zero Hedge Tyler Durden

Obama Takes an Obamacare Victory Lap

day after the end of Obamacare’s first official open enrollment
period, President Obama gave a speech on the White House lawn
touting the latest Obamacare sign-up figures.

Some 7.1 million people signed up for insurance through the law,
he said, a shade higher than the 7.04 million that White House
Press Secretary Jay Carney announced earlier today.

Obama admitted that problems with the health care system would
continue under the health law, with additional website glitches and
rising premiums for health insurance to come.

But the president credited the law for both expanding health
coverage and for slowing the growth of health care costs
nationally. It’s still unclear, however, how much effect the law
has had one reducing the number of uninsured. And experts are
divided about whether the health law deserves significant credit
for the recent slowdown in health care cost growth, which coincided
with the recession.

President Obama also took a few moments to chide Republicans for
their opposition to the law—and then declared the political battles
over the law finished. “The debate over repealing this law is
over,” he said. “The Affordable Care Act is here to stay.” The
latter may be true. I am certain the former is not. 

from Hit & Run

Watch Nick Gillespie and Remy Tonight on Red Eye! 3 A.M. E.T. on Fox News Channel

be on Fox News Channel’s Red Eye with Greg Gutfeld
tonight. The fun starts at 3 A.M. Eastern Time and runs for an hour
on Fox News.

TV’s Andy Levy is guest hosting along with Joanne Nosuchinsky.
The other guests include The Daily Caller‘s Will Rahn and
Remy, star of many wonderful Reason TV videos (including the newish
one at the bottom of this post).

For more
details, go here

Greg Gutfeld is promoting his new book,
Not Cool: The Hipster Elite and Their War on You

I highly recommend it, and not simply because it contains this
utterly unconvincing and unsubsidized blurb about Reason:
“The smartest magazine around. You want proof? Both me and [Andrew
Breitbart] applied for jobs there, and both of us were turned down.
I hold no grudges.”

While I have my disagreements with Not Cool (among
other things, Gutfeld disses leather jackets and refers to a
particular character actor as “sexy, in a male Angela Lansbury
sorta way”), it’s a comic tour de force that blows apart the
pretensions of those who would tell us all what to think and how to

For more on his tour schedule – including a Michigan, Ohio,
Kentucky, Tennessee, and Florida swing, go here.

from Hit & Run

What Other Businesses Can Los Angeles Destroy? What About Trash Haulers?

We should probably be surprised businesses were allowed to choose in the first place.Los Angeles City Council has
voted to seize the local private business/large apartment trash
hauling industry, take control of it, and sell off exclusive
contracts to those it deems appropriate. The word “seize” is not
used, of course, but instead it’s all being sold as a recycling and
landfill-use reduction plan. It takes the Los Angeles
nine paragraphs to get past the environmental
back-patting to explain
what’s actually going on

Currently, landlords for businesses and apartments choose
between competing businesses to haul their trash. Under the new
“exclusive franchise” system, Los Angeles will be divided up into
11 zones. Haulers will bid for city contracts giving them the
exclusive right to collect garbage in each zone.

The new system is hitched to environmental standards: To be
eligible to win each zone, haulers would have to provide separate
bins for recycling and use “clean fuel” vehicles, among
other ecologically friendly requirements.

The plan is backed by environmentalists and labor groups, who
say the system is the best way to help Los Angeles meet its goal of
diverting 90% of its trash from landfills. Activists say the system
will also mean fewer trucks crisscrossing city streets
and safer conditions for workers in a dangerous industry.

The city is turning a private competitive service into a
monopoly. The Times does note that the proposal puts
unions and environmentalists against business and private

Business groups say the new system will put small
haulers out of business and ultimately drive up rates.

“The environmental benefits are subterfuge for an effort to
organize an industry that the unions couldn’t organize
themselves,” Central City Assn. of Los Angeles president and CEO
Carol Schatz told The Times last week.

Indeed, labor unions were chanting “Si se puede
(“Yes, it can be done”) outside the council meeting after the vote
passed. Those union folks really, truly care a lot about the
environment, eh?

Only one council member voted against the new regulation,
Bernard C. Parks. He was also the only council member to vote
against the city’s pointless plastic bag ban. Reason
TV and Kennedy interviewed him in 2012
. He was concerned this
new trash plan would harm small businesses. A head of a local
commerce association predicts the new monopolies could drive more
than 100 small haulers out of business and suggested the city could
require environmental and recycling policies among private haulers
without resorting to exclusive contracts.

Speaking of small businesses being harmed in Los Angeles, the
city is still
shutting down medical marijuana dispensaries
that don’t fall
under the city’s protection racket put in place by a local ballot
initiative. The Los Angeles Daily News notes the city is
extracting fines from and charging landlords
who rent to
unauthorized pot dispensaries, even though the city is still
causing confusion by sending out tax certificates to applicants
that don’t qualify to do business in the city. These certificates
are then being shown to landlords as evidence that the dispensary
is legal, even if it’s not.

(Hat tip to Cato’s Walter Olson)

from Hit & Run