Cryptography vs. Big Brother: How Math Became a Weapon Against Tyranny

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“Large bureaucracies, with the power that the computer gives them, become more powerful,” said New York Times reporter David Burnham in a 1983 C-Span interview about his book The Rise of the Computer State. “They are escaping the checks and balances of representative democracy.”

Burnham warned that the integration of computers into every aspect of daily life could lead to a “level of automated surveillance unknown in any previous age.” For society to change course, Burham argued, citizens would need to rise up through the democratic process and demand new legal protections to safeguard their privacy.

“There are ways to deal with it,” Burnham told C-SPAN. “We have done it. And all I hope is that we’re on our toes enough and alert enough to see them and go after them.”

“This is just political jawboning,” retorted Timothy C. May to the idea that politics could keep the computer state in check.

May, a former Intel physicist, believed that putting faith in representative democracy was naive and that only technology could save us from the Orwellian state. He became a co-founder of the cypherpunk movement, which came together in the early 1990s around the idea that a recent breakthrough in the field of cryptography was the key innovation for combatting tyranny.

The second part in Reason’s four-part documentary series on this movement, “Cypherpunks Write Code,” looks at the political implications of this breakthrough in cryptography. (Part one is here.)

The cypherpunks saw cryptography as comparable to the crossbow, which had enabled individuals to go up against medieval armies, as mathemetician Chuck Hammill argued in a 1987 paper presented to the Future of Freedom Conference.

“I certainly do not disparage the concept of political action,” Hammill wrote, but “for
a fraction of the investment in time, money and effort I might expend in trying to convince the state to abolish wiretapping and all forms of censorship—I can teach every libertarian who’s interested how to use cryptography to abolish them unilaterally.”

Hammil’s paper, “From Crossbows To Cryptography: Techno-Thwarting The State,” was the first item posted to the cypherpunks’ widely read email list.

“The mathematics which makes this principle possible,” as Hammill put it, was public-key cryptography, an astonishing breakthrough. It was developed by the Stanford cryptographers Whitfield Diffie and Martin E. Hellmann, who first explained the concept in a November 1976 paper published in IEEE Transactions on Information Theory. The following year, a team of researchers at MIT developed the first working public-key system, known as RSA.

Many cypherpunks first learned about this discovery from the August 1977 issue of Scientific American, in which the “Mathematical Games” columnist Martin Gardner described a “new kind of cipher that would take millions of years to break.”

As Gardner told his readers, a discovery had been made that would “revolutionize the entire field of secret communication.”

Another way of thinking about public-key cryptography is that it replicated the privacy protections of the analog world in cyberspace. “If you look at 1791, at the moment of the Bill of Rights,” says Diffie, “impenetrably private conversations dominated.” What the framers didn’t foresee is that private communication would happen via computers sending messages across the world that could easily be intercepted. “Public-key cryptography gives you a mechanism whereby you can recover this ability to have an impenetrably private conversation between two people.”

Sending a secret message used to involve translating words through a secret code that government agents or other spies could potentially crack. Anyone sending and receiving messages also had to have a copy of the secret key or translation device, just like the decipher rings that schoolchildren started collecting in the 1930s.

Public-key cryptography made decoding devices unnecessary and figuring out the pattern effectively impossible. The big breakthrough was an easy-to-solve mathematical formula that you could funnel words into just as easily as dropping them through a trapdoor. But if you flipped the problem around and tried to pull the message out the other side, the formula was almost impossible to solve, such that in 1977 a supercomputer trying random numbers would need 40 quadrillion years to surface the answer.

But the person who set up the mathematical formula, or trap door, held the answer to the problem, or secret code, making it possible for that person to retrieve the original message.

Diffie compares the whole system to the most ubiquitous trapdoor system for sending messages. “Anyone can throw a letter in a mailbox,” he says, “but only the mailman, who has a key, can take it out.’

Anyone in the world could set up one of these equations, serving as the mailman of his or her very own impenetrable virtual letterbox. And because that individual could prove ownership of the mailbox by opening it with the only known key, public-key cryptography also made it possible to set up a provable identity on the internet completely disconnected from any real-world personal information.

In Future Imperfect (2008), economist David Friedman argued that “strong encryption functions as a virtual Second Amendment.”

“One way of reading the Second Amendment was that it was a way of making sure that if the government tried to suppress the people, the people would win,” Friedman says.

“In the modern world, the weapons that the army has differ by a lot more than they did in the 18th century. But I also think if you look at what politics are like nowadays, the real wars between the government and the population are information wars, not physical wars. Encryption means they can’t arrest you. They can’t blackmail your key people. They can’t do anything of the things governments might do to make sure that public information is what they wanted.”

Meanwhile, in the late 1970s, the U.S. intelligence community started doing everything in its power to keep this new tool out of the hands of the general public.

Part three in this series will look at the U.S. government’s effort to halt the widespread use of public-key cryptography with threats of criminal prosecution, and the legal and public relations battle waged by John Gilmore, a founding member of the cypherpunk movement, for free speech rights in software.

Written, shot, edited, narrated, and graphics by Jim Epstein; opening and closing graphics by Lex Villena; audio production by Ian Keyser; archival research by Regan Taylor.

Music: “Sunset” by Kai Engel, Creative Commons Attribution 4.0 International; “Prelude in C” by Kevin MacLeod, Creative Commons Attribution license.

Photos: Whitfield Diffie, Chuck Painter/Stanford News Service; NSA headquarters, Dod/ZUMA Press/Newscom; The Land Of The Free by Coco Curranski, Creative Commons Attribution 2.0 Generic.

Footage: “Panama Patrol,” 1939, directed by Charles Lamont; “Superman: Showdown,” Archive.org, Creative Commons Attribution-Share Alike 3.0; “Atom Bomb Effects” by U.S. Army, Prelinger Collection, Archive.org

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UK’s Johnson Mulls “Circuit-Breaker” Lockdown, France To Adopt Hot-Spot Curfews As European Outbreaks Worsen: Live Updates

UK’s Johnson Mulls “Circuit-Breaker” Lockdown, France To Adopt Hot-Spot Curfews As European Outbreaks Worsen: Live Updates

Tyler Durden

Wed, 10/14/2020 – 10:00

Summary:

  • Boris Johnson says will consider 2-week ‘circuit breaker’ lockdown
  • France’s Macron expected to announce new measures in Wednesday night interview
  • Iran’s cases, deaths continue to climb despite new restrictions
  • Philippines records nearly 2k new cases
  • Indonesia nears 350k
  • India outbreak continues to slow
  • South Korea sees new daily cases drop back below 100
  • Global cases: 38.2 million; deaths: 1.1 million

* * *

As pressure mounts, UK PM Boris Johnson acknowledged on Wednesday that his government will consider imposing the two-week lockdown that proponents have marketed as a “circuit-breaker” – even as the WHO warns that lockdowns (like the virus itself) imposes the biggest burdens on the poor.

More European countries announced plans to tighten social distancing restrictions yesterday, with the Netherlands imposing a partial lockdown that will endure for at least a couple of weeks, and hard-hit Ukraine closing schools and colleges.

Despite the punishing lockdowns implemented from Italy, to Britain, to Spain – and beyond – Europe reported more than 700,000 new COVID-19 cases last week, a record number and a jump of 34% compared with the week prior. Britain, France, Russia and Spain accounted for more than half of the new infections.

Meanwhile, the FT reports that the UK government is looking at a single coronavirus test to try and cut the amount of time travelers spend waiting for their results in half.  MPs launched a “travel taskforce” last week to explore different ways to adopt “COVID-19” testing in a way that will help heal the country’s battered tourism industry.

Across the channel, French President Emmanuel Macron is set to make a television appearance on Wednesday night amid predictions that he will unveil further restrictions to curb a recent surge in coronavirus infections and hospital admissions.

It comes as parts of France saw ICU units at 95% capacity, dangerous levels threatening to unleash higher mortality rates if the virus isn’t contained. The FT reported that Macron could use Wednesday night’s TV interview to announce curfews in the hardest hit areas (presently, that’s in and around Paris and Lyon) while announcing additional restrictions on public gatherings. The PM has said he will try and avoid another lockdown.

As China confronts its first confirmed outbreak in 2 months, more than 4.2 million tests in the northern port city of Qingdao have been completed, with no new cases among the almost 2 million results received. Nearly 9,000 coronavirus victims are in hospital in France, 1,642 of them in the ICU.

Here’s more COVID-19 news from overnight and Wednesday morning.

Iran’s coronavirus-related daily cases and deaths rose to a record as the government imposed restrictions on travelling to and from five big cities that are most infected by the virus. The latest 24-hour death tally increased to 279 on Wednesday, up from the 254 reported on Tuesday, while 4,830 people tested positive. Both those figures were the highest records since the pandemic began. The total number of deaths rose to 29,349, of 513,219 people who tested positive (Source: FT).

Shortly after trials of an Eli Lilly antibody therapeutic that had been submitted to the FDA for emergency use authorization were paused, the company’s CEO said during an interview at a virtual health conference that COVID-19 is likely to become “endemic” in the human population.

Global cases have reached 38,172,523, according to Johns Hopkins data, surmounting 38 million as the world remains on track to top 40 million cases by the end of October. Meanwhile, the worldwide death toll has hit 1,086,918 (Source: Nikkei).

Moscow says Russia will resume flights to Japan, Cuba and Serbia. The government has authorized three flights a week to Tokyo (Source: Nikkei).

Malaysia reports 660 new coronavirus cases and four more deaths, as the capital poses imposed tighter restrictions on movement for two weeks. More than half the new infections are in Sabah, a state under lockdown (Source: Nikkei).

Indonesia reports 4,127 new coronavirus infections on Wednesday, bringing its total number of cases to 344,749, data from its COVID-19 task force show. The country has also recorded 129 new deaths, the highest daily increase since Sept. 30 (Source: Nikkei).

The Philippines records 1,910 new coronavirus cases on Wednesday, the lowest number in more than three weeks, and 78 more fatalities. In a bulletin, the health ministry said the country’s confirmed infections had climbed to 346,536, while its death toll had risen to 6,449 (Source: Nikkei).

India’s official coronavirus infection count rose by 63,509 in the last 24 hours, reaching 7.24 million on Wednesday, according to the health ministry. Deaths from COVID-19 rose by 730 to 110,586, the ministry said (Source: Nikkei).

South Korea confirms 84 new coronavirus cases, down from 102 a day earlier. The country’s total infections have reached 24,889, with 438 deaths (Source: Nikkei).

The World Bank says its executive board approved on Tuesday $12 billion in new funding for developing countries to finance the purchase and distribution of COVID-19 vaccines, tests and treatments. The financing plan is a part of $160 billion in total funding that the multilateral development lender has pledged to developing countries through June 2021 to help them fight the coronavirus pandemic (Source: Nikkei).

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Wells Tumbles As Revenues Plunge, NIM Hits Record Low, Warns On Payment Deferrals

Wells Tumbles As Revenues Plunge, NIM Hits Record Low, Warns On Payment Deferrals

Tyler Durden

Wed, 10/14/2020 – 09:49

If there is one constant during earnings season, it is that no matter what the other banks do, Wells Fargo will always shit the bed, and this time was no different, with the stock sliding after reporting that Q3 earnings missed again as its Net Interest Margin dropped to a fresh all time low, while issuing an ominous warning that customer payment deferrals in the wake of the pandemic may delay the recognition of net charge-offs and delinquencies.

Wells reported Q3 EPS of just $0.42, down more than 50% from the 0.92 a year ago, and missing expectations of $0.45 even as Revenue of $18.862BN beat estimates of $18.0BN, but plunged 14% from $22BN a year ago. The bank reported Q3 net income of $2 billion, which was up $4.4 billion from the previous quarter, but down 56% from $4.6BN a year ago, on “lower provision expense and higher non-interest income on broad-based growth including higher mortgage banking income, partially offset by lower net interest income and higher noninterest expense, which included restructuring charges.”

The bank missed EPS even though – like all the other banks – it set aside only $769MM in loan-loss provisions, far less than the $1.65BN expected, and charged off just $683MM (up 5.9% Y/Y, but down $430MM from Q2), also below the $1.38BN expected.  Non-performing assets increased again, rising by $378 million, or 5%, to $8.2 billion, of which $417MM was due to an increase in nonaccrual loans at $8BN. Commercial nonaccruals increased $113 million “on higher commercial real estate nonaccruals” while consumer nonaccrual loans increased $304 million driven by higher consumer real estate and auto nonaccruals.

Wells also said that the net charge-off ratio of 0.29% was down 17 bps from Q2, as commercial losses of 29 bps, were down 15 bps “reflecting lower C&I losses driven by lower losses in oil and gas, as well as lower CRE losses” while “consumer losses of 30 bps, down 18 bps LQ driven by lower losses in credit card and auto loans.”

Expect these numbers to get far worse, as the bank implicit admitted when it warned that “customer forbearance and payment deferral activities instituted in response to the COVID-19 pandemic could delay the recognition of net charge-offs, delinquencies, and nonaccrual status for those customers who would have otherwise moved into past due or nonaccrual status.

Specifically, Wells revealed that $23.5 billion in unpaid principal balance of modified consumer loans were still in deferral as of 9/30/20, which while down from $37.2 billion as of 6/30/20, suggests that the charge-offs could get far worse especially since those who remain in forbearance are unlikely to revert to non-deferral.

Wells Fargo was also kind enough to break out its exposure of loans by type, starting with CRE, where nonaccrual loans of $1.4 billion, rose by $126 million driven by a $119 million increase in office buildings nonaccruals as criticized assets of $12.7 billion, rose $2.3 billion, or 22%…

… while C&I and lease financing nonaccrual loans of $3.0 billion, were down $13 million Q/Q as declines in oil and gas and retail nonaccruals (39% of nonaccruals were oil and gas nonaccruals, down from 47% in 2Q20) were largely offset by higher nonaccruals in the healthcare and pharmaceuticals, transportation services, commercial services, and tech, telecom, and media industries. Total C&I criticized assets of $24.6 billion, were down $3.1 billion.

In total, Wells’ allowance for credit losses (ACL) for loans was $20.5 billion, unchanged from last quarter, and “reflected an  improving economic environment and solid credit performance in the quarter, but continued uncertainty due to COVID-19.” On a percentage basis, the allowance coverage for total loans was 2.22%, up from 2.19% in 2Q20, due to a decline in total loans.

In short, Wells’ headaches on its massive loan book are nowhere near over.

And unfortunately, this was visible in its Net Interest Income, which plunged by 19% Y/Y, or $2.3 billion, to just $9.4BN, missing expectations of $9.6BBN, and “reflecting the lower interest rate environment.” Net interest income also decreased $512 million, or 5%, Q/Q “reflecting balance sheet repricing resulting from the lower interest rate environment, balance sheet mix shifts into lower yielding earning assets including the impact of lower commercial loans.”

And, as expected at a time of record low rates, Wells’ Net Interest Margin tumbled to a new all time lows of 2.13%, down 12bps Q/Q, due to i) (11) bps from balance sheet repricing and mix; ii) (3) bps from MBS premium amortization; iii) (1) bp from hedge ineffectiveness accounting results; and iv) 3 bps from variable sources of income.

Noninterest income was slightly better, rising $1.5BN Q/Q but down nearly $900MM Y/Y, due to the following:

Deposit-related fees up $157 million, or 14%, Q/Q on higher transaction volumes, one additional day in the quarter, and higher treasury management fees; Consumer was 56% and commercial was 44% of total

Trust and investment fees up $163 million, or 5%, Q/Q on brokerage advisory, commissions and other fees up $219 million on higher retail brokerage advisory fees (priced at the beginning of the quarter); Trust and investment management fees up $50 million on higher asset-based fees; Investment banking fees down $106 million from record 2Q20 investment grade results.

Card fees up $115 million, or 14%, Q/Q on higher interchange income driven by higher debit and credit card POS volumes

Mortgage banking up $1.3 billion Q/Q as net gains on mortgage loan originations were up $243 million and included higher  origination volumes and a higher gain on sale margin, while Servicing income was up $1.0 billion from a 2Q20 that included negative market-related MSR valuation changes.

One remarkable – and recurring – aspect of Wells’ revenues is just how poor its sales and trading performs compared to other banks. Perhaps Wells should hire the 50 best Robinhood traders to beef it up? Here are the details:

  • Fixed income, currencies and commodity trading (FICC) generated 78% of total trading-related revenue in 3Q20;
  • Trading-related revenue of $888 million was down $536 million, or 38%, Q/Q from a record 2Q20: Net interest income decreased $90 million, or 15%, reflecting a decline in average trading assets, as well as lower yields on fixed income trading securities; Net gains from trading activities decreased $446 million reflecting lower credit trading, rates, and volatility, as well as lower client demand for derivative hedging, partially offset by higher equity trading results
  • Trading-related revenue was down $226 million, or 20%, YoY: Net interest income decreased $311 million, or 37%, reflecting lower average trading assets, as well as lower yields on fixed income and equity trading securities; Net gains from trading activities increased $85 million reflecting higher equity trading on increased volatility and higher volumes and customer flow.

Away from revenues, the bank posted a surprise increase in third-quarter expenses which rose by $30MM Y/Y even as total revenues tumbles, as it set aside $961 million for customer remediation and $718 million in restructuring charges. That countered the abovementioned sharp drop loan-loss provisions that came in at less than half what analysts had expected. Some more details:

  • Personnel expense down $292 million and included: i) $344 million lower deferred compensation expense; ii) $163 million decline in expenses in response to COVID-19 from a 2Q20 that included bonus payments and premium pay for certain customer-facing and support employees, as well as child care services benefits; iii) Higher salaries expense driven by one additional day in the quarter, and higher revenue-based incentive compensation.
  • Technology, telecommunications and equipment expense up $119 million from a 2Q20 that included the reversal of an accrual for software expense.
  • Operating losses remained at an elevated level and included $961 million of customer remediation accruals for a variety of matters reflecting expansion of populations, time periods, and/or amount of reimbursement
  • Restructuring charges of $718 million, predominantly severance expense associated with expense reduction initiatives

As Bloomberg notes, in his first year atop Wells Fargo, CEO Charlie Scharf has been working to move the firm past a series of scandals. He’s tasked with making harmed customers whole, repairing relations in Washington and improving the firm’s earnings. He’s repeatedly lamented the firm’s high costs, pledging to ultimately shave $10 billion off annual expenses.

“Our top priority continues to be the implementation of our risk, control and regulatory work, but we are also taking targeted actions to improve the experience for our customers, clients, communities and employees,” Scharf said in a statement Wednesday. “The trajectory of the economic recovery remains unclear as the negative impact of Covid continues and further fiscal stimulus is uncertain.”

Finally, and perhaps the last nail in the coffin, Wells period-end loans continued to shrink, tumbling to $920.1 billion, down 4% or $34.8 billion year-over-year (YoY) “driven by lower commercial and industrial loans”…

… meanwhile as we noted yesterday, deposits across the banking sector continued to rise, and hit $1.4TN on an average basis (if declining slightly to $1.383TN on a period end-basis largely due to a decline in Wholesale Banking deposits of $29.7 billion, or 7%,
due to actions taken to manage under the Asset Cap) due to an increase in consumer and small business banking deposits “reflecting customers’ preferences for liquidity due to COVID-19.”

Not surprising after all this, the stock was sharply lower on the latest dismal earnings report by Wells. Wells shares have plunged 54% so far in 2020, worse than the 31% drop in the KBW Bank Index.

The full Wells earnings report is below (pdf link)

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Trump Can End Census Now, Says Supreme Court in Ruling That Could Have Big Impact on House Seats

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The Supreme Court ruled yesterday that the Trump administration can stop the 2020 census count right now, instead of at the end of the month. The ruling comes in response to officials arguing in an emergency request that an October 31 deadline would keep them from processing census counts by the end of the year.

“A group of local governments and nonprofit groups, led by the National Urban League, said that ending the count early will result in an undercount of immigrants, low-income people and other groups that are difficult to count,” writes James Romoser at SCOTUSblog. Technically, the Court’s order is framed “as a temporary pause of a district judge’s ruling that directed the department to proceed,” he explains. “But due to the compressed timeline for completing the census, the order is likely to be the definitive say on the matter.”

The Commerce Department, which leads the census, wanted to stop on September 30. The National Urban League said it should keep going until October 31, as previously planned.

At first glance, it may seem both sides are arguing over a very small window of time that can’t make that much of a difference either way. But Republicans want to make sure they wrap things up while President Donald Trump is still in power because census numbers are used to determine how seats in the House of Representatives are apportioned—a process the administration wants to change.

Per two executive orders, the first in July 2019 and the second in July 2020, Trump declared that the census would include a question about citizenship status and then that “for the purpose of the reapportionment of Representatives following the 2020 census, it is the policy of the United States to exclude from the apportionment base aliens who are not in a lawful immigration status.”

Commerce is required to process the census data for apportionment purposes by December 31, 2020.

If it doesn’t, and if Trump loses in November, “it is possible that the new administration would then be in control of the population totals used for reapportionment,” explained Romoser last week.”Trump wants to exclude unauthorized immigrants from those population totals—a change that could shift political power away from some populous blue states, such as California and New Jersey.”

In a dissent to the majority’s one-paragraph decision, Justice Sonia Sotomayor wrote that the Census Bureau’s claim that “absent a stay, the Bureau will not be able to meet the December 31 statutory deadline for reporting census results to the President…” goes against “the Government’s repeated assertions to the courts below that it could not meet the statutory deadline under any circumstances.” Sotomayor continued: “Moreover, meeting the deadline at the expense of the accuracy of the census is not a cost worth paying, especially when the Government has failed to show why it could not bear the lesser cost of expending more resources to meet the deadline or continuing its prior efforts to seek an extension from Congress. This Court normally does not grant extraordinary relief on such a painfully disproportionate balance of harms.”


QUICK HITS

• Supreme Court Justice Clarence Thomas is looking for a chance to cut down Section 230.

• From Reason‘s Billy Binion: No, Amy Coney Barrett Isn’t Part of a ‘Dark Money’ Plot To Overturn Gay Marriage and Abortion

• Los Angeles County will pay out $14 million in a class-action lawsuit settlement against the local sheriff’s department. The lawsuit alleged the department “routinely held people in jail beyond their release dates solely because of pending immigration investigations,” reports the Los Angeles Times:

More than 18,500 people who were held illegally for days, weeks or months from October 2010 to June 2014 because of requests from Immigration and Customs Enforcement could qualify for a share of the settlement, attorneys for the plaintiffs said. The Sheriff’s Department agreed to stop honoring detainer requests in 2014.

• Trump tweeting that something is declassified does not actually mean it is declassified, argues the Department of Justice (DOJ).

• The DOJ is suing Stephanie Winston Wolkoff over a book she wrote about her time as first lady Melania Trump’s adviser, arguing that she breached a non-disclosure agreement that includes “no termination date.”

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An Argument Against Supreme Court Term-Limits

There appears to be increasing support for adopting term limits on Supreme Court justices. My co-blogger Orin Kerr endorsed the issue some time ago, and it has been endorsed more recently by a range of folks, including Fix the Court and Stephen Calabresi. I have raised questions about the proposal, largely on the implementation side, but think it has some merit, particularly given its potential to help de-escalate judicial confirmation fights. My co-blogger Ilya gives the idea “two cheers.”

Not everyone is convinced. In USA Today, the R Street Institute’s Anthony Marcum makes the case against term limits.

Although well-intentioned, term limits have a problem. Not only are they unconstitutional, but they will have the exact opposite result proponents wish for. More, term limits will ensure that court vacancies are inextricably tied to every presidential race and has the potential to create abrupt ideological shifts on the highest court, only increasing the political scrutiny. In other words, term limits will not lower the temperature around nominations, they will leave the country scorched.

I agree that it would likely be unconstitutional to impose term limits on sitting justices, but I am not convinced it would be unconstitutional to redefine the office to which future justices are confirmed to only provide for 18 years of service on the Supreme Court, followed by continuing service on circuit courts thereafter.

I am more intrigued by Marcum’s argument that term limits would actually increase the partisan rancor over the Court. He writes:

term limits would regularize the process, and in turn tie two Supreme Court seats to every presidential cycle. A single two-term president could pick 44% of the court. If two presidents of the same party served three or four consecutive terms, an overwhelming majority of the court would quickly be ideologically one-sided. In the span of only a few years, a court of eight Scalias could turn to eight Ginsburgs. Certainly, the chance for such a dramatic ideological shift in the highest court would only put a greater spotlight on it during presidential elections and judicial confirmations.

Here I think he overstates the case. It would take a minimum of 14 years to go from a Court of “eight Scalias” to “eight Ginsburgs,” and would require sustained control of both the White House and Senate (as I doubt term limits would make the Senate as deferential as I would be to a President’s SCOTUS nominations). So such swings would only come about were there equally dramatic swings in the country at large.

More broadly, looking backwards, term limits for Supreme Court justices would have produced a Court composition not all that different from what we’ve seen in recent years. Indeed, were term limits already in place, there would be a 5-4 split on the Court in favor of Republican appointees. So it is not clear to me why term limits would necessarily produce a greater degree of volatility in the law than we have now. And even if my surmise is wrong, it is not clear why this is more problematic than potentially insulating doctrine from all political influence for decades at a time, as is possible now.

The argument that term limits would help de-escalate Supreme Court confirmation fights is that it would reduce the consequence of each confirmation. Partisans would no longer fear that a justice could serve for 30 or more years, and all would be assured that winning the White House would lead to the opportunity to make two nominations, and that a two-term President’s influence on the Supreme Court would mirror that which two-term Presidents tend to have on the lower courts. (On the other hand, this has not led to a de-escalation of lower court nomination fights—quite the contrary—so it’s reasonable to be unconvinced on this point.)

Marcum concludes:

Term limits are popular because they promise what it cannot attain — a way to depoliticize the courts. Still, we should not be dissuaded from trying to lower the political temperature around the judiciary. But we should find a better way to achieve it.

Marcum makes some reasonable arguments against term limits, but I am not particularly convinced. Term limits are certainly no panacea for the judicial confirmation mess, but I am inclined to think they would be a positive step.

 

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EU Readies Sanctions Against 6 Russians, 1 Company In Retaliation For Navalny ‘Poisoning’

EU Readies Sanctions Against 6 Russians, 1 Company In Retaliation For Navalny ‘Poisoning’

Tyler Durden

Wed, 10/14/2020 – 09:24

Since releasing the first photo of him and his family post-coma, Russian opposition candidate Alexei Navalny has hurled accusations at Russian President Vladimir Putin claiming one of the world’s most powerful leaders took time off from his busy schedule of running Russia to personally mastermind his second alleged poisoning.

German leaders claimed last month that Navalny had been poisoned with Novichok, according to an analysis by a military lab. Not that certain German politicians (even some officials in Angela Merkel’s coalition government) don’t have an interest to try and sabotage relations with Russia right now, ahead of next year’s election to decide who will lead a post-Merkel Germany.

Since then, an international chemical weapons agency has claimed to have confirmed the Novichok analysis.

Skeptics questioned how Navalny and the Skripals have all managed to survive alleged Novichok attacks. If the “feared” Soviet nerve agent is truly so deadly, then why have the assailants found it so difficult to deliver a large enough dose to kill their targets?

But western leaders have once again ignored calls urging them not to rush to judgment. According to media reports, the EU is preparing to blacklist at least six people and one entity over Russia’s “attempted murder” of Navalny.

Here’s more from Bloomberg, which cited anonymous sources familiar with Brussels’ plans (probably senior diplomats trying to send a threatening ‘trial balloon’ Putin’s way).

Here’s more from Bloomberg.

The European Union is poised to blacklist six people and one entity in Russia over the attempted murder of opposition leader Alexey Navalny.

EU member-state envoys in Brussels cleared the way on Wednesday for bloc-wide asset freezes on the Russian officials and the organization as well as travel bans on the individuals, according to a person familiar with the matter, who asked not to be identified before a public announcement. Russian Foreign Minister Sergei Lavrov said earlier that his country will retaliate against the move with reciprocal sanctions.

The identities of the people and entity targeted by the EU will be disclosed when the sanctions take effect, probably on Thursday, according to another official for the 27-nation bloc. The plan to impose penalties is based on a German-French proposal that EU foreign ministers agreed to on Monday.

Russia has repeatedly denied Germany’s and Navalny’s accusations, and offered to participate in the investigation. As Bloomberg notes, this is just the latest incident involving the EU and Russia, stretching back to Moscow’s annexation of Crimea back in 2014.

It’s unclear who is being targeted by the sanctions; we imagine we’ll learn the identities of the six individuals (as well as the unnamed “entity”) today, if not later this week.

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An Argument Against Supreme Court Term-Limits

There appears to be increasing support for adopting term limits on Supreme Court justices. My co-blogger Orin Kerr endorsed the issue some time ago, and it has been endorsed more recently by a range of folks, including Fix the Court and Stephen Calabresi. I have raised questions about the proposal, largely on the implementation side, but think it has some merit, particularly given its potential to help de-escalate judicial confirmation fights. My co-blogger Ilya gives the idea “two cheers.”

Not everyone is convinced. In USA Today, the R Street Institute’s Anthony Marcum makes the case against term limits.

Although well-intentioned, term limits have a problem. Not only are they unconstitutional, but they will have the exact opposite result proponents wish for. More, term limits will ensure that court vacancies are inextricably tied to every presidential race and has the potential to create abrupt ideological shifts on the highest court, only increasing the political scrutiny. In other words, term limits will not lower the temperature around nominations, they will leave the country scorched.

I agree that it would likely be unconstitutional to impose term limits on sitting justices, but I am not convinced it would be unconstitutional to redefine the office to which future justices are confirmed to only provide for 18 years of service on the Supreme Court, followed by continuing service on circuit courts thereafter.

I am more intrigued by Marcum’s argument that term limits would actually increase the partisan rancor over the Court. He writes:

term limits would regularize the process, and in turn tie two Supreme Court seats to every presidential cycle. A single two-term president could pick 44% of the court. If two presidents of the same party served three or four consecutive terms, an overwhelming majority of the court would quickly be ideologically one-sided. In the span of only a few years, a court of eight Scalias could turn to eight Ginsburgs. Certainly, the chance for such a dramatic ideological shift in the highest court would only put a greater spotlight on it during presidential elections and judicial confirmations.

Here I think he overstates the case. It would take a minimum of 14 years to go from a Court of “eight Scalias” to “eight Ginsburgs,” and would require sustained control of both the White House and Senate (as I doubt term limits would make the Senate as deferential as I would be to a President’s SCOTUS nominations). So such swings would only come about were there equally dramatic swings in the country at large.

More broadly, looking backwards, term limits for Supreme Court justices would have produced a Court composition not all that different from what we’ve seen in recent years. Indeed, were term limits already in place, there would be a 5-4 split on the Court in favor of Republican appointees. So it is not clear to me why term limits would necessarily produce a greater degree of volatility in the law than we have now. And even if my surmise is wrong, it is not clear why this is more problematic than potentially insulating doctrine from all political influence for decades at a time, as is possible now.

The argument that term limits would help de-escalate Supreme Court confirmation fights is that it would reduce the consequence of each confirmation. Partisans would no longer fear that a justice could serve for 30 or more years, and all would be assured that winning the White House would lead to the opportunity to make two nominations, and that a two-term President’s influence on the Supreme Court would mirror that which two-term Presidents tend to have on the lower courts. (On the other hand, this has not led to a de-escalation of lower court nomination fights—quite the contrary—so it’s reasonable to be unconvinced on this point.)

Marcum concludes:

Term limits are popular because they promise what it cannot attain — a way to depoliticize the courts. Still, we should not be dissuaded from trying to lower the political temperature around the judiciary. But we should find a better way to achieve it.

Marcum makes some reasonable arguments against term limits, but I am not particularly convinced. Term limits are certainly no panacea for the judicial confirmation mess, but I am inclined to think they would be a positive step.

 

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More Than Half Of All Americans “Plan To Stockpile Food And Other Essentials” For The Chaotic Months Ahead

More Than Half Of All Americans “Plan To Stockpile Food And Other Essentials” For The Chaotic Months Ahead

Tyler Durden

Wed, 10/14/2020 – 09:10

Authored by Michael Snyder via The Economic Collapse blog,

There was a time when preppers were relentlessly mocked, but nobody is laughing now.

Today, most Americans are thinking about stockpiling food, and this massive shift in our national mindset has been sparked by concern about what is going to happen in the months ahead. 

Many Americans believe that another wave of the coronavirus pandemic is coming, others believe that our ongoing economic depression will get even deeper, and yet others are convinced that the upcoming election could produce widespread violence.  Of course there have always been people that have been deeply alarmed about future events, but we have never seen anything quite like this. 

In fact, a brand new survey has found that over half of all Americans are currently planning “to stockpile food and other essentials”

Slightly more than half of Americans in a recent poll from Sports and Leisure Research Group say they already have or plan to stockpile food and other essentials. The chief reason: fears of a resurgent pandemic, which could lead to disruptions such as new restrictions on businesses. On Oct. 2, the number of COVID-19 cases in the USA was its highest in almost two months.

People still remember the shortages that we witnessed earlier this year when the coronavirus pandemic first erupted in this country, and those that ended up being stuck at home without enough toilet paper would rather not repeat that experience.

So as the mainstream media continues to hype a new wave of the pandemic, we should expect to see Americans hitting the grocery stores really hard.  And according to data company Envestnet Yodlee, there is evidence that this is already happening

Already, there’s some evidence that grocery sales are rising, according to data from industry sources. The typical bill for a trip to the grocery store rose to $72 for the week ended October 6, or 11% higher from the week before, according to data company Envestnet Yodlee.

“That’s the highest we’ve seen since the first week of June and the second-highest since we started tracking this in January,” said Bill Parsons, group president of data and analytics at Evestnet.

Fortunately, many grocery store chains anticipated a spike in demand in advance and started stocking up ahead of time.  The following comes from CNN

Grocery stores across the United States are stocking up on products to avoid shortages during a second wave of coronavirus.

Household products — including paper towels and Clorox wipes — have been difficult to find at times during the pandemic, and if grocery stores aren’t stocked up and prepared for second wave this winter, runs on products and shortages could happen again.

During a time when other retailers all over the nation are failing at a pace that we have never seen before, many grocery store chains are actually experiencing booming sales.

And of course I have been warning that this would eventually happen for a very long time.  During a time of crisis, demand for food and other essentials tends to go up and demand for non-essential items tends to go down.

Needless to say, this is something that is not just happening in the United States.  All over the world we have seen demand for food on the rise, and this comes at a time when global food production has become increasingly stressed.

As a result, food prices all over the world are starting to escalate quite aggressively

Food prices continue rising during the coronavirus pandemic, jeopardizing food security for tens of millions worldwide.

On Thursday, the Food and Agriculture Organization (FAO) of the United Nations said world food prices rose for the fourth consecutive month in September, led by surging prices for cereals and vegetable oils, reported Reuters.

FAO’s food price index, which tracks the international prices of the top traded food commodities (cereals, oilseeds, dairy products, meat, and sugar), averaged 97.9 in September versus a downwardly revised 95.9 in August.

Sadly, this is just the beginning.

Global food supplies will continue to get even tighter, and global demand for food will just continue to shoot higher.

So I would stock up while you still can, because prices will never be lower than they are right now.

Meanwhile, our society continues to unravel right in front of our eyes.  You would think that the Lakers winning the NBA title would be a time to celebrate for the city of Los Angeles, but instead large crowds of young people used it as an opportunity to riot and attack police officers

A crowd of more than 1,000 revelers descended into the area around Staples Center after the game. Unruly individuals mixed within the crowd began throwing glass bottles, rocks, and other projectiles at officers. That is when an unlawful assembly was declared, and only a limited number of people complied and began to disperse. A larger portion of the group broke off and began vandalizing businesses while continuing to engage in violent behavior, some aimed at responding officers.

In Portland, protesters just toppled statues of Teddy Roosevelt and Abraham Lincoln during a “day of rage”, but the mainstream media didn’t seem to think that this was any sort of a problem.

And in the middle of the country, the violence never seems to stop in the city of Chicago

Five people were killed and 48 others were injured by gunfire this weekend in Chicago. Five of those wounded were teenagers.

Last weekend saw 37 people shot throughout the city, five of them fatally.

Of course things could soon get a whole lot worse.

According to one recent survey, 56 percent of all Americans expect “an increase in violence as a result of the election”.

Isn’t that incredibly sad?

Many are still hoping that such a scenario can be avoided if one of the candidates is able to build an extremely large lead on election night.  A large enough lead could potentially cause the candidate that is behind to concede fairly quickly, and that may ease tensions.

But I wouldn’t count on that.

At this point we are about 500 hours away from the election, and both sides are indicating that they are prepared to fight until the bitter end.

And the side that ultimately ends up losing is likely to throw a massive temper tantrum, and that won’t be good for our country at all.

So it makes sense that so many Americans are making extra preparations for the months that are ahead, because it definitely appears that they could be quite rocky.

via ZeroHedge News https://ift.tt/33VAzaX Tyler Durden

Watch Live: Day 3 Of Judge Barrett’s Supreme Court Confirmation Hearings

Watch Live: Day 3 Of Judge Barrett’s Supreme Court Confirmation Hearings

Tyler Durden

Wed, 10/14/2020 – 08:55

Having been accused of using LGBTQ-offensive language (“sexual preference”) by Sen. Hirono, slammed for havbing no “empathy” by Sen. Booker, misrepresented constantly by various senators (Blumenthal and Coons for example), Judge Amy Coney Barret faces a second day of questioning today in her confirmation process.

Hopefully more of the utter f**king idiocy will not be there today…

A quick summary of Day One:

  • On abortion and Roe v. Wade: Barrett repeatedly declined to give her views on high-profile, contentious issues like abortion rights and the constitutionality of the Affordable Care Act. She was repeatedly asked about her views of Roe v. Wade, the 1973 landmark case establishing a constitutional right to abortion, and Planned Parenthood v. Casey, which reaffirmed its central holding in 1992.

  • The Affordable Care Act: Barrett also rejected Democratic senators’ questions on the Affordable Care Act, citing Ruth Bader Ginsburg’s response to answering hypothetical questions during her hearing in 1993. “No hints, no previews, no forecasts,” said Barrett. Sen. Kamala Harris stuck to her Democratic colleagues’ approach, connecting her nomination to the future of the health care law and telling Barrett that the American people are afraid the Affordable Care Act will be “destroyed in the middle of a pandemic.”

  • On a possible election case: Barrett did not commit to recusing herself from a potential Trump v. Biden case. The issue was raised when Vermont Democratic Sen. Patrick Leahy asked ‪Barrett if she would commit to recusing herself from any case related to the November elections. She declined.

  • On the nomination process: Barrett gave a surprisingly candid response to a question from Sen. Lindsey Graham on how it felt to be nominated for the Supreme Court of the United States. Barrett said that she tried “a media blackout for the sake of my mental health,” but is “aware of a lot of caricatures that are floating around” of her and her family.

…and all without the help of copious notes…

Watch Live (Starts at 0900ET):

via ZeroHedge News https://ift.tt/3lM2jFm Tyler Durden

Soaring Food Costs Send Producer Prices Higher In September

Soaring Food Costs Send Producer Prices Higher In September

Tyler Durden

Wed, 10/14/2020 – 08:39

Following yesterday’s mixed bag for consumer prices (used cars soaring, rent/shelter slowing), producer prices were expected to shift back into very modest inflation YoY in September (and after 5 straight months of deflation), and across the board PPI printed hotter than expected.

PPI Final Demand rose 0.4% MoM (double the +0.2% exp) sending PPI up 0.4% YoY (against expectations of a 0.2% rise) – the first inflationary print since March…

Source: Bloomberg

That is the highest PPI YoY since February (pre-COVID).

While Energy costs are lower (-0.3% MoM, -11.4% YoY), Food costs are the biggest incremental driver of the hotter than expected inflationary print, rising 1.2% MoM (+13.3% YoY).

Certainly nothing here to stall The Fed’s ongoing inflationary pressure.

 

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