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Hamilton: “I’ve A Bad Feeling US Is Following In The Footsteps Of Bernie Madoff”

Authored by Chris Hamilton via Econimica blog,

Charts and Words… blah blah blah…

The Problem:

The Fed and major central banks believe they are fighting a deflationary spiral battling ongoing misses to their inflation targets. But in truth their misguided policies are contributing to a depopulation spiral. They are forcing low interest rates that only exacerbate overcapacity for a consumer base among whom growth is fast decelerating. The cheap money is causing rapid asset appreciation absent like wage growth. Asset holders (primarily older and wealthy) are reaping the rewards while those with little or no assets (young, poor, those of childbearing ages) are paying higher rents, insurance, medical care, schooling, etc. etc. This inequitable inflationary pressure is pushing birth rates to all time lows and cutting off present and future demand…and this is met with even more of the medicine that made the patient sick in the first place.

From a US perspective, there has essentially been no bottom up US population growth since 1950. Chart below shows average annual US births per decade (including births from all sources, legal and illegal). Lower boxes show current age of the population borne during each decade. Births have essentially been flat for seven decades.

Average annual births per each generation and current age of each group, below. Again, births by generation have been flat since the completion of WWII.

Below, annual births highlighting each generation. From the early ’50’s to present, births have been remarkably flat, given the tripling of the total population.

15 to 64 year old population (red line) and year over year change (blue columns). Average annual growth, per period below, has decelerated 50% but will decelerate nearly 80% over the next decade. Average growth, per period:

1970 – 2009, +1.93 million
2010 – 2018, +0.98 million
2019 – 2030, +0.36 million

Through 2030, the working age population is estimated to grow by less than 4 million versus 19 million more 65+ year olds. The result is that the US is currently at full employment with little further labor force growth available, detailed HERE and HERE.

Population growth has shifted to the 65+ year old segment of the population. Average annual growth of the 65+ year old population, per period:

1970 – 2009, +0.46 million
2010 – 2018, +1.4 million
2019 – 2030, +1.7 million

75+ year olds have an 8% labor force participation rate…65 to 74 year olds just a 27% labor force participation rate. This elderly population growth translates into only minimal labor force growth.

The chart below shows 0 to 64 year old annual US population growth (blue columns), federal funds rate (black line), and annual US federal debt (Treasury issuance, red line). The interplay of decades of interest rate cuts, decelerating population growth, and surging issuance of federal debt should be fairly plain. From 2020 through 2030, I update the 0-64yr/old population growth based on actual observed declining births versus continually incorrect Census estimates for rising births (detailedHERE). The minimal working age growth versus massive elderly growth will require negative interest rates and a federal debt doubling or tripling. The impact of these actions will be a further collapse in fertility rates and births, requiring even more of the same failed solutions! Of course the US isn’t alone or the worst off (global situation detailed HERE).

The Solution (?!?):

Delaying the inevitable economic deceleration due to demographics and decelerating population growth via debt and inflation seems to be the rationale to creatively buy assets (aka, cheat for the “greater good”).

Chart below shows annual net Treasury issuance versus the Wilshire 5000 (representing the market cap of all publicly traded US equities) from 2003 through 2018. Seems to be a strong coincidence, correlation, and/or causation of rising asset valuations with rising Federal Reserve asset purchases. Likewise, seems increasing volatility or asset declines ensue during periods of Federal Reserve inactivity or outright declines in Treasury holdings.

But QE wasn’t just Treasury’s and the chart below includes MBS (mortgage backed securities) to provide a better view of Fed purchases and sales on the equity market.

But to attempt to see the full picture alongside the Federal Funds rate and federal debt, the chart below details the Federal Reserve holdings of Treasury’s (blue line), MBS (red line), versus far more rapidly declining Bank Excess Reserves (black line). This difference in the Fed’s balance sheet versus bank excess reserves is what I term direct monetization.

So, one very messy chart including stacked change in Fed holding of Treasury’s (yellow columns), MBS (blue columns), and Monetization (black columns) versus Wilshire 5000 (red line).

To narrow in, the next charts detail the Feds changing duration holdings and the impact on applicable interest rates. First, under 1 year Treasury’s (red line) held by Federal Reserve versus the impact on 3 month Treasury yields (blue shaded area).

1 to 5 year Treasury’s (red line) held by Federal Reserve versus the impact on 3 year Treasury yields (blue shaded area).

7 to 10 year Treasury’s (red line) held by Federal Reserve versus the impact on 10 year Treasury yields (blue shaded area).

20 to 30 year Treasury’s (red line) held by Federal Reserve versus impact on the 30 year Treasury yields (blue shaded area).

Looking at the impact of changing durations held by the Federal Reserve on the Wilshire. (red line below).

But what drove the Wilshire since 2017? As the chart above shows, while the Fed holdings of under 1 year debt were rising rapidly, Fed holdings of 1 to 10 year debt were decreasing even more rapidly and long term holdings were unchanged. Add to this rising rates, and what drove equities higher is a very good question?

So, I’ve a funny feeling that while all sources of traditional Treasury buying were forsaking US debt (foreigners, Federal Reserve, and slowing IG surplus purchasing…chart below), this left nearly all net purchasing up to domestic buyers. Exactly while equities were screaming higher, unfazed by the domestic trillions supposedly moving into Treasury bonds?!?

Since QE ended, a single buyer has saved America from an interest rate Armageddon and/or market meltdown. The Treasury details this buyer as “Other Investors”.

As the above charts detail (with data taken from the March, 2019 Treasury Bulletin); it is not foreigners, not the Fed, not the IG trust funds, not banks, not private buyers, not insurers, not mutual funds, not saving bonds, not state/local pensions that are buying US Treasury bonds. Just “other investors”?!? What “other” is left I really haven’t been able to figure out? Who was sitting on trillions in cash (since it didn’t impact the equity market via liquidations) that plowed into Treasury’s (particularly 7 to 10 year yields) since QE ended while all other sources ceased adding or net sold? Seems more than just coincidence.

Again, what’s the correlation of rising holdings of “other investors” Treasury’s and the Fed’s balance sheet on the asset valuations (Wilshire 5000)? Aside from during QE1, amid periods of “other investor” increasing holdings, assets struggle…during flat to down periods, assets soar.

Below, a very busy but very interesting chart from 2008 til present. 10yr Treasury yield in yellow, Wilshire 5000 in red, Fed’s balance sheet in black, and “other investors” in blue. Given the bond market is supposed to be “the smart money”, the red shaded boxes show 10 year Treasury high to low yields…you make any correlations with the other variables you like, particularly “other investors” surging Treasury demand since QE ended.

I’ve a bad feeling that the US is following in the footsteps of Bernie Madoff (who likewise had a “problem” that his Ponzi had run out of more buyers…so he came up with a “solution”). I see the US has a similar problem, they have run low on consumer growth and are now reliant on massive quantities of cheap federal and corporate debt issuance to keep economic “growth” alive…and I see a “solution” that an unidentifiable buyer has been created to allow the ongoing deluge of new debt without concern about free-market interest rates. I fear the “solution” is far worse than the problem ever was…and the solution is spawning systemic problems beyond the capability of our current system to handle.

via ZeroHedge News http://bit.ly/2PgpAjx Tyler Durden

Trump’s New Interior Secretary Confirmed — Aaaand He’s Under Investigation

President Trump’s brand new appointment for Secretary of the Interior is already under investigation by his own agency’s watchdog, according to CNBC.

Former oil industry lobbyist David Bernhardt was picked to replace embattled Interior Secretary and former Navy SEAL Ryan Zinke – who resigned after falling under investigation over a number of potential ethics violations while leading the department.

Now we learn that Bernhardt – confirmed less than a week ago, is under investigation by the Interior Department’s office of Inspector General over allegations of conflict of interest and other violations while he was the agency’s deputy secretary, according to the report.

The confirmation comes less than a week after the Senate confirmed Bernhardt to his position. It keeps the spotlight on the nation’s top steward of public lands, whose past lobbying for energy and agribusiness clients drew scrutiny from Democrats during confirmation hearings.

…

The disclosure was made in a letter to Rep. Betty McCollum, D-Minn., and Sen. Tom Udall, D-N.M. Last month, the lawmakers asked the inspector general to look into whether there was anything improper about Bernhardt’s participation in regulatory activity that affected former clients. Bernhardt previously chaired the natural resources practice at lobbying and law firm Brownstein Hyatt Farber Schreck.

Deputy Inspector General Mary Kendall told the lawmakers the office “has received seven complaints, including yours, from a wide assortment of complainants and have opened an investigation to address them.” –CNBC

After the New York Times reported on Bernhardt’s involvement in rolling back wildlife protections which would benefit his former farming clients in California, Democratic Rep. McCollumm and Sen. Udall requested an investigation. The Times then reported that Bernhardt continued his work for a former client – the Westlands Water District, after he said he had stopped lobbying months before.

A spokesperson for the Interior Department told the Times that his work did not constitute “regulated lobbying activity,” adding that Bernhardt “is in complete compliance with his ethics agreement and all applicable laws, rules, and regulations.”

“Secretary Bernhardt is hopeful the Inspector General will expeditiously complete a review of the facts associated with the questions raised by Democratic Members of Congress and DC political organizations,” said Press Secretary Faith Vander Voort in a statement.

In response to the inspector general’s investigation, Udall and McCollum said it was an important first step in safeguarding America’s natural resources and the public’s interest in them.

“The American public deserves to have the basic confidence that their Interior Secretary is looking out for their interests — protecting public land, species, the air and the water — and not the interests of former industry clients,” said Udall in a statement.

The probe marks the latest member of Trump’s administration to fall under scrutiny. Aside from Zinke, Interior Secretary Scott Pruitt resigned last July amid at least 14 separate federal investigations over his spending habits, management habits and potential conflicts of interest.

via ZeroHedge News http://bit.ly/2GhGY3l Tyler Durden

Nancy Pelosi Declares a ‘New Era’ of Internet Regulation; EU Threatens Same

We’ve all been watching this develop for years now: the internet is being slow-choked, not by rapacious ISPs forcing users to pay for “fast lanes,” but by politicians on both sides of the Atlantic who want to have a bigger role in what we’re allowed to do and say online. To be sure, lawmakers are being greatly aided in their efforts by major tech players such as Facebook’s Mark Zuckerberg and Apple’s Tim Cook, who are explicitly calling for regulation to maintain current market positions in a sector defined by creative destruction (all hail MySpace and Blackberry!).

In an interview with Recode‘s Kara Swisher, Speaker Nancy Pelosi (D-Calif.) pronounced that in the tech sector, the “era of self-regulation” is over when it comes to privacy and speech rules. Sounding a lot like conservative Republicans such as Sens. Ted Cruz of Texas and Josh Hawley of Missouri, she zeroes in especially on Section 230 of the Communications Decency Act as the thing that needs to be torched.

As the title of a new book puts it, Section 230 comprises “the twenty-six words that created the internet.” Author Jeff Kosseff explains that by immunizing websites, platforms, and service providers from “lawsuits over materials that their users upload,” Section 230 “fundamentally changed American life.” Indeed, the internet as we know it is based on both “content created not only by large companies, but by users,” writes Kosseff, who observes that of the top 10 most-trafficked websites in the United States in 2018, only Netflix “mostly provides its own content.” All the rest—Facebook, Wikipedia, YouTube, Twitter, et al.—either rely heavily on user-generated content (including potentially actionable reviews and comments about everything under the sun) or exist to guide users to such content (Google, Yahoo).

Pelosi is done with all that, telling Swisher that the freedom of expression empowered by Section 230 is “a gift” and a “privilege” that can be rescinded if major tech companies don’t move in the direction she and other politicians want. She frets over companies such as Facebook and Twitter buying up app makers and other services without explaining themselves to regulators. “Is this just commerce and they see a market opportunity and decide to take it on?” says Pelosi. “Or are they in competition with each other, buying something before somebody else doesn’t buy it and then all of a sudden, three or four firms dominate the marketplace and engines of search and the rest of that?”

“For the privilege of 230,” Pelosi warns, “there has to be a bigger sense of responsibility on it. And it is not out of the question that that could be removed.”

Like many Democrats, Pelosi remains convinced that Facebook helped to throw the election to Donald Trump by not regulating political advertising tightly enough and providing a space for the Russians to practice dark arts (the idea that Russian social media changed the outcome of the election is simply wrong). On top of that, liberals and progressives are calling for more policing of whatever they define as “hate speech.”

The motivations might be slightly different than those on the right—who accuse Facebook, et al. of limiting the reach and popularity of conservative figures and opinion due to ideological bias—but the endpoint is the same: a repeal of Section 230. “Google and Facebook should not be a law unto themselves,” Sen. Hawley told a crowd at the Conservative Political Action Conference (CPAC). “They should not be able to discriminate against conservatives. They should not be able to tell conservatives to sit down and shut up.” What Pelosi calls a gift, Hawley calls “a sweetheart deal” that should be ended by enforcing some sort of viewpoint equality on social-media platforms. Cruz has effectively called for the repeal of Section 230 and the implementation of something like a Fairness Doctrine for the internet. During a debate last year with former Rep. Beto O’Rourke (D-Texas) during the 2018 elections, Cruz said

“Right now, big tech enjoys an immunity from liability on the assumption they would be neutral and fair… If they’re not going to be neutral and fair, if they’re going to be biased, we should repeal the immunity from liability so they should be liable like the rest of us.”

It’s not at all clear what it means to say “they should be liable like the rest of us,” since publishers have the absolute right not to publish things and, under existing precedent, sites have the right to moderate some comments without becoming liable for the ones they allow to remain. But it’s never a good sign when conservatives and liberals, Republicans and Democrats start sounding like one another. Throw in President Trump’s recent statement that we need to “do something” about social media sites, and the only safe conclusion is that Section 230 is in real danger. And with it, the internet as we’ve known it.

Meanwhile, on the other side of the Atlantic, the European Union (EU) has approved “The Directive on Copyright in the Digital Single Market” whose Article 13 mandates that

anyone sharing copyrighted content must get permission from rights owners—or at least have made the best possible effort to get permission—before doing so. In order to do this, it’s thought that internet services and social networks will have no choice but to build and enforce upload filters and generally apply a more heavy-handed approach to moderating what users post online.

Another part of the law, Article 11, is effectively a link tax “requiring social networks and news aggregators to pay publishers to display snippets of their output.” Once the rules are officially published later this year, all EU members will have 24 months to write and implement their national versions of the law. It’s possible (likely, even) that there will be more push and pull on the rules before they are finally implemented, but there’s no question that as currently constituted, they will change the character of the internet.

from Latest – Reason.com http://bit.ly/2Zimm3Q
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Where Is Inflation Hiding? In Asset Prices!

Authored by Jesse Colombo via RealInvestmentAdvice.com,

A very dangerous fallacy has taken the world of economics by storm over the last several years: the idea that there is very little inflation in the U.S. economy, therefore interest rates should remain at unusually low levels for an even longer period of time. As I will prove in this piece, the people who believe in the “low inflation” myth are being fooled by the fact that inflation in this unusual, central bank-driven economic cycle is concentrated in asset prices rather than in consumer prices. By holding interest rates too low for too long, a massive asset bubble has inflated and is poised to inflate even further as long as economists and central banks like the Fed continue to be fooled by the “low inflation” myth. Unfortunately, the ultimate bursting of this unprecedented asset bubble is going to throw the U.S. and global economy into another depression.

One of the most fervent believers in the “low inflation” myth is President Donald Trump himself. Trump has complained many times about the Fed’s interest rate hikes that have occurred during his presidency. Over the past three years, the Fed hiked rates from 0% to 2.5%, which is still extremely low considering that rates above 5% were common throughout history. As Trump said earlier this month –

“Well I personally think the Fed should drop rates,” Mr. Trump said. “I think they really slowed us down. There’s no inflation. I would say in terms of quantitative tightening, it should actually now be quantitative easing. Very little if any inflation. And I think they should drop rates, and they should get rid of quantitative tightening. You would see a rocket ship. Despite that, we’re doing very well.”

Trump reiterated his “no inflation” belief in a tweet yesterday:

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, recently summarized the Fed’s position that inflation is still low and even believes that the Fed should let inflation run above its target for a few years:

Many prominent financial journalists and commentators including my friend Pedro da Costa believe that the Fed has been hiking interest rates too aggressively:

The well-known investing pundit and host of CNBC’s “Mad Money” TV show Jim Cramer is a vocal Fed rate hike critic and believer in the “low inflation” myth:

“Memo to Powell: keep listening. Be patient. Enjoy the employment gains. Let’s keep the strength going by waiting a little and not being too judgmental about rate hikes like some of your colleagues,” Cramer said.

The “Mad Money ” host reiterated his distaste in some Fed officials’ tendency to stick to traditional metrics when gauging how the economy is doing.

“How can you claim to be data-dependent if you’ve made up your mind before you see the data that you need one or two more rate hikes to get back to normal?” he asked. “Normal is where the data says you should go. Normal is the natural progression of jobs being created without a lot of inflation. Normal is not a percent.”

Belief in the “low inflation” myth stems from the overly rigid reliance on conventional inflation indicators even though we have been in an unconventional economic cycle since 2009 (because it has been driven by record low interest rates and trillions of dollars worth of quantitative easing). In this type of environment, it is wise to think outside of the box and to consider all information available, but most economists are still stuck in the past as if we are in a garden-variety business cycle in the twentieth century.

The Federal Reserve’s preferred inflation indicator is the core personal consumption expenditure price index (excluding volatile food and energy), which tracks the prices of U.S. consumer goods and services. The Fed has an official target of 2% annual inflation, but inflation has been running cooler than that since the Great Recession according to the core PCE index.

The inflation index most commonly referenced in the financial media is the core Consumer Price Index or CPI (excluding volatile food and energy). The core PCI tells a similar message as the core PCE index: consumer price inflation has been tepid since the Great Recession.

Wage growth has also been quite low since the Great Recession:

Overly rigid reliance on conventional inflation indicators has made the mainstream economics community completely blind to the elephant in the room, which is the fact that inflation has been concentrated in asset prices rather than consumer prices. As the chart below shows (which I’ve recreated from a chart made by Goldman Sachs a couple years ago), assets such as global stocks and bonds have risen at a much higher rate than global real economy prices since the current bull market began in March 2009.

Consumer price inflation has remained low while asset price inflation has exploded because asset prices have been acting like a relief valve for inflationary pressures that have been created by record low global interest rates and the pumping of trillions of dollars worth of liquidity into the global financial system. This doesn’t mean that we don’t have an inflation problem; we have a tremendous inflation problem on our hands, but you need to know where to look.

This Wikipedia entry explains how relief valves work in the mechanical world –

A relief valve or pressure relief valve (PRV) is a type of safety valve used to control or limit the pressure in a system; pressure might otherwise build up and create a process upset, instrument or equipment failure, or fire. The pressure is relieved by allowing the pressurised fluid to flow from an auxiliary passage out of the system. The relief valve is designed or set to open at a predetermined set pressure to protect pressure vessels and other equipment from being subjected to pressures that exceed their design limits. When the set pressure is exceeded, the relief valve becomes the “path of least resistance” as the valve is forced open and a portion of the fluid is diverted through the auxiliary route. The diverted fluid (liquid, gas or liquid–gas mixture) is usually routed through a piping system known as a flare header or relief header to a central, elevated gas flare where it is usually burned and the resulting combustion gases are released to the atmosphere. As the fluid is diverted, the pressure inside the vessel will stop rising. Once it reaches the valve’s reseating pressure, the valve will close.

A pressure relief valve. Image source: Wikipedia

As discussed earlier, the U.S. is currently experiencing a massive asset bubble due to the Fed’s aggressive, unconventional monetary policies during and after the Great Recession. The first of these policies is known as zero interest rate policy or ZIRP. The Fed cut its benchmark interest rate (the Fed Funds rate) to virtually zero and held rates at record low levels for a record length of time. Asset and credit bubbles often form when central banks cut interest rates to artificially low levels because it becomes much cheaper to borrow, low rates discourage saving and encourage speculation in riskier assets & endeavors, and because they encourage higher rates of inflation, to name a few examples. The dot-com and U.S. housing bubbles formed during relatively low interest rate periods as well.

In addition to ZIRP, the Fed utilized an unconventional monetary policy known as quantitative easing or QE, which pumped $3.5 trillion dollars worth of liquidity into the U.S. financial system from 2008 to 2014. When conducting QE, the Fed creates new money digitally for the purpose of buying bonds and other assets, which helps to boost the financial markets. The chart below shows the growth of the Fed’s balance sheet since QE started in 2008:

The Fed’s ZIRP and QE policies caused the S&P 500 to surge over 300% from its 2009 low:

The chart below compares the Fed’s balance sheet to the S&P 500. Notice how each expansion of the Fed’s balance sheet led to a corresponding increase in the S&P 500.

As a result of the Fed’s aggressive inflation of the stock market in the past decade, the S&P 500 rose much faster than earnings and is now at 1929-like valuations, which means that a painful correction is inevitable one way or another:

The Fed’s aggressive inflation of stocks and other assets has created a dangerous bubble in U.S. household wealth (see my presentation about this). U.S. household net worth has hit record levels relative to the GDP in recent years, which is a sign that household wealth is overly inflated and heading for an inevitable crash. The last two times household wealth became so stretched relative to the GDP were during the dot-com bubble and housing bubble, both of which ended in disaster. Terrifyingly, the current household wealth bubble blows the last two out of the water. There is a direct link between how large our current household wealth bubble is and how interest rates have been at record low levels for a record length of time. Unfortunately, the coming household wealth crash will be proportional to the run-up. (The Fed-driven household wealth bubble is also the main driver of growing U.S. wealth inequality, as I explained in Forbes recently.)

In addition to the fact that U.S. consumer price inflation has been low since the Great Recession because inflation has been concentrated in asset prices, there are many reasons to believe that consumer price inflation is actually running a lot hotter than mainstream economists think it is (or want you to think it is). According to John Williams, the proprietor of Shadow Government Statistics, the U.S. CPI formula has been changed over the years for the purpose of understating inflation.

For example, if we use the same CPI formula as we did in 1980 (blue line), it shows that inflation has been running at a nearly 10% annual rate for the past decade rather than the roughly 2% annual rate that today’s CPI (red line) indicates:

Similarly, the 1990 CPI formula (blue line) shows that inflation has been running at a roughly 5% annual rate rather than 2%:

One of the primary ways that our modern CPI formula understates inflation is through hedonic quality adjustments. In simple terms, consumer goods that experience technological improvements are considered to have fallen in price when calculating the CPI even if the price has stayed the same or even increased in real life. For example, if a computer with an eight-core processor costs $1,000 today and most computers have sixteen-core
processors but cost $1,300 in two years from now, it may get recorded as only costing $800 for the purpose of calculating the CPI. Of course, that’s no consolation to the consumer who actually has to pay $1,300.

Because so many high-tech consumer products have entered our lives over the past forty years and those products have improved at a rapid rate, they have masked the very real inflation that has occurred in big ticket necessities like housing, healthcare, childcare, and higher education. Sure, it’s great that laptops, cell phones, and big screen TVs have been falling in price while gaining more features, but that doesn’t help Americans who are going bankrupt due to exorbitant medical bills, being crushed under the weight of student loans, and can’t find affordable housing anywhere.

The chart below from the American Enterprise Institute shows the dichotomy between high-tech consumer products, which have been falling in price, and big ticket necessities that have surged in price and are becoming increasingly out of reach for many Americans:

To summarize, America has a very real inflation problem, but it’s not where everyone is looking. The pervasive, but wrong belief that interest rates should remain at ultra-low levels will only serve to further inflate the asset bubbles that the mainstream economics world is ignoring or in denial of. Unfortunately, these bubbles are eventually going to burst and will cause an economic depression. We should not expect a different outcome when the same characters who completely missed the housing bubble’s obvious warning signs are still employed at the Fed, the big banks, investment firms, academia, and financial media.

via ZeroHedge News http://bit.ly/2Gh5MIN Tyler Durden

His Wife Was Killed in Afghanistan. Then ICE Showed Up To Deport Him.

An undocumented immigrant and military widower whose wife was killed in Afghanistan in 2010 was deported to Mexico last week by Immigration and Customs Enforcement (ICE). Jose Arturo Gonzalez Carranza, who has a 12-year-old daughter, is now back in the U.S., though the reversal appears to have been an effort to avoid bad press.

The Arizona Republic was the first outlet to report the story. Gonzalez Carranza, 30, who entered the U.S. illegally in 2004, married Barbara Vieyra in 2007. Vieyra had always wanted to be in U.S. Army, and she joined up in 2008, not long after the birth of their daughter Evelyn, as detailed in a 2018 East Valley Tribune story.

Vieyra became a military police officer and was deployed to Afghanistan. Then, in September 2010, the military vehicle she was in was attacked by insurgents, sustaining improvised explosive device (IED) and rocket-propelled grenade (RPG) damage. Vieyra was killed, leaving her husband and daughter, among other family members, behind.

Gonzalez Carranza, meanwhile, was granted a parole in place exemption, his attorney, Ezequiel Hernandez, told the Republic. According to the U.S. Citizenship and Immigration Services (USCIS) website, individuals who might otherwise be deported “may be eligible for parole in place in 1-year increments if you are the spouse, widow(er), parent, son or daughter of” a current, former, or deceased member of the military.

Then, on the morning of April 8, while Gonzalez Carranza was driving to work, ICE agents accosted him with their guns drawn. “Put your hands up. Open the door,” he recalled them saying. Gonzalez Carranza told the Republic he responded: “Who you guys are? I have rights.” It didn’t matter. He was taken into custody and eventually deported to Nogales, Mexico.

So why did ICE come for Gonzalez Carranza, despite his parole in place exemption? At this point, there’s no clear answer. ICE appears to have refiled its case against him last year, according to Hernandez, even though he has no criminal record. Gonzalez Carranza was supposed to appear in court on December, but didn’t because the notice regarding his hearing was sent to an old address.

“We have evidence it went to the wrong address,” Hernandez told The Washington Post. “There were little errors throughout this case.”

“The government never revoked the [parole-in-place],” he added to CNN. They detained [Carranza] because of the order of removal done due to the court hearing my client did not go to because he did not know. As of today, we do not know why the client was removed.”

Even though Gonzalez Carranza didn’t show up for his court date, he should not have been deported. Per the Republic:

Hernandez said he filed a motion to reopen Gonzalez Carranza’s deportation case. The motion triggered an automatic stay of removal, but ICE deported him anyway, Hernandez said.

[American Civil Liberties Union deputy legal director Cecillia] Wang also said it Gonzalez Carranza should not have been deported if there was a stay of removal. She said, however, it is “not uncommon” for ICE to violate stays of removal.

In any case, Hernandez said that after sending a press release to the media and speaking with the Republic, ICE notified him of their reversal. On Monday afternoon, Gonzalez Carranza was taken back to the U.S.

Arizona Democratic Sen. Kyrsten Sinema may have had something to do with Gonzalez Carranza’s return as well. Her “office is in communication with Mr. Carranza’s attorney and we will assist the Carranza family in this process,” Sinema told CNN.

Gonzalez Carranza isn’t out of the woods yet. He needs an immigration judge to reopen the case so he can apply once again for the parole in place exemption. His daughter, meanwhile, who lives with her grandparents, didn’t even know her father was deported. “I didn’t tell her nothing,” Gonzalez Carranza told the Republic. “I don’t want to make her feel [worse], her feelings be more frustrated, like I don’t have a mom, and now I may never see my dad again.”

Gonzalez Carranza’s case is certainly sad. Unfortunately, he might not be alone. Last July, the Military Times reported that the Trump administration was rejecting a greater number of veterans’ requests for deportation exemptions for their family members:

The data shows that rejections of veteran requests have increased under President Donald Trump, from about a 10 percent rejection rate in fiscal 2016, the last year President Barack Obama was in office, to an almost 20 percent rejection rate through the first nine months of fiscal 2018. Specifically:

In fiscal 2016, the Obama administration denied 140 veteran requests for deportation protection and approved 1,304 requests.

In fiscal 2017, the Trump administration denied 250 veteran requests for deportation protection and approved 1,449 requests.

It’s undoubtedly a good thing that Gonzalez Carranza will most likely be able to stay in the U.S. What’s unfortunate is that there are many people in similar situations whose cases will not garner national outrage. ICE has a history of mismanagement and allegations of misconduct, and as Reason‘s Zuri Davis wrote in January, these issues will continue without more oversight.

For more Reason coverage of ICE, click here.

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Wall Street Stunned As Containerboard Carnage Wipes Out $3 Billion In Minutes

Was there any “good news” in today’s release of March containerboard and box data? If so, BMO’s Mark Wilde – and the market – missed it.

As the Canadian bank’s analyst wrote in an urgent dispatch, “markets have deteriorated rapidly” as box demand tumbled 3%, operating rates fell to 86.4% and exports slumped 19% y/y (containerboard and box shipments are a coincident indicator of trade momentum, and the latest data is quite simply a dire signal for global trade). As BMO points out, even with big production cut, “inventories fell less than the seasonal norm” and risk has increased that North American prices will follow sharp erosion in global prices.

What happened?

Following the release of the latest, March figures by the American Forest & Paper Association and the Fibre Box Association for containerboard mill and downstream corrugated box plants (impacting such producers as IP, WRK, PKG, and GEF), the market was in shock.

The reason: box demand was much weaker-than-expected, amid continued global trade war fallout. Furthermore, actual and “average week” shipments were down 3% y/y, far less than even the more bearish estimates of 1-2.5% growth. Putting the number in context, this was sthe worst comp since January 2016 – when global markets were in a post-China devaluation bear market – and when blended box volumes fell 3.2%. “With an uptick in March ISM index, we expected some strength” BMO writes… but it did not get it, suggesting the ISM index – and broader expectations of a global economic “green shoot” – has been wildly wrong.

Some more details, courtesy of BMO:

Overall mill operating rates fell to their lowest levels in almost a decade. March’s 86.4% was below a very weak February (89.5%). Anything below 92-94% to be “buyers’ market” territory. Linerboard was at 84.0%, medium at 92.5%.
Exports fell sharply again, -18.9% y/y to 354.2k tons. Offshore prices have been under increasing pressure since last autumn. Trade paper pricing is down ~$75-100/ ton; spot transactions have been reported at much lower levels

The containerboard news shocked traders and within an hour of the market open wiped off more than $3 billion in industry market-cap. According to Bloomberg, while the S&P 500 Containers & Packaging Industry Index (S5CONP) had bounced back from its December 26 low and was up about 24 percent throughMonday – and had been trading above all its major daily moving averages – following the release of the March data – a leading indicator to global economic strength, or in this case lack thereof – the index dropped as much as 4.5 percent Tuesday, and fell below its 50-day moving average for the first time since early January. It was the worst single day for the benchmark since mid-December, and trading volume was above average too.

As Bloomberg explains this morning, although lower March prices had been reported by the industry journal Pulp & Paper Week, that had also been flagged in dispatches last month; so hope was brewing in the sector that cuts were likely the bottom and it wouldn’t get much worse: “We expected pricing to hold at current levels,” BofAML analyst George Staphos wrote in a note, citing macro/sector trends and the packagers’ efforts to manage their supply-demand.

Alas, it did get much worse, and the shoe dropped Tuesday, when box shipment data was released for March, and as explained above, came in much weaker than investors expected. A decline in box shipments is the main takeaway from the March box data and “it’s hard to spin that number as anything other than disappointing,” according to Seaport Global analyst Mark Weintraub.

Packaging investors now await the next big catalyst, the latest containerboard pricing data from Pulp & Paper Week set to be released post-market on Friday. The consensus among analysts right now is that that’ll show still another price cut.

“Do prices go down next weekend? We don’t see it as a fait accompli but the risk definitely got higher,” Weintraub said.

Of course, should the containerboard carnage continue, while investors in the sector will likely be facing even greater losses, the bigger question is what does this dismal data – which suggests that any economic “green shoots” have been a mirage – mean for the global economy. Spoiler alert: with demand for boxes, and thus shipments, trade and logistics collapsing, the answer is “nothing good.“

Keep a close on FedEx for yet another profit warning.

via ZeroHedge News http://bit.ly/2IlaQza Tyler Durden

The Pentagon’s Bookkeeping Is Atrocious: The Books Are Wrong On Everything

Authored by Mac Slavo via SHTFplan.com,

The Department of Defense is the world’s worst bookkeeper. The books are so atrocious that they are wrong about everything and it’s impossible to detect just how bad the fraud and corruption that runs rampant through the Pentagon has become.

Journalist Matt Taibbi told RT’s Lee Camp that he discovered it’s not possible to make any sense of the books.

Taibbi recently dove headfirst into the insanity that is the Pentagon’s finances to find out how a much-lauded audit of the organization, (which receives half a trillion dollars a year) failed to give the DoD either a pass or fail. What Taibbi found was that the Pentagon operates under a system that is inherently unable to provide financial accountability, he said during an interview on Redacted Tonight.

“It’s organized so badly that when the Pentagon at the end of every year goes to ask for more money for the next year…they invent the numbers because they have no audit trail. They submit all those numbers to the Congress, saying we spent this on that, but they don’t actually have the documents,” he said.

“The sheer quantity of the numbers makes it impossible to detect anything like fraud or theft because the books are all wrong at every single level of the system.”

The massive amount of waste and corruption is unbelievable, yet it’s impossible to even get a handle on just how bad it has become. Taibbi also says that there is no way the Pentagon will ever change the way they do their books unless there is reform to how they receive their money. Unless the Pentagon cuts off weapons contractors, there will never be any type of reform – so don’t hold your breath.

“The people who sit on the Armed Services Committee and the Appropriations Committee are going to be primarily funded by military contractors. Which means that none of those people are ever going to approve any measure that threatens to stop funding of the Pentagon until they get their books in order,” Taibbi said.

“And the only way you can make the Pentagon make their books in order is to yank the money.”

The Pentagon is not known for their ability to reason or be responsible unless it’s providing “reasons” that they should be responsible for the deaths of millions across the globe.

*Side Note: Taibbi added that he sees the “Russiagate” hoax to be the biggest blow to mainstream media’s reputation since the “weapons of mass destruction” fiasco under the Bush administration.

via ZeroHedge News http://bit.ly/2UFkZxh Tyler Durden

How Specific Anti-Libel Injunctions Underprotect Speech

[You might also read my earlier post on the subject, Anti-Libel Injunctions and the Criminal Libel Connection, The First Amendment and Criminal Libel Law, The First Amendment and the Catchall Permanent Injunction, and The First Amendment and the Specific Preliminary Injunction; or you can read the whole article in PDF.]

Specific permanent injunctions, unlike specific preliminary injunctions, do follow a civil trial on the merits at which the speech has been found to be libelous. In fact, the trial might even be a jury trial. Perhaps for this reason, [courts in over 30 states] have treated permanent injunctions against libel as generally permissible, at least in certain classes of cases.

But while such specific injunctions are indubitably narrower than criminal libel laws, and even than catchall injunctions, they also fail to provide some of the key procedural protections that even criminal libel laws offer. Consider:

Catchall permanent injunction	Specific permanent injunction
Deters derogatory speech only about the plaintiff	Same
Deters derogatory speech only after the injunction is entered	Same
Deters all derogatory speech about the plaintiff	Deters only particular derogatory statements about the plaintiff
Speech punished only if found to be false beyond a reasonable doubt	Speech punished based on finding of falsehood by preponderance of the evidence
… at a criminal trial where an indigent defendant would have a court-appointed lawyer	… at a civil hearing where an indigent defendant would generally not have a lawyer
… and where finding is by jury, if judge provides that any criminal contempt trial will be before jury	… and where no jury would be present

Because the injunction categorically forbids Don from repeating the cheating allegation (in our hypothetical), the criminal contempt hearing will determine only whether that allegation was repeated. The falsehood of the allegation was conclusively determined at the injunction hearing, where the judge only had to find the allegation to be false, defamatory, and unprivileged by a preponderance of the evidence. Under the “collateral bar” rule (applicable in most states, and in federal courts) the only question at the contempt trial would be whether Don violated the injunction by repeating the statements, not whether the injunction had been properly issued.

Likewise, while Don could get a lawyer at the criminal contempt hearing, that lawyer would be unable to argue to the factfinder that the statement was true, was opinion, was privileged, or was otherwise not libelous. And at the initial civil hearing, when truth, opinion, and privilege were debated, Don had no right to a court-appointed lawyer.

The specific injunction is also more speech-restrictive than the catchall injunction, because it makes repeating a statement a crime regardless of changed circumstances and context. Yet “[u]ntrue statements may later become true; unprivileged statements may later become privileged.” Even if after Don’s first false statement that Paula had cheated him, Paula did end up cheating him, he’d still be barred from repeating the statement despite its now being true. [Footnote: This is especially likely if the original injunction bans not just a specific, detailed accusation, but, for instance, any claim that plaintiff is “either directly or indirectly, engaged, affiliated or connected with, illegal activity,” e.g., Irving v. Palmer, No. 18-cv-11617, at 3 (E.D. Mich. May 29, 2018).]

Relatedly, a statement may be libelous in one context, but hyperbole in another. Yet an injunction simply barring repetition of a statement will prohibit the statement regardless of context. The catchall injunction, which requires a jury finding of libelousness at the criminal contempt hearing, based on whether the statement was libelous at the time it was repeated (rather than at the time it was initially said), doesn’t suffer from this problem.

And each of these defects, I think, is of constitutional significance.

Proof Beyond a Reasonable Doubt

Before people go to jail for their speech, there should be proof beyond a reasonable doubt that their speech is indeed constitutionally unprotected. This is especially true because jail time not only deters speech, but incapacitates speakers, given that their speech rights are sharply limited when they’re in jail. Criminal libel law provides this protection when threatening jail for allegedly false and defamatory statements; a civil injunction, which has the same effect, should embody the same protection.

The Supreme Court has rejected this argument in obscenity cases (California ex rel. Cooper v. Mitchell Bros.’ Santa Ana Theater), though Justices Brennan, Marshall, and Stewart had urged it in McKinney v. Alabama. But proof beyond a reasonable doubt is more important in libel injunctions cases than it is in obscenity cases.

In obscenity cases, factfinder error generally risks restricting only nonobscene pornography, which the Court has, rightly or wrongly, found to be of lesser constitutional value. (To the extent that the controversy in a case is whether the work has serious literary, artistic, scientific, or political value, that standard is in essence a legal judgment, for which the quantum of proof is less significant than for factual judgments.) In libel cases, factfinder error risks restricting accurate statements of fact, including in many cases statements on matters of public concern. And, as noted in the next section, there is a long tradition of reading constitutional free expression guarantees as leaving the finding of truth and falsehood cases to the jury; and until libel injunctions came to be broadly accepted in the last few decades, such findings would generally yield criminal punishment for libel only in criminal cases, where proof beyond a reasonable doubt is required.

Finally, even if courts do rely on the obscenity precedents, those precedents should cut in favor of requiring at least a showing of clear and convincing evidence: This is what the California Court of Appeal held on remand in Mitchell Brothers, because such a standard was needed “to protect particularly important interests” in free speech. The speaker’s interest in libel cases is at least as important as in obscenity cases.

Jury Factfinding

In criminal libel cases, the finding that the statements are false must generally be made by a jury. That’s a Sixth Amendment requirement in those states where the criminal libel statute authorizes more than six months in jail. It’s a state constitutional requirement under the state constitutions that provide jury trials for all criminal libel cases. And it’s a state law requirement in all the other states (except Louisiana) that authorize jury trials for all misdemeanors.

This should be seen as a First Amendment requirement, and American free speech traditions support this view. Leaving the question of truth entirely to a judge is much like the pattern in pre-Revolutionary libel prosecutions, such as in the notorious John Peter Zenger trial. There too the judge decided whether a statement was libelous, and then the criminal jury decided only whether the defendant had published the statement. American law roundly rejected this approach for criminal libel, even when criminal libel prosecutions were common, and instead insisted that the criminal jury must determine whether the statement was indeed false. The law should likewise take the same approach to anti-libel injunctions, given that they are enforced through criminal prosecution.

Some may be skeptical about whether juries are indeed great protectors of free speech. But American libel law has long treated jury decisionmaking as important; this historical judgment should not be lightly set aside. And jury decisionmaking coupled with judicial gatekeeping may provide better protection than either jury decisionmaking or judicial decisionmaking alone—among other things, dispensing with a jury verdict would leave the defendant’s right to speak at the mercy of a single governmental decisionmaker.

Indeed, twenty-nine state constitutions expressly provide that in prosecutions for libel, the jury shall determine the facts (and, in many states, the law). The same principle should apply to prosecutions for violating anti-libel injunctions, even if they are labeled criminal contempt prosecutions. And, for the reasons given above, this principle should be understood as a facet of federal First Amendment law as well.

Note that, if a specific injunction is entered following a civil jury trial, the jury requirement would likely be satisfied. But the other three elements would still be lacking: proof of falsehood beyond a reasonable doubt before speakers are jailed for their speech, the assistance of counsel, and the requirement that speech be found to be false at the time and in the context in which it is repeated.

Assistance of Counsel

In criminal libel cases, defendants who can’t afford lawyers will get court-appointed lawyers who can argue that their statements are true, are opinions, are privileged, or are otherwise not libelous. This too is an important protection for speech.

Speakers who lack a lawyer will often be unable to effectively defend themselves. They aren’t expert at proving facts. They don’t know how to get discovery. They don’t know the details of various libel law privileges. They don’t know the precedents that help distinguish, say, facts from opinions.

If they lose at trial, they would find it very hard to effectively appeal. Indeed, they might feel so hamstrung by the lack of a lawyer that they might not contest the injunctions in the first place. The injunctions may also be entered far from where they live, making it even harder for them to effectively litigate the case. And when a defendant is absent, unrepresented, or practically unable to appeal, the factfinding at the initial civil injunction hearing is especially likely to be inaccurate.

This might be an unavoidable reality in the everyday operation of the civil justice system. Defendants who lack the resources to defend themselves may find themselves subject to civil judgments—though this is constrained, at least when it comes to lawsuits for damages, by the reluctance of most plaintiffs to spend money suing judgment-proof defendants.

But when courts issue injunctions against libel, they turn that reality into something with criminal law consequences: Defendants might be threatened with jail for repeating certain statements without ever having had lawyers who could effectively argue that the statements were not actually libelous. That should not happen.

Lack of Provision for Changing Circumstances and Changing Context

Specific permanent injunctions ostensibly bar only statements that have been found libelous. But, as discussed in Part IV.A, a statement that was libelous when first said, and was found libelous at the injunction hearing, might not be libelous if repeated when the facts and the context have changed.

True, a defendant could go to court to modify the injunction, but that is expensive and time-consuming. Or a defendant could ask the court to exercise its discretion not to initiate criminal contempt proceedings in light of the changed facts, but the judge may of course not agree that the facts have changed, or may think that in any event the defendant should have complied with the injunction. And, more generally, speakers should not have to “request the trial court’s permission to speak truthfully in order to avoid being held in contempt.”

* * *

Judge David Barron’s recent First Circuit dissent argues, in response to an earlier version of the argument in this paper, that “criminalizing the violation of an injunction that has been issued as a properly predicated prophylactic protection against the future expression of unprotected speech found likely to recur” ought not be equated with “criminalizing defamation as primary conduct (as in the case of criminal libel).” Yet the two are very similar: Both involve threat of criminal punishment for speech that the legal system finds to be false and defamatory. If we think that certain procedural safeguards—proof beyond a reasonable doubt, jury decisionmaking, a defense lawyer—are important to determining whether a statement is false in criminal libel cases, we should think the same in injunction cases, when the injunction is enforceable through the threat of criminal punishment.

“An injunction, like a criminal statute, prohibits conduct under fear of punishment. Therefore, we look at the injunction as we look at a statute, and if upon its face it abridges rights guaranteed by the First Amendment, it should be struck down.” An injunction banning specific instances of alleged defamation thus is indeed tantamount to a statute “criminalizing defamation as primary conduct.”

To be sure, as that dissent notes, “there were no criminal safeguards provided for in the injunctions [upheld in whole or in part] in Madsen and Schenck,” the Court’s abortion clinic protest cases. But those cases upheld narrow content-neutral restrictions on the time, place, and manner of speech. The injunctions there didn’t purport to criminalize the making of particular statements, nor did they rest on judicial determination of whether certain statements were false. Here, as elsewhere in First Amendment law, content-based restrictions on speech that the government believes to be wrong and valueless should be subject to more constraint than content-neutral restrictions on loud speech or speech that blocks building entrances.

from Latest – Reason.com http://bit.ly/2Go5osa
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Apple Joins Growing List Of Companies Helping To Rebuild Notre Dame

Apple CEO Tim Cook on Tuesday announced that the company would join two French billionaires and the energy company Total in donating money to help rebuild the cathedral of Notre Dame after Monday’s devastating fire.

While Cook framed the decision as contributing to efforts to restore France’s “heritage for future generations”, we wonder if his Silicon Valley peers will see it the same way.

We are heartbroken for the French people and those around the world for whom Notre Dame is a symbol of hope. Relieved that everyone is safe. Apple will be donating to the rebuilding efforts to help restore Notre Dame’s precious heritage for future generations.🇫🇷

— Tim Cook (@tim_cook) April 16, 2019

After all, the Catholic Church, which owns Notre Dame, has a well-documented history of homophobia and covering up sexual abuse by priests – two issues that are anathema to Bay Area techies.

Apple didn’t respond to requests for comment about Cook’s announcement. But in unrelated news, as the French business elite rallies to save the cathedral, a video has circulated purporting to show two gilets-jaune protesters walking along one of the cathedral’s two towers shortly before the blaze began.

Could Apple’s decision to donate to the cathedral turn Apple into the next Chick Fil-A? Or is the risk worth it, because perhaps Cook and the other billionaires will request shiny new luxury goods stores be installed in the cathedral as part of the renovations?

via ZeroHedge News http://bit.ly/2GqHdu8 Tyler Durden

How Even Legal Marijuana Use Can Land You in Jail

Last Tuesday, the New York City Council voted to stop testing probationers for marijuana use. The move is a reminder that even as states hammer out rules to legalize use—as New York is working through right now—remnants of the drug war have left a large population of Americans subject to the draconian measures of post-prison supervision.

There are more than 4.5 million people on probation or parole in the U.S., nearly twice the number of people behind bars at any given time. All of these folks are subject to incarceration if they violate the terms of their supervised release, and in most places, a prohibition on using cannabis products may be one of those terms.

“Marijuana is a big issue when it comes to parole, but it’s just the tip of the iceberg” explains Tyler Nims, the executive director of the Independent Commission on New York City Criminal Justice and Incarceration Reform. “Parole is a huge issue in criminal justice reform and in particular in New York. But it’s unseen and unknown.”

According to analysis of probation and parole figures put together by the Pew Charitable Trusts, a little more than half of probation and parole stints end without incident. But nearly 350,000 people get new jail terms annually because they’ve failed to complete probation or parole with a spotless record. In some states, revocation of supervised release is the main driver of incarceration. In Georgia, for example, 67 percent of new prison admissions in 2015 were due to revoked probation or parole. The same was true in Rhode Island, where 64 percent of new prison admissions in 2016 were due to supervised release revocations.

Judges have wide discretion to set the terms for release. That often includes prohibiting behavior that is otherwise perfectly legal. Probation and parole guidelines can limit where people go, who they can consort with, and what they may or may not consume. Earlier this year, a judge in Hawaii told a man arrested for stealing car that he could not consume Pepsi while on probation—and put him under supervised release for four years. While incidents like that one are relatively rare, prohibiting the use of marijuana while on supervised release is standard.

Whether marijuana use will continue to be deemed a violation is something to watch and weigh in on as state-level legalization continues.

Nims tells Reason that his organization started exploring parole reform as a way to close Rikers Island prison, shift the city toward smaller jails closer to the criminal courts across the boroughs, and reduce the city’s overall jail population.

The good news is that incarceration in general is on the decline in cities across the country, including New York. But there’s a big exception.

“Every category of person being detained has been decreasing except for those who are there for parole reasons,” Nims says. He calculates that 40 percent of the city’s parolees are re-incarcerated for non-criminal violations: things like failing drug tests and not living where they’re ordered to live. Nims knew of a convicted sex offender who was given clearance by his parole officer to purchase a particular type of cell phone that didn’t have internet access. It turned out the officer was wrong, and the offender was sent back to jail for a year for having the phone.

Parole and probation was not supposed to be this cruel, explains Vincent Schiraldi, a former New York City probation commissioner who is now co-director of Columbia University’s Justice Lab. The prospect of getting out of prison earlier in exchange for being supervised was presented as an act of mercy or leniency. But as incarceration rates increased in lockstep with longer sentences, more people were put on parole and probation under increasingly strict terms. Supervised release changed from an act of mercy to a different form of punishment.

“As probation grew, you’d expect incarceration to decline,” Schiraldi says. “It’s much more logical to conclude that it’s an add-on. It’s just a net widener.”

Schiraldi told a a New York Assembly committee in October that there’s no public safety justification for routine marijuana testing of people on probation or parole. He testified that the research showed drug testing increased the likelihood of somebody ending back up in jail for technical violations, but did not actually reduce criminal behavior. In order to avoid testing positive, probationers and parolees instead avoid their mandatory meetings with supervisors, which causes yet another technical violation (known as absconding), which makes them even more likely to end up back in prison.

Schiraldi recommended to the Assembly that any law legalizing marijuana in New York should remove marijuana abstinence as a condition for parole or probation. When his office decided on to stop testing for marijuana, they were able to cut probation revocations nearly in half, and only four percent of their clients were convicted of a new felony within a year following the end of probation.

The push to end marijuana testing is part of a larger effort to reform and restore some of the mercy parole and probation were intended to provide and reduce the likelihood it ends with people being sent back to prison. In December 2018, a coalition of criminal justice reformers partnered with Assemblyman Walter Mosley (D-Brooklyn) to introduce the Less is More: Community Supervision Revocation Reform Act to try to make it less likely that technical violations of parole will lead to people getting sent back behind bars.

The Less Is More Act would eliminate incarceration for most technical violations, and for any exceptions would cap a return to prison to a maximum of 30 days. People under supervision will also be able to earn credits to reduce the amount of time they have to spend on parole. And when somebody on parole gets snagged for an alleged violation, they will be provided a hearing before they’re detained (In New York City, somebody taken in for a parole violation can end up sitting at Rikers for 90 days before the state decides whether to send them back to prison). Several district attorneys, police chiefs, sheriffs, and many criminal justice reform organizations have signed on to support the bill.

A similar push is underway in Pennsylvania, where rapper Meek Mill has drawn attention to the arbitrary and harsh nature of how probation violations are handled. Mill faced two- to four-year prison sentence for a probation violation after he was filmed popping a wheelie on a dirt bike. He was eventually freed a year ago and used the experience to launch a justice reform group to change the way probation is handled. In early April, Meek’s new group, the REFORM Alliance, put together a rally in Philadelphia to support probation reforms.

There was a bill introduced in Pennsylvania in January, SB 14, that would cap the length of probation to five years for felonies, three years for misdemeanors, and would also, like the Less Is More Act, limit the amount of time somebody can be incarcerated for technical (but not criminal) violations of probation.

Nims and Schiraldi both see these changes in parole and probation as vital reforms to our criminal justice system, up there with reforming bail systems that keep poor people trapped behind bars before they’re ever convicted, and the elimination or reduction of mandatory minimum sentences that have handed down abnormally long prison terms for people convicted of certain types of drug crimes. Part of those reforms include making sure that as marijuana is legalized across the country, it doesn’t remain a reason that people on parole or probation get sent back to prison.

“It’s one of the least productive things you can do to for somebody coming back to the community,” Nims says.

from Latest – Reason.com http://bit.ly/2IGrN6N
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