May N.Y. Businesses Fire Employees for Using Parler and Gab?

Newsweek (Meghan Roos) reports:

The president of a literary agency [the Jennifer De Chiara Literary Agency] based in New York City said Monday on Twitter that one of the agency’s employees was terminated after her use of conservative social media sites Parler and Gab was discovered.

Is that legal?

The First Amendment, by its terms, doesn’t apply to private employers. It says “Congress shall …,” which has been read as applying to the federal government generally; the Fourteenth Amendment, which starts with “no state,” has applied this to state and local governments. But just as private firings based on religion or race don’t violate the Free Exercise Clause or the Equal Protection Clause, private firings based on speech don’t violate the Free Speech Clause.

But they might violate statutes. Federal law, for instance, generally bans private employers with 15 or more employees from firing people based on race and religion; many state laws do the same even as to smaller employers. And a considerable number of states bans firings based on certain kinds of speech or political activity, though the rules vary from state to state (and sometimes even by city and county), and are often quite vague.

I canvassed these laws in a 2012 article (and Utah has enacted a new law since then), but for now let’s turn to the New York law. Let’s assume for this that the article is correct in describing Oefelein as an employee; the law may not apply to certain kinds of independent contractors. (Whether New York law applies to an employee who apparently works from Alaska is an interesting question, which I’ll set aside for now; it would likely to turn on various details of the employment relationship, including whether the employment contract calls for applying New York law. Alaska has no such employee protection law.)

New York bars employer retaliation for off-duty “recreational activities,” including, among other things, “reading and the viewing of television, movies, and similar material.”

(2) Unless otherwise provided by law, it shall be unlawful for any employer or employment agency to refuse to hire, employ or license, or to discharge from employment or otherwise discriminate against an individual in compensation, promotion or terms, conditions or privileges of employment because of …

(c) an individual’s legal recreational activities outside work hours, off of the employer’s premises and without use of the employer’s equipment or other property …

{“Recreational activities” shall mean any lawful, leisure-time activity, for which the employee receives no compensation and which is generally engaged in for recreational purposes, including but not limited to sports, games, hobbies, exercise, reading and the viewing of television, movies and similar material ….}

(3)(a) [This section shall not be deemed to protect activity that] creates a material conflict of interest related to the employer’s trade secrets, proprietary information or other proprietary or business interest ….

(4) [A]n employer shall not be in violation of this section where the employer takes action based on the belief … that: … (iii) the individual’s actions were deemed by an employer or previous employer to be illegal or to constitute habitually poor performance, incompetency or misconduct.[1]

A separate part of the statute expressly protects a limited range of partisan political activities (“(i) running for public office, (ii) campaigning for a candidate for public office, or (iii) participating in fund-raising activities for the benefit of a candidate, political party or political advocacy group”); the question is whether the “recreational activities” protection covers political commentary on social media that’s outside those narrow categories.

The answer is unfortunately unsettled. Court decisions have indeed treated “recreational activities” as including arguing about politics at a social function[2] and participating in a vigil for a man killed because of his homosexuality.[3] Plus if “reading and the viewing of television, movies and similar material” is recreational, why wouldn’t writing and posting material on a social media platform be recreational too?

But one court has held that picketing is not sufficiently “recreational” to qualify.[4] Other New York courts have likewise held that certain non-speech activities—dating[5] and organizing and participating in “after-work celebrations with fellow employees”[6]—that might normally be seen as recreational nonetheless are not covered by the statute. This suggests that “recreational activities” might likewise be read narrowly in some speech cases.

It’s also not clear how the “without use of the employer’s equipment or other property” exception would play out here. There would be a factual question: Did the employee, for instance, use a company-issued phone or computer? And there may be a legal question: How should company-issued devices that are expected to be used at home for personal purposes alongside business purposes be treated for purposes of the law? I know of no cases exploring that.

What about the exception for activity that “creates a material conflict of interest related to the employer’s trade secrets, proprietary information or other proprietary or business interest”—could an employer argue that it allows firing for any activity that might harm the employer’s business by offending some customers or business partners?

One case read the exception as allowing the German National Tourist Office to fire an employee for becoming known as the translator of some Holocaust revisionist articles.[7] Presumably the court’s view was that the activity could lead to public hostility to the office, and that this hostility created a “conflict of interest” between the employee and the employer’s “business interest.” If that’s so, it could apply to any speech or other recreational conduct that’s sufficiently unpopular. But other cases interpreting similar statutes in other states, however, consider some speech to be protected even when it does undermine the employer’s business, for instance by offending customers.

Again, keep in mind that this is the New York statute; if a similar matter comes up in another state, you’d need to consult the statute in that state (or, in some instances, city or county). And note that none of this speaks to whether these laws are good ideas. Perhaps employers should be free to fire employees based on their speech or political activity or recreational activity (or their religion or sexual preference or race or what have you); or perhaps speech should be treated more like, for instance, religion, as a basis on which the employer may not fire an employee (even if the religion is quite unpopular); here, I just talk about what the law is.

[1] N.Y. Lab. Law § 201-d (McKinney 2011) (enacted 1992).

[2] Cavanaugh v. Doherty, 243 A.D.2d 92, 100 (N.Y. App. Div. 1998) (treating an allegation that plaintiff was fired “as a result of a discussion during recreational activities outside of the workplace in which her political affiliations became an issue” as covered by the statute).

[3] El-Amine v. Avon Prods., Inc., 293 A.D.2d 283 (N.Y. App. Div. 2002) (affirming denial of summary judgment in a § 201-d(2) case apparently brought based on plaintiff’s “involvement in a vigil for Matthew Shepard, the gay college student who was brutally murdered in Laramie, Wyoming,” Jennifer Gonnerman, Avon Firing, Village Voice, Mar. 2, 1999).

[4] Kolb v. Camilleri, No. 02-CV-0117A(Sr), 2008 WL 3049855, at *13 (W.D.N.Y. Aug. 1, 2008) (“Plaintiff did not engage in picketing for his leisure, but as a form of protest. While the Court has found such protest worthy of constitutional protection, it should not engender simultaneous protection as a recreational activity akin to ‘sports, games, hobbies, exercise, reading and the viewing of television, movies and similar material.'”).

[5] E.g., Hudson v. Goldman Sachs & Co., 283 A.D.2d 246 (N.Y. App. Div. 2001) (“romantic relationships are not protected ‘recreational activities'”); State v. Wal-Mart Stores, Inc., 207 A.D.2d 150 (N.Y. App. Div. 1995) (“dating is entirely distinct from … recreational activity”) (internal quotation marks omitted). But see id. at 153 (Yesawich, J., dissenting) (arguing that dating should be seen as covered).

[6] Delran v. Prada USA Corp., No. 101691/04, 2004 WL 5488006 (N.Y. Sup. Ct. Aug. 2, 2004).

[7] Berg v. German Nat’l Tourist Office, 248 A.D.2d 297 (N.Y. App. Div. 1998); Paul Schwartzman, It Just Isn’t Write[;] German Axed Over Hate Mag Article, Daily News (N.Y.), May 11, 1995, at 6.

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Biden’s Private Prisons Executive Order: A Solution in Search of a Problem?

Yesterday Pres. Biden issued an Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities. The operative bit is simple enough: “The Attorney General shall not renew Department of Justice contracts with privately operated criminal detention facilities, as consistent with applicable law.” The policy section before it is worth quoting in full:

More than two million people are currently incarcerated in the United States, including a disproportionate number of people of color. There is broad consensus that our current system of mass incarceration imposes significant costs and hardships on our society and communities and does not make us safer. To decrease incarceration levels, we must reduce profit-based incentives to incarcerate by phasing out the Federal Government’s reliance on privately operated criminal detention facilities.

We must ensure that our Nation’s incarceration and correctional systems are prioritizing rehabilitation and redemption. Incarcerated individuals should be given a fair chance to fully reintegrate into their communities, including by participating in programming tailored to earning a good living, securing affordable housing, and participating in our democracy as our fellow citizens. However, privately operated criminal detention facilities consistently underperform Federal facilities with respect to correctional services, programs, and resources. We should ensure that time in prison prepares individuals for the next chapter of their lives.

The Federal Government also has a responsibility to ensure the safe and humane treatment of those in the Federal criminal justice system. However, as the Department of Justice’s Office of Inspector General found in 2016, privately operated criminal detention facilities do not maintain the same levels of safety and security for people in the Federal criminal justice system or for correctional staff. We have a duty to provide these individuals with safe working and living conditions.

This picks up on the anti-private-prison memo issued toward the end of the Obama Administration, which I wrote about back in 2016. In particular, I find the reliance on the Inspector General’s 2016 report to be misplaced, since the IG’s report doesn’t truly show that the private sector underperforms the public sector.

I agree that the incarceration system needs reform. (And not just the incarceration system itself: I would also look at the mass of criminal laws, including drug laws; and the investigation, prosecution, and sentencing processes. But O.K., let’s also look at the incarceration system.) But well-intentioned prison reformers too often blame private prisons for problems that plague incarceration generally. For some, this may relate to a broader skepticism of markets; for some, this may relate to a view that profitmaking (while possibly appropriate elsewhere) is inappropriate for prisons. I believe that, on the contrary, the problems of incarceration aren’t particularly attributable to private prisons, and aren’t generally greater in private prisons than elsewhere; the moral objections are insubstantial; and perhaps those of us who want to reform prisons might consider increasing the use of private prisons:

  • Are private prisons better or worse than private prisons? Relatedly, do private prisons really save money? (And if so, a lot or a little?) These questions turn out to be surprisingly hard to answer. The cost question is difficult because of different accounting conventions between the private and public sectors. And the quality question is difficult because of the general failure to adopt performance standards and measure consistent quality numbers between sectors. Nonetheless, there have been a few good-quality studies, and these don’t generally find consistent differences between the public and private sectors. Public prisons outperform private prisons on some indicators, and do worse on others. <a href="https://ift.tt/3ooksd8 Part I of my Emory Law Journal article for more details on this. This is a challenge for defenders and critics of private prisons alike: if private prisons were such a humanitarian disaster, shouldn’t we clearly see that in the data? But if the magic of the market made private prisons so much better, shouldn’t we see that as well? In reality, we don’t see either strong result.
  • Do private prisons lobby for greater incarceration? It turns out there’s little solid evidence of this. Of course they lobby for greater privatization and to get more contracts, so you can see plenty of evidence of private prison lobbying. How about lobbying in favor of pro-incarceration policies, like stronger sentences or stricter enforcement? It’s hard to see strong evidence of this. By contract, it’s not hard to see evidence of pro-incarceration lobbying by public correctional officers’ unions. See my Stanford Law Review article for more details on this. Moreover, it’s not clear that greater privatization would make this problem greater; plausibly, it might alleviate the problem by splitting the industry up into a greater number of actors who would have more incentives to free-ride off each other.
  • Are there moral, non-consequentialist problems with prison privatization? (I.e., put aside any issues of cost, quality, accountability, and political influence, which are empirical issues that can be proven or disproven by the data, and merely focus on the supposed inconsistency of prison privatization with liberal values, expressive harms, etc.) I argue that there are no such problems. When we say “the state must punish”, we really mean that state employees must punish. But state employees are private people who agree, by contract, to do the state’s bidding in exchange for money. And this is the same thing that private prison providers agree to do. At this high, abstract level, there’s no morally significant difference between public employees and private contractors. Of course the form of the contract matters: different types of contracts can have different incentives and lead to different actions—which relates to how well prisoners are treated, and all sorts of other morally significant dimensions of incarceration. But those are empirical questions—and the possible details of how contracts are structured are infinitely various, so even if private prisons do badly, the response could just be “mend it, don’t end it”.
  • This last point is significant: if we can’t see much of a difference between private and public prisons in the data, perhaps this is because we haven’t really begun to explore the possibilities of contracting. As I noted above, contracts generally aren’t performance-based. But the Bureau of Prisons and state Departments of Corrections could make more of an effort to move in that direction. Why not incentivize rehabilitation by making a substantial part of contract payments depend on recidivism two years out, and/or releasees’ employment outcomes? Why not make a substantial part of contract payments depend on positive health outcomes for prisoners, floor space, in-prison security, and so on? If private corporations are so profit-grubbing, they’ll be glad to maximize whatever their contracts tell them to maximize. So performance-based contracting can be central to a comprehensive plan of prison reform. See Parts II and III of my Emory Law Journal article for more on this. (This could be done in public prisons too, through performance-based payments to public prison wardens. But there’s probably more room to experiment with compensation schemes in private contracting, and private firms would probably have greater flexibility to experiments, if their contracts allow them to.)
  • One source of skepticism of privatization might come from “guilt by association”. Perhaps prison privatization has been pushed, in part, by conservatives who don’t have much interest in prison reform or prisoner welfare. If so, that means that the Biden Administration is the perfect time to increase federal prison privatization. Prison privatization should be overseen by people who will invest in meaningful prison monitoring, who will insist that good performance measures be written into contracts, and who will be willing to penalize underperforming contractors.

tl;dr: Yes, let’s reform prisons. How about if we reform by increasing prison privatization rather than abandoning it?

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Proud Boys Leader Was ‘Prolific’ FBI Snitch: Court Docs

Proud Boys Leader Was ‘Prolific’ FBI Snitch: Court Docs

While US officials claim that ‘far-right extremism’ is one of the largest threats facing America, the leader of the group most commonly singled out as an example – the Proud Boys – was a ‘prolific’ informant for federal and local law enforcement, according to Reuters, citing a 2014 federal court proceeding.

Enrique Tarrio (left)

Enrique Tarrio repeatedly worked undercover for investigators following a 2012 arrest, court documents reveal.

Curiously, Tarrio was ordered to stay away from Washington D.C. one day before the January 6 Capitol riot after he was arrested on vandalism and weapons charges – upon a request by government prosecutors that he be prohibited from attending. At least five Proud Boys members were charged as part of the riot.

In the 2014 hearing, a federal prosecutor, an FBI agent and Tarrio’s attorney describe his undercover work – noting that the Proud Boys leader helped authorities prosecute over a dozen people in various cases involving drugs, gambling and human smuggling, accoding to Reuters.

In a Tuesday interview with Reuters, Tarrio denied working undercover or cooperating in cases.

“I don’t know any of this,” he said, adding “I don’t recall any of this.”

Law-enforcement officials and the court transcript contradict Tarrio’s denial. In a statement to Reuters, the former federal prosecutor in Tarrio’s case, Vanessa Singh Johannes, confirmed that “he cooperated with local and federal law enforcement, to aid in the prosecution of those running other, separate criminal enterprises, ranging from running marijuana grow houses in Miami to operating pharmaceutical fraud schemes.”

Tarrio, 36, is a high-profile figure who organizes and leads the right-wing Proud Boys in their confrontations with those they believe to be Antifa, short for “anti-fascism,” an amorphous and often violent leftist movement. The Proud Boys were involved in the deadly insurrection at the Capitol January 6.

The records uncovered by Reuters are startling because they show that a leader of a far-right group now under intense scrutiny by law enforcement was previously an active collaborator with criminal investigators. –Reuters

During Tarrio’s 2014 hearing, both the prosecutor and Tarrio’s defense attorney asked for a reduced prison sentence after pleading guilty in a fraud case related to the relabeling and sale of stolen diabetes test kits. In requesting leniency for Tarrio and two co-defendants, the prosecutor noted that Tarrio’s information had resulted in the prosecution of 13 people on federal charges in two separate cases, and helped local authorities investigate a gambling ring.

Tarrio’s former attorney, Jeffrey Feiler, noted that his client worked undercover several times – one involving “wholesale prescription narcotics,” another involving the sale of anabolic steroids, and a third involving human smuggling. Tarrio also helped police uncover three marijuana grow houses, and was a “prolific” cooperator, according to the report.

In the smuggling case, Tarrio, “at his own risk, in an undercover role met and negotiated to pay $11,000 to members of that ring to bring in fictitious family members of his from another country,” the lawyer said in court.

In an interview, Feiler said he did not recall details about the case but added, “The information I provided to the court was based on information provided to me by law enforcement and the prosecutor.”

An FBI agent at the hearing called Tarrio a “key component” in local police investigations involving marijuana, cocaine and MDMA, or ecstasy. The Miami FBI office declined comment. –Reuters

Reuters notes that there is no evidence Tarrio has cooperated with authorities since his previous involvement, however he admitted to notifying local law enforcement prior to Proud Boys rallies in various cities – letting police know of the group’s plans. Tarrio said he stopped this coordination after December 12 due to the DC police cracking down on the group. 

Tarrio’s involvement with law enforcement will no doubt fuel speculation over just how ‘organic’ the threat of ‘far-right extremism’ is, particularly when the vast majority of violence observed over 2020 was committed by far-left groups rioting in the name of racial justice.

Tyler Durden
Wed, 01/27/2021 – 12:00

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

President Biden Should Tell Chicago Teachers To Return to School

krtphotoslive874076

If President Joe Biden really wanted to unite the country at this moment of profound political crisis and existential dread, a powerful gesture is available to him. He could earn the appreciation of millions of parents by simply asserting that public school teachers—including those currently on strike in Chicago—must return to their classrooms.

Unfortunately, Biden and his surrogates have repeatedly sidestepped questions from reporters, giving no indication that the administration will defy the politically powerful teachers unions currently waging a quixotic campaign to keep schools closed for as long as possible.

“It seems like Biden is refusing to acknowledge the fact that there is increasingly a conflict between school districts that are trying to make schools safe so kids can get back to in-class learning with PPE and better ventilation and more, and teachers unions who are concerned about their teachers getting COVID and are basically just refusing what the health officials say they should be doing,” said CNN’s Jake Tapper on his program Tuesday evening.

Erin Burnett, another CNN anchor, asked White House Chief of Staff Ron Klain about schools. Klain demurred, saying that Congress must allocate billions in funding for schools before many of them can reopen.

“We need Congress to pass that plan so we can do the kinds of things you need to do so that the schools can be safe, so the teachers can be safe, so the students can be safe—sadly, it costs money,” said Klain.

Chicago Public Schools, though, has already implemented many of the mitigation strategies that government planners have in mind, and the district believes teachers can safely go back to class. Officials have good reason to think this: Outside major cities, many schools—including a great number of private schools that lack easy access to government dollars—have been open since at least September, and there’s simply no evidence of widespread disease in classrooms. Schools have not played host to superspreader events, and there’s little reason to think that students are infecting their teachers. Even the CDC, which is hardly known for taking an incautious approach to resuming normal life, says that schools can reopen safely.

Try telling that to teachers unions: Their response is thunderous denial that schools are safe enough yet. In fact, Chicago teachers are now engaged in what the district has described as an “illegal strike” to disrupt the city’s plan to reopen schools on February 1. The strike has actually forced Chicago preschools—which were open already—to close down because the teachers don’t plan to show up.

“As a result, we have no choice but to ask parents to keep your children home [Wednesday],” said the district in a statement. “We are greatly concerned for our youngest and highest-need students, who are suddenly without a safe, in-person learning option, and are continuing to make all possible efforts to reach an agreement that addresses the union’s priorities and provides families a much-needed resolution.”

Thanks to the Chicago Teachers Union’s efforts, city schools are even more shut down than they were a week ago. But the union is perfectly content to hold the city hostage for as long as possible. Its Twitter account recently released a video of “rank-and-file dance teachers” expressing their opposition to reopening through the medium of dance.

National teachers union boss Randi Weingarten, president of the American Federation of Teachers, said that she stands behind CTU “100 percent.” And if Biden disagrees with the teachers unions, he certainly isn’t saying so. (His incoming deputy education secretary fought tooth and nail to keep San Diego schools closed.)

The administration’s evasiveness on the question of school reopenings must be demoralizing for U.S. families who desperately want their children back in school and accept the scientific consensus that this can and should be done right now. The teachers unions have made it perfectly clear that they will thwart reopening plans, not just this month and next, but also in the fall, and perhaps in 2022 as well. In Fairfax, Virginia, a teachers union president recently asserted that she would keep kids out of school at least three days each week, even if school employees had been vaccinated.

Many of the public education system’s neediest students have now been at home, suffering through the farce of virtual learning, for nearly an entire year. With no powerful public union on their side, they have truly become the unheard. They deserve better choices than this.

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In Unprecedented Move, TD Ameritrade Puts “Restrictions” On Transactions In GME, AMC

In Unprecedented Move, TD Ameritrade Puts “Restrictions” On Transactions In GME, AMC

With the move higher in GME seemingly unstoppable…

… and with the SEC silent and refusing to step in and bailout the millions of shorts who remain trampled by the short squeeze stampede, the exchanges have decided to step in and moments ago TD Ameritrade was the first brokerage to announce that “in the interest of mitigating risk for our company and clients”, the company has put in place several restrictions in GME, AMC and other securities.

The brokerage said that it imposed these unprecedented unilateral – as in not mandated by either a regulator or the government – actions “out of an abundance of caution amid unprecedented market conditions and other factors.”

Expect many more exchanges to follow suit.

Meanwhile, with nobody there to bail them out, the basket of top hedge fund favorites, the Goldman hedge fund VIP stock basket, is plumbing new lows as fears of wholesale liquidations grow as the Goldman basket of most shorted names keeps rising ever higher (just as we said last November would happen).

Tyler Durden
Wed, 01/27/2021 – 11:44

via ZeroHedge News https://ift.tt/3t3VzXR Tyler Durden

Rand Paul: Dems Are “Angry, Unhinged, Deranged By Their Hatred” Of Trump

Rand Paul: Dems Are “Angry, Unhinged, Deranged By Their Hatred” Of Trump

Authored by Steve Watson via Summit News,

Senator Rand Paul argued against the impeachment of Donald Trump Tuesday, urging that “Democrats are about to drag our great country down into the gutter of rancor and vitriol the likes of which has never been seen in our nation’s history.”

Paul proclaimed that Democrats are “angry, unhinged partisans, deranged by their hatred of the former president.”

“Shame on those who seek blame and revenge, and who choose to pervert a constitutional process while doing so,” Paul said on the Senate floor, adding “I want this body on record — every last person here.”

“It’s almost as if they have no ability to exist except in opposition to Donald Trump” Paul declared, explaining that they are more guilty of ‘incitement’ than Trump could be.

Watch:

“No Democrat will honestly ask whether Bernie Sanders incited the shooter that nearly killed Steve Scalise,” Paul said, adding “No Democrat will ask whether Maxine Waters incited violence when she literally told her supporters to confront Trump officials in public.”

Paul further stated that while he voted against challenging the electoral college certification of the election, it is beyond the pale to attempt to cancel lawmakers who did.

“I disagreed. I don’t think Congress should overturn the Electoral College but impeaching or censoring, or expelling a member of Congress you disagree with? Is the truth so narrow that only you know the truth?” the Senator noted, in a reference to voter fraud.

Paul’s speech was part of an effort by the Senator to force a vote on the constitutionality of the impeachment trial.

When all was said and done, 45 Republicans voted with Paul, against the impeachment trial.

This means that 5 Republicans in the Senate side with Democrats on the impeachment. Those Senators are Mitt Romney of Utah, Ben Sasse of Nebraska, Susan Collins of Maine, Lisa Murkowski of Alaska and Pat Toomey of Pennsylvania.

Say their names.

Senator Paul noted that given that at least 17 Republicans would have to vote with Democrats, the vote “shows that impeachment is dead on arrival.”

“If you voted that it was unconstitutional then how in the world would you ever hope to convict somebody for this?” Paul asked, adding ,”45 of us, almost the entire caucus, 95% of the caucus, voted that the whole proceeding was unconstitutional.”

“This is a big victory for us. Democrats can beat this partisan horse as long as they want — this vote indicates it’s over, the trial is all over,” Paul declared.

Tyler Durden
Wed, 01/27/2021 – 11:34

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President Biden Should Tell Chicago Teachers To Return to School

krtphotoslive874076

If President Joe Biden really wanted to unite the country at this moment of profound political crisis and existential dread, a powerful gesture is available to him. He could earn the appreciation of millions of parents by simply asserting that public school teachers—including those currently on strike in Chicago—must return to their classrooms.

Unfortunately, Biden and his surrogates have repeatedly sidestepped questions from reporters, giving no indication that the administration will defy the politically powerful teachers unions currently waging a quixotic campaign to keep schools closed for as long as possible.

“It seems like Biden is refusing to acknowledge the fact that there is increasingly a conflict between school districts that are trying to make schools safe so kids can get back to in-class learning with PPE and better ventilation and more, and teachers unions who are concerned about their teachers getting COVID and are basically just refusing what the health officials say they should be doing,” said CNN’s Jake Tapper on his program Tuesday evening.

Erin Burnett, another CNN anchor, asked White House Chief of Staff Ron Klain about schools. Klain demurred, saying that Congress must allocate billions in funding for schools before many of them can reopen.

“We need Congress to pass that plan so we can do the kinds of things you need to do so that the schools can be safe, so the teachers can be safe, so the students can be safe—sadly, it costs money,” said Klain.

Chicago Public Schools, though, has already implemented many of the mitigation strategies that government planners have in mind, and the district believes teachers can safely go back to class. Officials have good reason to think this: Outside major cities, many schools—including a great number of private schools that lack easy access to government dollars—have been open since at least September, and there’s simply no evidence of widespread disease in classrooms. Schools have not played host to superspreader events, and there’s little reason to think that students are infecting their teachers. Even the CDC, which is hardly known for taking an incautious approach to resuming normal life, says that schools can reopen safely.

Try telling that to teachers unions: Their response is thunderous denial that schools are safe enough yet. In fact, Chicago teachers are now engaged in what the district has described as an “illegal strike” to disrupt the city’s plan to reopen schools on February 1. The strike has actually forced Chicago preschools—which were open already—to close down because the teachers don’t plan to show up.

“As a result, we have no choice but to ask parents to keep your children home [Wednesday],” said the district in a statement. “We are greatly concerned for our youngest and highest-need students, who are suddenly without a safe, in-person learning option, and are continuing to make all possible efforts to reach an agreement that addresses the union’s priorities and provides families a much-needed resolution.”

Thanks to the Chicago Teachers Union’s efforts, city schools are even more shut down than they were a week ago. But the union is perfectly content to hold the city hostage for as long as possible. Its Twitter account recently released a video of “rank-and-file dance teachers” expressing their opposition to reopening through the medium of dance.

National teachers union boss Randi Weingarten, president of the American Federation of Teachers, said that she stands behind CTU “100 percent.” And if Biden disagrees with the teachers unions, he certainly isn’t saying so. (His incoming deputy education secretary fought tooth and nail to keep San Diego schools closed.)

The administration’s evasiveness on the question of school reopenings must be demoralizing for U.S. families who desperately want their children back in school and accept the scientific consensus that this can and should be done right now. The teachers unions have made it perfectly clear that they will thwart reopening plans, not just this month and next, but also in the fall, and perhaps in 2022 as well. In Fairfax, Virginia, a teachers union president recently asserted that she would keep kids out of school at least three days each week, even if school employees had been vaccinated.

Many of the public education system’s neediest students have now been at home, suffering through the farce of virtual learning, for nearly an entire year. With no powerful public union on their side, they have truly become the unheard. They deserve better choices than this.

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Japan, EU Desperate For More COVID Jabs As Global Cases Top 100MM: Live Updates

Japan, EU Desperate For More COVID Jabs As Global Cases Top 100MM: Live Updates

Summary:

  • EU & AstraZeneca fight
  • Japan agrees to make AZ vaccines
  • Biden bans “Chinese virus” phrase
  • Sanofi to use its facilities to build BioNTech-Pfizer drug
  • Indonesia sees deadliest day yet
  • Israel to vaccinate all Olympic athletese by Msy
  • India reports nearly 13K new infections
  • Tokyo reports under 1K

* * *

As far as markets are concerned, the focus on Wednesday was on shares of GameStop and the epic short squeeze inspired by Wall Street Bets, the popular subreddit that for years has served as a venue for amateur traders, as well as a compendium of horror stories about traders losing massive sums on long-shot bets.

While the action in penny-stock land offered a badly needed distraction, the COVID-19 outbreak continues to rage across the world. In the US, the total number of cases has topped 25.4MM, the highest single-country total in the world. Meanwhile, worldwide, the number of confirmed cases has topped 100MM. Deaths, 425K (for the US) and 2.2MM (for the world).

New cases continued to fall across all 4 regions of the US, although deaths ticked higher following a brief dip.

Meanwhile, the US has become the first country to hit 25MM cases, as we mentioned above.

The number of patients hospitalized with COVID is falling almost everywhere across the country.

Following in the footsteps of the US, the UK has imposed a 10-day quarantine on arrivals from COVID hot spots, according to local media reports.

As the drama over AstraZeneca’s vaccine intensifies, vaccine news on Wednesday wasn’t all bad. We’re seeing some good news on the vaccine front as well. For example: Pharma giant Sanofi has agreed to produce millions of doses of the BioNTech and Pfizer coronavirus vaccine in an unusual collaboration to try and speed up the production of vaccines. The French drugmaker will allow Germany’s BioNTech access to all of its facilities in Frankfurt, which will start to deliver doses this summer, Sanofi said in a statement Wednesday. The deal will produce more than 125 million doses of the messenger RNA vaccine for the European Union.

“Sanofi’s move certainly suggests this is possible”” said Sam Fazeli, an analyst at Bloomberg Intelligence.

Desperate to build up vaccine stocks of its own, Japan is preparing to produce AstraZeneca COVID shots as it grows desperate to secure enough doses for the country’s population of 126MM as global supply shortages worse, Nikkei reports.

Joe Biden, meanwhile, has banned using the phrase “China Virus” as part of a memorandum condemning racism, xenophobia and intolerance against Asian Americans in the US, while praising the Asian and Pacific communities for their contribution to combating the COVID-19 pandemic.

Here’s some more COVID news from overnight and Wednesday morning:

  • Indonesia logs its deadliest day of the pandemic so far, with 387 COVID-19 deaths in the past 24 hours, and reports 11,948 new cases. The country’s totals stand at 1,024,298 cases, including 11,948 deaths (Source: Nikkei).
  • Israel intends to have all its athletes due to compete at the Tokyo Olympics vaccinated by May, it’s National Olympic Committee says amid a global debate over whether athletes should be given priority as shots become available (Source: Nikkei)..
  • A vaccine developed by India’s Bharat Biotech and a government research institute is likely to be effective against the U.K. strain, according to a study of 26 participants shared by the company (Source: Nikkei).
  • Tokyo reports 973 new infections, down from 1,026 a day earlier, with the number of patients in serious condition rising by 11 to 159 (Source: Nikkei).
  • India reports 12,689 cases in the last 24 hours, up from the eight-month low of 9,102 recorded the previous day, bringing the country’s total to 10.69 million (Source: Nikkei).

* * * *

Finally, as the world tries to determine how long various vaccination programs will last, the Economist Group has determined that China and India will see their programs stretch until late 2022 due to the size of their populations and more than 85 poor countries will not have widespread access to vaccines before 2023.

Tyler Durden
Wed, 01/27/2021 – 11:18

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Putin Hails Extension Of Key Nuclear Treaty “A Step In Right Direction” With US

Putin Hails Extension Of Key Nuclear Treaty “A Step In Right Direction” With US

With just days to go before its expiration next month, the United States and Russia struck a deal to extend the landmark New START treaty, which is the last nuclear arms control agreement between to the two former Cold War rivals.

Shortly after their first phone call on Tuesday between Presidents Biden and Putin in which the two discussed a range of sensitive topics which have plagued relations the AFP reported that Putin formally submitted a bill for Russian parliament to extend New START by five years.

“The presidents expressed satisfaction following today’s exchange of diplomatic notes on an agreement to extend the New START Treaty,” Putin’s office announced following the call. Russian parliament has since formally approved its five year extension.

The Kremlin noted that the “sides will finalize, within days, procedures needed to ensure further functioning of this major international mechanism of reciprocal limitation of nuclear missile arsenals,” according to TASS.

Russian parliament quickly approved the extension on Wednesday:

Both houses of parliament voted unanimously to extend the New START treaty for five years, a day after a phone call between U.S. President Joe Biden and Russian President Vladimir Putin. The Kremlin said they agreed to complete the necessary extension procedures in the next few days.

While the White House did not immediately confirm, last week it was announced that Biden is willing to see a five year extension with no preconditions. “The State Duma voted unanimously to extend the New START treaty for five years,” AP noted separately.

According to Reuters on Tuesday, “Asked why Washington had not explicitly said an agreement had been reached, a second U.S. official, also on condition of anonymity, said some steps were needed, including approval by the Duma, Russia’s lower house of parliament.” On the US side the treaty doesn’t require legislative approval for extension.

The White House readout said of the Biden-Putin phone call that “They discussed both countries’ willingness to extend New START for five years, agreeing to have their teams work urgently to complete the extension by February 5th.”

During his address to the World Economic Forum’s on Wednesday, Putin announced that the 5-year New START extension is “a step in the right direction,” but also urged more to be done.

“The situation can still develop unpredictably and uncontrollably if we sit on our hands,” he warned in his virtual address to the Davos summit.

Tyler Durden
Wed, 01/27/2021 – 11:00

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Lebowitz: The Fed’s Ever-Growing Golden Footprint

Lebowitz: The Fed’s Ever-Growing Golden Footprint

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

A special thank you to Alexander Stahel for providing us historical data on real interest rates.

What is a Dollar?

The value of a dollar is a figment of your imagination. A “greenback” is a worthless piece of paper backed by an intangible promise- the “full faith and credit” of the U.S. government. Its value rests on a necessary belief that one can transact with it today and tomorrow. Therein lies the value of any fiat currency.

Similarly, gold has little tangible value other than what we ascribe to it. Gold is not currently an authorized currency in any developed nation. But, it is held in proportionally small amounts by many governments as an informal reserve. Besides opinions of worth, the difference between the dollar and gold is gold has provided a means of storing wealth and transacting for millennia. Gold is and has always been the antithesis of fiat currency. There are important differences, such as elasticity, storage, and transact-ability that we will not review in this article.

Decades of irresponsible fiscal spending and monetary tomfoolery slowly but surely reduce the dollar’s value. The loss of its value is not perceptible to most as a dollar is still worth a dollar. For those on the lookout, however, the price of gold is sending a strong message.

The message is not in the price of gold per se but its strong correlation to destructive fiscal and monetary policies.

Trust in the Dollar

The U.S. dollar is the world’s most trusted currency. Even America’s most ardent enemies transact in dollars and hold them as reserves.

For the last 30 years, the U.S. government has run continual deficits requiring ever greater assistance from the Fed to fund it. The Fed works their magic by adjusting the nation’s money supply to manage interest rates and keep interest expenses manageable.

For many years, as shown below, the monetary base was approximately 5% of the nation’s annual economic output. Starting in 2008, however, the Fed took much bolder steps to push interest rates lower. Their actions ensured the government could sustain recurring outsized deficits. Equally important, corporate and private borrowers can service mounting debt levels.

With short-term rates lowered to zero in 2008 and traditional monetary tools not affecting longer-term rates, the Fed introduced QE. QE requires large amounts of Fed purchases of notes and bonds to put downward pressure on the entire yield curve.

Successive rounds of QE occurred well past the end of the financial crisis and are happening again on a grander scale today. The Fed’s goal is to allow the government and other debt holders to fund at low-interest rates. Essentially they need to flood the system with money to make money cheap.

Real Interest Rates

In a free market, the price of a good or service should be commensurate with the supply and demand of the good or service.

When the money supply is manipulated, prices stray from what supply and demand curves say the price should be.

A current example is U.S. Treasury yields or the price of money. Rational lenders/investors should always demand a positive yield accounting for inflation and risk. If not, they lose purchasing power and are better off not lending. Accordingly, the yield on Treasury debt should always equal future inflation expectations plus a risk premium.

The current yield on the 5-year Treasury note is 0.45%. 5-year inflation expectations are currently 2.18%. Even if we assume zero risks, the yield is at least 2.17% below what any rational investor should demand. The -2.17% difference between the nominal rate and inflation rate is called the real rate.

The level of real interest rates is a sturdy gauge of the weight of Federal Reserve policy. If the Fed is treading lightly and not distorting markets, real rates should be positive. The more the Fed manipulates markets from their natural rates, the more negative real rates become.

In this vein, we can analyze the price of gold and real interest rates to help decipher what gold prices may be signaling.

Gold’s Correlation to the Fed’s Footprint

When real rates are positive, the Fed is not excessively interfering in the pricing of interest rates. However, as they approach negatively and ultimately fall below zero, the impact, or degree of manipulation, is more noticeable.

Linking real rates to the degree of central bank action form the basis on which we can look at the dollar’s value through the prism of gold.

The first graph below shows gold has trended similarly to the monetary base.

The next set of scatter plots are more compelling. They tell the story of how the price of gold has become increasingly correlated to real yields as they decline. Said differently, gold is growing more positively correlated to the size of the Fed’s footprint.

The three scatter plots break down the relationship into three-time horizons as shown below.

  • The first graph, the Pre QE period, covers 1982-2007. During this period, real yields averaged +3.73%. The R-squared of .0093 shows no correlation.

  • The second graph covers Financial Crisis-related QE, 2008-2017. During this period, real yields averaged +0.77%. The R-squared of .3174 shows a moderate correlation.

  • The last graph, the QE2 Era, covers the period after the Fed started reducing their balance sheet and then sharply increasing it in late 2019. During this period, real yields averaged +0.00%, with plenty of instances of negative real yields. The R-squared of .7865 shows a significant correlation.

Summary

We repeat the last line of the introduction.

The message is not in the price of gold per se but its strong correlation to destructive fiscal and monetary policies. 

Will such actions continue? Will the Fed continue to devalue the dollar?

As the chart below shows, it sadly appears that the Fed’s destructive role is only likely to grow in importance.

Tyler Durden
Wed, 01/27/2021 – 10:40

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