UCLA Academic Freedom Committee Statement Related to the Gordon Klein Controversy

Just posted by the UCLA Academic Senate Committee on Academic Freedom, about the controversy discussed here on June 10:

Statement of the Academic Freedom Committee

June 30, 2020

In response to a recent controversy surrounding an e-mail reply to a student by Gordon Klein (a Lecturer in Accounting at the Anderson School), the UCLA Senate Committee on Academic Freedom underlines all instructors’ freedom (protected by APM-010) to express their views on grading policy as they determine to be appropriate.

Some people may well disagree with Prof. Klein’s views, and think that he should have responded differently to a student’s request that the grading structure be changed to “exercise compassion and leniency with Black students in our major.” But instructors are entitled and empowered to say “no” to such requests;[1] and, just as students have every right to express their views on such matters to faculty and to others, instructors are entitled to explain their views in turn to students. When any of us ask people to do things, especially based on a moral or political argument about current events, those people are entitled to respond with their own moral or political views.

The process of evaluating the situation is proceeding at the Anderson School, and our committee has no direct role in that process. Our concern instead is that any public announcement that an instructor is being placed on administrative leave for what appears to be a particular statement—whether the statement happened in class, in an e-mail responding to a student, on social media, or wherever else—creates a chilling effect for other instructors, especially untenured ones. It is the committee’s role to try to prevent such chilling effects.

An academic institution like UCLA must remain a place for the expression of a wide diversity of views and interpretations. It should also be a site of vigorous debate—including by students, by faculty, and by others—so that those exposed to or participating in these discussions have the opportunity to hear a range of opinions as they formulate their own views.

[1] See, e.g., Academic Senate Memo on Spring 2020 Final Exams, which reaffirms that instructors have “the flexibility to change their method of final assessments” so long as the final grade “reflect[s] the student’s achievement in the course” and is “based upon adequate evaluation of the achievement,” but does not require instructors to make any particular changes.

Disclosure: I am one of the several members of the Committee.

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The Roberts Court Slowly Inters Justice Kennedy’s Ephemeral “Jurisprudence of Doubt”

Two years ago, Justice Kennedy announced that he would retire from the Supreme Court. One of my earliest thoughts was, “I will never have to edit another Kennedy opinion for the casebook!” My follow-up thought was, “How long will I have to keep the Kennedy opinions in the casebook, once they are overruled or whittled away.” The whittling away has already begun. The Roberts Court is slowly, but surely interring Justice Kennedy’s ephemeral “jurisprudence of doubt.” Blue June has already buried at least three precedents with Justice Kennedy in the majority: Boumediene v. BushWhole Woman’s Health, and Footnote 3 of Trinity Lutheran.

Boumediene v. Bush

Boumediene suffered two major blows during Blue June. The first hit came in DHS v. Thuraissigiam (see here and here). Justice Alito’s majority required a very precise fit between history and the Petitioner’s claim.

Despite pages of rhetoric, the dissent is unable to cite a single pre-1789 habeas case in which a court ordered relief that was anything like what respondent seeks here.

Justice Kennedy’s 2008 majority opinion relied on history in a very fluid fashion. In dissent, Justice Sotomayor wrote that Boumediene “never demanded the kind of precise factual match with pre-1789 case law that today’s Court demands.” She’s right.

As I read Thuraissigiam, the Court has closed the door to any future expansion of the Suspension Clause jurisprudence, unless there is a close analogue to historical practice in 1789. Indeed, Mike Dorf finds an even greater limitation:

In both St. Cyr and Boumediene v. Bush, the Supreme Court said that the Suspension Clause protects a right to habeas that is “at the absolute minimum” as expansive as the scope of habeas in 1789, leaving open the possibility of further expansion. Justice Alito’s opinion (1) finds that the scope in 1789 does not benefit Thuraissigiam and (2) does not go beyond that minimum.

The Court has now rejected any possible “evolving” notion of habeas. The Great Writ is solidified in amber.

Boumediene took another hit in a sleeper case of the term, Agency for Int’l Development v. Alliance for Open Society. Justice Kavanaugh’s nine-page decision resolved a really important constitutional question with very little fanfare. He wrote:

First, it is long settled as a matter of American constitutional law that foreign citizens outside U. S. territory do not possess rights under the U. S. Constitution. Plaintiffs do not dispute that fundamental principle. Tr. of Oral Arg. 58–59; see, e.g., Boumediene v. Bush, 553 U. S. 723, 770– 771 (2008); Hamdi v. Rumsfeld, 542 U. S. 507, 558–559 (2004) (Scalia, J., dissenting); United States v. Verdugo-Urquidez, 494 U. S. 259, 265–275 (1990); Johnson v. Eisentrager, 339 U. S. 763, 784 (1950); United States ex rel. Turner v. Williams, 194 U. S. 279, 292 (1904); U. S. Const., Preamble.

Justice Kavanaugh posed this precise question during oral argument:

JUSTICE KAVANAUGH:  Good morning, counsel. I want to clarify, first, one thing from your colloquy with Justice Ginsburg. You agree, I assume, that unaffiliated foreign entities acting abroad have no constitutional rights under this Court’s precedents.

MR. BOWKER: We do, Your Honor.

This concession was unwise. And I also think it was wrong.

Justice Breyer’s dissent explains the Court has never actually reached this sweeping conclusion.

Even taken on its own terms, the majority’s blanket assertion about the extraterritorial reach of our Constitution does not reflect the current state of the law. The idea that foreign citizens abroad never have constitutional rights is not a “bedrock” legal principle. At most, one might say that they are unlikely to enjoy very often extraterritorial protection under the Constitution. Or one might say that the matter is undecided. But this Court has studiously avoided establishing an absolute rule that forecloses that protection in all circumstances.

Breyer explains that Boumediene, which Kavanaugh cited, rejects such a categorical rule.

Nor do the cases that the majority cites support an absolute rule. See ante, at 3. The exhaustive review of our precedents that we conducted in Boumediene v. Bush (2008), pointed to the opposite conclusion. In Boumediene, we rejected the Government’s argument that our decision in Johnson v. Eisentrager, (1950),”adopted a formalistic” test “for determining the reach” of constitutional protection to foreign citizens on foreign soil. This is to say, we rejected the position that the majority propounds today. Its “constricted reading” of Eisentrager and our other precedents is not the law. See Boumediene, 553 U. S., at 764.

The law, we confirmed in Boumediene, is that constitutional “questions of extraterritoriality turn on objective factors and practical concerns” present in a given case, “not formalism” of the sort the majority invokes today.

Well, with AMK in the middle, Boumediene rejected “formalism.” But now “formalism” is the law with JGR in the middle. And five votes endorse Justice Jackson’s observation from Eisenstrager.

Boumediene is basically a dead letter. Never overruled, but currently interred.

Whole Woman’s Health v. Hellerstedt

Whole Woman’s Health was decided in June 2016, shortly after Justice Scalia passed away. The vote was 5-3. Justice Breyer’s majority opinion expanded upon the framework from Planned Parenthood v. Casey: courts should balance two factors: (1) whether the law imposed an “undue burden” on abortion access and (2) whether the law provides an actual benefits. Of course, Justice Kennedy assigned that majority opinion to Justice Breyer. And Kennedy no doubt realized that Breyer was departing from Casey. But 2016 was a bizarre year. Justice Kennedy also reversed his own opinion on affirmative action from Fisher I to Fisher II, that conflicted with his vote in the Michigan affirmative action cases. In any event, 2016 was so four years ago.

In June Medical, Chief Justice Roberts vote to uphold the Louisiana abortion law–and only the Louisiana abortion law. His concurrence casts serious doubt on Whole Woman’s Health. Indeed, he seems to suggest that WWH departed from Casey. Yesterday, I noted:

Going forward, there are five votes to limit the Court’s abortion framework to consider a a law’s burdens, without weighing the law’s benefits.  The Chief has effectively overruled Whole Woman’s Health to the extent it departs from Casey. The Chief didn’t swing to the left; at most, he feinted left for this Blue June.

For reasons unknown, Roberts considers the Casey plurality (three votes) a valid precedent, but the WWH majority (five votes) is not a valid precedent. In any event, Justice Kennedy’s 2017 vote on abortion will be interred. But his 1992 vote on abortion is now, apparently, settled law. Go figure.

Trinity Lutheran v. Comer—Footnote 3

The vote in Trinity Lutheran was deceiving. On its face, the Court split by a 7-2 vote. But the majority was fractured. Justice Breyer only concurred in judgment. Chief Justice Roberts, and Justice Kennedy, Alito, and Kagan joined the majority opinion in full. And Justices Thomas and Gorusch joined the majority opinion, except for Footnote 3. Footnote 3 stated:

This case involves express discrimination based on religious identity with respect to playground resurfacing. We do not address religious uses of funding or other forms of discrimination.

In other words, Trinity Lutheran only concerned a case in which the state denies funding to the church because of its status as a house of worship. The case did not involve a denial of funding to the church because it would use money for “religious uses.” For example, instead of using funds to purchase tire scraps for the playground, the church could purchase funds to purchase books for religious instruction.

In a partial concurrence, Justice Gorsuch, joined by Justice Thomas, wrote that this distinction is flimsy.

First, the Court leaves open the possibility a useful distinction might be drawn between laws that discriminate on the basis of religious status and religious use. Respectfully, I harbor doubts about the stability of such a line.

In any event, the bulk of Trinity Lutheran was precedent, but Footnote 3 was not; it only garnered four votes. And could be disregarded just as quickly. Fast-forward to today, with Espinoza. Chief Justice Roberts wrote a majority opinion that was joined in full.

The Chief flagged the status/use distinction from Trinity Lutheran:

Some Members of the Court, moreover, have questioned whether there is a meaningful distinction between discrimination based on use or conduct and that based on status. See Trinity Lutheran, (GORSUCH, J., joined by THOMAS, J., concurring in part). We acknowledge the point but need not examine it here. It is enough in this case to conclude that strict scrutiny applies under Trinity Lutheran because Montana’s no-aid provision discriminates based on religious status.

Later, Roberts suggested that he was not tied to Footnote 3.

A plurality declined to address discrimination with respect to “religious uses of funding or other forms of discrimination.” Trinity Lutheran at n. 3. The plurality saw no need to consider such concerns because Missouri had expressly discriminated “based on religious identity,” which was enough to invalidate the state policy without addressing how government funds were used.

The key word is “plurality.” Not a majority. It seems that the Chief added Footnote 3 in Trinity Lutheran to assuage Justices Kagan and/or Kennedy. For the Chief, FN 3 was just another move in a game of 87-dimensional chess. He sacrificed a pawn to set up the Espinoza checkmate. Now, three years later, he no longer needs Justice Kennedy’s vote, and will not need to secure Justice Kagan’s on this case.

Trinity, and now Espinoza, also move away from the Rehnquist-Court era decision, Locke v. Davey. Michael Moreland observes that “Chief Justice Rehnquist wrote a narrow, almost case-specific holding (a characteristic Rehnquistian move)” in that case.

Justice Breyer seems miffed that the Court has abandoned the “play in the joints” line from Locke:

Although the majority refers in passing to the “play in the joints” between that which the Establishment Clause forbids and that which the Free Exercise Clause requires, its holding leaves that doctrine a shadow of its former self.

He’s right. There is no longer any need to appease Anthony Kennedy or Sandra Day O’Connor.

Going forward, I presumptively treat any 5-4 decision with Kennedy in the majority as persuasive, at best.

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UCLA Academic Freedom Committee Statement Related to the Gordon Klein Controversy

Just posted by the UCLA Academic Senate Committee on Academic Freedom, about the controversy discussed here on June 10:

Statement of the Academic Freedom Committee

June 30, 2020

In response to a recent controversy surrounding an e-mail reply to a student by Gordon Klein (a Lecturer in Accounting at the Anderson School), the UCLA Senate Committee on Academic Freedom underlines all instructors’ freedom (protected by APM-010) to express their views on grading policy as they determine to be appropriate.

Some people may well disagree with Prof. Klein’s views, and think that he should have responded differently to a student’s request that the grading structure be changed to “exercise compassion and leniency with Black students in our major.” But instructors are entitled and empowered to say “no” to such requests;[1] and, just as students have every right to express their views on such matters to faculty and to others, instructors are entitled to explain their views in turn to students. When any of us ask people to do things, especially based on a moral or political argument about current events, those people are entitled to respond with their own moral or political views.

The process of evaluating the situation is proceeding at the Anderson School, and our committee has no direct role in that process. Our concern instead is that any public announcement that an instructor is being placed on administrative leave for what appears to be a particular statement—whether the statement happened in class, in an e-mail responding to a student, on social media, or wherever else—creates a chilling effect for other instructors, especially untenured ones. It is the committee’s role to try to prevent such chilling effects.

An academic institution like UCLA must remain a place for the expression of a wide diversity of views and interpretations. It should also be a site of vigorous debate—including by students, by faculty, and by others—so that those exposed to or participating in these discussions have the opportunity to hear a range of opinions as they formulate their own views.

[1] See, e.g., Academic Senate Memo on Spring 2020 Final Exams, which reaffirms that instructors have “the flexibility to change their method of final assessments” so long as the final grade “reflect[s] the student’s achievement in the course” and is “based upon adequate evaluation of the achievement,” but does not require instructors to make any particular changes.

Disclosure: I am one of the several members of the Committee.

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Marsha P. Johnson Probably Didn’t Start Stonewall, and Might Not Have Been Trans. Does It Matter?

sipaphotosnine609227

Head over to Google today and you’ll see one of its famous doodle sketches in the form of Marsha P. Johnson, the LGBT rights activist, with her signature flower crown, gender-bending ensemble, and wide smile.

In recent years, Johnson has been credited as a “trans woman of color” who started the Stonewall Riots and thus, in some sense, the LGBT rights movement. While it’s undeniable that she was a charismatic central figure in that story, it’s far from clear that she was one of the main instigators at Stonewall. Even more fraught: It’s far from clear she was trans. 

On one level, it doesn’t really matter. She was an inspiring person who fought for civil rights despite huge obstacles in her way, and that’s enough to celebrate. But being on the right side of history—as so many activists in the intersectional social justice space believe they are—doesn’t give you license to rewrite it. In the end, the facts matter, even when they are slightly less convenient for your narrative.

In the early morning hours of June 28, 1969, New York City police officers descended on the Stonewall Inn to conduct what had become their typical, humiliating, and brutal raids on gay establishments. Patrons weren’t having it. Several days of riots followed.

In popular culture, the Stonewall Riots are widely viewed as pivotal. But there’s also a mythic air to the protests. Folkloric tellings and retellings change with each passing year: Who spearheaded the charge against authority? Who threw that fateful first brick? Or was it a shot glass?

The answers to those questions largely remain unanswered, but in recent years one narrative has taken hold. The claim that it was “trans women of color“—especially Johnson—who led the uprising has been repeated uncritically by politicians, pundits, and in the national media. 

But it isn’t difficult to figure out that the Stonewall riots did not begin with Johnson. For one thing, Johnson said so herself. “I was uptown and I didn’t get downtown until about two o’clock. When I got downtown, the place was already on fire, and there was a raid already,” she told historian Eric Marcus in 1987. “The riots had already started.”

Yet in recent years, an alternate narrative has shifted from urban legend to indisputable fact. Johnson was “one of three individuals” who first “incited pushback against police,” writes Rolling Stone. “It started when Marsha P. Johnson cried ‘I got my civil rights!’ and threw a shot glass into a mirror,” says a Forbes contributor, whose piece was selected and promoted as an Editors’ Pick.

“Transgender women of color led the uprising at the Stonewall Inn 51 years ago on Sunday,” The New York Times claimed, though the paper later ghost-edited that line and appended a correction. 

What’s more, there’s no evidence Johnson used the term transgender for herself. Though it’s true that the term was not nearly as widespread as it is today, it wasn’t unheard of. And Johnson—who used both “he” and “she” pronouns, and wore both male and female clothing—identified as a drag queen, as well as “gay” and as a “transvestite.” To conflate those identities with transgenderism trivializes and misappropriates the unique struggles those communities face.

Intersectionality—while built around the well-intentioned idea that we should be vigilant and caring toward society’s most vulnerable—can end up encouraging activists to prioritize identity at the expense of the truth. Saying your movement was started by a “transgender woman of color” checks a lot of boxes and confers the proper legitimacy on your cause.

Exactly how Johnson identified shouldn’t really be the main focus, though present-day activists have placed undue emphasis on it. Johnson was a determined activist for the cause and a founding member of the Gay Liberation Front. 

We could all stand to learn from Johnson, whose chosen middle initial—”P”—stood for “Pay it no mind,” a common response she’d give those who’d inquire about her gender. She begged not to be put into a box. Today’s activists have done the opposite.

On a broader level, such retroactive reimagining of history makes it hard to actually learn from the past. “Stonewall Inn was not a very hospitable place to those who were then referred to as transsexuals or transvestites,” says James Kirchick, a visiting fellow at the Brookings Institution. “A lot of gay bars were segregated in that way, and a lot of gay bars were racially segregated, maybe not officially or legally, but unofficially certainly.” Those like Johnson, then, were often rejected by the community they wanted to join. Members of that same community have now co-opted and reimagined Johnson for their own purposes.

Put differently, you could say Johnson was likely one step ahead of her peers. But that was because she understood what it was like not to have a seat at the table, much less to be at the head of it. “In some ways,” writes journalist Andrew Sullivan at New York, “it was the rebellion of those with much more to lose that marked a shift in consciousness.” 

Perhaps ironically, the left has often led the charge against attempts to change history and decried the effects of such revisionism. When it comes to the debate around Confederate monuments, for instance, many left-leaning folks have rightly resisted false portrayals surrounding the circumstances in which those statues were erected. To rewrite the Civil War narrative, they say, is to erase a savage history of human suffering, one that we’re still trying to learn from today. 

It’s for that same reason that Johnson’s history—her actual history, to the extent that we can know it—should be told truthfully, and in full.

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Stock Market Suspiciously Healthy. The Federal Reserve Does All It Can to Keep Economic Reality From Setting In.

47721145_m

Despite 33 states with over 10 percent unemployment rates, gross domestic product quarterly dives of over 50 percent, and a resurgence of COVID-19 infection numbers making both those conditions seem unlikely to turn around soon, the stock market as a whole remains strangely healthy. The Dow Jones Industrial Average is actually up over 1,500 points since mid-March when the coronavirus shutdowns began in earnest (though still down more than twice that number of points from the optimistic beginning of 2020).

While ultimately the only sure reason why the stock market does what it does is “the people buying and selling stocks make decisions that lead to those prices,” one very likely reason those making such decisions seem to think staying in and even buying more is a good idea right now is a concerted government effort to socialize the risk inherent in buying stocks across the economy.

The establishment market-watchers at The Wall Street Journal spelled out this thesis yesterday: “Expectations that the U.S. Federal Reserve will keep injecting liquidity into the market have helped fuel rebounds each time fallout from the coronavirus pandemic have sparked selloffs,” with one analyst insisting that because of Fed policy, “There’s a safety net under the bond market and the equity market.”

This judgment that government policy wants to get stock buyers and sellers to ignore grim economic reality via what amounts in part to special favors to big corporations is widespread. One of the reasons why is the Federal Reserve’s eager buying up of corporate debt this year.

CNN reports some of the implications of that:

In a note to clients Monday, Goldman Sachs said the Fed’s announcement that it would buy corporate bonds in the primary and secondary markets was enough to quickly provide relief. “The mere presence of the backstops helped to restore the flow of private credit,” chief economist Jan Hatzius said.

Lip service to the idea that these policies create problems for those not getting the help is given, as CNN notes. (“There are fears that an ongoing commitment to corporate bond purchases could create a so-called ‘moral hazard,’ encouraging companies to borrow more from less-selective lenders on the expectation that Fed intervention would limit risks.”) But such considerations almost never stop the government from doing what it can to help out Big Money.

Hussein Sayed, chief market strategist at FXTM, was warning his clients this week, CNN reported, that “monetary policy stimulus which explains most of the recovery in asset prices from the March lows will become less effective going forward if it doesn’t translate into a rebound in economic activity and better prospects for corporate earnings.”

The Washington Post reminds us that the “central bank has said it launched the corporate debt program to support the markets,” although it’s “unclear what the implications of its actions will be” as “the Treasury Department has devoted $75 billion to the Fed’s two corporate credit facilities as part of a pot of money allocated by the Cares Act….The Fed has bought almost $429 million in individual bonds,” buying them both directly from the company and from investors or funds that already owned previously issued bonds.

Aaron Klein, policy director of the Center on Regulation and Markets at the Brookings Institution, is quoted in the Post asking: “Why is the solution buying Apple, Microsoft and Comcast debt? Or eBay or Google?…Is the problem in America that the holders of Apple stock need more help? Is the problem that investors in Google debt are likely to suffer catastrophic and unexpected losses from the covid shutdown?”

As Politico reported regarding this latest round of Federal Reserve corporate debt buying, “most of the debt has to be considered investment-grade by credit ratings services, meaning it carries minimal risk to investors. But otherwise eligible firms that have been downgraded a notch to junk status since late March will still be included in the program.” Even if no actual straight-up losses to the government (read: all of us) arise from such debt buying, their very existence distorts where investment and growth goes, to the advantage of big business’ being temporarily propped up.

As James Dorn of the Cato Institute further explained:

The promise of supporting corporate bond prices and making loans to highly leveraged companies undermines corrective market forces: real markets are supplanted by pseudo markets in which the central bank will be subsidizing distressed companies and politicizing the allocation of capital. Initially private investors may purchase more corporate debt, but if corporations use that credit to pay off existing debt, and do not invest in productive capital, losses may continue. Private investors then will have an incentive to offload their holdings to the SPV [the Fed’s “special purpose vehicle” for such debt buys], effectively socializing those losses.  Those who value private, free markets recognize that the Fed’s promise to revitalize corporate debt markets is, in reality, a step toward market socialism.

The Federal Reserve has since the 2008-09 economic crisis become more and more a holder of financial assets of all sorts, a change whose risks are detailed in this 2014 Reason feature, “How the Fed Got Huge,” by Jeffrey Rogers Hummel.

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Marsha P. Johnson Probably Didn’t Start Stonewall, and Might Not Have Been Trans. Does It Matter?

sipaphotosnine609227

Head over to Google today and you’ll see one of its famous doodle sketches in the form of Marsha P. Johnson, the LGBT rights activist, with her signature flower crown, gender-bending ensemble, and wide smile.

In recent years, Johnson has been credited as a “trans woman of color” who started the Stonewall Riots and thus, in some sense, the LGBT rights movement. While it’s undeniable that she was a charismatic central figure in that story, it’s far from clear that she was one of the main instigators at Stonewall. Even more fraught: It’s far from clear she was trans. 

On one level, it doesn’t really matter. She was an inspiring person who fought for civil rights despite huge obstacles in her way, and that’s enough to celebrate. But being on the right side of history—as so many activists in the intersectional social justice space believe they are—doesn’t give you license to rewrite it. In the end, the facts matter, even when they are slightly less convenient for your narrative.

In the early morning hours of June 28, 1969, New York City police officers descended on the Stonewall Inn to conduct what had become their typical, humiliating, and brutal raids on gay establishments. Patrons weren’t having it. Several days of riots followed.

In popular culture, the Stonewall Riots are widely viewed as pivotal. But there’s also a mythic air to the protests. Folkloric tellings and retellings change with each passing year: Who spearheaded the charge against authority? Who threw that fateful first brick? Or was it a shot glass?

The answers to those questions largely remain unanswered, but in recent years one narrative has taken hold. The claim that it was “trans women of color“—especially Johnson—who led the uprising has been repeated uncritically by politicians, pundits, and in the national media. 

But it isn’t difficult to figure out that the Stonewall riots did not begin with Johnson. For one thing, Johnson said so herself. “I was uptown and I didn’t get downtown until about two o’clock. When I got downtown, the place was already on fire, and there was a raid already,” she told historian Eric Marcus in 1987. “The riots had already started.”

Yet in recent years, an alternate narrative has shifted from urban legend to indisputable fact. Johnson was “one of three individuals” who first “incited pushback against police,” writes Rolling Stone. “It started when Marsha P. Johnson cried ‘I got my civil rights!’ and threw a shot glass into a mirror,” says a Forbes contributor, whose piece was selected and promoted as an Editors’ Pick.

“Transgender women of color led the uprising at the Stonewall Inn 51 years ago on Sunday,” The New York Times claimed, though the paper later ghost-edited that line and appended a correction. 

What’s more, there’s no evidence Johnson used the term transgender for herself. Though it’s true that the term was not nearly as widespread as it is today, it wasn’t unheard of. And Johnson—who used both “he” and “she” pronouns, and wore both male and female clothing—identified as a drag queen, as well as “gay” and as a “transvestite.” To conflate those identities with transgenderism trivializes and misappropriates the unique struggles those communities face.

Intersectionality—while built around the well-intentioned idea that we should be vigilant and caring toward society’s most vulnerable—can end up encouraging activists to prioritize identity at the expense of the truth. Saying your movement was started by a “transgender woman of color” checks a lot of boxes and confers the proper legitimacy on your cause.

Exactly how Johnson identified shouldn’t really be the main focus, though present-day activists have placed undue emphasis on it. Johnson was a determined activist for the cause and a founding member of the Gay Liberation Front. 

We could all stand to learn from Johnson, whose chosen middle initial—”P”—stood for “Pay it no mind,” a common response she’d give those who’d inquire about her gender. She begged not to be put into a box. Today’s activists have done the opposite.

On a broader level, such retroactive reimagining of history makes it hard to actually learn from the past. “Stonewall Inn was not a very hospitable place to those who were then referred to as transsexuals or transvestites,” says James Kirchick, a visiting fellow at the Brookings Institution. “A lot of gay bars were segregated in that way, and a lot of gay bars were racially segregated, maybe not officially or legally, but unofficially certainly.” Those like Johnson, then, were often rejected by the community they wanted to join. Members of that same community have now co-opted and reimagined Johnson for their own purposes.

Put differently, you could say Johnson was likely one step ahead of her peers. But that was because she understood what it was like not to have a seat at the table, much less to be at the head of it. “In some ways,” writes journalist Andrew Sullivan at New York, “it was the rebellion of those with much more to lose that marked a shift in consciousness.” 

Perhaps ironically, the left has often led the charge against attempts to change history and decried the effects of such revisionism. When it comes to the debate around Confederate monuments, for instance, many left-leaning folks have rightly resisted false portrayals surrounding the circumstances in which those statues were erected. To rewrite the Civil War narrative, they say, is to erase a savage history of human suffering, one that we’re still trying to learn from today. 

It’s for that same reason that Johnson’s history—her actual history, to the extent that we can know it—should be told truthfully, and in full.

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Stock Market Suspiciously Healthy. The Federal Reserve Does All It Can to Keep Economic Reality From Setting In.

47721145_m

Despite 33 states with over 10 percent unemployment rates, gross domestic product quarterly dives of over 50 percent, and a resurgence of COVID-19 infection numbers making both those conditions seem unlikely to turn around soon, the stock market as a whole remains strangely healthy. The Dow Jones Industrial Average is actually up over 1,500 points since mid-March when the coronavirus shutdowns began in earnest (though still down more than twice that number of points from the optimistic beginning of 2020).

While ultimately the only sure reason why the stock market does what it does is “the people buying and selling stocks make decisions that lead to those prices,” one very likely reason those making such decisions seem to think staying in and even buying more is a good idea right now is a concerted government effort to socialize the risk inherent in buying stocks across the economy.

The establishment market-watchers at The Wall Street Journal spelled out this thesis yesterday: “Expectations that the U.S. Federal Reserve will keep injecting liquidity into the market have helped fuel rebounds each time fallout from the coronavirus pandemic have sparked selloffs,” with one analyst insisting that because of Fed policy, “There’s a safety net under the bond market and the equity market.”

This judgment that government policy wants to get stock buyers and sellers to ignore grim economic reality via what amounts in part to special favors to big corporations is widespread. One of the reasons why is the Federal Reserve’s eager buying up of corporate debt this year.

CNN reports some of the implications of that:

In a note to clients Monday, Goldman Sachs said the Fed’s announcement that it would buy corporate bonds in the primary and secondary markets was enough to quickly provide relief. “The mere presence of the backstops helped to restore the flow of private credit,” chief economist Jan Hatzius said.

Lip service to the idea that these policies create problems for those not getting the help is given, as CNN notes. (“There are fears that an ongoing commitment to corporate bond purchases could create a so-called ‘moral hazard,’ encouraging companies to borrow more from less-selective lenders on the expectation that Fed intervention would limit risks.”) But such considerations almost never stop the government from doing what it can to help out Big Money.

Hussein Sayed, chief market strategist at FXTM, was warning his clients this week, CNN reported, that “monetary policy stimulus which explains most of the recovery in asset prices from the March lows will become less effective going forward if it doesn’t translate into a rebound in economic activity and better prospects for corporate earnings.”

The Washington Post reminds us that the “central bank has said it launched the corporate debt program to support the markets,” although it’s “unclear what the implications of its actions will be” as “the Treasury Department has devoted $75 billion to the Fed’s two corporate credit facilities as part of a pot of money allocated by the Cares Act….The Fed has bought almost $429 million in individual bonds,” buying them both directly from the company and from investors or funds that already owned previously issued bonds.

Aaron Klein, policy director of the Center on Regulation and Markets at the Brookings Institution, is quoted in the Post asking: “Why is the solution buying Apple, Microsoft and Comcast debt? Or eBay or Google?…Is the problem in America that the holders of Apple stock need more help? Is the problem that investors in Google debt are likely to suffer catastrophic and unexpected losses from the covid shutdown?”

As Politico reported regarding this latest round of Federal Reserve corporate debt buying, “most of the debt has to be considered investment-grade by credit ratings services, meaning it carries minimal risk to investors. But otherwise eligible firms that have been downgraded a notch to junk status since late March will still be included in the program.” Even if no actual straight-up losses to the government (read: all of us) arise from such debt buying, their very existence distorts where investment and growth goes, to the advantage of big business’ being temporarily propped up.

As James Dorn of the Cato Institute further explained:

The promise of supporting corporate bond prices and making loans to highly leveraged companies undermines corrective market forces: real markets are supplanted by pseudo markets in which the central bank will be subsidizing distressed companies and politicizing the allocation of capital. Initially private investors may purchase more corporate debt, but if corporations use that credit to pay off existing debt, and do not invest in productive capital, losses may continue. Private investors then will have an incentive to offload their holdings to the SPV [the Fed’s “special purpose vehicle” for such debt buys], effectively socializing those losses.  Those who value private, free markets recognize that the Fed’s promise to revitalize corporate debt markets is, in reality, a step toward market socialism.

The Federal Reserve has since the 2008-09 economic crisis become more and more a holder of financial assets of all sorts, a change whose risks are detailed in this 2014 Reason feature, “How the Fed Got Huge,” by Jeffrey Rogers Hummel.

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A Rosy End to Blue June

I have now finished reading the Court’s 92-page decision in Espinoza v. Montana Dept. of Revenue. (If you’d like a 21-page edited version, please email me: josh-at-josh-blackman-dot-com.) My final prediction for the pre-Corona cases was very, very wrong. I speculated that Chief Justice Roberts or Justice Breyer would write Espinoza, and reach some sort of narrow ruling. I completely whiffed here.

Chief Justice Roberts’s majority opinion is a full and resounding victory for the Petitioners. There is some uncertainty about the remedy–what exactly is the Montana Supreme Court supposed to do on remand? But Roberts touches all the bases, and does not squish out on any of the key points. I will have much more to say about the specific mechanics in later posts. (I still have several other posts still in the hopper about June Medical and Seila Law).

Here, I’d like to place Espinoza in the larger context of Blue June. To date, social conservatives lost every big case: immigration (DACA), abortion (June Medical), and Title VII (Bostock). And in each case, the Chief was in the majority with the Court’s four progressives. But on the last day of June, the Chief authored a solid opinion that will have tangible benefits for people of faith in 30-odd states. This decision puts Blaine Amendments nationwide in constitutional doubt. Coupled with the Chief’s whittling away of Whole Woman’s Health in June Medical, some conservatives may feel a shot of adrenaline. A rosy end to Blue June, indeed.

There are about eight remaining cases, including the Little Sisters of the Poor latest challenge to the ACA. On Sunday, I was fairly confident the Chief would hold the administration’s feet to the fire and demand some precise level of APA-inspired seppuku to disembowel the Obama-era regulations. But my predictions have shifted. I think the Court reverses the Third Circuit.

What about the tax return cases? After the Chief’s unitarian decision in Seila Law, I don’t think he’ll find that the House’s subpoena is enforceable. I still think he will split the difference and allow the state grand jury proceeding to go forward. Roberts knows well that the grand jury proceedings will likely not be unsealed until Trump is out of office, and can be indicted. At that point, no one will really care.

Finally, my prediction about the other case decided today was on point. Justice Ginsburg wrote the majority decision in Patent and Trademark Office v. Booking.com B. V. I’m sure she was happy to give her former clerk, Lisa Blatt, another win. It was an excellent argument.

Much more to come.

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A Rosy End to Blue June

I have now finished reading the Court’s 92-page decision in Espinoza v. Montana Dept. of Revenue. (If you’d like a 21-page edited version, please email me: josh-at-josh-blackman-dot-com.) My final prediction for the pre-Corona cases was very, very wrong. I speculated that Chief Justice Roberts or Justice Breyer would write Espinoza, and reach some sort of narrow ruling. I completely whiffed here.

Chief Justice Roberts’s majority opinion is full and resounding victory for the Petitioners. There is some uncertainty about the remedy–what exactly is the Montana Supreme Court supposed to do on remand? But Roberts touches all the bases, and does not squish out on any of the key points. I will have much more to say about the specific mechanics in later posts. (I still have several other posts still in the hopper about June Medical and Seila Law).

Here, I’d like to place Espinoza in the larger context of Blue June. To date, social conservatives lost every big case: immigration (DACA), abortion (June Medical), and Title VII (Bostock). And in each case, the Chief was in the majority with the Court’s four progressives. But on the last day of June, the Chief authored a solid opinion that will have tangible benefits for people of faith in 30-odd states. This decision puts Blaine Amendments nationwide in constitutional doubt. Coupled with the Chief’s whittling away of Whole Woman’s Health in June Medical, some conservatives may feel a shot of adrenaline. A rosy end to Blue June, indeed.

There are about eight remaining cases, including the Little Sisters of the Poor latest challenge to the ACA. On Sunday, I was fairly confident the Chief would hold the administration’s feet to the fire and demand some precise level of APA-inspired seppuku to disembowel the Obama-era regulations. But my predictions have shifted. I think the Court reverses the Third Circuit.

What about the tax return cases? After the Chief’s unitarian decision in Seila Law, I don’t think he’ll find that the House’s subpoena is enforceable. I still think he will split the difference and allow the state grand jury proceeding to go forward. Roberts knows well that the grand jury proceedings will likely not be unsealed until Trump is out of office, and can be indicted. At that point, no one will really care.

Finally, my prediction about the other case decided today was on point. Justice Ginsburg wrote the majority decision in Patent and Trademark Office v. Booking.com B. V. I’m sure she was happy to give her former clerk, Lisa Blatt, another W.

Much more to come.

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Joe Biden’s COVID Response Plan: More Money, More Masks, More Testing

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With the number of reported coronavirus cases surging in many parts of the country, former vice president Joe Biden took the opportunity on Tuesday to wag his own plans for dealing with the deadly pandemic—even though the plans themselves are mostly secondary.

Biden wants all Americans to wear face masks in public, have access to more testing, and get additional aid from the federal government if they cannot return to work for an extended period of time. Those and other ideas that the presumptive Democratic presidential nominee outlined are things that his campaign has been floating since March. But the real purpose of Tuesday’s speech from Wilmington, Delaware, was to draw a distinction between how a potential Biden administration would cope with the pandemic and how the Trump administration has handled it so far—and at a time when polls show most Americans disapprove of the current president’s handling of the crisis.

“Infections are on the rise. The threat of massive spikes that could overwhelm the health care system are on the horizon,” Biden said in one part of the speech addressed directly to Trump. “Mr. President, the crisis is real and it is surging. Promises and predictions and wishful thinking are doing the country no good.”

Biden has the high ground largely because he doesn’t have to put any of his plans to the test. Would a temporary $200-per-month boost to Social Security payments actually help Americans respond to the COVID-19 pandemic, or merely worsen the wealth imbalance created and maintained by entitlement programs? Would putting the federal government in charge of telling states when they can reopen parts of their economies prove more effective than the plans states have implemented on their own, or would it do even more damage than the lockdowns have already caused? Biden says he would sign an executive order to force all Americans to wear masks in public, but the enforcement of such a measure would still depend on local authorities—and, ultimately, on individuals, since the government can’t possibly police something like that.

In other realms, Biden has the advantage simply because of how poorly Trump has responded to the first major crisis of his presidency. After first downplaying the seriousness of the pandemic and then spending weeks touting unfounded potential cures, the president has pushed responsibility to state leaders, has called for less testing to be done, and has held indoor campaign rallies in defiance of the advice of public health experts.

“Americans social distanced and did their part to bend the curve, but Trump didn’t lead,” Biden said Tuesday.

Given the current context of the race and the pandemic, Biden’s specific plans likely don’t matter so much as the impression that he at least has a plan.

In more normal circumstances, there would be an opportunity for Republicans and others to challenge Biden’s plan to hire at least 100,000 federal workers to do testing and tracing, for example, particularly in light of the fact that Congress has already inflated the deficit to record highs. Putting the Occupational Safety and Health Administration in charge of setting social distancing rules for workplaces (and imposing fines for violations), as Biden is proposing, seems like a massive expansion of federal regulatory powers that would be unlikely to recede when the crisis passes. And Biden’s promise to make more aggressive use of the Defense Production Act to force companies to make more masks and other personal protective equipment would be a huge federal intrusion into the market without any clear indication that it would help.

But given Trump’s myriad failures and short attention span for substantive policy discussions, Biden’s throw-everything-at-the-wall approach seems to make political sense.  Near the end of his address on Tuesday, Biden promised to eventually release a more specific plan for what he would do to combat the coronavirus starting “the day after the election is decided.” That’s the plan that will matter—the one that will be rooted in the reality of the pandemic’s advance, the country’s fiscal standing, and the economy’s ability to weather the next few months.

For now, Biden just has to look more competent than the guy who spent last weekend carelessly mashing the retweet button.

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