Category: reason

Initial public offerings (IPOs) are booming these days. But instead of operating companies offering their shares publicly—like Airbnb or DoorDash, both of which went public in 2020—the IPO market these days is being driven by a different kind of vehicle: the special purpose acquisition company (SPAC). While demand for SPACs appears to be cooling down, the Securities and Exchange Commission’s (SEC) interest is heating up. As the SEC looks at SPACs, it must recognize the benefits of variety and innovation in IPO offerings to companies and investors.

To start, let’s consider what SPACs are and what may be making them popular. A SPAC’s purpose is to raise money in order to merge with an existing private company; it has no business of its own. The strength of the management team—often successful investors themselves—is the key selling feature. After the merger, also known as de-SPACing, the private company assumes the SPAC’s place as a public company. SPACs typically have two years to complete a deal, or they must return the money to the investors. 

The traditional IPO process takes about four to six months, not counting the time that a company spends preparing to start the process, and includes meetings with potential investors, known as a “roadshow,” intended to create demand for the offering and to help set the offering’s price. While the SPAC itself goes through a traditional IPO process, that process is simpler when there is no operating business to evaluate. And the private company that merges with the SPAC can avoid the costly and time-consuming process altogether by assuming the SPAC’s public company status. Private companies also have considerably more flexibility in talking about, and talking up, their business through the merger process than through the IPO process, adding to the SPAC transaction’s attractiveness. 

SPACs are not new, but recently they’ve become a much larger part of the market. About 100 SPAC mergers have been completed since 2018, involving well-known companies like DraftKings and Virgin Galactic. More than 240 SPACs went public in 2020. SPACs raised $81 billion last year, compared to $100 billion raised by traditional U.S. firm IPOs. And SPACs have dominated the IPO market so far in 2021, raising more than $95 billion and accounting for 70% of all IPOs. In addition to SPACs backed by well-known financiers, a number of SPACs have debuted with celebrity connections, including Peyton Manning, Shaquille O’Neal, and Jay-Z.

Despite signs that the SPAC boom is cooling down, the SEC’s interest is only growing. Following disclosure guidance and an investor bulletin in December 2020, the SEC issued three more statements on SPACs in March 2021: a statement from the Division of Corporation Finance, a statement from the acting chief accountant, and an investor alert. These statements address different parts of a SPAC’s life cycle, from IPO to merger, and include a warning to investors that “it is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment.” The SEC’s Division of Enforcement has also begun an inquiry of underwriters involved in the SPAC process. 

None of the SEC’s recent statements or bulletins impose new regulatory obligations with respect to SPACs, nor can they. But the SEC’s approval process for SPAC IPOs reportedly has slowed, even while fewer SPACs appear to be seeking approval. The reasons for the slowdown are not known—and there could be any number of reasons—but throwing up new hurdles to approval, where no new obligations have been imposed, runs afoul of the same limitations that should also prevent the SEC from regulating through its enforcement inquiry.

If the SEC chooses to change requirements that apply to SPACs, it should first recognize the benefits of variety and innovation in the IPO market. A diversity of offering types, and many paths to public company status, can better serve companies that have different capital structures and goals. While a SPAC merger may not be the right decision for every company, having the option adds depth to the public market. A SPAC provides a different path to public company status than a traditional IPO, but the result is the same: a public company subject to the SEC’s public company disclosure regime. 

This innovation benefits investors, too. As SEC Commissioner Hester Peirce recognizes, “We should welcome the addition of startup public companies that historically would have experienced their growth stage in the private markets, where retail investors are not permitted to participate.” SPACs may offer ordinary investors the chance to see bigger returns that are usually reserved for wealthy accredited investors, but even if the returns are no more robust, encouraging more companies to join the public markets gives investors more choice.

While the SPAC boom has caught the SEC’s attention, the SEC should not attempt to impose hurdles to their use. Of course, investors should understand the risks inherent in a potential investment, especially where that investment, like a SPAC, is more complicated than average. But if anything, the demand for SPACs should cause the SEC to examine why companies want to avoid the traditional IPO process. Rather than limiting options for companies and investors, the SEC may do better to make the IPO process more attractive for startups.

from Latest – Reason.com https://ift.tt/3um9QPm
via IFTTT

In 2010, when former White House Chief of Staff Erskine Bowles and former Sen. Alan Simpson (R–Wyo.) were appointed to co-chair President Obama’s deficit-reduction commission, the Congressional Budget Office (CBO) offered two projections on the future of American debt. One forecast saw debt ballooning, and the second was much more moderate. Current projections are somewhere in the middle.

And in the 11 years since, America has also made no meaningful structural reforms to deal with the problem. 

Congress has doled out more than $4 trillion in response to the COVID-19 pandemic. The U.S. national debt held by the public is currently almost $22 trillion, or about $67,000 per citizen, surpassing the country’s annual GDP for the first time since World War II. 

On the current path, the CBO predicted in March that the debt would grow to 102 percent of GDP by the end of 2021, to 107 percent by 2031, and 202 percent by 2051. It also predicted that by 2051, the federal government will be spending more than a quarter of its annual budget just to pay interest on the principal. But those estimates came before President Joe Biden signed the $1.9 trillion COVID-19 relief bill, which made the long-term budget outlook even worse.

What is the risk to the U.S. economy? Fiscal hawks have been sounding the alarm about rising debt levels for decades, but their nightmare scenario of runaway inflation hasn’t come to pass. How do we know if this time is different? 

In 2010, midway through the first term of President Barack Obama and on the heels of the Great Recession, the national debt was skyrocketing. It had exploded under President George W. Bush, who engaged the U.S. in two foreign wars and expanded eldercare entitlements, which are the biggest drivers of U.S. debt. Bush had the full backing of Republicans in Congress. Under his watch, the U.S. also bailed out big banks and entire industries. But it wasn’t until a Democratic president championed an $831 billion federal stimulus that Republicans said they had finally seen enough.

The Tea Party rose to prominence, riding a wave of public concern over debt levels that they said would hinder economic progress and stick future generations with the bill. Republicans claimed to be renewing their commitment to fiscal responsibility post-Bush. After Democrats were walloped in the midterm elections, President Obama established the Simpson-Bowles Commission, which concluded that disaster was inevitable unless the federal government cut spending, raised taxes, and reformed entitlements. The commission’s recommendations were never adopted. Its critics say that that’s a good thing.

“If the Simpson-Bowles had been adopted, we would have been chronically short of demand in the years that followed its adoption,” Jason Furman, who chaired the Council of Economic Advisers under President Obama, tells Reason. 

“The unemployment rate would have been higher, growth would have been lower, and when we went into the COVID crisis we would have gone in with a lower inflation rate, lower interest rates, and thus, even less scope to maneuver than we actually had,” Furman says.

Furman has co-authored a paper with his Harvard colleague and former Treasury Secretary Lawrence Summers questioning past assumptions about the national debt. He says that the debt hawks of the 2010s were wrong to worry that America’s balance sheet endangered the economy. 

As the industrialized world racked up debt through the 2010s, inflation and interest rates stayed low—contrary to the warnings of the doomsayers.  

This situation, Furman and Summers say, implies that the U.S. government has much more leeway to borrow money, spend it on government projects, and grow its way out of the debt than fiscal hawks have led us to believe. Furman argues that the story is much the same regarding the pandemic-era economy. 

“There was nothing about the U.S. debt level going into the COVID crisis that created any constraint on the resources available to fight the crisis,” he says. “The United States was able to borrow an enormous amount, [and] not just the United States. Japan, which has a higher debt level, was able to borrow an enormous amount.” According to Furman, there is no relationship between a country’s debt and its ability to manage the COVID crisis. 

John Cochrane, an economist at Stanford University’s Hoover Institution, disagrees. “If you wait until the crisis comes, everything is much much worse,” he says.

As a fiscal hawk, Cochrane acknowledges that his doomsaying has been wrong for the past decade, but he says that doesn’t mean he’s wrong now. 

“I live in California. We live on earthquake faults.” Cochrane says. “We haven’t had a major earthquake, a magnitude nine, for about a hundred years.” It would be foolish to consider someone a doomsayer for preparing for an earthquake in California, he says, despite the fact that major earthquakes aren’t a common occurrence.

“That’s the nature of the danger that faces us. It’s not a slow predictable thing,” says Cochrane. “It is the danger of a crisis breaking out. So I’m happy to be wrong for a while, but that doesn’t mean that the earthquake fault is not under us and growing bigger as we speak.” 

Economist and New York Times columnist Paul Krugman wrote in a December piece titled “Learn to Stop Worrying and Love Debt” that, “It’s a completely safe prediction that once Joe Biden is sworn in, we will once again hear lots of righteous Republican ranting about the evils of borrowing.”

Krugman is right. Republicans have been complicit in ballooning the debt going back to the Nixon administration. But scoring rhetorical points about GOP hypocrisy doesn’t address the question of whether or not America’s debt, typically measured as a ratio of GDP, is cause for concern. The U.S. reached these heights only once before—at the end of World War II.

“The U.S. had a hundred percent debt-to-GDP ratio because we borrowed a ton of money to save the world from fascism,” Cochrane says. But he argues that today’s situation is different because the U.S. stopped spending after World War II. 

“The war was over and the U.S. ran steady primary surpluses, actually. Whereas right now, we’re talking about at least three to five percent primary deficits forever. Plus stimulus for crisis. Plus Social Security and Medicare,” Cochrane says.

But Furman and Summers say that if the government spends money borrowed at low-interest rates on critical infrastructure, it will more than pay for itself in the long run. 

“If it costs you…zero to borrow and something does more than zero, it’s worth doing,” says Furman. “It then needs to do a decent amount more than zero such that when you tax it…it pays itself back.” Furman claims that the expenditures that do this are limited, but says that the evidence points to the value of investing in children in areas like preschool and child health care. 

Cochrane agrees that government spending on certain projects theoretically can boost growth, but he is skeptical of the government’s ability to spend the money wisely. 

“None of the current stimulus payments are going towards things that raise the economy’s long-run growth path,” says Cochrane.

He claims that most of the money spent on COVID-19 relief won’t help the economy’s long-range prospects—and he’s not sure Biden’s $2.25 trillion for proposed infrastructure spending will, either. 

“Our government is not very good right now at investing wisely in things that are good projects,” Cochrane says. “Let me point to the California high-speed train for example. It’s going to connect Fresno to Bakersfield at about 60 miles an hour at a cost of $80 billion and has not one mile of track has been built yet. That’s the kind of infrastructure our government tends to [build].”

Money for high-speed rail was part of the 2009 $831 billion federal stimulus package. Summers, Obama’s chief economic adviser at the time, called it a targeted, temporary, and timely boost to the economy that would focus on “shovel-ready” infrastructure projects. But the stimulus package failed to stop civilian unemployment from rising to 10 percent, the construction workforce from contracting by more than 14 percent, and the economy from shedding more than 7 million jobs in Obama’s first term.

The Obama administration promised that 90 percent of the jobs supported by the act would be in the private sector. A year after the law’s implementation, four out of five positions created were government jobs. Each job the stimulus package created cost taxpayers between $100,000 and $400,000, according to a study by two Dartmouth economists.

Some economists, including Paul Krugman, said that the 2009 stimulus didn’t work because it was too small. Today’s $4.1 trillion in pandemic-related spending is a test of this theory. It is an unprecedented sum. In current dollars, it is equivalent to what the federal government spent both to land a man on the moon and to build the entire interstate highway system—multiplied by 5. And that doesn’t include the Biden administration’s proposed $2.25 trillion in infrastructure spending.

Summers recently expressed concern that inflation actually could be a problem after the U.S. spends trillions on fiscal stimulus.

“There’s a real possibility that, within the year, we’re going to be dealing with the most serious incipient inflation problem that we have faced in the last 40 years,” Summers said in an interview with Bloomberg in February. 

Furman believes that more stimulus money was allocated in 2021 than was warranted. He says that he would have preferred to have the payments more spread out over time.

“I think the number could have been even larger if it had been spread out over time,” says Furman. “So I don’t think it was optimally designed from an economic perspective. I think it creates some risks but I don’t think that those risks are huge. I think [that] on balance it’s more likely that the higher inflation is good than that the higher inflation is bad.”

Furman and Summers’ paper also expresses concerns about debt projections beyond 2030 absent Social Security and Medicare reform as baby boomers retire en masse. Simpson and Bowles recognized that the bill on eldercare would eventually be the item to bust the budget. 

“All else equal, addressing entitlements sooner is better than addressing entitlements later,” Furman says. “If you want to address it more on benefit reduction, then you probably do want an earlier start, I’m comfortable doing it on the tax side. I understand others probably want to do it on the benefits side. And if I were them, I’d want to get started sooner too.”

The libertarian economist Murray Rothbard once wrote that when economists started telling politicians that it was the “government’s moral and scientific duty to spend, spend, and spend,” they went from being the “grouches at the picnic” to in-house yes-men. 

Furman says that unlike advocates of Modern Monetary Theory, which posits that near-unlimited government money creation and spending are possible without dire consequences, he recognizes that there are limits. But he believes we are using the wrong metric to gauge the magnitude of the problem. 

“The question is where do you want to stabilize the debt,” says Furman. “People used to think it should be 30 percent of GDP. Is that what we need to do in order to be safe? I think if you’re asking that question without looking at interest rates, then you’re in danger of a very incomplete answer.”

“Most people acknowledge that there are limits but they envision slow, steady warnings. That you’ll see the problem coming and you’ll have plenty of time to fix things,” says Cochrane. “And I looked through history and I noticed that when things go wrong, they go wrong in a big crisis.”

Cochrane says he’s worried that debt will be a drag on economic growth, but he’s especially concerned that the U.S. could face a scenario similar to the sovereign debt crisis that hit Greece in 2010, which caused its economy to shrink by a quarter, and unemployment to climb to 25 percent. Greece’s position was admittedly different, but the country’s meltdown shows the social and political consequences of a fiscal crisis. The state seized assets; banks limited ATM withdrawals; there were food lines, anti-austerity protests, and violence; and extremist political parties gained ground.

Cochrane says that if a debt crisis like that of Greece hits the U.S., it would be an unimaginable catastrophe. Greece at least had Germany to bail them out, while there is no one to bail out the U.S.

“Governments that are undergoing a debt crisis grab money everywhere they can. So watch your wallet,” Cochrane says. “All those things that you count on coming from the government disappear. All of a sudden taxes go up very sharply…Basically, say goodbye to your wealth.”

Yet Cochrane believes it is not too late to avert a potential crisis and that the U.S. can look to other countries as examples to follow. He says that in the 1990s, Sweden “recognized that socialism wasn’t working” and reformed its social welfare system. As a result, its economy grew.

“It’s straightforward to do as economics. Functioning democracies are able to get together and see problems coming and fix them,” Cochrane says. “We have been able to do so in the past… let us hope that we can do so before it’s too late.”

Cochrane says that in the meantime, if there’s no political will to cut spending and slow down borrowing, Treasury Secretary Janet Yellen should “borrow long” by taking a slightly higher interest rate for a longer-term loan.

“Then in the event of trouble, we don’t have to pay more interest on the outstanding debt. And that really diffuses the crisis mechanics,” says Cochrane. “Are you going to be so greedy that you’re not going to pay one and a half percent interest rates in order to get rid of the possibility of a debt crisis for a generation? It seems like cheap insurance to me.”

Is there a point where taking on too much debt is an unacceptable risk? 

“The United States isn’t going to default on its debt. We borrow in our own currency. So there’s zero default risk,” says Furman. “There is definitely inflation risk if you borrow too much and can’t pay it off, but it’s not like you go from one and a half percent inflation to hyperinflation in the blink of an eye. There’s a lot of steps between here and there. I think there is certainly some risk and in the event that that risk materializes we will have to, very quickly, sit down and figure out how to raise taxes or cut spending.”

Cochrane has a different perspective. 

“Things always go boom all of a sudden, and so the key to fiscal management is to keep some dry powder around to have some ability to be able to borrow more,” Cochrane says. “Imagine if world war breaks out, and we’ve already borrowed the 100 percent debt-to-GDP ratio that we ended World War II with. Well, once we’re at a 100, 150, 200, our ability to meet that next crisis with borrowing is gone and then that next crisis is a catastrophe.”

Produced by Zach Weissmueller and Justin Monticello. Graphics by Lex Villena and Isaac Reese. 

Photo credits: Michael Debets/ZUMA Press/Newscom; Dennis Brack/DanitaDelimont.com/ “Danita Delimont Photography”/Newscom; Chuck Hill/ZUMA Press/Newscom; SHERRI LAROSE/KRT/Newscom; Dennis Brack/Newscom; BRIAN KERSEY/UPI/Newscom; Jeff Malet Photography/Newscom; The White House/Sipa USA/Newscom; Ron Sachs—Pool via CNP/Newscom; Paul Chinn/UPI/Newscom; Morio Taga/Jiji Press Photo/Newscom; Craig Kohlruss/ZUMA Press/Newscom; Hindustan Times/Newscom; Tom Williams/CQ Roll Call/Newscom; KEVIN DIETSCH/UPI/Newscom; Marios Lolos / Xinhua News Agency/Newscom; Michael Debets/ZUMA Press/Newscom;  Marios Lolos / Xinhua News Agency/Newscom; picture alliance / Robert Geiss/Newscom; AA/ABACA/Newscom; Abaca Press/Eklund Robert/Stella Pictures/Ab/Newscom; CNP/AdMedia/Newscom; Julien McRoberts / DanitaDelimont / Danita Delimont Photography/Newscom; Graham Oliver/Newscom;  Paul Chinn/UPI/Newscom; Jorge Nunez/EFE/Newscom; WASHINGTON POOL/SIPA/Newscom; John Gastaldo/ZUMA Press/Newscom; Harry Scull Jr./ZUMAPRESS/Newscom

from Latest – Reason.com https://ift.tt/39JtNI4
via IFTTT

A 60 Minutes story on Florida’s vaccine rollout accused Ron DeSantis, the state’s Republican governor, of making a corrupt deal with Publix to distribute the vaccine. CBS reporter Sharyn Alfonsi noted that the grocery chain donated $100,000 to DeSantis’ election campaign and suggested the lucrative vaccination contract was a “pay-to-play” scheme.

It’s an accusation that doesn’t really stand up to scrutiny: For one thing, Publix—like many large corporations—gives money to both Republicans and Democrats. But more importantly, the decision to have Publix coordinate vaccination was not even made by the governor’s office. According to Jared Moskowitz, director of the Florida Division of Emergency Management, it was his offices that recommended Publix. Moskowitz, a Democrat, has said that Publix was the best store for the job, since it has more than 800 locations across the state.

Indeed, when Alfonsi cornered DeSantis at a press conference and asked him about Publix, he gave a lengthy explanation that largely undercut her claims. He pointed out, for instance, that it wasn’t true that Publix got the vaccines first: CVS and Walgreens had already been contracted to coordinate vaccination for long-term care facilities. Here’s a transcript of what the governor said:

So, first of all, when we did, the first pharmacies that had it were CVS and Walgreens. And they had a long term care mission. So they were going to the long term care facilities. They got vaccines in the middle of December, they started going to the long term care facilities the third week of December to do LTCs. So that was their mission. That was very important. And we trusted them to do that. As we got into January, we wanted to expand the distribution points. So yes, you had the counties, you had some drive through sites, you had hospitals that were doing a lot, but we wanted to get it into communities more. So we reached out to other retail pharmacies—Publix, Walmart—obviously CVS and Walgreens had to finish that mission. And we said, we’re going to use you as soon as you’re done with that. For the Publix, they were the first one to raise their hand, say they were ready to go.

Remarkably, CBS cut this portion of DeSantis’ response. In fact, the 60 Minutes story reduced his two-minute answer to just a few seconds. The Daily Wire has a full breakdown of the sizable gap between what DeSantis actually said and what CBS included, and it’s telling. This was not a case of a journalist condensing the essence of what a source told her: Alfonsi blatantly ignored the part of the governor’s statement that clashed with her narrative, and instead included a brief comment that made it sound like he became combative with her for no reason.

The rest of the story is also quite flawed. It maligned DeSantis for “breaking with CDC guidelines” and prioritizing vaccination for the elderly instead of “teachers and essential workers.” Since the elderly are at the highest risk of dying from COVID-19, this prioritization makes absolute sense, irrespective of the CDC’s warped views on the subject.

CBS also implied that there’s something sinister and unique about a Republican administration having “privatized” the vaccine rollout. (Corporations +profits = scary.) But private entities are aiding with vaccine distribution elsewhere as well: In the District of Columbia, CVS has partnered with the city’s Democratic mayor to vaccinate all sorts of people.

The mainstream media seems intent on peddling a false narrative that Florida’s approach to the pandemic has been uniquely bad. As Zeynep Tufecki explained in a recent article, this is an example of how “polarization has eaten a lot of our brains”:

Lots of people are angry, very angry with Florida, and willing to quickly believe the worst. In reality, it’s… middling. Compared with the rest of the country, Florida’s record is neither stellar nor terrible. How much of this is its middling guidelines, how much of this is the weather advantage, how much of this just luck? It’s not yet fully clear.…

But the polarized climate means that Andrew Cuomo—who is implicated in a large number of terrible policies—can sell a book about his pandemic leadership for $4 million dollars (even before the pandemic was over!) while people are readily willing to believe that Florida—which, from what I can tell, actually has one of the better reporting systems—must be lying and covering up its terrible numbers.

60 Minutes‘ report is another example of this weird fixation. Moreover, it’s misleadingly clipped to deprive viewers of DeSantis’ plausible explanation of the alleged controversy. No wonder that so many people—and Republicans, especially—distrust the media.

from Latest – Reason.com https://ift.tt/3mjSnUS
via IFTTT

Justice Clarence Thomas this morning suggested that the Supreme Court is on a collision course with online platforms like Twitter and search engines like Google about how much power companies have to decide who may speak.

The context was a unanimous decision by the Supreme Court to order the dismissal of a lawsuit by the Knight First Amendment Institute against former President Donald Trump over whether Trump was unconstitutionally censoring people when he blocked them from tweeting at him. Now that Trump is no longer the president and has been banned from Twitter, the Supreme Court determined the case to be moot.

Thomas, concurring with the decision, decided to write separately to raise questions about the power of Twitter to eject Trump from the platform. He noted the oddness of the concept that a public official’s Twitter feed might be considered a “government forum” when interacting with the public, but “a private company has unrestricted authority to do away with it.”

Thomas, it seems, is raising points similar to those of some conservative politicians. He believes that there may be something wrong, possibly even unconstitutional, if a private online platform can boot people off or delete comments it objects to. He writes:

Today’s digital platforms provide avenues for historically unprecedented amounts of speech, including speech by government actors. Also unprecedented, however, is the concentrated control of so much speech in the hands of a few private parties. We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.

Thomas raises the question of whether some of these platforms might be considered by the courts to be “common carriers,” utilities like phone lines that serve the public interest. If the courts conclude that they are, then it would be legal, and not necessarily a violation of the First Amendment, for the government to put restrictions on the ability to prohibit people from using the platform.

Thomas also takes note of an argument presented by Eugene Volokh, professor of law at UCLA and co-founder of The Volokh Conspiracy (hosted here at Reason). In January, Volokh considered whether a federal law can run afoul of the First Amendment when it preempts a state law that grants particular free speech protections against private actions. There’s a Supreme Court precedent from 1980, Pruneyard Shopping Center v. Robins (Thomas references it in his concurrence), that concluded California had the power to force a shopping mall to allow protesters to engage in advocacy there, even though it was private property.

This precedent is potentially relevant due to the existence of Section 230 of the Communications Decency Act of 1996, which specifies that websites and online platforms have the power to moderate and remove speech they find offensive, even if said speech is protected by the First Amendment. Section 230 is under attack by politicians who want to either force social media platforms to censor content the politicians don’t like or, alternatively, force platforms to host content the social media companies themselves don’t like.

Volokh has wondered if the Pruneyard precedent could potentially collide with Section 230 if a state passes a law that essentially starts treating social media platforms as “common carriers” and requires them to host users. Florida Gov. Ron DeSantis says he wants a law in his state to force social media platforms to host candidates. The law would, on the surface, appear to violate both Section 230 and the First Amendment rights of a platform to control whose speech it wants to host. But Volokh says it may be a little more complicated than that if courts ever embrace the argument that social media platforms, like malls, could be ordered to host certain types of political or activist speech.

Volokh responded to Thomas’ concurrence this morning by suggesting that Thomas isn’t necessarily calling for tech platforms to be treated as common carriers, but he is noting that it seems like the Supreme Court is going to eventually have to weigh in on these complexities:

As I read it, Justice Thomas is not arguing that platforms are already generally common carriers or government actors under existing legal principles; that argument is quite a stretch, and his analysis seems to me to largely reject that argument, except perhaps when the platforms are restricting speech in response to government threats.

Rather, he is anticipating what might be done through legislation, and whether new state laws that do treat platforms as common carriers (more or less) are going to be seen as blocked by the First Amendment or 47 U.S.C. § 230. (His analysis of the interests involved may also be relevant to whether such state laws violate the Dormant Commerce Clause.) That’s an issue the Court will likely have to deal with in coming years.

It’s also worth noting that no other justices signed on to Thomas’ concurrence, despite the current court’s conservative leanings. If there is an interest among other justices to decide whether online platforms can legally be forced to host content, they’re not showing it.

from Latest – Reason.com https://ift.tt/31MX8Nd
via IFTTT

Derek Chauvin’s lawyer, Eric Nelson, says the former Minneapolis police officer “did exactly what he had been trained to do” when he knelt on George Floyd’s neck for more than nine minutes, pinning him facedown on the pavement. Lt. Robert Zimmerman, a 35-year veteran of the Minneapolis Police Department, unambiguously contradicted that claim when he testified on Friday in Chauvin’s murder trial.

Zimmerman noted that Floyd, who had been arrested for buying cigarettes with a counterfeit $20 bill, was handcuffed behind his back, which “stretches the muscles back through your chest” and “makes it more difficult to breathe.” Forcing Floyd to lie facedown on the ground would have compounded that problem, he said, because “if you’re [lying] on your chest, that’s constricting your breathing even more.”

In light of that danger, Zimmerman said, “once a person is cuffed, you need to turn them on their side or have them sit up; you need to get them off their chest.” One of Chauvin’s colleagues, Officer Thomas Lane, twice suggested that Floyd, who complained 27 times that he was having trouble breathing, should be rolled onto his side. Chauvin rejected those suggestions.

Floyd, who was initially terrified when an officer drew a gun on him, calmed down until Lane and Officer J. Alexander Kueng tried to place him in their squad car. At that point, he seemed to have a panic attack, saying he was claustrophobic, complaining that he could not breathe, and asking if he could ride in the front seat. After he struggled with Lane and Kueng inside the car, he either tumbled or was pulled out onto the street.

In a pretrial motion, Nelson faulted Lane and Kueng for needlessly escalating the situation. “If Kueng and Lane had chosen to de-escalate instead of struggle, Mr. Floyd may have survived,” he said. But once Floyd was handcuffed and out of the car, he was not given a chance to sit up and calm down—an option Zimmerman suggested was consistent with police training.

“Once a person is cuffed, the threat level goes down all the way,” Zimmerman said. “They’re cuffed. How can they really hurt you?” When the prosecutor questioning Zimmerman suggested that “a cuffed person could still be combative,” the lieutenant agreed but added that the risk of “you getting injured” is “way down.” For example, “you could have some guy try to kick you or something, but you can move out of the way.”

Once “that person is handcuffed,” Zimmerman said, “the threat level is just not there.” And “if they become less combative,” he said, “you may just have them sit down on the curb….The idea is to calm the person down.”

Zimmerman also criticized the restraint technique that Chauvin used. Based on the video record, he said, it was clear that Chauvin placed his knee on Floyd’s neck and kept it there until after an ambulance arrived. According to the prosecution, he maintained that position for nearly five minutes after Floyd was no longer responsive, even after Chauvin was repeatedly told that Floyd had no detectable pulse.

In Zimmerman’s view, Chauvin’s neck restraint was “totally unnecessary” and constituted “deadly force” because “if your knee is on a person’s neck, that can kill them.” He said he had never been trained to use that technique on someone who is handcuffed in a facedown prone position.

“Pulling him down to the ground facedown, and putting your knee on a neck for that amount of time is just uncalled for,” Zimmerman said. “I saw no reason why the officers felt they were in danger, if that’s what they felt, and that’s what they would have to feel to be able to use that kind of force.”

Sgt. David Pleoger, Chauvin’s supervisor, made a similar point when he testified on Thursday. Pleoger, who testified that Chauvin initially did not mention the neck restraint, said the officers should not have kept Floyd pinned to the ground when he stopped moving and was no longer responsive.

At that point, Zimmerman said, the officers, who were trained in CPR, had a duty to render aid rather than simply wait for an ambulance to arrive. “You need to provide medical care for a person that is in distress,” he said. “That person is yours. He’s your responsibility. His safety is your responsibility. His well-being is your responsibility.”

Two paramedics who testified on Thursday said Floyd showed no signs of life when they first examined him. He was not moving or breathing, and he had no pulse. “In layman’s terms,” paramedic Derek Smith said, “I thought he was dead.”

from Latest – Reason.com https://ift.tt/2Q1EUov
via IFTTT