Near Record Numbers On Wall Street Say Stocks Again “Overvalued”; Just 14% Believe In A V-Shaped Recovery

Near Record Numbers On Wall Street Say Stocks Again “Overvalued”; Just 14% Believe In A V-Shaped Recovery

Tyler Durden

Tue, 07/14/2020 – 14:40

There was some good news and some bad news in the latest, July BofA Fund Manager Survey, but mostly confusion when it comes to the future of the economy and how the market resolves the tension between near record overvaluation and constant Fed tinkering and interventions.

Starting with the economy, while 72% of those surveyed in the July survey (which took place July 2nd-July 9th and polled 201 participants with $607BN in AUM) expect stronger global growth, up 11 points from June, and the highest since Jan’14..

… conviction in the strength & duration of recovery continues to decline with just 14% now saying the recovery will be “V”-shaped, down from 18% last month, vs 44% expecting a “U”, and 30% a “W”.

In a similar vein 62% of investors (CIO’s) want corporates (CEO’s) to improve balance sheets, vs only 27% wanting higher capex, and just 9% eager for higher dividends/buybacks.

Meanwhile, looking at stocks, a renewed investor cautiousness has led to self-reported cash levels rising modestly to 4.9% (whether this is true in real life is a different matter), prompting BofA’s CIO Michael Hartnett to “predict choppy/higher summer prices, sell SPX>3250, buy<2950.” Putting the increase in cash to 4.9% from 4.7% in context, while it is down from the record hit in April/May, it remains on the high side, and just above the 10-year average of 4.7%: “cash says investors still cautious on virus, macro, and election”, according to Hartnett.

Yet somewhat disturbingly for the bulls, a near record 71% of FMS investors said the stock market is overvalued, which makes sense since not only is the Nasdaq at all time highs and the S&P just shy thereof, but P/E multiples are  the highest they have ever been.

Despite their “revulsion” to investing in a massively overvalued market, BofA finds that asset allocators are stubbornly long health care, US, tech, cash, bonds, and short energy, UK, banks, industrials…

… but there are 2 notable shifts: allocation to commodities now at highest since July’11…

… and there was a  big jump in European equity exposure & 42% want more Euro exposure.

Of course, no discussion of the “market” would be complete without some thoughts on the Fed, and in this vein, a majority, or 54% of participants said the Fed will not introduce YCC in September:

… while supply chain reshoring (67%) remains most likely structural shift post pandemic (with US the region most likely to benefit).

So what should one do to fade the consensus, which as we have showed on countless occasions is the best trade over the past decade? As BofA notes, the best short is tech stocks given positioning and stretched performance (more in a subsequent post on this), although in a world where shorts tend to lead to painful margin calls, one should rather focus on long ideas, and here the best long according to BofA is energy (oil prices acting well given whisper of higher OPEC supply) & banks (July FMS shows large drop in allocation to banks).

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Bari Weiss Resigns From The New York Times, Alleging That ‘Self-Censorship Has Become the Norm’

BariWeiss

Bari Weiss, one of the most polarizing journalists in the country, has resigned from the opinion section of The New York Times, citing a “hostile work environment” and an institutional yielding to an increasingly extreme ideological “orthodoxy.”

“The truth is that intellectual curiosity—let alone risk-taking—is now a liability at The Times,” Weiss wrote in a scorching resignation letter self-published Tuesday morning. “Why edit something challenging to our readers, or write something bold only to go through the numbing process of making it ideologically kosher, when we can assure ourselves of job security (and clicks) by publishing our 4000th op-ed arguing that Donald Trump is a unique danger to the country and the world? And so self-censorship has become the norm.”

This is the latest development in a remarkably turbulent and potentially far-reaching eight-week period within America’s leading liberal institutions. Beginning with the videotaped police killing of George Floyd in Minneapolis in late May, then the subsequent protests, riots and crackdowns, the country’s newspapers and universities and cultural organizations have experienced social media-fueled waves of internal revolts and leadership changes, frequently though not solely over questions of race.

One main fault-line, illustrated most starkly in the opposing open letters published last week about free speech and cancel culture (the first of which, in Harper’s Magazine, was signed by Weiss and 152 others, including 15 Reason contributors), is the divide between those journalists and academics who feel like they are defending the very foundations of liberalism, and those who feel like they are chipping away at the institutions of systemic prejudice. To witness the two sides talking angrily past one another, open up your Twitter feed.

In Weiss’s telling, the Times is retreating from the ethic of journalistic open inquiry and pluralistic debate, replacing it with a pre-baked notion of what readers ought to think.

“The lessons that ought to have followed the [2016 presidential] election—lessons about the importance of understanding other Americans, the necessity of resisting tribalism, and the centrality of the free exchange of ideas to a democratic society—have not been learned,” she charged. “Instead, a new consensus has emerged in the press, but perhaps especially at this paper: that truth isn’t a process of collective discovery, but an orthodoxy already known to an enlightened few whose job is to inform everyone else….[T]he paper itself has increasingly become a kind of performance space. Stories are chosen and told in a way to satisfy the narrowest of audiences, rather than to allow a curious public to read about the world and then draw their own conclusions. I was always taught that journalists were charged with writing the first rough draft of history. Now, history itself is one more ephemeral thing molded to fit the needs of a predetermined narrative.”

That last sentence in particular is surely a reference to the paper’s controversial 1619 Project, helmed by Pulitzer-winner Nikole Hannah-Jones, that seeks “to reframe American history, making explicit how slavery is the foundation on which this country is built.” Hannah-Jones, who spearheaded the intentionally publicized internal revolt last month that resulted in the resignation of Opinion Editor James Bennett, has been a longtime public critic of Weiss.

“My own forays into Wrongthink have made me the subject of constant bullying by colleagues who disagree with my views,” Weiss wrote, at the beginning of a three-paragraph section that carries the distinct whiff of both drama and potential legal action. “They have called me a Nazi and a racist; I have learned to brush off comments about how I’m ‘writing about the Jews again.’ Several colleagues perceived to be friendly with me were badgered by coworkers. My work and my character are openly demeaned on company-wide Slack channels where masthead editors regularly weigh in. There, some coworkers insist I need to be rooted out if this company is to be a truly ‘inclusive’ one, while others post ax emojis next to my name. Still other New York Times employees publicly smear me as a liar and a bigot on Twitter with no fear that harassing me will be met with appropriate action. They never are.”

It is both easy and appropriate to be mostly irritated by the overhyped internal personnel battles of elite coastal institutions—including at New York magazine, which today lost star columnist Andrew Sullivan a few weeks after having spiked one of his pieces. In a country beset by an 11.1 percent unemployment rate, 139,000 coronavirus deaths, massive economic uncertainty, and the mental degradations of extended familial quarantine, it’s hard to get exercised about a well-paid writer/editor noisily walking away from her job.

I have zero doubt that Bari Weiss (who is a friend), will not just land on her feet, but probably find herself at or near the center of a new media grouping of some kind. “As places like The Times and other once-great journalistic institutions betray their standards and lose sight of their principles,” she wrote, almost teasingly, “Americans still hunger for news that is accurate, opinions that are vital, and debate that is sincere.”

But even if you don’t care about the ongoing nervous breakdown of the media, that doesn’t mean the breakdown doesn’t care about you. The New York Times, for better and worse, has been the go-to model for the country’s other newspapers for at least the past half-century; what happens on 8th Avenue definitely does not stay on 8th Avenue. Basic media literacy suggests paying attention when an entire industry that contributes to the way we interpret the world announces loudly that it is rethinking its basic orientation.

More immediately, the name-and-shame defenestrations of the past two months have long since jumped the banks from media/academia to the more prosaic corners of the economy. “Showing up for work as a centrist at an American newspaper,” Weiss observed, “should not require bravery.” Nor should it at a restaurant or software company, but there we might well be going.

Bonus links: In January 2018, Weiss came on The Fifth Column podcast to talk about, among other things, how she left The Wall Street Journal editorial page after it became too pro-Trump. And in July of that year, Nick Gillespie interviewed her for the Reason Podcast.

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Justice Breyer made it impossible for Congress to impeach territorial officers for accepting bribes

Seth Barrett Tillman and I wrote a new piece on Balkinization about the Puerto Rico Appointments Clause case. Justice Breyer’s majority opinion held that territorial officers with “with primarily local duties” are not “officers of the United States,” as that term is used in the Appointments Clause. We explain that Justice Breyer’s analysis leads to some unanticipated consequences. Here is a snippet:

The PROMESA case also has unanticipated consequences. If territorial officers with only local duties are not “officers of the United States,” then they are not subject to the Impeachment Clause. That provision extends to the “President, Vice President and all Civil Officers of the United States.” Thus, Congress would be helpless to impeach, try, remove, and disqualify a territorial officer—no matter how egregious the conduct. Consider an example involving St. Clair. Trump v. Mazars recounted that in 1792, he led a “campaign against the Indians in the Northwest Territory, which had concluded in an utter rout of federal forces when they were caught by surprise near the present-day border between Ohio and Indiana.” Under the PROMESA Court’s reading of the Appointments Clause, Congress would have been unable to remove St. Clair through impeachment processes. By contrast, we can point to a 1796 opinion of the Attorney General, Charles Lee, advising the House of Representatives that it may proceed against a territorial judge by impeachment.

Justice Breyer’s majority opinion has other consequences. If territorial officers with primarily local duties are not “officers of the United States,” regardless of how they are appointed, then they may also not hold “office[s] . . . under the United States.” Under the prevailing readings of the Constitution, there is no meaningful difference between the Constitution’s “office”- and “officer”-language. The two phrases—”officers of the United States” and “office under the United States”—are seen as co-extensive. (We do not subscribe to that modern atextual reading of the Constitution.) If these conclusions are accurate, then territorial officers would not be subject to the Foreign Emoluments Clause. As a result, St. Clair and other frontier officers could have freely accepted foreign state diplomatic gifts or, even, bribes from England, France, and Spain, without seeking congressional consent. Congressional consent would not be required for diplomatic gifts, and impeachment would not extend to outright bribes. Moreover, such territorial officers would not be bound by two other provisions that use the phrase “office . . . under the United States”: the Elector Incompatibility Clause and the Impeachment Disqualification Clause.

The PROMESA Court may have resolved one question with respect to the Appointments Clause, but it created far greater problems with respect to the Impeachment Clause and the Foreign Emoluments Clause. The Constitution’s “office”- and “officer”-language has a Newtonian quality to it. Removing an office from the scope of one clause will necessarily remove it from the scope of other clauses using the same “office”- and “officer”-language. Likewise, subjecting an office to the scope of one clause will necessarily subject it to other clauses. Every action has an equal and opposite reaction. It is not possible to focus on a single provision at a time. This analysis should demonstrate that the Constitution’s “office”- and “officer”-language must be considered intratextually. A ruling with respect to one clause will have unintended consequences for other clauses. The Appointments Clause cannot be considered in a vacuum.

This post is an excerpt from our forthcoming article, Offices and Officers of the Constitution.

 

 

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Do COVID-19 Complications With Marriage Licenses Show It’s Time To Get the Government Out of Marriage?

Wedding Cake Topper

At the end of April, New York City announced “Project Cupid,” an emergency measure which moves the process of obtaining a marriage license online via video conference. Normally, New York state requires couples to obtain these licenses in person, but the COVID-19 pandemic has required a workaround. “We need moments of joy now more than ever,” said Mayor Bill de Blasio, “and we won’t let a pandemic get in the way of true love.” 

Touching stuff. Unfortunately, more than two months later, New Yorkers are still struggling to book their licensing appointments since the city clerk’s office has a huge backlog. For couples with an urgent reason to wed, this is untenable: A couple profiled in The City‘s report on the situation finally eloped to Maryland, à la The Philadelphia Story, because the husband was set to lose his health insurance and the wife worried her work visa would no longer be enough to avoid deportation. They couldn’t wait on a local license.

This sort of delay isn’t unique to New York. In Galveston County, Texas, marriage license requests have more than tripled because nearby cities and states are simply not licensing quickly enough, if at all. Likewise, some local governments have delayed issuance of pet licenses and tree-trimming permits; more seriously, some have halted building inspections, prolonging or effectively suspending construction work.

All such coronavirus-induced malfunctions of governance should occasion reexamination of whether we actually need many of the regulations shaping our daily lives. The pandemic has already prompted fresh scrutiny of alcohol laws, medical testing rules, occupational licensing, and more. But marriage licenses, the most intimate of the lot, deserve particular attention. The state should not be involved in marriage—not licensing, conducting, or defining it.

The practical case is obvious: There are likely thousands of people in America right now who want to be married and can’t be because they can’t get in to see their city clerk. Even amid such unique circumstances, this is absurd and unconscionable. No one should incur medical debt or deportation solely because the state is unable or unwilling to dole out official marital legitimacy.

The bigger principle of privatizing marriage, however, is that it concerns a fundamental and pre-political human right. The decision of whether and whom to marry must be made by those who are marrying “before God and these witnesses,” which is to say, in the context of their families, friends, and religious communities (if they have them). It is not for the state to determine, but historically, marriage licensing was a blatant tool of social control.

These licenses in America date to the 19th century, when they were developed as a means of forbidding unions deemed undesirable, which often meant interracial unions back then. With bans on interracial marriage gone and gay marriage legalized, the licenses today may seem but a rubber stamp on the free choice of two consenting adults. Yet, as many couples are learning now, that stamp is not guaranteed. Unforeseen circumstances may interrupt. New or renewed restrictions on who may marry certainly seem unlikely, but they’re not wholly inconceivable. (See, for example, Bermuda’s ongoing gay marriage whiplash.) With state authority over marriage intact, there’s always a chance that authority could be misused.

But saying “privatize marriage” is not the simple solution it may sound. Any credible argument for it must begin with concession of the point, often raised by skeptics, that so much of our government and financial system uses marriage as a legal shorthand. Eliminating the state’s regulatory authority here—which at the federal level alone entails “more than 1,100 rights [and] responsibilities,” to say nothing of state and local regulations and layers of common law—would throw all that into disarray.

Calling for privatized marriage in a meaningful sense is ultimately determined to dismantle regulations until state control over marriage wouldn’t be needed to make the transformed system work. We shouldn’t downplay the scale of this idea—there’s an entire libertarian agenda crammed inside this horse.

It’s an agenda which reflects the reality of changing attitudes toward marriage: Visions of privatization (in retrospect, including my own from before Obergefell v. Hodges) don’t always recognize just how many spheres of life and law the proposal would affect, but critics who focus on how marriage now fosters stability and protects children seem to forget marriage rates are plunging, and nearly four in 10 babies in America are born out of wedlock already.

This agenda also has the merit of sidestepping many of the culture war fights over religious liberty and gay marriage which continue apace five years after Obergefell. Coexistence between Americans with deeply held, differing views on sex, gender, and marriage could be less fraught, and fears about curtailment of religious practice much allayed, were the sanction and force of the state removed from play. 

But what if you assume, as I do, that the entire libertarian agenda stuffed into “privatize marriage” isn’t in our near future? Well, we could at least address the immediate problem: Smooth the application process for the duration of the COVID-19 pandemic, and then keep it that way. Let people obtain marriage licenses online or by mail. Nix waiting periods and interviews—which aren’t universally required—and make the fee as small as possible. We may not disentangle the state from marriage any time soon, but we could limit the harms perpetuated by its licensing scheme.

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Conviction of 17-Year-Old Girl for Threatening Her Mother Reversed

From today’s decision in State v. D.R.C. (by Chief Judge Rebecca Pennell, joined by Judges Laurel Siddoway and George Fearing):

The State is prohibited from penalizing constitutionally protected speech. But not all speech is protected. When it comes to the crime of harassment, speech is not protected if it constitutes a true threat, as opposed to mere bluster or hyperbole. The test for a true threat is objective, though not abstract. The State must show a reasonable person in the defendant’s position would have foreseen the speech would be perceived as a true threat by the individuals in the defendant’s intended audience.

Here, D.R.C. sent a series of text messages to her friends, indicating she wanted to kill her mother. The texts were sent in the midst of a mother-daughter fight. They were vaguely worded and peppered with smiling emojis and the initialism “LOL.” There is no indication D.R.C. ever meant for her mother to see the texts or that D.R.C. ever threatened her mother directly. Given these circumstances, the State has not met its burden of proving a true threat. The record shows nothing more than odious expressions of frustration. D.R.C.’s guilty adjudication and disposition is therefore reversed….

The case against 17-year-old D.R.C. began with a mother-daughter dispute over whether D.R.C. violated house rules by possessing gang-colored clothing. The argument took place in D.R.C.’s bedroom, and at some point D.R.C. slammed her door shut.

D.R.C.’s mother responded by removing the door from its hinges.

During the argument with her mother, D.R.C. was on her phone and texting

with several friends. The primary correspondent was an individual identified as “Joshua.” …

After removing D.R.C.’s bedroom door, the mother confiscated D.R.C.’s phone and turned to leave the room. As she was leaving, D.R.C.’s mother heard a loud noise.

D.R.C. had punched her bedroom wall, leaving a hole in it. D.R.C.’s mother called the police. The police arrived and talked to D.R.C. and her mother, but did not take further action.

Later that night, D.R.C.’s mother reviewed D.R.C.’s phone and discovered the texts between D.R.C., Joshua, and Lexy. She also saw a series of older texts between

D.R.C. and Lexy, wherein D.R.C. made violent comments about an acquaintance….

D.R.C.’s mother found the texts alarming. Although D.R.C. had never threatened her mother directly or engaged in any physical violence, D.R.C.’s mother took precautionary measures. She changed the locks on the entry doors to the house and slept with a knife under her pillow until she was able to obtain a stun gun. D.R.C.’s mother took screen shots of D.R.C.’s text messages and shared them with the police.

The State charged D.R.C. with harassment in juvenile court…. D.R.C. testified in her defense. She explained she never intended her messages to be seen by anyone other than her friends. Nor did she intend her texts to be taken seriously. They were instead a form of venting and expressing her emotions. D.R.C. testified she and her friends often used exaggerated language in their texts. Violent language was common but was not intended to be taken literally. According to D.R.C., she and her friends often denoted sarcasm through the use of emojis and initialisms such as LOLs or LMFAOs. D.R.C. did not think any of her friends would have taken the text messages about her mother seriously.

The juvenile court found D.R.C. guilty of harassment under RCW 9A.46.020(1) and (2)(a). The court reasoned D.R.C.’s messages constituted true threats, as required by the First Amendment to the United States Constitution, because they were taken seriously by both D.R.C.’s mother and Joshua, who advised D.R.C. to tone things down. The court imposed 13 days’ confinement and 12 months’ community supervision….

[B]ecause the crime of harassment penalizes pure speech, its enforcement raises First Amendment concerns. To penalize a defendant for harassment, the State must prove not only the elements of the offense but also that the defendant’s words were not the type of speech protected by the First Amendment. Proof of a true threat meets this requirement.

“A true threat is a serious threat.” It is not an idle statement, a joke, or even a “hyperbolic expression[] of frustration.” When assessing whether a statement at the heart of a criminal prosecution constitutes a true threat, our analysis is more demanding than otherwise applicable in a sufficiency challenge. We look carefully at context and independently assess whether a statement in fact “falls within the ambit of a true threat in order to avoid infringement on the precious right to free speech.”

The focus of the true threat analysis is on the speaker. But we do not look at

the speaker’s actual intent. Instead, the test is objective. We ask whether a reasonable person in the speaker’s position would foresee their statement would be interpreted as a serious expression of intent to cause physical harm.

While the true threat analysis requires an objective analysis with respect to the speaker, the same is not true of the audience. When assessing whether a reasonable person in the speaker’s position would foresee a statement interpreted as a serious threat, we look at the speaker’s actual intended audience, not a reasonable audience or an unintended recipient

Our case law has identified various tools for distinguishing true threats from hyperbole or a joke. Specific plans of causing harm are more threatening than vagaries. A threat will be perceived as more serious when it is conveyed with a serious demeanor. And a threat is understood as more serious when it is repeated to different audiences….

D.R.C.’s intended audience was not her mother, it was her two friends Joshua and Lexy. Thus, whether D.R.C.’s mother found her daughter’s texts alarming is not our focus. We instead must ask whether a reasonable person in D.R.C.’s position would have foreseen that either Joshua or Lexy would have interpreted D.R.C.’s texts as true threats, as opposed to merely a joke or an expression of emotion.

Our analysis of the perspective of Joshua and Lexy is hampered by the fact that neither was called as a witness at trial…. Without explicatory testimony, we are left with only our impressions of the text message exchanges.

We look first to D.R.C.’s exchange with Joshua. According to the State’s exhibit, Joshua was the one who started using violent language when he texted, “Haha beat her

ass.” By prefacing his comment with “Haha,” Joshua unambiguously indicated he was entertaining a joke. D.R.C. then made the comment, “imma get her killed.” At this point, Joshua did not change his joking tone. Instead he completed his comment “Woh chill just beat her ass” with the initialism “lol.” Given the entirety of this exchange, the record simply does not suggest Joshua interpreted D.R.C. as conveying a serious threat.

Even if Joshua had been troubled by D.R.C.’s comments, the context of the text messages is still not indicative of a true threat. Immediately after Joshua’s “lol” text,

D.R.C. reiterated the joking nature of the exchange by accenting her message with an emoji entitled “rolling on the floor laughing.” A reasonable person using this emoji in the context of Joshua’s “Haha” and “lol,” would not have foreseen D.R.C.’s statements as conveying a true intent to cause harm.

We next look at D.R.C.’s statements to Lexy. Unfortunately, the State’s exhibits do not provide much context for this exchange. We do not have Lexy’s response to D.R.C.’s text, “Imma fucking kill this bitch.” However, D.R.C. prefaced her text with an emoji entitled “face with tears of joy.” In addition, D.R.C. indicated she was upset because her mother was going to make D.R.C. live with her father. This parent-child conflict is the type of circumstance commonly associated with teenage frustration, but not homicidal ideation. Given the vagueness of D.R.C.’s statement that she wanted to kill her mother, and the other contextual indicators, the statement to Lexy is not reasonably interpreted as a true threat.

D.R.C.’s past conversation with Lexy supports D.R.C.’s testimony that she tended to use hyperbolic language with her friends. In the prior text between D.R.C. and Lexy, D.R.C. accompanied her statements about harming or killing a mutual acquaintance with “Lmfao”; the face with tears of joy emoji; a shrug emoji; a smiling face with horns emoji;;a zany face emoji; and a heart emoji. The combination of the initialism and emojis conveyed an unmistakable message of sarcasm, as opposed to a serious intent to cause harm or death….

While we rule in D.R.C.’s favor, our disposition should not be interpreted as approval of D.R.C.’s choice of language. We, like the trial court, find nothing funny in the texts. Nevertheless, the First Amendment protects all sorts of speech, even when the sentiment is hurtful or vile. D.R.C. would do well to heed the advice of the juvenile court judge and find a peer group that does not consist of “mean girls.”

Thanks to Mark Leen for the pointer.

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It’s never too late to start

By the summer of 1789, the people of France finally reached their breaking point.

France was the largest, most powerful empire in the world at the time. But their economy had been in ruins for years. Unemployment was high. Inflation had spiraled out of control. And after a very tough winter, many people had starved to death.

Violence, riots, and looting were a common occurrence, and Paris boiled in anger.

On the morning of July 14th, 241 years ago today, a crowd of around 1,000 people formed at the Bastille Saint-Antoine, a French military fortress that was a symbol of royal tyranny.

The crowd was there peacefully, at first. But by the end of the day, the conflict had escalated into a bloody mess… which is why historians usually consider this the start of the French Revolution.

The revolution began as a fight against oppression and a desire for greater liberty and freedom.

But within a few years, France would be plunged in even worse turmoil than before: civil war, hyperinflation, external war with Prussia and Austria, economic decay, and of course, the Reign of Terror.

During this period, 300,000 people were incarcerated, and nearly 30,000 were either publicly executed or died in prison without trial, because the “Committee for Public Safety” deemed them intellectual dissidents.

It literally took decades for France to finally return to ‘normal’.

One of the most interesting eye-witness accounts from the early days of the revolution comes from none other than Thomas Jefferson, who was stationed in Paris at the time as a diplomat.

In a letter to John Jay (another Founding Father), Jefferson provides a first-hand account of the storming of the Bastille… and the subsequent unrest that took over the country:

“[The mob] carried the Governor and Lieutenant governor to the Greve (the place of public execution) cut off their heads, and set them through the city in triumph. . .”

Jefferson could hardly believe what he was seeing: France, the most advanced and civilized country on earth, plunging into chaos.

The circumstances are obviously different today. But there are undoubtedly countless people right now who can hardly believe what they’ve been seeing in the US, and worldwide.

A global pandemic, total economic shutdown, tens of millions of jobs lost, trillions of dollars of debt and money printing, and social unrest, including riots and looting.

And then there’s the angry and growing mob that greets any intellectual dissent with punishment, persecution, and censorship.

People have been fired, forced to denounce family members, beaten, and even threatened with murder, for expressing completely benign perspectives.

Many politicians have already capitulated to the mob. Some have allowed sections of their city to be overrun. And others are actively seizing on the moment to foment a far-reaching Marxist revolution.

In the city of Seattle, a local councilwoman released a video stating her clear objective to overthrow the “racist, sexist, violent, utterly bankrupt system of capitalism. . . and replace it with socialism.”

Let’s be honest… this is worrisome. And it makes a lot of people feel like things are spiraling out of control.

My long-held view that I’ve been writing about for years is that having a Plan B is a way to take back control.

Having a Plan B is a completely rational; it’s like an insurance policy. You hope you’ll never need to use it. But if you ever do, you’ll be really glad that you have one.

A great Plan B has practically zero downside.

There’s no downside in good tax planning that can save you money. There’s no downside in making it more difficult for people to file frivolous lawsuits against you.

And in today’s environment, if you’re concerned about the policy impacts of mob rule, you’ll be better off with a Plan B to physically move yourself, if needed.

Frankly, what we’ve seen in 2020 so far is potentially just a taste of what may be coming.

Just imagine how swiftly and viciously governments could react if there will be COVID-20 or COVID-21.

Just imagine how much rage will explode in the streets depending on who wins the next US Presidential election.

And then there are other risks – like the looming Cold War with China, spiraling deficits, etc. We haven’t even started to see the effects of those.

So, it makes sense to have a second citizenship. Or at least a second residency – somewhere in the world that you can enjoy.

This means you’ll always have another option to live, work, invest, retire… and potentially even pass down those rights to future generations.

A Plan B also takes your finances into consideration.

Will the trillions and trillions of dollars that the Federal Reserve is pumping out cause serious damage to the dollar? Will the world eventually abandon the dollar as a reserve currency?

These are certainly possibilities. That’s why gold and other real assets are also worth considering as part of a Plan B.

Retirement planning is another factor to consider. According to updated projections from the Bipartisan Policy Center, in the Land of the Free, Social Security may be completely out of cash by 2029.

In terms of retirement planning, nine years is right around the corner.

So, taking charge of your retirement with a tax-advantaged retirement structure like a Solo 401(k) or Self-Employed Pension (SEP) IRA makes a lot of sense. These retirement structures allow you to put away a LOT more money for your retirement than traditional plans.

And they also allow you to invest your retirement plan’s funds in a wide variety of assets – private equity, startups, precious metals, real estate, etc.

Having a Plan B is like taking care of your health… it just makes sense. There’s no downside.

And, like taking steps to improve your health, it’s never too late to start.

Source

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Justice Breyer made it impossible for Congress to impeach territorial officers for accepting bribes

Seth Barrett Tillman and I wrote a new piece on Balkinization about the Puerto Rico Appointments Clause case. Justice Breyer’s majority opinion held that territorial officers with “with primarily local duties” are not “officers of the United States,” as that term is used in the Appointments Clause. We explain that Justice Breyer’s analysis leads to some unanticipated consequences. Here is a snippet:

The PROMESA case also has unanticipated consequences. If territorial officers with only local duties are not “officers of the United States,” then they are not subject to the Impeachment Clause. That provision extends to the “President, Vice President and all Civil Officers of the United States.” Thus, Congress would be helpless to impeach, try, remove, and disqualify a territorial officer—no matter how egregious the conduct. Consider an example involving St. Clair. Trump v. Mazars recounted that in 1792, he led a “campaign against the Indians in the Northwest Territory, which had concluded in an utter rout of federal forces when they were caught by surprise near the present-day border between Ohio and Indiana.” Under the PROMESA Court’s reading of the Appointments Clause, Congress would have been unable to remove St. Clair through impeachment processes. By contrast, we can point to a 1796 opinion of the Attorney General, Charles Lee, advising the House of Representatives that it may proceed against a territorial judge by impeachment.

Justice Breyer’s majority opinion has other consequences. If territorial officers with primarily local duties are not “officers of the United States,” regardless of how they are appointed, then they may also not hold “office[s] . . . under the United States.” Under the prevailing readings of the Constitution, there is no meaningful difference between the Constitution’s “office”- and “officer”-language. The two phrases—”officers of the United States” and “office under the United States”—are seen as co-extensive. (We do not subscribe to that modern atextual reading of the Constitution.) If these conclusions are accurate, then territorial officers would not be subject to the Foreign Emoluments Clause. As a result, St. Clair and other frontier officers could have freely accepted foreign state diplomatic gifts or, even, bribes from England, France, and Spain, without seeking congressional consent. Congressional consent would not be required for diplomatic gifts, and impeachment would not extend to outright bribes. Moreover, such territorial officers would not be bound by two other provisions that use the phrase “office . . . under the United States”: the Elector Incompatibility Clause and the Impeachment Disqualification Clause.

The PROMESA Court may have resolved one question with respect to the Appointments Clause, but it created far greater problems with respect to the Impeachment Clause and the Foreign Emoluments Clause. The Constitution’s “office”- and “officer”-language has a Newtonian quality to it. Removing an office from the scope of one clause will necessarily remove it from the scope of other clauses using the same “office”- and “officer”-language. Likewise, subjecting an office to the scope of one clause will necessarily subject it to other clauses. Every action has an equal and opposite reaction. It is not possible to focus on a single provision at a time. This analysis should demonstrate that the Constitution’s “office”- and “officer”-language must be considered intratextually. A ruling with respect to one clause will have unintended consequences for other clauses. The Appointments Clause cannot be considered in a vacuum.

This post is an excerpt from our forthcoming article, Offices and Officers of the Constitution.

 

 

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Do COVID-19 Complications With Marriage Licenses Show It’s Time To Get the Government Out of Marriage?

Wedding Cake Topper

At the end of April, New York City announced “Project Cupid,” an emergency measure which moves the process of obtaining a marriage license online via video conference. Normally, New York state requires couples to obtain these licenses in person, but the COVID-19 pandemic has required a workaround. “We need moments of joy now more than ever,” said Mayor Bill de Blasio, “and we won’t let a pandemic get in the way of true love.” 

Touching stuff. Unfortunately, more than two months later, New Yorkers are still struggling to book their licensing appointments since the city clerk’s office has a huge backlog. For couples with an urgent reason to wed, this is untenable: A couple profiled in The City‘s report on the situation finally eloped to Maryland, à la The Philadelphia Story, because the husband was set to lose his health insurance and the wife worried her work visa would no longer be enough to avoid deportation. They couldn’t wait on a local license.

This sort of delay isn’t unique to New York. In Galveston County, Texas, marriage license requests have more than tripled because nearby cities and states are simply not licensing quickly enough, if at all. Likewise, some local governments have delayed issuance of pet licenses and tree-trimming permits; more seriously, some have halted building inspections, prolonging or effectively suspending construction work.

All such coronavirus-induced malfunctions of governance should occasion reexamination of whether we actually need many of the regulations shaping our daily lives. The pandemic has already prompted fresh scrutiny of alcohol laws, medical testing rules, occupational licensing, and more. But marriage licenses, the most intimate of the lot, deserve particular attention. The state should not be involved in marriage—not licensing, conducting, or defining it.

The practical case is obvious: There are likely thousands of people in America right now who want to be married and can’t be because they can’t get in to see their city clerk. Even amid such unique circumstances, this is absurd and unconscionable. No one should incur medical debt or deportation solely because the state is unable or unwilling to dole out official marital legitimacy.

The bigger principle of privatizing marriage, however, is that it concerns a fundamental and pre-political human right. The decision of whether and whom to marry must be made by those who are marrying “before God and these witnesses,” which is to say, in the context of their families, friends, and religious communities (if they have them). It is not for the state to determine, but historically, marriage licensing was a blatant tool of social control.

These licenses in America date to the 19th century, when they were developed as a means of forbidding unions deemed undesirable, which often meant interracial unions back then. With bans on interracial marriage gone and gay marriage legalized, the licenses today may seem but a rubber stamp on the free choice of two consenting adults. Yet, as many couples are learning now, that stamp is not guaranteed. Unforeseen circumstances may interrupt. New or renewed restrictions on who may marry certainly seem unlikely, but they’re not wholly inconceivable. (See, for example, Bermuda’s ongoing gay marriage whiplash.) With state authority over marriage intact, there’s always a chance that authority could be misused.

But saying “privatize marriage” is not the simple solution it may sound. Any credible argument for it must begin with concession of the point, often raised by skeptics, that so much of our government and financial system uses marriage as a legal shorthand. Eliminating the state’s regulatory authority here—which at the federal level alone entails “more than 1,100 rights [and] responsibilities,” to say nothing of state and local regulations and layers of common law—would throw all that into disarray.

Calling for privatized marriage in a meaningful sense is ultimately determined to dismantle regulations until state control over marriage wouldn’t be needed to make the transformed system work. We shouldn’t downplay the scale of this idea—there’s an entire libertarian agenda crammed inside this horse.

It’s an agenda which reflects the reality of changing attitudes toward marriage: Visions of privatization (in retrospect, including my own from before Obergefell v. Hodges) don’t always recognize just how many spheres of life and law the proposal would affect, but critics who focus on how marriage now fosters stability and protects children seem to forget marriage rates are plunging, and nearly four in 10 babies in America are born out of wedlock already.

This agenda also has the merit of sidestepping many of the culture war fights over religious liberty and gay marriage which continue apace five years after Obergefell. Coexistence between Americans with deeply held, differing views on sex, gender, and marriage could be less fraught, and fears about curtailment of religious practice much allayed, were the sanction and force of the state removed from play. 

But what if you assume, as I do, that the entire libertarian agenda stuffed into “privatize marriage” isn’t in our near future? Well, we could at least address the immediate problem: Smooth the application process for the duration of the COVID-19 pandemic, and then keep it that way. Let people obtain marriage licenses online or by mail. Nix waiting periods and interviews—which aren’t universally required—and make the fee as small as possible. We may not disentangle the state from marriage any time soon, but we could limit the harms perpetuated by its licensing scheme.

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Conviction of 17-Year-Old Girl for Threatening Her Mother Reversed

From today’s decision in State v. D.R.C. (by Chief Judge Rebecca Pennell, joined by Judges Laurel Siddoway and George Fearing):

The State is prohibited from penalizing constitutionally protected speech. But not all speech is protected. When it comes to the crime of harassment, speech is not protected if it constitutes a true threat, as opposed to mere bluster or hyperbole. The test for a true threat is objective, though not abstract. The State must show a reasonable person in the defendant’s position would have foreseen the speech would be perceived as a true threat by the individuals in the defendant’s intended audience.

Here, D.R.C. sent a series of text messages to her friends, indicating she wanted to kill her mother. The texts were sent in the midst of a mother-daughter fight. They were vaguely worded and peppered with smiling emojis and the initialism “LOL.” There is no indication D.R.C. ever meant for her mother to see the texts or that D.R.C. ever threatened her mother directly. Given these circumstances, the State has not met its burden of proving a true threat. The record shows nothing more than odious expressions of frustration. D.R.C.’s guilty adjudication and disposition is therefore reversed….

The case against 17-year-old D.R.C. began with a mother-daughter dispute over whether D.R.C. violated house rules by possessing gang-colored clothing. The argument took place in D.R.C.’s bedroom, and at some point D.R.C. slammed her door shut.

D.R.C.’s mother responded by removing the door from its hinges.

During the argument with her mother, D.R.C. was on her phone and texting

with several friends. The primary correspondent was an individual identified as “Joshua.” …

After removing D.R.C.’s bedroom door, the mother confiscated D.R.C.’s phone and turned to leave the room. As she was leaving, D.R.C.’s mother heard a loud noise.

D.R.C. had punched her bedroom wall, leaving a hole in it. D.R.C.’s mother called the police. The police arrived and talked to D.R.C. and her mother, but did not take further action.

Later that night, D.R.C.’s mother reviewed D.R.C.’s phone and discovered the texts between D.R.C., Joshua, and Lexy. She also saw a series of older texts between

D.R.C. and Lexy, wherein D.R.C. made violent comments about an acquaintance….

D.R.C.’s mother found the texts alarming. Although D.R.C. had never threatened her mother directly or engaged in any physical violence, D.R.C.’s mother took precautionary measures. She changed the locks on the entry doors to the house and slept with a knife under her pillow until she was able to obtain a stun gun. D.R.C.’s mother took screen shots of D.R.C.’s text messages and shared them with the police.

The State charged D.R.C. with harassment in juvenile court…. D.R.C. testified in her defense. She explained she never intended her messages to be seen by anyone other than her friends. Nor did she intend her texts to be taken seriously. They were instead a form of venting and expressing her emotions. D.R.C. testified she and her friends often used exaggerated language in their texts. Violent language was common but was not intended to be taken literally. According to D.R.C., she and her friends often denoted sarcasm through the use of emojis and initialisms such as LOLs or LMFAOs. D.R.C. did not think any of her friends would have taken the text messages about her mother seriously.

The juvenile court found D.R.C. guilty of harassment under RCW 9A.46.020(1) and (2)(a). The court reasoned D.R.C.’s messages constituted true threats, as required by the First Amendment to the United States Constitution, because they were taken seriously by both D.R.C.’s mother and Joshua, who advised D.R.C. to tone things down. The court imposed 13 days’ confinement and 12 months’ community supervision….

[B]ecause the crime of harassment penalizes pure speech, its enforcement raises First Amendment concerns. To penalize a defendant for harassment, the State must prove not only the elements of the offense but also that the defendant’s words were not the type of speech protected by the First Amendment. Proof of a true threat meets this requirement.

“A true threat is a serious threat.” It is not an idle statement, a joke, or even a “hyperbolic expression[] of frustration.” When assessing whether a statement at the heart of a criminal prosecution constitutes a true threat, our analysis is more demanding than otherwise applicable in a sufficiency challenge. We look carefully at context and independently assess whether a statement in fact “falls within the ambit of a true threat in order to avoid infringement on the precious right to free speech.”

The focus of the true threat analysis is on the speaker. But we do not look at

the speaker’s actual intent. Instead, the test is objective. We ask whether a reasonable person in the speaker’s position would foresee their statement would be interpreted as a serious expression of intent to cause physical harm.

While the true threat analysis requires an objective analysis with respect to the speaker, the same is not true of the audience. When assessing whether a reasonable person in the speaker’s position would foresee a statement interpreted as a serious threat, we look at the speaker’s actual intended audience, not a reasonable audience or an unintended recipient

Our case law has identified various tools for distinguishing true threats from hyperbole or a joke. Specific plans of causing harm are more threatening than vagaries. A threat will be perceived as more serious when it is conveyed with a serious demeanor. And a threat is understood as more serious when it is repeated to different audiences….

D.R.C.’s intended audience was not her mother, it was her two friends Joshua and Lexy. Thus, whether D.R.C.’s mother found her daughter’s texts alarming is not our focus. We instead must ask whether a reasonable person in D.R.C.’s position would have foreseen that either Joshua or Lexy would have interpreted D.R.C.’s texts as true threats, as opposed to merely a joke or an expression of emotion.

Our analysis of the perspective of Joshua and Lexy is hampered by the fact that neither was called as a witness at trial…. Without explicatory testimony, we are left with only our impressions of the text message exchanges.

We look first to D.R.C.’s exchange with Joshua. According to the State’s exhibit, Joshua was the one who started using violent language when he texted, “Haha beat her

ass.” By prefacing his comment with “Haha,” Joshua unambiguously indicated he was entertaining a joke. D.R.C. then made the comment, “imma get her killed.” At this point, Joshua did not change his joking tone. Instead he completed his comment “Woh chill just beat her ass” with the initialism “lol.” Given the entirety of this exchange, the record simply does not suggest Joshua interpreted D.R.C. as conveying a serious threat.

Even if Joshua had been troubled by D.R.C.’s comments, the context of the text messages is still not indicative of a true threat. Immediately after Joshua’s “lol” text,

D.R.C. reiterated the joking nature of the exchange by accenting her message with an emoji entitled “rolling on the floor laughing.” A reasonable person using this emoji in the context of Joshua’s “Haha” and “lol,” would not have foreseen D.R.C.’s statements as conveying a true intent to cause harm.

We next look at D.R.C.’s statements to Lexy. Unfortunately, the State’s exhibits do not provide much context for this exchange. We do not have Lexy’s response to D.R.C.’s text, “Imma fucking kill this bitch.” However, D.R.C. prefaced her text with an emoji entitled “face with tears of joy.” In addition, D.R.C. indicated she was upset because her mother was going to make D.R.C. live with her father. This parent-child conflict is the type of circumstance commonly associated with teenage frustration, but not homicidal ideation. Given the vagueness of D.R.C.’s statement that she wanted to kill her mother, and the other contextual indicators, the statement to Lexy is not reasonably interpreted as a true threat.

D.R.C.’s past conversation with Lexy supports D.R.C.’s testimony that she tended to use hyperbolic language with her friends. In the prior text between D.R.C. and Lexy, D.R.C. accompanied her statements about harming or killing a mutual acquaintance with “Lmfao”; the face with tears of joy emoji; a shrug emoji; a smiling face with horns emoji;;a zany face emoji; and a heart emoji. The combination of the initialism and emojis conveyed an unmistakable message of sarcasm, as opposed to a serious intent to cause harm or death….

While we rule in D.R.C.’s favor, our disposition should not be interpreted as approval of D.R.C.’s choice of language. We, like the trial court, find nothing funny in the texts. Nevertheless, the First Amendment protects all sorts of speech, even when the sentiment is hurtful or vile. D.R.C. would do well to heed the advice of the juvenile court judge and find a peer group that does not consist of “mean girls.”

Thanks to Mark Leen for the pointer.

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Museum Curator Resigns After He Is Accused of Racism for Saying He Would Still Collect Art From White Men

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Until last week, Gary Garrels was senior curator of painting and sculpture at the San Francisco Museum of Modern Art (SFMOMA). He resigned his position after museum employees circulated a petition that accused him of racism and demanded his immediate ouster.

“Gary’s removal from SFMOMA is non-negotiable,” read the petition. “Considering his lengthy tenure at this institution, we ask just how long have his toxic white supremacist beliefs regarding race and equity directed his position curating the content of the museum?”

This accusation—that Garrels’ choices as an art curator are guided by white supremacist beliefs—is a very serious one. Unsurprisingly, it does not stand up to even minimal scrutiny.

The petitioners cite few examples of anything even approaching bad behavior from Garrels. Their sole complaint is that he allegedly concluded a presentation on how to diversify the museum’s holdings by saying, “don’t worry, we will definitely still continue to collect white artists.”

Garrels has apparently articulated this sentiment on more than one occasion. According to artnet.com, he said that it would be impossible to completely shun white artists, because this would constitute “reverse discrimination.” That’s the sum total of his alleged crimes. He made a perfectly benign, wholly inoffensive, obviously true statement that at least some of the museum’s featured artists would continue to be white. The petition lists no other specific grievances.

You might think that one of the most prominent art curators in the country—with 20 years of experience at SFMOMA—would be able to weather such a pathetically weak accusation of racism. But in the current cultural moment, it appears not. Garrels promptly resigned.

In a statement announcing his decision to step down, Garrels apologized for the harm his words caused, only slightly disputing the absurd charge against him. ” I do not believe I have ever said that it is important to collect the art of white men,” he said, according to artnet.com. “I have said that it is important that we do not exclude consideration of the art of white men.”

Suffice it to say that this is not the language of a white supremacist. Those who say otherwise—that Garrels is guilty of racism—have stripped the word of its potency. They have shown once again that the signatories of the recent Harper‘s letter were entirely correct that the progressive drive to purge lofty institutions of racism and sexism has frequently gone astray, in a manner that threatens both free inquiry and common decency. The 1793 Project continues.

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