Stossel: Let Charter Schools Teach

Many parents try to escape government-run schools for less-regulated “charter schools.”

Philadelphia mom Elaine Wells tells John Stossel that she wanted to get her boys into a charter because her local government-run school in inner-city Philadelphia was “horrible…there were fights after school every day.”

Her kids spent years losing lotteries that they hoped would get them into a charter.

“It’s heartbreaking,” Wells says.

In Philadelphia, thanks to government limits, only 7,000 kids get into charters. 29,000 apply.

But eventually, Wells got her kids into a new charter school: Boys’ Latin, founded by David Hardy.

Boys’ Latin does many unusual things. All kids learn Latin, wear uniforms, and stay longer hours—and it’s all-boys.

“The rules are there to set the stage for the students,” Hardy tells Stossel. “If the teacher can tell you to tuck in your shirt, they can tell you to be quiet in class…tell you to do your homework.”

Wells says that worked for her kids. “Before Boys Latin I would come home and say, ‘OK, I need you to read for an hour—read a book.’ And their response would be, ‘Why? What did we do?’ Like reading was a punishment! [After] Boys’ Latin…I would find books in the bathroom on the floor!”

Her son Ibrahim adds, “It came to the point where the teacher would tell our mom that I’d taken too many books.”

The school was better at hiring teachers who tried hard.

Wells recalls being shocked to find her sons talking to teachers at night: “He’s in his room and I hear him talking on the phone and it was 10 o’clock at night. I’m like, ‘Who are you on the phone with?’ and he was like, ‘Well, Mr. Bumbulsky told me to call him if I needed help with homework.'”

Stossel pushed back at some of David Hardy’s ideas, like making every student take four years of Latin. “It’s ridiculous. Nobody speaks Latin,” Stossel suggests to founder David Hardy.

“Well we picked Latin because it was hard,” Hardy replies.

“What’s the point of that?” Stossel asks.

“Because life is hard—to be prepared you have to work hard,” Hardy says. “We wanted to get that into the psyche of our students.”

Overall, Boys’ Latin gets somewhat better test scores than surrounding schools in most subjects.

“We deliver,” Hardy says. “Since the very first class we’ve sent more black boys to college than any high school in Pennsylvania.”

Despite that, government officials rejected his proposal to open a “Girls’ Latin” school. They’ve rejected a bunch of schools.

Opponents complain that charters “drain scarce resources” from government-run schools.

“You can’t tell me that,” Wells responds. “Every parent pays taxes…if I choose for my child to go to a charter school, then that’s where my taxes should go!”

In fact, Philadelphia and other cities don’t give charters the same amount of money they give to schools they control. Philadelphia gives them only 70 percent of that. So per student, Stossel notes, the government schools make money whenever a kid leaves for a charter. Over 13 years of schooling, Philadelphia saves $70,000 per kid.

Stossel asks Wells: What if those savings were passed onto the child?

“Absolutely! Give them the rest of the money!” Wells laughs.

But it won’t happen because, as Hardy notes, “It would also mean that there would be a whole lot less union jobs. The unions are not going to be for that.”

The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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China’s Xi: “I Can’t Believe What President Trump Says”

China’s Xi: “I Can’t Believe What President Trump Says”

With equity futures gradually rolling over overnight, there was the obligatory dose of trade war optimism in this morning’s news flow, with Trump reiterating that China wants to talk, while China was said to be hopeful the US can create conditions for trade talks; this was followed by a CCTV report according to which U.S. delegates said they hope U.S.-China trade talks can achieve progress and reach a deal as soon as possible, while China’s premier Li was quoted as saying that China and US should find solutions to disputes based on consensus reached by leaders of the two nations, adding that “China treats domestic, foreign companies fairly” and “puts more focus on intellectual property protection”, noting that “companies including U.S. firms are welcome to increase investment in China.”

This was more than enough to stabilize the drop in futures. But a bigger problem may be emerging behind the scenes, as the true feelings of China’s president toward president Trump have finally emerged on the record.

According to Kyodo, President Xi Jinping voiced distrust of U.S. President Donald Trump during his meeting with the Japanese Prime Minister Shinzo Abe in June amid the U.S.-China trade dispute, a source close to the matter said Tuesday.

“I can’t believe what President Trump says” concerning trade negotiations, Xi told Abe during a meeting on the fringe of the Group of 20 summit in Osaka. And while Abe told Xi that Trump trusts the Chinese president, Xi continued to air his grievances about his U.S. counterpart, the diplomatic source told Kyodo News.

The reason for Xi’s distrust: despite agreeing to Xi’s proposal on the phone to deal with Chinese telecommunication giant Huawei Technologies during the next working-level negotiations, “once the negotiations began, the U.S. side said that Huawei is not a trade issue but a security issue and did not deal with it,” Xi told Abe, pointing out that Trump’s remarks proved unreliable.

According to the Chinese Foreign Ministry, Xi had a telephone conference with Trump on June 18, during which he expressed China’s hope that “the U.S. side can treat Chinese firms in a fair manner.”

Xi further complained to Abe that while the Trump administration has repeatedly criticized Beijing for supporting state-owned companies with subsidies, “the U.S. is also providing Boeing with subsidies,” referring to the Chicago-based U.S. airplane manufacturer.

Last week, the United States slapped China with the first stage of a new round of tariffs that will see nearly all Chinese imports taxed. China retaliated on the same day with its own round of tariffs on U.S. goods and announced the following day its decision to lodge a case at the World Trade Organization over the latest U.S imposition of import duties on Chinese exports to the United States.

While the United States and China are planning to hold ministerial- level trade talks in October in Washington, it is uncertain whether there will be any breakthrough, especially with neither side trusting anything the other says.

Eager to claim a major trade victory to boost his 2020 re-election bid, Trump is likely to strengthen his hardline attitude toward China, according to Kyodo. But with no mutual trust between the two leaders, a major concession by Xi seems unlikely, making a prolonged conflict between the United States and China almost inevitable.

Meanwhile, relations between Japan and China have been improving recently, with the two sides preparing for Xi’s first state visit to Japan planned for next spring.


Tyler Durden

Tue, 09/10/2019 – 08:30

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Shouting Down a Speaker Isn’t “Lawful Activity”

In Oransky v. Martin Marietta Materials, Inc., 2019 WL 4242670 (D. Colo. Sept. 6, 2019), Paula Oransky was fired by Martin Marietta Materials, Inc. She sued, claiming (among other things) that the firing violated a Colorado statute that barred firing employees for any “lawful [off-duty] activity”—in this case, her actions at a community meeting involving Anadarko Petroleum, an MMM customer. (For more on how state statutes limit employer retaliation for employee speech, see this article of mine.) The court held against her, partly because her actions weren’t lawful:

Ms. Oransky resides with her family in Erie, Colorado. On September 27, 2017, Anadarko hosted a “Community Forum” in Erie to discuss its plans for oil and gas development in the area. Ms. Oransky attended the forum, where she met and briefly chatted with an Anadarko official with whom she was acquainted through her work.

During the forum, Ms. Oransky—who is concerned about health and environmental consequences associated with oil and gas development—and others protested Anadarko’s activities. Ms. Oransky led protesters in a series of call-and-response chants to the effect of “We demand you [Anadarko] leave our community!” and “No drilling, no wells!,” among others. The protestors succeeded in causing the forum to be cancelled early. After the protest, Ms. Oransky bragged in an online message that she “helped shut down the meeting.” All of the protest activities, as well as the aftermath, were recorded on video and posted on the protestors’ public Facebook page … .

MMM’s motion first challenges whether Ms. Oransky can show that her protest activities at the forum were “lawful.” MMM argues that Ms. Oransky’s disruption of the forum constituted violations of Colorado state laws—e.g. Colo. Rev. Stat. § 18-9-108 (prohibiting persons from “disrupting lawful assembly” via “physical action, verbal utterance, or any other means”)—as well as provisions of the Erie, Colorado municipal code—e.g. Erie Mun. Code § 7-6-5(N) (prohibiting any “use or attempt to interfere with the use of any … space or facility within parks or recreation facilities … reserved for any other person or group by a permit”).

Ms. Oransky responds that no citations were issued by police as a result of the protest and that no one else was attempting to speak at the time when the protest occurred. [But a Colorado Supreme Court precedent interpreting the Colorado off-duty-lawful-activities statute] effectively disposes of Ms. Oransky’s contention that her conduct cannot be considered unlawful simply because she was not charged with a crime. In [that case], there was no suggestion that the employee [who had been fired for using marijuana off-duty] had been charged by federal authorities with possession of marijuana; indeed, the Supreme Court noted in a footnote that federal authorities had expressly indicated an unwillingness to enforce federal laws against persons like the employee who were otherwise complying with state medical marijuana laws.. Nevertheless, the Supreme Court concluded that the employee’s use of marijuana was unlawful because it was nominally prohibited by law, regardless of whether the law was actually being enforced against him. By the same reasoning, the question here is not whether a police officer actually cited Ms. Oransky with a state or local criminal violation, but whether an officer could have done so.

Colo. Rev. Stat. § 18-9-108 provides that “a person commits disrupting lawful assembly if, intending to prevent or disrupt any lawful meeting, procession, or gathering, he significantly obstructs or interferes with the meeting, procession, or gathering by physical action, verbal utterances, or other means.” [Another Colorado Supreme Court precedent] interprets that statute in two significant respects. First, it indicates that, in determining whether a person intended to disrupt a gathering, the factfinder must consider the nature of the meeting, the “implicit customs and usages or explicit rules germane to a given meeting”—i.e. that outdoor events tolerate more disruption than indoor ones, and that political conventions might expect “prolonged, raucous, boisterous demonstrations” whereas funeral services would not—and the extent to which the person “was aware that his conduct was inconsistent with the customs of the assembly and whether he thereby intended his conduct to disrupt the assembly significantly.” Second, it suggests that a “significant disruption” to the event must occur….

There is no dispute that the forum was a lawful meeting organized by Anadarko. It was held indoors, in a community room in the town’s Community Center, and scheduled to run from 5:00 p.m. to 7:00 p.m. In publicizing the forum, Anadarko explained that its purpose was to invite community members to “meet the Anadarko employees working on these planned activities, learn more about oil and natural gas development, and ask any questions you may have about our operations.” As such, the “implicit customs” of such meetings might encompass heated exchanges between individual residents and Anadarko representatives on a one-to-one basis, and perhaps protests and picketing outside the venue, but it would be unreasonable to conclude that such meetings are customarily expected to tolerate groups of 30 or more individuals holding up signs and chanting loudly so as to make other discussions between interested residents and Anadarko representatives impossible.

It is also undisputed that Ms. Oransky fully understood and expected that her conduct and that of the protesters acting in concert with her would disrupt the meeting. In an e-mail sent to protesters just hours before the meeting, Ms. Oransky laid out her plans and expectations. She intended that protesters initially enter the forum shortly before 6:00 p.m. and blend in with legitimate attendees: “Everyone should be looking at the displays, asking general questions to the Anadarko reps to kill time … Do not protest at this time.” Other protesters in an e-mail chain that included Ms. Oransky also stated that they would have to “sneak banners in” to the forum..Ms. Oransky’s e-mail indicated that at 6:00 p.m., she should give a signal to the protesters and they would begin chanting and displaying signs. Her e-mail makes clear that Ms. Oransky understood and expected that these actions would be disruptive enough that the protesters would be ejected from the forum: “Likely, … we will be asked to leave, which we will do.” These facts underscore that Ms. Oranksy knew that her actions and those of the group she was leading would be unwelcome at the forum and would have the effect of disrupting it.

The record is also undisputed that Ms. Oransky’s conduct did indeed significantly disrupt the forum. Approximately 2½ minutes after Ms. Oransky’s group began chanting—roughly at 6:02 p.m.—a representative of the Community Center announced that the facility was closing and that everyone had the leave the building. Ms. Oransky took credit for that announcement immediately telling a videographer “we closed it down!”

Ms. Oransky is more demure in her response brief, arguing that it is possible that the closure was not a result of her leading the chanting inside the forum room but rather a response to other protesters who were gathered in the hallway or outside the building. But the record is clear that Ms. Oransky was instrumental in the recruitment and instructing of those protesters as well. In a September 17 e-mail exchange, an individual named Theresa contacted Ms. Oransky and asked if she would like as many as 100 protesters from a Boulder-based organization to attend the September 27 forum and protest, and Ms. Oransky responded “I’d be all for that idea.” Another participant in the same e-mail chain later advised Theresa that “Paula”—Ms. Oransky—”is going to organize the Anadarko meeting it terms of any noise we need to make outside, etc. We are going to entrust Paula to take on this task.” In her e-mail on the day of the forum, Ms. Oransky gives specific instructions to both protesters who would be inside the forum room and “people outside” as well (whom she stated “we will use … as an important secondary event, almost a diversion”).

In this sense, when Ms. Oransky boasted that “we closed it down,” it is clear that she is referring to all of the protesters that she was directing, both inside and outside the venue. Thus, even if, as Ms. Oransky argues, the forum was cut short because of protesters in the hallway or outside the building, rather than as a result of Ms. Oransky personally leading the chanting inside the forum room, it remains undisputed that the entire protest operation was directed by Ms. Oransky and that the disruption of the forum was the result of her actions.

Under such circumstances, the Court finds that there is no genuine dispute of fact in the record and that, on the undisputed facts presented herein, Ms. Oransky’s conduct on September 27 could have been deemed to constitute a violation of Colo. Rev. Stat. § 18-9-108, such that she cannot establish that her activities were “lawful.” As a result, MMM is entitled to summary judgment on her statutory claim….

The court also concluded that, in any event, Oransky’s actions would have fit within two exceptions to the statute, for activities that “reasonably and rationally relate[] to the employment activities of a particular employee or particular group of employees” (rather than all of the employer’s employees), or activities where disciplinary action “is necessary to avoid a conflict of interest” with the employee’s liability to the employer. Oransky, the court stressed, wasn’t just an average MMM employee, but rather was responsible for maintaining relationships with customers, including Anadarko. These exceptions raise separate and complicated questions, I think, and ones that are peculiar to the particular Colorado law (though they may also be influential in North Dakota, which has a very similarly worded statute). But the point about shouting down not being “lawful activity” may be relevant to many other kinds of disputes as well.

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 Iran Will Be A Full Nuclear Power By End Of 2020: Report

 Iran Will Be A Full Nuclear Power By End Of 2020: Report

Authored by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

French President Emmanuel Macron failed to promote successfully his Iranian initiative with the US administration despite the initial blessing of his US counterpart. This failure led Iran to make a third gradual withdrawal from its JCPOA nuclear deal commitment, raising two main issues.

Iran has become a regional power to be reckoned with, so we can now scrap from reactions to its policies the words “submit,” or “bow to the international community”. Moreover, since Europe is apparently no longer in a position to fulfill its commitments, Iran will now be headed towards a total pull-out following further gradual withdrawal steps. Just before the US elections due in November 2020, Iran is expected to become a nuclear country with the full capability of producing uranium enriched to more than 20% uranium-235, weapons-usable and therefore in a position to manufacture dozens of nuclear bombs (for which uranium must be enriched to about 90%). However, this does not necessarily mean that this is Iran’s ultimate objective.

Screenshot of Iranian President Hassan Rouhani inspecting and touring a facility. 

Industry data shows that half of the effort goes into enriching from 0.7% to 4%. If Iran reaches the level of 20%, the journey towards 90% is almost done. A few thousand centrifuges are needed to reach 20% enrichment while a few hundred are enough to cross from 20% to the 90% needed for a nuclear bomb.

When Iran announces it is reaching a level which is considered critical by the west, there is the possibility that Israel might act militarily against Iran’s capability as it did in Iraq in 1981, in Syria in 2009, and in assassinating nuclear scientists. If this happens, the Middle East will be exposed to a mega earthquake whose outcome is unpredictable. But if Israel and the US are not in a position to react against Iran’s total withdrawal from the JCPOA (nuclear deal), Iran will no longer accept a return to the 2015 deal. Its position will become much stronger and any deal would be difficult to reach.

Sources within the decision-making circle have said “Iran will become a state with full nuclear capability. It is also aiming for self-sufficiency and is planning to move away from counting solely on its oil exports for its annual budget. It is starting to generate and manufacture in many sectors and it will certainly increase its missile development and production. Missile technology has proved to be the most efficient and cheapest deterrent weapon for Iran and its allies in Lebanon, Syria, Iraq and the Yemen.”

Iran has been following a “strategy of patience” since US President Donald Trump unlawfully revoked the nuclear deal. Tehran allowed Europe, for an entire year, to think about a way to tempt Iran to stay within the nuclear deal on the basis of 4 (France, Russia, China, UK) + 1 (Germany), excluding the US. After that long waiting period, Iran has taken the initiative into its own hands and is gradually pulling out of the deal. It seems Trump did not learn from President Obama who signed the deal, convinced that US sanctions would be ineffective.

But Iran is not missing an opportunity worth trying to make its case. At the G7 in France, Iranian Foreign Minister Javad Zarif cut short his visit to Beijing to meet European leaders and ministers at the request of President Macron. It was hinted that there were chances for Iran to sell its oil and that Macron had managed to break through the US-Iran tension.

Iran’s President Hassan Rouhani thought there was a real opportunity to smooth over tensions and that Trump, according to the source in Tehran, was ready to ease the sanctions in exchange for a meeting and the beginning of discussion. This is why Rouhani overtly stated his readiness to meet any person if that helped. But Zarif was surprised to learn that Macron didn’t fulfil his promises – because Trump had changed his mind. The initiative was stillborn and all are back at square one.

Macron understood that the problem doesn’t lie with the US President but in his consigliere Prime Minister Benyamin Netanyahu and his neocon team of Pompeo-Bolton. The meeting between the French Minister of Armed Forces Florence Parly and the Pentagon Chief Mark Esper was an attempt to convince the US Secretary of Defence to distance himself from the Pompeo-Bolton team before the situation gets out of control and Iran became unstoppable. 

Trump rejected the French idea to offer Iran a line of credit of 15 billions of Euros (not Dollars). This credit is part of Iran’s acquired right since it has agreed with Europe to sell 700,000 barrels of oil daily as part of a signed deal. Following the US sanctions on any country or company buying Iranian oil, Europe refrained from honouring the agreement. Vice Foreign Minister Abbas Araghchi calculated the amount at stake of 15 billion euros with European representatives. The agreement was that Iran would sell oil to Europe for this amount in the future, and that Iran could buy any product, not limited to food and medicine which were originally excluded from the US sanctions. Iran, according to the deal with European partners, would have had the right to take the money in cash and transfer it to any other country, including Iran”, said the source.

All this has been thrown to the winds. The result is simple: Iran will continue its nuclear program but will allow the International Atomic Energy Agency to monitor development. It is relying on the nuclear deal articles 26 and 36 to partially withdraw, a deal that was not signed based on trust, but on respect for law. This is the reason why Iran announced its third withdrawal step, increasing its stockpile of enriched uranium and replacing its IR-1 and IR-2m with IR-6 centrifuges (supposed to happen in 2026, as stated in paragraph 39).

Europe has used all its resources to persuade Iran from taking withdrawal steps, but to no avail. Iran has moved from a “patience strategy” to an “aggressive strategy” and will no longer accept a soft approach. It has undergone sanctions since 1979 and though it has learned to live with them, its patience is exhausted.

The US has nothing to offer to Iran but further sanctions and additional pressure on Europe, so the old continent follows its withdrawal path. The US administration planned to form various coalitions, including an Arab NATO, but failed so far to pull off any such alliance. US officials believed the Iranian regime would fall in months and that the population would turn against their leaders. Nothing of the sort happened. On the contrary: Trump and his neocons brought Iranian pragmatists and hardliners together for the same cause. The US destroyed the possibility of any moderate argument with people like Rouhani and Zarif, and showed that it was too untrustworthy for any reliable deal or agreement.

Iran FM Javad Zarif with French President Emmanuel Macron on the sidelines of the recent G7 summit, via mfa.ir

Iran is feeling stronger: it has downed a US drone, sabotaged several tankers and confiscated a British-flagged tanker despite the presence of the Royal Navy nearby. It has shown its readiness for war without pushing for it. Iran knows its allies in Lebanon, Syria, Iraq, Yemen and Palestine will be united as one in the case of war. The Iranian officials did not use revolutionary or sectarian slogans to face down US sanctions but instead managed to create national solidarity behind its firm policy of confrontation with the US. Washington, largely responsible for the status quo in the Gulf, failed to weaken Iran’s resolve and has so far been unsuccessful in undermining the Iranian economy. It is putting about the idea that its “suffocation policy” has been successful, but Iran is not giving the submission signals the US administration wants and needs, to justify the tension it has created in the Middle East and the Gulf.

Iran is handling its policy towards the US and Europe in the same way Iranians weave carpets. It takes several years to finish an artisanal carpet and many more years to sell it. The nuclear deal needed several years of preparation but even more time for establishing acceptance and the bona fides of the signatories. Trump’s simple-minded decision destroyed all that work. The US and Europe have lost the initiative. Europe is not politically in any position to stand against the US sanctions, nor does it have sufficient tools or standing to offer Iran and thus force it to the negotiating table. 

Iran is becoming stronger and much more difficult to tame than in the past. It is imposing itself as a regional power and a challenge to the west. It has advanced nuclear technology and capabilities, a self-sufficient armament program and it is strengthening its allies in the Middle East.

It is difficult to foresee any negotiation between Iran and the West before November 2020, the date of the US elections. Iran is no longer willing to accept in 2019 what it signed in 2015; Trump is responsible for the new scenario. Destroying the nuclear deal now redounds to the benefit of Iran. There will be a time when the US administration, due to the realization of its ignorance in Iranian affairs, will feel regret, and will ask to return to the negotiating table – perhaps after Trump? But conditions will definitely no longer be the same and it may very well come too late to see Iran accepting what it signed for in 2015.


Tyler Durden

Tue, 09/10/2019 – 08:11

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Shouting Down a Speaker Isn’t “Lawful Activity”

In Oransky v. Martin Marietta Materials, Inc., 2019 WL 4242670 (D. Colo. Sept. 6, 2019), Paula Oransky was fired by Martin Marietta Materials, Inc. She sued, claiming (among other things) that the firing violated a Colorado statute that barred firing employees for any “lawful [off-duty] activity”—in this case, her actions at a community meeting involving Anadarko Petroleum, an MMM customer. (For more on how state statutes limit employer retaliation for employee speech, see this article of mine.) The court held against her, partly because her actions weren’t lawful:

Ms. Oransky resides with her family in Erie, Colorado. On September 27, 2017, Anadarko hosted a “Community Forum” in Erie to discuss its plans for oil and gas development in the area. Ms. Oransky attended the forum, where she met and briefly chatted with an Anadarko official with whom she was acquainted through her work.

During the forum, Ms. Oransky—who is concerned about health and environmental consequences associated with oil and gas development—and others protested Anadarko’s activities. Ms. Oransky led protesters in a series of call-and-response chants to the effect of “We demand you [Anadarko] leave our community!” and “No drilling, no wells!,” among others. The protestors succeeded in causing the forum to be cancelled early. After the protest, Ms. Oransky bragged in an online message that she “helped shut down the meeting.” All of the protest activities, as well as the aftermath, were recorded on video and posted on the protestors’ public Facebook page … .

MMM’s motion first challenges whether Ms. Oransky can show that her protest activities at the forum were “lawful.” MMM argues that Ms. Oransky’s disruption of the forum constituted violations of Colorado state laws—e.g. Colo. Rev. Stat. § 18-9-108 (prohibiting persons from “disrupting lawful assembly” via “physical action, verbal utterance, or any other means”)—as well as provisions of the Erie, Colorado municipal code—e.g. Erie Mun. Code § 7-6-5(N) (prohibiting any “use or attempt to interfere with the use of any … space or facility within parks or recreation facilities … reserved for any other person or group by a permit”).

Ms. Oransky responds that no citations were issued by police as a result of the protest and that no one else was attempting to speak at the time when the protest occurred. [But a Colorado Supreme Court precedent interpreting the Colorado off-duty-lawful-activities statute] effectively disposes of Ms. Oransky’s contention that her conduct cannot be considered unlawful simply because she was not charged with a crime. In [that case], there was no suggestion that the employee [who had been fired for using marijuana off-duty] had been charged by federal authorities with possession of marijuana; indeed, the Supreme Court noted in a footnote that federal authorities had expressly indicated an unwillingness to enforce federal laws against persons like the employee who were otherwise complying with state medical marijuana laws.. Nevertheless, the Supreme Court concluded that the employee’s use of marijuana was unlawful because it was nominally prohibited by law, regardless of whether the law was actually being enforced against him. By the same reasoning, the question here is not whether a police officer actually cited Ms. Oransky with a state or local criminal violation, but whether an officer could have done so.

Colo. Rev. Stat. § 18-9-108 provides that “a person commits disrupting lawful assembly if, intending to prevent or disrupt any lawful meeting, procession, or gathering, he significantly obstructs or interferes with the meeting, procession, or gathering by physical action, verbal utterances, or other means.” [Another Colorado Supreme Court precedent] interprets that statute in two significant respects. First, it indicates that, in determining whether a person intended to disrupt a gathering, the factfinder must consider the nature of the meeting, the “implicit customs and usages or explicit rules germane to a given meeting”—i.e. that outdoor events tolerate more disruption than indoor ones, and that political conventions might expect “prolonged, raucous, boisterous demonstrations” whereas funeral services would not—and the extent to which the person “was aware that his conduct was inconsistent with the customs of the assembly and whether he thereby intended his conduct to disrupt the assembly significantly.” Second, it suggests that a “significant disruption” to the event must occur….

There is no dispute that the forum was a lawful meeting organized by Anadarko. It was held indoors, in a community room in the town’s Community Center, and scheduled to run from 5:00 p.m. to 7:00 p.m. In publicizing the forum, Anadarko explained that its purpose was to invite community members to “meet the Anadarko employees working on these planned activities, learn more about oil and natural gas development, and ask any questions you may have about our operations.” As such, the “implicit customs” of such meetings might encompass heated exchanges between individual residents and Anadarko representatives on a one-to-one basis, and perhaps protests and picketing outside the venue, but it would be unreasonable to conclude that such meetings are customarily expected to tolerate groups of 30 or more individuals holding up signs and chanting loudly so as to make other discussions between interested residents and Anadarko representatives impossible.

It is also undisputed that Ms. Oransky fully understood and expected that her conduct and that of the protesters acting in concert with her would disrupt the meeting. In an e-mail sent to protesters just hours before the meeting, Ms. Oransky laid out her plans and expectations. She intended that protesters initially enter the forum shortly before 6:00 p.m. and blend in with legitimate attendees: “Everyone should be looking at the displays, asking general questions to the Anadarko reps to kill time … Do not protest at this time.” Other protesters in an e-mail chain that included Ms. Oransky also stated that they would have to “sneak banners in” to the forum..Ms. Oransky’s e-mail indicated that at 6:00 p.m., she should give a signal to the protesters and they would begin chanting and displaying signs. Her e-mail makes clear that Ms. Oransky understood and expected that these actions would be disruptive enough that the protesters would be ejected from the forum: “Likely, … we will be asked to leave, which we will do.” These facts underscore that Ms. Oranksy knew that her actions and those of the group she was leading would be unwelcome at the forum and would have the effect of disrupting it.

The record is also undisputed that Ms. Oransky’s conduct did indeed significantly disrupt the forum. Approximately 2½ minutes after Ms. Oransky’s group began chanting—roughly at 6:02 p.m.—a representative of the Community Center announced that the facility was closing and that everyone had the leave the building. Ms. Oransky took credit for that announcement immediately telling a videographer “we closed it down!”

Ms. Oransky is more demure in her response brief, arguing that it is possible that the closure was not a result of her leading the chanting inside the forum room but rather a response to other protesters who were gathered in the hallway or outside the building. But the record is clear that Ms. Oransky was instrumental in the recruitment and instructing of those protesters as well. In a September 17 e-mail exchange, an individual named Theresa contacted Ms. Oransky and asked if she would like as many as 100 protesters from a Boulder-based organization to attend the September 27 forum and protest, and Ms. Oransky responded “I’d be all for that idea.” Another participant in the same e-mail chain later advised Theresa that “Paula”—Ms. Oransky—”is going to organize the Anadarko meeting it terms of any noise we need to make outside, etc. We are going to entrust Paula to take on this task.” In her e-mail on the day of the forum, Ms. Oransky gives specific instructions to both protesters who would be inside the forum room and “people outside” as well (whom she stated “we will use … as an important secondary event, almost a diversion”).

In this sense, when Ms. Oransky boasted that “we closed it down,” it is clear that she is referring to all of the protesters that she was directing, both inside and outside the venue. Thus, even if, as Ms. Oransky argues, the forum was cut short because of protesters in the hallway or outside the building, rather than as a result of Ms. Oransky personally leading the chanting inside the forum room, it remains undisputed that the entire protest operation was directed by Ms. Oransky and that the disruption of the forum was the result of her actions.

Under such circumstances, the Court finds that there is no genuine dispute of fact in the record and that, on the undisputed facts presented herein, Ms. Oransky’s conduct on September 27 could have been deemed to constitute a violation of Colo. Rev. Stat. § 18-9-108, such that she cannot establish that her activities were “lawful.” As a result, MMM is entitled to summary judgment on her statutory claim….

The court also concluded that, in any event, Oransky’s actions would have fit within two exceptions to the statute, for activities that “reasonably and rationally relate[] to the employment activities of a particular employee or particular group of employees” (rather than all of the employer’s employees), or activities where disciplinary action “is necessary to avoid a conflict of interest” with the employee’s liability to the employer. Oransky, the court stressed, wasn’t just an average MMM employee, but rather was responsible for maintaining relationships with customers, including Anadarko. These exceptions raise separate and complicated questions, I think, and ones that are peculiar to the particular Colorado law (though they may also be influential in North Dakota, which has a very similarly worded statute). But the point about shouting down not being “lawful activity” may be relevant to many other kinds of disputes as well.

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Justice Ginsburg Speaks Sensibly about Judicial Confirmations

Speaking at the University of Chicago, Justice Ruth Bader Ginsburg lamented the current politicized and polarized approach to judicial confirmations.

During the hourlong event, Ginsburg also lamented the increasingly partisan nature of Supreme Court confirmations, in which senators vote mostly along party lines.

She noted in particular the confirmations of Chief Justice John Roberts and Justices Sonia Sotomayor and Elena Kagan. Nominated by President George W. Bush in 2005, Roberts was confirmed with a 78-22 vote. Sotomayor and Kagan—nominated by President Barack Obama in 2009 and 2010, respectively—each received fewer than 70 affirmative votes.

“We really should get back to the way it was when people were examining qualifications of what it takes to be a judge, rather than trying to guess how they would vote on contentious cases,” said Ginsburg, who was confirmed in 1993 with a 96-3 vote, becoming the second woman to join the nation’s highest court.

The Chicago Sun-Times covered her remarks here.

Of note, when Justice Ginsburg was herself a judicial nominee, she articulated what has come to be known as the “Ginsburg Standard” of “no forecasts, no hints” on how a judge might rule from the bench:

“You are well aware that I came to this proceeding to be judged as a judge, not as an advocate. Because I am and hope to continue to be a judge, it would be wrong for me to say or preview in this legislative chamber how I would cast my vote on questions the Supreme Court may be called upon to decide. Were I to rehearse here what I would say and how I would reason on such questions, I would act injudiciously. Judges in our system are bound to decide concrete cases, not abstract issues; each case is based on particular facts and its decision should turn on those facts and the governing law, stated and explained in light of the particular arguments the parties or their representatives choose to present. A judge sworn to decide impartially can offer no forecasts, no hints, for that would show not only disregard for the specifics of the particular case, it would display disdain for the entire judicial process.”

Although subsequent judicial nominees have repeatedly sought to adopt this approach, Senators on the judiciary committee have been resistant, particularly with judicial nominees from the opposite side of the aisle.

Speaking of Justice Ginsburg, CNN reports on how she welcomed Justice Neil Gorsuch to the Court after his confirmation.

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Justice Ginsburg Speaks Sensibly about Judicial Confirmations

Speaking at the University of Chicago, Justice Ruth Bader Ginsburg lamented the current politicized and polarized approach to judicial confirmations.

During the hourlong event, Ginsburg also lamented the increasingly partisan nature of Supreme Court confirmations, in which senators vote mostly along party lines.

She noted in particular the confirmations of Chief Justice John Roberts and Justices Sonia Sotomayor and Elena Kagan. Nominated by President George W. Bush in 2005, Roberts was confirmed with a 78-22 vote. Sotomayor and Kagan—nominated by President Barack Obama in 2009 and 2010, respectively—each received fewer than 70 affirmative votes.

“We really should get back to the way it was when people were examining qualifications of what it takes to be a judge, rather than trying to guess how they would vote on contentious cases,” said Ginsburg, who was confirmed in 1993 with a 96-3 vote, becoming the second woman to join the nation’s highest court.

The Chicago Sun-Times covered her remarks here.

Of note, when Justice Ginsburg was herself a judicial nominee, she articulated what has come to be known as the “Ginsburg Standard” of “no forecasts, no hints” on how a judge might rule from the bench:

“You are well aware that I came to this proceeding to be judged as a judge, not as an advocate. Because I am and hope to continue to be a judge, it would be wrong for me to say or preview in this legislative chamber how I would cast my vote on questions the Supreme Court may be called upon to decide. Were I to rehearse here what I would say and how I would reason on such questions, I would act injudiciously. Judges in our system are bound to decide concrete cases, not abstract issues; each case is based on particular facts and its decision should turn on those facts and the governing law, stated and explained in light of the particular arguments the parties or their representatives choose to present. A judge sworn to decide impartially can offer no forecasts, no hints, for that would show not only disregard for the specifics of the particular case, it would display disdain for the entire judicial process.”

Although subsequent judicial nominees have repeatedly sought to adopt this approach, Senators on the judiciary committee have been resistant, particularly with judicial nominees from the opposite side of the aisle.

Speaking of Justice Ginsburg, CNN reports on how she welcomed Justice Neil Gorsuch to the Court after his confirmation.

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US Futures Drift Higher On Chinese Invitation To Bagholders, Trade And Central Bank Optimism

US Futures Drift Higher On Chinese Invitation To Bagholders, Trade And Central Bank Optimism

There wasn’t the usual trade talk optimism overnight, nor central bank trial balloons that record low interest rates will be dragged even deeper into negative territory.

Instead, what helped send European equity markets and US equity futures back in the green after an overnight slump that pushed the Emini from 2,985 to 2,965, was news that China removed one more hurdle for foreign investment into its capital markets almost 20 years after it first allowed access, when Beijing scrapped quotas for approved foreign institutional investors in domestic bond and equity markets. This means that all those WeWork bagholders who may have lost a majority of their investments, can no go ahead and lose the other have by investing in China, where the auditors have a habit of “community adjusting” everything.

In any case, the news helped send the Emini back in the green from overnight session lows just after the European open..

… with global markets back to unchanged.

Meanwhile, what we said about no central bank trial balloons, well we were kidding, because just after 7am, Reuters leaked that the BOJ “may be open to debate additional easing”, because apparently the existing easing has worked so well. According to the report, the BOJ is considering taking rates further into negative territory if it decides to ease, but other options – such as tiering – also remain on the table, Reuters reports, citing unidentified people familiar. The BOJ’s decision on whether and when to ease is expected to be a close call; conclusion may not be final until the last minute which will be just after the Fed’s own rate cut announcement. Ultimately, the BOJ’s thinking is driven by the bank’s growing less confident about early pickup in global growth

Actually, it turns out that we were also kidding about the lack of trade optimism: according to Bloomberg, China’s Premier Li said that US and China should find a solution to the ongoing trade dispute, adding that he hopes (there’s that word again) that trade talks make progress. In response there was an immediate “risk on” move as European equity indices spiked higher as a result of these headlines with the DAX Sep’ 19 futures spiking higher to 12,265 from 12,235, while the crude complex and USD/JPY also saw positive ticks. That said, the sharp move higher in US equities was less pronounced and quickly faded.

The Stoxx Europe 600 Index dropped a second day, led by financial services and health-care shares, although it rebounded following the China Li and BOJ more easing news. The pound fluctuated as embattled British Prime Minister Boris Johnson insisted he won’t ask for another Brexit delay, while U.K. wage and unemployment data beat estimates. Most euro-zone sovereign bonds nudged lower as European Central Bank officials prepare to meet.

Earlier in the session, Asian stocks fluctuated, with energy producers advancing and health-care firms retreating. Markets in the region were mixed as investors assessed the global growth outlook and China-U.S. trade negotiations with South Korea up and Thailand down. The Topix climbed 0.4%, as Japanese banks contributed most to gains following a rebound in long-term U.S. Treasury yields, which in turn pushed JGB yields modestly higher as well. The Shanghai Composite Index edged down 0.1%, snapping a six-day rising streak, with Kweichow Moutai and Ping An Insurance Group among the biggest drags. The big news out of China, as noted above, is that global funds no longer need approvals to purchase quotas to buy Chinese stocks and bonds, the State Administration of Foreign Exchange said in a statement on Tuesday. It removed the $300 billion overall cap on overseas purchases of the assets, about two-thirds of which remain unused.

Also overnight, China reported that its headline CPI inflation was flat at 2.8% year-on-year in August, just above consensus expectations and close to the 3% policy target; in month-on-month terms, headline CPI inflation moderated to +2.9% in August from +3.5% in July. A bigger problem was the second consecutive print of negative year-over-year PPI inflation, which moderated further to -0.8% yoy in August, on both a high base (PPI up 3.6% mom s.a. ann in August 2018) and a sequential decline of 2.8% mom s.a. ann in August. Inflation in the ferrous metals sector slowed the most, followed by petroleum industry, suggesting corporate profits will be further depressed in coming months.

In emerging markets, a four-day rally in equities stalled and the risk premium on sovereign debt rose as investors marked time before the resumption of trade talks between China and the U.S. as well as central-bank meetings in coming days. Developing-nation stocks climbed almost 4% in the previous four days after China and the U.S. announced face-to-face negotiations aimed at ending the tariff war would be held in Washington next month. China, meantime, removed one more hurdle for foreign investment into its capital markets almost 20 years after it first allowed access, when it said Tuesday that global funds no longer need approvals to purchase quotas to buy Chinese stocks and bonds.

With the European Central Bank announcing its policy decision in Thursday and the Federal Reserve next up, investors are hoping on increased monetary stimulus to prop up markets. A gauge of emerging-market currencies gained for a fifth day, the longest streak since June, with South Africa’s rand leading the advance.

“Markets were oversold, rebounded and without any genuinely positive catalysts are faltering again,” said Julian Rimmer, a trader at Investec Bank in London. “Funds were clearly bearishly positioned over the summer with the salami slicing of global growth expectations, low volumes and the worldwide hunt for yield. Some of that negativity has diminished slightly so we had some short-covering and a bit more risk-on, but fundamentally nothing has changed and all those concerns are still apparent.”

In rates, European bond markets inched lower while the region’s stocks declined for a second day ahead of Thursday’s ECB policy announcement. Bear steepening resumed in the German curve although the long-end claws back some initial weakness to trade back at 0%. Peripheral spreads widened to core, with the long-end of the Spanish curve underperforming. Gilts drifted lower after robust domestic employment and wages data, but as ever, Brexit keeps any hawkish repricing in check.

The recent pullback in the bond rally “is a correction to an outsized move in yields during August, not a turn in the trend,” Kit Juckes, chief global FX strategist at Societe Generale SA, wrote in his daily note. “Last Friday’s U.S. labor market data show, clearly enough for me, that the U.S. economy is slowing slowly but steadily as the global trade slowdown infects it.”

In geopolitical news, North Korea launched 2 projectiles; a Japanese Defence Ministry official later commented that the latest North Korea missiles pose no immediate threat to Japan’s national security. Pakistani Foreign Minister has told UN Human Rights council that India’s “illegal Kashmir military occupation” raises spectre of “genocide”. Additionally, Pakistan’s Qureshi says that he sees ‘no possibility of a bilateral engagement with India’.

In FX, the Bloomberg Dollar Spot Index halted a five-day slide Tuesday as the yield on 10-year U.S. Treasuries fell 2bps, its first decline in five days. The only G-10 currency to climb against the dollar was the Swiss franc but moves were limited; meanwhile, the largest losses were seen by the Swedish krona, as the currency weakened by almost 1% to the dollar and the euro after Swedish inflation unexpectedly slowed to its lowest in three years, in more bad news for the Riksbank which is keen to increase interest rates. Finally, the Norwegian krone tumbled alongside its Swedish peer after similarly disappointing inflation reading.

Elsewhere, oil extended gains to the highest level in almost six weeks as Saudi Arabia’s new energy minister signaled his commitment to production cuts ahead of an OPEC+ meeting later this week. Gold headed for its fourth day of declines, sinking to around $1,495 an ounce. Sweden’s krona tumbled after the country’s inflation unexpectedly slowed.

Expected data include NFIB Small Business Optimism. HD Supply and Zscaler are reporting earnings

Market Snapshot

  • S&P 500 futures down 0.1% to 2,973.75
  • STOXX Europe 600 down 0.5% to 383.96
  • MXAP down 0.01% to 156.79
  • MXAPJ down 0.2% to 507.06
  • Nikkei up 0.4% to 21,392.10
  • Topix up 0.4% to 1,557.99
  • Hang Seng Index up 0.01% to 26,683.68
  • Shanghai Composite down 0.1% to 3,021.20
  • Sensex up 0.4% to 37,145.45
  • Australia S&P/ASX 200 down 0.5% to 6,614.06
  • Kospi up 0.6% to 2,032.08
  • Brent futures up 0.2% to $62.74/bbl
  • Gold spot down 0.2% to $1,496.06
  • U.S. Dollar Index up 0.1% to 98.41
  • German 10Y yield rose 0.6 bps to -0.579%
  • Euro down 0.05% to $1.1043
  • Italian 10Y yield rose 6.6 bps to 0.603%
  • Spanish 10Y yield rose 1.5 bps to 0.233%

Top Overnight News from Bloomberg

  • After Parliament blocked his Brexit strategy, and then refused to give him the election he wanted, U.K. Prime Minister Boris Johnson is promising to work for a deal with the EU. Monday night saw him suffer his sixth consecutive defeat in a vote in the House of Commons, after his attempt to get approval for a snap poll was rejected for a second time
  • The U.K. economy continued to create jobs over the summer and wages jumped, despite the escalating turmoil over Brexit. The jobless rate fell to the lowest since the 1970s but jitters weighing on the wider economy were appearing. Employment growth was weaker than forecast; vacancies slipped to the lowest since 2017
  • Mario Draghi needs to go out with a bang if he’s to renew a surge in bond prices that sent yields to unprecedented lows. Markets have factored in the ECB slashing interest rates and restarting QE, so it will take a multi-faceted stimulus package in his penultimate meeting Thursday to impress investors
  • Germany’s worship of fiscal discipline is being challenged by a looming recession and tantalizingly cheap credit — and a silent revolution is under way at the finance ministry to shed its economic dogma
  • Executives of WeWork and its largest investor, SoftBank, are discussing whether to shelve plans for an initial public offering of the money-losing co-working company, said people with knowledge of the talks
  • China removed one more hurdle for foreign investment into its capital markets almost 20 years after it first allowed access

Asian equity markets traded mixed as they followed suit to the indecisive tone seen on Wall St amid a sell-off in treasuries and as the region also digested ambiguous inflation figures from China. ASX 200 (-0.5%) was negative with gold miners frontrunning the declines in Australia after the precious metal slipped below the psychological key USD 1500/oz level but with further losses in the index stemmed by strength in the energy sector following the recent rally in oil prices, while Nikkei 225 (+0.4%) was kept afloat by favourable currency moves. Elsewhere, Hang Seng (Unch.) and Shanghai Comp. (-0.1%) gave back initial gains despite the liquidity efforts by the PBoC and firmer than expected Chinese inflation data, as the figures were largely influenced by a 10% increase in food prices amid the swine fever epidemic and also showed PPI at its sharpest contraction in 3 years. Finally, 10yr JGBs were lower following the bear-steepening seen in US and broad declines across global bonds, while the absence of the BoJ from the market today also added to the lacklustre demand.

Top Asian News

  • North Korea Tests More Weapons After Floating Fresh U.S. Talks
  • Hong Kong Leaders Grow More Frustrated by Leaderless Protesters
  • Hong Kong Dollar Peg Questions Seen Fading One Way or Another
  • Chinese Exporters Cut Currency Hedges in Sign of Yuan Pessimism

European equities are modestly softer [Eurostoxx 50 -0.3%] following on from a mixed Asia-Pac session as participants remain on standby ahead of Thursday’s ECB monetary policy decision. Sectors are mixed with underperformance in the IT sector, whilst energy names outperform as the oil complex holds onto its recent gains and banking names remain supported by yesterday’s surge in yields (RBS +4.4%, UBS +3.4%, Barclays +4.5%). In terms of stocks on the move, EDF (-7.5%) share fell from the open after the Co. noted deviations in technical standards governing the manufacture of nuclear-reactor components. On the flip side, Subsea 7 (+2.7%) shares opened higher after the Co. announced its current COO as the new CEO effective January 1st 2020, additionally the Co. were awarded an offshore contract in Saudi Arabia. Finally, JD Sports (+3%) shares are supported post earnings after H1 sales rose 47% Y/Y and the Co. forecasts FY results to be at the mid-point of their previously guided range.

Top European News

  • EDF Flags Issues in Reactor Parts in Blow to Nuclear Industry
  • Spanish Banks Risk Setback in Fight Over Unfair Mortgage Claims
  • Germany Doesn’t Need to Splurge to Address Slowdown, Scholz Says
  • Sweden Inflation Slows to 3-Year Low in Blow to Riksbank

In FX, the major underperformers in wake of softer than forecast Swedish and Norwegian inflation data that calls into question hawkish guidance from the Riksbank and Norges Bank. Eur/Sek has rebounded from sub-10.7000 levels through 10.7500 and breached several technical resistance points in the process, including 10 and 21 DMAs plus a Fib retracement, while Eur/Nok is back above 9.9000 from almost 9.8500 and also taking on board the latest Norges Bank regional network survey showing that contacts envisage slightly slower growth in the coming 6 months.

  • USD – The Dollar is mixed to marginally firmer awaiting this week’s top-tier US data for more input ahead of the September FOMC after last Friday’s rather inconclusive BLS report and broadly upbeat comments from Fed chair Powell, on balance. However, the DXY remains rangebound between 98.260-463 and well within near term chart support and resistance not to mention recent highs and lows for the index.
  • CHF/NZD/AUD – The Franc has pared some losses vs the Greenback and single currency as risk appetite wanes/falters and selling abates into key technical psychological markers, like 0.9950 in Usd/Chf and 1.1000 in Eur/Chf. Meanwhile, the Aussie and Kiwi have lost some momentum, with Aud/Usd drifting back towards 0.6850 in wake of a downturn in NAB business sentiment and dip in conditions overnight, and Nzd/Usd fading ahead of 0.6450 as Aud/Nzd meanders between 1.0645-85.
  • GBP/CAD/JPY/EUR – Sterling staged another attempt to hunt out stops around 1.2385 vs the Buck and briefly crossed the 100 DMA against the Euro (0.8930), but failed to sustain momentum again amidst the ongoing UK political and Brexit paralysis. However, the ensuing Pound pull-back was arrested by more encouraging data as earnings beat consensus on a headline basis and the jobless rate eased to 3.8% from 3.9%. Note also, 2 bn option expiries in Cable at the 1.2300 strike have provided a buffer. Elsewhere, trade has been considerably more rangebound with the Loonie straddling 1.3175, Yen holding within 107.19-49 parameters and Euro stuck in a 1.1037-59 band awaiting Thursday’s ECB policy pronouncements for more direction.
  • EM – Contrasting fortunes again for the Rand and Lira, as Usd/Zar continues its deep reversal from 15.0000+ towards 14.6900 regardless of more SA ratings warnings from Moody’s, but Usd/Try elevated above 5.7500 in the run up to this week’s CBRT rate verdict and heeding even more dovish calls (-500 bp touted in a Turkish paper) alongside the persistent threat of US sanctions.

In commodities, WTI and Brent futures are holding onto most of its recent gains with the two benchmarks around 58.00/bbl and 63/bbl respectively at the time of writing. News-flow for the complex has been light, although reports stated that Russia’s Energy Minister Novak will be meeting with newly appointed Saudi Energy Minister Abdulaziz in Jeddah later today to discuss the energy market alongside strengthening Saudi-Russia cooperation ahead of Thursday’s JMMC meeting. Meanwhile, Nigeria’s Finance Ministry notes of strong indications of an oil glut next year, and thus lowered its benchmark forecast to 55/bbl from 60/bbl. This evening will also see the release of EIA’s Short-Term Energy Outlook with focus on global demand growth forecasts. Looking further ahead, participants will also be eyeing the weekly API crude inventory data with markets expecting a headline drawdown of 2.5mln barrels. Elsewhere, gold prices are largely unchanged below the 1500/oz mark amid the undecisive risk tone in the market ahead of this week’s key events. Meanwhile, copper prices have seen a more pronounced downside compared to yesterday with the red-metal flirting with 2.60/lb to the downside at the time of writing. Finally, Dalian iron ore prices advanced as much as 4% amid expectations that China will ratify further economic stimulus that would boost steel demand.

US Event Calendar

  • 6am: NFIB Small Business Optimism, est. 103.5, prior 104.7
  • 10am: JOLTS Job Openings, est. 7,331, prior 7,348

DB’s Jim Reid concludes the overnight wrap

Every year in early September the financial world takes in a new breed of graduates and to you all I say welcome and good luck in your career. If you’d have started as a newbe last Thursday then the whole of your career would have been in a big bond bear market. You’d be excused for wondering if bonds ever actually rally. Indeed yesterday saw another fixed income sell-off, as reports on the German fiscal stance and positive comments on the US-China trade war supported investor sentiment. 10yr Bund yields rose +5.3bps, reaching their highest level in nearly a month at -0.59%, while 30y bunds rose +7.8bps but after spending much of the day in positive territory closed at -0.003%. Nearly but not quite. Lending to the German government out to 2049 will still involve a small haircut. For context the long run return on US equities has been around 9% p.a. over the last couple of hundred years and by my calculations that would mean you would earn 13 times your original investment over an average 30 year period through history. Even at the lower long run return for German equities of c.8% you would earn over 10 times your original investment over the same period. I’m not wildly excited about current equity valuations but this is food for thought for all you new graduates as you invest for your retirement. It’s too late for us but you can save yourselves.

The bond sell-off was global with 10y Treasuries up +7.7bps, BTPs up +6.7bps, and Gilts +8.5bps. Yield curves also steepened, with US 2s10s up +3.2bps to 4.9bps and to its highest level in three weeks. In credit, spreads widened in Europe, with Euro IG spreads +2.0bps and at a 7-week high, while Euro HY spreads were flat. In the US it was a different story as IG and HY spreads tightened further, down -1.3bps and -9bps respectively. Safe havens sold off across the board however, with gold down -0.53%, while the Swis Franc was the worst performing G10 currency, down -0.48% against the dollar, followed by the Japanese Yen (-0.32%).

The sell-off came as Reuters reported that Germany is considering creating a “shadow budget”, which would allow the government to get round the country’s fiscal rules. This would be done by setting up independent bodies, which could take advantage of the country’s low borrowing costs and invest in “infrastructure and climate protection”, but this spending would not count under the debt brake. Meanwhile, the euro strengthened after a letter obtained by Bloomberg News showed Bettina Hagedorn, a deputy finance minister, wrote that the government could change its plans to run balanced budgets if the economic situation required. The reports come ahead of this morning’s debate on the 2020 budget, which will be taking place in the Bundestag. These stories have become more frequent in recent weeks and whilst the market always gets more excited by the headlines than is justified by hard evidence of any change in policy, it’s fair to conclude that market pressure and chatter on this story is building.

Other drivers behind the bond sell-off included data which showed German exports unexpectedly rising by +0.7% (vs. -0.5% expected) in July, while imports fell by -1.5% (vs. -0.3% expected), sending the current account balance for July up to 22.1bn (vs. 16.4bn expected). So good news on exports even if declining imports might be demand led. Meanwhile comments from Secretary Mnuchin further helped things, as he said “we’ve made a lot of progress” in the trade talks, ahead of the planned meeting between China and the US in Washington next month. Ahead of Thursday’s much-anticipated ECB meeting, these positive developments seem to have marginally reduced the implied odds that markets have given to a larger 20bps reduction in the deposit rate, which now stand at 44%, having been at 61% just a week ago.

In equity markets, US stock indices were mixed with relatively high divergence between sectors. The S&P 500 ended just about flat (-0.01%) while the DOW gained +0.14%. Relatively more of the DOW is made up of bank stocks, which performed well (+3.15%) amid the higher yields. Tech lagged, with the NASDAQ down -0.19%. In Europe, the picture was similarly mixed, with the STOXX 600 losing -0.28%. Much of the fall came from UK stocks, with the FTSE 100 -0.72% as it reacted to sterling’s appreciation, but the CAC 40 (-0.27%) also declined, while the DAX and the FTSE MIB only made modest gains. European banks mirrored their American cousins’ positive performance, with the STOXX Banks up +2.72% on rising yields, while energy stocks also saw gains as Brent Crude rose +1.85% to reach a one-month high.

Overnight in Asia, markets are trading mixed with the Nikkei (+0.36%) and Kospi (+0.37%) both up while the Hang Seng (+0.08%) is trading flattish and the Shanghai Comp (-0.36%) is trading down. In Fx, all G10 currencies are slightly weaker against the greenback this morning with the exception of the New Zealand dollar (+0.19%). The onshore Chinese yuan is trading up c. 0.1% at 7.1164. Sovereign bond yields have ticked up in Asia this morning following the global sell-off with 10y JGB yields up +2.9bps at -0.234%. Elsewhere, futures on the S&P 500 are trading flattish (-0.06%) while WTI crude oil is up +0.45% after Saudi Arabia’s new energy minister signaled his commitment to production cuts ahead of an OPEC+ meeting on Thursday in Abu Dhabi to discuss their production pact. In terms of overnight data releases, China’s August CPI and PPI both came in one tenth higher than consensus at +2.8% yoy and -0.8% yoy, respectively.

In other news, top North Korean diplomat Choe Son Hui issued a statement this morning that the country would be willing to hold nuclear talks with the US, “at the time and place to be agreed late in September.” However, shortly after the statement North Korea fired two “short-range projectiles” into its eastern seas. Meanwhile, President Trump was a bit cautious in his response over the North Korean statement, citing the regime’s continued freeze on nuclear weapons testing and added, “We’ll see what happens, but I always say having meetings is a good thing, not a bad thing.”

In the UK, MPs rejected the chance of having a mid-October general election for the second time in a week, as the motion failed to reach anything close to the required two-thirds majority once again (239 to 46; PM Johnson needed 434 to call an early election). Opposition parties mostly abstained as they want Mr Johnson to be forced to ask for an extension he has said he will never do. Parliament has now been prorogued, so it won’t sit again until October 14th, which is also the week of the next European Council Summit. The political chatter now points to a late November election but there will be an incredible amount of water flowing under the bridge between now and then. Mr Johnson seems to have pushed his energy into getting a deal now but that is as far away as it ever has been. I wonder whether he may have one go at passing a deal through Parliament before October 31st just to show the electorate that he did everything he could to deliver Brexit by that date and hope the leave vote feels emboldened to vote for him by Parliament’s likely rejection of it.

DB’s Oli Harvey published his latest Brexit update yesterday (link here ), where his base case is that the government fails to secure agreement with the EU27 at the October Council meeting, leaving Johnson with a choice between requesting an extension, resigning as Prime Minister, or ignoring or circumventing the legislation. Looking at his full probabilities, he maintains his view that the cumulative probability of a no-deal Brexit is 50%, be that either at the end of October or after a general election, and places just a 10% chance on Johnson completing his aim of a successful renegotiation and a ratified Withdrawal Agreement by the end of October.

Earlier in the day, sterling rallied as markets approved of the more conciliatory remarks from Prime Minister Johnson, who described a no-deal Brexit as “a failure of statecraft”, and said that “I would overwhelmingly prefer to find an agreement.” The currency strengthened +0.49% against the dollar to its highest level in over a month.

In terms of data yesterday, as well as the aforementioned German export numbers, UK GDP surprised to the upside, with the economy growing by +0.3% mom in July (vs. +0.1% expected). All sectors outperformed, with services +0.3% (vs. +0.1% expected) and manufacturing production +0.3% (vs. -0.3% expected). Looking at the whole 3 months to end-July the UK economy saw a flat 0.0% growth rate over the previous three months.

Meanwhile the Federal Reserve’s consumer credit numbers showed a $23.29 billion expansion in credit, the largest monthly increase since 2017. Revolving credit, which includes mostly credit card debt, drove the increase as it rose by $10 billion, also the highest since 2017. Separately, the NY Fed’s inflation expectations survey showed 1-year expectations falling to their lowest level on record at 2.4%, while 3-year expectations also fell, by 0.1pp to 2.5%.

Looking at the day ahead, data releases include France’s July industrial and manufacturing production, along with Italy’s July industrial production. In the UK, the monthly employment report, including the unemployment rate and average weekly wage growth will be released, while from the US, we have the NFIB small business optimism index and the JOLTS job openings release.


Tyler Durden

Tue, 09/10/2019 – 07:49

via ZeroHedge News https://ift.tt/34wy0L3 Tyler Durden

Sarah Palin’s Husband Files For Divorce

Sarah Palin’s Husband Files For Divorce

After 31 years of marriage, Todd Palin – the husband of former Alaska governor and vice presidential candidate Sarah Palin, has filed for divorce.

In the April 29th filing eight days after their most recent anniversary, Todd cited “incompatibility of temperament” and that the couple “find it impossible to live together as husband and wife” in his request to dissolve their marriage in Anchorage Superior Court. 

The filing, first reported by the Anchorage Daily News, only uses initials but details the couple’s marriage date and the birth date of their 11-year-old son, Trig, and asks for an equal separation of assets and debts.

The two have been married since 1988 and have five children: Track, Trig, Bristol, Willow and Piper. Todd Palin’s filing asks for shared custody of Trig, who has Down Syndrome. –NBC News

The Palins, both 55-years-old, have been together through Sarah’s rise to governor of Alaska in 2006, her resignation in 2009 (before the end of her four-year term), and her brief tenure as John McCain’s running mate in the 2008 presidential election – losing to Barack Obama and Joe Biden. According to the New York Times, McCain regretted picking Palin vs. Joe Lieberman. 

McCain’s daughter, current “The View” host Meghan McCain, wrote in her 2010 book, “Dirty Sexy Politics,” that Palin brought “drama, stress, complications, panic and loads of uncertainty” to the campaign, but also lauded the enthusiasm she generated. –ABC News

While Todd Palin has avoided the spotlight, Sarah Palin has been a frequent political commentator on cable news, and wrote the book “Sweet Freedom: A Devotional.”


Tyler Durden

Tue, 09/10/2019 – 07:05

via ZeroHedge News https://ift.tt/319b0zq Tyler Durden

Elizabeth Warren’s Plans Don’t Add Up

At the heart of Elizabeth Warren’s campaign for president—and of her entire career as a politician and public intellectual, really—are two simple ideas.

The first is that the economy is fundamentally broken. This downer of an idea was present in the speech that launched her presidential campaign on February 9, 2019, in which she declared that “millions and millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected” and in which she insisted that the only response was to fight for “big structural change.”

It was present at the first Democratic primary debate, in which she inveighed against corporate profits and monopolistic businesses and corrupt lawmakers who have “made this country work much better for those who can make giant contributions, made it work better for those who hire armies of lobbyists and lawyers, and not made it work for the people,” and in which she scored the opening night’s standout moment by offering a full-throated argument for the elimination of private health insurance.

It was present in the 2007 essay that imagined what would eventually become the Consumer Financial Protection Bureau, a federal agency premised on the notion that American families were being “steered into overpriced credit products, risky subprime mortgages, and misleading insurance plans” and that many of these products needed to be regulated as pervasive dangers to the American family.

It was present in the very title of her breakout 2004 book, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, which promoted a systemic view of America’s economic fragility, driven by data that Warren had compiled during her career as an academic bankruptcy researcher.

It was explicit in her campaign’s July broadside, “The Coming Economic Crash—And How to Stop It,” which cast Warren as a prophet of economic collapse and proposed an array of economic policies, from a $15 minimum wage to enforcing restrictions on certain bank loans, that she argued could stave off the crisis.

And it is present, in spirit if not in word, in each and every one of the slew of white papers and policy proposals that have poured forth from Warren’s campaign as if she were running a think tank rather than a presidential bid.

In the space of just a few months this year, Warren released plans for everything from ending drilling on public lands to breaking up Facebook and Amazon to imposing a new industrial policy of “economic patriotism.” She wants to spend $500 billion on affordable housing and trillions more to cancel most student debt, make public college tuition free, and offer subsidies for child care. And she has proposed paying for these costly programs with wealth taxes designed not only to offset the price tag of new government spending but to help reduce economic inequality by shrinking large stores of wealth.

This brings us to Elizabeth Warren’s second big idea: The economy is fundamentally fixable—but only if Elizabeth Warren is manipulating all the levers of power.

Warren’s penchant for wonky policy detail has defined her candidacy: “Elizabeth Warren has a plan for that” has become a rallying cry and a slogan, one her fans have plastered across an array of T-shirts and campaign signs. Warren has happily embraced this persona, joking with crowds that her focus on the details of federal agencies would turn them all into nerds.

Warren is running as a wonk populist, the sort of politician who could give a rousing speech at a picket line in the morning, then stroll into a conference room and offer detailed comments on a new regulatory scheme in the afternoon. Her campaign is an attempt to marry rabble-rousing economic grievance to high-class technocratic solutionism.

The Warren worldview is thus both bloodless and moralizing. It is also dangerous, combining self-righteous certainty about the perils of the economy with dubious data and an instinct for bureaucratic paternalism. Warren wants the federal government to be the American economy’s hall monitor, telling individuals and companies what they can and can’t sell or buy and making some of the nation’s most successful businesses answer to her demands.

It seems to be working. During the first six months of 2019, this strategy vaulted Warren into the top tier of Democratic primary contenders, helping her raise more than $19 million during the year’s second quarter and placing her among the top three or four candidates in the party’s crowded field. Focus groups and political reporting have consistently found that Democratic voters are warming not only to the substance of Warren’s ideas but to the very fact that she has them.

Yet Warren’s wonkery and her populist fury are both based on myths and misdirection, often perpetuated by Warren herself. Although she styles herself as a data-driven champion of the little guy, she has run a campaign based on a dismal representation of the U.S. economy that fails to account for factors that complicate her story. And although she has received kudos for the volume and specificity of her plans, Warren has a history of pushing misleading research and cherry-picked data designed to support politicized conclusions.

So, yes, it’s true that Elizabeth Warren has a lot of plans. The problem is that they don’t all add up.

To understand the deep roots of Elizabeth Warren’s economic pessimism, you have to know a little about her most well-known book, The Two-Income Trap. And to understand The Two-Income Trap, you have to understand Warren’s early work as a bankruptcy researcher.

Warren first rose to prominence as the co-author of a pioneering study of consumer bankruptcy, which was published in book form in 1989 under the title As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America. Warren and her co-authors based the book on a trove of court data from about 1,500 bankruptcy cases in Pennsylvania, Illinois, and Texas during 1981.

The book made a splash, partly because of its reliance on real-world case studies and partly because of its stark language. “Bankrupt,” reads the book’s opening line. “The single word is a body blow, like ‘Dead.'” Warren was an academic, working with other academics to code and statistically analyze a trove of unique data. But she wasn’t just poring through variables and spreadsheet entries. She was telling a story in order to make an argument about politics and policy.

The story was that rapacious credit card companies, rather than consumer overspending, were primarily responsible for a run-up in consumer debt and the resulting sense that household budgets had grown more precarious. The book’s authors saw bankruptcy in broadly sympathetic terms, as a financial safety net for struggling families. In the years that followed, Warren would go on to become one of the nation’s most prominent advocates of making bankruptcy easier, more lenient, and more accessible.

But that story had some notable problems. Among others, it was based on cases from 1981, a recession year when consumers would have looked worse off than usual. It was released years later, after a significant reform to the bankruptcy code in 1984 rendered its picture of American bankruptcy somewhat out of date. And it wasn’t clear whether data from the three selected states could be generalized to the population as a whole.

Within the world of academic bankruptcy research, the book generated controversy. In the 1990–91 edition of the Rutgers Law Review, Rutgers law professor Philip Shuchman, a star of the field who had initially recommended a $110,000 grant to help fund Warren’s research, wrote a scathing and brutal assessment of the book, calling into question the authors’ methods, data, and scholarly ethics. Shuchman, who died in 2004, accused Warren et al. of making “serious errors” and refusing to produce raw data that would allow other scholars to check their conclusions. His review said the research exhibited an “anti-scientific bias” and accused the authors of engaging in “repeated instances of scientific misconduct.”

The scientific misconduct charge was investigated and dismissed by the National Science Foundation, which provided funding for the work. But the investigators noted that there remained “extreme differences” between the feuding researchers “regarding the interpretation of data.” Warren and her co-authors were given the opportunity to respond to Shuchman but never did.

In retrospect, it’s clear that this research played a significant role in the formation of Warren’s staunchly populist worldview and in her conclusion that the only solution was substantial policy reform. Bankruptcy was a system governed by legal rules, rules that in her view had been rigged to empower one group—financial elites—at the expense of others. The rules could be changed if politicians and bureaucrats were sufficiently committed. But convincing people that change was necessary meant telling a clear and simple story, one that captured the raw feeling of what was happening to ordinary people. That sometimes meant ignoring nuances and complications that made the story less compelling.

Earlier this year, Warren was questioned about the controversy surrounding Shuchman’s review by The Washington Post. She insisted that “the data are rock solid” but did not address specific criticisms: “There’s just nothing else to say.” She claimed she couldn’t remember why she never penned a response to Shuchman’s review. According to the Post, she had pushed aggressively for a retraction. The Rutgers Law Review never withdrew the article.

In the ensuing years, Warren not only stood by her story of predatory financiers exploiting sympathetic middle-class families; she amplified it—and sold it to an eager public.

The Two-Income Trap, which Warren co-authored with her daughter Amelia Warren Tyagi, a business consultant who has served as chair of the liberal think tank Demos, is largely an explication of the worldview underlying her bankruptcy research. Even more than As We Forgive Our Debtors, the book was targeted squarely at a popular audience, free of academic jargon and full of easy-to-digest stories about middle-class struggle.

By the time the book was published, Warren had risen through the academic ranks to become a Harvard law professor. She had also served as an adviser to the National Bankruptcy Review Commission.

Once again, Warren drew on her bankruptcy research to argue that the middle class had been given a raw deal. The number of households filing for bankruptcy had shot up dramatically, she said, and it wasn’t because they were spending too much. Instead, the increasingly high cost of housing, driven heavily by competition for access to good schools, and the pile-up of medical debt were driving families into dire straits.

These effects were compounded by the movement of women into the workforce. Where stay-at-home wives had once served as a safety net—the earners of last resort should a breadwinner husband lose his job—the rise of the working mother had increased financial risk for two-earner families. Using comparisons between a hypothetical 1970s single-earner household making about $39,000 in inflation-adjusted dollars and a hypothetical 2000s dual-earner household making about $68,000, she purported to show that middle-class families weren’t really any better off than they were when men were the primary earners. “Today’s dual income families have less discretionary income—and less money to put away for a rainy day—than the single-income family of a generation ago,” she wrote.

The book and its ideas served as a kind of manifesto for Warrenism in both substance and style. It was accessible, folksy, pessimistic, and wonky, and in the years since its publication it has, if anything, grown in influence, establishing Warren as a policy thinker ahead of her time. In many ways it does feel prescient, not only in its preview of a politics focused on middle-class malaise but in its warnings about the systemic economic risks posed by subprime mortgages granted to borrowers with limited ability to pay.

Yet as with her previous work, the book’s findings were marked by controversy and unanswered questions about the soundness of her methodology. In particular, Warren’s notion that housing prices have been pushed upward by school competition doesn’t fully stand up to scrutiny.

Although research has found that school quality does impact housing prices, the effect is fairly modest. A 2006 study in the Quarterly Journal of Economics found a 2.5 percent increase in home prices for every 5 percent increase in test scores. Additionally, Warren’s comparison budgets aren’t entirely realistic. She adds preschool, for example, to the list of expenses for the modern two-income family (thus detracting from the wages brought in by the second earner)—but that is a cost that is incurred for only a few years. Although the book notes that the price of food and clothing declined between the 1970s and the 2000s, the budget comparison lumps those purchases into a catchall category labeled “discretionary income.” This makes it difficult to see where the cost of living has gone down.

And then there’s the role of taxes. In the book’s hypothetical comparison budgets, Warren presents fixed dollar amounts for every type of expenditure—mortgage, health insurance, car payments, discretionary spending, etc.—except one: taxes. Instead, taxes are presented as a percentage of household income—24 percent in the 1970s, 33 percent in the 2000s—which the book describes as a 35 percent change.

Yet as George Mason University law professor and consumer finance scholar Todd Zywicki has noted, the choice to render taxes only as a percentage of income has the effect of masking the total dollar value. Using Warren’s own figures, Zywicki calculated that the tax increase—owing partly to the hypothetical family hitting a new tax bracket and partly to the imposition of additional state, local, and property taxes over time—was by far the largest factor affecting the modern family’s budget. Warren’s own numbers, in other words, showed that families had been strapped not by increased spending on homes or health insurance but by a bigger tax bill.

“The data is presented in a fashion that makes it very difficult for the reader to understand,” Zywicki says. “It almost seems to be designed to mislead.”

Zywicki is among Warren’s most outspoken critics, and he has made this case—that Warren’s own data do not show what she claims they do about the plight of the middle class—on multiple occasions over the span of more than a decade. Yet Warren has never responded directly to his arguments, he says, and Warren’s campaign did not agree to an interview request for this story.

Warren’s insistence on the prominent role of medical bills in bankruptcy cases has drawn even sharper criticism.

In The Two-Income Trap, Warren says that for families with children, the vast majority of bankruptcy filings are a result of just three factors: medical problems, job loss, and family breakup. The following year, Warren, still a Harvard professor, co-authored a Health Affairs study purporting to show that at least 46 percent of the nation’s bankruptcies were a result of medical bills, a figure she subsequently updated to 62 percent. Her research claimed that medically induced bankruptcies had increased a shocking 23-fold since 1981.

These figures garnered major media headlines and became talking points during the debate over the health care law that passed in 2010. President Barack Obama warned that sky-high medical costs had forced many Americans to “live every day just one accident or illness away from bankruptcy.”

But these numbers, too, relied on dubious methodology and misleadingly presented research. Warren broadly categorized bankruptcy filers as having a “major medical cause,” even if they did not list medical issues as the cause of their bankruptcy, so long as they had incurred $1,000 in personal medical expenses in the two years prior to filing. The alleged dramatic uptick relied on a comparison between this broadly defined group and people who had explicitly described themselves as filing for medical reasons, a much narrower category.

In early 2018, a group of health economists from the Massachusetts Institute of Technology, Northwestern University, and the University of California, Santa Cruz published a study in The New England Journal of Medicine directly countering Warren’s claims. In “Myth and Measurement—The Case of Medical Bankruptcies,” the authors argued that her research suffered from a “basic statistical fallacy.” Her paper’s methodology, they wrote, “assumes that whenever a person who reports having substantial medical bills experiences a bankruptcy, the bankruptcy was caused by the medical debt. The fact that, according to a 2014 report from the Consumer Financial Protection Bureau, about 20% of Americans have substantial medical debt, yet in a given year less than 1% of Americans file for personal bankruptcy, suggests that this assumption is problematic.” Using a more rigorous approach, they estimated that hospital bills cause only about 4 percent of bankruptcies—not nothing, but a far cry from the majority share that Warren’s paper had estimated.

This was not an ideologically motivated attack on Warren’s character or politics; it was an attempt by a group of widely respected health policy researchers to set the record straight on an important matter of fact. And it followed years of criticism of the initial study—criticism that had begun almost immediately with rebuttals in Health Affairs, the journal that published the initial work. Warren and her co-authors responded to early criticism with a letter defending themselves and noting that their critics had received funding from insurance industry sources who were opposed to universal coverage schemes, a tactic she has relied on more than once.

“In Elizabeth Warren’s worldview, there are no good-faith disagreements with Elizabeth Warren,” Zywicki says. “Anybody who doesn’t agree with her is a shill.”

The response by Warren and her co-authors was revealing. In one sense, they were engaged in a conventional academic dispute about interpreting bankruptcy data. But what they were really fighting about—what was really at stake—was public policy. Warren clearly believed that the value of her research was in the story it told and the way that story informed and influenced the real world of politics and public affairs.

Warren had already served as an adviser in the 1990s to the National Bankruptcy Review Commission, fighting a series of bankruptcy proposals that would eventually pass as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. But in the years after her bankruptcy study’s release, Warren would begin to explore more direct roles in the policymaking process.

In 2007, Warren wrote an essay for the influential liberal policy journal Democracy arguing that many consumer financial products, such as home loans, were dangerous. Titled “Unsafe at Any Rate”—a nod to Ralph Nader’s bestselling 1960s book accusing auto manufacturers of malfeasance—the essay made a case that many financial products posed an active threat to American consumers and should be regulated accordingly. Analogizing home loans to toasters that could burst into flames at any moment, Warren called for “a new regulatory regime, and even a new regulatory body, to protect consumers who use credit cards, home mortgages, car loans, and a host of other products.”

A few years later, Warren got her wish. In the aftermath of the 2007–08 financial crisis, Congress, then controlled by Democrats, passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was billed as a direct response to the economic meltdown and an attempt to make sure it never happened again. A centerpiece of the bill was the creation of a new federal agency, the Consumer Financial Protection Bureau (CFPB), which was modeled on Warren’s original proposal.

It is often difficult to determine how presidential hopefuls would govern, especially when, like Warren, they have no executive experience and only a few years of lawmaking experience. But the CFPB offers a glimpse of what a Warren presidency might look like in practice.

The bureau, as imagined by Warren, was first and foremost a paternalistic enterprise. It was premised on the notion that consumers did not and in some cases could not understand the financial services they relied on, and that only an army of unusually powerful government bureaucrats could save them from blundering into the tricks and traps set by lenders.

Those bureaucrats, meanwhile, would be heavily insulated from both presidential and congressional oversight. Housed within the Federal Reserve, the CFPB has its own funding stream and is thus removed from the congressional appropriations process. And instead of a bipartisan board of commissioners like those that govern comparable independent federal agencies—the Federal Trade Commission, for example—the CFPB was designed with a single agency head who could only be removed by the president for cause, such as neglect of duties or malfeasance.

This design was not just unaccountable. It was, critics said, unconstitutional. Because it vested authority in a single director who was insulated from oversight, it created a law enforcement body outside of the constitutional hierarchy; it was an unchecked superagency with the power to make law. In a series of legal cases, multiple federal courts have agreed, although the issue remains under dispute.

The goal of the structure, supporters said, was to remove the CFPB from the significant pressures that large financial institutions could exert on the regulatory process. The bureau had been created as a check on such financial institutions, the “moneyed interests” that Warren and others argued caused the financial crisis; those interests could not be allowed to capture their regulators.

Yet Warren herself has not been entirely immune from the pressures of wealthy interests: As a U.S. senator, she has pushed for the elimination of a tax on medical device makers (which have a heavy presence in her home state of Massachusetts) using language that closely mirrors industry talking points. And in the 1990s, as a law professor, Warren worked as a legal consultant for a variety of large corporations, helping them navigate bankruptcy proceedings. Among those corporations was Dow Chemical, which was being sued by women who claimed they had been made ill by the company’s silicone breast implants. Warren’s role, according to The Washington Post, was to help a company trying to limit its payments to the women.

The CFPB’s mission, meanwhile, was far more expansive than its origin story might imply. From payday lenders to cash advance services, many of the financial products it was given power to regulate had little or nothing to do with the financial crisis. And while Warren pitched the agency as a purveyor of simple rules for a complex world, it would, in practice, end up specializing in inherently complex rules covering inherently complex products. Which is, itself, a central tenet of Warrenism: She believes every economic problem can be solved by changing the rules. Although she also favors new spending programs, her emphasis is on regulatory mechanisms, especially with regard to credit.

Yet by doing so, she “ends up defending America’s path down the road to a more credit-centric economy,” says Samuel Hammond, a policy analyst at the Niskanen Center, a Washington, D.C., think tank. “Instead of broad-based insurance programs, America did a lot of stuff through credit, making home mortgages artificially cheap.”

But focusing on credit rules, Hammond says, merely entrenches that system and enhances the systemic complexity Warren claims to reject. Her approach results in “much more micromanaging, much more complex interaction effects….For the CFPB, complexity is basically the first word.”

The Consumer Financial Protection Bureau is a powerful, roving agency, created under a flimsy pretense in the aftermath of an economic calamity, subject to minimal outside supervision, and dedicated to a mission that might best be described as unchecked Warrenism. In this sense, it is a reflection of Warren’s own character as both a politician and a public intellectual: self-certain, superior, uninterested in engaging critics. So it was hardly a surprise that the initial expectation was that its first director would be none other than its intellectual brood mother, Elizabeth Warren.

It quickly became apparent, however, that Republican opposition in the Senate would stymie Warren’s appointment. Instead, President Obama in 2010 made her assistant to the president and special advisor to the secretary of the treasury for the CFPB, tasking her with setting up the agency. In 2011, he made it clear that Warren still would not be nominated as director, and she stepped down from her White House role.

The CFPB was the culmination of decades of research and advocacy on Warren’s part. She had imagined it, fought for its creation, and then, from her perch in the administration, ushered it into being. Now she was being shut out.

What looked like a moment of triumph had become a significant personal defeat. Warren’s reputation as a liberal firebrand had rendered her so politically untenable, such a partisan lightning rod, that even Obama would not fight for her. By making herself anathema to the congressional GOP, she had lost the chance to carry out her agenda from a position of unusual power.

And yet there was a kind of victory as well, in the simple fact of the CFPB’s creation. Warren would not be its leader—that role would eventually go to former Ohio Attorney General Richard Cordroy, who was given a recess appointment that caused its own controversy—but she had willed it into being and would continue to provide spiritual guidance. She had not achieved her own political ambitions, but on the policy question, she had triumphed.

In the years that followed, something strange happened: Warren, the icon of progressivism whose political brand had proven too toxic to move through the CFPB nomination process, became the object of a strange new respect from the right.

There had always been an undercurrent of social conservatism to Warren’s politics. Although The Two-Income Trap was written from a position of nominal support for working women, it was, in some ways, a lament about mothers moving into the labor force and about the decline of the male breadwinner economic model. On occasion, Warren seemed alive to the deleterious effects of government subsidies, such as when she opposed government-funded day care, which she argued would “make financial life more difficult” for families with stay-at-home moms. And the book’s best piece of advice—don’t buy more house than you can afford—was fundamentally conservative. (It also conflicted somewhat with its thesis that consumer debt was not driven by irresponsible spending.)

Eventually conservatives, especially those whose focus tended toward family and culture, started to notice. In 2011, Christopher Caldwell published an essay in The Weekly Standard titled “Elizabeth Warren, Closet Conservative: The Most Misunderstood Woman in Washington,” praising the arguments in The Two-Income Trap. Warren had placed the economic stability of middle-class families at the center of her politics. She was a progressive, yes, but at heart she was a woman of the right.

Under President Donald Trump, that overlap has only grown. In July, The American Conservative, long a bastion of immigration-skeptical conservative nationalism, ran an essay extolling Warren’s economics, particularly her plans for a new bureaucracy dedicated to “defending good-paying American jobs,” and saying that in some respects, “Warren may be a bigger economic nationalist than even Trump himself.”

Nor is Warren’s popularity limited to small opinion journals. In June, Fox News’ Tucker Carlson, among the most-watched hosts on cable news and an influence on the Trump administration, opened his show with an extended monologue praising Warren’s domestic jobs plan and its elevation of “economic patriotism,” which calls for, in the senator’s words, “aggressive new government policies to support American workers.”

“Many of Warren’s policy prescriptions make obvious sense,” Carlson said. “She sounds like Donald Trump at his best.” Later, at a conference in July, he praised The Two-Income Trap as “one of the best books I’ve ever read on economics.”

It is hard to imagine the Republican Party ever embracing Elizabeth Warren. Trump frequently mocks her claims of Native American heritage, and the congressional GOP continues to view her with deep hostility. She’ll never be an ally to the party. But in some increasingly influential corners of the right, her ideas and her outlook are winning.

In 2012, Warren challenged Massachusetts Sen. Scott Brown, a Republican whose 2009 special election had caused headaches for supporters of Obamacare, and won. It was hard not to see the move as a steppingstone toward a run for president.

Despite the urging of many progressives, Warren sat out the 2016 race but watched as her fellow senator, Bernie Sanders (I–Vt.), ran a surprisingly strong primary campaign against frontrunner Hillary Clinton on a self-described democratic socialist agenda—one that mirrored Warren’s own in many ways. Given the energy of the Sanders campaign and the closeness of the general election vote, it’s easy to wonder whether Warren, had she run, would have captured the Democratic nomination and perhaps even defeated Donald Trump.

Now she has a second chance. In 2018, Warren soft-launched her 2020 effort with a series of policy proposals, and she has continued to roll out plans since her official announcement early this year. Each works from the themes of economic despair and disillusionment that she has dwelled on for decades, telling a dire-yet-evocative story of ever-more-powerful corporate interests preying on the middle class.

Yet in many ways, her plans still don’t add up.

Her signature policy is a 2 percent wealth tax on households worth over $50 million, with an additional surtax on households worth $1 billion or more. Her campaign claims the change would raise $2.75 trillion over a decade.

Most first-world countries that have implemented wealth taxes in recent decades have abandoned them, however. They’re expensive to enforce, and they encourage rich people to park their money—and the jobs that money might fund—elsewhere. As a result, these taxes rarely raise as much as hoped.

That helps explain the considerable academic skepticism about Warren’s revenue projections. Lawrence Summers, who served as a senior economic official in the Obama and Bill Clinton administrations, has argued that the estimates Warren relies on discount the likelihood that the wealthy would evade the new tax by strategically moving their money.

And in July, a trio of economists from the U.S. Treasury Department, Princeton, and the University of Chicago Booth School of Business presented a paper at the National Bureau of Economic Research finding that the rich simply have less wealth to tax than the estimates assume. This suggests that, even ignoring evasion, a wealth tax would raise only about half what Warren expects. In a survey of economic experts conducted by Chicago Booth, 73 percent said Warren’s wealth tax would be “much more difficult to enforce than existing federal taxes.” (Her campaign says the plan is structured to avoid these pitfalls, partly by imposing hefty fines on those who try to move their money elsewhere.)

Despite all this, Warren has outlined plans to spend the revenue aggressively. She has said her wealth tax could pay for a universal child care plan (which would cost about $700 billion, according to a Moody’s estimate) as well as her free college and student loan forgiveness plan (which would cost about $1.25 trillion). She has further suggested that the same tax could be used to cover a $7 billion plan for minority entrepreneurship, plus “down payments on a Green New Deal and Medicare for All”—an environmental policy that the center-right American Action Forum found could cost as much as $90 trillion (yes, trillion) and a single-payer health care plan that multiple estimates have found would cost more than $30 trillion. Given the likelihood that the wealth tax would not raise as much revenue as her campaign claims, it is probable that she would end up spending more money than she raises.

There are other problems as well. The cost estimate Warren points to for her child care plan relies on “dynamic scoring,” which assumes that the program will have a positive overall effect on the economy. But as Philip Klein of The Washington Examiner has noted, the revenue estimate for Warren’s wealth tax relies on what’s known as a “static” analysis. It counts no growth effects into its assumptions, presumably because taxing the sort of people who are likely to make large, economy-building investments would have a negative impact on growth. As with her early research, Warren has deployed her wealth tax in a slippery manner designed largely to further her policy goals.

It’s also quite possibly illegal, since the U.S. Constitution prohibits “direct taxes,” which probably means taxes that apply to a state of being—as in, the state of being wealthy—rather than an action. The Supreme Court has never offered a precise definition of the term, but there’s little question Warren’s effort would face a lengthy court challenge.

Her announcement speech in February, meanwhile, was peppered with dubious economic factoids such as the notion that “40 percent of Americans can’t find $400 to cover an emergency.” This commonly repeated statistic is based on a misreading of a government survey question about how people would choose to pay a $400 emergency expense: Forty percent said they would use a credit card, not that they couldn’t afford it at all. In fact, 86 percent of respondents said they would either pay with cash or use a credit card that they would pay in full at the end of the month.

Warren’s speech also included an outdated warning that “wages in America have barely budged” since the 1970s. It’s true that wages stagnated in the years after the 2008 recession, especially for workers at the bottom end of the income ladder. But in May, The New York Times reported that “wage growth, long stuck in neutral, has at last found a higher gear.” Furthermore, the article noted, “the recent gains are going to those who need it most. Over the past year, low-wage workers have experienced the fastest pay increases.”

In the midst of the longest economic expansion in American history—an expansion that has particularly benefited minorities and women—Warren’s campaign is structured as an extended argument that, actually, the economic outlook for most Americans is awful.  Yet under Warren, things could be even worse: Her economic micromanagement, her heavy-handed approach to regulation, her lack of interest in transparency, her willingness to pursue policies based on dubious and politically motivated data, and her unwillingness to respect the conventional checks and balances of multiparty democratic politics all foretell a presidency that would be dangerous for the economy writ large and potentially fatal for basic economic freedom. The current economy has serious risks and flaws. But the risks of Warrenism are even more severe.

To be sure, the economy could take a nosedive at any moment. Boom times always end eventually, and by the time the Democratic primaries are held next year—let alone the general election—the country could well be in a recession. The overhang of federal debt has added risk to the economy, as has Trump’s tariff-driven trade policy.

But Warren isn’t really arguing about federal debt, which she would almost certainly expand, or about the merits of Trump’s protectionist approach to trade, which her industrial policy would continue in spirit if not in precise detail. And she isn’t warning about the recurring cycle of economic ups and downs. Instead, she is making essentially the same argument she was making in 2004. She wants people to believe the American economy is rotten to the core—that it is irredeemable, at least without her at the helm.

Like so much of Warren’s worldview, it is a simple story, based in part on data that are either erroneous or presented in a misleading fashion. Yet her core conclusions about the struggles of middle-class families have become standard arguments in modern political dialogue on both the left and the right.

The Democratic primary field has adopted much of Warren’s agenda, and it has been forced to play catch-up to her high-volume approach to policy. In April, CNN held back-to-back town hall events with Warren’s rival candidates: Every single one was asked to answer a question about one of her plans.

Bernie Sanders’ success as a proponent of Nordic-style democratic socialism overlaps heavily with Elizabeth Warren’s economic doomsaying. New York Rep. Alexandria Ocasio-Cortez’s blend of personable social media chattiness, economic catastrophizing, and spare-no-expense policy proposals owes much to Warren’s pseudo-wonky populist brand.

Liberal think tanks, many of which were built to serve the Obama administration and the expectation of a Hillary Clinton presidency, have been unusually absent from the 2020 primary debate. But the Democratic Party doesn’t need a think tank to point the way. It has Elizabeth Warren.

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