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Poll Commissioned by Pot Prohibitionists Shows How Unpopular Pot Prohibition Is

“Half of Americans now support alternatives to full legalization of recreational marijuana use,” the anti-pot group Smart Approaches to Marijuana (SAM) says in a press release about a poll it commissioned. That spin, which casts “full legalization” as the default option, speaks volumes about the evolution of public opinion on this issue. What SAM’s poll actually found is that federal marijuana prohibition is extremely unpopular.

For years SAM has argued that polls finding majority support for legalizing cannabis are misleading because it’s not clear exactly what policy respondents have in mind. Surveys generally ask, “Do you think that the use of marijuana should be legal, or not?” That is the wording used by Gallup, the Pew Research Center, Quinnipiac University, the General Social Survey, and CBS News. But a yes answer to that question could signify support for a range of policies, from eliminating penalties for possessing small amounts of marijuana to allowing commercial production and distribution.

The options in SAM’s survey are more specific. The results are interesting, although probably not quite what an organization dedicated to scaring people about Big Marijuana wanted to see.

Mason Dixon Polling & Strategy, the firm hired by SAM, asked 1,000 respondents to say which of four policies “best describes your preference on national marijuana policy.” Sixteen percent chose “keep the current policy,” while 29 percent preferred to “legalize the use of marijuana for physician-supervised medical use.” Only 5 percent wanted to “decriminalize marijuana use by removing the possibility of jail time for possession and also allowing for medical marijuana, but keep the sale of marijuana illegal.” Forty-nine percent were ready for full legalization, saying the federal government should “legalize the commercial production, use and sale of marijuana for recreational use, as they have done recently in several states.”

As Vox‘s German Lopez notes, the SAM poll indicates that more than four-fifths of Americans are unhappy with the current federal policy, which classifies marijuana as a Schedule I drug with no legitimate use. Furthermore, full legalization was by far the most popular option, supported by nearly half of the respondents. But that is still lower than the percentages saying “the use of marijuana should be legal” in recent polls by Gallup (64 percent), Pew (61 percent), and Quinnipiac (58 percent). The SAM results are consistent with the premise that some of the people who agree with that statement support a more restrictive policy than the one adopted by the eight states that license and regulate marijuana growers, distributors, and retailers.

Then again, polls that framed the question a bit differently have found majority support for tolerating cannabis capitalism. In a 2014 CNN poll, for instance, 54 percent of respondents said “the sale of marijuana should be made legal.” That same year, a survey commissioned by NBC News and The Wall Street Journal indicated that 55 percent of Americans would support a law that “allowed adults to purchase small quantities of marijuana for their own personal use from regulated, state-licensed businesses.” A 2013 Reason-Rupe survey found that 53 percent of Americans thought “the government should treat marijuana the same as alcohol.”

Even if we ignore these other surveys, SAM’s poll indicates that the group opposing criminal penalties for possession but supporting them for cultivation and distribution is pretty small—one-third as big as the group that favors the current federal policy, which was the second least popular option. If SAM was hoping to find support for a policy that lets people use marijuana but not buy it, this poll has to be disappointing. The fact that only 5 percent of respondents supported such halfway decriminalization—a policy that had wide support until pretty recently, despite its moral and practical illogic—may be this poll’s most striking finding.

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A Market Valuation That Defies Comparison

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Comparing current equity valuations to prior valuation peaks such as those of 2008, 1999 or any other period is commonplace, but remains an essential way of assessing current market prospects and potential risks. Currently, seven of the eight traditional valuation techniques shown by Goldman Sachs below are in the upper strata of recent history.

The graph above, courtesy Goldman Sachs, is from August 2017. Since that time it is highly likely that all of those valuation levels have risen further.

In Second to None, published March 1, 2017, we opined that simply assessing valuation techniques, as shown above, is a great starting place for investors to gauge the present status of valuations. We added that it is equally important to normalize different periods of time to make their valuations comparable based on the level of economic growth which directly supports corporate profits. The result of our analysis shows that the current level of Cyclically Adjusted Price to Earnings (CAPE) is well above the levels of every other market peak, including 1999 and 1929. Essentially, investors are willing to pay more for each unit of economic growth today than at any time in modern history.

In this article, we update the data to reflect the current GDP adjusted CAPE and take it a step further to include the cyclical nature of corporate profit margins. When both adjustments are factored in, we gain a unique perspective that demonstrates the extent to which today’s valuations are, quite literally, off the charts.

GDP Trends

While the economy cycles from recession to growth and back, the long term economic growth trend, or secular GDP, has trended lower for the better part of the last 30 years. The graphs below show the cyclical short-term nature of economic growth (left) as well as the longer term trend (right).

Data Courtesy: St. Louis Federal Reserve (FRED)

There are a number of reasons for the long-term, downward growth trend about which we have written extensively. In a nutshell, the following are the three largest factors accounting for the deteriorating trend in growth:

Debt – The amount of federal, corporate and individual debt has consistently risen at a pace faster than economic growth. As such, many debtors are unable to borrow further to keep spending. Others are hampered by interest payments which crowd out spending. The Federal Reserve has used extraordinary policies to force interest rates to historic lows to counter the debt burden, but their actions have only bought time and incentivized even more debt. The debt problem, which we call the Lowest Common Denominator, has only worsened.
Demographics – Over the last 30 years, baby boomers provided a driving force for economic growth. As this outsized generation nears retirement, they will spend less and, in many instances, become a burden on the taxpayers that support them through social security and other entitlements. Additionally, slowing population growth and tightened restrictions on immigration are reducing the number of workers and consumers that can contribute to economic growth.
Productivity – Partially as a result of years of poor economic, fiscal and monetary policy that dis-incentivized long-term investment in favor of consumption, the rate of productivity growth, the lifeline of economic growth is nearing zero.

It is primarily these three reasons and their longer-term projections that make us nearly certain that secular economic growth will continue to weaken in the years ahead. That does not mean there will not be periods of stronger growth. However, given that few of our nation’s leaders truly understand what drives sustainable economic growth and even fewer have the courage required to reverse the trends, we see little reason to expect change.

Given our assumption that long-term economic trends are likely to persist, we believe it is necessary to use economic growth to normalize current equity valuations to compare them to prior periods. The following graph is an updated version of the one shown in Second to None. It plots CAPE divided by the trailing ten-year growth rate of nominal GDP.

Data Courtesy: St. Louis Federal Reserve (FRED) and Robert Shiller

Note that the graph above and all of the graphs normalizing CAPE in this article, unlike the one presented in Second to None, are scaled by multiples of the average on the y-axis instead of the calculated number. The rationale being that the purpose of the analysis is not to provide a concrete numerical data point, but a comparative measure that allows one to relate valuations over many different economic environments. As an example the current reading is 2.86, meaning market valuations using this measure are 2.86 times higher than the average since 1956.

The two potential arguments against this type of analysis are likely from those that disagree with our longer-term growth forecast or those that agree with us but believe that we should exclude data from the financial crisis of 2008 as it was far from the norm.

For those that think economic growth will be better than the trend of the last thirty years, you should be aware that a ten-year growth rate of 8.21% is required to bring the adjusted valuation to its long-term mean. Such a ten-year growth rate has not been witnessed since 1987 and is nearly 2% greater than the average over the last 70 years.

For those that think excluding 2008 is appropriate, we calculated a seven-year CAPE divided by seven-year growth. While the current level using this time frame is not as egregious, it is two times that of the average over the last 70 years and only slightly lower than the peak established in the year 2000. We remind those in this camp that the current economic expansion has lasted 103 months, almost twice the average since 1945. The longest expansion during this period was 120 months. No one knows when a correction will come, but we are clearly in the later stages of the cycle unless one assumes that the laws of mean reversion have been permanently suspended for both valuations and economic cycles.

Margins are Cyclical

Corporate profit margins, or the difference between sales and net profits, are considered one of the most cyclical fundamental measures that exist. The reason is that, when margins are high in certain industries, new entrants are lured to those industries by the higher margins. Conversely, when margins are low, companies exit those industries and those remaining companies can increase margins. The graph below shows the cyclical nature of corporate margins since 1948.

Data Courtesy: St. Louis Federal Reserve (FRED)

When margins are higher or lower than average, it makes sense to assume they will revert to the mean over time. Therefore, the rationale and logic for normalizing CAPE based on current margins and its historical tendency, provides a valuation level, as shown below, that is comparable to other periods.

Data Courtesy: St. Louis Federal Reserve (FRED) and Robert Shiller

Note that in the first graph showing historical margins that margins over the last 70 years appear to have broken the cyclical pattern and have stayed well above the average for an extended period. Many stock promoters believe this is a reflection of a “new normal” and cheer such a feat. They may be correct, but you might also want to consider that if margins have risen to a new level and are not cyclical anymore, the age-old incentives that drive business decisions in a free market economy no longer exist. If that is the case, we may also want to consider that capitalism may be broken. If capitalism is in fact eroding, do you really want to pay a high premium for stocks? To help answer that question, we suggest a quick review of the gross economic inefficiencies of those nations where capitalism is not employed.

Comparative CAPE

We believe that durable longer-term economic trends and profit margins should be used to normalize CAPE and again make it comparable to prior periods. The graph below presents CAPE adjusted for both.

Data Courtesy: St. Louis Federal Reserve (FRED) and Robert Shiller

The graph above highlights that valuations using this measure dwarf any prior valuation peak since at least the 1950’s. At over 350% above the mean, stock investors are currently paying significantly more for a unit of economic growth than at any time in the last 70 years. To extend the analysis, we estimated the adjusted CAPE level of 1929, as shown on the graph, and come to the same conclusion.

Summary

Most astute investors know that stock valuations are at or near historical highs. Even these investors, however, may be unaware that today’s valuations, when adjusted for the level of economic growth and heightened profit margins, defy comparison with any prior period since the Great Depression. The simple fact is that investors are paying over three times the average and almost twice as much as the prior peak for a dollar of economic growth. Furthermore, it is happening at a time when we are clearly late in the economic cycle and the outlook for growth, even if one is optimistic, is well below that required to justify such a level.

Fundamental valuations are a great means of understanding the potential value or lack thereof in a market or individual stock. However, it is a poor short-term trading tool. There is no doubt that, in time, valuations will revert to the norm. This can occur via sharp earnings increases or slower earnings growth accompanied by years of price stagnation. It can also transpire, as it has in the past, with a sharp drawdown in equity prices. Regardless of how you think this resolves itself, we hope this valuation technique provides another helpful tool for assessing the proper risk and reward tradeoff offered by markets currently.

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The Supreme Court’s Big Public Sector Union Case Is Really About Free Speech

Mark Janus did not vote to join a union, and he does not support the union that he was forced to join as a condition of his job. Nevertheless, each month the Association of Federal, State, County, and Municipal Employees, Council 13, takes a cut of Janus’ paycheck.

Late next month, the U.S. Supreme Court will tackle the question of whether that should be legal. For now, unions in many states are able to collect mandatory dues payments from millions of public sector workers, whether or not those workers want those unions to speak for them. The unions, after all, don’t just negotiate with employers about pay and working conditions; they regularly lobby for and against a range of public policies.

Janus v. AFSCME Council 31 is best thought of as a sequel to Friedrichs v. California Teachers Association, a 2016 Supreme Court case that raised the same question about whether public-sector unions can extract political dues from recalcitrant members. That case ended in a 4-4 draw after Justice Antonin Scalia’s sudden death left the Court with an even number of conservative and liberal members. For obvious reasons, that means all eyes in this case will be fixed on the newest justice, Neil Gorsuch.

While the case could have far-ranging implications for labor policy at all levels of government, it will likely turn on a relatively simple question: Does money equal speech?

In a newly published analysis of the arguments in the Janus case, Trey Kovacs, a policy analyst with the Competitive Enterprise Institute, says it does.

“Workers should not have to fund an organization with which they disagree in order to keep their jobs,” says Koavks, “especially organizations like public-employee unions, which are inherently political.”

Janus, like Friedrichs, takes aim at an earlier case: 1977’s Abood v. Detroit Board of Education, when the Supreme Court ruled that public-sector unions could levy compulsory dues. Without those mandatory payments, the Court reasoned, unions would have to represent “free riders” who benefit from the representation of a union without contributing anything in return. As Damon Root noted in the January Reason, that decision has been a major boon to public sector unions.

In its filing in Janus, AFSCME calls mandatory dues a “small intrusion on employees’ First Amendment interests.”

Writing at The Volokh Conspiracy (which Reason hosts, though it is editorially independent), UCLA law professor Eugene Volokh suggests that the First Amendment argument might not be as compelling as Janus and his allies think.

“The government can constitutionally require people to pay money to the government (in taxes), money that the government can then use for ideological purposes (e.g., supporting a war, opposing racism, promoting environmentalism, and so on),” Volokh writes. “Likewise, the government can constitutionally require people to pay money to unions, money that the unions can then use for ideological purposes.”

The legal distinction, if the justices wish to draw one, could lie in the difference between being forced to pay money to the government and being forced to pay money to a nongovernmental third party.

At least some ears on the bench will probably be receptive to Janus’ position. “Preventing nonmembers from free-riding on the union’s efforts,” Justice Samuel Alito wrote in 2014, is “generally insufficient to overcome First Amendment objections.”

“Except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support,” Alito concluded.

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DOJ Demands Sanctuary Cities Turn Over Law-Enforcement Documents

The Trump administration’s battle with so-called sanctuary cities escalated Wednesday when the Department of Justice, under the guidance of Attorney General Jeff Sessions, asked for records from 20 cities and countries, including the country’s three largest, as well as California, Illinois and Oregon.

The documents would reveal whether law enforcement agencies in these jurisdictions are illegally withholding information from US immigration authorities in violation of federal law, Reuters reported. Most sanctuary cities have passed local laws meant to stop municipal law enforcement from sharing an arrestee’s immigration status with ICE.

“If these jurisdictions fail to respond to our request, fail to respond completely or fail to respond in a timely manner, we will exercise our lawful authorities and issue subpoenas for the information,” said a senior Justice Department official, briefing reporters on condition of anonymity.

Trump’s battle with sanctuary cities has been raging for nearly his entire tenure in office, beginning just days after his inauguration when he signed an executive order to bar federal funding to cities that failed to cooperate with immigration authorities. This order was swiftly blocked by a federal appeals court, like so many of Trump’s other immigration-related policies. As a candidate, Trump promised to deport all of the roughly 11 million undocumented immigrants living in the US.

New York, Los Angeles and Chicago are each being targeted, as are Denver, San Francisco, the Washington state county that includes Seattle, Louisville, Sacramento, Albany, West Palm Beach and others, according to Reuters.

Some cities, including Philadelphia, didn’t make the list because of pending litigation.

Last March, Attorney General Jeff Sessions made a surprise appearance at then-White House Press Secretary Sean Spicer’s press briefing to announce that the DOJ would take steps to require sanctuary cities to comply with federal immigration laws, or see federal public-safety grants withheld. The DO would even try to claw back past DOJ awards, Sessions said. But the agency was quickly blocked by a flurry of lawsuits by Chicago, San Francisco and Philadelphia.

The judge overseeing the Chicago case issued a nationwide injunction barring the DOJ from withholding what is known as Byrne JAG grant money on the constitutional grounds. These funds are typically used to help local police improve crime-fighting techniques, buy equipment and assist crime victims. The DOJ is appealing this ruling.

According to Reuters, supporters of the sanctuary movement say enlisting local law enforcement officers’ support in rounding up immigrants for deportation undermines trust in local police.

Some cities have said they will honor requests by immigration authorities when accompanied by a criminal warrant.

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Utah’s Free-Range Kids Bill Would Give Kids More Freedom

Kids To prevent parents from being arrested for simply letting their kids play outside or walk home from a park in these remarkably safe times, Utah is considering a “Free-Range Kids Bill.”

To become law it must pass a senate committee (into which it was introduced by Republican Sen. Lincoln Fillmore), then the senate itself, then the state House of Representatives. But yesterday it passed its first hurdle—unanimously.

As Fox 13 Salt Lake City reported:

A bill that makes it no longer a crime for parents to let their children walk home alone from school or play outside alone has passed a Utah Senate committee.

Senate Bill 65, sponsored by Sen. Lincoln Fillmore, R-South Jordan, modifies child neglect law in Utah to allow for so-called “free range kids.”

“As a society, we’ve kind of erred as our pendulum has swung for children’s safety a little bit too much to the side of helicopter parenting, right? We want kids to be able to learn how to navigate the world so when they’re adults they’re fully prepared to handle things on their own,” Sen. Fillmore told FOX 13 in an interview.

“Free range kids” and “free range parenting” is a pushback on the concept that children are constantly in danger.

Happily, cops bearing down on decent parents has not been a big issue in Utah. But the fear that someone calling 911 when they see a kid outside could prompt an investigation is something no parent should have to worry about.

Naturally, some authorities don’t like the idea of non-worried parents. The Associated Press reported that Salt Lake County District Attorney Sim Gill showed up to offer the following testimony: “Right now, parents have pretty much all the liberty they need to parent as they see fit.” If such a law isn’t worded carefully, it could become a defense for parents in child abuse cases, he said. “We want to be careful this … doesn’t comprise our ability as prosecutors to hold abusive parents accountable.”

But under Fillmore’s law, cops and child protective services retain the right to investigate cases of real abuse or neglect. It just reassures parents freaked out by stories of overzealous arrest—like the Meitivs of Maryland, investigated twice for letting their kids, 10 and 6, walk home from the park—that allowing their kids a modicum of freedom would no longer be considered suspect. An old-fashioned childhood would be re-normalized.

Utah believes in letting parents raise kids with some resourcefulness and self-reliance. Let’s hope the this bill becomes law.

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“I Just Signed Your Death Warrant”: US Ex-Gymnastics Doctor Sentenced To 175 Years In Prison

Capping the rising tide of pervasive sex-abuse scandals unleashed by the recent takedown of Harvey Weinstein, moments ago the former USA Gymnastics and Michigan State University sports doctor Larry Nassar was sentenced to between 40 and 175 years in prison for the sexual assault of dozens of girls.

The sentencing on seven charges of criminal sexual conduct in Ingham County, Michigan followed seven days of testimony from more than 150 current and former gymnasts who said Nassar molested them while professing to treat them for injuries.

“I just signed your death warrant” said Judge Rosemarie Aquilina after issuing the verdict and added that it was “honor and privilege” to sentence him Nassar.

“Your crime, all of your crimes, the depth of them, have cut into the core of this community and many communities,” Aquilina said during the sentencing.

“You did this for your pleasure,” she said after reading a letter by Nassar submitted to the court. “You still think that somehow you are right, that you are a doctor … I wouldn’t send my dogs to you, sir.”

“You do not deserve to walk outside of a prison ever,” she said.

Aquilina then addressed the gymnasts present, telling them, “You are no longer victims, you are survivors.”

Nassar, 54, pleaded guilty in November to seven counts of first-degree sex assault. He was already serving a 60-year sentence for child pornography convictions, and is still awaiting sentencing on three charges of criminal sexual conduct in Eaton County, Mich.

Speaking before the sentencing, Nassar addressed his victims who confronted him over the past week: “There are no words that can describe depth and breadth of how sorry I am,” he said. “I will carry your words with me for the rest of my days.”

Larry Nasser just addressed the court — and his victims. Here’s what he said. https://t.co/49ElDNNCiY

— Meg Wagner (@megwagner) January 24, 2018

However, the judge dismissed his remarks as insincere and read out a letter in which he claimed he was compelled and “manipulated” into pleading guilty. The courtroom audibly gasped as she read his letter aloud. She offered Nasser to change his plea, which he declined.
* * *

Prosecutor Angela Povilaitis said Wednesday that Nassar is “possibly the most prolific serial child sex abuser in history.”

“To each survivor, thank you,” she said. “Thank you for coming forward, for trusting us, for doing what is so hard and difficult. What is obvious is that a strong group of determined women can in fact change the world, and will.”
Among the victims who spoke at the sentencing were Olympic gymnasts Aly Raisman and McKayla Maroney. Gymnasts Gabby Douglas and Simone Biles also accused Nassar of sexual assault.

Three members of USA Gymnastics’ top leadership stepped down earlier this week over the scandal, and the organization said earlier this month that it would move training facilities from Karolyi Ranch, where Nassar abused the girls.

The NCAA has also opened an investigation into Michigan State University’s handling of sexual abuse claims against Nassar. He was a doctor at the university from 1997-2016.

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Donald Trump Supports School Choice. Here’s Why You Should Too.

Earlier this week, President Donald Trump did something good: For the second year in a row, he issued a proclamation supporting National School Choice Week, an annual event that promotes interest in and discussion of ways to bring more options to K-12 students and their parents. The full proclamation is after the jump, but here’s a snippet:

Communities that provide academic options — traditional public, public charter, private, magnet, parochial, virtual, and homeschooling — empower parents and guardians to select the best educational fit for their children.

School choice helps alleviate common hindrances to success and creates the space necessary for students’ aspirations to flourish. Families that participate in school choice programs are not the only ones who benefit from expanded educational options. Children in traditional public schools benefit as well. In fact, 29 of the top 31 empirical studies on the topic find that freedom of school choice improves the performance of nearby public schools.

I disagree with Donald Trump on many, probably most, issues. But he’s absolutely correct in insisting that parents should have more choices on where to send their kids to school, curricula to choose from, and how to individualize learning. America is a post-industrial country and we no longer put up with standardized food, clothing, lifestyles, or housing. Why should something as fundamental as education—”Life in the United States starts with a 13-year mandatory minimum K-12,” quips Earn.com’s CEO Balaji Srinivasan—be as ossified and stratified as it is? Across the United States, per-pupil spending averages over $13,000, which is up from about $6,000 in 1970 (in constant dollars). I’d wager there is no other area in our lives where costs have skyrocketed by more than double while the underlying good or service has not radically improved or been completely superseded by something else.

Yet the most basic measure of outcome, scores on standardized tests for graduating seniors on the National Assessment of Educational Progress, has not improved:

So we’re spending tons more money per student and yet getting the same basic result.

There are, of course, many ways to dispute this. Kids today are more disadvantaged (not true), schools are expected to do so much more (not really true, or, same thing, schools choose to prioritize all sorts of stuff over learning), teachers are underpaid compared to the past, so the current crop is simultaneously less good and unmotivated (not true, not true).

Beyond anything related to test scores, which are at best a bad proxy for knowledge and achievement, we might ask whether that $13,000 per K-12 student could be spent in ways that make learning more interesting for kids. The answer here is: Of course it can be. There’s a reason why school choice—whether in terms of charters, vouchers, Educational Savings Accounts (ESAs), scholarship programs, and more—is growing and it’s not because traditional residential-assignment schools are popular. As University of Arkansas researcher Jay P. Greene has put it, the move toward broadly defined school choice has “reached escape velocity” because parents and students are demanding the same sort of flexibility, personalization, engagement, and attention from education that we take for granted in all other parts of our lives.

Here is Trump’s full proclamation:

All American children deserve the opportunity to achieve their dreams through hard work and personal integrity. Our Nation’s education policies must support them on their journeys, recognizing the diverse career goals and academic needs of students in communities across our country. During National School Choice Week, we honor those dedicated educators, administrators, and State and local lawmakers, who promote student-focused academic options for all families, as we increase educational freedom for all Americans.

The United States is one of the most educated countries in the world. Almost 90 percent of American adults attain a high school diploma or GED. But our students deserve more than just a paper diploma. Indeed, they deserve access to an education that provides the tools needed to succeed in our ever-evolving world. To maintain our global leadership and strengthen our modern economy, America’s education system must prepare students for the unforeseen challenges of the future. Communities that provide academic options — traditional public, public charter, private, magnet, parochial, virtual, and homeschooling — empower parents and guardians to select the best educational fit for their children.

School choice helps alleviate common hindrances to success and creates the space necessary for students’ aspirations to flourish. Families that participate in school choice programs are not the only ones who benefit from expanded educational options. Children in traditional public schools benefit as well. In fact, 29 of the top 31 empirical studies on the topic find that freedom of school choice improves the performance of nearby public schools.

My Administration is refocusing education policy on students. We are committed to empowering those most affected by school choice decisions and best suited to direct taxpayer resources, including States, local school boards, and families. As part of my steadfast commitment to invest in America’s students, I signed into law the Tax Cuts and Jobs Act last December. One of the bill’s provisions includes an expansion of 529 education savings plans so that their funds can be allocated tax-free to K-12 public, private, and religious educational expenses. By giving parents more control over their children’s education, we are making strides toward a future of unprecedented educational attainment and freedom of choice. Under the leadership of Secretary of Education Betsy DeVos, we will continue to advance school choice so that every child in America has access to the tools best suited to enabling them to achieve the American Dream.

During National School Choice Week, I encourage parents to explore innovative educational alternatives, and I challenge students to dream big and work hard for the futures they deserve. I also urge State and Federal lawmakers to embrace school choice and enact policies that empower families and strengthen communities.

NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim January 21 to January 27, 2018, as National School Choice Week.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-second day of January, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-second.

DONALD J. TRUMP

Reason is a proud media partner of National School Choice Week, an annual event promoting the ability of parents and students to have greater options in K-12 education. Go here to get more information about events and data about how increasing school choice—charters, vouchers, educational savings accounts, and more—is one of the best ways to improve education for all Americans. For a constantly updated list of stories about school choice, go to Reason‘s archive page.

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White House Didn’t Learn About Flynn’s FBI Meeting Until Days Later

Yesterday, the Washington Post reported that Special Counsel Robert Mueller III is hoping to question President Donald Trump during the coming weeks about his decisions to oust national security adviser Michael Flynn and FBI Director James Comey – the latest sign that the prosecutor’s investigation into Russia-Trump “collusion” has pivoted to focusing on obstruction of justice.

With Mueller’s probe increasingly focusing on Flynn, who has agreed to testify in exchange for leniency after being indicted for allegedly lying to the FBI, NBC published a bombshell report Wednesday about the meeting that set this whole saga into motion: Flynn’s initial meeting with the FBI, which took place exactly one year ago today, on Jan. 24, 2017.

According to NBC, the meeting took place after an employee from the office of Deputy Director Andrew McCabe contacted a scheduler for Flynn to set up a time for Flynn to meet with the FBI. The scheduler put the meeting on Flynn’s calendar without asking why the bureau wanted to meet with their boss.

When the agents showed up later that day, Flynn met with them without informing the White House of the National Security Council, or even his own personal lawyer. Apparently, Flynn was unaware that the meeting pertained to his conduct involving agents of the Russian government.

A brief phone call from the office of Andrew McCabe, the deputy FBI director, to a scheduler for Flynn on Jan. 24 set the interview in motion, according to people familiar with the matter. The scheduler was told the FBI wanted to speak with Flynn later that day, these people said, and the meeting was placed on Flynn’s schedule. The scheduler didn’t ask the reason for the meeting, and the FBI didn’t volunteer it, one person familiar with the matter said.

Later that day, two FBI agents arrived at the White House to speak with Flynn. A lawyer for the National Security Council typically would be informed of such a meeting and be present for it, one person familiar with the procedures said. But that didn’t happen in this instance, and Flynn didn’t include his own personal lawyer, two people said. He met with the two federal agents alone, according to these people.

“No one knew that any of this was happening,” said another senior White House official who was there at the time.

“Apparently it was not clear to Flynn that this was about his personal conduct,” another White House official said. “So he didn’t think of bringing his own lawyer.”

White House Counsel Don McGahn III was the first White House official to learn about Flynn’s meeting, when he was informed by acting Attorney General Sally Yates. Yates also reportedly told McGahn that Flynn had lied to Vice President Mike Pence and therefore might be vulnerable to blackmail from the Russians. Yates has been interviewed in Mueller’s probe.

Yet, McGahn did not later ask Flynn if he lied to the FBI, one person familiar with the matter said.

McGahn quickly briefed Trump, Bannon and White House chief of staff Reince Priebus, who left the White House last summer. Still, it would be weeks before Flynn was fired on Feb. 13.

However, it would be months before McGahn realized that Flynn might’ve lied to the FBI, when Mueller’s team requested a trove of documents from Flynn’s tenure at the White House.

By the end of 2017, Mueller’s team had spoken with Director of National Intelligence Dan Coats; Mike Rogers, the director of the National Security Agency; former FBI Director James Comey; and numerous members of Trump’s campaign and White House inner circle. Steve Bannon is expected to meet with Mueller’s team by the end of the month. McGahn has also sat for two days of interviews with Mueller’s team.

One person familiar with the matter described Pompeo, Coats and Rogers as “peripheral witnesses” to the Comey firing. Attorney General Jeff Sessions, who played a key role in Comey’s departure and was a top adviser on the Trump campaign, was interviewed by Mueller last week as the special counsel’s team inches closer to possibly questioning the president himself.

Notably, Trump has taken aim at McCabe lately, accusing the deputy of political bias, while also maintaining that this phenomenon is widespread throughout the bureau.

Interestingly, one of the two agents who interviewed Flynn was Peter Strzok, who was fired by Mueller last summer and is now the object of Republican ire, after Congress received batches of text messages between Strzok and his mistress, FBI Lawyer Lisa Page, expressing their opposition to Trump. At one point, Page texted Strzok about an “insurance policy” to prevent Trump from becoming president.

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Stocks Are Suddenly Tanking…

Weak-Dollar outflows? Trade Wars? Or Pension-fund outflows? Take your pick, but stocks are getting slammed…

The weakness seemed to start around Wilbur Ross’ comments on China’s “Direct Threat” but has extended as Pension flow concerns rise…

A lot of the stock drop was catch-down to bond/dollar reality…

Of course the NYSE breaking did not help…

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Foreign Buyers Jump Into Mediocre, Tailing 5-Year Auction

While nowhere near as impressive as yesterday’s 2Y auction, today’s sale of $34 billion in 5Y Notes was good, if toward average. 5-year note auction went off without any difficulties with metrics that were generally close to average.

The high yield stopped at 2.434% a 0.4bps tail to the 2.430% When Issued, 20bps higher than last month’s 2.23%, and the highest since April 2010. The bid to cover of 2.48 was higher than December’s 2.36 if right on top of the 6 month average of 2.49%, with total bids of $89.4b for $39.0b in notes sold vs six previous auction average of $87.3b in bids for $36.6b in notes sold.

Similarly, the buyside takedown figures were in line with the average: there was a 65.0% Indirect takedown, well above December’s 58.4%, but in line with the 6 month average of 65.4%. Direct bidders took down 9.1%, just below the 6 month average 9.5%, leaving 26% to Direct bidders.

Overall, an unremarkable sale with nothing to write home about; perhaps the only notable feature is that in light of today’s broad selloff across the curve it could have been far worse.

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