Neal Katyal, one of the leading appellate lawyers in the country, has filed a superb petition in Waggy v. U.S., urging the court to consider this question, cowritten by his Hogan Lovells US LLP colleagues Mitchell P. Reich and Benjamin A. Field, and federal public defender Matthew Campbell. (The Pennsylvania Center for the First Amendment and I filed an amicus brief supporting the petition—thanks to my student Nicole Patolai for her work on it.) Here are the facts and procedural history, from the petition (which is of course an advocacy document, but in my view quite reliable):
Robert Waggy is a disabled Marine Corps veteran who receives private medical care paid for by the Department of Veterans Affairs (VA). One day, Waggy called his local VA medical center to complain about its failure to reimburse him for $30,000 in medical bills. During the calls, Waggy became irate and used profanity. Waggy did not level true threats or incite violence; he merely petitioned—intemperately—for a redress of his grievances. Nonetheless, the Government made a federal case out of it, successfully charging Waggy with “mak[ing] a telephone call,” “with intent to harass … or embarrass any other person,” “using … lewd, lascivious, [or] indecent language.” A divided panel of the Ninth Circuit affirmed Waggy’s conviction, reasoning that it comported with the First Amendment because the statute punished Waggy solely for his “nonexpressive conduct” rather than for his speech.
The split among circuits on the broader question of the constitutionality of telephone harassment laws:
That decision deepens an intractable split among the lower courts as to the constitutionality of telephone harassment statutes. The Ninth Circuit has now joined three other circuits and six state high courts, as well as a bevy of intermediate state courts, that have upheld similar telephone harassment statutes against First Amendment challenge on the ground that they do not regulate protected speech at all. In contrast, two circuits, six state high courts, and numerous state intermediate courts have subjected telephone harassment statutes to searching First Amendment scrutiny—and have deemed such laws unconstitutional as applied to speech, like Waggy’s, that raises matters of public concern. This split is widely acknowledged, deepening, and manifestly incapable of resolution without this Court’s intervention. The time has come for the Court to step in and resolve the split once and for all.
A summary of the leading precedent in favor of holding such statutes unconstitutional, at least as to calls on matters of public concern to government offices:
The leading case on this side of the split is United States v. Popa, 187 F.3d 672 (D.C. Cir. 1999), which the panel below disagreed with and dismissed as inconsistent with the “great weight of authority,” Pet. App. 9a n.5. In Popa, the defendant placed a series of calls to the office of Eric Holder, then the U.S. Attorney for the District of Columbia, in which Popa mixed racial epithets with complaints that the office had “violated … [his] rights.” 187 F.3d at 673-674. The Government prosecuted Popa under the federal telephone harassment statute, charging him with making calls “without disclosing [his] identity and with intent to annoy, abuse, threaten, or harass.” Id. at 674 (quoting 47 U.S.C. § 223(a)(1)(C))….
The principal problem, the D.C. Circuit explained, was that the statute extends to a broad swathe of “public or political discourse.” Id. at 676-677. Among other things, the court noted that the law applies to calls in which “the caller has an intent to verbally ‘abuse’ a public official for voting a particular way on a public bill, ‘annoy’ him into changing a course of public action, or ‘harass’ him until he addresses problems previously left unaddressed.” Id. Yet “the statute could have been drawn more narrowly, without any loss of utility to the Government, by excluding from its scope those who intend to engage in public or political discourse.” Id. at 677. For instance, while the Government may have a legitimate interest in preventing callers from “tying up someone’s line with a flood of calls,” “[p]unishment of those who use the telephone to communicate a political message is obviously not ‘essential to the furtherance of that interest.’ ” Id. (quoting United States v. O’Brien, 391 U.S. 367, 377 (1968)). That meant that Popa’s conviction could not stand: “complaints about the actions of a government official were a significant component of his calls,” and so the statute was “unconstitutional as applied to his conduct.” Id. at 677-678….
And the broader errors by the majority below and by other courts in their First Amendment analysis:
Several lower courts, including the Ninth Circuit, have reasoned that telephone harassment laws like Washington’s are exempt from First Amendment scrutiny because, by barring only those communications with an “intent to harass,” these laws restrict “nonexpressive conduct” rather than speech. Pet. App. 10a-13a (citing cases). That is a puzzling characterization. The fact that speech is uttered with a particular intent does not transform it into unprotected conduct; a political protest made for vindictive reasons is no less protected than one made for lofty reasons. See FEC v. Wisconsin Right To Life, Inc., 551 U.S. 449, 468 (2007) (lead op.) (A “speaker’s motivation is entirely irrelevant to the question of constitutional protection.” (citation omitted)).
Further, telephone harassment laws sweep into their prohibition speech that is plainly communication—namely, the calls themselves, and the ideas and thoughts the caller wishes to express through them. See Cohen, 403 U.S. at 18 (holding that a conviction that punishes “the fact of communication” is a restriction “upon ‘speech’ ” (citation omitted)). That is particularly clear in the case of Washington’s law, which expressly restricts the “words [and] language” a caller may utter. If a restriction on the use of particular words is not a speech restriction, then nothing is….
Some lower courts have also suggested that “harassment” is a type of speech categorically outside the ambit of the First Amendment. See, e.g., Eckhardt, 466 F.3d at 943-944. That too is wrong. “ ’From 1791 to the present’ … the First Amendment has ‘permitted restrictions upon the content of speech in a few limited areas,’ ” and harassment is not one of them. Stevens, 559 U.S. at 468 (listing obscenity, defamation, fraud, incitement, and speech integral to criminal conduct as traditionally proscribable categories). Nor is harassing speech “part of a long (if heretofore unrecognized) tradition of proscription.” Entm’t Merchants, 564 U.S. at 792. To the contrary, this Court has time and again held that the First Amendment protects speech that is “annoying,” Coates, 402 U.S. at 615, or that is “offensive and embarrassing to those exposed to” it, Carey v. Population Servs. Int’l, 431 U.S. 678, 701 (1977); seeStreet v. New York, 394 U.S. 576, 592 (1969) (“[T]he public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”). Simply put, “[t]here is no categorical ‘harassment exception’ to the First Amendment’s free speech clause.” Saxe, 240 F.3d at 204 (Alito, J.).
Nor is there a categorical exclusion from the First Amendment for speech that is “lewd, lascivious, profane, [or] indecent.” Wash. Rev. Stat. § 9.61.230(1)(a). Although “obscenity” falls outside the protection of the First Amendment, “indecency” does not. See Reno v. ACLU, 521 U.S. 844, 874 (1997). And the Washington courts have expressly held that the Washington telephone harassment statute prohibits “‘indecent’ speech,” as distinguished from obscenity. Dyson, 872 P.2d at 1119-20; see Pet. App. 27a (instructing Waggy’s jury that the law prohibits “indecent” speech, and that “indecent” means “not decent, such as: grossly improper or offensive, unseemly, inappropriate”)….
My view of when telephone harassment laws are constitutional, especially as to calls that aren’t to government offices, is complicated (see this article); but I entirely agree that the Court should speak to this issue, and I hope it does so in this case. You can also read the government’s brief opposing certiorari, the petitioner’s reply brief, and the amicus brief filed on behalf of the National Coalition Against Censorship by Prof. Lisa Hoppenjans at the Wash. U. First Amendment Clinic.
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Yesterday Attorney General William Barr expressed his opposition to scaling back or eliminating qualified immunity for police officers. Reformers think scrapping the doctrine would discourage abuses like the life-endangering restraint technique that killed George Floyd. But Barr argues that increased liability for cops—whether accomplished by the Supreme Court’s reconsideration of the qualified immunity doctrine or by legislation like the bill that Rep. Justin Amash (L–Mich.) recently introduced—would have a chilling effect on good policing.
Defenders of qualified immunity often express that concern. But it seems to be overblown, for reasons that also put a damper on the hopes of the doctrine’s opponents.
“I don’t think you need to reduce immunity to go after the bad cops, because that would result certainly in police pulling back,” Barr said on Face the Nation. “Policing is the toughest job in the country….The vast, overwhelming majority of police are good people. They’re civic-minded people who believe in serving the public. They do so bravely. They do so righteously.”
That position is unsurprising coming from Barr, who has expressed dismay at what he perceives as insufficient respect for police officers and the work they do. “Being a police officer is more difficult today than it has ever been before,” he said in a speech at a police symposium in Miami last February. “One reason is the emergence of a deeply troubling attitude towards police in some parts of society. Far from respecting the men and women who put their lives on the line to protect us, it has become common in some quarters to scapegoat and disrespect police officers and disparage the vital role you play in society. This undoubtedly makes your already difficult job of protecting the public even harder.”
That “deeply troubling attitude” must be understood, of course, in the context of police corruption and abuse. If the “vast, overwhelming majority of police are good people,” curtailing those problems is in their interest as well as the interest of bad cops’ potential victims. Their reputation, their relationship with the communities they serve, and their effectiveness all suffer when the public believes that officers will not be held accountable for abusing their powers. And to the extent that “pulling back” means police will hesitate before doing things they should not do—say, kneeling on a prone, handcuffed arrestee’s neck for nearly nine minutes—that effect should be welcomed.
But Barr is arguing that the net effect of eliminating this barrier to civil rights lawsuits will be negative because it will overdeter police, causing them to second-guess their decisions in ways that jeopardize public safety. The Supreme Court has repeatedly expressed similar concerns.
“A policeman’s lot is not so unhappy that he must choose between being charged with dereliction of duty if he does not arrest when he has probable cause, and being mulcted in damages if he does,” the majority said in Pierson v. Ray, the 1967 case in which the Court recognized a “good faith” exception to liability under 42 USC 1983, which allows people to sue government officials for violating their constitutional rights under color of law. In Harlow v. Fitzgerald, the 1982 case in which the Court said lawsuits under that statute are allowed only when they allege violations of rights that were “clearly established” at the time, the justices worried that allowing “insubstantial claims” against government officials to proceed would create “undue interference with their duties” and “potentially disabling threats of liability.”
In a 2020 Columbia Law Reviewarticle, UCLA law professor Joanna Schwartz, a prominent critic of qualified immunity, carefully considers such claims, drawing on her analysis of nearly 1,200 federal civil rights cases, her survey of about 100 lawyers practicing in this area, and her in-depth interviews with 35 of them. Her conclusions suggest that Barr is unduly worried that increased liability would paralyze the police. But they also suggest that opponents of qualified immunity should temper their expectations of the good that can be accomplished by eliminating it.
Schwartz found that the vast majority of unsuccessful civil rights lawsuits fail for reasons other than qualified immunity, which suggests that the impact of abolishing it would be less dramatic than many people on both sides of the debate imagine. She nevertheless predicts that without qualified immunity, more cases would be filed against police officers. But a surge in “insubstantial claims” is unlikely, she argues, mainly because attorneys working for contingency fees have a strong financial reason to eschew such cases. And even if a larger share of civil rights lawsuits survive motions for dismissal, Schwartz thinks their success rate probably would stay about the same, since “jurors’ sympathies for government defendants mean that plaintiffs would continue to regularly lose at trial.”
One important benefit of eliminating qualified immunity, Schwartz argues, would be to clarify the contours of constitutional rights. Since 2009, when the Supreme Court said courts can dismiss a lawsuit under 42 USC 1983 without even deciding whether the plaintiff’s rights were in fact violated, it has become increasingly difficult for victims of police abuse to locate the precedents they need to show that officers violated “clearly established” law. As 5th Circuit Judge Don Willett has observed, “important constitutional questions go unanswered precisely because those questions are yet unanswered.”
Without qualified immunity, Schwartz says, “it would be more difficult for district and appellate courts to avoid ruling on the merits of plaintiffs’ constitutional claims. Instead of limiting their analysis to whether the facts of a prior case were similar enough to ‘clearly establish’ the unconstitutionality of defendants’ conduct, courts would more regularly explore and explicate the boundaries of constitutional protections. Such rulings could provide guidance to governments as they create policies and trainings for government officials, and begin dialogue with other branches of government and the body politic about shared constitutional principles.”
Barr and other supporters of qualified immunity tend to assume that it decreases the burden of litigation on officers, police departments, and the governments that oversee them, which on the face of it makes sense. But based on her case analysis and the opinions of attorneys who handle such cases, Schwartz argues that qualified immunity actually “increases the cost, complexity, and time associated with civil rights litigation.” She therefore predicts that eliminating qualified immunity would tend to reduce those burdens for any given case, although it probably would increase the total number of cases.
What about the impact on officers’ behavior, which is the focus of Barr’s fears as well as the hopes of qualified immunity’s opponents? “Several studies of law enforcement officers have shown that ‘the possibility of being sued does not play a role in the day to day thinking of the average police officer,'” Schwartz writes. “The majority of surveyed officers in two different studies reported that legal liability was not among their top ten thoughts when doing their work. Contrary to the Supreme Court’s suggestion that police fret overmuch about the possibility of being sued while making split-second decisions, available evidence suggests that the threat of legal liability rarely enters most officers’ minds when they are doing their job.”
That state of affairs, Barr presumably would argue, shows that qualified immunity is working as intended. But Schwartz suggests several other reasons why officers do not worry very much about being sued:
First, law enforcement officials infrequently pay for their defense counsel and virtually never contribute to settlements and judgments entered against them…Second, available evidence suggests that most law enforcement agencies do not gather and analyze information from lawsuits brought against their officers…Third, available evidence suggests that government officials have a number of other concerns on their minds beyond the threat of litigation. Recent reports attribute the challenges of recruiting and retaining law enforcement officers to “high-profile shootings, negative publicity about the police, strained relationships with communities of color, tight budgets, low unemployment rates, and the reduction of retirement benefits.” Officers unquestionably dislike being sued. But these three factors—widespread indemnification, government inattention to information in lawsuits, and myriad other concerns about accepting government employment—likely explain officers’ current disregard for the threat of being sued while on the job. And these three factors would presumably continue to exist in a world without qualified immunity.
Those observations, while perhaps reassuring to supporters of qualified immunity like Barr, are hardly encouraging for critics of the doctrine. But even if the positive deterrent effect of eliminating qualified immunity is modest, there are several important reasons to do it.
First, as Amash points out, the Supreme Court has read into 42 USC 1983 exceptions that are not actually part of the statute. If Congress wanted to bar lawsuits in cases where officials acted in “good faith” or where their conduct, even when clearly outrageous, did not closely match the details of earlier cases, Congress could have done so. In that light, Amash argues, the justices have usurped the legislative role of the people’s elected representatives.
Second, Schwartz suggests that more cases and more trials could “influence officer behavior” through “the disclosure of information about government behavior.” She argues that “complaints, discovery, motion practice, and trial can bring to the surface valuable information about government behavior previously unknown to the public—and sometimes unknown to the government entities whose employees are implicated in the suit.”
Third, as Schwartz also argues, qualified immunity encourages courts to avoid resolving important constitutional issues. Did Idaho police violate the Fourth Amendment when they wrecked a woman’s home by bombarding it with tear gas grenades after she agreed to let them inside to arrest her former boyfriend? What about the Georgia sheriff’s deputy who shot a 10-year-old boy while trying to kill his dog, simply because police had chased a suspect into their yard? Or the Nebraska sheriff’s deputy who, while responding to an erroneous “domestic assault” report, lifted the purported victim in a bear hug and threw her to the ground, knocking her unconscious and breaking her collarbone? Or the Tennessee officer who allegedly sicced a police dog on a burglary suspect who had already surrendered and was sitting on the ground with his hands up? Or the California cops who allegedly stole cash and property worth more than $225,000 while executing a search warrant?
In these and other cases, we do not know the answers, because appeals courts dismissed them without addressing the constitutional questions they posed. Cases like these send the message that Americans have no remedy when police violate their rights in appalling ways, unless they can locate precedents with closely similar facts. As Willett notes, “qualified immunity smacks of unqualified impunity, letting public officials duck consequences for bad behavior—no matter how palpably unreasonable—as long as they were the first to behave badly.” Or as Justice Sonia Sotomayor puts it, qualified immunity “tells officers that they can shoot first and think later.”
Schwartz agrees that such decisions “deny what is often the best available relief to plaintiffs who have been grievously wronged by government actors, suggest to government officials that they can violate the law with impunity, and send the troubling message to victims of misconduct that they are not deserving of constitutional protection.” At the same time, she cautions against excessive optimism about the benefits of scrapping qualified immunity.
“Doing away with qualified immunity will not be the silver bullet that critics of qualified immunity hope,” Schwartz writes. “In qualified immunity’s absence, there would remain multiple other substantive and procedural barriers to relief, judges and juries predisposed against civil rights plaintiffs, and local government practices—including widespread officer indemnification, budgetary arrangements that shield agencies from the financial consequences of suits, and inattention to lawsuit data—that dampen the deterrent effect of civil rights suits. Eliminating qualified immunity will not address these barriers to relief and reform. Yet eliminating qualified immunity will also prompt several significant shifts in civil rights litigation: It will clarify the law, reduce the cost and complexity of civil rights litigation, increase the number of attorneys willing to consider taking civil rights cases, and put an end to decisions protecting officers who have clearly exceeded their constitutional authority. Eliminating qualified immunity should, therefore, be understood as a preliminary—but important—step toward greater accountability and deterrence.”
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“The lockdown has saved hundreds of thousands, if not millions, of lives and spared American hospitals the horrors of rationing care.“
That was the resolution of a public debate hosted via Zoom by the Soho Forum on Monday, June 1, 2020. It featured Marty Makary, a surgical oncologist at Johns Hopkins, and Knut Wittkowski, former head of the Department of Biostatistics, Epidemiology, and Research Design at The Rockefeller University.
The Soho Forum typically hosts Oxford-style debates, in which a live audience votes before and after the event, and the debater who swayed the most people wins the contest. Because this debate took place over Zoom, we did things a little differently. The online audience was asked to vote before the debate. If you voted before the debate, please go to sohovote.com after you listen to the podcast and cast your final vote. But if you didn’t register your initial vote before the debate started on Monday evening, your final vote won’t be counted.
Knut Wittkowski argued for the negative. Wittkowski is the CEO of ASDERA LLC, a company discovering novel treatments for complex diseases from data of genome-wide association studies. Wittkowski also served for 20 years as head of the Department of Biostatistics, Epidemiology, and Research Design at The Rockefeller University in New York City.
The Soho Forum, sponsored by the Reason Foundation, is a monthly debate series at the SubCulture Theater in Manhattan’s East Village.
Voting on this debate is open until Monday, June 8, 2020, at noon EST.
Produced by John Osterhoudt. Photo: NYPD, Maria Khrenova/ZUMA Press/Newscom; Marty Makary, Keith Weller/Creative Commons Attribution 3.0 files; Rockefeller University, Ajay Suresh from New York, NY, USA / CC BY (https://creativecommons.org/licenses/by/2.0); Oak Grove, Sean Meyers/ZUMA Press/Newscom; 6 Feet Sign, Mehmet Demirci/ZUMA Press/Newscom; Lockdown protest, Daniel Mears/TNS/Newscom; Delivery, Ron Adar/M10s/MEGA/Newscom; Circles, Narayan Maharjan/ZUMA Press/Newscom; Santa Monica store, Jason Ryan/ZUMA Press/Newscom; Times Square, Alcir N. da Silva/Polaris/Newscom; Empty Subway, William Volcov/ZUMA Press/Newscom; Empty Shelves, Joe Burbank/TNS/Newscom; Boarded Up Business, Karen Focht/ZUMA Press/Newscom
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“Break The Glass” – Guggenheim’s Minerd Warns Fed May Start Buying Gold To Support Dollar Hegemony Tyler Durden
Mon, 06/08/2020 – 15:30
“Don’t fight The Fed” may soon have a very different meaning for the long-time asset-gatherers and commission-rakers who spew this age-old phrase to justify buying stocks at the first sign of any easing by central banks.
If Guggenheim Investments’ Global CIO, Scott Minerd, is right, not fighting The Fed may soon mean buying gold alongside them…as he explores The Fed’s increasingly unorthodox policy options ahead if the economy remains mired in a protracted downturn.
Minerd’s line of reasoning is straightforward and logical: as numerous challenges for the Fed, including the need to make large-scale asset purchases to keep credit available at attractive rates in the face of multi-trillion-dollar budget deficits; The Fed may be forced to buy gold to maintain the appearance of responsibility for the world’s reserve currency.
This is not the first time we have heard such ‘blasphemy’ – remember, in the eyes of the establishment (as far as their public-facing narrative is concerned, as opposed to their own personal actions) owning gold is an affront to the omnipotence of central planners: an admission that all is not well.
In 2016, Pimco’s strategist Harley Bassman suggested that instead of buying bonds, or stocks, or crude oil, “the Fed should unleash a massive Fed gold purchase program that could echo a Depression-era effort that effectively boosted the U.S. economy.”
At the time, Bassman said that the Fed should “emulate a past success by making a public offer to purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce? It would be operationally simple as holders could transact directly at regional Federal offices or via authorized precious metal assayers.”
What would the outcome of such as “QE for the goldbugs” look like? His summary assessment:
A massive Fed gold purchase program would differ from past efforts at monetary expansion. Via QE, the transmission mechanism was wholly contained within the financial system; fiat currency was used to buy fiat assets which then settled on bank balance sheets. Since QE is arcane to most people outside of Wall Street, and NIRP seems just bizarre to most non-academics, these policies have had little impact on inflationary expectations. Global consumers are more familiar with gold than the banking system, thus this avenue of monetary expansion might finally lift the anchor on inflationary expectations and their associated spending habits.
The USD may initially weaken versus fiat currencies, but other central banks could soon buy gold as well, similar to the paths of QE and NIRP. The impactful twist of a gold purchase program is that it increases the price of a widely recognized “store of value,” a view little diminished despite the fact the U.S. relinquished the gold standard in 1971. This is a vivid contrast to the relatively invisible inflation of financial assets with its perverse side effect of widening the income gap.
In fact, since the end of 2018, the dollar has been drastically losing value against gold while maintaining some semblance of stability against its fiat peers…
The Federal Reserve (Fed) will face numerous challenges in the months and years ahead. Economic output will remain below potential for years to come as we deal with the pandemic and its long-term scarring effects. An additional challenge will be a U.S. federal government budget deficit that will exceed $3 trillion this year with significant likelihood that it could be larger. Absent further action by the Fed, this deluge of Treasury securities will likely start pushing interest rates higher, threatening the overall economic expansion. The Fed cannot allow this to happen. As I gaze into my crystal ball, the Fed’s roadmap is likely to include the following progression of policy tools as the economy remains mired in a protracted downturn:
Extended forward guidance:
The first and most likely policy option will be to announce a lengthy period of forward guidance. Forward guidance is nothing more than the Fed saying it does not expect to raise interest rates for a period of time. Given the current situation, forward guidance will have to be aggressive. With the market already pricing rates staying very close to the zero bound for the next five years, there is not going to be very much shock and awe if the Fed announces that it will keep interest rates at zero for two or three years. Currently the two-year Treasury note is yielding 21 basis points (and got as low as 11 points on May 8), and the five-year note is at 46 basis points. Pegging the overnight rate at zero would have a limited effect on reducing rates at the front end of the yield curve.
To make sure that longer-term interest rates stay in a range that provides greater support to the U.S. economy and financing the U.S. Treasury, the Fed will have to provide forward guidance that zero interest rates will be necessary for a protracted period. Extended forward guidance will keep a substantial part of the yield curve well-anchored, so the prospect of long-term rates rising dramatically will be limited even as the economy strengthens and inflation picks up.
The Fed is going to want to establish the shortest minimum time it thinks it can get away with, yet still have the impact of shocking the market. The minimum period of time for keeping rates at the zero bound would be something like five years, but a longer time period may be necessary. The Fed will most likely establish a second condition of an inflation rate target. In this scenario, the Fed could commit to maintaining rates at the zero bound for at least five years, and possibly longer, subject to the average inflation rate needing to exceed 2 percent on average over a five-year period. Only upon meeting the inflation target condition would the Fed begin a lift off in rates. Such an approach would have the benefit of automatically extending the expected period at the zero lower bound if economic conditions worsen or the recovery falters.
Swap Market is Beginning to Price in Higher Rates Within 5 Years
Source: Guggenheim Investments, Bloomberg. Data as of 6.5.2020.
Formal QE Program: The likelihood that the Fed will have to continue to engage in sizable purchases of Treasury securities is very high. The ability to attract enough capital to finance a multi trillion-dollar deficit at current interest rates is limited.
The dirty little secret about quantitative easing during the financial crisis is that it was used to finance the U.S. Treasury and keep interest rates from skyrocketing and crowding out the private sector. The Fed wants to make sure credit is available at attractive rates, which means a formal quantitative easing (QE) program, or large-scale asset purchases, must be on the horizon.
Currently the pace of the Fed’s purchases is determined weekly based on market functioning metrics monitored by the Open Market Desk. In the next QE program, the FOMC will outline the composition, size, frequency, and duration of its asset purchases. Given the government’s financing needs, I expect that the next QE program will be larger than any previous rounds of QE in terms of monthly purchases. The current pace of Fed purchases ($6 billion per day, or roughly $125 billion per month) is insufficient to absorb the $170 billion in net monthly Treasury coupon issuance we forecast for the rest of the year, let alone the hundreds of billions of monthly net T-bill issuance we expect. The duration of the next QE program could also be tied to achieving specific dual mandate outcomes, given the high amount of uncertainty around how long the purchases will be needed.
It will likely take at least $2 trillion in asset purchases per year just to fund the Treasury. The commitment to large-scale asset purchases should allow the Fed to at least take a first step in trying to contain any increase in long-term rates. The trade-off here is that committing to the zero bound for a period of time through forward guidance could raise inflationary expectations, which means that longer-term rates could rise. The rate sensitivity of the mortgage market, and the importance of the housing sector to the overall economy, means the Fed is not going to want to see long-term rates skyrocket. The announcement of a QE program would let the market know that the Fed is prepared to absorb some of the supply that is driven by federal deficits, while increasing the money supply to support nominal economic growth.
Yield Curves Show the Need for Fed Forward Guidance to Extend Beyond 5 Years and for QE to Support Treasury Securities
Source: Guggenheim Investments, Bloomberg. Data as of 6.5.2020.
Yield Curve Control:
The first two items I’ve mentioned—extended forward guidance and a formal QE program—are very likely to occur within the next several months, perhaps in part as early as this Wednesday. If these programs fail to adequately support markets and the economy, the Fed will do more to support the economy and maintain satisfactory conditions for financing the government and corporations. The next option would be yield curve control. Very simply, yield curve control would require the central bank to announce that it will not allow interest rates across a portion of the curve to rise above a certain rate. For example, the Fed would announce a rate—say 50 basis points—and state that it stands ready to purchase all Treasury bonds of a certain tenor that trade above this level.
There is precedent for this policy tool. The Japanese government is currently engaged in yield curve control, and we did it here in the United States in the 1940s to help finance the war. The experience of yield curve control here and in Japan demonstrates that once the Fed announces that there is a put to the central bank at a certain interest rate level, it will not buy many securities. This has been the case with the Bank of Japan over the last year or so during their exercise in yield curve control and was the case for the Fed in the 1940s and early 1950s. It may not deliver as much incremental stimulus as outright QE, but it’s been used before, and it would effectively limit the rise in long-term rates and help ensure the effective transmission of forward guidance. The associated reduction in interest rate volatility would also help to lower mortgage rates and corporate bond yields.
It is worth noting that establishing a policy for yield curve control is fundamentally at odds with setting a quantitative target for QE purchases. Once the Fed transitions to yield curve control, the quantitative purchase target becomes somewhat meaningless. This has been the experience of the Bank of Japan which, after implementing yield curve control, continued to have a purchase target of 80 trillion yen per annum. But in reality, it has bought much less, totaling just 18 trillion yen in the past year.
Yield curve control could prove an interesting tool to limit money supply growth while keeping interest rates low in the event of a sudden surge of inflation.
Negative Interest Rates:
The fourth option—and now we are getting into the land of more remote possibilities—is a negative interest rate policy (NIRP). Fed Chairman Jay Powell has gone out of his way to dispel any notion that negative interest rates are under consideration, but the one thing he does not do is affirmatively close the door to using them. He raises doubts about their efficacy and says they would not be appropriate in the U.S. economy. NIRP could also wreak havoc with the banking sector and money market funds. Nevertheless, if all other tools fail up to this point, negative interest rates have to be left on the table.
The Fed and virtually everybody else in the market thinks that negative interest rates are something that will be decided by the Fed, but it’s not like the Fed provides a permit in order to allow bonds to trade at negative yields. The reality is that the market can do it. In Europe the ECB policy rate is -50 basis points and German bunds have traded below -80basis points, meaning the bund yield curve has been inverted. Even if the Fed keeps the fed funds rate trading at 5 basis points, the bund relationship shows that the U.S. Treasury yield curve could invert and trade at negative rates.
Negative market rates can happen in the U.S., and most likely will happen at some point. The only question is whether the Fed endorses a negative interest rate policy. The central bankers would be loath to do it, but they cannot rule it out if the market forces their hand and other policy tools prove inadequate.
Equity Purchases:
And then there are what I’ll call the more exotic destinations on the Fed’s roadmap. Equity market purchases might not necessarily follow negative interest rates, but they might come instead of NIRP if it is just too unpalatable. Either of these two policies would be highly politically charged.
There is a strong correlation between stock prices and corporate credit spreads. If stock prices were to begin to slide, this would mean that corporate credit spreads could widen. If that began to happen in a disorderly manner, the Fed would become more actively involved in purchasing corporate bonds. Ultimately the scale of the bond-buying program would probably not be large enough to contain a dramatic spread widening of the type that would come about from a slide in stocks of 30 percent or more.
Equities and Credit Spreads Are Highly Correlated
Source: Guggenheim Investments, Bloomberg. Data as of 6.5.2020.
If the Fed needs to tame a severe credit crisis, it will have to find a way to prop up stocks and thereby maintain access to capital in a market other than the bond market. The Federal Reserve charter does not allow for the purchase of stocks, but the U.S. Treasury could establish a special purpose vehicle to buy stocks that the Federal Reserve could fund. That artifice would be similar to that which is used for the purchase of corporate bonds and ETFs. If credit spreads should start to widen significantly again, perhaps if we see a second spike in COVID activity as the lockdowns are unwound, the Fed would not rule out a program to prop up equity prices and provide financing to the Treasury to do it.
Break the Glass:
As long as we are looking at the possible roadmap for the Fed, we cannot avoid discussing one other tool. Central banks around the world, including the Fed, hold almost 35 thousand tonnes of gold reserves. A central bank owns gold to buttress its reserves with an asset that becomes increasingly valuable in a severe crisis.
There are no signs the world is questioning the value of the U.S. dollar, but it is clear that it has been slowly losing market share as the world’s reserve currency.
With the Fed going all-in on financing the government deficit, the U.S. dollar could be at risk to negative speculation of its status as the dominant global reserve currency. Investing in gold may help offset this trend. The accumulation of gold as a reserve asset historically has been seen as a responsible policy response in periods of crisis.
This may very well become the policy option of choice in the future.
Shifting Market Share of Global FX Reserves
Currency Composition of Official Foreign Exchange Reserves (COFER)
Source: Guggenheim Investments, Haver. Data as of 12.31.2019.
A decade ago, I spoke about unorthodox monetary policies such as QE and forward guidance. Today, these have become acceptable and permanent policy tools of the Fed. To conceive that these policies are now considered sound monetary orthodoxy would have been practically unthinkable. Fast-forward a decade into the future and I foresee that we may be shocked at what is considered sound central bank policy.
* * *
As Bassman explained in 2016,massive Fed gold purchase program would differ from past efforts at monetary expansion. Via QE, the transmission mechanism was wholly contained within the financial system; fiat currency was used to buy fiat assets which then settled on bank balance sheets. Since QE is arcane to most people outside of Wall Street, and NIRP seems just bizarre to most non-academics, these policies have had little impact on inflationary expectations. Global consumers are more familiar with gold than the banking system, thus this avenue of monetary expansion might finally lift the anchor on inflationary expectations and their associated spending habits.
The USD may initially weaken versus fiat currencies, but other central banks could soon buy gold as well, similar to the paths of QE and NIRP. The impactful twist of a gold purchase program is that it increases the price of a widely recognized “store of value,” a view little diminished despite the fact the U.S. relinquished the gold standard in 1971. This is a vivid contrast to the relatively invisible inflation of financial assets with its perverse side effect of widening the income gap.
In coda I would respond to the argument that a central bank cannot willfully create inflation – I disagree; it just depends upon how hard one tries. There are plenty of examples ranging from Weimar Germany to Zimbabwe where central banks have unleashed uncontrolled hyperinflations.
The more interesting question is not whether the Fed can create a 15% to 20% price spiral, but rather can they implement policies that will result in a somewhat gentle and controlled 2% to 3% inflation rate that will slowly deleverage the U.S. debt load while simultaneously increasing middle class nominal wages.
Many people will rightfully dismiss the gold idea as absurd, as just another fanciful strategy to print money; why not just buy oil, houses or some other hard asset? In fact, why fool around with gold; why not just execute helicopter money as originally advertised? I would answer the former by noting that only gold qualifies as money; and as for the latter, fiscal compromise on that order seems like a daydream in Washington today – don’t expect a helicopter liftoff anytime soon.
Let’s be honest; most people thought NIRP was just as nonsensical a few years ago, yet it has now been implemented by six central banks with little evidence it is effective. And while a gold purchase program should qualify as a fairy tale, what is unique here is that it actually occurred with a confirmed positive effect on the U.S. economy.
So when the next seat for a Fed governor becomes available, I would nominate Rumpelstiltskin … just a thought.
via ZeroHedge News https://ift.tt/3cNVYnM Tyler Durden
24-Year-Old Convicted Felon Charged With Murder Of Retired St. Louis Police Captain During Riots Tyler Durden
Mon, 06/08/2020 – 15:18
A 24-year-old convicted felon has been charged with the murder of retired police captain David Dorn during last week’s riots in St. Louis, Missouri.
On Sunday, the St. Louis PD announced that Stephan Cannon had been arrested and charged with first-degree murder, first-degree robbery, first-degree burglary, armed criminal action and the unlawful possession of a firearm, according to Breitbart.
Dorn, who retired from the St. Louis Metropolitan Police Department after 38 years on the force, was found at approximately 2:30 a.m. last Tuesday outside Lee’s Pawn and Jewelry where he was working as an occasional security guard.
According to police, surveillance footage shows Dorn approaching the pawn shop which had already been looted by Cannon and other men, when Cannon can be seen approaching the corner with a gun – shortly before Dorn was shot and left to die, bleeding on the sidewalk.
“All over some TVs.” 77-year-old St. Louis retired Police Captain David Dorn was shot dead by looters when he tried to get them to stop looting a local pawn shop. pic.twitter.com/Xtvii4HoB1
Treasurys Are Trading As If Yield Curve Control Is Already Here Tyler Durden
Mon, 06/08/2020 – 14:55
Markets are reluctant to unwind speculation the Federal Reserve will embark on curve control to keep front-end yields in check. That has helped two-year bonds weather the storm in the long end of the Treasury yield curve.
According to a Sunday leak by the WSJ’s Fed watcher, while the Fed is debating whether to put a lit on rising long-term bond yields in the form of yield curve control caps, “Fed officials aren’t prepared to announce any decision on so-called yield caps when their two-day policy meeting concludes Wednesday.”
And yet, as Bloomberg’s macro commentator Ven Ram writes overnight, the bond market is already trading as if YCC is already in place, with two-year yields trading “almost immune to the ructions at the long end, and are trading much richer than implied by a modeled framework.” And while the Fed was careful to leak that YCC will not be announced on Wednsday, Ram notes that “the Fed has often followed the market’s lead, and may do so again on this issue.”
Below he explains why:
Two-year notes are trading at a premium to fair value, while 10- and 30-year bonds are near levels where they need to be, a multi-factor analysis shows. At around 0.22%, two-year yields are just a fraction of where they ought to be, with fair value at 0.76%. In contrast, 30-year Treasuries are trading at a minor discount to the predicted value of 1.64% (see table below)
Bond yields can be conceptually broken down into the expected real rate and estimated inflation together with real and inflation risk premiums. My modeling framework assumes that yields can be bootstrapped from market-embedded expectations on the evolution of interest rates, the trajectory of inflation and correlations with leading macroeconomic indicators
A backtest of the model shows how closely it would have tracked the actual yield (see chart below) before the pandemic
The divergence between the forecast and actual values hasn’t been this pronounced since at least the start of 2018. That reflects aggregate fears about the economic downturn, the prospect of the Fed embarking on a control of the yield curve and speculation on negative rates.
While the jobs data for May showed the economy holding up better than forecast, the premium on front-end Treasuries still reflects deep skepticism about growth.
The Fed is “thinking very hard” about targeting specific yields on Treasury securities to ensure borrowing costs stay low, New York Fed President John Williams said late last month.
If the central bank were to take a leaf from Australia, it would target just the front end of the curve. The RBA targets around 0.25% on the three-year rate.
Meanwhile, speculation regarding the prospect of negative rates refuses to die despite speaker after Fed speaker having reiterated that the global experience with sub-zero rates shows mixed success and is not something that makes sense in the U.S. context.
Even if the Fed gives negative rates a skip – as I think it should given the experience in Japan and the euro area – just taking control of the yield curve would ensure that the front end remains anchored at low levels
Treasury markets have pretty much usurped the Fed’s agenda this year. For instance, two-year yields collapsed by almost half from year-end 2019 through Feb. 29 to 0.91%, prompting the Fed to slash the lower bound of its policy rate to 1% in an out-of-cycle policy review. Yields then slumped further, prompting a cut to zero barely two weeks later.
Treasury two-year yields have gone nowhere in the past few weeks, and have essentially been trapped in a thin range that seems to be centered around 0.16%-0.18%. That, in effect, is yield-curve control as envisioned by the markets. That may mean the Fed will follow their cue yet again.
via ZeroHedge News https://ift.tt/37a57pC Tyler Durden
China & Russia Bombard US With “You Reap What You Sow” Messages Amid Unrest & Instability Tyler Durden
Mon, 06/08/2020 – 14:35
Both China and Russia have continued to use the opportunity of the George Floyd protests and unrest on many American city streets to lash out at Washington at a deeply vulnerable moment for US leaders.
“Who is more like Nazi Germany?” China’s state-run Global Times Editor-in-Chief Hu Xijin tweeted Sunday in response to Pompeo’s likening China’s crackdown on Hong Kong to Nazi Germany’s rapid and brutal WWII push across Europe.
A follow-up Global Times editorial underscored that the US government response of deploying National Guard troops in some locations to quell protests “have blown the US’ national reputation, uprooting Washington’s moral foundation for blaming other places, including Hong Kong, on human rights.”
China had not fought a war in 32 yrs, while the US has fought continuously on 4 continents. The US withdrew from many UN agencies that help bring world peace, while China is a staunch defender of UN. The US also launched an unprecedented trade war. Who is more like Nazi Germany? pic.twitter.com/bxbIdQCTKa
Pompeo had made the provocative comparison in a Saturday interview with the conservative Daily Caller.
“The promises that the Chinese Communist Party had made in their treaty with the United Kingdom that they broke when they made the decision to deny Hong Kong people the freedoms that they had been promised were similar to some of the promises that were broken back in the days when Germany advanced against the rest of Europe,” Pompeo said.
GT further attempted to to on the attack and dismantle the statement as follows:
When rioters set Hong Kong on fire, US politicians called that a “beautiful sight to behold,”but when similar incidents swept the US, the same group of politicians decried them as riots that should be quelled. Have Pompeo and his peers realized that their country is using up its resources and chances to play such double-standard tricks?
By smearing China as Nazi Germany, Pompeo clearly revealed Washington’s ideological hysteria. While China has spared no efforts to put COVID-19 under control and saved numerous people, and while the US has exposed flaws in its system that has led to the world’s No.1 infections and top coronavirus death toll, Pompeo’s remarks cannot deceive people from telling which country acts more like the Nazis.
Thus the now months-long war of words is centered on not just the coronavirus blame game, but the George Floyd protests, Hong Kong’s status, and which government is more Nazi-like, apparently.
China’s Global Times file image
Meanwhile, the Kremlin hasn’t been absent from spotlighting the cracks in US domestic society, with the Russian Foreign Ministry issuing a “you reap what you sow” message to the US and Europe amid continuing mass protests.
“By sowing chaos [abroad], they’ve got chaos at home,” ministry spokesperson Maria Zakharova told Rossiya 1 TV channel.
“Everything they’ve been embedding into the world’s consciousness – they’re reaping it now,” she added in reference to images of raging unrest on American streets, which has in the past days actually subsided compared to the intensity of a week ago.
She pointed to Washington’s long history of ‘divide and conquer’ tactics used to destabilize rivals and enemies of the US, which has now come home to roost in a perfect storm of pandemic, economic, and racial instability.
via ZeroHedge News https://ift.tt/2BM4G9n Tyler Durden
Yesterday Attorney General William Barr expressed his opposition to scaling back or eliminating qualified immunity for police officers. Reformers think scrapping the doctrine would discourage abuses like the life-endangering restraint technique that killed George Floyd. But Barr argues that increased liability for cops—whether accomplished by the Supreme Court’s reconsideration of the qualified immunity doctrine or by legislation like the bill that Rep. Justin Amash (L–Mich.) recently introduced—would have a chilling effect on good policing.
Defenders of qualified immunity often express that concern. But it seems to be overblown, for reasons that also put a damper on the hopes of the doctrine’s opponents.
“I don’t think you need to reduce immunity to go after the bad cops, because that would result certainly in police pulling back,” Barr said on Face the Nation. “Policing is the toughest job in the country….The vast, overwhelming majority of police are good people. They’re civic-minded people who believe in serving the public. They do so bravely. They do so righteously.”
That position is unsurprising coming from Barr, who has expressed dismay at what he perceives as insufficient respect for police officers and the work they do. “Being a police officer is more difficult today than it has ever been before,” he said in a speech at a police symposium in Miami last February. “One reason is the emergence of a deeply troubling attitude towards police in some parts of society. Far from respecting the men and women who put their lives on the line to protect us, it has become common in some quarters to scapegoat and disrespect police officers and disparage the vital role you play in society. This undoubtedly makes your already difficult job of protecting the public even harder.”
That “deeply troubling attitude” must be understood, of course, in the context of police corruption and abuse. If the “vast, overwhelming majority of police are good people,” curtailing those problems is in their interest as well as the interest of bad cops’ potential victims. Their reputation, their relationship with the communities they serve, and their effectiveness all suffer when the public believes that officers will not be held accountable for abusing their powers. And to the extent that “pulling back” means police will hesitate before doing things they should not do—say, kneeling on a prone, handcuffed arrestee’s neck for nearly nine minutes—that effect should be welcomed.
But Barr is arguing that the net effect of eliminating this barrier to civil rights lawsuits will be negative because it will overdeter police, causing them to second-guess their decisions in ways that jeopardize public safety. The Supreme Court has repeatedly expressed similar concerns.
“A policeman’s lot is not so unhappy that he must choose between being charged with dereliction of duty if he does not arrest when he has probable cause, and being mulcted in damages if he does,” the majority said in Pierson v. Ray, the 1967 case in which the Court recognized a “good faith” exception to liability under 42 USC 1983, which allows people to sue government officials for violating their constitutional rights under color of law. In Harlow v. Fitzgerald, the 1982 case in which the Court said lawsuits under that statute are allowed only when they allege violations of rights that were “clearly established” at the time, the justices worried that allowing “insubstantial claims” against government officials to proceed would create “undue interference with their duties” and “potentially disabling threats of liability.”
In a 2020 Columbia Law Reviewarticle, UCLA law professor Joanna Schwartz, a prominent critic of qualified immunity, carefully considers such claims, drawing on her analysis of nearly 1,200 federal civil rights cases, her survey of about 100 lawyers practicing in this area, and her in-depth interviews with 35 of them. Her conclusions suggest that Barr is unduly worried that increased liability would paralyze the police. But they also suggest that opponents of qualified immunity should temper their expectations of the good that can be accomplished by eliminating it.
Schwartz found that the vast majority of unsuccessful civil rights lawsuits fail for reasons other than qualified immunity, which suggests that the impact of abolishing it would be less dramatic than many people on both sides of the debate imagine. She nevertheless predicts that without qualified immunity, more cases would be filed against police officers. But a surge in “insubstantial claims” is unlikely, she argues, mainly because attorneys working for contingency fees have a strong financial reason to eschew such cases. And even if a larger share of civil rights lawsuits survive motions for dismissal, Schwartz thinks their success rate probably would stay about the same, since “jurors’ sympathies for government defendants mean that plaintiffs would continue to regularly lose at trial.”
One important benefit of eliminating qualified immunity, Schwartz argues, would be to clarify the contours of constitutional rights. Since 2009, when the Supreme Court said courts can dismiss a lawsuit under 42 USC 1983 without even deciding whether the plaintiff’s rights were in fact violated, it has become increasingly difficult for victims of police abuse to locate the precedents they need to show that officers violated “clearly established” law. As 5th Circuit Judge Don Willett has observed, “important constitutional questions go unanswered precisely because those questions are yet unanswered.”
Without qualified immunity, Schwartz says, “it would be more difficult for district and appellate courts to avoid ruling on the merits of plaintiffs’ constitutional claims. Instead of limiting their analysis to whether the facts of a prior case were similar enough to ‘clearly establish’ the unconstitutionality of defendants’ conduct, courts would more regularly explore and explicate the boundaries of constitutional protections. Such rulings could provide guidance to governments as they create policies and trainings for government officials, and begin dialogue with other branches of government and the body politic about shared constitutional principles.”
Barr and other supporters of qualified immunity tend to assume that it decreases the burden of litigation on officers, police departments, and the governments that oversee them, which on the face of it makes sense. But based on her case analysis and the opinions of attorneys who handle such cases, Schwartz argues that qualified immunity actually “increases the cost, complexity, and time associated with civil rights litigation.” She therefore predicts that eliminating qualified immunity would tend to reduce those burdens for any given case, although it probably would increase the total number of cases.
What about the impact on officers’ behavior, which is the focus of Barr’s fears as well as the hopes of qualified immunity’s opponents? “Several studies of law enforcement officers have shown that ‘the possibility of being sued does not play a role in the day to day thinking of the average police officer,'” Schwartz writes. “The majority of surveyed officers in two different studies reported that legal liability was not among their top ten thoughts when doing their work. Contrary to the Supreme Court’s suggestion that police fret overmuch about the possibility of being sued while making split-second decisions, available evidence suggests that the threat of legal liability rarely enters most officers’ minds when they are doing their job.”
That state of affairs, Barr presumably would argue, shows that qualified immunity is working as intended. But Schwartz suggests several other important reasons why officers do not worry very much about being sued:
First, law enforcement officials infrequently pay for their defense counsel and virtually never contribute to settlements and judgments entered against them…Second, available evidence suggests that most law enforcement agencies do not gather and analyze information from lawsuits brought against their officers…Third, available evidence suggests that government officials have a number of other concerns on their minds beyond the threat of litigation. Recent reports attribute the challenges of recruiting and retaining law enforcement officers to “high-profile shootings, negative publicity about the police, strained relationships with communities of color, tight budgets, low unemployment rates, and the reduction of retirement benefits.” Officers unquestionably dislike being sued. But these three factors—widespread indemnification, government inattention to information in lawsuits, and myriad other concerns about accepting government employment—likely explain officers’ current disregard for the threat of being sued while on the job. And these three factors would presumably continue to exist in a world without qualified immunity.
Those observations, while perhaps reassuring to supporters of qualified immunity like Barr, are hardly encouraging for critics of the doctrine. But even if the positive deterrent effect of eliminating qualified immunity is modest, there are several important reasons to do it.
First, as Amash points out, the Supreme Court has read into 42 USC 1983 exceptions that are not actually part of the statute. If Congress wanted to bar lawsuits in cases where officials acted in “good faith” or where their conduct, even when clearly outrageous, did not closely match the details of earlier cases, Congress could have done so. In that light, Amash argues, the justices have usurped the legislative role of the people’s elected representatives.
Second, Schwartz suggests that more cases and more trials could “influence officer behavior” through “the disclosure of information about government behavior.” She argues that “complaints, discovery, motion practice, and trial can bring to the surface valuable information about government behavior previously unknown to the public—and sometimes unknown to the government entities whose employees are implicated in the suit.”
Third, as Schwartz also argues, qualified immunity encourages courts to avoid resolving important constitutional issues. Did Idaho police violate the Fourth Amendment when they wrecked a woman’s home by bombarding it with tear gas grenades after she agreed to let them inside to arrest her former boyfriend? What about the Georgia sheriff’s deputy who shot a 10-year-old boy while trying to kill his dog, simply because police had chased a suspect into their yard? Or the Nebraska sheriff’s deputy who, while responding to an erroneous “domestic assault” report, lifted the purported victim in a bear hug and threw her to the ground, knocking her unconscious and breaking her collarbone? Or the Tennessee officer who allegedly sicced a police dog on a burglary suspect who had already surrendered and was sitting on the ground with his hands up? Or the California cops who allegedly stole cash and property worth more than $225,000 while executing a search warrant?
In these and other cases, we do not know the answers, because appeals courts dismissed them without addressing the constitutional questions they posed. Cases like these send the message that Americans have no remedy when police violate their rights in appalling ways, unless they can locate precedents with closely similar facts. As Willett notes, “qualified immunity smacks of unqualified impunity, letting public officials duck consequences for bad behavior—no matter how palpably unreasonable—as long as they were the first to behave badly.” Or as Justice Sonia Sotomayor puts it, qualified immunity “tells officers that they can shoot first and think later.”
Schwartz agrees that such decisions “deny what is often the best available relief to plaintiffs who have been grievously wronged by government actors, suggest to government officials that they can violate the law with impunity, and send the troubling message to victims of misconduct that they are not deserving of constitutional protection.” At the same time, she cautions against excessive optimism about the benefits of scrapping qualified immunity.
“Doing away with qualified immunity will not be the silver bullet that critics of qualified immunity hope,” Schwartz writes. “In qualified immunity’s absence, there would remain multiple other substantive and procedural barriers to relief, judges and juries predisposed against civil rights plaintiffs, and local government practices—including widespread officer indemnification, budgetary arrangements that shield agencies from the financial consequences of suits, and inattention to lawsuit data—that dampen the deterrent effect of civil rights suits. Eliminating qualified immunity will not address these barriers to relief and reform. Yet eliminating qualified immunity will also prompt several significant shifts in civil rights litigation: It will clarify the law, reduce the cost and complexity of civil rights litigation, increase the number of attorneys willing to consider taking civil rights cases, and put an end to decisions protecting officers who have clearly exceeded their constitutional authority. Eliminating qualified immunity should, therefore, be understood as a preliminary—but important—step toward greater accountability and deterrence.”
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“The lockdown has saved hundreds of thousands, if not millions, of lives and spared American hospitals the horrors of rationing care.“
That was the resolution of a public debate hosted via Zoom by the Soho Forum on Monday, June 1, 2020. It featured Marty Makary, a surgical oncologist at Johns Hopkins, and Knut Wittkowski, former head of the Department of Biostatistics, Epidemiology, and Research Design at The Rockefeller University.
The Soho Forum typically hosts Oxford-style debates, in which a live audience votes before and after the event, and the debater who swayed the most people wins the contest. Because this debate took place over Zoom, we did things a little differently. The online audience was asked to vote before the debate. If you voted before the debate, please go to sohovote.com after you listen to the podcast and cast your final vote. But if you didn’t register your initial vote before the debate started on Monday evening, your final vote won’t be counted.
Knut Wittkowski argued for the negative. Wittkowski is the CEO of ASDERA LLC, a company discovering novel treatments for complex diseases from data of genome-wide association studies. Wittkowski also served for 20 years as head of the Department of Biostatistics, Epidemiology, and Research Design at The Rockefeller University in New York City.
The Soho Forum, sponsored by the Reason Foundation, is a monthly debate series at the SubCulture Theater in Manhattan’s East Village.
Voting on this debate is open until Monday, June 8, 2020, at noon EST.
Produced by John Osterhoudt. Photo: NYPD, Maria Khrenova/ZUMA Press/Newscom; Marty Makary, Keith Weller/Creative Commons Attribution 3.0 files; Rockefeller University, Ajay Suresh from New York, NY, USA / CC BY (https://creativecommons.org/licenses/by/2.0); Oak Grove, Sean Meyers/ZUMA Press/Newscom; 6 Feet Sign, Mehmet Demirci/ZUMA Press/Newscom; Lockdown protest, Daniel Mears/TNS/Newscom; Delivery, Ron Adar/M10s/MEGA/Newscom; Circles, Narayan Maharjan/ZUMA Press/Newscom; Santa Monica store, Jason Ryan/ZUMA Press/Newscom; Times Square, Alcir N. da Silva/Polaris/Newscom; Empty Subway, William Volcov/ZUMA Press/Newscom; Empty Shelves, Joe Burbank/TNS/Newscom; Boarded Up Business, Karen Focht/ZUMA Press/Newscom
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Just a tip here: If you’re trying to sell a concept that sounds as radical as defunding or abolishing police, you shouldn’t use extremely loaded attack words like “privilege” in response to people’s fears that they won’t get assistance when they’re victims of crimes.
Circulating through the internet today is a clip of an interview between CNN’s Alisyn Camerota and Minneapolis City Council President Lisa Bender. Over the weekend, Minneapolis City Council members announced that they had enough votes to dismantle the city’s police department and restructure it with an alternative system that Bender said would “actually keep us safe.”
It’s still not entirely clear what this alternative system will be. Given an opportunity to explain a bit further on CNN, Bender stumbled a bit. Camerota bluntly asked Bender who people are going to call when their home is broken into. Bender should have been very prepared for this question. Here’s how she responded:
Yes, I mean I hear that loud and clear from a lot of my neighbors, and myself, too, and I know that that comes from a place of privilege. Because for those of us for whom the system is working, I think we need to step back and imagine what it would feel like to already live in that reality where calling the police may mean more harm is done.
The first sentence of her response has been snipped out and circulated on Twitter as evidence that the #DefundPolice movement is yet another “social justice” trend that is intended to attack white people rather than to fix social problems.
The full context of the whole quote is better, and the earlier parts of the interview (you can watch it here) express the basic idea more capably. The message that Bender is trying to get across is that for many Americans, the police actually aren’t terribly effective at either stopping or solving crimes. Plenty of data back that up.
But here’s the thing: The police actually aren’t terribly effective at solving crime in general, regardless of the victim’s race, ethnicity, or income. Making this about “privilege” actually undercuts the strength of her own argument.
For example, Minneapolis has a terrible clearance rate for rape: Just 22 percent of its rape cases were cleared in 2018. A little over half the murder cases were solved in 2019. Both of those statistics are lower than the national average, but not by much. The FBI’s data for 2018 have 33.4 percent of rape cases solved across the country. For murder and manslaughter, the figure is 62.3 percent. Less than a third of robbery cases are resolved. Only 19 percent of larceny or theft cases. Only 14 percent of burglary and auto theft cases.
So why fracture people’s reactions politically? Most people do not, in fact, have the “privilege” of having the police solve crimes that have harmed them.
The past week’s protests bolster Bender’s argument better than any invocation of “privilege.” Several cities saw police corralling, tear gassing, or otherwise escalating conflicts with protesters—while looters broke into stores just blocks away, without cops there to stop them. And when police did show, they didn’t necessarily make things better. One incident, captured by the Fox affiliate in Los Angeles, showed police officers handcuffing a couple of black people who had been defending a store from looters, ignoring the reporter’s attempt to explain to them that these were the people trying to help.
There is a strong case to be made that the police in much of America are not prioritizing crimes for which there are identifiable victims, getting entrenched instead in doomed campaigns to fight vices and enforce petty regulations that exist to bring revenue into the government.
There is a privilege at work here: People in poorer communities, often minorities, are much more likely to be targeted for this unnecessary enforcement, depriving the community of economic activity (and fostering more crime). While that’s an important reason for the ongoing anger at the police, it’s important to talk about reducing the reasons police are used.
The better answer to Camerota’s question would have been to explain how dismantling the city’s current police apparatus could be a step toward an environment where victims of a crime could call 911 and know that that’s what the people on the other side of the call would focus on. The police wouldn’t be arresting prostitutes and homeless people, or trying to find excuses to issue petty fines or seize drug suspects’ assets. Minneapolis citizens wouldn’t be calling out the police to deal with street vendors or petty feuds with neighbors.
I realize this comes off as tone-policing the tone police. But one thing I’ve learned from years of advocating reforms is to find values and language that you share with those you’re trying to convince. So much success in reforming civil asset forfeiture, for example, has come from making sure people understand that citizens are having their money and property taken away without ever having been convicted a crime. Some readers are more shocked to see the government targeting poor minorities and immigrants who lack the resources to fight back and thus are left even poorer; others are more upset by the violations of our due process and property rights. Both groups’ support is welcome.
We should never suggest that it’s “privilege” for a crime victim to call for help and expect a response. That should be treated as the expectation. And if you want that expectation fulfilled, you should also want to dismantle every part of the police department that isn’t about protecting people’s lives, property, and civil liberties.
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