California Enacts Asset Forfeiture Reform, Mostly Closing Lucrative Fed Loophole

California Gov. Jerry Brown signed a sweeping asset forfeiture reform bill into law on Wednesday, making California the largest state in the country to roll back a practice that critics say allow police to seize property with little to no recourse for the owner.

With Brown’s signature, California becomes the 17th state in recent years to pass some form of civil asset forfeiture reform. Nebraska and New Mexico have banned the practice outright.

Civil asset forfeiture allows police to seize property—most often cash and cars, but even flatscreen TVs, video game systems, and houses—suspected of being involved in a crime. Police do not have to convict or in some cases even charge someone with a crime to seize their property. Law enforcement groups say the practice allows them to target the ill-gotten gains of drug traffickers and organized criminals, but civil liberties advocates say the perverse incentives and lack of safeguards lead just as often to everyday citizens being shaken down for cash.

California’s new law will require police to obtain a criminal conviction before they can forfeit assets under $40,000 and—more significantly—receive payment from the federal government’s revenue sharing program for the seizure. While the law will still allow large-scale seizures without a conviction, the bill’s sponsors say it will mostly close a loophole that police departments used to circumvent previous state law.

“It’s clear based on national media coverage, and hundred of calls that have come into my offices from people all over my state telling us about egregious abuses, that this was a bill we couldn’t let die on the floor,” California state senator Holly Mitchell said in an interview with Reason earlier this summer. “It seems reasonable to me that if you can’t convict me of a crime, you can’t assume my assets were gained through illegal activity.”

Under previous California law, a conviction was required to forfeit property valued under $25,000, but that did not stop local and state law enforcement from working with federal task forces, where there are no such rules. Working with federal law enforcement allows local police to keep up to 80 percent of the proceeds from asset forfeitures they participate in.

According to a report last year by the Institute for Justice, a libertarian-leaning public interest law firm that has challenged asset forfeiture laws in several states, the Justice Department paid local and state agencies in California more than $696 million between 2000 and 2013, compared to $23 million in proceeds from state-level seizures.

“For too long, local and state law enforcement agencies have exploited a loophole in forfeiture law: the federal ‘equitable sharing’ program,” the Institute for Justice’s Lee McGrath said in a statement. “Because the federal government does not require a criminal conviction and pays a greater percentage of forfeiture proceeds back to state and local law enforcement than happens under state law, California agencies have routinely participated in equitable sharing.”

Mitchell introduced a similar bill in the California legislature last session, but it was voted down under opposition from state law enforcement groups, who said it would have cut off millions of dollars to local police and crippled their ability to go after drug cartels and organized crime. This year, Mitchell and other legislators reached a compromise with law enforcement groups that they say will preserve police’s ability to go after major drug traffickers while still protecting vulnerable citizens from petty and abusive seizures.

Earlier this year, the American Civil Liberties Union of California released a report finding that 85 percent of the federal asset forfeiture money flowing into the state went to departments that police minority communities, and that half of the DEA seizures from California involved people with Latino surnames. In 2013, the Drug Policy Alliance calculated the average forfeiture in California to be roughly $5,100.

“Solutions like SB 443 give communities plagued by injustice some relief,” Zachary Norris, executive director of the Ella Baker Center for Human Rights, said in a statement. “Low income people simply do not have the means to hire an attorney to get their lawfully earned cash returned to them. When their money gets taken by law enforcement, it’s a family crisis affecting rent, food, everything.”

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California Enacts Asset Forfeiture Reform, Mostly Closing Lucrative Fed Loophole

California Gov. Jerry Brown signed a sweeping asset forfeiture reform bill into law on Wednesday, making California the largest state in the country to roll back a practice that critics say allow police to seize property with little to no recourse for the owner.

With Brown’s signature, California becomes the 17th state in recent years to pass some form of civil asset forfeiture reform. Nebraska and New Mexico have banned the practice outright.

Civil asset forfeiture allows police to seize property—most often cash and cars, but even flatscreen TVs, video game systems, and houses—suspected of being involved in a crime. Police do not have to convict or in some cases even charge someone with a crime to seize their property. Law enforcement groups say the practice allows them to target the ill-gotten gains of drug traffickers and organized criminals, but civil liberties advocates say the perverse incentives and lack of safeguards lead just as often to everyday citizens being shaken down for cash.

California’s new law will require police to obtain a criminal conviction before they can forfeit assets under $40,000 and—more significantly—receive payment from the federal government’s revenue sharing program for the seizure. While the law will still allow large-scale seizures without a conviction, the bill’s sponsors say it will mostly close a loophole that police departments used to circumvent previous state law.

“It’s clear based on national media coverage, and hundred of calls that have come into my offices from people all over my state telling us about egregious abuses, that this was a bill we couldn’t let die on the floor,” California state senator Holly Mitchell said in an interview with Reason earlier this summer. “It seems reasonable to me that if you can’t convict me of a crime, you can’t assume my assets were gained through illegal activity.”

Under previous California law, a conviction was required to forfeit property valued under $25,000, but that did not stop local and state law enforcement from working with federal task forces, where there are no such rules. Working with federal law enforcement allows local police to keep up to 80 percent of the proceeds from asset forfeitures they participate in.

According to a report last year by the Institute for Justice, a libertarian-leaning public interest law firm that has challenged asset forfeiture laws in several states, the Justice Department paid local and state agencies in California more than $696 million between 2000 and 2013, compared to $23 million in proceeds from state-level seizures.

“For too long, local and state law enforcement agencies have exploited a loophole in forfeiture law: the federal ‘equitable sharing’ program,” the Institute for Justice’s Lee McGrath said in a statement. “Because the federal government does not require a criminal conviction and pays a greater percentage of forfeiture proceeds back to state and local law enforcement than happens under state law, California agencies have routinely participated in equitable sharing.”

Mitchell introduced a similar bill in the California legislature last session, but it was voted down under opposition from state law enforcement groups, who said it would have cut off millions of dollars to local police and crippled their ability to go after drug cartels and organized crime. This year, Mitchell and other legislators reached a compromise with law enforcement groups that they say will preserve police’s ability to go after major drug traffickers while still protecting vulnerable citizens from petty and abusive seizures.

Earlier this year, the American Civil Liberties Union of California released a report finding that 85 percent of the federal asset forfeiture money flowing into the state went to departments that police minority communities, and that half of the DEA seizures from California involved people with Latino surnames. In 2013, the Drug Policy Alliance calculated the average forfeiture in California to be roughly $5,100.

“Solutions like SB 443 give communities plagued by injustice some relief,” Zachary Norris, executive director of the Ella Baker Center for Human Rights, said in a statement. “Low income people simply do not have the means to hire an attorney to get their lawfully earned cash returned to them. When their money gets taken by law enforcement, it’s a family crisis affecting rent, food, everything.”

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Inside France’s “The Jungle” Migrant Camp

Submitted by Soeren Kern via The Gatestone Institute,

  • In 2001 alone, 54,000 people "attacked" the Channel Tunnel terminal in Calais and 5,000 had gotten through.
  • Migrants evicted from Calais moved to Paris and established a massive squatter camp at the Jardins d'Eole, a public park near the Gare du Nord station, from where high-speed Eurostar trains travel to and arrive from London. The area has become a magnet for human traffickers who charge migrants thousands of euros for fake travel documents, for passage to London.
  • The President of the Alpes-Maritimes region, Eric Ciotti, criticized the government's "irresponsible" plan to relocate migrants in Calais to other parts of France. He said the plan would "proliferate a multitude of small Calais, genuine areas of lawlessness that exacerbate lasting tensions throughout the country."
  • A whistleblower reported that volunteer aid workers at "The Jungle" were forging sexual relationships with migrants, including children. "Female volunteers having sex enforces the view (that many have) that volunteers are here for sex," he said.

French President François Hollande has vowed "definitively, entirely and rapidly" to dismantle "The Jungle," a squalid migrant camp in the northern port town of Calais, by the end of this year.

Hollande made the announcement during a September 26 visit to Calais — but not to the camp itself — amid growing unease over France's escalating migrant crisis, which has become a central issue in the country's presidential campaign.

The French government plans to relocate the migrants at the camp to so-called reception centers in other parts of the country. But it remains unclear how the government will prevent migrants from returning to Calais.

Sceptics say the plan to demolish "The Jungle" is a publicity stunt that will temporarily displace the migrants but will not resolve the underlying problem — that French officials refuse either to deport illegal migrants or else to secure the country's borders to prevent illegal migrants from entering France in the first place.

The decision to demolish the camp came just days after construction work began on a wall in Calais, a major transport hub on the edge of the English Channel, to prevent migrants at the camp from stowing away on cars, trucks, ferries and trains bound for Britain.

In recent months, people-smugglers armed with knives, bats and tire irons have forced truck drivers to stop so that migrants can board their vehicles. The Deputy Mayor of Calais, Philippe Mignonet, has described the main route to the port as a "no-go area" between midnight and 6am.

"The Jungle" — the name "jungle" comes from "dzhangal," the Pashto word for forest — now houses around 10,000 migrants from Africa, Asia and the Middle East who are trying to reach Britain. Migrants at the camp are from Sudan (45%), Afghanistan (30%), Pakistan (7%), Eritrea (6%) and Syria (1%), according to aid agencies. The migrants at the camp are mostly young men and boys, including some 800 unaccompanied minors, who are seeking jobs in Britain's underground economy.

Migrants have been gathering in Calais in large numbers ever since the Channel Tunnel linking France and Britain opened in May 1994, and the Schengen Agreement, which abolished border controls between France and most of its neighbors (but not the UK), entered into force in March 1995.

In 1999, the French government asked the Red Cross to build a migrant "reception center" in Sangatte to accommodate a growing number of migrants on the streets of Calais and surrounding areas. The Sangatte camp, which was housed in a giant warehouse situated about a half mile from the entrance to the Channel Tunnel, had a capacity of 600 people.

Far from resolving the migrant problem in Calais, the Sangatte facility served as a magnet, quickly drawing thousands more people to the area. Within months, some 2,000 migrants were living in the camp in increasingly cramped conditions. Many of those staying at Sangatte tried to jump onto slow-moving trains at the entrance to the Channel Tunnel, or hide inside trucks crossing to Britain on ferries.

At the time, French authorities reported a massive increase in the number of arrests in or around the Channel Tunnel. In 1999, 8,000 people were arrested in Calais for immigration offenses. By 2001, that number had jumped ten-fold to 80,000 arrests. Eurotunnel, the company that manages and operates the Channel Tunnel, said that in 2001 alone, 54,000 people had "attacked" the terminal in Calais and 5,000 had gotten through. Many of those were living in Sangatte.

The Sangatte camp was closed in late 2002, after a series of riots between Afghan and Kurdish migrants. In all, some 67,000 migrants stayed at the facility during its three years in operation.

In February 2003, France and Britain signed the Treaty of Le Touquet, which allows for so-called juxtaposed controls, meaning that travelers between the two countries now clear immigration in the country of departure rather than upon arrival. In effect, the treaty pushed parts of the British border to France. By doing so, it exacerbated the migration bottleneck in Calais.

As part of the agreement to close Sangatte, Britain took in 1,200 migrants. Those who remained in France sheltered in at least a dozen different squats both inside and on the outskirts of Calais. These camps — Africa House, Fort Galloo, Leader Price/Sudanese Jungle or Tioxide Jungle — have been repeatedly raided or bulldozed by French police, only for other squats to crop up elsewhere.

Many of the migrants housed at Sangatte moved a few kilometers east to a disused industrial zone called The Dunes. Situated just steps from the Port of Calais, the area would become known as "The Jungle." Over the years, French authorities have repeatedly tried to demolish all or parts of the camp, only for it to reemerge time and time again, and always with more migrants.

On September 22, 2009, French police bulldozed "The Jungle" and rounded up hundreds of migrants hoping to stow away on trucks headed for Britain. A day later, Calais Mayor Natacha Bouchart said she had "spotted between fifteen and twenty new squats" nearby. She also reported that Afghan migrants were establishing makeshift camps at the Hoverport, a disused collection of buildings which closed in 2005 after the last hovercraft sailed from Dover to Calais.

September 12, 2014. Police in Calais warned that migrants were becoming increasingly violent in their quest to reach Britain. Gilles Debove, the Calais area delegate for the French police union, said tear gas was being used to stop "mass onslaughts" on vehicles about to cross the Channel:

"The other day, two to three hundred migrants tried to get into a lorry park and we fired tear gas to scatter them because there are too few of us to control situations like this any other way. We're also facing an increase in crimes by migrants who mug people, steal mobile phones and carry out sexual assaults."

September 10, 2015. French media reported that police were searching for an Islamic State jihadi who was hiding in "The Jungle" in the hope of reaching Britain to launch an attack there.

November 11, 2015. More than 250 French riot police were deployed to "The Jungle" after weeks of unrest. Local government official Fabienne Buccio said the rise in violence was due to the migrants' frustration at being prevented from reaching Britain.

January 19, 2016. French authorities leveled one-third of "The Jungle" to create a 100-meter "buffer zone" between the camp and an adjacent highway that leads to the ferry port.

February 7, 2016. The migrant crisis spread to other parts of France due to an increased police presence in Calais. Migrant camps sprouted up in the nearby ports of Dunkirk, Le Havre, Dieppe and Belgium's Zeebrugge, as migrants seek new ways to cross the English Channel to Britain.

February 29, 2016. After a court in Lille approved a plan by the French government to evict 1,000 migrants from "The Jungle," demolition teams began dismantling the southern part of the camp. The government tried to relocate the migrants to official accommodation inside converted shipping containers in the northern part of the camp. But most refused the offer, fearing they would be forced to claim asylum in France. "Going to Britain is what people here want," Afghan migrant Hayat Sirat said. "So destroying part of the jungle is not the solution."

French riot police attempt to control a crowd of migrants in "The Jungle" squatter camp near Calais, on February 29, 2016, as demolition teams begin dismantling the southern part of the camp. After being pelted with stones and other objects, police responded with tear gas and water cannon. (Image source: RT video screenshot)

March 7, 2016. Migrants evicted from "The Jungle" moved to a new camp in Grande-Synthe near the northern port of Dunkirk, just up the coast from Calais. Critics said the new camp risks becoming a "new Sangatte," referring to the Red Cross center in Calais that was closed in 2002.

May 31, 2016. Migrants evicted from Calais moved to Paris and established a massive squatter camp at the Jardins d'Eole, a public park near the Gare du Nord station, from where high-speed Eurostar trains travel to and arrive from London. The area, which is so dangerous that the government has classified it as a no-go zone (Zone de sécurité prioritaires, ZSP), has become a magnet for human traffickers who charge migrants thousands of euros for fake travel documents, for passage to London.

August 11, 2016. In an interview with Le Figaro, a French counter-terrorism officer warned that Islamic State jihadis were hiding in "The Jungle." He said: "What is happening in The Jungle is truly mind boggling. Our officers are rarely able to penetrate the heart of the camp. It is impossible to know if a jihadi from Belgium, for example, is hiding in the camp. This camp is a blind spot for national security."

September 5, 2016. Hundreds of French truck drivers, businessmen and farmers blocked off the main route in and out of Calais, in an attempt to pressure the French government to close The Jungle. The blockage brought to a standstill the route used by trucks from all over Europe to reach Calais and Britain.

September 12. A document leaked to Le Figaro revealed the government's plan, dated September 1, to relocate 12,000 migrants from Calais to other parts of France. The migrants would be relocated to around 60 so-called Reception and Orientation Centers (centres d'accueil et d'orientation, CAO), each with a capacity of between 100 and 300 migrants.

September 13, 2016. The President of the Alpes-Maritimes region, Eric Ciotti, criticized the government's "irresponsible" plan to relocate migrants in Calais to other parts of France. He said the plan would "proliferate a multitude of small Calais, genuine areas of lawlessness that exacerbate lasting tensions throughout the country." He added:

"This plan reflects the resignation of the government in the face of massive illegal immigration. It weakens national cohesion under a false pretext of humanity which hides a dangerous ideology that denies any distinction between foreigners who seek asylum, who France should decently receive, and those who are economic migrants, whom we can no longer tolerate, and who should be returned to their countries of origin.

 

"The only solution is to deport, without delay, all illegal immigrants who do not intend to remain on our territory, and to place asylum seekers in centers dedicated to the study of their cases."

September 14, 2016. The President of the Auvergne-Rhône-Alpes region, Laurent Wauquiez, expressed anger at the government's "diktat" to relocate 1,800 migrants from Calais to his region. He said: "This is madness and it is not a matter of solidarity. The problem of Calais is not solved by multiplying Calais throughout France. We expect the government to solve the problem of Calais, not move it to other parts of the country."

September 16, 2016. Steeve Briois, the Mayor of Hénin-Beaumont and Vice President of the National Front criticized the government's plan to relocate migrants from "The Jungle" to the rest of the country. He said:

"This crazy policy would consequently multiply mini-Calais on the entire national territory, without consulting the people and local elected officials. This forced policy of the Socialist government is simply unacceptable; it seriously threatens public order and the safety of our citizens."

September 20, 2016. Construction work began on a wall to prevent migrants at the camp from stowing away on cars, trucks, ferries and trains bound for Britain. Dubbed "The Great Wall of Calais," the concrete barrier — one kilometer (half a mile) long and four meters (13 feet) high on both sides of the two-lane highway approaching the harbor — will pass within a few hundred meters of "The Jungle."

September 21, 2016. A whistleblower reported that volunteer aid workers at "The Jungle" were forging sexual relationships with migrants, including children. "I have heard of volunteers having sex with multiple partners in one day, only to carry on in the same vein the following day," he wrote. "And I know also, that I'm only hearing a small part of a wider scale of abuse." He added that the majority of cases in question involved female volunteers and male migrants. "Female volunteers having sex enforces the view (that many have) that volunteers are here for sex," he wrote.

September 28. Calais Mayor Natacha Bouchart expressed skepticism about President Hollande's pledge to close "The Jungle." In an interview with Europe 1, she said: "This dismantling will be very complicated. I am skeptical about the commitment of François Hollande that there will be no migrant camp in the territory of Calais. I do not know how he will do it."

via http://ift.tt/2djq2LG Tyler Durden

School Cop Arrests Black Teen for ‘Stealing’ 65-Cent Milk Carton—Even Though Lunch Is Free

CafeteriaA black teenager is facing charges in Prince William County, Virginia, for allegedly stealing a 65-cent milk carton from the school cafeteria. The teen, Ryan Turk, refused to accept a lesser charge in exchange for entering a diversionary program that required him to admit his guilt—which means the case is headed to trial.

It’s an absurd prosecution, according to Turk’s version of events as reported by The Washington Post. Turk didn’t steal anything, he claims—he qualifies for free lunches under a state program. He says he forgot to grab his milk the first time he was in the lunch line, and later went back for it. A school resource officer assumed he was stealing, and approached him.

Turk says he put the carton back, but the officer wanted him to take it to the principal’s office. The officer then grabbed him by the neck, handcuffed him, and charged him with two misdemeanors: disorderly conduct and petit larceny.

The officer—who is also black—tells a slightly different story. He says the teen threw the milk back at him, pushed him, and tried to get away.

Turk’s lawyer thinks racism was involved, according to The Post:

“No one needs to be punished for stealing a 65-cent carton of milk,” said Emmett Robinson, a lawyer who is representing the family and said Ryan’s arrest was related to institutional racism. “This officer treats kids like they’re criminals, and guess what happens — they’re going to become criminals.”

Turk had the option of entering a diversion program that would have scrubbed the charges from his record, but turned it down because it would have meant admitting guilt. Prosecutors are moving forward with the case against him.

That’s a huge waste of the criminal justice system’s time and financial resources—this farce should be abandoned, immediately.

But this case also highlights the absurdity of placing cops in schools and expecting them to handle disciplinary issues that should be left to teachers, counsellors, and principals. If Turk did something wrong—and it’s not at all clear he did—he should be scrubbing blackboards and clapping erasers, not facing charges.

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Project Mayhem – Man Calmly Enters Apple Store And Crushes Every iPhone In Sight With A Ball Bearing

It is unclear what caused this Frenchman to walk into an Apple store and crush every single iPhone in site with a metal ball bearing but that is exactly what he decided to do.  Perhaps he was one of the unfortunate victims of a spoof video that apparently succeeding a convincing people to drill a headphone jack in their new iPhone 7?

 

Luckily for the iPhone smasher, this event occurred in France where security guards quickly surrendered the store and allowed the man to simply walk out and go on his merry way.

via http://ift.tt/2dqEhQM Tyler Durden

The Fed’s Monetary Politburo Is Finally Catching Some Flack

Submitted by David Stockman via Contra Corner blog,

Now that’s more like it. Echoing Donald Trump’s Monday night bull’s-eye regarding the Fed’s thoroughly political essence, Rep. Scott Garrett put more wood to Janet Yellen during Wednesday’s hearing:

Rep. Scott Garrett, R-N.J., seized Trump’s mantle during Wednesday’s hearing, saying “the Fed has an unacceptable cozy relationship” with the Obama administration and Democrats.

 

“As the saying goes, perception is reality,” Garrett told Yellen. “Whether you like it or not, the public increasingly believes that the Fed’s independence is nothing more than a myth.”

Of course it’s a myth, and a dangerous one at that. The truth is, Keynesian monetary central planning is inherently, massively and irremediably “political”.

That’s because it interjects the state deeply into the money and capital markets—-the very heart of capitalism—-and thereby in plenary fashion manipulates, rigs and falsifies the prices of all financial assets.

So doing, it supersedes governance by the many via continuous auction and free market processes of financial valuation and allocation with governance by the few, who rule arbitrarily and often secretly via ideological whims and shibboleths that they are pleased to call “policy”.

Worse still, the Eccles Building politicians who rule the financial markets directly—-and through them much of the balance of capitalism indirectly—- are unelected and are accountable to no democratic oversight and control whatsoever. They have essentially seized great power in the manner of a coup d’ etat, and have then added insult to injury by proclaiming the utterly spurious doctrine of Fed “independence”.

The cover story, of course, is that central banking is such a complex, arcane and intellectually demanding business that only a tiny elite of the best and brightest are capable of manning the monetary dials.

Indeed, it is claimed that the job of keeping capitalism on the straight and narrow path toward the Keynesian nirvana of full-employment—-and off the shoals of underperformance, recessionary lapse and depressionary crisis, where it is otherwise inclined—-can only be accomplished by an elite politburo; and one that is accountable only to itself and its esoteric econometric models.

Folks, that is self-serving bunkum and poppycock. If you want to have financial rule by politicians rather than markets, the FOMC has absolutely no more competence than the House Financial Services Committee. In fact, if you want to set the money market rate by essentially throwing a dart at the wall, you could pick the FOMC by lot from the phone book!

After all, the so-called science of Keynesian central banking amounts to nothing more than deciding by how much you want to falsify the market price of money and financial assets——-along with how frequently you want to change the “fix” and which components of the yield curve and tradable assets you want to rig.

Since the purported geniuses who occupy the 12 chairs at the FOMC have essentially not changed the peg for 94 months running, the job can’t be all that hard. Does it really take an economics PhD or ex-banker to figure this out or, for that matter, to ascertain that Wall Street gamblers prefer free money, as opposed to expensive money, to fund their speculations?

In fact, it all boils down to the very kind of binary decisions that both elected politicians and average voters excel at making. To wit, if you are rigging the financial markets, who do you want to help and who do you want to hurt?

That is, borrowers or savers, speculators or entrepreneurs, money shufflers or wage earners, bankers or depositors, the risk-prone or the risk-averse, day-traders or business-builders, etc. It’s really not all that hard to rig markets if you have a printing press and plenary authority to redistribute economic gain and pain and societal income and wealth by political fiat, and without the inconvenience of periodic elections.

Needless to say, there is one hell of an argument in favor of market-based price discovery by capital providers and capital users in their tens of millions as opposed to a tiny posse of politicians in the Eccles Building or in the Rayburn Building or from the phone book. But until very recently, the choice between financial rule by politicians versus markets wasn’t even on the radar screen of public discussion.

No more. Donald Trump deserves the nation’s eternal gratitude for finally raising the topic—–even if his point was narrowly partisan and electoral. But politics is politics, and now that Flyover America has been reminded that the Fed is knee deep in it, hopefully the drumbeat will grow louder.

Fortunately, the obtuse arrogance of the monetary politburo itself is helping to screw-up the courage of politicians like Rep.Garrett. He has apparently come out of the monetary closet and hopefully has provided an example for his Capitol Hill colleagues.

In this instance, Hillary Clinton’s Treasury Secretary designate, and lifelong financial apparatchik, Lael Brainard, made it easy. She’s been an in-your-face contributor to the Clinton campaign, and has been visibly lobbying for the high office that Jack Lew, Tim Geithner and Hank Paulson have recently so thoroughly defiled with their bailouts and booty:

Federal Reserve Chair Janet Yellen’s defense of the central bank as non-partisan came under attack on Wednesday, as a Republican congressman cornered her on whether a key policy maker would have a conflict of interest in discussing a post in the next U.S. president’s administration.

 

Fed Governor Lael Brainard has donated to Clinton’s campaign and is widely viewed as a potential Clinton pick for Treasury secretary. Yellen hesitated and then demurred when Representative Scott Garrett of New Jersey asked whether Brainard would have a conflict of interest if she were indeed in talks with Democratic nominee Hillary Clinton’s campaign about a position. The election takes place Nov. 8.

As it happened, this isn’t the first time. Our Wall Street/Washington financial rulers have become so brazen in their political machinations that Tim Geithner actually confessed to lobbying Obama for the Treasury job in the white heat of the October 2008 meltdown.

That is, when as the President of the New York Fed he was supposedly helping to administer the secret ministrations by which the best and brightest go about saving capitalism from itself, he actually had his head far up the Democratic candidate’s keister in pursuit of politics:

In his memoir, Timothy Geithner recalls meeting with then-Senator Obama in his room at the W Hotel in midtown Manhattan before the 2008 election, where the future president suggested that he might ask Geithner — then head of the New York Fed — to come to Washington as Treasury secretary. That meeting was in mid-October; Geithner voted at the next Fed meeting, at the end of the month, to cut interest rates by a half percentage point amid the deepening financial crisis.

The process of defrocking the high priests of the monetary temple might even become contagious. This morning one Ruchir Sharma, who is chief global strategist at Morgan Stanley Investment Management, let loose a real stunner. Excerpts from his Wall Street Journal piece are highlighted below.

But first let’s cut to the chase. Approximately 3,200 days have elapsed since January 2008 and on 70 of those days, or 2% of the time, the monetary politburo was in session at the Eccles Building. Yet, mirabile dictu, (wonderful to relate) 60% of the entire stock market gain during that nearly nine-year period occurred on exactly those 2% of days.

Can you say, rigged!

Donald Trump did. Scott Garrett did. Now even the Morgan Stanley guy has let the cat out of the bag.

 …….Since the Fed began aggressive monetary easing in 2008, my calculations show that nearly 60% of stock market gains have come on those days, once every six weeks, that the Federal Open Market Committee announces its policy decisions.

 Put another way, the S&P 500 index has gained 699 points since January 2008, and 422 of those points came on the 70 Fed announcement days. The average gain on announcement days was 0.49%, or roughly 50 times higher than the average gain of 0.01% on other days.
 
This is a sign of dysfunction. The stock market should be a barometer of the economy, but in practice it has become a barometer of Fed policy.

Yes, you could call it “dysfunction”. But the right word is sheer madness.

In effect, the politicians at the Fed have entered a symbiotic embrace with the gamblers on Wall Street. Yet, finally, even an honest voice from the latter has dared to describe the untoward results.

Here is more unpeeling of the Fed “independence” lie from Ruchir Sharma’s blockbuster op ed:

Fed policy proclamations had little influence on the stock market before 1980. Between 1980 and 2007, returns on Fed announcement days averaged 0.24%, about half as much as during the current easing cycle. The effect of Fed announcements rose sharply after 2008 when the Fed launched the early rounds of quantitative easing (usually called QE), its bond purchases intended to inject money into the economy.

 

Whether this is a “big, fat, ugly bubble” depends on how one defines a bubble. But a composite index for stocks, bonds and homes shows that their combined valuations have never been higher in 50 years. Housing prices have been rising faster than incomes, putting a first home out of reach for many Americans.

 

Mr.Trump was also right that despite the Fed’s efforts, the U.S. has experienced “the worst revival of an economy since the Great Depression.” The economy’s growth rate is well below its precrisis norm, and the benefits have been slow to reach the middle class and Main Street. Much of the Fed’s easy money has gone into financial engineering, as companies borrow billions of dollars to buy back their own stock. Corporate debt as a share of GDP has risen to match the highs hit before the 2008 crisis.

 

In this way the Fed’s policies have fueled a sharp rise in wealth inequality world-wide—and a boom in the global population of billionaires. Ironically, rising resentment against such inequality is lifting the electoral prospects of angry populists like Mr. Trump, a billionaire promising to fight for the little guy. His rants may often be inaccurate, but regarding the ripple effects of the Fed’s easy money, Mr. Trump is directly on point.

So now perhaps another question can be raised. Why do we even need politicians to peg and falsify the price of money and financial assets?

Has there been a shortage of debt that requires artificially low interest rates to encourage households, businesses and government officials to borrow?

Has the financial sector languished and dragged down the real economy—especially since Alan Greenspan discovered the printing press in the basement of the Eccles Building during the stock market crash of October 1987?

Do we need chronic, egregiously “easy money” when the financial sector’s size has risen from 1.5X national income during the halcyon days of the 1950s and 1960’s to 5X the flat-lining economy of the present era?

Financialization of US Economy Since Greenspan

Do we need a posse of politicians at the Fed empowered to ride roughshod over every financial asset price for the absurd purpose of generating more inflation? Is that not the equivalent of carrying coals to Newcastle when the American economy already has nearly the highest costs and wages in the world?

Have these central bank politicians ever offered a smidgeon of proof that consumers don’t buy flat screen TVs, computers or i-Phones because their prices are falling? Or that they delay purchasing food, fuel and necessities because the CPI is too weak? Or that they need to be smacked in the forehead by “sticker shock” in order to buy a car?

To the contrary, in a world in which massive amounts of jobs and incomes have been off-shored owing to the China Price for goods and the India Price for services what would be so bad about a little deflation, exactly?

In fact, workers in the middle and lower reaches of the jobs market have not even kept up with the average nominal wage, which has nearly tripled since 1987, even as their after-inflation paychecks—-measured by an honest cost-of-living deflator—-have been shrinking for decades.

Average Hourly Earnings - Nominal and Real - Click to enlarge

At the end of the day, the current regime of political rule of financial markets is based on the monetary politburo’s self-serving myth that flexible, mobilized, market-set interest rates will impair economic prosperity and that left to its own devices capitalism has a death wish.

To the contrary, mobilized, free-market interest rates are the only route to financial stability, efficient capital allocation and the extinguishment of the rampant speculation and malinvestment which is bringing American capitalism to ruin. Accomplish that much, and the business cycle will self-correct and capitalist prosperity will be off to the races.

To be sure, there is a long way from here to there. But calling out the politics-ridden nature of the Federal Reserve and the myth of its vaunted “independence” is a least a start in the right direction.

via http://ift.tt/2dKRjJj Tyler Durden

Basket of Aleppos, Moynihan’s Porn, and Uncle Tom’s Yeezys: It’s the Best Fifth Column Ever!

Goddamn it, Kmele. ||| Kmele FosterEx-Reasoner Michael C. Moynihan, the third wheel (heel?) of The Fifth Column, pronounced at the close of this latest (and longest!) episode of the world’s greatest podcast that it was our “best ever.” Then again, he was drunk, and had spent much of the time just cold rambling about porn.

No really, good stuff here, on topics including:

* Gary Johnson’s latest “Aleppo moment.”

* Hillary Clinton’s off-puttingness even when standing next to Donald Trump.

* The risible notion that a vote for not-Hillary is a vote for war, because Al Gore or something.

* California’s ridiculous put-condoms-on-porn-dicks ballot initiative.

* Kmele Foster getting called “coon,” “Uncle Tom,” and worse for not jumping to conclusions about officer-involved shootings.

* Ayn Rand’s great writing on racism and collectivism.

* Kmele’s new Yeezys (pictured).

Go ahead and give it a listen:

Now, here are the places you can download, interact with, recommend to your friends about, write glowing reviews of, and submit your fan-art to, The Fifth Column: iTunes, Stitcher, Google Play, wethefifth.com, @wethefifth, and Facebook.

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Congress Gets “Case Of Rapid-Onset Buyer’s Remorse” One Day After Passing 9/11 Bill

Apparently Congress will never learn that “passing a piece of legislation so you can see what’s in it” is never a good strategy.  It certainly didn’t work out well with Obamacare and it looks to be backfiring with the controversial 9/11 bill as well with many members of Congress expressing remorse over supporting the bill just 1 day after overriding Obama’s veto.  Per The Hill, both Paul Ryan and Senate Majority Leader Mitch McConnell have expressed some concerns with the bill just 1 day after passing it:

“We want to make sure the 9/11 victims and their families have their day in court,” Ryan told reporters. “At the same time, I would like to think that there may be some work to be done to protect our service members overseas from any kind of legal ensnarements that occur, any kind of retribution.

 

“Everybody was aware of who the potential beneficiaries were but nobody had really focused on the potential downside in terms of our international relationships, and I think it was just a ball dropped,” Senate Majority Leader Mitch McConnell of Kentucky told reporters Thursday, saying it was worth discussing possible fixes after the elections.

 

“I don’t think we had enough time to consider all of the ramifications,” Sen. Orrin Hatch (R-Utah), one of the bill’s co-sponsors, said on Tuesday. “It’s a political issue that people jumped on without really thoroughly looking at everything.”

Pointing out that members of Congress couldn’t possibly be expected to read legislation or conduct any other form of due diligence on their own, Senate Majority Leader Mitch McConnell blamed the White House.  Per The Hill:

“It seems to be a failure to communicate early about the potential consequences of a piece of legislation that was obviously very popular.

 

“I wish the president — I hate to blame everything on him and I don’t, but it would have been helpful if we had a discussion on this much earlier than last week,” he added.

Which, of course, White House press secretary Josh Earnest quickly seized upon by comparing Congress to a bunch of ignorant elementary school kids, saying “what’s true in elementary school is true in the United States Congress: Ignorance is not an excuse.”

JASTA

 

So how did we get here? 

Per Bloomberg, the September 11 families for years had pushed for the legislation, after repeated efforts to hold members of the Saudi royal family responsible were blocked in court, thanks to a 1976 law giving foreign states immunity in U.S. courts.  Saudi officials have long been accused of having links to the 9/11 hijackers as fifteen of the nineteen men who brought down passenger planes that day were Saudi citizens.

Sen. Chuck Schumer (D-N.Y.) championed the effort for at least seven years and in 2015, he teamed up with Majority Whip John Cornyn (R-Texas) to offer the Justice Against Sponsors of Terrorism Act (JASTA).  The bill altered existing U.S. law to allow victims of terrorist attacks on U.S. soil to sue foreign governments that are not officially designated as sponsors of terrorism — like Saudi Arabia.

Despite lobbying efforts from the Obama administration, the Senate passed the measure unanimously in May 2016.  Months later, the House also passed the measure unanimously.

When President Barack Obama vetoed the measure, he issued a detailed lengthy explanation, warning that allowing such lawsuits against foreign governments “based solely upon allegations by private litigants” may “lead to suits against the United States or U.S. officials for actions taken by members of an armed group that received U.S. assistance, misuse of U.S. military equipment by foreign forces, or abuses committed by police units that received U.S. training,” even if the lawsuits are “without merit.”

But Congress was not convinced and voted to override the veto by a 97-1 vote in the Senate 348-77 vote in the House.  Per the Washington Post:

“Overriding a presidential veto is something we don’t take lightly, but it was important in this case that the families of the victims of 9/11 be allowed to pursue justice, even if that pursuit causes some diplomatic discomforts,” Sen. Charles E. Schumer (D-N.Y.), who co-authored the bill with Sen. John Cornyn (R-Tex.), said in a statement.

 

“Ultimately these senators are going to have to answer their own conscience and their constituents as they account for their actions today,” Earnest said, noting that at least one GOP senator said some of his colleagues had failed to read the bill before voting on it initially. “To have members of the United States Senate only recently informed of the negative impact of this bill on our service members and our diplomats is in itself embarrassing.”

As Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies, pointed out to the Washington Post, the biggest issue with the bill is that it opens the U.S. government up to “court-ordered discovery.”

CIA Director John O. Brennan also warned of the 9/11 bill’s “grave implications for the national security of the United States” in a statement Wednesday.

 

Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies, said in an interview that it could take time to grasp the bill’s full implications, and there may be “some time to tweak the law before some of the most damaging consequences become clear.”

 

“But the biggest issue is that it opens up government agencies to court-ordered discovery,” Alterman said, adding that the federal government could face lawsuits from those who have been victims of drone strikes and other American military activities. “It’s not limited to Saudi Arabia, and it’s likely to have a much larger impact on the U.S. government than the Saudi government, because the U.S. government takes rules very seriously.”

But we’re not too concerned about the whole discovery issue…our high-ranking government officials have thoroughly demonstrated a masterful ability to circumvent federal subpoenas and destroy emails and other evidence with relative ease…BleachBit is about to get a lot more use.

via http://ift.tt/2dxboUk Tyler Durden

Why It’s So Hard to Stop Bad Cops From Getting New Jobs: New at Reason

Depending on the state you live in, you may be required to obtain an occupational license to become a plumber, an insurance agent, a hair braider, a manicurist, or even a racetrack employee. These licenses, which can take dozens or hundreds of hours of training to procure, afford privileged access to specific industries—and they can be revoked if certain standards aren’t met. But in six states, the same standard isn’t applied to one surprising profession: law enforcement.

Massachusetts, New York, New Jersey, Rhode Island, California, and Hawaii employ 26 percent of this country’s law enforcement officers, according to the Bureau of Justice Statistics. But they have no legal authority to revoke the licenses of cops who have been dismissed for misconduct. And even though the other 44 states can decertify police officers, there is no nationwide mechanism allowing every police department in the country to access an applicant’s work history with out-of-state departments. This information gap allows officers banned from working as police in one state to secure law enforcement employment in another state.

Police representatives would have you believe that “gypsy cops,” as such officers are sometimes referred to, represent an overstated and barely existent threat at best. In March 2016, Ray McGrath, the legislative director of the International Brotherhood of Police Officers (IBPO)—one of the U.S.’s most prominent police unions—told members of the Massachusetts legislature, “It’s not possible for an officer [fired for misconduct] to get another job in civil service,”according to a state House reporter for Boston University.

But bad cops can and do find work in law enforcement. Decertified police have repeatedly slipped through the cracks to find new jobs in the profession, often by moving to another state and applying to a department lacking the resources or manpower to do a thorough background check.

Although some efforts to track police decertifications exist, they are scattered and fragmented, varying from state to state, with no unified national coordination. That’s why police reform advocates have been pushing for the creation of a single, federally maintained database for more than 20 years.

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