Month: February 2017

The Central Banks Pull Back: Now It’s Up To Fiscal Policy To “Save The World”

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending.

Have you noticed that the breathless anticipation of the next central bank "save" has diminished? Remember when the financial media was in a tizzy of excitement, speculating on what new central bank expansion would send the global markets higher in paroxysms of risk-on joy?

Those days are gone. Nowadays, central banks cautiously continue the bond buying programs they've had in place for years, but their policy initiatives are tepid at best: they talk about expanding asset-buying programs to include more stocks, or discuss notching interest rates higher in some cases; but the talk is subdued, as expectations are being consciously lowered.

The reason central bankers are pulling back from their previous "we can do no wrong, we're saving the world" expansion is those policies have failed to bolster the real economy. Even conventional economists who never met a central bank expansion they didn't love are grudgingly conceding that quantitative easing and all the other monetary expansions did little but make the rich richer and everyone else poorer. (see wealth chart below for data confirming this.)

Even the Davos crowd who benefited so mightily from central bank largesse is looking anxiously over their shoulders, fearing a sharpened pitchfork wielded by an enraged debt-serf might be plunged into their backs.

The last big rally was driven not by central bank policy but by a political event–the unexpected election of Donald Trump, who has pushed a fiscal stimulus agenda of reducing regulations and taxes while spending more on repairing and improving infrastructure.

My colleague Gordon Long describes this as the Great Rotation from monetary to fiscal stimulus. Monetary stimulus boiled down to a trickle-down wealth effect: if the central banks inflate asset bubbles, those who own the assets bubbling higher will feel wealthier and this will cause them to borrow and spend more, boosting the prospects of the debt-serfs who don't own enough assets to enjoy the central-bank largesse directly.

And indeed, the spending of the top 5% soared as the central bank winds filled the sails of those who owned all the assets being pushed higher. But the spending of the wealthy did little for the Main Street economy, which has experienced eight years of stagnating household incomes, a reduction of opportunity and an erosion of purchasing power as supposedly non-existent inflation has nibbled away at their disposable income.

Even those of us without PhDs in economics can see that infrastructure spending that goes to wages rather than asset bubbles will have a more positive effect on Main Street than the luxury spending of the wealthy.

Unfortunately, there are a few flies in the ointment of fiscal stimulus. One is that a number of cycles suggest the tepid "recovery" is long in tooth and the global economy is overdue for a good old-fashioned recession.

A recession–massive writedowns of bad debt and a contraction of private borrowing and spending–tends to offset any gains that might have been notched by fiscal stimulus.

Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending. Historian Peter Turchin explored historical cycles of social disintegration and integration in his recent book Ages of Discord. I discussed the book previously in Now Is the Winter of our Discontent: Our Era of Rising Discord (November 16, 2016)

Here is a greatly simplified summary of the forces that propel widespread social and political discord. Note that all three are present today:

Gordon Long and I discuss the Great Rotation, cycles and the Age of Discord in this video program:

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Trump: “I Haven’t Eased Anything On Russia”

The White House has backtracked on a report it is rolling back sanctions on Russia’s Federal Security Service, the successor agency to the KGB,  after the Treasury Department announced an amendment to put measures in place by former President Obama in response to Russian interference in the 2016 presidential election.

The FSB was one of several entities sanctioned by Obama in December related to Russian hacking of Democratic political organizations and operatives. The FSB must also approve certain technology imports to Russia per domestic law.

“We’re not easing sanctions,” press secretary Sean Spicer told reporters, arguing that it’s “common for Treasury after sanctions are put in place to go back and look at specific carve-outs for different industries or products and services. “It is a regular course of action that Treasury does often when sanctions are imposed.”

Trump himself was quoted moments ago as saying “I haven’t eased anything on Russia.”

As reported previously, the Treasury Department earlier in the day amended Obama’s additional Russian sanctions to allow United States technology companies to export products to Russia. Treasury’s Office of Foreign Assets Control (OFAC) clarified that American tech companies can seek licenses from Russia’s Federal Security Service (FSB) to export their goods to Russia, so long as the products aren’t used in Crimea or violate pre-existing sanctions.

The move was widely interpreted as President Trump relaxing sanctions on Russia. But foreign policy experts cited by The Hill insisted that the OFAC’s amendment was likely meant to clean up unintended consequences on American tech companies.

“This isn’t Trump weakening sanctions,” said Eric Lorber, sanctions consultant at Financial Integrity Network, on Twitter. “Unintended consequences popped up, OFAC dealt with them.”

Having popped in earlier trading, Russian ETFs and stocks have since pared gains on the update. 

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Albert Edwards: “Agree With Trump Or Not, He Seems Determined To Enact What He Promised”

The latest strategist to step into the pro/anti-Trump fray, is one of the original permabears, SocGen’s Albert Edwards, who in a Thursday note sided with Dan Loeb, and wrote that while the Donald Administration “might be a neo-liberal nightmare” if one strips away some of his more controversial rhetoric on immigration, “a lot of what he says on the economic front makes perfect sense to me.”

Edwards is also happy that unlike his predecessors, while crass and unpolished, Donald Trump continues to arouse “as much passion in office as he did on the campaign trail” and while one can “agree with him or not, unlike most politicians he seems determined to actually enact the things he promised the electorate.” That said, Edwards points out something we warned back in November, namely that while until the last couple of weeks “the markets had embraced only the ?good? bits of his campaign rhetoric”, only now are they reappraising, among other things, the likelihood of a trade war, with the Administration turning on Germany.”

The best example of this was Ray Dalio’s take in a recent Daily Observation note, in which the formerly enthusiastic hedge fund manager, warned that “we are now in a period of time when how this balance tilts will be more important to the economy, markets, and our well-beings than normally dominant drivers such as central bank policies,” Dalio wrote. The duo added that the current investment environment is marked by “exceptional uncertainty” and recommended avoiding concentrated bets, and holding easy-to-sell assets.

Edwards goes on to agree with Trump that “we have long written on these pages that Germany is one of the biggest currency manipulators in the world. Germany aggressively refutes any criticism, let alone does anything about it (unlike China).” The SocGen strategist also predicts that continued intransigence “will have huge implications for both financial markets and the sustainability of the eurozone” and notes that “Trump’s attack on excess regulation on US corporates also rings true. US corporate competitiveness is poor and deteriorating. The World Bank, for example, ranks the US a derisory 51st on how easy it is to start a business!”

This brings up a point we addressed one week ago, when using JPM calculations, we showed the staggering cost of regulatory compliance for US businesses, which amounted to $20,000 per employee on average, and a whopping $30,000 for workers employed across America’s small business, traditionally the biggest sources of new jobs across the US.

 

Clearly, there is room for improvement.

Edwards shows the above hurdle to the US economy from a slightly different angle, citing the World Bank’s annual survey, and notes that “competitiveness is not, as many economists suppose, about low wage costs and the ability to hire and fire at will. The World Bank looks at 10 categories of competitiveness to come up with an aggregate figure and ranking.”

As mentioned above, the US is ranked a derisory 51st on ?how easy it is to start a business?, down six places from 45th last year and incredibly down from 3rd place only 10 years ago! That not only places the US below the most developed economies, but also below Albania, Armenia, Belarus, Burundi, Egypt, Jamaica, Kosovo, Kyrgyzstan, Liberia, Mongolia and Russia (among others, see chart below). It is even easier to start a new business in France than it is in the US. Now that really is a surprise!”

Edwards then focuses on another relevant topic: government spending and associated taxation.

Most long-term readers would have worked out by now, that despite my berating central bank QE and government interventions (eg former UK Chancellor George Osborne?s moronic help-to- buy housing subsidy), I regard myself as pretty liberal (socialist even) on many issues. I used to vigorously debate with my former colleague Dylan Grice. He made the very valid point that France?’s economic struggles were probably due to the fact that the government dominates the economy ?- indeed it is comparable to Cuba. A ranking of government spending of OECD countries does indeed have France at an extreme. By contrast, the more ?flexible?, fast-growing economies such as the US and the UK tend to have small government spending.

But, he concedes, it is not a question of taxation or spending, but rather strangling regulation that is a far greater issue:

I believe high public sector tax and spending is not the problem. Instead, I always thought the problem with countries like Italy and France was regulation that strangles enterprise. ?Socialism?, in the sense of having a high tax and spend economy, may be commonly associated with struggling economies, but high tax and spend does not in itself condemn a country to low growth (correlation is not causality). Most economists believe long-run GDP growth is driven by productivity growth and as this tends to be sluggish in the public sector, a vibrant private company sector is key (although government can help create the conditions for growth via education, etc.). So what really condemns a nation to sluggish economic growth is when ?socialism? strangles business enterprise with excess regulation.

 

 

So when you look at the latest World Bank ?Ease of Doing Business Survey? it is little surprise to see France, Italy and Greece near the bottom, and the UK and US near the top ? mirroring the size of their public sector (see charts above).

In other words, to Edwards it’s not the socialism per se that is the problem, it’s regulations that make suffocate new business: “look at the Skandi countries: these high tax and spend nations do not make life impossible for their private business sector – quite the reverse. These ?socialist? nations allow business to thrive, tax them, then redistribute the proceeds. The US is the opposite of the Skandi nations. The US is a low tax and spend nation that has strangled its corporate sector. That means the small company sector, which is traditionally the engine for jobs growth, has been struggling (see chart below).”

So is new business creation truly that bad in the US? Well, yes and no: “the only things where the US excels are the ability of companies to ?get credit? (2nd) and ?resolving insolvency? (5th). So US companies excel at leveraging up and going bust – great! In most of the other eight categories the US ranking is pretty appalling and if we average them we come up with the US at a lowly 37th position overall.

Edwards’ conclusion: “There is much work indeed for The Donald.” There is, indeed, and he should be prepared to fight relentless obstruction every step of the way by those who think the old ways are the best.

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Is The Kremlin Funding A Campaign That Undermines U.S. Fracking?

Submitted by Irina Slav via OilPrice.com,

The recent National Intelligence Council report assessing the involvement of Russia in last year’s U.S. presidential elections spurred a flurry of media reports suggesting that Russia is heavily involved in anti-fracking campaigning. Some authors interpreted this involvement as a “propaganda effort”, while others claimed the Kremlin was financially backing anti-fracking groups in the U.S., without, however, providing any evidence for this claim.

The basis for all these reports is part of the report, in which the authors discuss the agenda of RT, a state-funded TV channel and website that is widely seen as the Kremlin’s chief megaphone abroad. They quote shows and reports that led them to conclude that RT aimed at fueling discontent in the U.S. and influence interior politics.

Anti-fracking rhetoric was identified in the report as a major element of RT’s agenda and interpreted by the report’s authors as reflecting Russia’s concern about the growing influence of shale oil and gas on international markets and “the potential challenges to Gazprom’s profitability.”

One media report author, Drew Johnson, went further, seeing this rhetoric as indicative of Putin’s direct financial involvement in anti-fracking campaigns in an effort to undermine America’s energy independence.

It only takes a bit of common sense to see why Russia would not be too happy with the shale revolution – it brought prices down, shaving billions off Russia’s state revenues from oil. So, the suggestion that the Kremlin has a material interest in undermining the popularity of fracking in the U.S. by fueling opposition to it is a logical one.

Yet, besides this logical suggestion, there are several questions that might raise some doubts as to the actual “Russian threat” to fracking.

First of all, how is Russia directly harmed by the growing shale oil and gas production in the U.S.? Unlike Saudi Arabia, whose oil minister has been making condescending remarks about the future of shale oil, Russia does not export its own fossil fuels to America, so that can’t be a reason for the campaigns.

 

Second, was Russia the worst hit by the oil price crash? Certainly not; that was Venezuela. But what’s more, Russia’s energy industry has proved to be very resilient—more than a lot of small U.S. shale players—simply because of size and government support. One could argue that the U.S. energy industry actually suffered a bigger blow from the price crash than the Russian industry. So, Russia has no reason to hold a grudge against the shale boomers, especially since they weren’t the only ones to raise production to record levels, bringing the prices down.

 

Third, the threat that American gas could pose to Gazprom’s profitability is a very remote one: gas is exported either via pipelines or as LNG. Gazprom’s pipeline network around Russia and in Europe ensures its stable position on regional markets – a position that it will take U.S. exporters a lot of time and investment to challenge by offering competitive prices and easy deliveries of their gas.

 

Fourth, why would Russia want to undermine America’s energy independence? This independence may actually be good news for Moscow: the more U.S. oil and gas is consumed locally, the less it has for exports. In 2015, imports accounted for 24 percent of oil and oil product consumption, which was the lowest since 1970, according to the EIA, but still quite high. As energy independence is a priority for the Trump administration, satisfying domestic consumption with local output will likely be more important than expanding globally through exports, possibly threatening Russian markets.

 

Last, the rise of anti-fracking sentiments hardly has anything to do with Russian propaganda, no matter how passionately the latter supports it. Anti-fracking sentiment has a lot to do with growing environmental concerns in the U.S. that seek to reduce all fossil fuel extraction, as well as with the huge increase in seismic activity in some parts of the U.S., such as Oklahoma, after the start of the shale revolution.

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Schwarzenegger Responds: “Hey Donald, Let’s Switch Jobs, Then People Can Finally Sleep Again”

Shortly after Donald Trump slammed Arnold Schwarzenegger’s Celebrity Apprentice rating during today’s National Prayer Breakfast, saying “I want to just pray for Arnold if we can, for those ratings,” the Terminator actor immediately shot back, and took to Twitter to respond to President Trump.

As a reminder, this is what Trump said this morning: “They hired a big, big movie star, Arnold Schwarzenegger to take my place, and we know how that turned out,” Trump said at the breakfast. “The ratings went right down the tubes. It’s been a total disaster. And [producer] Mark [Burnett] will never, ever bet against Trump again, and I want to just pray for Arnold, if we can, for those ratings.”

Moments later, Schwarzenegger posted a Twitter video in which he suggested that the president could switch with him and come back to his reality show. The upside: “people can finally sleep comfortably again.”

“Hey Donald I have a great idea. Why don’t we switch jobs? You take over TV, because you’re such an expert in ratings, and I take over your job. And then people can finally sleep comfortable again. Hmm?”

A spokesman for Schwarzenegger also sent a statement to ABC News following Trump’s Thursday remarks.

“Arnold is praying that President Trump can start improving his own approval ratings, which were the worst in history for an incoming president, by taking his job seriously and working inclusively,” spokesman Daniel Ketchell said in the statement.

 A spokesman for Schwarzenegger also sent a statement to ABC News following Trump’s Thursday remarks. “Arnold is praying that President Trump can start improving his own approval ratings, which were the worst in history for an incoming president, by taking his job seriously and working inclusively,” spokesman Daniel Ketchell said in the statement.

The back and forth lead to Trump’s old nemesis, former Mexican president Vicente Fox, to also chime in: “Just do your job, Donald. He looks RIDICULOUS fighting with every single celebrity. Such a CLOWN.”

Perhaps what is most concerning is not that the president is engaging in what are otherwise petty ego attacks, but that this may be yet another tactical ruse by Trump to get the media’s attention focused on precisely this “conflict” (which will surely boost ratings of The Apprentice), while ignoring the far more pressing issues facing the Trump administration during today’s news cycle.

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San Bernardino Deputy Threatens to ‘Create’ Charges Against Man Videotaping Him

A San Bernardino sheriff’s deputy did not appreciate a citizen videotaping him during a terse exchange in the sheriff’s office, and threatened to arrest the man because of it. When asked on what grounds did the deputy have for making an arrest, the deputy replied, “I’ll create something.”

Duncan Hicks, a 34-year-old Victorville (Calif.) man, was frustrated by what he perceived as a lack of cooperation from this same San Bernardino County sheriff’s deputy and a front desk clerk while he tried to file a domestic incident report. Hicks told the San Bernardino Sun that the deputy and clerk were “rude and irritated,” adding, “They refused to even help me and kicked me out, telling me I had to leave.”

A short while later, Hicks returned to the station, this time video recording his encounter on his phone.

After taking issue with what he said was incomplete information on the incident report, the unidentified deputy told Hicks, “Duncan, you know what man, I’m about getting tired of you and you’re about to go to jail.” Hicks naturally objected to that threat, to which the deputy replied, “I’ll create something. Do you understand? You’ll go to jail. Do you understand that?”

The deputy then claimed that Hicks recording him was against the law, which is not true, a fact confirmed by the sheriff’s spokesperson who told the Sun, “there is no rule preventing one from recording video or taking photographs in our lobby.”

Watch the incident below, the deputy’s threat happens at around the 0:50 mark:

Hicks told the Sun that another sergeant at the station thought the deputy “was probably having a bad day,” to which Hicks retorted, “If he did this when he was having a bad day, what’s he capable of doing when he’s having a terrible day.”

Hicks makes a good point. If this deputy—knowing he was being recorded—was so blithely willing to admit he would “create” charges as a means of punishing an inconvenient citizen, it’s chilling to think what he would consider doing in a situation with less transparency.

San Bernardino County Sheriff John McMahon said in a statement, “our employees’ response to the citizen is not consistent with my expectation of customer service. Additionally, the deputy’s responses are not consistent with the interpretation of the law.” An administrative investigation into the incident is now underway.

Read more Reason coverage on the “War on Cameras” here.

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Homeland Security Chief Hopes Trump’s Wall “Will Be Done Within 2 Years”

Without mentioning who will pay for it, President Trump's new Secretary of Homeland Security told Fox News late Wednesday that he hopes the US-Mexico border wall can be built in two years.

As AFP reports, retired Marine general John Kelly told Fox…

"The wall will be built where it's needed first, and then it will be filled in. That's the way I look at it… I really hope to have it done within the next two years."

Trump has signed an executive order designed to meet his campaign pledge to build a wall along the 2,000 mile (3,200 km) southern US border, with the stated goal of keeping out undocumented migrants, drugs and criminals. Some 653 miles of border already features fencing that blocks people and/or vehicles.

Kelly said that protecting the southern border is "a layered approach" that includes physical barriers as well as technological sensors "and things like that".

Kelly, who will oversee the wall's planning and construction, said that the Trump administration officials "already have the authority" under existing law to start the project.

Trump has said that his cost estimates for building the wall range from $4 to $10 billion, but other estimates put the price at $11 billion for 400 more miles of fencing. The MIT Technology Review estimated that a 1,000 mile steel and concrete wall would cost $27 to $40 billion.

 

Kelly was optimistic about what he called "the money aspect."

 

"I think the funding will come relatively quickly," Kelly said, adding that construction could begin in just a few months.

While not commenting on the wall per se, former Mexican president Vicente Fox has been active on Twitter again this morning…

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US Eases Sanctions Against Russian Federal Security Service

Just moments ago, when reporting on the latest Putin comment involving the recent flaring up of violence in Eastern Ukraine, we said that “the biggest question remains unanswered: what side of the Ukraine-Russian conflict will the new US State Department under Rex Tillerson side with, and will Trump slam the alleged Russian violence as his predecessor was so quick to do on virtually every single occasion.“

We may have just gotten the answer, because moments ago the Treasury Department’s Office of Foreign Assets Control, under Rex Tillerson, posted a Russia-related general license notice on its website, according to which US authorities eased sanctions against Russia’s Federal Security Service – the successor agency to the USSR’s KGB – pertaining to licenses and permits for information technology products in Russia.

According to the license, “all transactions and activities” with participation of the Russian Federal Security Service, prohibited earlier by executive orders of the US President, are authorized with certain exceptions. Also related to “transactions necessary and ordinarily incident to comply with rules and regulations administered by, and certain actions or investigations involving, the FSB,” according to Treasury website.

Cited by Tass, Russian Presidential spokesman Dmitry Peskov has declined to make a statement on the United States’ decision.

“First we need to understand what it is all about,” Peskov said. “If we turn to the rocket engines matter, we will see that our US counterparts never impose sanctions that could damage their own interests.”

While this initial de-escalation of sanctions against Russia may or may not give John McCain an aneurysm, it will certainly lead to a vocal outcries by Democrats and the media against Rex Tillerson – whose proximity to Putin is well-known – and of course, president Trump, accusing them of immediately going soft on Russia, and leading to even further sanctions elimination between the US and Russia, thus alienating Europe, whose relations with Moscow remain as icy as anything observed under the Obama administration.

The full Treasury general license notice is below (link).

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Gorsuch’s Track Record Suggests He Won’t Be Trump’s Rubber Stamp

Demand Progress says Neil Gorsuch, President Trump’s choice to replace the late Supreme Court Justice Antonin Scalia, is the sort of judge who “will rubber stamp Trump’s assaults on Americans’ freedoms.” People for the American Way likewise warns that Gorsuch will be “a rubber stamp for the kind of anti-constitutional actions that we have seen over just the last week.” A review of opinions Gorsuch has written since he joined the U.S. Court of Appeals for the 10th Circuit in 2006 provides ample reason to question such claims.

Since the “anti-constitutional actions” to which PFAW refers presumably include Trump’s executive order restricting admission to the United States, the fact that Gorsuch has repeatedly sided with immigrants resisting deportation is particularly relevant in evaluating the suggestion that he would reflexively uphold the executive branch’s decisions. Those immigration cases involved retroactive application of an executive agency’s legal interpretation, which was also at the center of Caring Hearts v. Burwell, a 2016 case in which Gorsuch said a company providing home health services could not be required to return Medicare payments deemed improper based on regulations that were “but figments of the rulemakers’ imagination, still years away from adoption,” when the claims were filed. “Surely one thing no agency can do,” he said, “is apply the wrong law to citizens who come before it, especially when the right law would appear to support the citizen and not the agency.”

And then there is the case of the bothersome burper. Last August, as Nick Gillespie noted at the time, the 10th Circuit upheld the arrest of a New Mexico seventh-grader who burped up a storm during P.E. class, to the amusement of his peers and the annoyance of his gym teacher. Gorsuch dissented:

If a seventh grader starts trading fake burps for laughs in gym class, what’s a teacher to do? Order extra laps? Detention? A trip to the principal’s office? Maybe. But then again, maybe that’s too old school. Maybe today you call a police officer. And maybe today the officer decides that, instead of just escorting the now compliant thirteen year old to the principal’s office, an arrest would be a better idea. So out come the handcuffs and off goes the child to juvenile detention. My colleagues suggest the law permits exactly this option and they offer ninety-four pages explaining why they think that’s so. Respectfully, I remain unpersuaded.

According to the New Mexico Court of Appeals, Gorsuch pointed out, the law under which the kid was charged, which makes “interfering with the educational process” a misdemeanor, “does not criminalize ‘noise[s] or diversion[s]’ that merely ‘disturb the peace or good order’ of individual classes.” He added:

Often enough the law can be “a ass—a idiot”…and there is little we judges can do about it, for it is (or should be) emphatically our job to apply, not rewrite, the law enacted by the people’s representatives. Indeed, a judge who likes every result he reaches is very likely a bad judge, reaching for results he prefers rather than those the law compels. So it is I admire my colleagues today, for no doubt they reach a result they dislike but believe the law demands—and in that I see the best of our profession and much to admire. It’s only that, in this particular case, I don’t believe the law happens to be quite as much of a ass [sic] as they do.

That does not sound like a judge who bends over backward to side with the government.

Further evidence of Gorsuch’s willingness to stand up for the rights of defendants, even when they are indisputably guilty and their crimes make them pariahs, comes from U.S. v. Ackerman, a 2016 child pornography case. Walter Ackerman was charged with possession and distribution of child pornography after AOL reported him to the National Center for Missing and Exploited Children (NCMEC), which opened Ackerman’s email and examined photos attached to it. Ackerman argued that NCMEC, which is authorized by statute and charged with collecting information about possible child pornography offenses, qualifies as a governmental entity, or at least as an agent of the government, and therefore should not have examined his email without a warrant. In an opinion written by Gorsuch, the 10th Circuit agreed that NCMEC should be treated as governmental actor under the Fourth Amendment, although it left open the possibility that the search could be justified by an established exception to the warrant requirement.

Another search and seizure case from last year, U.S. v. Carloss, shows that Gorsuch is not shy about breaking from his colleagues when he thinks they are reading the Fourth Amendment too narrowly. In that case, which Damon Root highlighted last week, the 10th Circuit ruled that police officers needed no permission or justification to bang on a man’s door and question him, with the aim of gaining “consent” for a search, notwithstanding multiple “No Trespassing” signs. In his dissent, Gorsuch emphasized the boldness of that claim:

The government suggests that its officers enjoy an irrevocable right to enter a home’s curtilage to conduct a knock and talk….A homeowner may post as many No Trespassing signs as she wishes. She might add a wall or a medieval-style moat, too. Maybe razor wire and battlements and mantraps besides. Even that isn’t enough to revoke the state’s right to enter.

My point is not that Gorsuch routinely sides with criminal defendants; judging from the majority opinions he has written, he usually rejects their appeals. But contrary to the picture painted by opponents of his nomination, Gorsuch does not shrink from siding with unsympathetic defendants when he thinks the government is wrong. In a 2015 case involving a convicted murderer named Philbert Rentz, for instance, Gorsuch agreed that he was improperly charged with two counts of using a firearm in a crime of violence (each of which carries a five-year sentence) after he “fired a single gunshot that wounded one victim and killed another.”

I doubt the positions that Gorsuch took in these cases, which gave “bad hombres” the benefit of legal niceties, would be endorsed by Donald Trump, who ran on a fearmongering “law and order” platform and has demonstrated little appreciation for the rights of the accused. And I am pretty sure that Trump, who has a long, amazingly petty history of suing people who hurt his feelings and wants to facilitate such claims by “open[ing] up those libel laws,” would not approve of the conclusion Gorsuch reached in Bustos v. A & E Television Networks, a 2011 defamation case.

Jerry Lee Bustos, a prison inmate in Colorado, sued A & E after it used surveillance camera footage of him fighting with another prisoner in a documentary about the Aryan Brotherhood. Bustos complained that the program implicitly identified him as a member of the gang, which he was not. A federal judge rejected his defamation claim, and the 10th Circuit upheld that decision in an opinion written by Gorsuch. “Can you win damages in a defamation suit for being called a member of the Aryan Brotherhood prison gang on cable television when, as it happens, you have merely conspired with the Brotherhood in a criminal enterprise?” he wrote. “The answer is no. While the statement may cause you a world of trouble, while it may not be precisely true, it is substantially true. And that is enough to call an end to this litigation as a matter of law.”

Another Gorsuch opinion dealing with freedom of speech suggests he has considerably more respect for the First Amendment than Donald Trump does. In the 2007 case Van Deeling v. Johnson, the 10th Circuit overturned a federal judge’s dismissal of a lawsuit brought by a man who had irked officials in Douglas County, Kansas, by repeatedly challenging his property tax assessments. Michael Van Deeling claimed that the county commissioners had pressured him into dropping his challenges through threats and intimidation. The judge rejected Van Deeling’s First Amendment claims on the ground that his tax challenges did not address a matter of public concern. “We write today to reaffirm that the constitutionally enumerated right of a private citizen to petition the government for the redress of grievances does not pick and choose its causes but extends to matters great and small, public and private,” Gorsuch said. “Whatever the public significance or merit of Mr. Van Deelen’s petitions, they enjoy the protections of the First Amendment.”

Trump’s critics (including me) were understandably concerned that his Supreme Court nominee would be a judge with authoritarian instincts who almost always sides with the government and would not be inclined to question the president’s power grabs. Judging from Gorsuch’s track record, he is not that guy.

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