Fed’s Kaplan Makes A Stark Admission: Equilibrium Rate May Be As Low As 0.25%

As we have hammered away at for years, “the math doesn’t work”, and it appears The Fed just admitted it.

In a stunning admission that i) US economic potential is lower than consensus assumes and ii) that the Fed is finally considering the gargantuan US debt load in its interest rate calculations, moments ago the Fed’s Kaplan said something very surprising:

  • KAPLAN SAYS NEUTRAL RATE MAY BE AS LOW AS 2.25 PCT, LEAVING FED “NOT AS ACCOMMODATIVE AS PEOPLE THINK”

Another way of saying this is that r-star, or the equilibrium real interest rate of the US (calculated as the neutral rate less the Fed’s 2.0% inflation target), is a paltry 0.25%.

What Kaplan effectively said, is that with slow secular economic growth and ‘fast’ debt growth, there’s only so much higher-rate pain America can take before something snaps and as that debt load soars and economic growth slumbers so the long-term real ‘equilibrium’ interest rate is tamped down. It also would explain why the curve has collapsed as rapidly as it did after the Wednesday FOMC meeting, a move which was a clear collective scream of “policy error” from the market.

This should not come as a surprise. As we showed back in December 2015, in “The Blindingly Simple Reason Why The Fed Is About To Engage In Policy Error“, when calculating r-star, for a country with total debt to GDP of 350%…

… The equilbirium real rate is around 0.4-0.6% at most, certainly below 1%, and as low as 0.30%.

 

Furthermore, as Deutsche Bank’s Dominic Konstam said almost two years ago, “One might argue for low “implied” equilibrium short rates via debt ratios. For example, if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs.

In this case, real growth would slow in response to rate hikes because productivity would stay weak at full employment and companies would be profit/price constrained around paying higher wages.

 

Moreover, nominal growth would then slow even more than real growth does because inflation would fall to 1 percent or below.

To be sure, the Fed hinted as much two days ago, when on Wednesday it lowered its longer-run federal funds rate to 2.75% from 3.00%. Another hint came last week from the BOC which, together with Bill Dudley, hinted it was willing to considering changing its mandate, i.e. lowering the inflation target, thereby unlocking some potential upside to the Real Interest Rate.

In the meantime, however, the mere fact that another Fed president is once again hinting that r-star is far lower than consensus, is an indication that the central bank is very limited in how much more tightening it can pull out this cycle. The simple math is that if Kaplan is right, the Fed has at most 3 more hikes left before it prompts yield curve inversion and another recession.

Expect to hear much more on this now that the r-star genie is out of the bottle. Finally the other consideration is that with the Fed once again talking about cutting the neutral rate, is means that not only is tightening approaching its end, but that the Fed may soon be forced to ease, by either cutting rates or QE.

Which also explains the second part of Kaplan’s statement: that the Fed is not as “accomodative as people think.” That is basically the Dallas Fed president jawboning risk assets lower, an implied warning that the market is not appreciating how close to capacity the economy currently is. Of course, the question why stocks aren’t dropping is best left to the ECB and BOJ…

Then again, maybe this time the market will notice, as LT yields are finally starting to move.

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

No, Simply Touching Fentanyl Can’t Kill You

For all the ink American media outlets have spilled covering the increase in fentanyl-related overdose deaths, few of the stories I’ve read explain how fentanyl works or why it’s so deadly.

As a result, journalists have created the impression that fentanyl is a magically awful drug. In that sense, it has a lot in common with PCP, methamphetamine, and crack cocaine. “Using [crack] even once,” ABC’s Peter Jennings declared in a 1989 episode of World News Tonight, “can make a person crave cocaine for as long as they live.” If there’s an equally believable-but-untrue claim about fentanyl, it’s that simply touching the stuff can kill you.

I thought it might be useful for other reporters, and people who are simply concerned and/or curious about fentanyl, to figure out which oft-reported claims are true, partially true, or flat out wrong. So I got in touch with the Stanford anesthesiologist Steven Shafer, an expert in the pharmacology of pain medicine. I’ve edited our exchange for length and clarity.

Q: How do street-level doses of fentanyl—which seem to range from less than a milligram to a few milligrams—compare to surgical doses?

A: A milligram of fentanyl is a huge dose, one that would be fatal. For surgery we typically use doses of 0.1 milligram (100 micrograms). In terms of street drugs, the high potency has a very practical implication: The stuff is difficult to measure. There would be no obvious difference to a user given a packet of fentanyl-laced heroin if it had a very small amount of fentanyl, or a guaranteed fatal dose of fentanyl. The user would need to trust whomever weighed out the fentanyl used to lace the heroin.

Q: What makes illicitly used fentanyl deadlier than other opioids?

A: Fentanyl effect peaks at 5 minutes after an intravenous injection. The fast onset is more likely to be fatal than a slow onset, because the body doesn’t have time to build up carbon dioxide. With a slow onset opioid (e.g., morphine), breathing slows gradually as the drug starts to act, and carbon dioxide rises. As carbon dioxide rises, it drives ventilation, offsetting (somewhat) the effects of the morphine on breathing. With the rapid onset of fentanyl, there is little time for carbon dioxide to raise before there is full effect of the fentanyl on depressing breathing. That will result in more lethality for the same maximal opioid drug effect.

Q: What do we mean when we say fentanyl is “x times more potent” than other opioids?

A: Potency is usually given for opioids by the amount (by weight) of drug required to achieve a particular drug effect. For example, one could use the “Minimal Effective Analgesic Dose,” basically the lowest dose of a drug that produces some amount of pain relief. Potency can also be discussed in terms of tissue concentration, what is the plasma concentration of drug that produces a particular effect.

Because of differences in pharmacokinetics (drug uptake, distribution, and metabolism), differences in dose and differences in concentration may vary several-fold. The rate of blood brain equilibration also makes a difference. Fentanyl effect peaks at five minutes after an intravenous injection, and it’s washed out by 90 minutes. Because it has slow blood-brain equilibration, morphine effect is quite modest at five minutes, but peaks at 90 minutes. Thus, it’s tricky to talk about one drug being X-fold more potent than the next, because it depends on exactly when you measure drug effect. At five minutes? At 90 minutes? You will get very different answers for relative potency depending on exactly when you make your measurements.

If one says that fentanyl is 50 times stronger than drug X, you can’t tell from the statement if that means that it takes 1/50th of the dose, or if it requires 1/50th of the concentration. Thus, the key concept is that fentanyl is gobs more potent than drug X, so you need a very small fraction of fentanyl compared to the other drug to get a big effect. It’s not more scientific than that, because so many details affect how the potency is calculated and compared.

Q: Is it possible to develop a tolerance to fentanyl? Are users at higher risk of overdose due to lack of tolerance if they inadvertently take fentanyl mixed into a non-opioid formulation?

A: Tolerance develops to all opioids. Fentanyl is no better, or worse, than others. However, tolerance is shared: Tolerance to heroin will make the addict also tolerant to fentanyl. Tolerance also occurs with benzodiazepines. If an addict who is tolerant to valium mixes it with a “normal” amount of fentanyl, and then takes a whopping dose of valium, they may overdose from the fentanyl.

Q: EMTs have reported needing larger doses of naloxone to reverse fentanyl overdoses. Does that sound correct?

A: It depends on the dose. Fentanyl is displaced from the mu opioid receptor just like morphine, oxycodone, or any other opioid. Naloxone will work just fine. However, because fentanyl is so potent, the person mixing it into heroin might make a 10-fold dose error. In that case, it will take 10 times the amount of naloxone. So there’s nothing magic about fentanyl, other than that it is so potent that it’s hard to get the dose right when you are using crude scales to mix it together.

Q: Is fentanyl dangerous to touch, as several law enforcement agencies have reported?

A: No, fentanyl is not dangerous to touch. Transdermal fentanyl patches deliver fentanyl across the skin, but they require special absorption enhancers because the skin is an excellent barrier to fentanyl (and all other opioids). However, it is readily absorbed through mucus membranes, so snorted, rubbed in the mouth, or swallowed are all effective ways of administering fentanyl.

Q: Does fentanyl produce a better high than other opioids?

A: It isn’t fundamentally different from other opioids, like heroin, morphine, or oxycodone. In terms of drug effect, an opioid is an opioid is an opioid. They all bind at the mu opioid receptor, and they all have the same fundamental properties. So fentanyl isn’t going to give addicts a better high. Addicts like the “rush” of the fast onset, so they might prefer the fentanyl rush to the onset of a slower opioid like morphine. However, the net opioid effect will be the same.

Q: In terms of what various public health agencies are doing globally to reduce overdose rates, what kind of strategies do you think are worth trying in the U.S.?

A: This is a very complex question! There are several parts to the answer. First, we need to develop better strategies of managing pain. A lot of addiction starts with opioids given for pain management. This is because there is almost no pain that cannot be managed effectively for a short time by opioids. In other words, opioids are very effective short-term analgesics. There seems to be nothing else that can replace them. We need to find ways to limit opioid use for chronic pain, except at the end of life, because they cause addiction and lead to dependence. The other problem is that we need better ways to treat psychological pain. Psychological pain is handled by the same brain pathways that handle physical pain. That’s why we use the same word, “pain,” for both. Opioids are effective for psychological pain as well, but they are a terrible choice.

Q: Are there any harm reduction strategies that might reduce fentanyl overdose rates specifically? I know some facilities in Canada offer free reagent testing, but I’ve also seen it argued that reagent testing is not an effective way to identify fentanyl in a mixture.

A: That would work, as long as it is sufficiently sensitive. One could readily make over the counter fentanyl detection kits so that addicts could identify if their concoction has been laced with fentanyl. That would likely be a good idea.

from Hit & Run http://ift.tt/2jRIEc1
via IFTTT

“Get Out James Comey, You’re Not Our Homey”: Comey Mercilessly Heckled At Howard University Speech

Former FBI Director James Comey was mercilessly heckled this afternoon as he attempted to deliver a speech at the Howard University convocation ceremony.  As the Washington Post confirms, a group of 20 Howard students led the heckling session that persisted throughout Comey’s speech and included the following clever chants:

“Get out James Comey, you’re not our homey.”

“No justice, no peace.”

At another point, protesters launched into song with the following lovely rendition of “We Shall Not Be Moved.”

 

Comey and University officials attempted to quiet the crowds with condescending and patronizing overtures, but, to our great ‘shock’, they didn’t work.

At another point, the rest of the crowd of more than 1,000 in attendance began cheering “let him speak!’’ but the protesters were not deterred or quieted.?

 

University officials urged the protesters to “be better than this,’’ but were met by chants of “White supremacy is not a debate.’’

 

Comey, wearing black academic robes sought to get the attention of the crowd, to no avail.

 

“I’m only going to speak for 12 minutes,’’ he said.

 

“I love the enthusiasm of the young folks, I just wish they would understand what a conversation is,’’ said Comey, trying to speak above the interruptions of the protesters.

As NBC notes, Howard University announced back in August that Comey would lead a series of lectures during the 2017-2018 school year which angered many groups on campus, including “HU Resist” which apparently orchestrated today’s entertainment.

Howard University officials first announced in August that Comey would serve as the school’s Gwendolyn S. Colbert I. King Endowed Chair in public policy for the 2017-2018 academic year. The former FBI director’s responsibility will include leading a series of five lectures and formally welcoming the new freshmen class on Friday.

 

However, a number of students objected to the choice.

 

In a petition circulated by, “HU Resist”, a student run organization that challenges university policies, activists argued that Comey’s actions as as the head of the FBI have ranged from the “criminalization” and attempted dismantling of Black Lives Matter” to the promotion of xenophobic and “characterizations” of “Muslim people.”

We certainly hope these kids enjoy the lifetime of FBI surveillance they just earned as a result of their “extremely careless” behavior…see what we did there?

via http://ift.tt/2xl48mR Tyler Durden

Rand Paul and John McCain Might Have Killed the GOP’s Obamacare Repeal Bill

Sens. Rand Paul, R-Ky., and John McCain, R-Ariz., will vote against the latest Republican-led effort to repeal parts of Obamacare, likely killing any slim chance that the proposal had of reaching the necessary 50 votes in the Senate.

Paul told the Associated Press he plans to vote against the Graham-Cassidy bill because it does not do enough to repeal Obamacare’s regulations and taxes.

McCain, in a statement issued later Friday, said he would not vote for the bill because he disagreed with the procedural shortcuts Republicans were taking to get the bill to the floor without committee hearings and the opportunity for amendments.

McCain, who cast the deciding vote against the Senate’s so-called “skinny repeal” bill in July over similar concerns about Senate GOP leaders abandoning “regular order,” said he would consider voting for the Graham-Cassidy bill “were it the product of extensive hearings, debate, and amendments” and only after getting a full CBO score of the bill, something that won’t be available before the end of the month.

“I cannot in good conscience vote for the Graham-Cassidy proposal,” McCain said Friday. “We should not be content to pass health care legislation on a party-line basis, as Democrats did when they rammed Obamacare through Congress in 2009. If we do so, our success could be as short-lived as theirs when the political winds shift, as they regularly do.”

By themselves, Paul and McCain would not be enough to sink the GOP health care bill. But at least two other Republican senators—Lisa Murkowski of Alaska and Susan Collins of Maine—are widely believed to be “no” votes on the bill. Collins confirmed Friday to the Associated Press that she’s leaning against the bill.

President Donald Trump on Friday threatened Republicans—and Paul in particular—who were considering voting against the bill. He said those who refused to support the Graham-Cassidy bill in the Senate “will forever…be known as ‘the Republican who saved Obamacare'”

In the tweet, Trump specifically identified Paul, who has so far been the only Republican to go on the record as opposing Graham-Cassidy, though at least two other Republican senators—Lisa Murkowski of Alaska and Susan Collins of Maine—are widely believed to be “no” votes on the bill. Murkowski and Collins, along with Sen. John McCain, R-Ariz., voted against the so-called “skinny repeal” bill in July.

Trump’s threats have nothing to do with the policy of the bill, and the White House is only interested in a political win, Paul told the AP.

Paul’s assessment of the situation seems pretty accurate. Trump has never indicated much of an interest in the policy aspects of the health care debate that has raged on Capitol Hill since March, though he did quickly organize a Rose Garden press conference to celebrate the House’s passage of an earlier Obamacare repeal bill. A lack of White House engagement was widely noted in the wake of the “skinny repeal” bill’s embarrassing failure in July, but—aside from some bluster on Twitter—neither the president nor his top health officials have been particularly active in selling the Graham-Cassidy bill to potentially recalcitrant Republicans this week.

Indeed, even Republicans in the Senate who said they would vote for the Graham-Cassidy bill appeared this week to be having a difficult time explaining the merits of it. A vote on the bill is scheduled for next week, but that timeline is dictated more by the ticking clock than by any broad agreement that Graham-Cassidy is a good bill. Republicans only have until September 30 to pass a health care bill using the reconciliation process. After that a major rewrite of Obamacare will require 60 votes and therefore must have Democratic support.

Paul’s and McCain’s opposition creates some difficult math for GOP leaders. That’s why Republicans, as IJR‘s Haley Byrd reported yesterday, have dangled a carrot in front of Murkowski. In exchange for voting to scrap parts of Obamacare, her home state of Alaska will be allowed to keep Obamacare. It’s a blatantly political move to buy votes (the same kind of move that Republicans denounced when it was used to help pass Obamacare in the first place), and Paul is right to recognize it as such, which he did in his interview with the AP.

As for Trump’s promise to attack him in future political campaigns if he votes against the bill?

“I’m a big boy,” says Paul.

from Hit & Run http://ift.tt/2xzmqAB
via IFTTT

John McCain Kills GOP’s Last Ditch Efffort To Repeal Obamacare

Third time turned out to be unlucky after all.

Earlier today, Sen. Susan Collins said that she has serious concerns about the latest GOP bill to repeal and replace ObamaCare as Republicans prepare to vote on the legislation next week, adding that she was “leaning against the bill… I’m just trying to do what I believe is the right thing for the people of Maine.”  And with Collins voicing against the bill, it meant that GOP leadership would be left with no room for error if they want to get their last-ditch ObamaCare repeal bill through the Senate next week.

The math is simple: Republicans have 52 seats and need 50 senators to support the bill, which would require Vice President Pence to break a tie, under the special budget rules being used to avoid a Democratic filibuster.  Sen. Rand Paul has already said he will vote against the legislation.

Which meant that losing just one more vote would mean the end of this latest attempt to repeal Obamacare.

They lost it moments ago when John McCain said in a statement that “I cannot in good conscience vote for the Graham-Cassidy proposal.

And with the GOP’s final attempt to pass Obamacare repeal before the end of the month now history, the market sighed a collective breath of relief, sending the managed care index soaring as the status quo is now assured to remain indefinitely.

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

Why Is NASA Covering Up Elon Musk’s Mistakes?

Authored by Drew Armstrong via The Mises Institute,

On June 28th, 2015, Elon Musk’s SpaceX Falcon 9 rocket launched a Dragon resupply ship not into space, but rather into the Atlantic Ocean.

It was a catastrophic failure that cost taxpayers $112 million. The payload that was meant to resupply the International Space Station (ISS) went up in a huge plume of smoke and flames. However, even though SpaceX did not complete their mission, they still received all but twenty percent of the full payment.

Standard NASA protocol is to release a report on every launch accident, but to this day – two years later – there is still no formal statement as to what went wrong on the SpaceX accident.

Per NASA, there won’t be one released anytime soon. The Agency recently announced that it will in fact not publicly release a report on their investigation into the disastrous explosion of the SpaceX Falcon 9 rocket. They had originally committed to reporting their results by the summer of 2017, but have instead passed the buck to the FAA.

“Since it was an FAA licensed flight, NASA is not required to complete a formal final report or public summary, and has deferred any additional products related to the matter at this time,” the agency’s Public Affairs Office (PAO) stated.

 

“The data is important for historical purposes, but the mishap involved a version of the Falcon 9 rocket, the version 1.1, that is now no longer in use.”

Apparently, the fact that SpaceX is no longer using that version of the Falcon 9 after this $112 million “mishap” of taxpayer funds means the American taxpayers have no right to know what happened. Strangely, that storyline did not work for a competing firm’s similar failure that occurred eight months prior.

On Oct. 28th, 2014, an Orbital Sciences Antares rocket was loaded with NASA Supplies aboard a Cygnus cargo ship worth $51 million bound for the ISS. Upon lift-off, the booster exploded, and the payload was lost, severely damaging the launch pad. Just like the SpaceX flight, the Orbital rocket was an official FAA-Licensed commercial launch. Both the Antares and the Falcon 9 launches were conducted under the same NASA Commercial Resupply Services (CRS) program. And just like the Falcon 9, the Antares was part of an expiring line of rockets. Yet, NASA completed and published an executive summary within one year of the Antares incident.

The smell of hypocrisy has never been so potent.

After the report on the Antares accident was released, the explosion was traced to a failure of a turbo pump on an aging AJ26 first stage engine that was originally built for the Soviet Union’s lunar program more than 40 years earlier. Two months after the accident, Orbital announced it would replace the AJ26 engines with newly manufactured RD-181 engines which would require substantial modifications to Antares. The company learned from its mistake, as it should have been expected to do.

The same cannot be said for SpaceX. The only report NASA has made public regarding the Falcon 9 accident was an audit conducted by the agency’s Office of Inspector General. This report focused only on the loss of Dragon on NASA’s resupply program. The audit spent less than one page discussing the cause of the accident without presenting any conclusions.

This glaring hypocrisy between the handling of the Orbital and the SpaceX cases has not gone unnoticed. Rep. Lamar Smith (R-Texas), chairman of the House Committee on Science, Space and Technology wrote a letter just after the SpaceX accident to NASA Administrator, Charles Bolden, expressing his belief that this “discrepancy … raises questions about not only the equity and fairness of NASA’s process for initiating independent accident investigations, but also the fidelity of the investigations themselves.”

The lack of a full investigation into the SpaceX Falcon 9 accident begs the question: Why is SpaceX given such preferential treatment? It appears that NASA is playing favorites with SpaceX. Considering the high risk and astronomical cost of the space program, shouldn’t all those involved be held to the highest standards?

Instead of getting to the bottom of the problems leading up to the SpaceX explosion, NASA responded by giving SpaceX a new long-term contract. The contract included discounted prices for future cargo missions and other “significant considerations,” but it still gives the impression that NASA has chosen to reward failure. The whole process raises questions about how NASA handles launch failure investigations, manages risk for cargo flights, and assigns cargo for those missions — not to mention their standards of accountability to the taxpayers that are funding the space program.

While there is no doubt that SpaceX has implemented some innovative, cost-cutting solutions for NASA, it should not be held to a different set of standards. Over the years, there have been various amendments proposed to completely ban the use of the company’s competition. For instance, in the FY 2018 NDAA, the House Armed Service Committee has proposed limiting funding for Russian rocket engines, as well as funding for new launch vehicles and launch vehicle systems. Competitors like the United Launch Alliance (ULA) are working on new, competitive evolved expendable launch vehicles (EELVs) that use American-made rockets, but the NDAA in its current form would kill their progress and give SpaceX a monopoly.

 

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

Bannon Held Secret Meeting With China’s Second Most Powerful Man

Shortly after Steve Bannon visited Hong Kong last week to give a closed-door speech at a big investor conference hosted by CLSA, a Chinese state-owned brokerage and investment group, Trump’s former strategist flew to Beijing for a “secret meeting with the second most powerful Chinese Communist party official”, less than a month after the former chief White House strategist declared that America was at “economic war with China”, the FT has reported.

The meeting occurred at Zhongnanhai, the Chinese leadership compound, where Bannon meet with Wang Qishan, the head of the Chinese Communist party’s anti-corruption campaign.

“The Chinese reached out to Bannon before his Hong Kong speech because they wanted to ask him about economic nationalism and populist movements which was the subject of his speech,” the FT quoted a “person familiar” with the situation.

Mr Wang, who is seen as the second most powerful person in China after President Xi Jinping, arranged through an intermediary for a 90-minute meeting after learning that Mr Bannon was speaking on the topic, according to the second person, who stressed there was no connection to President Donald Trump’s upcoming visit to China.

As the FT adds, the (not so) secret meeting between Bannon and Wang will “stoke speculation that the Chinese anti-graft tsar, who has purged hundreds of senior government officials and military officers for corruption in recent years, may continue to work closely with Mr Xi during his second term in office.”

Under recent precedent, Mr Wang, who turned 69 in July, would be expected to step down from the Politburo Standing Committee, the Communist party’s most powerful body. But his many admirers argue that as China’s most knowledgeable and experienced financial technocrat, he should stay on to help Mr Xi force through a series of stalled financial and economic reforms.

Incidentally, before his appointment as head of the party’s Central Commission for Discipline Inspection, Wang was Beijing’s point man for Sino-US relations and has played a pivotal role in most of China’s key financial reforms over the past 20 years. And while Wang no longer has an official government position, he has continued to meet regularly with international figures such as former US Treasury secretary Hank Paulson, International Monetary Fund managing director Christine Lagarde and the hedge fund billionaire Ray Dalio. Earlier this week Wang also held an unexpected meeting in Beijing with Singapore’s prime minister, Lee Hsien Loong.

Ironically, while Bannon himself no longer has an official post, many pundits suggest that his influence on Donald Trump is just as expansive now that he has returned to run Breitbart, as it was during his brief tenure on the administration.  During last week’s CLSA conference, Bannon said he left the White House to be Trump’s “wingman” and to campaign on behalf of congressional candidates who would back the president’s “America first” agenda. Furthermore, Bannon has long argued that the US needs to take a tougher economic stance against China, which he argues is responsible for the hollowing out of manufacturing jobs in the US.

To be sure, the topic of bilateral trade between China and the US has become as a core focus for the two nations. After Trump won the election, China frequently approached Jared Kushner to help “navigate the US-China relationship.” But Kushner has taken much less of a role in recent months leaving Rex Tillerson, secretary of state, as point man. While the former Exxon CEO has been leading efforts to get Beijing to put pressure on North Korea, some Chinese experts have expressed concern that the administration does not have a clear point person to handle the relationship with China.

Trade will be a key topic as well this week, when Wilbur Ross, the US commerce secretary who worked closely with Mr Bannon to press for tougher trade measures against China, travels to Beijing to pave the way for Trump’s November summit with Xi. The trip comes as the US struggles to engineer some of the measures against China that Mr Trump talked about during the campaign and after his election. Efforts to impose tariffs on steel and aluminium imports have stalled amid concerns about the effect on the US economy.

In July, Mr Ross asked Mr Trump to consider a deal on reducing Chinese steel overcapacity that he had crafted with Wang Yang, a Chinese vice-premier. But Mr Trump rejected the offer and dismissed a second improved version, telling his commerce secretary that he wanted to find ways to impose tariffs on Chinese goods.

As for what Bannon discussed with Wang during the informal summit, it remains to be disclosed.

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

Does the Colorado River Have Rights?

RiverColoradoFotoeye75Dreamstime“In a first-in-the-nation lawsuit filed in federal court, the Colorado River is asking for judicial recognition of itself as a ‘person,’ with rights of its own to exist and flourish.” So declares a press release from the activist organization Deep Green Resistance. The lawsuit against Colorado’s governor is being filed in federal district court by the Community Environmental Legal Defense Fund (CELDF), which says it “seeks a ruling that the Colorado River, and its ecosystem, possess certain rights, including the right to exist, flourish, evolve, regenerate, and restoration.”

In support of the legal theory that rivers have rights, the suit cites Supreme Court Justice William Douglas’ famous dissent in Sierra Club v. Morton (1972). In that case, the Sierra Club sued to block the Disney company from building a ski resort at Mineral King in the Sequoia National Forest. The majority of the court ruled that the Sierra Club did not have legal standing—that is, that the group failed to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party’s participation in the case. (As it happens, the ski resort was never built anyway.)

In his dissent, Justice Douglas, with considerable legal poetry, argued:

Inanimate objects are sometimes parties in litigation. A ship has a legal personality, a fiction found useful for maritime purposes. The corporation sole—a creature of ecclesiastical law—is an acceptable adversary and large fortunes ride on its cases. The ordinary corporation is a “person” for purposes of the adjudicatory processes, whether it represents proprietary, spiritual, aesthetic, or charitable causes.

So it should be as respects valleys, alpine meadows, rivers, lakes, estuaries, beaches, ridges, groves of trees, swampland, or even air that feels the destructive pressures of modern technology and modern life. The river, for example, is the living symbol of all the life it sustains or nourishes—fish, aquatic insects, water ouzels, otter, fisher, deer, elk, bear, and all other animals, including man, who are dependent on it or who enjoy it for its sight, its sound, or its life. The river as plaintiff speaks for the ecological unit of life that is part of it. Those people who have a meaningful relation to that body of water—whether it be a fisherman, a canoeist, a zoologist, or a logger—must be able to speak for the values which the river represents and which are threatened with destruction.

The CELDF also cites a recently enacted provision in the constitution of Ecuador that confers rights on nature:

Nature, or Pachamama, where life is reproduced and occurs, has the right to integral respect for its existence and for the maintenance and regeneration of its life cycles, structure, functions and evolutionary processes. All persons, communities, peoples and nations can call upon public authorities to enforce the rights of nature.

Let’s just say that the law pertaining to the use of water is complex. I personally prefer common law riparian rights as a way to govern streams, rivers, and lakes. Riparian water rights give landowners along a stream rights to an undiminished quantity and quality of water. Consider the 1913 case Whalen v. Union Bag & Paper, in which a New York Court of Appeals ruled that a million-dollar paper mill employing 500 people did not have the right to pollute the water flowing past Robert Whalen’s 255-acre farm on Kayaderosseras Creek, near Albany, New York. The Court reasoned:

Although the damage to the [farmer] may be slight as compared with the [paper mill’s] expense of abating the condition, that is not a good reason for refusing an injunction. Neither courts of equity nor law can be guided by such a rule, for if followed to its logical conclusion it would deprive the poor litigant of his little property by giving it to those already rich.

It did not matter how much money had been invested or how many jobs were at stake; the paper company had violated Whalen’s right to an undiminished quantity and quality of water flowing past his farm.

In the western United States, the prior appropriation doctrine awarded water rights to individuals on a “first-in-time, first-in-right” basis. Those who first diverted water had first claim on water. State water laws also typically require that rightsholders divert water for use; otherwise, they forfeit it to other users. (In other words, use it or lose it.) Thus state intervention basically stymied the development of water markets that would enable farmers, cities, ranchers, fishers, canoeists, and environmentalists to bargain among themselves on the best ways to manage rivers and streams. The Property Environment Research Center* in Bozeman, Montana, describes how markets enable the nonprofit Scott River Trust in Siskiyou County, California, to lease water from rightsholders in order to maintain instream flows to support salmon runs. There is no need to confer rights on the Scott River when trading transferable rights to water make it possible to protect salmon.

Deep Green Resistance and CELDF have a point in that unowned natural goods are subject to a tragedy of the commons, in which users have an incentive to overexploit and ruin them. But instead of trying to confer rights on nature, the better course is to assign strong property rights to people, so that individual and common owners are empowered to protect resources and environmental amenities.

*Disclosure: I have been the happy beneficiary of grants, conferences, and intellectual enrichment from PERC for many years.

from Hit & Run http://ift.tt/2xoeDDN
via IFTTT

We Read HIllary’s Book So You Don’t Have to: New at Reason

Hillary Clinton’s new book What Happened attempts to explain Trump’s upset victory in 2016 through a series of reasons which are not Hillary Clinton. The gambit runs from apathetic white lady voters to Russian meddling to the inscrutable popularity of Donald Trump. When Clinton’s focus turns to herself, however, she’s light on culpability. She admits she can be guarded, but that admission doesn’t encapsulate the relentless political ambition paired with shady financial dealings and a willingness to subvert national security that turned off much of the country.

In the end Clinton was also just a bad candidate.

In the latest Mostly Weekly Andrew Heaton explores Clinton’s new book, so you don’t have to.

View this article.

from Hit & Run http://ift.tt/2hot0QS
via IFTTT