Chinese youth may have more to worry about than their social credit score. According to the Wall Street Journal, China’s younger generations are loading up on debt like drunken sailors.
And according to the Journal’s Stella Yifan Xie, Shan Li and Julie Wernau, this boost in consumption couldn’t come at a better time for the Chiense economy.
While previous generations were frugal savers—a product of their years growing up in a turbulent economy with a weak social safety net—the more than 330 million people born in China between 1990 and 2009 behave much more like Americans, spending avidly on gadgets, entertainment and travel. –WSJ
The result? China’s economy is receiving a much-needed diversification at a critical juncture – mainly amid pressure from a tariff-driven slowdown thanks to the Trump administration. Beneficiaries of the spending glut include Alibaba Group, Tencent Holdings, and other tech companies according to the report.
The downside – as all to many in the West know – is rising household debt over the past several years as Chinese youth continue to borrow for their purchases. “As household debt climbs, some economists worry the country’s debt burdens overall could become unmanageable and weigh on China’s growth,” according to the Journal.
Nearly a quarter of Chinese car buyers under 30 – a figure expected to rise to around 60% by 2025 according to Volkswagen Group head of market research and customer intelligence, Zhou Ya, who adds that the demographic will be crucial to the company’s success in the country.
Fueling the fire are short-term lenders such as Ant Financial Services Group, which charges up to 16% APR depending on the borrower’s credit.
A 2018 survey in China by Rong360, a loan recommendation website, found that around half of respondents who took out consumer loans were born after 1990.
Most had borrowed from multiple lending platforms, the survey found, and nearly a third took out short-term loans to repay other debts. Nearly half of them had missed payments.
One of the most popular ways to borrow is a Huabei account, a revolving credit line embedded in China’s Alipay mobile payments network. Huabei has extended loans in excess of 1 trillion yuan, or more than $140 billion, since its launch in April 2015, a person familiar with the matter said. Ant Financial, which owns Alipay, declined to disclose any figures related to Huabei.
To avoid catastrophe, some economists say the Chinese will have to rein in household borrowing to sustainable levels. Worst case, a glut of consumer, government and corporate debt could amplify the economic slowdown.
This is worth watching, as rapid growth in consumer credit is often a precursor to financial crises. pic.twitter.com/7MDNi1tunU
According to JPMorgan, China’s ratio of household debt to GDP will reach 61% by 2020, up from 26% in 2010. Currently, this is higher than both Italy and Greece, and could quickly become a full blown crisis if young Chinese workers lose their jobs or see their wages cut. That said, at present default rates on consumer loans appear relatively low.
Right now, over 8.3 million Chinese college students are expected to graduate vs. around six million just 10 years ago, and only 165,000 in 1989. Unfortunately for the glut of new “qualified applicants,” some of China’s largest employers such as e-commerce company JD.com have cut jobs as their growth has stalled.
Where have we heard that one before?
As the U.S. saw in the 2008 financial crisis, default rates can shoot up rapidly when growth slows.
This generation “has no idea what a rainy day feels like,” said Dong Tao, an economist at Credit Suisse in Hong Kong. “Any consumer credit boom will always be tested—no exception,” he says.
He points to mortgage debt as a deepening problem across China’s economy, including for young people. Mortgage debt outstanding grew from $1.1 trillion in the fourth quarter of 2012 to $3.9 trillion as of June.
Mortgages accounted for about a third of China’s medium- to long-term loans, up from 20% in 2012, according to the People’s Bank of China.
The Journal’s case studies in spendthrift Chinese youth sounds a lot like kids in America. First, we meet Liu Biting – who’s operating at the margin and hasn’t yet taken on debt.
Liu Biting, 25 years old, says she spends all of her paycheck each month: 10,000 yuan ($1,400) a month from her marketing job in Shanghai. About a third goes to rent, and the rest on food, her sewing hobby, going out, music and other products. So far, she has avoided falling into debt.
Until recently, one of her monthly expenses was a clothing rental subscription that cost $70 a month. She liked it, she says, because she could “try out a lot of strange clothes.” She discovers makeup brands on a WeChat account she follows that recommends products, many of them local.
“For my parents’ generation, for them to get a decent job, a stable job, is good enough—and what they do is they save money, they buy houses and they raise kids,” she says. “We see money as a thing to be spent.”
Her parents repeatedly ask her how much she has saved in her three years of working. “I say, ‘I’m sorry, probably nothing.’ All my friends are like this. We have no savings and we don’t really care about it.”
Next, we have 24-year-old Wang Xinyu – who says he has about $11,200 in debt spread over six credit cards. Most of Wang’s debt was accrued while he was in college. Now, he earns around $600 per month at a Beijing bookstore – putting “his entire salary toward paying down his debt,” while still relying on credit to pay for food and rent.
Wang Xinyu
“[S]ometimes uses one credit card to pay back another,” according to the report.
Chinese parents, meanwhile, are helping their kids to buy homes – which Tao, the Credit Suisse Economist, sees as a red flag. Japan saw similar multi-generational real-estate purchases in the 1980s, “sometimes with three generations helping to pay for a mortgage,” which may be a sign that the market is overheated.
Shortly thereafter, Japan’s economy took a nosedive and real-estate prices corrected.
What happens in China if your social credit and your financial credit bottom out?
via ZeroHedge News https://ift.tt/2ZDEu77 Tyler Durden
Imagine an organization that can grow an economy as fast it can destroy it. This institution can make presidents kings and then transform them into court jesters. The smartest men in a room situated on 2051 Constitution Ave can choose to increase the value of money in your wallet or make it worth less than single-ply generic brand toilet paper.
Well, this is not a fictitious body found in a dystopian novel. It is right here in the real world. It is the Federal Reserve System. Cue The Twilight Zonetheme song.
William Dudley
Burning Down Trump White House
Former New York Fed Bank President William Dudley recently penned a scathing op-ed on Bloomberg News titled “The Fed Shouldn’t Enable Donald Trump.” Dudley wrote that the central bank should refrain from bailing out Trump on the economy. He believes that the Eccles Building must cease enabling the administration by accommodating policy to Trump’s whims, otherwise, he warns, the country risks re-electing the president next year.
Dudley, who served as NYFRB head from 2009 to 2018, stated that his former employer needs to avoid coming to the president’s aid in his trade war with China. The tit-for-tat dispute has escalated over the last month, though both sides are ostensibly returning to the negotiating table. He explained that the Fed needs to send a clear message that it is Trump, not the Fed, bearing the risks and responsibility of the prolonged trade spat.
But the biggest revelation in Dudley’s piece is how far some people would go to stop Trump earning a second term.
“After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.”
This essentially hints that Fed monetary policy can pick US presidents.
A Nation Reacts
The Fed issued a statement responding to the remarks, noting that it does not use politics as a guide for its decisions. A spokesperson confirmed that it only operates based on its congressional mandate to ensure maximum employment and maintain price stability.
Observers say that Dudley’s comments are inappropriate, and it will be difficult for the incumbent Fed leadership to overcome his proposal when the people are losing confidence in conventional institutions.
While Trump has not tweeted about it, he has continued his lamentations on the central bank. He recently tweeted that the “No Clue FED!” is unable to “mentally keep up” with the other G7 economies.
Soon after the opinion piece was published, Sen. Thom Tillis (R-SC) announced that he will request the Senate Banking Committee to launch a probe into the Fed’s independence. He plans to ask committee chairman Sen. Mike Crapo (R-ID) to convene a hearing about “Fed independence and the danger of this institution taking unprecedented and inappropriate steps to meddle in the presidential election.”
He also told Politico:
“I am very disappointed that former Fed monetary Vice Chairman Bill Dudley is lobbying the Fed to use its authority as a political weapon against President Trump. The President is standing up for America against China after 30 years of our country and our workers being ripped off and there is now an effort to get the Fed to try to sabotage the President’s efforts.”
The senator, who is up for re-election in a swing state next year, should not be surprised.
Independence Is A Myth
Why nobody suggested an investigation decades ago into the Fed’s independence is befuddling.
Despite the mainstream media pearl-clutching about the Trump administration undermining the Fed’s independence, the reality is that it is about as independent as a Greenwich Village hipster following the herd. Liberty Nation has thoroughly documented the cordial and cooperative relationship between the Fed and the White House since the 1930s.
When former President John F. Kennedy requested the central bank to speed up the printing press, Fed Chair William Martin acquiesced, and the national money supply grew by 3%. Former President Richard Nixon wanted to fight stagflation and make inflation seem less intimidating, so Arthur Burns ballooned the money supply by 10% and established the “core” inflation rate. Former President Barack Obama needed to stimulate the economy, so the Fed monetized the debt and expanded its balance sheet to the tune of $4.5 trillion.
But it is a little bit different this time. Now, there might be a civil war brewing inside the Federal Open Market Committee (FOMC): One side may be persuaded to sabotage the president’s re-election bid and the other may heed Trump’s tweets and slash interest rates. The latter seems to be what is occurring with Fed funds futures traders betting on more rate cuts over the next 12 months.
Indeed, the most likely scenario is something similar to that of former Fed Chair G. William Miller, who served under President Jimmy Carter. Miller, an expansionist and inflationist, presided over an exploding money supply that saw the inflation rate reach 14%, causing his successor, Paul Volcker, to dramatically raise interest rates.
The Most Awesome Monetary Force
No matter what happens, it is frightening to know just how much power the Federal Reserve holds. In the US, it is said that the White House is the most powerful office in the land. Considering that the central bank can make or break economies, select presidents, and destroy the value of money, the Federal Reserve is really the most formidable force in the world. Be afraid. Be very afraid.
via ZeroHedge News https://ift.tt/2PpUjyk Tyler Durden
Officials at India’s two main ports warned Thur., that Pakistan-trained commandos are in the vicinity of those ports and are preparing terrorist attacks against vessels, Reuters reported.
The Mundra Port, the largest private port of India located on the north shores of the Gulf of Kutch near Mundra, in the Kutch district, and the state-owned Kandla Port, also located on the Gulf of Kutch, have had government advisories posted at both facilities warning employees and ship operators to be extra vigilant in the weeks ahead for Pakistani terrorists.
We have reported for most of the year about the rising tensions between India and Pakistan on the Line of Control (LoC) in the Himalayan region of Kashmir.
Earlier this month, India revoked the special status of its portion of Kashmir and moved to shut down communications and bring the area to a standstill.
Pakistan responded with cutting trade and transport routes into India and even ejected India’s ambassador.
Both countries almost sparked a massive regional conflict near Kashmir in February/March after Indian aggression led to Pakistan shooting down two Indian Air Force jets.
On Thursday, Pakistan tested new surface-to-surface ballistic missiles, which was viewed as hostile by India.
India has spent the last month moving troops and heavy artillery pieces to the LoC, in preparation for a full out conflict with Pakistan.
In recent weeks, both countries have been involved in cross-border skirmishes along the LoC. If the conflict picks up steam, this could be one of the most dangerous nuclear flashpoints for 2020.
Venu Gopal, secretary of a trust that runs Kandla Port, confirmed the threat to Reuters.
“We’ve reviewed the situation and instructed our security personnel to beef up security at vital installations and vulnerable areas,” he said.
A vessel advisory issued by the Mundra Port told all vessels to “take utmost security measures and maintain a vigilant watch.”
A spokesman for Pakistan’s military told Reuters that “India is trying to divert the attention of the world from Kashmir. There has been no such movement.”
The threat of war between India and Pakistan comes at a time when India’s economy is imploding. The country’s automobile market accounts for more than 50% of the country’s manufacturing output, just had its steepest decline in auto sales since December 2000. Automobile companies, directly and indirectly, employ more than 35 million people, which already, hundreds of thousands of people have been laid off.
The current manufacturing slowdown in India is cyclical and isn’t expected to trough for the next few years. This could mean India would be willing to respond with a shooting war with Pakistan if vessels were blown up at its ports. War is the best fiscal stimulus, and it might be the right prescription to revive India’s crashing manufacturing sector.
via ZeroHedge News https://ift.tt/2MKSWZ5 Tyler Durden
“Lenin said that capitalists would sell the Communists the rope to hang them. But as matters turned out, capitalists let China sell them the labor that served to hang American capitalism.” – Michael Hudson
I was surprised to be given credit by readers for Trump ordering American corporations out of China and to bring the jobs back to the American workers that the corporations had abandoned. American economists, financial media, and Washington policymakers had never paid any attention to my analysis of US economic decline in terms of globalism and the offshoring of US jobs and technology, and I thought readers hadn’t either. Many readers tell me that economics is over their heads. My economic articles are the least read on my website.
I was again surprised when foreign media, including Press TV in far distant Iran, immediately contacted me requesting an interview about my influence on the White House. What does it all mean?
First, I will say that it is possible that someone showed Trump my latest column, and that the light switched on. But it is also possible that Trump ordering the corporations home is just an escalation in his threats and reflects not his understanding but the impotence of tariffs to correct the lack of good jobs for Americans and the decline in their real incomes.
However, in the event a light went on in the White House, and that Trump might be shown how to proceed in bringing the offshored jobs back to America where they belong, I will address the issue. If nothing else, perhaps at some distant time historians of economic thought will write that only Paul Craig Roberts and Michael Hudson had a clue about the collapse of US economic power.
To recap before we move forward.
When the Soviet Union unexpectedly and suddenly collapsed, China and India gave up on socialism and opened their economies to Western capital. The Soviet Union did not collapse because Reagan won the cold war, a goal that Reagan disavowed, but because hardline elements in the Communist Party leadership were concerned that Gorbachev was careless in trusting the Americans and was retreating from the Soviet Empire too cavalierly. To halt the dissolution of the empire that protected Russia from land invasion, the hardline Communists placed President Gorbachev under house arrest. It was this that initiated the collapse that left Yeltsin, a Washington puppet, in charge as Washington dismantled the Soviet Union and proceeded to steal, together with Israel, Russia’s resources.
The conclusion reached by India and China, the countries with the largest populations, was that socialism leads to collapse, but capitalism leads to riches. For the first time the vast under-employed labor resources of the world’s two most populous countries were available for foreign exploitation. The labor could be exploited, that is, paid less than its contribution to output, because an immense over-supply of labor existed in the labor market. The excess supply of labor meant that that a work force could be hired for far less than it contributed to the corporation’s earnings.
Corporate CEOs and directors—and Wall Street—noticed this opportunity to increase profits. The first corporations that rushed into China were disappointed, and the word went out that the opportunity wasn’t as good as it looked. But China worked to make offshored production a lucrative adventure, and manufacturing jobs left the US by the droves. The consequence was that the US Middle Class shrunk, and with it the tax base of states and cities. America ceased to prosper, but the economic hurt was covered up with fake inflation, employment, and GDP growth reports, and Federal Reserve printing of massive amounts of money that propped up the prices of financial assets and real estate.
When the hurt became harder to hide, China was blamed for hurting American workers by exporting too much to America. The people blaming China did not bother to look at the percentage of imports from China that consisted of Apple computers and iPhones, Nike shoes, Levi Strauss jeans, etc. The offshored production of US firms constitutes a large percentage of imports. Goods and services produced by US firms offshore count as imports when they are brought back to the US to sell.
In other words the “Chinese import problem” was in fact the offshored production of US firms brought back to sell to Americans who no longer were involved in the production of the goods and services and, therefore, did not have any income from the production of what they purchased. In contrast, the offshoring corporate shareholders were rolling in money.
India benefited from receiving US IT and software engineering jobs, which could be performed anywhere and the work product sent over the Internet. Indian education and English language skills made it easy for US tech firms to use work visas to bypass US university graduates.
What resulted over the last quarter century was the dismantling of the supply chains and labor force that supported American manufacturing and industry. The once booming factories and industrial sites are closed and run down or converted into condos or apartments.
If Trump can bring the US corporations home, where do they go?
The offshoring era wasn’t a six-month economic recession. It was years when skilled and experienced labor aged and died, and no new entrants learned the skills and work discipline. Today China is a fully developed manufacturing and industrial economy. The United States is not.
For the US corporations to come back home, they have to leave a developed economy in China for a semi-developed or undeveloped one in the US. If they are compelled to do this all at once, they will lose their production in China before they can recreate the plant and equipment, work force, supply chains, and transportation systems essential to renew the US as a manufacturing and industrial power. If you look at the payroll jobs reports, it has been many years since the US created manufacturing and industrial jobs.
A quarter century of capitalist flight from the American work force has left the United States similar to India a half century ago, a country whose jobs consist mainly of lowly paid domestic service jobs. The absence of livable jobs is why so many Americans aged 24-34 cannot live an independent existence and live at home with parents or grandparents. It is why university graduates cannot repay their student loans and have been turned into debt slaves.
In order to bring American corporations home from China, this is what Trump has to do. The transition has to be gradual. The corporations can only phase out their offshored production in China as they can recreate the necessary conditions for producing in the US. The process is, in effect, like bringing development to an undeveloped economy.
Trump, that is, the US government, will have to compensate the corporations for the enormous increase in their labor (and regulatory, liability, etc.) costs associated with again producing for US markets with US labor by changing the way the corporations’ income is taxed. Companies that produce for their domestic market with domestic labor would have a low tax rate. Companies that produce abroad with foreign labor for their US market would have a high tax rate. The difference in the tax rates can be calculated to offset the labor cost differential. Companies that produce abroad for sale abroad would not be affected.
If Trump orders US corporations out of China before they can reconstruct the conditions for manufacturing and industry in the US, the firms will be without sales and revenues and fail.
The question is raised whether Trump can order US firms to leave China and return home.
There are two reasons Trump’s order might be simply rhetoric.
One is that the corporations are content with their existing profits that flow from low cost labor and have no intention of losing the cost savings. US global corporations have the wealth to interfere in US elections and elections in every country in which they have a presence. If Trump goes against the global corporations, he will not receive their campaign funds. His opponent will instead.
Trump can make the argument that the offshoring deal only worked for the corporations, not for the American people. “Free market” economists gave assurances that better jobs would take the place of the manufacturing jobs moved offshore and that offshore production would pay back to the US consumer in lower prices more than the loss of wages from the offshored jobs. This was not the case. Have any of you experienced lower prices of Nike shoes, Levi jeans, Apple computers and iPhones? The corporations did not deliver on the free market promise. They lowered their costs but kept the prices up. Not a single one of the better jobs materialized. Trump will need these arguments to put the corporations on the defensive.
The second reason is that Trump is alleged not to have the power to order US corporations to leave China and to return to their American work force, whatever is left of it. At one time this was probably the case. In 1952 President Truman nationalized the the American steel industry in order to prevent a strike that would have stopped steel production during the Korean War. The Supreme Court ruled against Truman. But today after the extraordinary accumulation of powers in the presidency from the Clinton, George W. Bush, and Obama regimes, and the powers given by Congress to the executive branch to fight “the war on terror,” the president today can rule by executive order.
Trump has cited the 1977 International Emergency Economic Powers Act as law empowering him to order US firms home from China. He has many additional powers. A president who has the power to detain in violation of habeas corpus US citizens indefinitely without evidence presented to a court, and who can order the execution of US citizens on suspicion alone without due process of law, can order whatever he wants.
Based on the powers created by Republicans during the George W. Bush Regime and Democrats during the Obama Regime, President Trump has the power to arrest CEOs and boards of directors that have offshored production on the grounds that they are conspiring with China to steal American jobs and to drive the United States down into the ranks of Third World Countries. A far better case could be made for this than for the absurd Russiagate story that was used to stop Trump from normalizing relations with Russia.
To insure that he has the deep state’s support, all Trump has to do is to remind the US military/security complex that the United States cannot continue to produce the weapon systems necessary to remain as the world’s hegemon unless it can reestablish its manufacturing and industrial capability. Andrei Martyanov in his new book, The Real Revolution in Military Affairs proves that in decisive weapons systems and force integration, the US is completely outclassed by the Russians, and in some respects by the Chinese. Indeed, it is not clear that the US is capable of defeating Iran in conventional war. The parts of many US weapons systems are produced abroad, which raises the question of supply during times of war.
With the backing of the deep state, Trump can order the corporations home.
For years John Whitehead and I have stressed that Washington is creating a dictatorship. If the deep state is on Trump’s side, he becomes a dictator who can dispense with elections and dispense with his opposition. To be clear, not only can Trump do this, but any future president can. The only question is who will be the target? White people? Offshoring corporations who have ruined America for their own profits? Russia? China? Iran?
No, I haven’t gone off the deep end. I am describing for you the extrapolation of the implications of what we are witnessing and living. An American President elected by Americans dispossessed of their jobs and their livelihoods by greed-driven US corporations and faced with unlimited illegal immigration to drive down the wages of the lowly paid jobs that still exist, an American President who, like Ronald Reagan, declared peaceful intentions toward Russia in order to reduce the likelihood of a nuclear war that would destroy all life on Earth—it is this President who is under attack.
Why is the President who wants to restore American jobs and reduce the threat of nuclear war so vehemently opposed by the American presstitute media, the liberal/progressive/left, the Democratic Party, and millions of otherwise doomed Americans? The only reason such an absurd attack on Trump could take place is that the military/security complex was behind it. Otherwise, a president with all the powers that have been accumulated in the presidency over the past quarter century could have arrested his opponents and held them in indefinite detention. Even President Lincoln could do this to 300 Northern newspaper editors during the War of Northern Aggression. Lincoln even exiled a US Congressman who was critical of Lincoln’s invasion of the Confederacy.
Trump is correct that if the US is to remain a world power, it is necessary to restore manufacturing and industrial capability. If the US is to absorb the massive number of third world peoples it has admitted, it is necessary to restore middle class jobs and the ladders of upward mobility.
The way Trump should proceed is to explain to the corporations that they have inflated their profits in the near term at the cost of destroying consumer purchasing power, and thereby their sales, in the longer term. Americans whose real incomes are not rising do not have the discretionary purchasing power with which to purchase the goods and services that provide revenues to US corporations. Of course, the CEOs and directors are not here in the longer run, and they might not care. But a president can make it a patriotic issue and put them on the spot.
Next Trump needs to work with the corporations to alter the way they are taxed and to recreate the conditions necessary to restore manufacturing in the US. This is not a simple task. It requires cooperation, not conflict.
In the meantime immigration must be put on hold as there is no economy to absorb the immigrants, and Washington needs to stop its wars. The associated costs, debt, and risks are far greater than the benefits. If the US does not reverse its course, it will end up an undeveloped country. This is a far greater threat to us than alleged dictators and alleged terrorist-supporting states in the Middle East.
Here is my 8 minute, 44 second interview with Press TV:
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“Like all teenagers, S.K. sought to impress and humor her closest friends. During the 2016–17 school year at Maurice J. McDonough High School in Charles County, Maryland, the 16-year-old female maintained a group chat on her cellphone for text messages with her best high school friends, A.T., another sixteen-year-old female, and K.S., a seventeen-year-old male. The group chat was used, among other things, to send silly photos and videos in an effort to “one-up” each other. The trio hung out together and trusted one another to keep their group messages private.
As part of the “one-up” competition, S.K. sent a one-minute video of herself performing fellatio on a male. Later in the school year, when there was a falling-out among the trio of friends, the video was distributed to other students at the school and shared with the school resource officer.
For reasons that elude me, the State’s Attorney for Charles County MD thought this warranted filing a juvenile petition alleging criminal charges against S.K. for violating Maryland’s prohibition against distributing child pornography, and the prohibition against distributing “obscene” material to a minor [Maryland Code, Criminal Law §11-207(a)(4) and §11-203(b)(1)(ii) respectively].
“… a person may not knowingly distribute any matter, visual representation, or performance . . . that depicts a minor engaged as a subject in . . . sexual conduct” (defined as “(1) human masturbation; (2) sexual intercourse; or (3) whether alone or with another individual or animal, any touching of or contact with: (i) the genitals, buttocks, or pubic areas of any individual; or (ii) breasts of a female individual”) (§11-207);
and
“… a person may not willfully or knowingly display or exhibit to a minor an item: . . . (i) principally made up of an obscene description or depiction of illicit sex; or (ii) that consists of an obscene picture of a nude or partially nude figure” (§11-203)
The juvenile court found S.K. to have been “involved” in criminal activity—that is, that she committed “a delinquent act which would be a crime if committed by an adult.” She was then “placed on electronic monitoring until June 9, 2017” and placed on “supervised probation” administered by the Department of Juvenile Services, which was subject to several terms and conditions such as:
reporting to the Probation Officer;
obtaining permission before changing her home address or leaving the State;
permitting the Probation Officer to visit her home;
submitting to weekly drug urinalysis;
attending and completing anger management class;
submitting to a substance abuse assessment and following any recommendations …
All this notwithstanding the fact that the conduct depicted in the video was (a) her own, (b) entirely consensual, and (c) completely legal in Maryland (for anyone 16 years old or older).
S.K. appealed her conviction, but the court upheld it. Relying entirely on the “plain language” of the statutes quoted above, it found that the statutory language does not exempt a minor who is a participant in the sex act being depicted from being a “‘person’ who is a distributor of child pornography [under 11-207] and a displayer of obscene matter [under 11-203].” Putting it “more dramatically,” the court held that “a minor legally engaged in consensual sexual activity [can] be his or her own pornographer through the act of sexting.”
Here, S.K is prosecuted as a “child pornographer” for sexting and, because she is a minor, her actions fell directly within the scope of the statute. … As written, the statute in its plain meaning is all encompassing, making no distinction whether a minor or an adult is distributing the matter.
It’s a dreadful result—dreadful for S.K., who now has a criminal record, and dreadful as a matter of principle. According to the court, over 18% of middle and high schoolers in Maryland report having sent or received sexually explicit material, and singling out S.K. for special punishment seems cruel to me. Furthermore, as the lone dissenting judge (Hotten) pointed out, these statutes are clearly designed for the dual purpose of “addressing child pornography trafficking and preventing the sexual exploitation and abuse of minors”—neither of which is remotely implicated on these facts.
To be fair, the court itself clearly indicated that it felt hamstrung by the statutory language, and that the Maryland legislature should amend the relevant statutes to remove the prospect of criminal liability in circumstances like these:
“We do not find any ambiguity in this text and, therefore it is our duty to interpret the law as written and apply its plain meaning to the facts before us. In affirming this adjudication, however, we recognize that there may be compelling policy reasons for treating teenage sexting different from child pornography…. Although the majority of states have passed legislation to amend their child pornography statute relative to sexting, Maryland is one of twenty-one states that have not passed any such legislation and thus permit teenagers to be charged under the child pornography statute…. In response to this case, legislation was introduced in the 2019 Legislative Session that was not passed but in light of these policy concerns, such legislation ought to be considered by the General Assembly in the future.”
And speaking of “plain meaning,” the finding by the juvenile court that S.K. was “involved in a delinquent act which would be a crime if it were committed by an adult” seems clearly wrong, just on semantic grounds: if S.K. were an adult, a video of her own sexual act would not constitute “child pornography” (obviously—because it would depict adult conduct), and therefore she would not be criminally liable for distributing it to others.
The only good news for S.K. in all this is that she was not ordered to register as a sex offender with the Maryland Sex Offender Registry. Although the criminal activity she was found to have engaged in ordinarily requires registration (and all of the attendant collateral disabilities regarding housing, movement, employment, etc. that attend classification as a “sex offender”), Maryland (thankfully) permits juvenile court judges to forego the requirement for juveniles. That would really have ruined her life, for no good reason at all.
Hopefully, the Maryland legislature will clear this up—if S.K. were the daughter of a legislator, my guess is they’d get right on this.
[h/t to Paul Levy for calling my attention to this case]
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Who said higher taxes and higher real estate prices were a virtue?
…because that doesn’t seem to be the case in New York City. In fact, people are fleeing the New York City area in droves, according to Bloomberg. New York City leads all US metro areas as the largest net loser with an estimated 277 people moving out of the area every single day. This is more than twice the 132 people the number stood at one year ago. Los Angeles and Chicago both have also seen a triple digit net loss of 201 and 161 residents leaving, respectively.
These numbers are according to 2018 census data on migration flows to the largest 100 US metropolitan areas. These migration figures do not take into account the natural increase in population, which is the net of all live births and deaths.
On the other side of the coin, cities like Dallas, Phoenix, Tampa, Orlando, Atlanta, Las Vegas and Austin all saw substantial inflows as a result of both domestic and international migration. Houston and Miami also saw enough inflows to rank them eighth and ninth, while Seattle rounded out the top 10 and was the only cold weather destination on the list.
In 10 of the top 100 metro areas, deaths exceeded births. Five of these of these locations are in Florida and, without migration, the cities would be shrinking in size. In 11 more cities, mostly in Utah and Texas, there were twice as many births as deaths. Provo, for instance, had a 5 to 1 birth to death ratio.
Migration came from both international and domestic channels. The international portion is the difference between those moving from outside the country and those leaving the country. And domestic migration is made up of those who move from another part of the country and subtracts those who leave for other areas of the country.
The blow from people leaving New York has been somewhat softened by international migrant inflows. Close to 200,000 New Yorkers sought to move out of the area between July 2017 and July 2018, but, during this time, the area welcomed almost 100,000 net international migrants. The second most attractive location for international migrants was Miami, which added 93,000 of them. These locations were followed by Los Angeles, Houston and Boston.
Phoenix was the greatest beneficiary of domestic migration, passing Dallas and adding more than 62,000 residents between July 1, 2017 and July 1, 2018. Dallas saw an influx of 46,000 domestic migrants while Las Vegas, Tampa and Austin rounded out the top five.
Some of the reasons that many residents continue to leave New York are the high home prices and local taxes. The same issues are also deterring people from moving to places like Los Angeles and Chicago.
In places like Hartford, Bridgeport and New Haven, Connecticut, close to 20,000 residents left last year. Places like Colorado Springs, Boise and Charleston reported more than 10 times as many domestic net movers as international arrivals. Among the 100 most populous metro areas, 28 shrank in total net migration, all due to negative domestic migration. Of the 72 areas that posted gains, 18 lost residents to domestic areas and had international migration to thank for their gains.
via ZeroHedge News https://ift.tt/32mvWDv Tyler Durden
“Like all teenagers, S.K. sought to impress and humor her closest friends. During the 2016–17 school year at Maurice J. McDonough High School in Charles County, Maryland, the 16-year-old female maintained a group chat on her cellphone for text messages with her best high school friends, A.T., another sixteen-year-old female, and K.S., a seventeen-year-old male. The group chat was used, among other things, to send silly photos and videos in an effort to “one-up” each other. The trio hung out together and trusted one another to keep their group messages private.
As part of the “one-up” competition, S.K. sent a one-minute video of herself performing fellatio on a male. Later in the school year, when there was a falling-out among the trio of friends, the video was distributed to other students at the school and shared with the school resource officer.
For reasons that elude me, the State’s Attorney for Charles County MD thought this warranted filing a juvenile petition alleging criminal charges against S.K. for violating Maryland’s prohibition against distributing child pornography, and the prohibition against distributing “obscene” material to a minor [Maryland Code, Criminal Law §11-207(a)(4) and §11-203(b)(1)(ii) respectively].
“… a person may not knowingly distribute any matter, visual representation, or performance . . . that depicts a minor engaged as a subject in . . . sexual conduct” (defined as “(1) human masturbation; (2) sexual intercourse; or (3) whether alone or with another individual or animal, any touching of or contact with: (i) the genitals, buttocks, or pubic areas of any individual; or (ii) breasts of a female individual”) (§11-207);
and
“… a person may not willfully or knowingly display or exhibit to a minor an item: . . . (i) principally made up of an obscene description or depiction of illicit sex; or (ii) that consists of an obscene picture of a nude or partially nude figure” (§11-203)
The juvenile court found S.K. to have been “involved” in criminal activity—that is, that she committed “a delinquent act which would be a crime if committed by an adult.” She was then “placed on electronic monitoring until June 9, 2017” and placed on “supervised probation” administered by the Department of Juvenile Services, which was subject to several terms and conditions such as:
reporting to the Probation Officer;
obtaining permission before changing her home address or leaving the State;
permitting the Probation Officer to visit her home;
submitting to weekly drug urinalysis;
attending and completing anger management class;
submitting to a substance abuse assessment and following any recommendations …
All this notwithstanding the fact that the conduct depicted in the video was (a) her own, (b) entirely consensual, and (c) completely legal in Maryland (for anyone 16 years old or older).
S.K. appealed her conviction, but the court upheld it. Relying entirely on the “plain language” of the statutes quoted above, it found that the statutory language does not exempt a minor who is a participant in the sex act being depicted from being a “‘person’ who is a distributor of child pornography [under 11-207] and a displayer of obscene matter [under 11-203].” Putting it “more dramatically,” the court held that “a minor legally engaged in consensual sexual activity [can] be his or her own pornographer through the act of sexting.”
Here, S.K is prosecuted as a “child pornographer” for sexting and, because she is a minor, her actions fell directly within the scope of the statute. … As written, the statute in its plain meaning is all encompassing, making no distinction whether a minor or an adult is distributing the matter.
It’s a dreadful result—dreadful for S.K., who now has a criminal record, and dreadful as a matter of principle. According to the court, over 18% of middle and high schoolers in Maryland report having sent or received sexually explicit material, and singling out S.K. for special punishment seems cruel to me. Furthermore, as the lone dissenting judge (Hotten) pointed out, these statutes are clearly designed for the dual purpose of “addressing child pornography trafficking and preventing the sexual exploitation and abuse of minors”—neither of which is remotely implicated on these facts.
To be fair, the court itself clearly indicated that it felt hamstrung by the statutory language, and that the Maryland legislature should amend the relevant statutes to remove the prospect of criminal liability in circumstances like these:
“We do not find any ambiguity in this text and, therefore it is our duty to interpret the law as written and apply its plain meaning to the facts before us. In affirming this adjudication, however, we recognize that there may be compelling policy reasons for treating teenage sexting different from child pornography…. Although the majority of states have passed legislation to amend their child pornography statute relative to sexting, Maryland is one of twenty-one states that have not passed any such legislation and thus permit teenagers to be charged under the child pornography statute…. In response to this case, legislation was introduced in the 2019 Legislative Session that was not passed but in light of these policy concerns, such legislation ought to be considered by the General Assembly in the future.”
And speaking of “plain meaning,” the finding by the juvenile court that S.K. was “involved in a delinquent act which would be a crime if it were committed by an adult” seems clearly wrong, just on semantic grounds: if S.K. were an adult, a video of her own sexual act would not constitute “child pornography” (obviously—because it would depict adult conduct), and therefore she would not be criminally liable for distributing it to others.
The only good news for S.K. in all this is that she was not ordered to register as a sex offender with the Maryland Sex Offender Registry. Although the criminal activity she was found to have engaged in ordinarily requires registration (and all of the attendant collateral disabilities regarding housing, movement, employment, etc. that attend classification as a “sex offender”), Maryland (thankfully) permits juvenile court judges to forego the requirement for juveniles. That would really have ruined her life, for no good reason at all.
Hopefully, the Maryland legislature will clear this up—if S.K. were the daughter of a legislator, my guess is they’d get right on this.
[h/t to Paul Levy for calling my attention to this case]
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Like the twentieth-century Cold War between the United States and the Soviet Union, the new rivalry between China and the West is a contest between fundamentally incompatible political systems. And the idea that freedom and democracy will prevail can no longer be taken for granted.
With the 30th anniversary of the fall of the Berlin Wall approaching, the issue of freedom has returned to the fore in Moscow and Hong Kong, albeit under very different historical and political circumstances. We are reminded that the modern era was built on freedom, and on the recognition that all people are born equal. This radical Enlightenment idea, when it took hold, constituted a break from all previous history. But times have changed. In the twenty-first century, we are confronted with a fundamental question: Could a modernized form of authoritarianism represent an alternative to liberal democracy and the rule of law?
In 1989, the obvious answer to that question would have been no, not just in the West but around the world. Since then, however, we have witnessed the revival of nationalism in Europe, the failure of the Arab Spring, the election of US President Donald Trump, Russia’s relapse into revanchism, and the emergence of a global China. Now, all bets on liberal democracy are off.
China’s emergence as a second military, economic, and technological superpower suggests that there is now an alternative development model. In modern China, the rule of law and democracy are regarded as a threat to one-party rule. Hence, the ongoing protests for freedom and democratic accountability in Hong Kong expose a division not just between two normative frameworks, but between two systems of political power.
For a while, China appeared to have found a formula for bridging this divide. The principle of “one country, two systems” was supposed to allow for the orderly reintegration of Hong Kong and (more aspirationally) Taiwan. Should this formula now fail in Hong Kong, there will be an immediate escalation of military tensions across the Taiwan Strait, because the island’s continued special status will become impossible for the Chinese government to accept or ignore.
Still, the formula has indeed worked so far. Hong Kong has become extraordinarily important to the Chinese economy, because it provides access to global capital markets and serves as a financial gateway for inward foreign direct investment. And the relationship with Taiwan has, for the most part, remained relatively quiet.
The arrangement with Hong Kong worked because the government in Beijing showed ample consideration for the city’s semiautonomous status. But as China has grown stronger, its perception of itself as a new global superpower has produced a change in behavior. The Chinese authorities are exerting ever more influence in Hong Kong, suggesting that they want to move in the direction of “one country, one system.”
The proposed law (since suspended) to enable the extradition of people arrested in Hong Kong to mainland China was widely seen as a threat to democracy and the rule of law in the former British colony. The authorities in Beijing know perfectly well that this attempt to weaken Hong Kong’s autonomy – not covert operations by foreign intelligence services – is why millions of people have taken to the city’s streets.
Given the current power structures in China (and Russia), the mass protests this summer in Hong Kong (and Moscow) have little to no chance of success in the short term. Yet they are significant nonetheless, because they provide a foil for the democratic malaise that has spread throughout the West.
More broadly, the division of the world into two systems immediately brings back memories of the Cold War. But in that conflict, the main issue was military strength – hence the centrality of the nuclear-arms race. When it came to living standards, the Soviet Bloc never really had a chance (as was obvious in the so-called Kitchen Debate between then-US Vice President Richard Nixon and the Soviet leader, Nikita Khrushchev, in 1959).
The competition with China, however, will be precisely about the question of which system delivers more in terms of technological and material progress. China’s ascent from a poverty-stricken developing country to an economic powerhouse is one of the greatest achievements of the modern era. Millions of people have been lifted out of poverty and into a growing consumption-oriented middle class, and millions more could soon follow them.
At the same time, although China has been building up its military, it has not exerted force beyond its immediate neighborhood, unlike the Soviet Union. When China pursues its strategic interests in Africa and Eastern Europe, it does so through economic and financial means. It owes its growing global influence not to its military, but to its economy and its growing capacity for rapid technological innovation. For the West, the “Chinese Challenge,” then, is to show that its model of democracy is still better suited than Eastern-style authoritarianism for the majority of humankind.
In this larger contest, US President Donald Trump is something of a Chinese Trojan Horse. Although he is waging an aggressive trade and technology war against China, he is also doing everything he can to undermine the credibility of the Western model. In historical terms, his attacks on democracy will prove far more consequential than his tariffs. Making matters worse, Europe, with its obvious economic weaknesses and geopolitical naiveté, is also failing to marshal a defense of the Western model.
At this stage, China’s ascent cannot be prevented. The country is simply too large and too strong to be boycotted or contained; at any rate, the Chinese people’s desire to share in global prosperity is entirely legitimate. The West has little choice but to maintain good relations with the new superpower, while at the same time defending its values. The rise of China – and of the Chinese system – will inevitably create more competition, and these new rivalries must be handled peacefully at all costs. A world with eight billion people cannot afford a global conflict.
Whether China’s model of authoritarian modernization can succeed in the long term is a question for future generations of Chinese. Those with no memories of past horrors such as the Cultural Revolution may simply regard the Chinese model as a matter of course. But the modern age was built on liberty.
As we have seen in this summer in Hong Kong and Moscow, that lesson will not be forgotten anytime soon.
via ZeroHedge News https://ift.tt/2Ztilgm Tyler Durden
Fox News host and longtime Trump pal Jeanine Pirro has come under fire by Media Matters and Salon for suggesting that Democrats hate Trump and his supporters because their ‘plot to remake America’ has been disrupted.
During a Wednesday appearance on “The Todd Starnes” show on Fox Nation, Pirro said:
“I’ve often wondered, who do they hate more?” Starnes asked Pirro. “Do they hate Donald Trump? Or do they hate the people who put him into office?”
“Well, they hate Donald Trump. He’s the one they want to get rid of, because people like you and me who put him into office — their plan and their plot to remake America is to bring in the illegals, change the way the voting occurs in this country, give them licenses,” said Pirro. “They get to vote, maybe once, maybe twice, maybe three times, and you know, you’ve got motor-voter registration on the day of the election. You’ve got people with — We’ve got voter rolls that haven’t been purged of dead people in years where the Democrats have resisted that.”
“Think about it,” Pirro added. “It is a plot to remake America — to replace American citizens with illegals who will vote for the Democrats.“
According to Salon, Pirro’s comments were quickly spun into an ’embrace of the white supremacist “great replacement” conspiracy theory’ used by the El Paso, Texas shooter.
Pirro’s words mirrored the rhetoric of the accused El Paso shooter, who wrote in a racist screed that “this attack is a response to the Hispanic invasion of Texas.” The shooter directly echoed President Trump‘s repeated warnings of “an invasion” at the border ahead of the 2018 midterm elections. According to this theory, which has become a core tenet of white supremacist ideology of white supremacy, nonwhite immigrants are somehow “replacing” white people.
“The [El Paso] suspect wrote that his views ‘predate Trump,’ as if anticipating the political debate that would follow the blood bath,” Peter Baker and Michael D. Shear wrote in the New York Times after the massacre. “But if Mr. Trump did not originally inspire the gunman, he has brought into the mainstream polarizing ideas and people once consigned to the fringes of American society.” –Salon
Yet another case of wrongthink. We can only imagine, applying the same logic, that Bernie Sanders is embracing the murder of tens of millions by espousing socialist views.
Via Media Matters:
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There is no doubt that Jim Comey was part of a conspiracy to destroy Donald Trump and his Presidency. But all the evidence is not yet on the record.
There is some understandable frustration reverberating around the web that Comey is not being indicted in the wake of the latest Inspector General report detailing Jim Comey’s inappropriate and unethical handling of Government material. But that is not the role of the Inspector General. It is up to DOJ to prosecute and a careful reading of the current report makes clear that there was not adequate foundation to get an indictment and prosecute.
However, if you believe that Jim Comey is getting a pass and will get away with corrupt activity, let me suggest you are overreacting and that patience is warranted. Comey is not out of the woods.
My only previous experience with Bill Barr was the role he played in making sure that the two guys who planted the bomb on Pan Am 103 were prosecuted. Barr was a straight shooter and would not cut corners. I also am friends with a person who worked directly for him during that period. That person insists that Barr is not going to let Comey and Brennan and Clapper off the hook. But that person also has reminded me that Barr will do it by the book and do it fairly.
With that predicate, I want you to focus on the core of yesterd=day’s Inspector General report. It is very simple and concise:
The focus of the OIG’s investigation was to determine whether Comey violated Department or FBI policies, or the terms of his FBI Employment Agreement, in his handling of the Memos during and after his tenure as FBI Director.
Memos 2 and 7 contained small amounts of information classified at the “CONFIDENTIAL” level. The FBI designated Memos 4, 5, and 6 as unclassified, “For Official Use Only.”
Comey was removed as FBI Director on May 9, 2017, Comey still had copies of Memos 2, 4, 6, and 7 in his personal safe at home.
[t]he Inspector General Act of 1978, the OIG provided a copy of [these] factual findings to the Department for a prosecutorial decision regarding Comey’s conduct. . . After reviewing the matter, the Department declined prosecution.
As described in this report, we conclude that Comey’s retention, handling, and dissemination of certain Memos violated Department and FBI policies, and his FBI Employment Agreement.
I repeat, Comey violated Department of Justice and FBI policies and violated his FBI Employment Agreement. If he had taken classified memos home and stored them then he would have been indicted. But he did not engage in criminal activity with respect to classified information. He consciously and deliberately took steps to not keep classified information at his house. This is quite different from the conduct of Hillary Clinton, who knowingly and intentionally kept classified information on her unclassified, private server.
Jim Comey is stupidly taking a victory lap over this report and insisting that he is vindicated. I once considered Comey to be a smart person. Clearly he is not. He just pretends to be. His behavior today reveals an immaturity and hubris that confirms why he was fired in the first place as FBI Director.
This is the second Inspector General report that blasts Comey for unprofessional and unethical conduct. Being unprofessional and unethical is not illegal and does not guarantee a prison term.
The Inspector General is building a clear body of evidence that Jim Comey routinely and frequently violated Department of Justice and FBI policies and procedures. I want you to recall what the Inspector General said about Jim Comey and his July 2016 press conference on the Hillary Clinton investigation:
We determined that Comey’s decision to make this statement was the result of his belief that only he had the ability to credibly and authoritatively convey the rationale for the decision to not seek charges against Clinton, and that he needed to hold the press conference to protect the FBI and the Department from the extraordinary harm that he believed would have resulted had he failed to do so.
While we found no evidence that Comey’s statement was the result of bias or an effort to influence the election, we did not find his justifications for issuing the statement to be reasonable or persuasive. We concluded that Comey’s unilateral announcement was inconsistent with Department policy and violated long-standing Department practice and protocol by, among other things, criticizing Clinton’s uncharged conduct. We also found that Comey usurped the authority of the Attorney General, and inadequately and incompletely described the legal position of Department prosecutors.
We found no evidence that Comey’s decision to send the October 28 letter was influenced by political preferences…
Much like with his July 5 announcement, we found that in making this decision, Comey engaged in ad hoc decisionmaking based on his personal views even if it meant rejecting longstanding Department policy or practice. We found unpersuasive Comey’s explanation as to why transparency was more important than Department policy and practice with regard to the reactivated Midyear investigation while, by contrast, Department policy and practice were more important to follow with regard to the Clinton Foundation and Russia investigations.
Comey’s description of his choice as being between “two doors,” one labeled “speak” and one labeled “conceal,” was a false dichotomy. The two doors were actually labeled “follow policy/practice” and “depart from policy/practice.”
…we found it extraordinary that Comey assessed that it was best that the FBI Director not speak directly with the Attorney General and Deputy Attorney General about how best to navigate this most important decision and mitigate the resulting harms, and that Comey’s decision resulted in the Attorney General and Deputy Attorney General concluding that it would be counterproductive to speak directly with the FBI Director.
Why in the world does Jim Comey celebrate being known as the FBI Director who routinely departed from DOJ and FBI policy and practice. He did not follow the rules. He made up rules to suit his personal fancy. The fact that Comey thinks this is a worthy trait tells us everything we know about his lack of character and integrity.
Another critical Inspector General report on Russiagate is still pending and Comey faces great danger on this front. This one will cover the FBI’s conduct with respect to the FISA warrant process. There is no doubt that Jim Comey lied to the FISA court in asserting that the information derived from the Steele Dossier was true and verified. But he will not be alone in this finding. Lying to a Federal court is a charge with weight and teeth. That is still hanging over Comey’s head.
I think DOJ did the right thing in not trying to prosecute Comey over the memo’s he drafted. It is a nuanced process crime and would be tough to present to a jury. Lying about the FISA warrant is completely different and more profound.
Barr’s Department of Justice should prosecute Comey and others on that issue. If they do not, then the cause of justice in our Republic will be dead. It is that simple. Justice is supposed to be blind in terms of not having a preconceived conclusion about guilt or innocence. This also means that your status and wealth should not provide you protection against being held accountable for illegal acts. The jury remains out with respect to what Attorney General Barr will do. I still give him the benefit of the doubt.
via ZeroHedge News https://ift.tt/2ZzEadD Tyler Durden
