Pandemic Crushes Coffee Futures To Near 15-Year Low

Pandemic Crushes Coffee Futures To Near 15-Year Low

Tyler Durden

Sun, 06/28/2020 – 07:35

Coffee fundamentals indicate deteriorating demand and oversupplied conditions could soon pressure prices to 15-year lows. 

A global surplus of 3.5 million bags is expected in 2020-21 as Brazil expects a record crop after a lower yield in 2019. To some degree, this had been anticipated by the market.

Adding to concerns about a bulging supply imbalance, the Brazilian real has dropped 5% in the last few weeks versus the U.S. dollar. Coffee farmers in Brazil who fear continued real weakness are incented to deliver more and more coffee for export, even at the current low prices.

Expectations for demand growth, the one positive variable that had supported price increases, have been dialed back in light of the global pandemic. Recent data from the International Coffee Organization revealed global arabica coffee exports of 82.75 million bags in 2019, a six percent increase over 2018, and growth had been expected to continue in 2020 until lockdowns tempered the optimism. – a Charles Schwab commodity report said, seen by FXStreet

Now knowing the bearish fundamental backdrop, Reuters Commodity Desk forecasts a significant downward wave (c) ” that could result in coffee prices reaching $0.6380 per lb in the first half of 2021. 

New York coffee may seek a support zone of $0.8760-$0.9110 per lb next quarter, to stay around this range or bounce moderately towards $1.08 before dropping again.

The support at $0.9110 is provided by the 76.4% projection level of a downward wave (c) from $1.7955. This wave is capable of traveling to $0.6380.

However, the support triggered a decent bounce in May 2019, which lasted until December 2019. This barrier is likely to cause another weaker bounce.

It must be noted that the calculated projection levels are not perfect. There might be a brief piercing below $0.9110. The expected bounce may not occur until coffee finds a lower support at $0.8760, the May 2019 low.

Probably, the second bounce will be limited to $1.08. Based on this outlook, coffee may be mostly rangebound between $0.8760 and $1.08 in the third quarter. A fall below $0.8760 could be extended into the range of $0.6380-$0.7955.

A detailed study on the daily chart reveals the progress of a downward wave C from $1.2905, which may eventually travel to $0.8615, its 100% projection level, very close to $0.8760.

Resistance is at $1.0255, a break above which could suggest an earlier-than-expected development of the bounce towards $1.08.

– Reuters Commodity Desk 

Virus pandemic crushing demand, oversupplied conditions, and no V-shaped global economic rebound has likely resulted in the great coffee bust of the early 2020s

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Taking The PiS… Trump Embraces Poland To Spite Germany And Russia

Taking The PiS… Trump Embraces Poland To Spite Germany And Russia

Tyler Durden

Sun, 06/28/2020 – 07:00

Authored by Finian Cunningham via The Strategic Culture Foundation,

President Trump laid out his rationale while hosting his Polish counterpart at the White House. President Andrzej Duda who is allied with the ruling Law and Justice Party (PiS) was on his third visit to the White House this week since Donald Trump took office. He is the first foreign leader to be received in Pennsylvania Avenue since the pandemic lockdown.

For such an honor, Trump readily explained that the purpose of his Polish embrace was to spite both Germany and Russia. He confirmed the planned removal of U.S. troops from German soil, which he announced last week, and said some of those units would be going to Poland.

“We’re going to be reducing our forces in Germany. Some will be coming home and some will be going to other places, but Poland would be one of those other places,” said Trump at a press briefing at the White House with Duda.

He said that would send “a very strong signal to Russia”.

The Kremlin responded that such a move would violate the 1997 Russia-NATO Founding Act. Moscow has previously protested deployment of U.S. troops in Poland on a rotational basis. Now the American forces seem to be setting up permanent bases.

Trump repeated his accusation that Germany was “delinquent” in its military spending on the NATO alliance.

“Poland is one of the few countries that are fulfilling their obligations under NATO, in particular their monetary obligations,” said Trump.

“And they asked us if we would send some additional troops. They’re going to pay for that. They’ll be paying for the sending of additional troops, and we’’ll probably be moving them from Germany to Poland. We’re going to be reducing Germany very substantially.”

The American president was referring to an arbitrary spending target of 2 per cent of national economy for NATO members. Germany allocates about 1.3 per cent, although it has dramatically increased its military spending over the past two years. However, that is still not enough for Trump who has repeatedly chided Berlin for seeking protection from the U.S. while allegedly not paying its dues.

Poland is one of eight NATO members in the 30-nation military alliance that does meet the 2 per cent spending target, although in absolute monetary terms its annual military budget is only about a quarter of Germany’s ($50 billion).

Trump is also known to have a sour relationship with German Chancellor Angela Merkel. Her refusal in May to attend a proposed G7 summit in Washington was seen as a snub to Trump. Tellingly, his surprise move to pull U.S. troops out of Germany then followed that spat.

The initial White House report to withdraw some 9,5000 American soldiers stationed in Germany out of a total of 35,000 blindsided politicians in Berlin. The Pentagon also seemed to not have been consulted by Trump. The hasty move smacked of vindictiveness by Trump, intent on insulting the Germans. Certainly, the horrified reaction from the Berlin establishment showed that Trump had hit where it hurts.

Hosting the Polish president at the White House this week and moving ahead with the proposed U.S. troop relocation is further rubbing Germany’s nose by Trump. The two leaders signed a “defense cooperation agreement”.

“Today we are entering another stage, namely there is a possibility of further increase in American troops in our country,” Duda said.

It’s not clear exactly how many U.S. forces are heading to Poland. Reports indicate it could be about 2,000 troops as well as up to 30 F-16 fighter jets. That’s still a lot less than the number Trump is planning to pull out of Germany. Nevertheless, it is hugely symbolic.

Germany was traditionally the European base for U.S. forces since the end of World War Two. Poland, a former Warsaw Pact member, then joined the U.S.-led alliance in 1999 following the breakup of the Soviet Union. Twenty years later, it is set to host U.S. troops in permanent bases. Trump’s cozying up to Warsaw is therefore grooming Poland as the new European base for American forces. (Whether the Pentagon buys into that in the long-term is another question.)

The Law and Justice (PiS) government in Poland together with President Duda have long appealed to Washington to station U.S. troops in their country. That appeal fits their intensely Russophobic narrative accusing Russia of “aggression”. Duda and PiS have set about rewriting the history of World War Two in which Nazi Germany is equated with the Soviet Union. The defeat of the Nazi Reich by the Red Army and liberation of Poland and other nations is furiously denied by the Warsaw government.

Trump has very much played into that discreditable narrative. In a speech delivered in Warsaw in July, 2017, Trump conflated Nazi occupation with claims of the Soviet Union’s “brutal campaign to demolish freedom”.

By sending U.S. troops and warplanes to bases in Poland which borders Russia’s territory of Kaliningrad, Trump is indulging Warsaw’s persecution complex about alleged Russian aggression. Last month, Poland officially declared Russia as its “biggest security threat”.

The added rationale for Trump’s troop maneuver appears to be his umbrage over Germany buying much of its energy supply from Russia instead of from the U.S. He pointedly linked the relocation of American troops from Germany to Poland with the Nord Stream 2 gas pipeline from Russia to Germany.

Trump said:

“It sends a very strong signal to Russia, but I think a stronger signal sent to Russia is the fact that Germany is paying Russia billions of dollars to purchase energy from Russia through the pipeline.”

However, he added:

“With all that being said, we expect to get along with Russia. We expect to get along with everybody.”

The Kremlin warned earlier this month against additional U.S. forces going to Poland. “Whatever military potentially ends up threatening us from Polish territory, the relevant Russian government structures will take comprehensive measures in response,” said deputy Foreign Minister Vladimir Titov.

Trump is foolishly toying with strategic interests for short-term tactical gains and petty vanity. He is pandering to Polish reactionary politics to offend both Germany and Russia. But this president doesn’t have a clue about the monster of reactionary forces in Poland that he is fomenting. His instinctive money-grubbing rush for profit and petty score-settling is massively destabilizing European security. Yet, as he idiotically says, “we expect to get along with everybody”.

Now, that is really taking the…

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Buddymandering

featuresgerrymandering

Are you against gerrymandering? Of course you are! You’ve laughed at the shapes of districts with nicknames like the Praying Mantis, the Steam Shovel, and Goofy Kicking Donald Duck. Like almost everyone who follows politics, you agree that it’s wrong to fiddle with legislative maps to help a favored party or candidate.

Or do you? To test your commitment, here’s a composite example from a fictional 51st state of the union we’ll call the State of Madison.

Public opinion in Madison is strongly opposed to extreme partisan gerrymandering, the sort where the more powerful of two major parties redraws the map to hurt the other. The leadership of the state legislature has taken this to heart and entrusted the task of drawing the next set of district lines to a bipartisan commission. It’s split half and half between the two major parties; the tiebreaker is a genial retired lawmaker who gets along with everyone. True, there are no Libertarians or Greens on the panel, nor even any registered independents. But that’s understandable—isn’t it?—since voters have not chosen to elect anyone from those groups to the legislature.

And there’s more good news. Some were worried that the majority party, which got about 54 percent of the vote and 56 percent of the seats last time around, would engineer matters so as to grab many more safe seats. Not so. When seasoned political analysts look at the lines that were drawn, they can predict exactly which party is going to win nearly every seat next time, and they say hardly any will change hands. There had been some grumbling about how only three seats were competitive in the last general election; the commission must have been listening, because this time there will be four competitive seats instead of three—not enough to tip any balance, but at least enough to provide some interest come November.

One curious thing about those four competitive-in-November seats: They’re all open seats where an incumbent is retiring. That’s because none of the incumbents who planned to run again volunteered their districts to be made into the competitive ones. In fact, when you look more closely, many incumbents got their districts snipped here and expanded there so as to make them safer, not just in the general election but also—this will be less obvious, except to the well-informed—in the primaries. Sometimes the voters in a town never really warm up to you, in which case the best course is to pass that town on to the next lawmaker over.

Once you look more closely, you see that many of the districts have shapes that are a little more stretchy and boundary lines that are a little more jiggly than they would strictly need to be. Also, they crisscross county and city borders more than they have to. In two or three instances, you notice a thin peninsula of land that juts out from the main body of a district to capture a remote neighborhood. You ask an insider, who explains that those fingers are meant to connect the home residence of some lawmaker with the district he or she wishes to represent. In fact, the starting point for most of the districts had simply been to ask incumbent members of both parties how they wanted their districts to look. To paraphrase a famous line: Officials had succeeded in picking their voters, rather than letting voters pick their officials.

In one case (and only one), the new map throws two incumbents from the same party into a single district. Your insider friend explains that that was to get rid of a member of the majority party who just caused trouble all the time—making noise about supposed scandals, never cooperating with more senior colleagues. No one likes him, really. Or at least no one in the leadership does. Without this disruptive personality, the next legislature will be more collegial and less polarized. And that’s to the good, right? Also, seeing what happened to this troublemaker, none of the members are going to think about crossing the leadership next term.

Everyone Wants Reform—But What Kind?

I call this kind of arrangement a “buddymander.”  Many people who hate partisan gerrymandering hate it too, but others are willing to let it slide or even are fine with it. The animating logic is: We’ll protect our guys and you can protect yours. It’s outwardly different from extreme partisan gerrymandering, since the main goal is not to take away seats from the opposition. But the two spring from the same underlying temptation: When the system gives insiders wide discretion over line drawing, they are apt to use it to advance their own interests.

The main task of redistricting reform is to confine that discretion. To appreciate the difficulty of that task, let’s switch for the moment to a seemingly remote question: Why allow any discretion in drawing legislative maps at all?

When you serve on a redistricting commission, as I have now done in Maryland twice, that’s one of the most common questions you get: Why can’t we turn the whole thing over to a computer algorithm? At its simplest, this can take the form of proposing that the state simply be divided into districts of equal population (as the courts require) by some brute method. Thus a state might be divided among the proper number of congressional districts by drawing vertical lines dividing it into strips of varying widths.

To spend a few minutes with such a map is to grasp its flaws. Even in a conveniently rectangular state like Colorado, districts would end up comprising unrelated communities separated from each other by mountains and long distances. Coherent communities would be split, perhaps multiple ways, to no good purpose. Before long, you will have rediscovered some of the basic keys to good districting, namely: compactness, with districts looking more like turtles than snakes or octopuses; practical contiguity, meaning that all sections of a district are accessible by road connections without having to leave the district; and congruence with the boundaries of other political subdivisions, such as counties and cities.

Happily, each of these three desirable features can be translated into formulas in algorithm-friendly ways. While experts have devised many mathematical formulas to score compactness, picking any one of them will help curtail the worst gerrymanders. Likewise, a formula can keep track of the number of county splits (lower is better). Further prescriptions can install a decision mechanism such as splitting more populous counties before those that are less populous.

Unfortunately, algorithms are far less adept at incorporating formulas for a fourth aspect of good districting, one that has been called intelligibility. People want at least a fighting chance to describe their district in words, and to guess correctly whether someone lives in it based on knowing where his or her residence is. Curved and diagonal lines usually don’t register as intelligible, while “east of the River” or “south of I-70” may work fine. And while some neighborhoods may need to be split to make the numbers come out evenly, intelligibility is lost if a district line heedlessly splits every neighborhood it hits rather than finding the boundaries between them.

Because few of us are willing to jettison intelligibility entirely, fully algorithmic districting is unlikely to arrive anytime soon. But the impulse at least deserves respect, since it stands for the right goal: to confine the role of discretion. And it points the way to what is probably the most promising use of mathematics in districting, which is to pair quantifiable formulas with a band of discretion within which mapmakers are asked to pursue intelligibility. For example, it might be proposed that a lawful map must attain a compactness score no more than 20 percent worse than the most compact map taken under consideration, or that it must inflict no more than two more than the minimum attainable number of county splits.

It’s unsurprising and true: States that have enacted clear, objective rules to guide mapmakers on topics like compactness and congruence tend to have far less of a gerrymandering problem than those that have not. The same kinds of rules also provide a firm basis for judicial review. While it is troublesome to give judges themselves massive discretion in line drawing—for one thing, it risks magnifying the role of politics in judicial selection, already a problem in many states—it is much less dangerous to assign them the quintessentially judicial task of holding others to clear and specific marching orders.

For an example of a redistricting criterion that is anything but clear and objective, consider the notion that district lines should follow so-called communities of interest. No one can pin down what this means to general satisfaction. Should a town that is suburban, industrial, and coastal be grouped with other areas that are suburban? Industrial? Coastal? It’s a recipe for arbitrariness, disagreement, and manipulability. The same is true if a court is instructed to apply that same vague standard later on.

The toughest question—on which it is hard to offer more than speculation—is that of who, if not political insiders, should draw the lines. The currently popular plan, adopted in such places as Arizona and California, is that of the independent citizen volunteer commission. Experience with this innovation has been mixed so far, with much depending on the details of how a given law is drawn. Over time, interest groups will probably attempt to influence, or even infiltrate, the citizen commission. At the same time, the new blueprints for citizen redistricting include powerful measures to shake up the old way of doing things, such as rules forbidding commissions to take into account the residence of any incumbent or the voter registration or voting history of any community.

Public submission of maps, enabled by open databases and the availability of free or cheap software, holds great promise as well. For one thing, courts are more likely to provide effective judicial review if multiple maps are made available for comparison.

Yet another reform blueprint is to turn over the task to a legislative services bureau bound by strong impartiality norms. The results have been applauded in Iowa, a state known for relatively clean politics in which the two main political parties are approximately equally matched. But legislative service bureaus in other states might prove less robust in resisting political influence.

In the background are widening differences over what the goal of good districting should be in the first place. Those of us on the classical liberal side are likely to be inspired by the ideals of neutrality, impartiality, and objectivity. But some of the academics and commentators drawn to the controversy want a rough match between seat strength and voter strength—implicitly, a criterion of proportional representation, so that if a state is 40 percent Republican, say, somewhere around 40 percent of its seats will go to Republicans. A second group of thinkers takes the view that the chief evils to be fought are those of polarization and the alienation that arises from feeling one’s vote doesn’t matter; they thus advocate conscious efforts to create more competitive districts, especially ones that are competitive in general elections. (As Charles Blahous of the Mercatus Center at George Mason University and others have shown, the trend has been for more districts to become competitive in party primaries, even as fewer remain competitive in the general.)

These two latter schools of thought—proportional representation and a preference for the creation of more competitive districts—are in practical terms at odds with each other. When many districts are drawn to be competitive, relatively modest swings in voter sentiment can lead to large swings in seat control.

The polarization issue is also more complicated than it may look. It is true that party positions in the U.S. House and many state legislatures have grown more polarized in recent decades, with a winnowing out of conservative Democrats and liberal Republicans. But the same dynamic can be seen in the U.S. Senate, and no one now alive plays any role in drawing that body’s boundaries. The best guess is that several forces are contributing to polarization, with gerrymandering one part of the mix.

Proponents of proportional outcomes sometimes seem to be fighting a losing war against the inherent nature of America’s “first-past-the-post” electoral system, which has always tended to generate major gaps between voter strength and seat strength. (This faction might be better advised to throw its support behind a ranked-choice, Australian-ballot, or European-style system, each of which is meant to avoid this outcome.) At any rate, the result-minded thinkers in both schools have something important in common, which is that both are obliged to resort to line drawing that is intensely conscious of voters’ political leanings. It’s hard for either to get on board with the California idea of blinding mapmakers to political data about registration, voting history, and politicians’ residences.

Indeed, once you accept a goal of corralling voters into patterns judged to yield good electoral outcomes, you may even grow cool (as some contemporary academics are) toward traditional neutral-impartial-objective criteria such as compactness and avoiding county splits. They just get in the way of reaching the right results.

Redistricting Reform Returns From the Dead

After many years of back-burner status, interest in partisan gerrymandering began mounting rapidly around 2015 for two reasons. First, constitutional litigators had a case they hoped to win. Second, the issue got pulled into the ceaseless noise machine of Red Team/Blue Team warfare, because (as had not been the case over long historical stretches) one party was now doing significantly better from gerrymandering than the other.

For years, the only hope of getting the Supreme Court to recognize a constitutional remedy for gerrymandering turned on the cooperation of Justice Anthony Kennedy. With Kennedy’s tenure on the bench nearing what was to prove to be its end in 2018, a search went out for a case that might tempt him. That search failed. The “efficiency gap” test proffered in a case out of Wisconsin failed to persuade him. Kennedy then retired, after which the necessary votes weren’t there. In 2019, the Court used two cases—Rucho v. Common Cause and Lamone v. Benisek—to rule, 5–4, that there was no constitutional remedy to be had in federal court over partisan gerrymandering.  But in the meantime, the usual publicity apparatus deployed for big Supreme Court cases had done its thing, and the issue had risen in public awareness.

A brighter-than-usual spotlight on this issue also followed the 2010 wave election, in which Republicans ousted Democrats from 680 state legislative seats in the biggest such partisan pickup in history, flipping no fewer than 20 state legislative chambers. In what became an oft-told tale, the GOP carefully deployed its new power using a program called REDMAP, which helped in devising exquisitely detailed gerrymanders that enabled the party to push its advantage further against Democrats in state after state. It helped that database and geographic information system technologies were improving constantly so as to allow super-fine-grained assemblage of districts on the fly. Legislators were able to sort local voters by political preference down to individual blocks, buildings, and households—a far cry from the old days, when pulling off a gerrymander might require weeks amid maps and awkward printouts of voter data.

Republicans enjoyed one other systemic advantage as well: Their objectives often meshed nicely with those of the federal Voting Rights Act (VRA). That law sanctions and even encourages—though the courts have had trouble sorting out exactly to what extent—the creation and maintenance of race-conscious districts in which minority voters hold a majority big enough to elect a candidate of their choice. It’s an open secret that maps that result in significant black representation are often also maps where Republicans do well, since VRA districts funnel one of the most loyal Democratic voting groups off from the rest of the map.  A Republican strategist could simply approach black legislators and ask them to draw their “perfect district.” Wildly noncompact districting was accepted as legitimate in many VRA situations; indeed, it’s not uncommon for districts that show up on lists of the worst partisan gerrymanders to have been created by legislators (or even suggested by judges) under a VRA rationale.

Notwithstanding what happened in 2010, there has been little over the longer term to mark out gerrymandering as a distinctively Republican practice. In 1986, for example, officials of both major parties took positions more or less the opposite of their 2019 ones. In Davis v. Bandemer, a high-profile Supreme Court case from that year, the Republican National Committee filed an amicus brief in favor of strong Court intervention to correct partisan gerrymanders (a stance requiring it to argue against its own Indiana state party, which had engaged in the practice in the case at hand). As one of the brief’s co-authors explained the following year, Democrats had just pulled off a massive and successful gerrymander in the state of California, and Republican leaders foresaw the same thing happening in many other states, “since Democrats control considerably more state legislative houses than do Republicans.”

Meanwhile, the chairman of the Democratic National Committee disparaged the idea that the federal courts should be in any hurry to jump in, saying that Republicans, having failed “to win control of more legislatures,” were now seeking “a quick fix” to make up their losses.

In the longer run, unease at California gerrymanders did help touch off what became the most notable development in redistricting reform: the rise of independent citizen commissions, typically propelled by the ballot initiative process. Arizona went first with Proposition 106 in 2000, followed by California with Proposition 11 in 2008 and Proposition 20 in 2010. (Prominent California Democrats, including once-and-future Speaker Nancy Pelosi, quietly worked to sabotage the latter effort and keep the electeds in control.)

Map-related misconduct was indeed a bipartisan affair. A 2006 report from Azavea, a geographical software applications firm, listed the 10 most gerrymandered states. At the time the maps were drawn, four were controlled by Democratic legislatures, five were controlled by Republican legislatures, and one was split. Of the 10 most gerrymandered districts, four were in states that had Democratic legislatures at the time of drawing, three were in states controlled by Republicans, and three were split. Illinois Democrats in 2016 managed to kill a referendum backed by 500,000 petition signers, just as Michigan Republicans have lately fought a pitched legal battle to foil a voter-backed plan for an independent commission. Maryland Democrats behave much like Texas Republicans, and so on.

What Comes Next?

Some of today’s momentum will continue, come what may. While the federal courts may have bolted their doors against gerrymander challenges, their state counterparts are still capable of surprises, especially when they draw on the language of state constitutions, as Pennsylvania’s high court did in striking down that state’s congressional map in 2018.

A deeper problem for reformers is that they are beginning to run out of states with strong ballot-initiative and referendum provisions. Only 18 states allow voters to initiate laws or constitutional amendments directly, and the practical number is a few less than that, since several of the states make the process quite hard to use. Most districting reform successes in recent years have come in states where advocates either ran a ballot initiative or credibly threatened to do so, starting with Western states and more recently extending to Ohio, Michigan, and Missouri.

With Democratic fortunes beginning to revive in the 2018 midterms, the party will soon face decisions about whether to pursue gerrymanders in Virginia and other newly consolidated states at the cost of giving up some of the moral high ground the party has briefly occupied on the issue. Meanwhile, Republicans, who have ceded so much of that same ground in the scramble for the imagined cartographic Ring of Power, will have to decide whether it’s worth trying to reclaim any. Barack Obama, who since his presidency ended has sometimes spoken out against gerrymandering, has now thrown in with the National Democratic Redistricting Committee (NDRC), an official Democratic activist organization, which may limit his maneuvering room to act in ways the party perceives as adverse to its interests.

Wouldn’t it be neat, though, if there were a neutral reform that would do a powerful lot of good on a national basis, was plainly consistent with the U.S. Constitution, promised to work as intended with few or no unintended effects, and was easy to explain to boot? One that could slay buddymanders as well as gerrymanders of the extremely partisan kind?

Good news: There is! What’s more, it’s been hiding in plain sight all the while. Charles Blahous describes it in a valuable 2019 paper for the Mercatus Center.

It begins with the Elections Clause—Article I, Section 4—in which the Constitution grants Congress an express role in overseeing the elections states hold for the House of Representatives. The wording makes clear that it is allocating power so as to give state legislatures the lead but not the final word: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations.”

Congress has used its enumerated powers in this area for well over 150 years. For example, it has at various points (including the present) required that states elect House members from single- rather than multi-member districts. It also began requiring states to divide population equally among House districts long before the Supreme Court began interpreting the Constitution to require as much.

Less well known is that for about 30 years a century ago, Congress extended its oversight to include other good districting practices. The Apportionment Act of 1901, whose relevant terms remained in effect until 1929, stated that districts must be made up of “contiguous and compact territory and containing as nearly as practicable an equal number of inhabitants.” There is no reason why such rules could not be re-enacted today, updated (as Blahous persuasively argues) to specify a quantitative test of the sort that political scientists regularly employ. In measuring compactness across states, it makes sense to disregard elements of noncompactness that derive from the irregularity of states’ external outlines, since Florida cannot help being more elongated than South Carolina, for example. A fairer comparison can be obtained by focusing on the length of district lines that are interior to the silhouette.

Depending on how much pressure it wishes to apply against gerrymandering, Congress would be free to make an overall compactness standard easier or tougher. For example, of the 18 states that already have a legal compactness requirement for House districts on their books, none currently has any districts with a “G score” (a metric that adjusts for exterior state boundaries) above 150. If Congress set the threshold at that level, it would render just 5 percent of current districts illegal, but those would include most if not all of what are known as the most egregious gerrymanders. If it proceeded to a somewhat tougher standard of 125, it would make 8 percent of current districts illegal.

Either way, we’d finally be rid of those oddly shaped, colorfully nicknamed monsters whose habitat is our electoral maps—districts like the Duck, the Snake by the Lake, the Broken-Winged Pterodactyl. And we wouldn’t miss them.

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Buddymandering

featuresgerrymandering

Are you against gerrymandering? Of course you are! You’ve laughed at the shapes of districts with nicknames like the Praying Mantis, the Steam Shovel, and Goofy Kicking Donald Duck. Like almost everyone who follows politics, you agree that it’s wrong to fiddle with legislative maps to help a favored party or candidate.

Or do you? To test your commitment, here’s a composite example from a fictional 51st state of the union we’ll call the State of Madison.

Public opinion in Madison is strongly opposed to extreme partisan gerrymandering, the sort where the more powerful of two major parties redraws the map to hurt the other. The leadership of the state legislature has taken this to heart and entrusted the task of drawing the next set of district lines to a bipartisan commission. It’s split half and half between the two major parties; the tiebreaker is a genial retired lawmaker who gets along with everyone. True, there are no Libertarians or Greens on the panel, nor even any registered independents. But that’s understandable—isn’t it?—since voters have not chosen to elect anyone from those groups to the legislature.

And there’s more good news. Some were worried that the majority party, which got about 54 percent of the vote and 56 percent of the seats last time around, would engineer matters so as to grab many more safe seats. Not so. When seasoned political analysts look at the lines that were drawn, they can predict exactly which party is going to win nearly every seat next time, and they say hardly any will change hands. There had been some grumbling about how only three seats were competitive in the last general election; the commission must have been listening, because this time there will be four competitive seats instead of three—not enough to tip any balance, but at least enough to provide some interest come November.

One curious thing about those four competitive-in-November seats: They’re all open seats where an incumbent is retiring. That’s because none of the incumbents who planned to run again volunteered their districts to be made into the competitive ones. In fact, when you look more closely, many incumbents got their districts snipped here and expanded there so as to make them safer, not just in the general election but also—this will be less obvious, except to the well-informed—in the primaries. Sometimes the voters in a town never really warm up to you, in which case the best course is to pass that town on to the next lawmaker over.

Once you look more closely, you see that many of the districts have shapes that are a little more stretchy and boundary lines that are a little more jiggly than they would strictly need to be. Also, they crisscross county and city borders more than they have to. In two or three instances, you notice a thin peninsula of land that juts out from the main body of a district to capture a remote neighborhood. You ask an insider, who explains that those fingers are meant to connect the home residence of some lawmaker with the district he or she wishes to represent. In fact, the starting point for most of the districts had simply been to ask incumbent members of both parties how they wanted their districts to look. To paraphrase a famous line: Officials had succeeded in picking their voters, rather than letting voters pick their officials.

In one case (and only one), the new map throws two incumbents from the same party into a single district. Your insider friend explains that that was to get rid of a member of the majority party who just caused trouble all the time—making noise about supposed scandals, never cooperating with more senior colleagues. No one likes him, really. Or at least no one in the leadership does. Without this disruptive personality, the next legislature will be more collegial and less polarized. And that’s to the good, right? Also, seeing what happened to this troublemaker, none of the members are going to think about crossing the leadership next term.

Everyone Wants Reform—But What Kind?

I call this kind of arrangement a “buddymander.”  Many people who hate partisan gerrymandering hate it too, but others are willing to let it slide or even are fine with it. The animating logic is: We’ll protect our guys and you can protect yours. It’s outwardly different from extreme partisan gerrymandering, since the main goal is not to take away seats from the opposition. But the two spring from the same underlying temptation: When the system gives insiders wide discretion over line drawing, they are apt to use it to advance their own interests.

The main task of redistricting reform is to confine that discretion. To appreciate the difficulty of that task, let’s switch for the moment to a seemingly remote question: Why allow any discretion in drawing legislative maps at all?

When you serve on a redistricting commission, as I have now done in Maryland twice, that’s one of the most common questions you get: Why can’t we turn the whole thing over to a computer algorithm? At its simplest, this can take the form of proposing that the state simply be divided into districts of equal population (as the courts require) by some brute method. Thus a state might be divided among the proper number of congressional districts by drawing vertical lines dividing it into strips of varying widths.

To spend a few minutes with such a map is to grasp its flaws. Even in a conveniently rectangular state like Colorado, districts would end up comprising unrelated communities separated from each other by mountains and long distances. Coherent communities would be split, perhaps multiple ways, to no good purpose. Before long, you will have rediscovered some of the basic keys to good districting, namely: compactness, with districts looking more like turtles than snakes or octopuses; practical contiguity, meaning that all sections of a district are accessible by road connections without having to leave the district; and congruence with the boundaries of other political subdivisions, such as counties and cities.

Happily, each of these three desirable features can be translated into formulas in algorithm-friendly ways. While experts have devised many mathematical formulas to score compactness, picking any one of them will help curtail the worst gerrymanders. Likewise, a formula can keep track of the number of county splits (lower is better). Further prescriptions can install a decision mechanism such as splitting more populous counties before those that are less populous.

Unfortunately, algorithms are far less adept at incorporating formulas for a fourth aspect of good districting, one that has been called intelligibility. People want at least a fighting chance to describe their district in words, and to guess correctly whether someone lives in it based on knowing where his or her residence is. Curved and diagonal lines usually don’t register as intelligible, while “east of the River” or “south of I-70” may work fine. And while some neighborhoods may need to be split to make the numbers come out evenly, intelligibility is lost if a district line heedlessly splits every neighborhood it hits rather than finding the boundaries between them.

Because few of us are willing to jettison intelligibility entirely, fully algorithmic districting is unlikely to arrive anytime soon. But the impulse at least deserves respect, since it stands for the right goal: to confine the role of discretion. And it points the way to what is probably the most promising use of mathematics in districting, which is to pair quantifiable formulas with a band of discretion within which mapmakers are asked to pursue intelligibility. For example, it might be proposed that a lawful map must attain a compactness score no more than 20 percent worse than the most compact map taken under consideration, or that it must inflict no more than two more than the minimum attainable number of county splits.

It’s unsurprising and true: States that have enacted clear, objective rules to guide mapmakers on topics like compactness and congruence tend to have far less of a gerrymandering problem than those that have not. The same kinds of rules also provide a firm basis for judicial review. While it is troublesome to give judges themselves massive discretion in line drawing—for one thing, it risks magnifying the role of politics in judicial selection, already a problem in many states—it is much less dangerous to assign them the quintessentially judicial task of holding others to clear and specific marching orders.

For an example of a redistricting criterion that is anything but clear and objective, consider the notion that district lines should follow so-called communities of interest. No one can pin down what this means to general satisfaction. Should a town that is suburban, industrial, and coastal be grouped with other areas that are suburban? Industrial? Coastal? It’s a recipe for arbitrariness, disagreement, and manipulability. The same is true if a court is instructed to apply that same vague standard later on.

The toughest question—on which it is hard to offer more than speculation—is that of who, if not political insiders, should draw the lines. The currently popular plan, adopted in such places as Arizona and California, is that of the independent citizen volunteer commission. Experience with this innovation has been mixed so far, with much depending on the details of how a given law is drawn. Over time, interest groups will probably attempt to influence, or even infiltrate, the citizen commission. At the same time, the new blueprints for citizen redistricting include powerful measures to shake up the old way of doing things, such as rules forbidding commissions to take into account the residence of any incumbent or the voter registration or voting history of any community.

Public submission of maps, enabled by open databases and the availability of free or cheap software, holds great promise as well. For one thing, courts are more likely to provide effective judicial review if multiple maps are made available for comparison.

Yet another reform blueprint is to turn over the task to a legislative services bureau bound by strong impartiality norms. The results have been applauded in Iowa, a state known for relatively clean politics in which the two main political parties are approximately equally matched. But legislative service bureaus in other states might prove less robust in resisting political influence.

In the background are widening differences over what the goal of good districting should be in the first place. Those of us on the classical liberal side are likely to be inspired by the ideals of neutrality, impartiality, and objectivity. But some of the academics and commentators drawn to the controversy want a rough match between seat strength and voter strength—implicitly, a criterion of proportional representation, so that if a state is 40 percent Republican, say, somewhere around 40 percent of its seats will go to Republicans. A second group of thinkers takes the view that the chief evils to be fought are those of polarization and the alienation that arises from feeling one’s vote doesn’t matter; they thus advocate conscious efforts to create more competitive districts, especially ones that are competitive in general elections. (As Charles Blahous of the Mercatus Center at George Mason University and others have shown, the trend has been for more districts to become competitive in party primaries, even as fewer remain competitive in the general.)

These two latter schools of thought—proportional representation and a preference for the creation of more competitive districts—are in practical terms at odds with each other. When many districts are drawn to be competitive, relatively modest swings in voter sentiment can lead to large swings in seat control.

The polarization issue is also more complicated than it may look. It is true that party positions in the U.S. House and many state legislatures have grown more polarized in recent decades, with a winnowing out of conservative Democrats and liberal Republicans. But the same dynamic can be seen in the U.S. Senate, and no one now alive plays any role in drawing that body’s boundaries. The best guess is that several forces are contributing to polarization, with gerrymandering one part of the mix.

Proponents of proportional outcomes sometimes seem to be fighting a losing war against the inherent nature of America’s “first-past-the-post” electoral system, which has always tended to generate major gaps between voter strength and seat strength. (This faction might be better advised to throw its support behind a ranked-choice, Australian-ballot, or European-style system, each of which is meant to avoid this outcome.) At any rate, the result-minded thinkers in both schools have something important in common, which is that both are obliged to resort to line drawing that is intensely conscious of voters’ political leanings. It’s hard for either to get on board with the California idea of blinding mapmakers to political data about registration, voting history, and politicians’ residences.

Indeed, once you accept a goal of corralling voters into patterns judged to yield good electoral outcomes, you may even grow cool (as some contemporary academics are) toward traditional neutral-impartial-objective criteria such as compactness and avoiding county splits. They just get in the way of reaching the right results.

Redistricting Reform Returns From the Dead

After many years of back-burner status, interest in partisan gerrymandering began mounting rapidly around 2015 for two reasons. First, constitutional litigators had a case they hoped to win. Second, the issue got pulled into the ceaseless noise machine of Red Team/Blue Team warfare, because (as had not been the case over long historical stretches) one party was now doing significantly better from gerrymandering than the other.

For years, the only hope of getting the Supreme Court to recognize a constitutional remedy for gerrymandering turned on the cooperation of Justice Anthony Kennedy. With Kennedy’s tenure on the bench nearing what was to prove to be its end in 2018, a search went out for a case that might tempt him. That search failed. The “efficiency gap” test proffered in a case out of Wisconsin failed to persuade him. Kennedy then retired, after which the necessary votes weren’t there. In 2019, the Court used two cases—Rucho v. Common Cause and Lamone v. Benisek—to rule, 5–4, that there was no constitutional remedy to be had in federal court over partisan gerrymandering.  But in the meantime, the usual publicity apparatus deployed for big Supreme Court cases had done its thing, and the issue had risen in public awareness.

A brighter-than-usual spotlight on this issue also followed the 2010 wave election, in which Republicans ousted Democrats from 680 state legislative seats in the biggest such partisan pickup in history, flipping no fewer than 20 state legislative chambers. In what became an oft-told tale, the GOP carefully deployed its new power using a program called REDMAP, which helped in devising exquisitely detailed gerrymanders that enabled the party to push its advantage further against Democrats in state after state. It helped that database and geographic information system technologies were improving constantly so as to allow super-fine-grained assemblage of districts on the fly. Legislators were able to sort local voters by political preference down to individual blocks, buildings, and households—a far cry from the old days, when pulling off a gerrymander might require weeks amid maps and awkward printouts of voter data.

Republicans enjoyed one other systemic advantage as well: Their objectives often meshed nicely with those of the federal Voting Rights Act (VRA). That law sanctions and even encourages—though the courts have had trouble sorting out exactly to what extent—the creation and maintenance of race-conscious districts in which minority voters hold a majority big enough to elect a candidate of their choice. It’s an open secret that maps that result in significant black representation are often also maps where Republicans do well, since VRA districts funnel one of the most loyal Democratic voting groups off from the rest of the map.  A Republican strategist could simply approach black legislators and ask them to draw their “perfect district.” Wildly noncompact districting was accepted as legitimate in many VRA situations; indeed, it’s not uncommon for districts that show up on lists of the worst partisan gerrymanders to have been created by legislators (or even suggested by judges) under a VRA rationale.

Notwithstanding what happened in 2010, there has been little over the longer term to mark out gerrymandering as a distinctively Republican practice. In 1986, for example, officials of both major parties took positions more or less the opposite of their 2019 ones. In Davis v. Bandemer, a high-profile Supreme Court case from that year, the Republican National Committee filed an amicus brief in favor of strong Court intervention to correct partisan gerrymanders (a stance requiring it to argue against its own Indiana state party, which had engaged in the practice in the case at hand). As one of the brief’s co-authors explained the following year, Democrats had just pulled off a massive and successful gerrymander in the state of California, and Republican leaders foresaw the same thing happening in many other states, “since Democrats control considerably more state legislative houses than do Republicans.”

Meanwhile, the chairman of the Democratic National Committee disparaged the idea that the federal courts should be in any hurry to jump in, saying that Republicans, having failed “to win control of more legislatures,” were now seeking “a quick fix” to make up their losses.

In the longer run, unease at California gerrymanders did help touch off what became the most notable development in redistricting reform: the rise of independent citizen commissions, typically propelled by the ballot initiative process. Arizona went first with Proposition 106 in 2000, followed by California with Proposition 11 in 2008 and Proposition 20 in 2010. (Prominent California Democrats, including once-and-future Speaker Nancy Pelosi, quietly worked to sabotage the latter effort and keep the electeds in control.)

Map-related misconduct was indeed a bipartisan affair. A 2006 report from Azavea, a geographical software applications firm, listed the 10 most gerrymandered states. At the time the maps were drawn, four were controlled by Democratic legislatures, five were controlled by Republican legislatures, and one was split. Of the 10 most gerrymandered districts, four were in states that had Democratic legislatures at the time of drawing, three were in states controlled by Republicans, and three were split. Illinois Democrats in 2016 managed to kill a referendum backed by 500,000 petition signers, just as Michigan Republicans have lately fought a pitched legal battle to foil a voter-backed plan for an independent commission. Maryland Democrats behave much like Texas Republicans, and so on.

What Comes Next?

Some of today’s momentum will continue, come what may. While the federal courts may have bolted their doors against gerrymander challenges, their state counterparts are still capable of surprises, especially when they draw on the language of state constitutions, as Pennsylvania’s high court did in striking down that state’s congressional map in 2018.

A deeper problem for reformers is that they are beginning to run out of states with strong ballot-initiative and referendum provisions. Only 18 states allow voters to initiate laws or constitutional amendments directly, and the practical number is a few less than that, since several of the states make the process quite hard to use. Most districting reform successes in recent years have come in states where advocates either ran a ballot initiative or credibly threatened to do so, starting with Western states and more recently extending to Ohio, Michigan, and Missouri.

With Democratic fortunes beginning to revive in the 2018 midterms, the party will soon face decisions about whether to pursue gerrymanders in Virginia and other newly consolidated states at the cost of giving up some of the moral high ground the party has briefly occupied on the issue. Meanwhile, Republicans, who have ceded so much of that same ground in the scramble for the imagined cartographic Ring of Power, will have to decide whether it’s worth trying to reclaim any. Barack Obama, who since his presidency ended has sometimes spoken out against gerrymandering, has now thrown in with the National Democratic Redistricting Committee (NDRC), an official Democratic activist organization, which may limit his maneuvering room to act in ways the party perceives as adverse to its interests.

Wouldn’t it be neat, though, if there were a neutral reform that would do a powerful lot of good on a national basis, was plainly consistent with the U.S. Constitution, promised to work as intended with few or no unintended effects, and was easy to explain to boot? One that could slay buddymanders as well as gerrymanders of the extremely partisan kind?

Good news: There is! What’s more, it’s been hiding in plain sight all the while. Charles Blahous describes it in a valuable 2019 paper for the Mercatus Center.

It begins with the Elections Clause—Article I, Section 4—in which the Constitution grants Congress an express role in overseeing the elections states hold for the House of Representatives. The wording makes clear that it is allocating power so as to give state legislatures the lead but not the final word: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations.”

Congress has used its enumerated powers in this area for well over 150 years. For example, it has at various points (including the present) required that states elect House members from single- rather than multi-member districts. It also began requiring states to divide population equally among House districts long before the Supreme Court began interpreting the Constitution to require as much.

Less well known is that for about 30 years a century ago, Congress extended its oversight to include other good districting practices. The Apportionment Act of 1901, whose relevant terms remained in effect until 1929, stated that districts must be made up of “contiguous and compact territory and containing as nearly as practicable an equal number of inhabitants.” There is no reason why such rules could not be re-enacted today, updated (as Blahous persuasively argues) to specify a quantitative test of the sort that political scientists regularly employ. In measuring compactness across states, it makes sense to disregard elements of noncompactness that derive from the irregularity of states’ external outlines, since Florida cannot help being more elongated than South Carolina, for example. A fairer comparison can be obtained by focusing on the length of district lines that are interior to the silhouette.

Depending on how much pressure it wishes to apply against gerrymandering, Congress would be free to make an overall compactness standard easier or tougher. For example, of the 18 states that already have a legal compactness requirement for House districts on their books, none currently has any districts with a “G score” (a metric that adjusts for exterior state boundaries) above 150. If Congress set the threshold at that level, it would render just 5 percent of current districts illegal, but those would include most if not all of what are known as the most egregious gerrymanders. If it proceeded to a somewhat tougher standard of 125, it would make 8 percent of current districts illegal.

Either way, we’d finally be rid of those oddly shaped, colorfully nicknamed monsters whose habitat is our electoral maps—districts like the Duck, the Snake by the Lake, the Broken-Winged Pterodactyl. And we wouldn’t miss them.

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Journal of Appellate Practice & Process Now at University of Arizona

After 20 years at University of Arkansas (Little Rock), the journal—which specializes in a subject near and dear to my heart, and I suspect to the hearts of many of our readers—has moved to the law school at the University of Arizona; if any of you are interested in submitting articles, e-mail Prof. Tessa Dysart at tdysart@arizona.edu.

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Journal of Appellate Practice & Process Now at University of Arizona

After 20 years at University of Arkansas (Little Rock), the journal—which specializes in a subject near and dear to my heart, and I suspect to the hearts of many of our readers—has moved to the law school at the University of Arizona; if any of you are interested in submitting articles, e-mail Prof. Tessa Dysart at tdysart@arizona.edu.

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Escobar: Why Iran Won’t Be Broken

Escobar: Why Iran Won’t Be Broken

Tyler Durden

Sun, 06/28/2020 – 00:00

Authored by Pepe Escobar via The Asia Times,

So what’s goin’ on in Iran? How did the Islamic Republic really respond to Covid-19? How is it coping with Washington’s relentless “maximum pressure”?

These questions were the subject of a long phone call I placed to Prof. Mohammad Marandi of the University of Tehran – one of Iran’s premier, globally recognized analysts.

As Marandi explains:

“Iran after the revolution was all about social justice. It set up a very elaborate health care network, similar to Cuba’s, but with more funding. A large hospital network. When the coronavirus hit, the US was even preventing Iran to get test kits. Yet the system – not the private sector – managed. There was no full shutdown. Everything was under control. The numbers – even contested by the West – they do hold. Iran is now producing everything it needs, tests, face masks. None of the hospitals are full.”

Expanding Marandi’s observations, Tehran-based journalist Alireza Hashemi notes, “Iran’s wide primary healthcare system, comprising public clinics, health houses and health centers is available in thousands of cities and villages”, and that enabled the government to “easily offer basic services”.

As Hashemi details, “the Health Ministry established a Covid-19 call center and also distributed protective equipment supplied by relief providers. Supreme Leader Ayatollah Khamenei ordered the armed forces to help – with the government deploying 300,000 soldiers and volunteers to disinfect streets and public places, distribute sanitizers and masks and conduct tests.”

It was the Iranian military that established production lines for producing face masks and other equipment. According to Hashemi, “some NGOs partnered with Tehran’s chamber of commerce to create a campaign called Nafas (“breath”) to supply medical goods and provide clinical services. Iran’s Farabourse, an over-the-counter stock market in Tehran, established a crowd funding campaign to purchase medical devices and products to help health workers. Hundreds of volunteer groups – called “jihadi” – started producing personal protective equipment that had been in short supply in seminaries, mosques and hussainiyas and even natural fruit juices for health workers.”

This sense of social solidarity is extremely powerful in Shi’ite culture. Hashemi notes that “the government loosened health-related restrictions over a month ago and we have been experiencing a small slice of normality in recent weeks.” Yet the fight is not over. As in the West, there are fears of a covid-19 second wave.

Marandi stresses the economy, predictably, was hurt:

“But because of the sanctions, most of the hurt had already happened. The economy is now running without oil revenue. In Tehran, you don’t even notice it. It’s nothing compared to Saudi Arabia, Iraq, Turkey or the UAE. Workers from Pakistan and India are leaving the Persian Gulf in droves. Dubai is dead. So, in comparison, Iran did better in dealing with the virus. Moreover, harvests last year and this year have been positive. We are more self-reliant.”

Hashemi adds a very important factor:

“The Covid-19 crisis was so massive that people themselves have pitched in with effort, revealing new levels of solidarity. Individuals, civil society groups and others have set up a range of initiatives seeking to help the government and health workers on the front line of countering the pandemic.”

What a relentless Western disinformation campaign always ignores is how Iran after the revolution is used to extremely critical situations, starting with the eight-year-long Iran-Iraq war in the 1980s. Marandi and Hashemi are adamant: for older Iranians, the current economic crisis pales in comparison with what they had to put up with throughout the 1980s.

Made in Iran soars

Marandi’s analysis ties up the economic data. In early June, Mohammad Bagher Nobakht – responsible for planning Iran’s state budgets – told the Majlis (Parliament) that the new normal was “to sideline oil in the economy and run the country’s programs without oil.”

Nobakht stuck to the numbers. Iran had earned just $8.9 billion from the sale of oil and related products in 2019-20, down from a peak of $119 billion less than a decade ago.

The whole Iranian economy is in transition. What’s particularly interesting is the boom in manufacturing – with companies focusing way beyond Iran’s large domestic market towards exports. They are turning the massive devaluation of the rial to their advantage.

In 2019-20, Iran’s non-oil exports reached $41.3 billion. That exceeded oil exports for the first time in Iran’s post-revolutionary history. And roughly half of these non-oil exports were manufactured goods. Team Trump’s “maximum pressure” via sanctions may have led to total non-oil exports going down – but only by 7%. The total remains near historic highs.

According to Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce, private sector manufacturers were seriously back in business already in the first month following the relaxation of the partial lockdown.

The fact is Iranian consumer goods and industrial products – everything from cookies to stainless steel – are exported by small and medium enterprises to the wider Middle East and also to Central Asia, China and Russia. The myth of Iranian “isolation” is, well, a myth.

Some new manufacturing clusters bode well for the future. Take titanium – essential for myriad applications in military, aerospace, marine industries and industrial processes. The Qara-Aghaj mine in Urmia, the provincial capital of West Azarbaijan, which is part of Iran’s mineral belt, including the country’s largest gold reserves, has tremendous potential.

Iran features in the Top 15 of mineral-rich countries. In January, after getting the technology for deep-level mining, Tehran launched a pilot project for extraction of rare earth minerals.

Still, Washington pressure remains as relentless as the Terminator.

In January, the White House issued yet another executive order targeting the “construction, mining, manufacturing, or textiles sectors of the Iranian economy.” So Team Trump is targeting exactly the booming private sector – which means, in practice, countless Iranian blue-collar workers and their families. This has nothing to do with forcing the Rouhani administration to say, “I can’t breathe”.

The Venezuelan front

Apart from a few scuffles between the Islamic Revolutionary Guards Corps (IRGC) and the Health Ministry about China’s response to Covid-19, the Iran-China “comprehensive strategic partnership” (CSP) remains on track.

The next big test is actually in September. That’s when Team Trump wants to extend the UN arms embargo on Iran. Add to it the threat to trigger the snapback mechanism inbuilt in UNSC resolution 2231 – if other Security Council members refuse to support Washington and let the embargo expire for good in October.

China’s mission at the UN has stressed the obvious. The Trump administration unilaterally abandoned the JCPOA. Then it reimposed unilateral sanctions. Thus it has no right to extend the arms embargo or go for the snapback mechanism against Iran.

China, Russia and Iran are the three key nodes of Eurasia integration. Politically and diplomatically, their key decisions tend to be taken in concert. So it’s no wonder that was reiterated last week in Moscow at the meeting of Foreign Ministers Sergey Lavrov and Javad Zarif – who get along famously.

Lavrov said, “We will be doing everything so that no one can destroy these agreements. Washington has no right to punish Iran.”

Zarif for his part described the whole juncture as “very dangerous”.

Additional conversations with Iranian analysts reveal how they interpret the regional geopolitical chessboard, calibrating the importance of the axis of resistance (Tehran, Baghdad, Damascus, Hezbollah) in comparison with two other fronts: the US and its “stooges” (the House of Saud, UAE, Egypt), the master – Israel – and also Turkey and Qatar, which, like Iran, but unlike the “stooges”, favor political Islam (but of the Sunni variety, that is, the Moslem Brotherhood).

One of these analysts, pen name Blake Archer Williams, significantly remarks, “the main reason Russia holds back from helping Iran (mutual trade is almost at zero) is that it fears Iran. If Trump does not have a Reagan moment and does not prevail on Iran, and the US is in any event driven out of the Middle East by the continuing process of Iran’s weapons parity and its ability to project power in its own pond, then all of the oil of the Middle East, from the UAE, Qatar, Kuwait and Bahrain, to Iraq, of course, and not least to the oilfields in Saudi Arabia’s Qatif region (where all the oil is and is 100% Shi’ite), will come under the umbrella of the axis of resistance.”

Still, Russia-China continue to back Iran on all fronts, for instance rebuking the International Atomic Energy Agency (IAEA) for giving in to US “bullying” – as the IAEA’s board last week passed a resolution submitted by France, Britain and Germany criticizing Iran for the first time since 2012.

Another key foreign policy front is Venezuela. Tehran’s soft power, in quite a spectacular manner keenly observed all across the Global South, de facto ridiculed Washington’s sanctions/blockade in its own Monroe Doctrine “backyard”, when five Iranian tankers loaded with gasoline successfully crossed the Atlantic and were received by a Venezuelan military escort of jets, helicopters, and naval patrols.

That was in fact a test run. The Oil Ministry in Tehran is already planning a round two of deliveries to Caracas, sending two or three cargos full of gasoline a month. That will also help Iran to offload its huge domestically produced fuel.

The historic initial shipment was characterized by both sides as part of a scientific and industrial cooperation, side by side with a “solidarity action”.

And then, this past week, I finally confirmed it. The order came directly from Supreme Leader Ayatollah Khamenei. In his own words: “The blockade must be broken”. The rest is – Global South – history in the making.

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New York’s Highest Court Upholds Taking of Private Property for Pipeline that Might Never Get Built

Pipeline

On Thursday, the New York Court of Appeals (which is that state’s highest court) issued a decision in National Fuel Gas Supply Corp. v. Schueckler, upholding the use of eminent domain to seize private property for a pipeline that might never get built. Robert Thomas, a prominent takings lawyer, has a helpful summary at the Inverse Condemnation blog:

A private pipeline company obtained a certificate of public convenience from [the Federal Energy Regulatory Commission]. Under the Natural Gas Act, FERC may issue such certificates conditioned on the applicant meeting the Clean Water Act’s requirement of obtaining state environmental check off on the project. The pipeline needed an easement across Schuecker’s land, and began the condemnation process under New York law. It attached to its condemnation petition the conditional FERC certificate. 

Schuecker objected, asserting that the FERC certificate was no good, because the pipeline had not met the condition: it had not certified to FERC that it had received all state approvals (as required by the federal Natural Gas Act). Indeed, the New York Department of Environmental Conservation had denied the pipeline’s water quality certification. The pipeline responded that it was seeking reconsideration with FERC, and that the NYDEC could not deny water quality certification because it was too late to do so. The trial court agreed with the pipeline, but the appellate department reversed…

In National Fuel Gas Supply Corp. v. Schueckler, No. 29 (June 25, 2020), the court’s majority agreed with the pipeline, and concluded that the FERC certificate was good enough, and the pipeline fulfilled the requirements of New York’s eminent domain statute. That statute exempts a condemnor from making findings about public use and environmental impact of the taking if it obtains a certificate of public convenience from a federal or state agency considering “factors similar” to these.

Yeah, the FERC certificate was conditional, but it really wasn’t “conditional” in a way that would interfere with the processing of an eminent domain case. See slip op. at 13. The pipeline can’t actually build anything, but it can take property.

The majority recognizes that both the federal and state constitutions mandate that eminent domain can only be used to take property for a “public use,” which both the New York Court of Appeals and the federal Supreme Court define broadly to cover almost any project that benefits the public. But the Court of Appeals concluded that the pipeline satisfies this standard, despite the fact that it might never actually get built:

To be sure, the Appellate Division’s concern that the power of eminent domain should be exercised only for viable projects is legitimate; both our state and federal constitutions permit the taking of property by eminent domain only for public use (see NY Constitution art I, § 7; US Constitution, Fifth Amendment)… and any exercise of eminent domain involves a careful balancing of the interests of property owners, the community, and the public use to be served (see EDPL 101). However, in enacting the statutory exemption set forth in EDPL 206 (A), the legislature recognized that eminent domain is, at its core, intended to advance public works and that, in connection with such public projects, government agencies may often render determinations of public use that typically need not be replicated. Where, as here, a state or federal agency has determined that a project serves a public use, duplicative and exacting review of that determination would contravene the statutory framework prioritizing efficient resolution of condemnation claims for the greater public good….

In my work on public use issues, I have criticized the broad definition of “public use” adopted by New York courts and by the federal Supreme Court, arguing for a narrower one. But this goes beyond allowing a broad definition of public use, under which a very wide range of private projects qualify. It even goes beyond the ruling the federal Supreme Court made in the controversial case of Kelo v. City of New London, where the majority concluded that the government need not prove that the project they envision will actually produce the public benefits that supposedly justified it in the first place.

Here, there is real doubt whether the project in question—the pipeline—will ever actually get built at all. If courts are going to allow a very broad definition of what qualifies as a “public use” and defer to the government on its supposed benefits, the least they can do is ensure that the government can prove that the project will at least get built. If it isn’t, then there cannot be any public use, even under a very broad definition.

Judge Jenny Rivera makes a similar point in her powerful dissenting opinion:

In concluding that the Corporation may rely on a Federal Energy Regulatory Commission certificate to satisfy its burden under the EDPL, even though the certificate expressly conditions the project on completion of additional federal and state mandatory assessments with the potential to stop the project, the majority measures the certificate by its title, the equivalent of “judging a book by its cover.” Metaphorically, and as a matter of law, no good can come from this. Indeed, the majority misinterprets the federal regulatory process and the EDPL condemnation framework, and in so doing sanctions the condemnation of private property for development projects that may never gain final approval. I do not see how the public benefits from the premature taking of private land, and therefore I dissent….

The Corporation concedes, and FERC anticipates, that the project’s details may go through further revision in order to accommodate and address pre-construction problems. It may be that after taking title, and clear-cutting the Scheuckler property, the Corporation modifies its plans, perhaps rendering use of the disputed land unnecessary or requiring an easement to another swath in a different location. Given this uncertainty, and the potential for project redesign that affects the public use justification for taking a designated area of land in the first place, it is nonsensical and unfair to take the Scheuckler property before completing the necessary state permit process and ensuring that the project will likely move ahead in a form approved by New York.

In a later part of her dissent, Judge Rivera urges the state legislature to correct the problem created by this decision, and analogizes it to Kelo, which generated a massive wave of state eminent domain reform laws. New York was one of only five states that did not enact any reforms in response to that ruling.

Kelo is also similar to the current case in another way: the “economic development” project for which private homes were condemned in Kelo was a dubious proposition from the beginning, and ultimately fell through. To this day (fifteen years after the Supreme Court ruling), nothing has been built on the condemned property and the only regular users of the land are feral cats. If the pipeline project suffers a similar fate, New York might end up creating another expensive feral cat reservation.

The majority suggests that it makes sense to construe state law to allow takings for an uncertain project, because if the pipeline project is “abandoned,”  Theresa Schueckler will have the right to repurchase the property. Judge Rivera has a strong response to this point, too:

The majority argues that because section 406 grants an owner the right to repurchase property should the project be abandoned, we must read the EDPL as allowing involuntary title transfers for projects that may eventually fail. That position misses the mark. First, it is unclear that failure to acquire the necessary approvals constitutes “abandonment” of a project for purposes of the EDPL. For example, the project could be redesigned and go forward without the need to condemn the owner’s property. Second, the property buy-back allowed by section 406 applies only if condemnation was properly exercised, meaning 406 provides a limited remedy to an owner where the public use initially justified acquisition of the property, but the condemnor subsequently deserts the project. Here, the Corporation failed to satisfy the requirements of EDPL article two: the Corporation did not hold hearings and make findings in accordance with section 204, nor does the FERC certificate comply with section 206. The limited remedy of section 406 is simply irrelevant on these facts. Third, the remedy has limited impact and works best for those who are able financially to buy back their land and interested in doing so no matter the changes to the landscape, years after having title taken away. For example, if the Corporation “abandons” the project after gaining title, clear cutting the land and commencing construction… there is no certainty that respondent Theresa Schueckler—now widowed—would have the funds to repurchase that property, even if she wanted it in its changed condition.

Despite Judge Rivera’s plea, I am not optimistic that the New York state legislature will fix this issue.  As Robert Thomas notes, New York eminent domain law is among the most hostile to property owners in the entire country. However, in recent years, abusive pipeline takings have triggered a political backlash that cuts across ideological and partisan lines. Perhaps New York will feel its effects, as well.

Judge Rivera cites a good deal of academic literature on Kelo and its aftermath, including an article I wrote back in 2007. Sadly, she did not cite my book about the case, in which I assessed it much more thoroughly.  This is the second time this month that a court has cited my writings on Kelo, following a major property rights decision by the Supreme Court of Israel. This is not a testament to my work, but rather to the significance of the Kelo case itself, which continues to resonate fifteen years after it was decided.

NOTE: The Court of Appeals is in fact New York’s highest court, despite the seemingly anomalous name, and despite the fact that its judges have the title of “Judge” rather than “justice.” In New York, the “supreme court” is actually a trial court.

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