Month: February 2021

Brickbats: February 2021

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Chicago Mayor Lori Lightfoot campaigned on a promise to reduce the city’s dependence on fines and fees to balance its budget, noting that fines and fees fall disproportionately on the poor and minorities. Now that Lightfoot is facing the possibility of a more than $1 billion deficit in 2021, her budget proposal calls for $35 tickets for anyone the city’s speed cameras detect driving as little as 6 mph over the limit.

When Geauga County, Ohio, Juvenile Court Judge Timothy J. Grendell ordered two teenage boys to resume visitation with their estranged father, they refused. So Grendell had them locked up in a juvenile detention center for the weekend instead.

 Oklahoma County, Oklahoma, District Attorney David Prater has charged two former detention officers and their supervisor with cruelty to a prisoner and conspiracy. Prater says the three forced inmates to listen to the children’s song “Baby Shark” for extended periods of time.

Qatari officials took all the women off a flight scheduled to leave for Australia in October and strip-searched them. An infant had been found in a restroom at the airport terminal, and officials were reportedly examining the women for signs that one of them had recently given birth.

Four police officers in Milan, Italy, stopped a couple and issued them a 400 euro ($486) fine for kissing in public, a violation of the nation’s mandatory mask rule. The couple protested that they are engaged and have been romantically involved for two years, but police would not budge.

In October, the Gloucestershire Constabulary in England said it would begin patrolling routes out of Wales looking for Welsh drivers who appear to be taking long trips. Cops will stop such drivers and order them to turn around; if they don’t, police will report them to their Welsh counterparts for possibly violating a ban on nonessential travel.

The Château des ducs de Bretagne museum in France has postponed an exhibit on Genghis Khan and the Mongol Empire. It was being put together with the help of a museum in Hohhot, China. But the Chinese Bureau of Cultural Heritage demanded control over the exhibit and ordered that certain words and phrases, including Genghis Khan, empire, and Mongol, be removed.

In the runup to the November election, a federal judge ordered that Tyler Maxwell, 18, be allowed to keep parking his truck at Florida’s Spruce Creek High School. The principal had rescinded Maxwell’s parking pass after he refused to remove a pro-Trump display, including a large elephant statue, from the truck.

When Dade City, Florida, police found Gwen Donahue, a 74-year-old dementia patient who had wandered away from her nursing home, they ran her name through their database and found that she had a warrant from nearly a decade ago. Rather than return her to her nursing home, they arrested her. Donahue’s daughter says the warrant was for driving under the influence and that her mother completed her sentence, except for a two-hour online course. It took the family nearly a week to get a judge to sign a release order to get her out of jail.

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Explaining the Great 2020 Homicide Spike

Last year, cities across the country suffered from what I will call the Great 2020 Homicide Spike. Homicide rates were 30% higher than in 2019—an historic increase representing more than 1,268 additional murders (in a sample of 34 cities), according to an important new report released today by Professor Richard Rosenfeld and two colleagues. The new Rosenfeld report explains that this is a “large and troubling increase that has no modern precedent.” The previous largest single-year increase in the United States was 12.7%, back in 1968.

After presenting data on the homicide spike, the Rosenfeld report briefly attempts to explain what might have caused it. The report discusses two potential causes: first, the COVID-19 pandemic; and, second, anti-police protests following the death of George Floyd during his arrest by Minneapolis police. But after carefully laying out these two possibilities, the report declines to take a position on which one is the more significant  contributor to the homicide spikes. And then, in a concluding section on recommendations, it focuses on need for subduing the COVID-19 pandemic and downplays the need to consider whether the anti-police protests—and consequent police pullbacks—have played a major role in the deaths of more than a thousand homicide victims.

In my view, the best explanation for the Great 2020 Homicide Spike is a decline in proactive policing–and, accordingly, public policy responses to the spike should specifically address that decline. This post builds on a lengthy paper I published last month in the Federal Sentencing Reporter (which also included responses from Larry Rosenthal and Richard Rosenfeld). My paper relied on data through the summer of 2020, but my position can now be supported with data ending through the end of 2020 based on the new Rosenfeld report.

Let’s start first with 2020 homicide data, as no real dispute exists about the fact that last year homicides increased dramatically in most major cities. The report looked at homicide rates in 2020 compared to 2019 in sample of 34 cities. In 29 of the 34 cities, homicides increased–and, in many cities, increased substantially–as shown in Figure 11 from the new Rosenfeld report:

As can be seen, there were significant increases in almost all cities. Because these figures are percentages, however, they can perhaps be misleading for smaller cities.  As the report explains, Chula Vista, California, experienced the largest percentage homicide increase in the sample (150%), but that percentage is based on a difference of just six homicides (ten in 2020 compared with four in 2019).

But staggeringly large homicide increases were observed in many of the country’s most populous cities. New York suffered 131 homicides, representing a 43% increase. Chicago suffered 278 homicides compared to its 2019 total of 502, for an increase of 55%.  Los Angeles’ homicides were up 37%, Phoenix’s up 46%, Philadelphia’s up 27%, Milwaukee’s up 85%, and Seattle’s up 63%. Unsurprisingly, given their size, large cities with appreciable homicide increases contributed disproportionately to the overall increase in murder victims. The nation’s three largest cities (New York, Los Angeles, and Chicago) accounted for 40% of the 1,268 additional people murdered in 2020.

While variation exists among the cities, what is most notable is that homicides rose substantially in the vast majority of them. As the Rosenfeld report appropriately concludes: “[L]ocal variations in social and demographic conditions, while important, do not appear to be the primary driving force behind rising homicide rates. National factors must be explored to better understand the increase.”

The report then turns to two national factors that might have caused the Great 2020 Homicide Spike: (1) the pandemic; and (2) protests against police violence. Turning first to the pandemic, the report argues that the pandemic may have initially suppressed some homicides by limiting the opportunities for offenders and victims to interact due government-ordered restrictions. Then, as pandemic-related restrictions were relaxed during the last spring and summer of 2020 (or compliance with them diminished), homicide rates increased.  The report suggests that this increase in social mobility was a major factor in the homicide surge, although the report does not include precise data or findings on social mobility.

A major problem with attempting to link the homicide spike to the pandemic itself, however, is the spike’s timing. Let’s first look at the homicide trend line that needs to be explained.  The new Rosenfeld report provides this graph of homicide trends from 2017 through 2020:

This graph depicts a structural break in homicide trends (the vertical red line) occurring in June 2020 that might appear to correspond somewhat to the onset of the pandemic and related social mobility trends. But this graph–which depicts monthly data–does not allow much precision in identifying when the spike in homicides began. To be sure, homicides increased in the spring of 2020. But given the “seasonality” of homicide (more homicides in summer, fewer in the winter), some general upward trend would be expected.

More informative on the issue of the homicide spike’s precise timing are weekly homicide data, reported though October 2020 by Rosenfeld in an earlier report, as depicted below:

This graph depicts the structural break (the vertical red line) in homicide trends–i.e., a statistically significant change in the times series occurring in the last week of May. This graph would seem to identify the increase in homicides igniting at that time–not earlier.

Now let’s compare the weekly homicide trends with social mobility data.  Social mobility in the U.S. plummeted in mid-March as the pandemic struck, but then moved back to normal levels at a steady pace from early April through the late summer. Depicted below, for example, is national social mobility data from the last year from Apple, based on iPhone routing requests:

As readily apparent, from a nadir in early April, social mobility rebounded fairly smoothly through the summer of 2020. Given that the pandemic struck in mid-March and social mobility began returning normal levels in early April, the timing of the homicide spike does not appear to coincide with the pandemic. Indeed, the new Rosenfeld report acknowledges that homicide rates increased “significantly” in June, “well after the pandemic began, coinciding with the death of George Floyd and the mass protests that followed.”

Other analysis of national homicide trends confirms the conclusion that homicides (and shootings) were largely unaffected by the pandemic’s onset. For example, Professor David Abrams has published a detailed analysis of crime data from 25 large U.S. cities for January through May 2020. Abrams concluded that, as of the end of May, “[s]ome types of serious violent crime seemed unaffected by the pandemic onset, notably homicide and shootings.”

The Rosenfeld report (and the Abrams analysis just discussed) rely on aggregate data from a number of cities. But it is useful to drill down into particular cities to see if any patterns emerge. I have previously researched homicide issues in Chicago, the nation’s third largest city. Here is Chicago’s homicide data for 2020:

This graph (taken from the excellent website https://ift.tt/3anfusa) shows the five-year average for homicides in grey and then the 2020 homicide data in red. Between January 1 and May 28, 2020, Chicago suffered 191 homicides. During the same time frame in 2019, it had an almost identical number of homicides: 192.

Then, as with other major cities, Chicago witnessed substantial antipolice protests a few days after George Floyd’s death on May 25, 2020. Four days after Floyd’s death, on May 29, demonstrators shut down several downtown Chicago streets. The next day, Chicago protests escalated; one person died and six others were shot. A dozen police officers were injured. These protests “evolved into criminal conduct” (as Chicago Mayor Lori Lightfoot put it) and protesters and looters extensively damaged businesses on Michigan Avenue. The next day, Mayor Lightfoot asked the Illinois Governor to summon the National Guard to Chicago for the first time in fifty-two years. (The last time was during the 1968 riots.) The economic costs of the protests and looting in Chicago through June 1 were estimated at around $66 million.

And a homicide spike ignited. On May 31, eighteen people were murdered and dozens more were shot in Chicago, making it the single most violent day in six decades.  Chicago’s 9-1-1 emergency center received 65,000 calls for all types of service–50,000 more than on a usual day. The homicide explosion in Chicago does not appear to follow the more gradual trends, such as modestly changing social mobility patterns linked to the pandemic.

This explosive spike in homicides is also evident in other cities. Depicted below is Philadelphia’s homicide data for 2020:

Here again, an explosive spike at the end of May 2020 is evident, although there are also other increases visible in the Philadelphia data (which is the proverbial “noise” in data that always attends research of this type).

Similar patterns can be observed in data for the first cousin to homicides–shootings.  Here is Minneapolis shooting data for the relevant period:

And here is New York City’s shooting data:

These are obviously sudden changes in trends, not gradual ones.

If changes due to the pandemic do not explain the nation’s explosive homicide spike, what does? The Rosenfeld report readily acknowledges the other leading hypothesis: That following George Floyd’s death at the hands of Minneapolis police on May 25, 2020, anti-police protests led to a decline in policing. This hypothesis is what I (and others) have called a “Minneapolis Effect”—that is, as police protests spread around the country, police had to be redeployed from their normal duties to help manage the protests. And, more expansively, even following the protests, “proactive policing” declined.

Measuring a decline in proactive policing is difficult. Not all police agencies report good data on policing. And there isn’t a single measure of proactive policing that captures all varieties of police work. But it is possible to get some general sense of changes in policing in 2020. Important measures of proactive policing generally show a post-protest decline. For example, the chart below depicts total arrests by the Chicago Police Department.

As can be seen, in mid-March the pandemic’s onset triggered a sharp decline in arrests. Then, beginning in April, arrests climbed toward pre-pandemic levels. But at the end of May, that return to normalcy was interrupted and arrests plummeted, never to again regain traditional levels.

Here’s another similar trend line showing sharp reductions in policing at the end of May, this one depicting street stops by the Los Angeles Police Department:

Here again, LAPD activity (as measured by total persons stopped) dropped below normal levels (depicted in the grey line) beginning around mid-March. During April stops returned to expected levels, equaling normal levels just before the last week in May. But then, suddenly, pedestrian stops declined well below normal levels, where they have remained ever since.

Once last graph will show a similar trend line–this one for traffic stops in Philadelphia:

Here again, the pandemic-induced decline in stops appears in mid-March, followed by a return toward normal levels in April and most of May—only to see a steep drop to well below normal levels after the start of anti-police protests. And this drop coincides exactly with the onset of the Great 2020 Homicide Spike.

Against this backdrop, a “de-policing” explanation readily emerges as the triggering event for the sudden increase in homicides in late May. In the wake of the antipolice protests following George Floyd’s death in late May, less proactive policing occurred. For example, police had to be redeployed to manage the protests, diverting them from antigun patrols and other activities that deter the carrying of illegal firearms. And even after the protests began to wane, police pulled back from proactive policing—that is, from self-initiated policing methods designed to reduce crime by using preventive strategies, such as street stops or antigun patrols. In addition, beginning at the same time, law enforcement capabilities were diminished by reduced funding and other setbacks (such as increased retirements due to demoralization), again due to the anti-police protests. The consequence of reducing law enforcement activity directed against gun violence has been, perhaps unsurprisingly, an increase in gun violence.

Since I articulated my “Minneapolis Effect” theory several months ago, an important new paper had been published supporting my conclusions. As a companion piece to my article in the Federal Sentencing Reporter, Professor Lawrence Rosenthal published an article entitled “The Law and Economics of De-Policing.” In his article, he points to “mounting evidence for what some have dubbed ‘De-Policing’—police retreat in the face of hostile public scrutiny, often in the wake of a highly publicized incident of police misconduct.” He also concludes that the law and economics of policing suggest the most likely mechanism for the decline in law enforcement activity: “Because police officers internalize few, if any, of the benefits of effective policing, when they perceive a risk that they will be made to internalize its costs, over-deterrence is the likely outcome.”

Also supporting the de-policing theory is the seemingly puzzling pattern of crime trends in 2020, developed in today’s Rosenfeld report. During 2020, homicides dramatically  increased (up 30%), as did the somewhat related crime categories of gun assaults (up 8%) and aggravated assaults (up 6%). On the other hand, declines occurred in many other crime categories, including robbery (down 9%), residential burglary (down 24%), non-residential burglary (down 7%), larceny (down 16%), and drug offenses (down 30%).

The Great 2020 Homicide Spike looks eerily similar to the pattern of crime increases during the 2016 Chicago homicide spike. As Professor Fowles and I explained in an earlier paper about Chicago crime trends, in 2016 stop-and-frisks fell dramatically in the Windy City following an agreement between Chicago Police and the ACLU. And, as a consequence of that agreement, homicides and shootings dramatically increased, while most other crimes did not. The 2016 Chicago pattern may thus provide a key for unlocking an answer to why rates for some crimes spiked in the U.S. last year while others did not. As the 2016 Chicago homicide spike demonstrates, proactive policing (e.g., stop-and-frisks) plays a uniquely important role in deterring the carrying of illegal guns and thus preventing firearm crimes. When stop-and-frisks plummeted in Chicago in 2016, gun violence spiked (but not other crime categories). So, too, in the summer of 2020, as proactive policing declined across the country, gun violence spiked (but not other crime categories).

Today’s new report about 2020 crime trends acknowledges the possibility of de-policing–as does an earlier paper by Rosenfeld.  But today’s report seemingly discounts the issue, noting that “the connection between police violence, protects and social unrest, and heightened community violence remains uncertain.” (p. 16). At some level, this point is true. Social science research is often unable to reach definitive conclusions. But the issue for policy makers today is how to respond to the dramatic homicide spike–and policymakers do not have the luxury of waiting until perfect knowledge exists.

To my mind, the major flaw in today’s Rosenfeld report is its concluding section, which makes policy recommendations. The section calls for “bold action” to respond to rising homicide rates, But rather than presenting a bold response, the reports offers three anodyne recommendations–recommendations that unfortunately seem to steer clear of directly addressing de-policing issues.

The first recommendation calls for “subduing the coronavirus pandemic.” No one will disagree with that proposal. But for reasons explained above, the pandemic does not appear to be the main cause of the homicide spike and thus subduing it will not address most of the problem.

The Rosenfeld report’s second recommendation is “improving the fairness and legitimacy of the justice system in general, and policing in particular.” This is a good idea, to be sure. Indeed, I doubt anyone would disagree with improving the “legitimacy” of our criminal justice system in general. But, again, this proposal does not provide helpful guidance to policymakers seeking to respond immediately to the sharp increase in homicides that has manifested over the last seven months. Issues surrounding “legitimacy” of the system ebb and flow in long term cycles that seem unrelated to the current spike.

The final recommendation is that “responses to record-breaking increases in homicide must not wait. Policymakers can and should address the pandemic, police legitimacy, and violent crime simultaneously. A large body of rigorous empirical evidence demonstrates that violent crime can be addressed using strategies that are available now and do not require significant budgetary outlays, new legislation, or deep systemic reforms.” This recommendation is apparently based on a footnote to one of the co-authors on the Rosenfeld report–Thomas Abt, who has written an informative book, Bleeding Out. But that book, written in 2019 before the pandemic, offers a series of proposals designed to reduce homicides generally, such as by expanding social services and anti-violence programs. To be sure, preventing homicides is obviously a good thing. But general approaches obviously are not targeted to a specific problem that sudden arose during the last half of 2020. The Rosenfeld report fails to explain clearly what countermeasures would be effective in specifically combating the nation’s recent homicide spike.

Indeed, one interesting point is that Abt’s book discusses the importance of “hot spot” policing, explaining that “[w]hether a hot person carries a hot gun in a hot spot depends on, among other things, supply and demand. To reduce the demand for illegal firearms among dangerous people in dangerous places, the risk of apprehension must be high.” This suggests that if recent anti-police protests have reduced the risk of apprehension for carrying illegal firearms or for committing gun crimes, the likely result is an increase in gun crimes. Thus, the Rosenfeld report seems to be suggesting (sub silencio) that we need more “hot spot” policing–although that point is not specifically mentioned. I wish the Rosenfeld report had more pointedly called for expanded proactive policing, as that seems to be the clear and immediate need in this country.

While today’s report is unduly limited in its recommendations, I hope that the report will lead to further research on last year’s homicide spike. Given the wealth of data that are available, time series regression analysis should be able to shed further light on what caused such a dramatic increase in homicides over such a short period of time. To be sure, time series analysis of events in 2020 will be difficult, given that COVID-19 has disrupted so many aspects of American society–including criminal justice.  But difficult does not mean impossible. Research should be able to disentangle the competing effects of the various events in 2020, allowing policymakers to have a better understanding of why homicides sharply increased last year.

While highlighting these points of possible disagreement with today’s report, I want to conclude by emphasizing a point of strong agreement between me and the Rosenfeld et al. The new report concludes that the Great 2020 Homicide Spike led to 1,268 more deaths in the sample of 34 cities than in the year before. In its last sentence, the report finishes with the plea that “[w]ith so many lives at stake, the time to act is now.”

I wholeheartedly agree–and have argued in my earlier paper for immediate responses to spiking homicide rates. It is time to act now, as many lives are, indeed, at stake–disproportionately the lives of victims who are of color, residents of inner cities, and impoverished. But that immediate action must be clear-eyed about why so many additional victims were murdered last year. The best, currently available evidence strongly supports the conclusion that the Great 2020 Homicide Spike resulted from the widespread anti-police protests, which in turn lead to a reduction in policing activity directed at fighting gun crimes. To save lives in 2021, we need urgent action to restore proactive policing to its pre-protest levels.

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Juvenile Cases Transferred to Ordinary Criminal Court Can’t Be Categorically Sealed

Juvenile cases have historically been litigated confidentially. Ordinary criminal cases have historically been litigated openly, and the First Amendment has been read as protecting that openness. What should happen when serious juvenile cases are transferred to ordinary criminal court? In today’s Hartford Courant Co. v. Carroll, the Second Circuit (in an opinion by Judge Denny Chin, joined by Judges Joseph Bianco and Steven Menashi) said that those cases can’t be categorically sealed (though courts could consider case by case whether particular such cases should indeed be tried confidentially):

As the district court properly held, the right of access to court proceedings and records depends on the nature of the proceeding, not on the personal characteristics of the litigant. And courts have consistently held that regular criminal courts are presumptively open to the public, even where the parties involved in the proceedings [such as crime victims] are children….

The district court presumed that defendants had “a compelling interest in protecting the confidentiality of court records and proceedings pertaining to juvenile defendants.” We too can presume without deciding that defendants have established that they have such an interest, because even so, we agree that the Act is not narrowly tailored to serve that interest, and we therefore conclude that it violates the Courant’s right of access to the courts….

[T]he Courant provided a number of examples, including the prosecution of Michael Skakel, that illustrate why the Act is not narrowly tailored. As of December 2019, Mr. Skakel was fifty-nine-years old, but under the Act, the records and proceedings in his case are mandatorily sealed because, despite being forty when he was charged, he committed his alleged offense at the age of fifteen. The need to protect the confidentiality of juveniles is not implicated by Mr. Skakel’s case, and yet the statute’s broad scope reaches him, in a case of great public interest. We need not strain ourselves to think of other examples where the statute would broadly overreach. For instance, gang prosecutions involving juveniles are not uncommon, and under the Act, Connecticut courts would be required to conduct numerous secret jury trials, where, given the seriousness of the crimes usually involved, the risk of unfair stigma does not seem to be outweighed by the substantial public interest in disclosure.

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These Are The Shadowy New York Financial Institutions That Forced Robinhood To Restrict Trading In Certain Stocks

These Are The Shadowy New York Financial Institutions That Forced Robinhood To Restrict Trading In Certain Stocks

Authored by Michael Snyder via TheMostImportantNews.com,

Have you ever heard of the Depository Trust & Clearing Corporation?  What about Cede and Company?  If those names are foreign to you, then you don’t really understand how the core of our financial system really works.  A lot of people are blaming Robinhood CEO Vlad Tenev and the heads of other major trading platforms for the stock trading restrictions that we witnessed last week, but it was actually the DTCC that suddenly jacked up deposit requirements ten-fold.  Robinhood and other trading platforms were put in a vise-like grip, and they had no choice but to act.  Someone needs to investigate how these decisions were made at the DTCC, and if laws were broken those that were responsible for the decisions need to go to prison.

We are being told that retail traders needed to be brought under control “for their own good”, but it was the reckless short selling of the big hedge funds that actually set the stage of last week’s chaos.

Why doesn’t anyone ever talk about restricting their exceedingly foolish trading strategies?

Thanks to relentless buying by “the Reddit Army”, several major hedge funds got absolutely slaughtered last week, and that group included Melvin Capital…

Melvin Capital, a premier Wall Street hedge fund entangled in the frenzy over GameStop (GME), lost 53% in January, a source familiar with the matter told CNN Business.

Melvin, a major short-seller of GameStop, bet that the company’s shares would drop. But, on January 11, GameStop announced new board members who could help it with digital sales. That set off a fury on Reddit, namely subreddit WallStreetBets, which catapulted GameStop’s stock more than 1,600%.

Of course the small fish are not supposed to beat up the big fish like that, and the billionaires at the big hedge funds undoubtedly reached out to their powerful friends for help.

There had been speculation that the big hedge funds leaned on Robinhood CEO Vlad Tenev and the heads of other large trading platforms directly, but the truth is more complicated.

It turns out that the pressure on Robinhood and other major trading platforms came from the clearinghouse level.  The following comes from a piece in USA Today that was authored by Vlad Tenev himself…

In a matter of days, our clearinghouse-mandated deposit requirements related to stocks increased ten-fold. These deposits are the collateral we post to ensure our access to clearinghouse services on behalf of our customers. They are what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on. As we noted in a blog on Friday, it was not because we wanted to stop people from buying these or any stocks — we built Robinhood to provide access to investing for all. And it certainly wasn’t because we were trying to help hedge funds.

Tenev didn’t mention it by name, but the company that clears almost all of Robinhood’s trades is the Depository Trust & Clearing Corporation.  If you are not familiar with the DTCC, here is some basic info from Wikipedia…

The Depository Trust & Clearing Corporation (DTCC) is an American post-trade financial services company providing clearing and settlement services to the financial markets. It performs the exchange of securities on behalf of buyers and sellers and functions as a central securities depository by providing central custody of securities.

DTCC was established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). User-owned and directed, it automates, centralizes, standardizes, and streamlines processes in the capital markets.[3] Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bonds, unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter derivatives. It also manages transactions between mutual funds and insurance carriers and their respective investors.

In 2011, DTCC settled the vast majority of securities transactions in the United States and close to $1.7 quadrillion[4][5][6] in value worldwide, making it by far the highest financial value processor in the world.[6] DTCC operates facilities in the New York metropolitan area, and at multiple locations in and outside the United States.

Theoretically, the DTCC is supposed to be a neutral participant in the markets.

But as we saw last week, that is definitely not the case.

So why should we allow a “for-profit monopoly” to have so much power over our financial system?  The following comes from a piece that was just authored by Omid Malekan…

The brilliance of this excuse is that it only proves the skeptics and conspiracy-theory believers right. DTCC is a for-profit monopoly that sits at the heart of America’s financial system. It is controlled by the biggest Wall Street institutions and responsible for all public equity settlement. A subsidiary of it literally owns every single share of publicly traded stock in America. Yes, you read that correctly. You don’t actually own your shares of Apple or Microsoft, they do. You are only allowed to enjoy the financial benefits of being an investor because your corporate overlords let you. Why? Because the government wants it that way (the fact that financial firms like DTCC always donate a lot of money to politicians has nothing to do with it.)

Of course the DTCC is not actually the top of the pyramid.

The Depository Trust & Clearing Corporation, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation are all managed “under the umbrella” of a shadowy entity known as Cede and Company…

This small New York based financial institution has a dozen directors and no more than a half dozen employees but holds, according to some reports, some 34 trillion dollars in assets.

A complex system of interlocking bodies, such as The Depository Trust & Clearing Corporation, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation oversee all stock trading in the US. They all come under the umbrella of Cede.

And, on paper at least, own all the stocks traded.

One or more decision makers at these shadowy entities decided to put an extraordinary amount of pressure on Robinhood and other trading platforms.

We need to find out exactly who was involved in making the decisions, and if something illegal took place the decision makers need to be held accountable.

For now, Robinhood and other trading platforms will continue to restrict trading in certain stocks as we begin a new week…

Robinhood will continue to limit trading on Monday in short-squeeze names like GameStop that have experienced explosive rallies and unprecedented volatility over the past week.

Customers can only buy one share of GameStop’s stock and five options contracts. However, the millennial-favored stock trading app did cut down its list of restricted stocks from as many as 50 on Friday to eight starting Monday.

Our financial system is far more vulnerable than most people realize, and it is just a matter of time before the house of cards comes tumbling down.

Anyone that still thinks that we have a “free market” after what we witnessed last week is simply being delusional.

Very powerful forces look out for the interests of the ultra-wealthy, and the game has been carefully designed for them to win.

*  *  *

Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

Tyler Durden
Mon, 02/01/2021 – 12:22

via ZeroHedge News https://ift.tt/2MKPXki Tyler Durden

Brickbats: February 2021

brickbats1

Chicago Mayor Lori Lightfoot campaigned on a promise to reduce the city’s dependence on fines and fees to balance its budget, noting that fines and fees fall disproportionately on the poor and minorities. Now that Lightfoot is facing the possibility of a more than $1 billion deficit in 2021, her budget proposal calls for $35 tickets for anyone the city’s speed cameras detect driving as little as 6 mph over the limit.

When Geauga County, Ohio, Juvenile Court Judge Timothy J. Grendell ordered two teenage boys to resume visitation with their estranged father, they refused. So Grendell had them locked up in a juvenile detention center for the weekend instead.

 Oklahoma County, Oklahoma, District Attorney David Prater has charged two former detention officers and their supervisor with cruelty to a prisoner and conspiracy. Prater says the three forced inmates to listen to the children’s song “Baby Shark” for extended periods of time.

Qatari officials took all the women off a flight scheduled to leave for Australia in October and strip-searched them. An infant had been found in a restroom at the airport terminal, and officials were reportedly examining the women for signs that one of them had recently given birth.

Four police officers in Milan, Italy, stopped a couple and issued them a 400 euro ($486) fine for kissing in public, a violation of the nation’s mandatory mask rule. The couple protested that they are engaged and have been romantically involved for two years, but police would not budge.

In October, the Gloucestershire Constabulary in England said it would begin patrolling routes out of Wales looking for Welsh drivers who appear to be taking long trips. Cops will stop such drivers and order them to turn around; if they don’t, police will report them to their Welsh counterparts for possibly violating a ban on nonessential travel.

The Château des ducs de Bretagne museum in France has postponed an exhibit on Genghis Khan and the Mongol Empire. It was being put together with the help of a museum in Hohhot, China. But the Chinese Bureau of Cultural Heritage demanded control over the exhibit and ordered that certain words and phrases, including Genghis Khan, empire, and Mongol, be removed.

In the runup to the November election, a federal judge ordered that Tyler Maxwell, 18, be allowed to keep parking his truck at Florida’s Spruce Creek High School. The principal had rescinded Maxwell’s parking pass after he refused to remove a pro-Trump display, including a large elephant statue, from the truck.

When Dade City, Florida, police found Gwen Donahue, a 74-year-old dementia patient who had wandered away from her nursing home, they ran her name through their database and found that she had a warrant from nearly a decade ago. Rather than return her to her nursing home, they arrested her. Donahue’s daughter says the warrant was for driving under the influence and that her mother completed her sentence, except for a two-hour online course. It took the family nearly a week to get a judge to sign a release order to get her out of jail.

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Facebook Oversight Reverses Hydroxychloroquine Censorship Decision

Facebook Oversight Reverses Hydroxychloroquine Censorship Decision

Facebook’s independent Oversight Board has ruled against the social media giant’s decision to remove an October 2020 post touting hydroxychloroquine (HCQ) – the antimalarial which Democrats and their media surrogates were cautiously optimistic about until former President Trump promoted it.

“In October 2020, a user posted a video and accompanying text in French in a public Facebook group related to COVID-19,” explained the board on its website. “The post alleged a scandal at the Agence Nationale de Sécurité du Médicament (the French agency responsible for regulating health products), which refused to authorize hydroxychloroquine combined with azithromycin for use against COVID-19, but authorized and promoted remdesivir. The user criticized the lack of a health strategy in France and stated that “[Didier] Raoult’s cure” is being used elsewhere to save lives. The user’s post also questioned what society had to lose by allowing doctors to prescribe in an emergency a “harmless drug” when the first symptoms of COVID-19 appear.“

The Oversight Board noted that the user’s post did not encourage people to take HCQ without a prescription, and was instead “opposing a governmental policy and aimed to change that policy.”

“The combination of medicines that the post claims constitute a cure are not available without a prescription in France and the content does not encourage people to buy or take drugs without a prescription. Considering these and other contextual factors, the Board noted that Facebook had not demonstrated the post would rise to the level of imminent harm, as required by its own rule in the Community Standards,” the Board continued, adding that Facebook failed to satisfactorily explain why it removed the post, annd that their ‘misinformation and imminent harm rule’ is too vague – recommending that the company clarify its standards on health misinformation.

“The Board also found Facebook’s misinformation and imminent harm rule, which this post is said to have violated, to be inappropriately vague and inconsistent with international human rights standards,” wrote the panel. “A patchwork of policies found on different parts of Facebook’s website make it difficult for users to understand what content is prohibited. Changes to Facebook’s COVID-19 policies announced in the company’s Newsroom have not always been reflected in its Community Standards, while some of these changes even appear to contradict them.”

One can’t help but wonder how many lives left’s politicization of HCQ may have cost, after several studies have concluded that when taken early into a COVID-19 infection, the antimalarial has been shown to reduce mortality.

The currently completed retrospective studies and randomized trials have generally shown these findings: 1) when started late in the hospital course and for short durations of time, antimalarials appear to be ineffective, 2) when started earlier in the hospital course, for progressively longer durations and in outpatients, antimalarials may reduce the progression of disease, prevent hospitalization, and are associated with reduced mortality. –American Journal of Medicine

 

One Brazilian study found 4.6x fewer hospitalizations in patients who took HCQ and azithromycin within seven days of infection, while a retrospective study of cases in Detroit showed a 71% reduction in mortality with early treatment using the HCQ / Azithromycin combination.
 
A meta-analysis of 105,040 cases from 20 studies in 9 countries found a reduction in mortality by up to three times in groups treated early with Hydroxychloroquine and Azithromycin.
 
Unfortunately for those hoping to use HCQ, Trump made the mistake of endorsing it, setting off a cascade of anti-HCQ propaganda which has been largely disproven.
 
We’re beginning to like this Oversight Board.

Tyler Durden
Mon, 02/01/2021 – 12:04

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Actually, there is an alternative

On March 12, 1989, a research fellow at CERN named Tim Berners-Lee submitted a paper to the agency’s senior management, proposing a new way to organize information across computer networks.

The Internet was already in full swing by 1989, at least among governments and universities. But it was mostly used for email at that point, because there was no easy way to post and access different types of content.

Berners-Lee solved that problem, and his creation became known as the World Wide Web.

A few years later, a young software engineer named Marc Andreessen led the development of the first graphical web browser; it was called Mosaic, and it was instrumental in popularizing the Internet around the world.

Andreessen broke away from the Mosaic project and founded a new company– Netscape Communications. And its ‘Netscape Navigator’ quickly became the most popular web browser in the world.

Barely a year after its founding, Netscape decided to go public. And this was extremely unusual at the time.

Back in the 1980s, nearly EVERY company to IPO was profitable, and fairly seasoned. Apple, Microsoft, Adobe, etc. were all making money when they went public.

Sure, it was normal that sophisticated investors who could bear the risk would buy shares of unprofitable startups. But it was unthinkable that an unprofitable company would go public, or that mainstream investors would actually want to own the stock.

Netscape, despite the popularity of its browser, was losing tons of money, so its decision to go public was highly unusual.

But that didn’t seem to matter to investors; Netscape’s IPO was a smashing success. When it went public in August 1995, the share price doubled on the first day, and it was up 600% within a few months.

And soon, it seemed like every 20 year old with a website was going public. And not only were most of these companies unprofitable, many of them weren’t even generating revenue.

It took another 4+ years for the dot-com bubble to burst. And when it did, the decline was ferocious; the NASDAQ stock index dropped nearly 80% from its peak, and most of the former high-flying dotcoms went bust.

You’d think that would have been a valuable lesson, and that no one would repeat the same mistakes of the dot-com bubble again.

But that’s precisely what we’re seeing now– companies that lose tons of money are some of the most popular stocks in the world.

Uber, for example, has never turned a profit. Its operating cash flow has totaled NEGATIVE $11 billion over the past five years with no end in sight. Yet its stock is worth roughly $100 billion.

SnapChat similarly has lost billions of dollars over the years. Yet its stock is worth nearly $80 billion.

Even stocks that are profitable are trading at absurd valuations.

I know its sacrilege to criticize Tesla… but let’s be honest– even though the company finally had a full year of positive Free Cash Flow, the stock is trading at an unbelievable 1600x earnings.

In fact MOST of the market is overvalued; the current P/E ratio of the S&P 500 is nearly FORTY (versus a long-term average of 15).

Yet people keep piling into the market despite these extreme valuations, let alone the fact that the new ruling party wants to raise their taxes and create all sorts of debilitating regulations.

The common refrain is that ‘There is No Alternative,” or TINA. In other words, because the Federal Reserve is printing so much money, it’s nearly impossible to find a fairly valued asset anymore.

But this TINA mentality demonstrates a remarkable lack of creativity or insight. And one need only look as far as gold.

Now, typically when I write about gold, I discuss its utility as a hedge against systemic risk.

Gold is like an insurance policy. And if the proverbial ever hits the fan, its not a bad idea to own a little bit of an asset with a 5,000 year history of value and marketability.

But today I’d point to gold’s potential speculative upside.

Remember when the pandemic first hit last year? Gold went through the roof because everyone was in a panic. And by early August, gold hit an all-time high of $2,058.

About two days prior to that record high, when the price was in excess of $2,000 per troy ounce, I wrote that “a short-term correction” in gold prices might occur, especially “if a Covid vaccine is produced.”

And that’s pretty much what happened; gold prices started to decline slightly and are now down roughly 10.5% from the peak.

The S&P 500, on the other hand, is up 12% since August. Oil and natural gas prices are up more than 25%. Real estate across the United States (according to Zillow data) is up 6%.

Even prices of industrial and agricultural commodities like corn, rubber, copper, lumber, cotton, and iron are WAY up since August.

But gold is DOWN.

This makes gold one of the only major assets to fall over the past five months.

And yet the world is not exactly on a positive trend right now.

Public health officials have been terrorizing their citizens about the evil new Covid strain; one government minister in Singapore just said it would be 4-5 YEARS before Covid conditions went away.

Politicians still want to restrain economic activity and pay people to stay home. Governments are still going deeper into debt and creating all sorts of debilitating regulations. Central banks are actively debasing their currencies.

Amid all of this, stock market valuations are near record levels… but gold is down 10%.

Now, I’m not suggesting anyone should sell their stocks to buy gold (we aren’t investment advisors anyhow); in fact there’s a case to be made that stocks will rise even further as long as the central bank keeps printing money.

The larger point is that this TINA mentality is total nonsense. It seems obvious that gold is a very credible alternative when so many other assets are overvalued.

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In Defense Of Hedge Funds – Gamestop Squeeze Hides Market Excess Risk

In Defense Of Hedge Funds – Gamestop Squeeze Hides Market Excess Risk

Authored by Daniel Lacalle,

The short-squeeze forced in Gamestop and other stocks through Reddit’s WallStreetBets has generated a massive media frenzy against hedge funds and comments all over social media hailing the decision of a group of small investors to trigger a huge repurchase of a beaten-down stock.

The first thing we need to understand is that hedge funds play an essential role in markets. They provide liquidity, and in many cases are the ones that buy when the largest proportion of equity and bond markets, long-only investment funds, panic, and sell massively.

It is interesting to see how the average citizen and the media tends to blame hedge funds for market crashes when these investment firms account for less than 3% of global assets under management.

When markets crash it is not because of hedge funds attack, but because long-only large funds sell. However, the activity of shorting (borrowing a stock and selling it to repurchase it afterward at a cheaper price) has been demonized numerous times, and usually by CEOs of companies that are missing earnings, underdelivering on their strategy, and destroying value.

Hedge Funds are the easiest scapegoat to blame for the excesses of markets. However, they are a small proportion of the global market and, more importantly, their main activity is not to short stocks or bonds.

There are many fallacies about hedge funds that we read constantly:

  1. Hedge Funds profit from market crashes. The vast majority of hedge funds are net long, which means that they have more bets on a rising market than short exposure: In the latest Hedge Fund Review conducted by HSBC, the average net length of hedge funds is 40%, a very strong exposure to rising markets.

  2. Hedge funds are massively leveraged and create distortions in markets. According to a study by Columbia Business School, the average net leverage of hedge funds is 0.59 and the average long-only leverage is 1.36.

  3. Hedge Funds make solid companies collapse. A short position is not a guarantee to bring a stock down. As I have witnessed as a hedge fund manager, short positions can often be very painful, especially in a rising market, because the risk in a short position is asymmetric: A stock can go up more than 100% but cannot fall more than 100%. Short-squeezes (the process by which hedge funds need to cover their shorts when the price of an asset rises fast and the losses become unbearable) happen more often than what people think.

  4. Hedge Funds make concentrated attacks on companies. Collusion is illegal and penalized with jail sentences and heavy fines. In reality, hedge funds have a multitude of different strategies and very different objectives, that is why often one can find a large hedge fund with a short position in a headline-grabbing stock and a competitor building a long position in that same stock. If one or two hedge funds decided to attack a stock, it is not just illegal if there is collusion, but immediately we would see a large group of investors buying to prove them wrong if fundamentals and catalysts are positive.

The latest episode of hedge fund-bashing came with the Gamestop saga.

Obviously, having a massive short position in a $300 million equity value company with 136% of its free float in short interest is a very risky and unprofessional bet.

Most hedge funds use shorts to finance long investments and reduce exposure to market (beta) factors in order to isolate the idiosyncratic value of the investment. If I buy a large technology company for its superb strategy and I want to hedge (hence the name) exposure to interest rates, money supply changes, regulation, or other external factors, I may decide to use a short in a similar, but weaker, technology company. this is what most hedge funds do, not place massive short bets on a bankrupt company that may blow up the risk metrics and performance of the entire fund.

It makes no sense to expose an entire portfolio to the risk of a short-squeeze. In an ideal portfolio, the hedge fund manager will place risk-adjusted bets on the long and the short side so that one position does not destroy the performance of the portfolio if the bet goes wrong, either because a long investment collapses or a short one rises. Why? because the manager’s objective is to grow the fund, keep adding names and attract more investors thanks to a low-volatility and risk-adjusted strategy.

There is a lot to be said about those that kept unadjusted bets on Gamestop ignoring the daily volumes, the high concentration of shorts, and the diminishing free float. But that is not what most hedge funds do and is even less what any hedge fund should have as a strategy.

The strategy of a hedge fund is to mitigate volatility and generate absolute returns adjusting risk limits and keeping a strict control of the exposures to different factors. No serious hedge fund manager would finance long positions in liquid names with massive shorts in illiquid and crowded-short trades. That person would be fired immediately from a Citadel or Millennium, houses where portfolio managers spend hours-on-end analysing risk and exposure limits to be as neutral as possible. Hedge fund managers like Izzy Englander or Ken Griffin are precisely the ones that promote in their firms a no-nonsense strict approach to risk analysis and specifically weighted factor exposures.

It is precisely this, the dedicated and strict risk analysis with strong limits to market and external exposures that differentiate real hedge funds from a “long-only with a few shorts”, firms that have unfortunately flourished in a bull market driven by central bank insanity.

Hedge Funds have been essential providers of liquidity when markets have crashed and some of the best and most talented investors I have met in my life have built their careers in the hedge fund world.

Without hedge funds, we would also miss an increasingly rare but essential part of markets: the ones that think outside the box, the investors that actually identify bubbles and excessive risk in a world where all we hear every day from consensus is that nothing is bad and markets can only go up.

Gamestop has exposed a few bad strategies but not destroyed the true value of a well-hedged and low-risk long-term portfolio with quality longs and good sources of funds hedging them. There is nothing in the Gamestop saga that debunks the proven strategy of so many really market-neutral hedge funds.

The Gamestop saga only proves three things.

a) There are too many people taking excessive risk due to the insane monetary policy we live in, including the alleged Robin Hood investors trying to force short-squeezes in bankrupt companies.

b) It is amazing to see that the same people that -rightly- criticize when there is an episode of collusion between investment firms hailing the ultimate collusion promoted by a website that moves 197 million shares of a stock in one day and wants us to believe that it is all the action of a few young investors who decided that a bankrupt company is a place to put their hard-earned savings on.

c) A short-squeeze is relatively easy to trigger. The problem, as so many will find, is to sell afterward.

Small investors benefit a lot more from websites where they share ideas and opinions. Colluding to trigger short-squeezes in an almost-bankrupt company may seem fun but it is behaving in the same casino non-fundamental insane way that many of these investors accuse others of implementing.

If you want to invest, learn from successes achieved by great investors and the mistakes committed by them analyzing companies, do not play the greater fool theory and hope for the best.

Learn from the best, not from the reckless.

Tyler Durden
Mon, 02/01/2021 – 11:30

via ZeroHedge News https://ift.tt/2YAvwcA Tyler Durden

“This Is Unprecedented In History” APMEX CEO Explains Why They Halted Silver Bullion Sales Over The Weekend

“This Is Unprecedented In History” APMEX CEO Explains Why They Halted Silver Bullion Sales Over The Weekend

As we noted over the weekend, online bullion dealers saw such huge demand for silver ahead of today’s moves as ‘Reddit-Raiders’ prepared to take aim at the precious metals markets.

Sites from Money Metals and SD Bullion to JM Bullion and APMEX, all halted sales amid the unprecedented demand.

Over the weekend, Tyler Wall, the CEO of SD Bullion wrote the following (emphasis ours): 

In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open.

In a normal market, we normally can find at least one supplier/source willing to sell some ounces over the weekend if we exceed our long position (the number of ounces we predict we will sell over the weekend).

However, everyone we talk to is afraid of a gap up at Sunday night market open.

This is about ready to get really interesting as there was very little inventory left from suppliers/mints going into Friday close.

Our direct AP supplier informed us after close on Friday that the “US Mint will be on allocation for the remainder of Type 1” (Current Silver Eagle Design).

Our sales for the month of January exceeded any one month last year during the heart of the pandemic. It was an all-time record month in our company history. 

And, perhaps most importantly, as QTR tweets so succinctly, “no matter what happens with #SilverSqueeze, a lot of younger people are for the first time informing themselves that metals are the only true real money. That realization sticks for life, even when squeezes end… this is a red pill moment for many, and it’s beautiful.“

However, the comments from APMEX’s CEO Ken Lews were just as shocking… (emphasis ours)

To our valued customers,

APMEX Statement On Current Market Conditions:

In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week. 

Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. We have partnerships around to world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history. 

As we evaluate the markets, it is difficult to know where Silver’s price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.

We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.

We wonder if Nelson, Lamar, and William Hunt would approve of Reddit’s approach?

Tyler Durden
Mon, 02/01/2021 – 11:12

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Biden’s Orders Continue the Presidency’s Slide Toward Elective Monarchy

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“Ease up on the executive actions, Joe,” The New York Times urged recently inaugurated President Biden last week. While supportive of the president’s broadly progressive agenda, the newspaper’s editorial board found his flurry of executive orders and other unilateral actions both troubling and vulnerable to easy reversal by future presidents. “This is no way to make law,” the Times added.

Unfortunately, creeping rule-by-decree has become common for presidents, and Biden’s impatience with the normal frustrations of the legislative process builds on the conduct of his predecessors. While partisans tend to pick sides on executive power depending on who holds the White House, the devolution of the presidency into something resembling elective monarchy should worry everybody.

Not that executive orders are supposed to be royal decrees. At their root, they are nothing more than the authority of leaders to set rules for their organizations.

“Presidents have historically utilized various written instruments to direct the executive branch and implement policy,” the Congressional Research Service noted in 2014. “These include executive orders, presidential memoranda, and presidential proclamations.”

“The substance of an executive order, including any requirements or prohibitions, may have the force and effect of law only if the presidential action is based on power vested in the President by the U.S. Constitution or delegated to the President by Congress,” the 2014 report added.

But the limits of such orders are fuzzy since there is no mention of them in the Constitution; they evolved as a matter of convenience and so have their powers.

“When carried out pursuant to legislative or constitutional authority, executive orders are unobjectionable,” the Cato Institute’s Gene Healy observed in his 2008 book, The Cult of the Presidency. “Yet many of the orders issued by modern presidents lack such authority and justification.”

Professor Dana D. Nelson of Vanderbilt University agrees. In her 2008 book Bad for Democracy, Nelson called such unilateral commands “power tools” that “allow the president to enact both foreign and domestic policy directly, without aid, interference, or consent from the legislative branch.”

That’s not to say that executive actions can’t be challenged; judges do occasionally overturn them. But it takes less time to issue a memo than to fight it in court, so orders accumulate along with their reach.

Under Coolidge and Hoover, most executive orders applied to such matters as civil service rules. However, by the 1960s, the majority were policy-specific, filling the role of legislation. Issuing orders is easy; persuading lawmakers to pass your bills is difficult and time-consuming. As a result, unilateral action is tempting even for critics of such governance.

“A polarized, narrowly divided Congress may offer Mr. Biden little choice but to employ executive actions or see his entire agenda held hostage,” the Times sniffed while objecting to the practice.

For its part, the Biden administration makes no secret of its impatience with normal legislative channels.

“There are steps, including overturning some of the harmful, detrimental and yes, immoral, actions of the prior administration that he felt he could not wait to overturn,” White House press secretary Jen Psaki told reporters who questioned the Biden administration’s reliance on unilateral action.

But every faction thinks its agenda is important and that its ideological foes do harm; that’s why political parties oppose each other. If the refusal of lawmakers to enact a president’s policies is justification for unilateral executive action, then a slide toward elective monarchy is inevitable. And that’s exactly what seems to be happening.

“Biden’s use of the executive power in his first two days far outpaced that of his predecessors,” PolitiFact confirmed amidst public concern over the issue. “Biden issued 17 executive orders on his first two days in office, compared with Trump who issued one and Obama who issued two. Biden issued three proclamations, while Trump and Obama each issued one.”

But those predecessors also relied heavily on executive actions. “Trump is on pace to sign more executive orders than any president in the last 50 years,” CNN reported in 2017 of the 45th president.

“Once a presidential candidate with deep misgivings about executive power, Mr. Obama will leave the White House as one of the most prolific authors of major regulations in presidential history,” The New York Times concluded at the end of the 44th president’s time in office.

Notably, before taking office, Obama, Trump, and Biden were all critics of presidential rule through unilateral orders. “We’re a democracy. We need consensus,” Biden told ABC News in October. Just months later he issued his flurry of executive actions.

Maybe that’s because consensus is difficult to find in a vast nation of millions of people with varying values and preferences. That’s especially true when the country is as bitterly divided as the United States is now, into factions that despise each other to the point of violence. Presidents and their supporters often complain of a “do-nothing Congress” when legislators are in fact doing something: they’re blocking the president’s agenda. That may well be what their constituents want them to do.

Such relative inaction may actually be best when there’s so little agreement on what people desire from government—and what they fear from it.

“Overwhelming majorities of both Biden and Trump supporters say that if the other candidate wins in November they would not only be very concerned about the country’s direction, but that this would lead to lasting harm to the nation,” Pew Research found before the presidential election. That was before the Capitol riot and further souring of the national mood, with a majority of Americans now fearing each other as “domestic enemies.”

America’s divisions have deepened as government has become more involved in our lives and as presidents have indulged their taste for bypassing Congress. To reverse that dangerous trend, we need a president willing to do less, especially when it comes to issuing unilateral orders. That’s a tough ask for people who spend their lives pursuing political power. We may have to settle, again, for the next president unilaterally reversing this one’s actions.

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