Month: September 2021

With frustrated Democrats pressing Sen. Joe Manchin (D-WV) to produce a dollar figure at which he’d be willing to vote for their gargantuan spending bill, it turns out that many on the hill already knew what his absolute top-line figure was.

According to Politico, Manchin proposed a $1.5 trillion package to Senate Majority Leader Chuck Schumer (D-NY) this summer in a one-page document that outlined his red lines to President Biden’s jobs and families plan.

The document, dated July 28, proposes raising the corporate tax rate to 25%, the top tax rate on income to 39.6%, capital gains to 28% and that any that any revenue raised from the bill exceeding $1.5 trillion would go towards deficit reduction.

In bold text, the document says “Senator Manchin does not guarantee that he will vote for the final reconciliation legislation if it exceeds the conditions outlined in this agreement.“

While both Manchin and Schumer signed the document, Schumer wrote a note which said he’d “try to dissuade Joe on many of these.”

“Leader Schumer never agreed to any of the conditions Sen. Manchin laid out; he merely acknowledged where Sen. Manchin was on the subject at the time,” said Schumer’s office. “Sen. Manchin did not rule out voting for a reconciliation bill that exceeded the ideas he outlined, and Leader Schumer made clear that he would work to convince Sen. Manchin to support a final reconciliation bill — as he has doing been for weeks.”

As Politico notes, it’s unlikely Democrats will come down to Manchin’s figure, and it’s of course unknown if he’ll shift his figure higher (though recent comments suggests that’ll be a ‘no’), the document shows that Manchin does in fact have a top-line number.

Manchin has met with President Biden several times since producing the document.

“I wasn’t trying to be a fly in the ointment at all. I’ve never been. I’ve never been a liberal in any way shape or form,” said Manchin in a Thursday press conference after Politico‘s story went to print. “For them to get theirs, I guess elect more liberals. I’m not asking them to change. I’m willing to come from zero to $1.5” trillion.

Manchin said on Wednesday the top priority of the Senate’s reconciliation bill should be tax reform, and he’s generally on the same page with most Democrats in his proposal — though his corporate tax rate idea is below Biden’s preference and that of House Democrats. Manchin is not alone there: Sen. Angus King (I-Maine) said in an interview this week he also prefers a 25 percent corporate rate.

Additionally, Manchin is calling for means testing on as many new programs as possible, including health care, child care and education, “targeted spending caps on existing programs” and “no additional handouts or transfer programs.” Manchin has repeatedly raised concerns about Biden’s plan potentially creating an “entitlement society.”

Working on Sinema

Democratic leaders have also been pressuring Kyrsten Sinema (D-AZ), another moderate Democrat who refuses to vote for the $3.5 trillion bill.

“Senator Sinema said publicly more than two months ago, before Senate passage of the bipartisan infrastructure bill, that she would not support a bill costing $3.5 trillion. In August, she shared detailed concerns and priorities, including dollar figures, directly with Senate Majority Leader Schumer and the White House. Claims that the Senator has not detailed her views to President Biden and Senator Schumer are false,” said Sinema spokesman, John LaBombard. “She continues to engage directly in good-faith discussions with both President Biden and Senator Schumer to find common ground.”

Despite the tremendous rise and fall in SoftBank shares over the last 18 months, Elliott Management’s position in the Japanese telecoms-giant-with-a-VC-arm-attached is likely still in the green, partially thanks to Elliott’s strategy of pushing for more buybacks (although all the buybacks in the world likely couldn’t offset more “zeros” from soured investments in early-stage and mid-stage Silicon Valley startups).

But, for better or worse, Paul Singer and his nearly $50 billion activist hedge fund have decided to apply the same approach (push for endless corporate buybacks) to a less-willing Japanese partner: Toshiba.

According to the FT, Elliott has joined a “wolfpack” of activist funds who are investing in Toshiba, in an attempt to seize control of the Japanese giant and install management that would be more friendly to Elliott’s strategy for boosting the company’s share price: sell off several subsidiaries to PE buyers, then use the money raised to finance stock buybacks up the wazoo.

Most Americans probably remember Toshiba for the DVD players, TVs and other consumer electronics it once produced and sold in droves. But in more recent decades, the company has been badly mismanaged. It was forced to sell off its once-prized chips business in 2018 to offset losses generated by a disastrous foray into the nuclear power business. Then, back in June, Osamu Nagayama, the chairman of its board, was ousted in a rare vote by shareholders to oust the chairman of a major Japanese firm in the wake of an accounting fraud scandal. In Japan, taking out board members and management in such a brusque style simply isn’t done.

Now, the board is at a cross-roads. It’s in the final stages of a strategic review demanded by above-mentioned “wolfpack”. They’re pressuring the company to agree to set of measures that would beef up the stock price (selling assets, funding buybacks). According to the FT, activist and special events funds are “camped out in Toshiba’s shareholder register in the expectation that investors can force the company into a strategy that would significantly raise its share price.”

Sources told the FT that Elliott’s stake hasn’t yet topped 5% (the threshold at which its ownership stake would need to be publicly disclosed). But in recent days and weeks, Toshiba’s board has engaged in “unprecedented levels” of talks with investors as the “strategic review” continues.

Ultimately, the goal is a private equity buyout of the entire firm that could value the firm at more than $30 billion. If that doesn’t work, investors are hoping to force a sell-off of Toshiba’s most valuable subsidiaries and will use the proceeds to pump up the stock price the old fashioned way – with a torrent of buybacks.

At this point, the FT says several of the activist funds have threatened the board and management, claiming that if the “strategic review” doesn’t include pursuing a deal with private equity, they will vote to oust the current CEO. However, interest on the PE side is apparently lukewarm, per the FT, which spoke to two large buyout firms that said they had looked at a possible buyout, and passed. Bloomberg later reported that Toshiba started pursuing a plan to go private back in May.

Elliott confirmed its in investment in Toshiba to Bloomberg, saying it was “encouraged by the company’s underlying value.”

“Our investment in Toshiba reflects our strong conviction in the company’s underlying value,” an Elliott spokesperson said in an emailed statement. “We have been encouraged by the constructive nature of our engagement with the company in recent months.”

So, the big question now: will we see Toshiba be taken private by Apollo, Blackstone or one of their major competitors (we’ve heard Warren Buffett is interested in opportunities in Japan)? Or will it be broken down and sold for parts, allowing the financiers to extract this “value” in the form of profits…well, we don’t need to tell you what happens, you’ve probably seen Wall Street.

Authored by Jonathan Turley,

Below is my column in USA Today on the recent call by Sen. Elizabeth Warren (D., Mass.) for Amazon to steer readers to “true” books on climate change. It is the latest example of Democrat’s embracing a type of  corporate governance model to carry out tasks barred to the government under the Constitution. Companies are now being asked to protect us from our own dangerous interests and inquiries. An array of enlightened algorithms will now watch over citizens to help them make good choices and read “true” things.

Here is the column:

Two centuries ago, rulers sought to convince subjects that they should embrace the notion of “enlightened despotism,” living without rights under the beneficent watch of overlords. Holy Roman Emperor Joseph II summed up the idea with the maxim “everything for the people, nothing by the people.”

Today, we seem to be living in an age of enlightened corporate despotism, where social media and technology companies watch over what we read and what we discuss to protect us from ourselves.

That corporate governance model was on display this month when Sen. Elizabeth Warren, D-Mass., called on Amazon CEO Andy Jassy to use algorithms to steer readers away from books that spew “misinformation.”

Enlightened algorithms are already responsible for large-scale censorship across social media platforms that reach global audiences. They “stand the wall” as sentinels against dangerous ideas.

Warren argued that people were not listening to the enlightened views of herself and leading experts.

Instead, they were reading views of vaccine skeptics by searching Amazon and finding books, including “falsehoods about COVID-19 vaccines and cures, including those written by the most prominent spreaders of misinformation.”

Warren blamed Amazon for failing to limit searches or choices:

“This pattern and practice of misbehavior suggests that Amazon is either unwilling or unable to modify its business practices to prevent the spread of falsehoods or the sale of inappropriate products.”

In her letter, Warren gave the company 14 days to change its algorithms to throttle and obstruct efforts to read opposing views.

What was most striking about this incident is that Warren was eager for others to see her efforts to promote a form of censorship.

Once considered unAmerican and authoritarian, censorship has become a rallying cry from the left. Indeed, a new poll shows roughly half of the public supports not just corporate censorship but government censorship of anything deemed “misinformation.”

In one critical hearing, tech CEOs appeared before the Senate to discuss censorship programs. Twitter CEO Jack Dorsey apologized for censoring the Hunter Biden laptop story, but then pledged to censor more people in defense of “electoral integrity.”

Delaware Sen. Chris Coons, however, was not happy. He was upset not by the promised censorship but that it was not broad enough.

He noted that it was hard to define the problem of “misleading information,” but the companies had to impose a sweeping system to combat the “harm” of misinformation on climate change as well as other areas. “The pandemic and misinformation about COVID-19, manipulated media also cause harm,” Coons said. “But I’d urge you to reconsider that because helping to disseminate climate denialism, in my view, further facilitates and accelerates one of the greatest existential threats to our world.”

Connecticut Sen. Richard Blumenthal also warned that he and his colleagues would not tolerate any “backsliding or retrenching” by “failing to take action against dangerous disinformation.” He demanded “the same kind of robust content modification” from the companies – the new Orwellian term for censorship.

Others have sought even more “robust” action. For years, Democratic leaders, including President Joe Biden, have called for corporate censorship on a variety of subjects.

Last year, Democratic Reps.  Anna Eshoo and Jerry McNerney of California wrote a letter to cable carriers like AT&T to ask why they are still allowing people to watch FOX News. (For the record, I appear as a FOX legal analyst). The members stressed that “not all TV news sources are the same” and called the companies to account for their role in allowing such “dissemination.”

Washington Post columnist and CNN analyst Max Boot also wrote that cable providers should “step in and kick FOX News off.” New York Times columnist Nicholas Kristof  insisted that “cable providers should be asked why they distribute channels that peddle lies.”

CNN’s media expert Brian Stelter has called for censorship as “a harm reduction model.”

Twitter, Facebook, and other companies have responded enthusiastically in banning those who question the official view of vaccines, climate change, elections or other subjects.

Calling for companies to protect us from ourselves is the ultimate in enlightened despotism.  It is ironic that Warren has denounced the use of “racist” algorithms in biometric technology like facial recognition. She objects to the error rate in such algorithms but has few such concerns when other algorithms are used to curtail free speech.

The embrace of corporate censorship reflects a change in attitude of many toward free speech. Once the very defining right of our constitutional system, it is now more often portrayed as an existential threat to that system. Speech is now “harmful” and allowing the expression of unpopular opinions is treated as an act of an accomplice.

Once free speech is defined as harmful or violent, the algorithms can take it from there. At the urging of our leaders companies like Amazon can censor “everything for the people, nothing by the people.”

We can then live under the enlightened despotism of governing algorithms that protect us from our dangerous curiosities.

The Taliban is condemning the United States for violating Afghanistan’s airspace with drones, calling the flights a severe violation of prior US-Taliban peace agreements reached in Doha, warning of “consequences” should they continue. The statements come a week after the Pentagon said it won’t be asking “permission” to strike terrorists operating inside the country. 

“The US has violated all international rights and laws as well as its commitments made to the Taliban in Doha, Qatar, with the operation of these drones in Afghanistan,” the Taliban announced Wednesday. “We call on all countries, especially United States, to treat Afghanistan in light of international rights, laws and commitments… in order to prevent any negative consequences,” it added. 

But in terms of imposing any significant “consequences” – the reality remains that the Taliban doesn’t have much in the way of aerial capabilities to take out US drones, other than helicopters and small aircraft it has seized following the rapid American troop exit over the summer, or perhaps very limited surface-to-air capabilities.

The Biden administration has continually touted its “over the horizon” capabilities, while Pentagon spokesman John Kirby has followed by confirming there is “currently no requirement to clear airspace with the Taliban.” This after questions over the degree to which the US would cooperate with the Taliban in fighting ISIS-K have persisted. 

According to Al Jazeera, the US is likely to see its ability to fly drones over Afghanistan despite the protests from Kabul justified based on its counterterror mission:

…the US has argued that such actions are justified under international law when a government is “unable or unwilling” to address a threat from groups operating in its territory.

So far it looks like regional countries surrounding Afghanistan have been largely unwilling to host US aircraft and spy planes. This means such aircraft have to operate from bases or carriers all the way over in the Gulf region. 

Interestingly, on Tuesday in Senate testimony which focused on the Afghan pullout debacle, Chairman of the US Joint Chiefs of Staff Mark Milley maintained that the US had “adhered to every condition” of the US-Taliban withdrawal agreement. However, he didn’t specifically address the question of drone flights and how he interprets such operations. 

Authored by Brad Jones via The Epoch Times,

Several members of a state-mandated Reparations Task Force accused the California Department of Justice (DOJ) staff of overreach over the removal of agenda items and the refusal to facilitate public hearings on Saturdays.

Assembly Bill 3121 requires the DOJ to provide administrative, technical, and legal assistance to the Task Force to Study and Develop Reparation Proposals for African Americans. The task force, which held its first meeting June 1, has two years to draft an apology to the descendants of slaves and recommend ways the state might to compensate them.

Kamilah Moore, task force chair, claimed at a two-day virtual public hearing last week the DOJ overstepped its bounds when staff removed two items from the Sept. 23 and 24 meeting agenda. One allowed for a discussion about who would qualify to receive any possible reparations, and the other a discussion about potential subpoena powers of the task force to call witnesses.

“And so, we are working on meeting with more higher ups. We’re working on meeting with the Chief of Staff upon his office and [Attorney General Rob] Bonta himself and Secretary [of State] Shirley Weber to address these issues,” Moore said.

Task force member Lisa Holder, a civil rights attorney, said both items should have been on the September public hearing agenda.

“I talked to the witnesses about that, and their thoughts about how we should be utilizing our subpoena power strategically to get information that will buttress our ultimate recommendation,” Holder said.

“I do think that in the next meeting, we should have a plenary session where we have an opportunity to not only talk about the subpoena power and how we may want to strategically use it, but also to get a primer from the DOJ on what that subpoena power entails,” she said.

Amos Brown, a seasoned civil rights activist and vice chair of the task force, chided Deputy Attorney General Sarah Belton and asked that the Moore be given the respect she deserves as task force chair.

“We are a task force was created to do a job. And we should not … be disenfranchised in exercising our legal authority,” he told Belton.

“If there is some reason that staff feels certain things shouldn’t be done, just say it. Talk to us. But, I think it’s a bit much for an arbitrary decision to be made without any discussion.”

Brown pointed out that “attempts have been made to speak to the attorney general and higher ups” about the matter, but they have taken an “evasive posture.”

State Sen. Steven Bradford (D-Gardena) questioned whether the DOJ has veto power over the Reparations Task Force agenda.

“I’m going to place a personal call into Attorney General Bonta and get clarity on this issue, because it makes no sense really. No disrespect to staff, but I’ve served on plenty of boards, and I’ve never known where staff has veto power over either elected or appointed board in setting an agenda,” Bradford said.

“I’m really troubled by that,” he said. “Either we’re the body … empowered to move this task force forward and set our own agenda to address what AB 3121 said we should do, or it’s the DOJ, and I don’t think that’s what the bill stated. …We shouldn’t have to go through these maneuvers to put something back on the agenda that we originally agendized for a meeting.”

Saturday Hearings Denied

Brown also criticized the attorney general’s office and DOJ for ruling out the possibility of holding some public hearings on Saturdays to accommodate a greater number of working people.

The DOJ denied the request due to budget constraints, overtime costs, and staffing limitations, Belton said.

“Ms. Belton, I consider that to be very unreasonable,” Brown said.

“We are concerned about righting a wrong,” he said.

“We’re not saying every weekend there will be a meeting but … there ought to be at least one or two meetings that would fit the schedules of the oppressed.”

Quoting a line from the poem, “The Present Crisis” by abolitionist James Russell Lowell, Brown asked Belton to tell state Attorney General Rob Bonta, “New occasions teach new duties,” and “Time makes ancient good uncouth.”

“We deserve consideration,” he said.

Holding a town hall on the weekend “to accommodate the people is not asking much,” he said.

“They ought to be heard. … They’re the locked out. They’re the left behind.”

If there were an earthquake, “everybody would run to the rescue,” Brown said.

“And, you know, this thing of race, oppression, bigotry, and unconstitutional acts against black folks is a fault line … of seismic proportions.”

“The civil rights movement came from the bottom up, not from the top down, and that’s not to negate or disrespect resources, knowledge or whatever comes from wherever. But we don’t need to be treated like we are children or that we don’t have the capabilities for self-governance,” he said. “We know how to behave, and we know how to govern.”

Both Moore and Bradford said they shared Brown’s sentiments.

“As an individual who’s been elected for 22 years, I think public input is critical. And to silence that voice, whether unintentional or not, by saying that we can’t hold some kind of meeting on a weekend, I find is somewhat insulting especially in light of our current budget situation,” Bradford said.

He paraphrased Dr. Martin Luther King Jr.’s famous words at the 1963 March on Washington, when King said, “America has given the Negro people a bad check, a check which has come back marked ‘insufficient funds.’”

Bradford said there is “no way I’m going to believe that the vaults of California can’t afford to hold a Saturday meeting over the next two years.”

During public comments, several participants also expressed support for holding Saturday meetings.

Seven more public meetings are planned. The next one is slated for Oct. 12 and 13.

Following Texas lawmakers’ decision to ban local government from working with Wall Street banks whose policies restrict the firearms industry, it appears JPMorgan is the first of the virtue-signaling banks to feel the pinch from the new law.

Earlier this year, JPMorgan CEO Jamie Dimon told a Congressional committee that his bank won’t finance gun companies that make military-style weapons for consumers.

In May, the Texas House of Representatives passed the bill that would block the state and local governments from contracting with banks and other financial-services companies that have policies that limit their work for the firearms or ammunition industries. The legislation reflected 2nd Amendment rights supporters’ furore over corporations pushing themselves into the increasingly divisive policies of America’s identity-politics wars.

And now, as Bloomberg reports, the first impact of the law is hitting Wall Street.

This week, JPMorgan was replaced by UBS as the underwriter of a bond issue for the Decatur authority, an arm of a 7,000-person Texas city that operates Wise Health System.

In July, the agency had disclosed that it was planning to have JPMorgan serve as senior managing underwriter on a financing that could include the sale of up to $150 million of bonds.

The authority cited “uncertainty related to the implementation of new legislation passed by the State of Texas,” though it didn’t specify which law.

Texas’ fast-growing population has made it one of the biggest markets for the muni-bond business and more troubling for the banks in general is the fact that Texas-based issuers accounted for $58 billion of debt sales in 2020, the second-most of any state behind California, according to data compiled by Bloomberg.

JPMorgan was credited with working on $3.6 billion of long-term municipal-bond deals in Texas in 2020, according to data compiled by Bloomberg.

Now that’s a lot of fees that JPMorgan, BofA, and Citi will be missing out on from here:

“While our business practices should permit us to certify, the legal risk associated with this ambiguous law prevents us from bidding on most business right now with Texas public entities,” Patricia Wexler, a spokesperson for the bank, said in an emailed statement.

Three words summed it all up to us – broke banks mounting!

Authored by Jonathan Turley,

Below is my column in the Hill on growing conflicts over “misgendering” in the use of pronouns. Both governmental agencies and academic institutions are increasingly treating misgendering as a form of hate speech or discrimination.

That is triggering major free speech fights in this county and abroad.

Here is the column:

This past week the American Civil Liberties Union honored the late Supreme Court Justice Ruth Bader Ginsburg on the one-year anniversary of her death — by rewriting her famous defense of a woman’s right to abortion to remove offensive language. The offensive language? References to women and female pronouns.

While Ginsburg herself likely would have made short work of such “woke” revisionism, the incident highlighted a critical crossroads reached in politics and academia in the treatment of “misgendering” as a form of hate speech or discrimination.

Across the country, universities are ramping up misgendering rules for faculty and students. The most recent is Point Park University in Pittsburgh, which notified students that its Office of Equity and Inclusion will enforce rules against misgendering, pronoun misuse and deadnaming for individuals who do not use their classmates’ preferred pronouns. The university sent an email to students that states “any individual who has been informed of another person’s gender identity, pronouns, or chosen name is expected to respect that individual.” Students were informed that using the wrong pronoun was a violation and “action could be taken.”

Many of us have no objection to using a student’s preferred pronouns. Indeed, many faculty members try to avoid using pronouns altogether in class, rather than look up a student’s designated pronoun. Confirming the right pronouns can be challenging in the middle of a fast-moving class. Students today identify from a growing list of gender identities including, but not limited to, genderfluid, third-gender, amalgagender, demigender, bi-gender, pansgender, and a-gender. Pronouns can include, but are not limited to: He/She, They/Them, Ze/Hir (Ze, hir, hir, hirs, hirself), Ze/Zir (Ze, zir, zir, zirs, ze), Spivak (Ey, em, eir, eirs, ey), Ve (Ve, ver, vis, vis, verself), and Xe (Xe, xem, xyr, xyrs, xe).

Pronouns are fast fading from common discourse under the threat of pronoun penalties. Cities, too, are enforcing misgendering rules; for example, the New York City Human Rights Law allows for fines if employers, landlords or professionals fail to use a preferred name, pronoun or title.

Yet some people have religious beliefs against following the new order and using such pronouns. As a result, there are serious free-speech and religious-freedom objections to mandatory usage rules.

We are seeing a new stage in the fight over pronouns, where usage is mandatory and misgendering is a sanctionable offense. In other countries, it can be a violation of the criminal code. In England, a woman, Kate Scottow, was arrested following a debate on twitter over transgender policy. A transgender activist charged Scottow with harassment and “deadnaming,” or using the prior name or gender of a transexual person.

It is not just religious conservatives objecting to misgendering and new identification rules. Some feminists have objected that the movement endangers feminist values and undermines advances for women. In Scotland, feminist activist Marion Millar was charged with “malicious communication” due to tweets criticizing gender self-identification. She has been labeled a “TERF” (trans-exclusionary radical feminist).

Will misgendering in the United States be treated as actual hate speech or discriminatory speech?

To protect students from misgendering, universities and agencies would have to compel speech. This already is being litigated in some lower courts. In Loudon County, Va., a school board is fighting the courts in its effort to fire teacher Byron “Tanner” Cross, who was suspended for speaking against gender policies in a public board meeting. Cross refused to use required pronouns and told the board: “It’s lying to a child, it’s abuse to a child, and it’s sinning against our God.” The courts, including the state supreme court, ruled for Cross, noting that he could keep his job, adhere to his faith and satisfy the policy by avoiding pronouns altogether.

Notably, the school’s rule extends to students themselves, who are required to use correct pronouns, and mandates punishment for those who “intentionally and persistently refuse to respect a student’s gender identity by using the wrong name and gender pronoun.” Religious families have said such a rule would require them to leave the public school system as a threshold exclusionary condition for public education.

In Ohio,  Shawnee State University Professor Nicholas Meriwether, won a major appeal before the United States Court of Appeals for the Sixth Circuit which reversed a lower court that initially upheld his punishment for using a student’s designated pronoun choices. The school had refused Meriwether’s suggested compromises to just use the last name of the complaining student or use chosen pronouns after adding a personal disclaimer on the syllabus.

The same objections are being heard in other areas. Recently, a California court ruled that misgendering patients is protected despite a landmark LGBTQ+ rights bill. The appellate court ruled that the 2017 law unconstitutionally restricted “freedom of speech” by classifying “willful and repeated” misgendering and deadnaming as a misdemeanor punishable by a fine of up to $2,500 or imprisonment of up to 180 days. The court stated that “we recognize that misgendering may be disrespectful, discourteous, and insulting, and used as an inartful way to express an ideological disagreement with another person’s expressed gender identity. But the First Amendment does not protect only speech that inoffensively and artfully articulates a person’s point of view.”

Now, as shown by the ACLU, past pronoun offenses are being scrubbed away even for feminist icons like the “notorious” Ginsburg, for referring to the right of “women” to have abortions. Activists like Charlotte Clymer insisted that “trans men and non-binary folks need abortion access.” The result is deepening rather than closing the divide in our society.

It is possible to allow for the adoption of alternative pronouns and the recognition of different gender identities without seeking to compel others to do so. We need to find a place of common accommodation and respect in our society. Religious people, conservatives and “TERFs” also are part of the diversity that we should seek to protect. In the end, a degree of mutual understanding and tolerance could produce greater integration of all of these groups.

Justice Ginsburg herself may have said it best when she advised people to “fight for the things you care about, but do it in a way that will lead others to join you.”