January 2022 – Page 44

First Amendment Clearly Protects Student Encouraging Classmates to Negatively Evaluate Professor

From Thompson v. Ragland, decided today by Tenth Circuit, in an opinion by Judge Harris Hartz, joined by Chief Judge Timothy Tymkovich and Judge Scott Matheson:

Rowan Thompson, a student at Metropolitan State University of Denver (MSU), had a classroom dispute with her chemistry professor that ultimately prompted Thompson to drop the professor’s class. But when Thompson emailed her former classmates to express her displeasure with the professor and to suggest that her classmates leave “honest” end-of-term evaluations, Thomas Ragland, MSU’s Associate Director for Student Conduct, allegedly prohibited Thompson from further contacting the professor or even discussing the professor with any students taking any of the professor’s classes….

Thompson has an eye condition that makes her sensitive to light, requiring that she sit in the first three rows of a classroom to see what is written on the white board. She was enrolled in a chemistry class at MSU taught by Dr. Megan Lazorski. On February 4, 2019, Thompson arrived late to the class. Noting that all the seats in the first three rows were occupied, she sat on the floor in the front row. Dr. Lazorski did not approve, interrupting her lecture to instruct Thompson to take a seat. Although Thompson informed Dr. Lazorski about her eye condition, the professor still insisted that Thompson move to a seat, and she had students leave the front row so that Thompson could sit there.

A week later, Thompson again arrived late to Dr. Lazorski’s class. Because all seats in the first three rows were taken, Thompson sat on the floor in the front row, in a space where a desk was missing. Dr. Lazorski instructed Thompson to move to a seat. Thompson said she preferred to sit on the floor in the front row because of her eye condition. Dr. Lazorski responded that the only options were to sit at a desk or leave the classroom. Thompson chose to leave class.

Thompson ultimately dropped Dr. Lazorski’s class because of the seating dispute “and the unlikelihood of it being resolved.” MSU removed the class from Thompson’s record, and the school refunded her tuition for the class. Still, Thompson was dissatisfied with how Dr. Lazorski had treated her. She complained about Dr. Lazorski to various top MSU officials and administrators in a letter. She also requested a mediation of her dispute with Dr. Lazorski, which took place on March 18. During the mediation Thompson was encouraged to fill out evaluation and class-rating forms to address her concerns about Dr. Lazorski’s performance as a professor.

Thompson later realized, however, that she could not submit a review of the class or Dr. Lazorski’s performance because she was no longer enrolled in any of the professor’s classes. She proceeded to send the following email to her former classmates:

Hello everyone, I’m Rowan- some of you may know me as the goth girl who sat on the floor in class. For those who don’t know, I came late to class a couple of times and sat on the floor. It angered the professor enough that I was asked to leave class on the last occasion. A few weeks later, after a mediation attempt between the dean of chemistry and the professor, I had to drop the class to stop further confrontation- over sitting on the floor.

I have heard so many of you say how horrible a time you’re having in this class, that there are some bits that are ridiculous or downright unreasonable. You shouldn’t have to suffer through a class, especially one that is required, and this is not what college is supposed to be like. College is supposed to make us feel excited about our futures and finally learn what we are interested in, not ditch class because we know we won’t learn anything. You don’t need to keep your complaints and troubles private; this is what the evaluations are for. They’re online; the link to fill them out appears when you log into Blackboard, they take only a couple of minutes, are anonymous, and the more detail is said the better. Every issue you’ve had, every complaint? This is when the faculty and university is listening and wants to hear them. Students, including myself, who have dropped the class won’t be able to fill out an evaluation- our voices cannot be heard unless we speak to the deans directly, but I know for a fact that many are afraid to speak face-to-face.

Please, take the few minutes to review this chemistry class and be honest- make the faculty listen to you so that this class can change for the better. If not for yourself, than for those who have had to drop the class, feeling worthless and stupid, or for students who will have to take this class after you.

Hang in there- you’re almost done and then you can leave this semester behind you! ? ?

-Rowan

The complaint alleges that the email did “not involve a substantial interference or material disruption to the work of MSU” and did “not impinge on the rights of any other student.”

On April 25, Thompson received a letter from Ragland informing her that “the Dean of Students Office received reports that [Thompson] may have violated provisions of the Student Code of Conduct”; that these reports concerned “the disagreement between [Thompson] and Dr. Lazorski”; that, specifically, Thompson’s email to her former classmates “may have violated the Student Code of Conduct”; that Thompson had to meet with Ragland; and that Thompson was subject to a “No Contact order” restricting her from communicating with Dr. Lazorski. Ragland’s letter specifically cautioned: “Further, due to the persistent communication and disruption your communication is about Dr. Lazorski (sic), you are restricted from discussing Dr. Lazorski with any student in the CHE 1800 course or any of Dr. Lazorski’s classes, as this would be a violation of the this No Contact Directive (sic).” …

Thompson sued, and the defendants moved to dismiss on qualified immunity grounds; but the court held that what the complaint alleged was a violation of the student’s clearly established First Amendment rights, the court held—of course, if the facts are as alleged, which is the assumption at this stage of the litigation. The court cited the key First Amendment K-12 student cases, and also noted that two college student cases that provided still clearer protection for college students:

In Healy v. James (1972), … [the court] rejected “the view that, because of the acknowledged need for order, First Amendment protections should apply with less force on college campuses than in the community at large.” … But the Court cautioned that “First Amendment rights must always be applied in light of the special characteristics of the environment in the particular case.” And the Court maintained that although students in higher education enjoy the protection of the First Amendment, a university “may expect that its students adhere to generally accepted standards of conduct” that govern “the time, the place, and the manner” of student speech….

The next year, in Papish v. Board of Curators of University of Missouri (1973) (per curiam), the Court considered the expulsion of a graduate student at a public university for her distribution of an underground newspaper that contained a vulgar headline and a political cartoon depicting policemen raping the Statue of Liberty. The university had found that the student had violated provisions of the university’s code of conduct requiring students “to observe generally accepted standards of conduct” and prohibiting “indecent conduct or speech.” But the Court declared that there was not evidence of “any disruption of campus order or interference with the rights of others,” and concluded that the student “was expelled because of the disapproved content of the newspaper rather than the time, place, or manner of its distribution,” thereby violating the student’s First Amendment rights….

We think [all these] precedents clearly establish that Thompson’s complaint adequately states a First Amendment violation. Indeed, this case is, at least at the present stage of the proceedings, an easy one. Thompson’s speech was restricted. And there is no apparent legitimate basis for this restriction.

On appeal Ragland has not argued that Thompson’s communications were vulgar, as in Bethel School Dist. No. 403 v. Fraser (1986) [a high school student case], or otherwise violated valid restrictions on the time, place, or manner of speech, see Healy. Nor has he suggested that Thompson was disciplined for violating the rules for engaging in school-sponsored expressive activity, see Hazelwood School Dist. v. Kuhlmeier (1988), or for advocating unlawful conduct, see Morse v. Frederick (2007) [two other high school student cases]….

The justification for the restriction that Ragland provides in his briefs is that Thompson created disruption. He relies in part on the disruption caused to the two classes Thompson attended when she sat on the floor. Those two classes were in early February 2019. Ragland’s letter to Thompson was in late April. In the interim (sometime after the mediation on March 18) Thompson sent her email to fellow students. A reasonable factfinder could readily determine that the discipline was imposed on Thompson because of the email, not just because of the two classroom incidents that caused minimal disruption and had apparently been resolved by Thompson’s dropping the class.

The other possible cause of disruption was Thompson’s email to fellow students. But there is no evidence of any disruption caused by the email; on the contrary, the complaint alleges that there was no disruption to the work of MSU, and none was mentioned in Ragland’s letter imposing the discipline. Nor could disruption be reasonably anticipated. Thompson merely sent a respectful, noninflammatory email expressing her dissatisfaction with a professor’s performance and encouraging her former classmates to submit “honest” reviews about the class and the professor.

What Ragland argues in his appellate brief is remarkable. He claims that Thompson’s “efforts to encourage other students to give negative evaluations would disrupt Dr. Lazorski’s career and her relationship with her students, as well as [MSU’s] efforts in employing faculty to conduct the class.” … If we were to accept that rationale, there would be no First Amendment protection for criticism of government employees. Moreover, student critiques of faculty members are widely recognized as a useful mechanism for improving college teaching, and the complaint alleges that Thompson was encouraged at the mediation to submit an evaluation of her professor. It was only after she learned that her departure from the class precluded her from submitting her own evaluation that she sent the email encouraging others to do so….

[E]ven if Thompson’s request that her classmates submit evaluations of Dr. Lazorski’s class had played out on campus and in person, it still would have been clearly unlawful for Ragland to discipline Thompson and suppress her speech, as alleged in the complaint. If anything, the fact that Thompson’s speech occurred off campus and online—reducing the speech-to-university nexus and thus MSU’s power to regulate the speech—makes the alleged First Amendment violation clearer, not less clear.

We note, however, that Ragland has not yet had an opportunity to present evidence that might justify his actions. Because the district court disposed of the case on a Rule 12(b)(6) motion, Ragland has not even filed an answer. Our holding today is therefore limited. Ragland may be entitled to qualified immunity at the summary-judgment stage, when a clearer picture of what happened will have emerged….

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First Amendment Clearly Protects Student Encouraging Classmates to Negatively Evaluate Professor

From Thompson v. Ragland, decided today by Tenth Circuit, in an opinion by Judge Harris Hartz, joined by Chief Judge Timothy Tymkovich and Judge Scott Matheson:

Rowan Thompson, a student at Metropolitan State University of Denver (MSU), had a classroom dispute with her chemistry professor that ultimately prompted Thompson to drop the professor’s class. But when Thompson emailed her former classmates to express her displeasure with the professor and to suggest that her classmates leave “honest” end-of-term evaluations, Thomas Ragland, MSU’s Associate Director for Student Conduct, allegedly prohibited Thompson from further contacting the professor or even discussing the professor with any students taking any of the professor’s classes….

Thompson has an eye condition that makes her sensitive to light, requiring that she sit in the first three rows of a classroom to see what is written on the white board. She was enrolled in a chemistry class at MSU taught by Dr. Megan Lazorski. On February 4, 2019, Thompson arrived late to the class. Noting that all the seats in the first three rows were occupied, she sat on the floor in the front row. Dr. Lazorski did not approve, interrupting her lecture to instruct Thompson to take a seat. Although Thompson informed Dr. Lazorski about her eye condition, the professor still insisted that Thompson move to a seat, and she had students leave the front row so that Thompson could sit there.

A week later, Thompson again arrived late to Dr. Lazorski’s class. Because all seats in the first three rows were taken, Thompson sat on the floor in the front row, in a space where a desk was missing. Dr. Lazorski instructed Thompson to move to a seat. Thompson said she preferred to sit on the floor in the front row because of her eye condition. Dr. Lazorski responded that the only options were to sit at a desk or leave the classroom. Thompson chose to leave class.

Thompson ultimately dropped Dr. Lazorski’s class because of the seating dispute “and the unlikelihood of it being resolved.” MSU removed the class from Thompson’s record, and the school refunded her tuition for the class. Still, Thompson was dissatisfied with how Dr. Lazorski had treated her. She complained about Dr. Lazorski to various top MSU officials and administrators in a letter. She also requested a mediation of her dispute with Dr. Lazorski, which took place on March 18. During the mediation Thompson was encouraged to fill out evaluation and class-rating forms to address her concerns about Dr. Lazorski’s performance as a professor.

Thompson later realized, however, that she could not submit a review of the class or Dr. Lazorski’s performance because she was no longer enrolled in any of the professor’s classes. She proceeded to send the following email to her former classmates:

Hello everyone, I’m Rowan- some of you may know me as the goth girl who sat on the floor in class. For those who don’t know, I came late to class a couple of times and sat on the floor. It angered the professor enough that I was asked to leave class on the last occasion. A few weeks later, after a mediation attempt between the dean of chemistry and the professor, I had to drop the class to stop further confrontation- over sitting on the floor.

I have heard so many of you say how horrible a time you’re having in this class, that there are some bits that are ridiculous or downright unreasonable. You shouldn’t have to suffer through a class, especially one that is required, and this is not what college is supposed to be like. College is supposed to make us feel excited about our futures and finally learn what we are interested in, not ditch class because we know we won’t learn anything. You don’t need to keep your complaints and troubles private; this is what the evaluations are for. They’re online; the link to fill them out appears when you log into Blackboard, they take only a couple of minutes, are anonymous, and the more detail is said the better. Every issue you’ve had, every complaint? This is when the faculty and university is listening and wants to hear them. Students, including myself, who have dropped the class won’t be able to fill out an evaluation- our voices cannot be heard unless we speak to the deans directly, but I know for a fact that many are afraid to speak face-to-face.

Please, take the few minutes to review this chemistry class and be honest- make the faculty listen to you so that this class can change for the better. If not for yourself, than for those who have had to drop the class, feeling worthless and stupid, or for students who will have to take this class after you.

Hang in there- you’re almost done and then you can leave this semester behind you! ? ?

-Rowan

The complaint alleges that the email did “not involve a substantial interference or material disruption to the work of MSU” and did “not impinge on the rights of any other student.”

On April 25, Thompson received a letter from Ragland informing her that “the Dean of Students Office received reports that [Thompson] may have violated provisions of the Student Code of Conduct”; that these reports concerned “the disagreement between [Thompson] and Dr. Lazorski”; that, specifically, Thompson’s email to her former classmates “may have violated the Student Code of Conduct”; that Thompson had to meet with Ragland; and that Thompson was subject to a “No Contact order” restricting her from communicating with Dr. Lazorski. Ragland’s letter specifically cautioned: “Further, due to the persistent communication and disruption your communication is about Dr. Lazorski (sic), you are restricted from discussing Dr. Lazorski with any student in the CHE 1800 course or any of Dr. Lazorski’s classes, as this would be a violation of the this No Contact Directive (sic).” …

Thompson sued, and the defendants moved to dismiss on qualified immunity grounds; but the court held that what the complaint alleged was a violation of the student’s clearly established First Amendment rights, the court held—of course, if the facts are as alleged, which is the assumption at this stage of the litigation. The court cited the key First Amendment K-12 student cases, and also noted that two college student cases that provided still clearer protection for college students:

In Healy v. James (1972), … [the court] rejected “the view that, because of the acknowledged need for order, First Amendment protections should apply with less force on college campuses than in the community at large.” … But the Court cautioned that “First Amendment rights must always be applied in light of the special characteristics of the environment in the particular case.” And the Court maintained that although students in higher education enjoy the protection of the First Amendment, a university “may expect that its students adhere to generally accepted standards of conduct” that govern “the time, the place, and the manner” of student speech….

The next year, in Papish v. Board of Curators of University of Missouri (1973) (per curiam), the Court considered the expulsion of a graduate student at a public university for her distribution of an underground newspaper that contained a vulgar headline and a political cartoon depicting policemen raping the Statue of Liberty. The university had found that the student had violated provisions of the university’s code of conduct requiring students “to observe generally accepted standards of conduct” and prohibiting “indecent conduct or speech.” But the Court declared that there was not evidence of “any disruption of campus order or interference with the rights of others,” and concluded that the student “was expelled because of the disapproved content of the newspaper rather than the time, place, or manner of its distribution,” thereby violating the student’s First Amendment rights….

We think [all these] precedents clearly establish that Thompson’s complaint adequately states a First Amendment violation. Indeed, this case is, at least at the present stage of the proceedings, an easy one. Thompson’s speech was restricted. And there is no apparent legitimate basis for this restriction.

On appeal Ragland has not argued that Thompson’s communications were vulgar, as in Bethel School Dist. No. 403 v. Fraser (1986) [a high school student case], or otherwise violated valid restrictions on the time, place, or manner of speech, see Healy. Nor has he suggested that Thompson was disciplined for violating the rules for engaging in school-sponsored expressive activity, see Hazelwood School Dist. v. Kuhlmeier (1988), or for advocating unlawful conduct, see Morse v. Frederick (2007) [two other high school student cases]….

The justification for the restriction that Ragland provides in his briefs is that Thompson created disruption. He relies in part on the disruption caused to the two classes Thompson attended when she sat on the floor. Those two classes were in early February 2019. Ragland’s letter to Thompson was in late April. In the interim (sometime after the mediation on March 18) Thompson sent her email to fellow students. A reasonable factfinder could readily determine that the discipline was imposed on Thompson because of the email, not just because of the two classroom incidents that caused minimal disruption and had apparently been resolved by Thompson’s dropping the class.

The other possible cause of disruption was Thompson’s email to fellow students. But there is no evidence of any disruption caused by the email; on the contrary, the complaint alleges that there was no disruption to the work of MSU, and none was mentioned in Ragland’s letter imposing the discipline. Nor could disruption be reasonably anticipated. Thompson merely sent a respectful, noninflammatory email expressing her dissatisfaction with a professor’s performance and encouraging her former classmates to submit “honest” reviews about the class and the professor.

What Ragland argues in his appellate brief is remarkable. He claims that Thompson’s “efforts to encourage other students to give negative evaluations would disrupt Dr. Lazorski’s career and her relationship with her students, as well as [MSU’s] efforts in employing faculty to conduct the class.” … If we were to accept that rationale, there would be no First Amendment protection for criticism of government employees. Moreover, student critiques of faculty members are widely recognized as a useful mechanism for improving college teaching, and the complaint alleges that Thompson was encouraged at the mediation to submit an evaluation of her professor. It was only after she learned that her departure from the class precluded her from submitting her own evaluation that she sent the email encouraging others to do so….

[E]ven if Thompson’s request that her classmates submit evaluations of Dr. Lazorski’s class had played out on campus and in person, it still would have been clearly unlawful for Ragland to discipline Thompson and suppress her speech, as alleged in the complaint. If anything, the fact that Thompson’s speech occurred off campus and online—reducing the speech-to-university nexus and thus MSU’s power to regulate the speech—makes the alleged First Amendment violation clearer, not less clear.

We note, however, that Ragland has not yet had an opportunity to present evidence that might justify his actions. Because the district court disposed of the case on a Rule 12(b)(6) motion, Ragland has not even filed an answer. Our holding today is therefore limited. Ragland may be entitled to qualified immunity at the summary-judgment stage, when a clearer picture of what happened will have emerged….

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Ex-Barclays Chief Jes Staley Reportedly Begged JP Morgan To Keep Epstein As Client

JP Morgan was implicated but never prosecuted in Bernie Madoff’s Ponzi scheme after authorities determined that employees at the bank likely knew something was off inside Madoff’s shop – but there was simply nothing to be gained by blowing the whistle. Still, its association with Madoff became a major embarrassment for the bank, and afterward management pledged to be more judicious and discerning.

But that didn’t stop the bank from continuing to service unrepentant pedophile Jeffrey Epstein for years after his 2008 conviction of soliciting sex from a minor (a charge that was eventually exposed as woefully inadequate considering the scope of Epstein’s child sex-trafficking operation). But even then, those who knew Epstein must have had at least some nagging doubts, even if they had completely rationalized Epstein’s penchant for traveling with a harem of underage women.

Former Barclays CEO Jes Staley is among the Wall Street titans who were dislodged from their perch in the aftermath of Epstein’s subsequent arrest and suicide. It was his relationship with Epstein, which investigators hired by Barclays had determined stretched beyond the bounds of “professional”, that led to his ouster from Barclays.

But as the FT and other media reports had previously exposed, Staley’s relationship with Epstein stretched back years, all the way to the turn of the millennium, when he was still overseeing JPMorgan’s private bank, before moving on to lead the bank’s entire wealth management business. But never before has the pulic learned about the lengths to which Staley went while still at JP Morgan to convince his employer not to drop Epstein, which it eventually did in 2013.

Staley appears to have delayed the bank’s decision to sever its relationship with Epstein by as long as a year while he argued that the billionaire had served his time and paid his debt to society.

Here’s more from FT:

Jes Staley pressed JPMorgan Chase to keep Jeffrey Epstein as a client – despite the fact that the disgraced financier had been convicted of prostitution offences – before the bank cut him off as a customer in 2013, according to two people involved in the discussions.

Staley made the argument to other senior officials of the bank as JPMorgan examined whether Epstein’s conviction in 2008 of soliciting sex from a minor, which resulted in a 13-month prison sentence, was grounds to remove him as a client of its private bank, the people said.

Staley, then head of JPMorgan’s investment bank, argued during the year before the bank dropped Epstein as a client that he had served his sentence and paid his debt to society, one of the people said.

JPMorgan declined to comment. A spokesperson for Staley declined to comment.

An earlier FT report disclosed new details about the Barclays investigation into the relationship between Staley and Epstein. It found that while Staley was at JPM, he and Epstein exchanged more than 1,200 emails, some of them containing unexplained terms like “snow white”.

Of course, Staley’s influence eventually wasn’t enough to stop JPM from showing Epstein the door.

But what happened after that? Was Epstein, a billionaire, simply forced to stash his galleons in a giant grain silo like Scrooge McDuck? Of course not.

He simply became a client of Deutsche Bank.

Tyler Durden
Wed, 01/26/2022 – 17:45

via ZeroHedge News https://ift.tt/3FYidGc Tyler Durden

Justice Breyer, Democracy, and Expertise

https://www.flickr.com/photos/96739999@N05/25705935635 — Justice Stephen Breyer.

Media reports indicate that Supreme Court Justice Stephen Breyer plans to retire this year, once his successor has been nominated and confirmed. Much can be said about the upcoming nomination and confirmation process. In this post, I wish to say a few words on Breyer’s judicial philosophy, and his contributions to the nation – of which some of the most important actually came before his appointment to the Supreme Court.

Unlike many judges, Breyer wrote extensively about his judicial philosophy, including in books such as Making Our Democracy Work, and Active Liberty: Interpreting Our Democratic Constitution. As these titles imply, the main theme of Breyer’s interpretive theory is the need for courts to help facilitate democratic political participation, the “active liberty” he referred to. In this respect, Breyer’s approach has much in common with legal scholar John Hart Ely’s famous “representation-reinforcement” approach to judicial review.

As Breyer and Ely both argued, representation-reinforcement is sometimes obviously compatible with judicial review, as when courts strike down laws that restrict freedom of speech, constrain the right to vote, or otherwise directly interfere with democratic participation.

Breyer, however, went much father than this, and also defended strong judicial review in many situations where the connection between it and representation-reinforcement were, at best highly questionable (as in the case of abortion rights, for example). In other situations, he advocated judicial “restraint” in cases where there are strong arguments that striking down laws or regulations could promote popular participation in various ways.

I outlined these and other reservations about Breyer’s theory in much greater detail in my 2006 review of Active Liberty. Here is an excerpt from the abstract:

Justice Stephen Breyer’s … Active Liberty: Interpreting Our Democratic Constitution, is an important contribution to the longstanding debate over the relationship between democracy and judicial review. Breyer argues that judicial power should be used to facilitate citizen engagement in the democratic process rather than undermine it; he claims that judges should promote democracy by explicit consideration of the practical consequences of their decisions….

Breyer’s contribution to the debate is important and on some points convincing…. However, the Justice is far less persuasive in defending his own approach to democracy and judicial review. This Review focuses on Justice Breyer’s vision of the relationship between democracy and judicial power. Unfortunately, that relationship is considerably more complex than Active Liberty lets on. In some instances, a fuller understanding of the connection justifies results very different from those Justice Breyer argues for.

Part II shows that Breyer’s claim that judges should explicitly weigh consequentialist considerations in making decisions may lead the judiciary well beyond its field of competence. This point is dramatically illustrated by the sometimes superficial treatment of democracy in Justice Breyer’s own book, which ignores tensions between different conceptions of democracy and often fails to consider relevant empirical evidence.

I also contend that a sounder judicial approach to democracy would look more favorably upon judicial limits on the power of the federal government in order to foster federalism. Such efforts could, at least at the margin, strengthen the federal government’s accountability to voters by limiting the impact of political ignorance. They could also impose accountability on government by strengthening citizens’ ability to vote with their feet instead of just at the ballot box….

Ultimately, Justice Breyer is right to claim that the judiciary may have a valuable role in promoting democracy. But his prescriptions on how it should achieve that goal are far less compelling.

As noted in my review, there is a tension between Justice Breyer’s emphasis on facilitating popular democratic participation, and his long-time advocacy of the need for deference to experts. In his excellent 1993 book, Breaking the Vicious Circle (my personal favorite among his writings), Breyer outlines how a combination of public ignorance, irrationality, and inconsistent agency actions leads to badly flawed regulatory policies. To fix the problem, he recommended the establishment of a kind of super-agency of experts, whose task would be to regulate the other regulators. This agency would, Breyer contended, have to enjoy a great deal of insulation from political pressure, including that from majority public opinion.

The theme of deference to experts recurs in many of Breyer’s judicial opinions, including in his recent dissents in the OSHA vaccination mandate case, and the CDC eviction moratorium case. There is certainly an argument for giving broad discretion to experts. But it is at odds with Breyer’s emphasis, elsewhere, on the need to empower to political participation by ordinary people. I don’t think he ever satisfactorily resolved this tension in his own thought, or came close to doing so.

My own view is that courts can best empower ordinary people by helping to enable them to “vote with their feet,” which is in many respects superior to both ballot-box voting and concentrating power in the hands of experts. In many situations, this requires decisions limiting the power of the federal government and protecting constitutional rights – such as the right to private property – that Breyer viewed with deep skepticism. With a few notable exceptions, Breyer tended to be a strong opponent of both judicial enforcement of federalism, and protection for constitutional property rights. His dissent in United States v. Lopez (1995), where he argued that Congress’ power to regulate interstate commerce is broad enough to encompass a law banning possession of a gun near a school, is a dramatic example of the former.

The above emphasizes my differences with Breyer more than points of agreement. But I don’t doubt that he was an outstanding jurist who wrote many fine opinions. And I think his writings on regulation effectively highlighted important problems, even if I am skeptical of his proposed solution. I also agree with his recent criticisms of proposals for court-packing.

Breyer’s greatest service to the nation may have come long before his 1994 appointment to the Supreme Court. As an aide to Sen. Ted Kennedy in the late 1970s, Breyer played a key role in the enactment of airline deregulation. This reform made possible better and vastly cheaper air travel, which for the first time made this mode of transportation affordable to the middle and working classes. Generations of travelers owe Breyer a great debt, even if most do not know it.

In a retrospective PBS interview on this experience, Breyer made some points on the importance of competitive markets that too many on both right and left seem intent on ignoring today:

Two things I think turned out to be wrong [with regulation]. The first is that if you take a group of people, set them up in a commission and try to insulate them from congressional control or from presidential control, other political forces will develop in an effort to take control. And what you will find is that the agency itself develops its own politics, where industry had a major role in trying to influence the commission, and then later consumer groups or public-interest firms, or those who felt they represented the public interest would also try to influence the commissioners. And politics develop around the commission; and soon it’s learned that there is no science that dictates the proper level of a railroad rate…. [S]omeone sitting in a room with a pencil and piece of paper is not going to be able to figure out the proper airline rate any better than allowing the consumers and producers in a competitive marketplace to experiment with rates and service, and permit those that provide the lowest rates or the best service or the proper combination to survive, while the others fall by the wayside.

In other words, efforts…. to have people guess what the market would produce if it were free to create a price are so very different in their result from what the market does produce when it is free that it becomes a kind of parody of a free-market situation. And people found that it often would hurt the consumers and the producers as well, compared to what would happen if you allowed the market to function on its own…

Breyer’s advocacy of airline deregulation was an example example of addressing regulatory dysfunction by limiting the role of government, and empowering ordinary people to “vote with their feet” (in this case for cheaper and more reliable airlines). It can also be seen as an example of following expert opinion (most economists supported the idea), but not by delegating ongoing authority to experts to regulate as they see fit.

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Daily Briefing: Stocks Surrender Gains, Treasury Yields Rise Following FOMC Statement

The Federal Open Market Committee said today “it will soon be appropriate to raise the target range for the federal funds rate.” And it issued a separate statement on “Principles for Reducing the Size of the Federal Reserve’s Balance Sheet,” even as asset purchases continue. Stocks were already having their best day of 2022 ahead of this afternoon’s releases, and equity indexes continued to rally post-2:00 p.m. ET. The Fed finds itself in uncharted territory, and its various statements reflect the fact that there is no roadmap for combating inflation while balancing serious risks to growth – among them geopolitical tensions that continue to drive crude oil higher as well as an ongoing pandemic. Darius Dale, founder and CEO of 42 Macro, joins Real Vision’s Alfonso Peccatiello to break down one of the most highly anticipated FOMC meetings in recent times. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3KLKALp

Tyler Durden
Wed, 01/26/2022 – 14:50

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Justice Breyer, Democracy, and Expertise

I outlined these and other reservations about Breyer’s theory in much greater detail in my 2006 review of Active Liberty. Here is an excerpt from the abstract:

Justice Stephen Breyer’s … Active Liberty: Interpreting Our Democratic Constitution, is an important contribution to the longstanding debate over the relationship between democracy and judicial review. Breyer argues that judicial power should be used to facilitate citizen engagement in the democratic process rather than undermine it; he claims that judges should promote democracy by explicit consideration of the practical consequences of their decisions….

Breyer’s contribution to the debate is important and on some points convincing…. However, the Justice is far less persuasive in defending his own approach to democracy and judicial review. This Review focuses on Justice Breyer’s vision of the relationship between democracy and judicial power. Unfortunately, that relationship is considerably more complex than Active Liberty lets on. In some instances, a fuller understanding of the connection justifies results very different from those Justice Breyer argues for.

Part II shows that Breyer’s claim that judges should explicitly weigh consequentialist considerations in making decisions may lead the judiciary well beyond its field of competence. This point is dramatically illustrated by the sometimes superficial treatment of democracy in Justice Breyer’s own book, which ignores tensions between different conceptions of democracy and often fails to consider relevant empirical evidence.

I also contend that a sounder judicial approach to democracy would look more favorably upon judicial limits on the power of the federal government in order to foster federalism. Such efforts could, at least at the margin, strengthen the federal government’s accountability to voters by limiting the impact of political ignorance. They could also impose accountability on government by strengthening citizens’ ability to vote with their feet instead of just at the ballot box….

Ultimately, Justice Breyer is right to claim that the judiciary may have a valuable role in promoting democracy. But his prescriptions on how it should achieve that goal are far less compelling.

In a retrospective PBS interview on this experience, Breyer made some points on the importance of competitive markets that too many on both right and left seem intent on ignoring today:

Two things I think turned out to be wrong [with regulation]. The first is that if you take a group of people, set them up in a commission and try to insulate them from congressional control or from presidential control, other political forces will develop in an effort to take control. And what you will find is that the agency itself develops its own politics, where industry had a major role in trying to influence the commission, and then later consumer groups or public-interest firms, or those who felt they represented the public interest would also try to influence the commissioners. And politics develop around the commission; and soon it’s learned that there is no science that dictates the proper level of a railroad rate…. [S]omeone sitting in a room with a pencil and piece of paper is not going to be able to figure out the proper airline rate any better than allowing the consumers and producers in a competitive marketplace to experiment with rates and service, and permit those that provide the lowest rates or the best service or the proper combination to survive, while the others fall by the wayside.

In other words, efforts…. to have people guess what the market would produce if it were free to create a price are so very different in their result from what the market does produce when it is free that it becomes a kind of parody of a free-market situation. And people found that it often would hurt the consumers and the producers as well, compared to what would happen if you allowed the market to function on its own…

The post Justice Breyer, Democracy, and Expertise appeared first on Reason.com.

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Inflation Is The Kryptonite That Will End Our Decades-Long Monetary Policy Ponzi Scheme

Submitted by QTR’s Fringe Finance

The linchpin that allows the world’s nefarious central banking model to be so effective is that the commonfolk – the plumber, the electrician, the teacher, the bartender, bus driver or barber – don’t understand it.

Countless times, I have reminded my readers and listeners that the inflationary “machinery of night” blankets the most regressive tax possible upon the people who can least afford it, and does so in an extraordinarily convenient way for elites, politicians, central bankers and central planners whose titles and “jobs” hinge upon nobody questioning them and/or figuring out how the system works in the first place.

Today, the fabric of our modern banking world is held together by a logical fallacy of a system, wherein central banks are afforded the asinine luxury of being able to print infinite amounts of “money”, which is then disproportionately distributed toward the ruling class, billionaires, and elites, instead of the people who need it the most.

This shows up, literally, as a widening gap between the “haves” and the “have nots” that has widened consistently since the late 1970’s.

As a result of the most recent re-distribution of purchasing power disguised as “monetary stimulus” during the Covid-19 “crisis”, billionaires amassed an additional $4.1 trillion of wealth during a period of time in which the World Bank estimates that “some 100 million people have fallen into extreme poverty,” Bloomberg reported, in conjunction with the World Inequality Report, in December.

As I have asked many times, when the Fed considers stimulating by printing trillions: why not just divide up the money evenly amongst everybody in the country? Why must it be re-balanced and then deployed in a fashion that benefits those who already own financial assets?

The answers to these questions belie a bigger problem: the global economic “system” and monetary policy as a whole.

In the early 2000s and 2010s, posturing as though QE was a one-time experiment that “worked” because inflation didn’t run rampant was easy for central bankers. But now, in 2022, it looks as though it is finally time to pay the piper.

Today, the Fed faces a fork in the road where, in one direction, stocks collapse because of rising rates – and in the other direction, the dollar becomes worthless as we fruitlessly attempt to print our way out of debt.

But in 2022, unlike other points in history, we are facing this challenge at a time when the world has never been more aware of the false narrative central planners are trying to perpetuate.

Over the last decade, the populace has started to get wise to the con. Thanks to the popularity of cryptocurrency, many people who wouldn’t otherwise be interested have started to learn how our fractional reserve central banking system works.

I’m not the world’s biggest advocate for cryptocurrency, but I do support the fact that it has educated an entire generation of investors as to the pitfalls of modern day monetary policy. I just happen to believe it will also educate the same generation of investors lessons about intrinsic value, mania, the madness of crowds, the mechanics of Ponzi schemes and the greater fool theory.

In addition to younger generations “catching on”, older generations have likely moved inflation to, or close to, the #1 spot in their political priorities list. As I’ve said many times, mainstream newsmedia’s coverage of inflation means that it has become a hot-button issue that people want answers about. In an election year like this, politicians want to deliver those answers – or at least deliver bullshit that sounds like answers – to voters in an attempt to appease them.

And therein lies the beauty, and the tragedy, of it all: there is no easy way out for anybody. Politicians will run out of excuses and the few they have left the people won’t believe. The Fed will sit in front of Congress resembling a trembling and tearful addict who has hit rock bottom in the hours before accepting treatment on the TV show Intervention. Last, but certainly not least, collectively, as a country, we will bear the brunt of the consequences of central planners’ decades of deception, our naivety in trusting that it was all under control and the world’s willful ignorance in letting it unfold.

For years, politicians and central bankers have been relying on flawed monetary policy to try and endlessly appease their constituents with promises of grandeur and excess while they pull the strings on a system that socializes losses and privatizes profits for the elites.

They’ve done this with success, subtly sending the message that “everything is always going to be okay, so no one needs to ever question authority or the powers that be”.

Monetary policy has worked splendidly for the elites and central planners over the last few decades and, while it has resulted in a wider gap between the lower and upper class than we’ve seen in 50 years and a country that is nearly at civil war with itself, the harrowing machinations of the monetary motor have all happened behind the curtain, under the cloak of night. This has allowed the elites and central planners to side-step responsibility for 50 years worth of gripes and misfortunes, while being able to point to the stock market to try and convince the populace that things aren’t as bad as they seem.

But this time, things are definitely as bad as they seem – and everybody understands it.

“It means buckle your seatbelt Dorothy, because Kansas is going bye-bye.”

This time around will resemble nothing like the last 50 years.

People are going to want answers to the inflation problem and the Fed doesn’t have any. A market collapse would only add to the panic and hysteria that is already bubbling up as a result of skyrocketing prices. Amidst a historic supply chain breakdown and supply crunch, I believe we’re only a couple CPI percentage points away from the psychology of hyperinflation starting to set in, wherein people consciously abandon dollars and start to hoard basic products

I also believe there are a lot of politicians out there who don’t even understand the shit that we just collectively put our foot in. I’d love to give them credit for being smart enough to just outright lie to us about the country’s economics, but I think the reality (and tragedy) of the situation, as we often find out during Congressional hearings involving finance, is that most politicians don’t even understand the basics of our country’s precarious financial position.

And now, because the whole world is on alert, paying attention, and acutely aware of the problems we face, every single move that the Federal Reserve and our politicians make with regard to inflation and monetary policy is going to be scrutinized in a way it has never been before in American history.

Ultimately, many people, myself included, believe that there will be no way for us to escape a catastrophic end result: markets will crash, the dollar will collapse, or a combination of both.

This is why many “conspiracy theorists” are screaming bloody murder about the World Economic Forum’s Klaus Schwab‘s “Great Reset” plan as being so toxic.

The 4th industrial revolution, the Great Reset and Covid-19 | by John Slegers | Medium

The people speaking out about the plan this early see it for what it likely really is: a pre-emptive strike by the powers that be to engineer a much-needed solution to a catastrophic problem that is barreling directly towards us. And, like all solutions that central planners and governments offer, the “Great Reset” results in fewer civil liberties for the rest of us and more power for the oligarchs.

The “Great Reset” will just be another form of “QE”, in the sense that it’ll be a tool for disproportionately dividing up the finite world of resources and power on Planet Earth amongst those who Schwab, and his ilk, deem most worthy.

The fact that Schwab’s plans have already been turned into fodder for ridicule by the alternative media is a positive sign: people are starting to wake up.

And here’s a message to the bankers, elites and central planners to read carefully: we are all already on notice. We now know how the rigged game works and we plan on placing under a microscope every decision that is made from this point going forward.

We will not relinquish further civil rights and we believe that, through decades of living through this planned system that has usurped us of power and liberties unknowingly and unwillingly already, we have earned the right to criticize any and all proposed solutions that don’t act in the interest of freedom and liberty. We will do this peacefully, as I am doing today, by exercising our first amendment rights and doing our part to educate and inform those around us of what has clearly come into focus to those of us with our eyes wide open.

The unfortunate news for the elites and central planners is that not everybody out there is sleeping anymore. And get ready, because many of us that “slept” through Covid are about to be jarred wide awake by inflation.

Group protests vaccine, mask mandates | News, Sports, Jobs - The Nashua Telegraph

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Tyler Durden
Wed, 01/26/2022 – 17:25

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Spotify Removing Neil Young’s Music After Tantrum Over Joe Rogan ‘Misinformation’

Streaming music service Spotify is in the process of removing Neil Young’s music, depriving tens of fans access to the 76-year-old’s song library on the platform.

Young, whose biggest hit, “Heart of Gold” came out 50 years ago, threw a temper tantrum earlier in the week over podcaster Joe Rogan, who the aging rocker says was spreading “fake information” about vaccines.

In an email to Warner Records, Young said Spotify “has a responsibility to mitigate the spread of misinformation on its platform,” adding “I want you to let Spotify know immediately TODAY that I want all my music off their platform.”

Young’s letter was a response to a December podcast in which Rogan interviewed Robert Malone, a controversial virologist who researched messenger RNA vaccines and is now sceptical of them. On the podcast, Malone told Rogan that US hospitals are financially incentivised to falsely report deaths as being caused by coronavirus. Rogan has also on his podcast encouraged “healthy” young people not to get a Covid-19 vaccine. –FT

Rogan notably inked a deal with Spotify in May of 2020 worth more than $100 million. Four months later, Spotify employees threatened to strike unless the company agreed to remove past Rogan podcast episodes with ‘controversial guests,’ and give employees direct editorial oversight over the Joe Rogan Experience podcast. This did not happen.

Now, according to the Wall Street Journal, Young’s music will be no more on the platform.

Neil Young is gonna regret this when his monthly Spotify checks for $1.37 stop rolling in https://t.co/nAyAJ8ayqv

— The Daily Show (@TheDailyShow) January 25, 2022

Tyler Durden
Wed, 01/26/2022 – 17:05

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White House, Ukraine At Odds Over Threat Of Russian Invasion In Awkward Back & Forth

Authored by Dave DeCamp via AntiWar.com,

With all eyes on Ukraine and Russia, officials in Washington and Kyiv don’t seem to be on the same page. Ukrainian officials are urging calm and say a Russian incursion isn’t imminent. But over in Washington, the scaremongering continues.

When faced with Ukraine’s assessment of the situation, White House Press Secretary Jen Psaki insisted that Russia could invade at any moment. Asked if the US still believes the threat is “imminent,” Psaki replied, “correct.”

Later in the day, President Biden appeared to admit that he doesn’t actually know if Russian President Vladimir Putin is planning to invade. “This is all Putin. I don’t think even his people know for certain what he’s going to do,” he said.

In Kyiv, Ukrainian Defense Minister Oleksii Reznikov told parliament that “as of today, there are no grounds to believe” Russia will invade imminently, The Associated Press reported. “Don’t worry, sleep well,” Reznikov said. “No need to have your bags packed.”

Ukrainian President Volodymyr Zelensky also called for calm on Tuesday. “We are strong enough to keep everything under control and derail any attempts at destabilization,” he said. Addressing Washington’s decision to order the families of US diplomats in Ukraine to leave the country, Zelensky said the move “doesn’t necessarily signal an inevitable escalation and is part of a complex diplomatic game.”

The State Department ordered the embassy drawdown on Sunday and also released a travel advisory for Ukraine citing “the increased threats of Russian military action.” But Ukraine’s Foreign Ministry rejected the US assessment.

“In fact, there have been no radical changes in the security situation recently: the threat of new waves of Russian aggression has remained constant since 2014, and the accumulation of Russian troops near the state border began in April last year,” the ministry said.

For their part, Russia had been denying that it is planning an invasion of Ukraine since the US started making the accusation in November. Putin is seeking guarantees from the US on NATO’s eastward expansion and the presence of NATO troops near Russia’s borders. The US is expected to give Russia a written response on the security proposals sometime this week.

Tyler Durden
Wed, 01/26/2022 – 16:45

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Tesla Tumbles Despite Across The Board Beat After Warning Supply-Chain Constraints Seen Through 2022

As we previewed earlier, in today’s TSLA earnings call, investors are going to be watching for “details about when production will begin at new factories in Austin and Berlin” and “sales projections for 2022 after the company surprised with record deliveries in the fourth quarter”, as Bloomberg wrote. We reported that in Q4, Tesla gave up on $1.3 billion in German subsidies it had hoped for as part of the EV manufacturer’s new battery-cell plant in Brandenburg, close to Berlin.

The company may also offer color and face questions on Elon Musk’s stock sales, which amounted to over $10 billion worth of Tesla stock heading into the end of 2021. Recall, the company just posted a record delivery quarter for Q4. For 2021, the automaker delivered “over 936,000” vehicles, per a company press release. Those numbers were up about 87% from the year prior. The report also reminded that Tesla has said “repeatedly it expects 50% annual increases in deliveries over a multi-year period”.

In addition to sales and deliveries, investors will likely be watching the company’s vehicle mix and how it affects ASP, which declined 6% YOY last quarter. It looks as though the phasing out of the Model S and the Model X is heading toward completion. Of the deliveries in the fourth quarter, 296,850 of them were Model 3 or Model Y vehicles, while just 11,750 were Model S or Model X vehicles.

Estimates had called for 12,719 Model S and X deliveries and 263,422 Model 3 and Y deliveries.

Investors may also be looking for color on a slew of recalls that occurred toward the end of last year, with the automaker recalling what amounted to hundreds of thousands of vehicles, stemming from from opening and closing the trunk lid that may damage the rearview camera cable harness and increase the risk of a crash.

There is much more in the our full preview here.

So what that in mind, here is what Tesla just reported for Q4 moments ago:

Revenue $17.72B, beating Est. $16.64B
Adj EPS $2.54, beating Est. $2.36
Automotive Gross Margin +30.6%, beating Est. +29.9% (it was 29.2% ex-regulatory credits)
Adjusted EBITDA $4.09BN, beating est. of $3.894BN
Free cash flow $2.78 billion, +49% y/y, beating estimate $1.67 billion
Customer deposits $925 million, +23% y/y, and beating estimates of $808.0 million
Cash and cash equivalents $17.58 billion, -9.3% y/y, above the estimate $17.49 billion
CapEx was $1.81 billion in Q4: quarterly capex first broke $1 billion in the third quarter of 2020, and it’s been trending higher ever since, as Musk launched construction of two new assembly plants in Austin and Berlin.

So far so good, even if the company’s regulatory credits rose in Q4 to $314 million, up from 279 million in Q3.

So why is the stock tumbling after hours? It appears that the market is focusing on the same issues that have been here previously, but is only now paying attention: namely production bottlenecks and supply-chain challenges.

Here is the text that the market is focusing on:

“In Q4, we saw a continuation of global supply chain, transportation, labor and other manufacturing challenges, limiting our ability to run our factories at full capacity.”

As Tesla noted in its Q4 2021 investor update, the company “plans to grow its manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain.”

And here is the big red flag: “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022”

The company also touched on supply-chain issue in another place in the slidedeck, saying that “after a successful 2021, our focus shifts to the future. We aim to increase our production as quickly as we can, not only through ramping production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai.”

Tesla also echoed what many other auto companies have said about 2022: those who have the chips will win: “We believe competitiveness in the EV market will be determined by the ability to add capacity across the supply chain and ramp production.“

And yet, Tesla’s warning is bizarre because just as it is warning about supply chain bottlenecks, it says that “Fremont factory achieved record production in 2021. We believe there is potential to extend overall capacity beyond 600,000 per year. We aim to maximize output from our Fremont factory while ramping new factories.”

Even more surprising, the company said that “over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.” Putting this in context, a 50% gain this year would be about 1.8 million vehicles. And even if Tesla does have issues, it’s outperformed the rest of the auto industry in its ability to adapt to shortages.

To be clear, a 50% gain this year would be about 1.8 million vehicles. And even if Tesla does have issues, it’s outperformed the rest of the auto industry in its ability to adapt to shortages.

Commenting on the results, Gene Munster of Loup Ventures said that “the current state of the business is doing exceptionally well,” said Munster. “But the commentary on the risk factors are taking on a different weight in the current environment. As a large cap company, you need to be pounding the table that everything is going well. Whenever there are unknowns about the future it can spook investors a little bit.”

So bottom line, great results but for a company that is trading on a ludicrous forward multiple, that is to be expected. Meanwhile, the market is spooked by continued supply-chain issues, and the stocks is down on the day, erasing an earlier loss of as much as 5% when TSLA stock hit a session low of $880 after trading at $987.69 earlier.

If these losses hold in regular trading tomorrow – and Tesla has a knack of staging miraculous recoveries during the Musk call – Tesla shares will go back to levels last touched in mid-December. The stock is currently down about 4%.

And if Powell’s mauling wasn’t enough, Tesla’s troubles are also weighing on shares of other electric vehicle startups as well, with several trading lower in postmarket trading such as Rivian down 2.3%, Lucid falling over 1% and Nikola down 1.6%.

The Tesla Q4 investor deck can be found here.

Tyler Durden
Wed, 01/26/2022 – 16:31

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