Month: March 2022

A Federal Judge Says a Victim of Retaliatory Prosecution Can Sue a Cop Who Treated Criticism As a Crime


Forrest-City-police-badge-background

Four years ago, Grant Long, a resident of Forrest City, Arkansas, was acquitted of three criminal charges: harassment, harassing communications, and theft by receiving. In a federal lawsuit against former Forrest City police officer Darren Smith, Long argues that he was prosecuted in retaliation for his constitutionally protected criticism of Smith, who repeatedly lied in the affidavit that led to the charges.

This week a federal judge allowed Long to proceed with that claim and two others against Smith. It is not hard to see why, given the flagrantly fraudulent basis for the charges against Long, who had sued Smith in federal court and criticized him on Facebook. The case vividly illustrates how easy it is for a cop with a personal beef against someone to punish him with baseless criminal charges when prosecutors and judges fail to do their jobs by independently evaluating the allegations.

Why did Smith accuse Long of receiving stolen property? Because Long had used a Freedom of Information Act (FOIA) request to obtain a scathing June 2016 letter describing the results of an internal affairs investigation that was prompted by a personnel complaint Long’s nephew had filed against Smith a month earlier. The nephew, Derrick Long, said Smith had unlawfully entered his home, taken his dog, and stolen $900. In the internal affairs letter, Lt. E.P. Reynolds informed Forrest City Police Chief Deon Lee that “a thorough investigation” had confirmed at least two of those allegations.

“There was NO probable cause (P/C) to enter the citizen’s home,” Reynolds wrote. “Nor was there [probable cause] to seize and remove the dog from the owner’s home. The IA investigation found Officer Smith to be in direct violation of the 4th Amendment.”

Reynolds said “these violations mark yet another recent example of poor judgment on the part of Officer Smith with regard to his conduct and job performance.” He added that “there would appear to be a pattern of behavior from Officer Smith that would place our department in jeopardy of increased liability issues.”

Reynolds told Lee “the results of this most recent IA investigation (coupled with previous IA investigations) substantiate…clear violations of department protocol by Officer Smith” and “demonstrate an obvious pattern of questionable behavior and conduct on the part of Officer Smith.” Noting that Smith had already been temporarily demoted from sergeant as a result of “a previous IA investigation,” Reynolds recommended Smith’s termination.

Lee did not take Reynolds’ advice. But three years later, after Smith was promoted to lieutenant, Lee dismissed him following a complaint that he had shoved a man for no legitimate reason. WREG, the CBS affiliate in Memphis reported that Lee, who initially called Smith “a good officer” after that assault, “said there were many reasons Smith’s employment was terminated but acknowledged the shoving incident was one of them.” Previous complaints against Smith included unnecessary force against a minor, tasing a man without warning at a nightclub, and an incident in which Smith, while off duty, pulled a gun on a Walmart customer he mistakenly suspected of shoplifting.

Long included Reynolds’ prescient letter in a federal lawsuit he filed in 2018 based on Smith’s treatment of his nephew. (That lawsuit, which Long prepared without legal assistance, was dismissed without prejudice because Long had failed to establish his own standing to sue by explaining how Smith’s conduct had injured him, as opposed to his nephew.) Long also posted the internal affairs letter on Facebook. The very next day, Smith wrote and submitted the affidavit that led to the charges against Long.

In his March 2018 affidavit, Smith claimed Long’s FOIA request for the internal affairs letter “was denied due to the record being classified as a personnel record as defined in the statute.” It was therefore clear, Smith averred, that Long had “conspired with others to steal the document” and was “in possession of the stolen property.”

In reality, Lee’s office had given Long the letter, along with other documents related to the internal affairs investigation, in response to his FOIA request. “A rational juror could easily conclude Officer Smith was intentionally lying,” U.S. District Judge Lee Rudofsky notes in his March 28 order rejecting Smith’s motion to dismiss Long’s retaliatory prosecution claim. “A rational juror could conclude that there was no probable cause to prosecute Mr. Long for theft by receiving.”

Why did Smith accuse Long of “harassing communications”? In addition to publicizing the internal affairs letter, Long had posted a body camera video of a traffic stop in which Smith let a driver go after describing him as “dirty” because he had been “drinking with a CDL” (commercial driver’s license). A breath test put the driver’s blood alcohol concentration (BAC) at 0.046 percent, below the 0.08 percent level that would have made him automatically guilty of driving while intoxicated (DWI). But under Arkansas law, a BAC of 0.04 percent or more can be considered, along with other evidence, in determining whether a driver was intoxicated.

“Look at the work we pay for,” Long wrote on Facebook above the link to the video, which he had obtained from Smith’s partner, Officer Vanessa Brayboy. “SMITH LETS A DIRTY DWI DRIVER GO.”

The video revealed other questionable conduct: It showed that Smith and Brayboy were wearing each other’s body cameras during the traffic stop and switched them back afterward. “Officer Smith can then be seen manipulating the bodycam previously worn by Officer Brayboy,” Rudofsky notes. In the comment section below the video link, Long wrote that another Facebook user “couldn’t say why the officer deleted the video in the street but this is an officer who say[s] he is missing a whole mo[n]th of video.”

By Smith’s reckoning, Long’s posting of the video and the internal affairs letter, along with the accompanying criticism, amounted to “harassing communications,” which Arkansas defines to include electronic messages “likely to harass, annoy, or cause alarm” that are delivered with that purpose. While it is obvious that Long’s posts did indeed “annoy” Smith, that is not enough to satisfy the elements of this crime. If it were, the statute would be clearly inconsistent with the First Amendment.

One obvious problem with Smith’s reading of the law is that it seems Long did not deliberately “communicate” with him at all: While Smith happened to be a member of the Facebook group (“Let’s Talk Forrest City”) in which Long was participating, Long said he did not know that, and there is no evidence that he did. Furthermore, Rudofsky notes, “the record is replete with genuinely disputed material facts from which a rational juror could find that Officer Smith knowingly lied or recklessly disregarded the truth” in alleging that Long had violated the law prohibiting “harassing communications.”

Smith’s affidavit claimed, for example, that “Grant Long has continually made false statements about [me] on a public for[u]m on Facebook.” Yet as Rudofsky points out, “the record reflects one post involving the Internal Affairs Investigation Letter, one post involving the traffic stop video, and one comment to the post about the traffic stop.” Hence “a rational juror could easily conclude that Officer Smith’s use of the word ‘continually’ to describe Mr. Long’s criticisms was intentionally false.”

Smith also averred that Long “accused me falsely of letting a drunk driver continue to operate a motor vehicle after having conducted tests that show[ed] the driver was intoxicated.” But as Rudofsky notes, “a rational juror could find that Mr. Long said nothing of the sort, and that Officer Smith knew it.” Long described the driver as “dirty,” which was the same word Smith had used. Long also described him as a “DWI driver,” which was arguably true, given that his BAC was high enough to count, along with other indicators, as evidence of intoxication.

Smith said Long “public[ly] accused me of destroying evidence” and “knew when he posted such that he was posting falsehoods.” Yet “a rational juror could view the bodycam switching (between Officers Smith and Brayboy) and Officer Smith’s subsequent manipulation of one of the bodycams as evidence that Officer Smith did delete the video in the street,” Rudofsky says. “Thus, a rational juror could conclude that Mr. Long’s comment was true, that Officer Smith knew it was true, and that
Officer Smith’s description of the comment as false in the Affidavit of Arrest was a lie.”

Smith, who described Lt. Reynolds as “a former disgruntled employee,” asserted that the results of the internal investigation had been “refuted.” Yet “there is no record evidence that the findings in that letter were ever ‘refuted,'” Rudofsky says. “A rational juror could thus conclude that Officer Smith’s statement was intentionally false.”

In sum, Rudofsky says, Long “certainly didn’t communicate with Officer Smith ‘in a manner likely to harass, annoy, or cause alarm.'” And assuming Long was not aware that Smith was part of the Facebook group (which appears to be the case and is taken as true at this stage of the lawsuit), he “could not have the ‘purpose to harass, annoy, or alarm’ Officer Smith.”

Why did Long accuse Smith of “harassment”? That charge, Rudofsky says, “is even more far-fetched.” Under Arkansas law, “a person commits the offense of harassment if, with purpose to harass, annoy, or alarm another person, without good cause, he or she…engages in conduct or repeatedly commits an act that alarms or seriously annoys another person and that serves no legitimate purpose.” A “legitimate purpose,” in other words, bars this charge even when someone’s conduct “seriously annoys” another person.

“If these postings do not serve a legitimate purpose, nothing does,” Rudofsky writes. “If these postings do not serve a legitimate purpose, then the statute violates the First Amendment. Accordingly, there’s no probable cause for the harassment charge.”

As a backup to his argument that he had probable cause to accuse Long of these three crimes, Smith maintained that he was protected by qualified immunity, a legal doctrine that shields government officials from federal civil rights lawsuits when their alleged misconduct did not violate “clearly established” law. Rudofsky rejects that claim as well, since it was well-established in March 2018 that a police officer violates the First Amendment when he uses trumped-up charges to punish protected speech.

Rudofksy also allowed Long to proceed with two other claims against Smith: malicious prosecution as defined by state law and violation of Long’s “right to remonstrate” under the Arkansas Constitution. The same pattern of behavior that supports Long’s “retaliatory-inducement-to-prosecute claim under the First Amendment,” Rudofsky concludes, makes those state law claims viable as well.

The fact that Long will get a chance to hold Smith accountable for his egregious, blatantly dishonest abuse of power is encouraging. But it is more than a little troubling that a St. Francis County District Court judge approved the arrest warrant the same day Smith asked for it (a fact that Smith cited in his defense) and that local prosecutors saw fit to pursue Smith’s vendetta against Long. Even a modicum of skepticism, critical reading, and curiosity would have revealed that Smith’s accusations were driven by personal pique rather than a good-faith, evidence-supported belief that Long had broken the law. Yet somehow these officials perceived probable cause that was plainly lacking.

In his arrest affidavit, Smith repeatedly noted that Long “had full knowledge that I was a Forrest City Police Office[r].” While Smith’s status as a police officer had nothing to do with the validity of the charges against Long, it helps explain why Smith thought criticizing him was a crime and why no one bothered to correct that misconception until now.

The post A Federal Judge Says a Victim of Retaliatory Prosecution Can Sue a Cop Who Treated Criticism As a Crime appeared first on Reason.com.

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PBOC Raises Billions To Bail Out Chinese Banks As Property Sector Teeters On Brink Of Collapse

PBOC Raises Billions To Bail Out Chinese Banks As Property Sector Teeters On Brink Of Collapse

Earlier this month, Evergrande, China’s perennially troubled real-estate developer, announced that foreign lenders had seized more than $2 billion in deposits belonging to one of its subsidiaries in an effort to recoup money owed by the firm. Holders of the company’s bonds (which had been in default for weeks) were apoplectic, and the whole incident has once again laid bare the rot at the core of China’s property sector (even as Evergrande promised to swiftly produce an emergency debt-restructuring plan, something that was seen as a band-aid on a bullet wound).

With the country’s property sector teetering on the precipice (keep in mind, a collapse could have global repercussions on par with the Great Financial Crisis, as we have pointed out in the past)…

…The CCP leadership has reportedly devised a plan to raise hundreds of billions of yuan for a new fund to backstop the country’s troubled financial firms in an effrt to create a buffer against a punishing property sector default.

Here’s more from Bloomberg:

The People’s Bank of China is leading the effort, seeking to shore up confidence in the $60 trillion financial system as the economy slows and a debt crisis in the property industry spreads. The stability fund would dwarf other pools available to bail out troubled institutions and their depositors.

China’s banks have been struggling with mounting bad loans for years (of course, the true extent of the threat is masked by the expansive shadow credit system in China, which relies on debt issued by local authorities that isn’t entirely reflected in national figures). But ratings agencies have stepped up their warnings, despite the government’s best efforts to keep the true extent of the problem under wraps.

Source: Bloomberg

The latest hint at the dire situation in Chinese credit arrived yesterday, with the release of the latest Beige Book data out of China. As Bloomberg pointed out, the survey – which showed a drop in loan demand due to sky-high borrowing costs – paints “a grimmer picture of credit demand in the corporate sector than the slowdown reflected in the official data.” It’s the latest sign that the PBOC’s efforts to cut rates and encourage refinancing at more favorable rates has reached its limits.

Source: Bloomberg

And as lockdowns in Shanghai and elsewhere threaten to derail China’s economy, it appears the CCP has accepted the fact that – as the old saying goes – desperate times call for desperate measures.

Tyler Durden
Thu, 03/31/2022 – 17:20

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Daily Briefing: Will Crude Oil Constraints Continue To Drive Inflation?

Daily Briefing: Will Crude Oil Constraints Continue To Drive Inflation?

President Joe Biden announced a plan to release from the U.S. Strategic Petroleum Reserve 1 million barrels of oil per day for the next six months as part of the federal government’s effort to fight inflation. Releasing 180 million barrels from the SPR is an unprecedented step. But it’s unclear whether it will have a meaningful impact on oil prices. Earlier Thursday, OPEC+ ratified a 432,000 barrel per day production increase as of May, but that increase is in line with the cartel’s plan; it is not responding to oil consumers’ calls for significant output boosts. Oil investors everywhere seem to be holding the line for only gradual production increases, despite the ongoing crisis in Eastern Europe. Bart Melek, Global Head of Commodity Markets Strategy at TD Securities, joins Real Vision’s Ash Bennington to discuss the global crude oil market, current constraints on production and supply, and inflation. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3IV7RbE

Tyler Durden
Thu, 03/31/2022 – 14:12

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Do Studies Show Gun Control Works? No.


Gun control science

After reaching historic lows in the mid-2010s, gun violence rates in America have gone up in recent years, and they remain higher than in some other parts of the developed world. There are hundreds of laws and regulations at the federal and state level that restrict Americans’ access to guns, yet according to some advocates, social science research shows that a few more “simple, commonsense” laws could significantly reduce the number of injuries and deaths attributed to firearms.

There has been a massive research effort going back decades to determine whether gun control measures work. A 2020 analysis by the RAND Corporation, a nonprofit research organization, parsed the results of 27,900 research publications on the effectiveness of gun control laws. From this vast body of work, the RAND authors found only 123 studies, or 0.4 percent, that tested the effects rigorously. Some of the other 27,777 studies may have been useful for non-empirical discussions, but many others were deeply flawed. 

We took a look at the significance of the 123 rigorous empirical studies and what they actually say about the efficacy of gun control laws. 

The answer: nothing. The 123 studies that met RAND’s criteria may have been the best of the 27,900 that were analyzed, but they still had serious statistical defects, such as a lack of controls, too many parameters or hypotheses for the data, undisclosed data, erroneous data, misspecified models, and other problems. 

And these glaring methodological flaws are not specific to gun control research; they are typical of how the academic publishing industry responds to demands from political partisans for scientific evidence that does not exist.

Not only is the social science literature on gun control broadly useless, but it provides endless fodder for advocates who say that “studies prove” that a particular favored policy would have beneficial outcomes. This matters because gun laws, even if they don’t accomplish their goals, have large costs. They can turn otherwise law-abiding citizens into criminals, they increase prosecutorial power and incarceration, and they exacerbate the racial and socioeconomic inequities in the criminal justice system. 

The 123 papers identified by RAND tested 722 separate hypotheses about the impact of gun control policies for “statistical significance.” Peer-reviewed journals generally accept a result as statistically significant if it has a one-in-20 chance or less of being due to random chance. So if researchers run 100 tests on the relationship between two things that obviously have no connection to each other at all—say, milk consumption and car crashes—by pure chance, they can be expected to get five statistically significant results that are entirely coincidental, such as that milk drinkers get into more accidents. 

In terms of the gun control studies deemed rigorous by RAND, this means that even if there were no relationship between gun laws and violence—much like the relationship between drinking milk and getting into car accidents—we’d nevertheless expect about five percent of the studies’ 722 tests, or 36 results, to show that gun regulations had a significant impact. But the actual papers found positive results for only 18 combinations of gun control measure and outcome (such as waiting periods and gun suicides). That’s not directly comparable to the 36 expected false positives, since some combinations had the support of multiple studies. But it’s not out of line with what we would expect if gun control measures made no difference.

Also concerning is the fact that there was only one negative result in which the researchers reported that a gun control measure seemed to lead to an increase in bad outcomes or more violence. Given the large number of studies done on this topic, there’s a high statistical likelihood that researchers would have come up with more such findings just by random chance. This indicates that researchers may have suppressed results that suggest gun control measures are not working as intended. 

Most inconclusive studies also never get published, and many inconclusive results are omitted from published studies, so the rarity of pro-gun-control results and the near-total absence of anti-gun-control results is a strong argument that, based on the existing social science, we know nothing about the effects of gun control.

The reasons that we have no good causal evidence about the effectiveness of gun control are fundamental and unlikely to be overcome in the foreseeable future. The data on gun violence are simply too imprecise, and violent events too rare, for any researcher to separate the signal from the noise, or, in other words, to determine if changes in gun violence rates have anything to do with a particular policy. 

One common research approach is to compare homicide rates in a state the years before and after gun control legislation was passed. But such legislation can take months or years to be fully implemented and enforced, if ever. Most modern gun control measures only affect a minority of gun sales, and new gun sales are a small proportion of all firearms owned. Very few of the people who would be prevented from buying guns by the legislation were going to kill anyone, and many of the people who were going to kill someone would do it anyway, with another weapon or by getting a gun some other way.

Therefore, the most optimistic projection of the first-year effect of most laws on gun homicides would be a reduction of a fraction of a percent. But gun homicide rates in a state change by an average of six percent in years with no legislative changes, based on FBI Uniform Crime Reporting (UCR) data going back to 1990. As a statistician’s rule of thumb, this kind of before-and-after study can only pick up effects about three times the size of the average year-to-year change, meaning that such studies can’t say anything about the impact of a gun law unless it leads to an 18 percent change or greater in the gun murder rate in a single year. That’s at least an order of magnitude larger than any likely effect of the legislation.

One way to try to get around these limitations is to use what statisticians call “controls,” which are mathematical tools that allow them to compare two things that are different in many ways, and isolate just the effect they’re looking for. In this case, gun control studies often compare the violence rates in two or more states that have stricter versus more lax gun laws, and they try to control for all the differences between the states except for these policies. 

Another option for researchers is to compare violence rates in a single state with national averages. The idea is that factors that change homicide rates other than the legislation will affect both state and national numbers in the same way. Comparing changes in the state rate to changes in the national rate supposedly controls for other factors that are affecting rates of violence, such as a nationwide crime wave or an overall decline in shootings.

The problem here is that national violence rates actually don’t track well with individual states’ violence rates. Based on the FBI’s UCR data, annual changes within states have only about a 0.4 correlation with national rates when there is no change in legislation. That means the difference between any individual state’s rate and the national rate is more volatile than the change in the state’s rate on its own. The control adds noise to the study rather than filtering noise out. The same problem exists if you try to compare the state to similar or neighboring states. We just don’t have good controls for state homicide rates.

To find an effect large enough to be measured, gun control researchers sometimes group together dozens or hundreds of state legislative initiatives and then look for changes in homicide rates. But states with strong gun control regulations are different from states with weaker gun control regulations: they’re generally richer, more liberal, more urban, and they have lower murder and suicide rates. The cultural differences are too big and there’s just too much uncertainty in the data to say anything about what would happen if we enforced Greenwich, Connecticut, laws in Festus, Missouri.

Researchers try to avoid the pitfalls of before-and-after studies or inter-state comparisons by using longer periods of time—say, by studying the change in gun homicide rates in the 10 years after legislation was enacted compared to the 10 years before. Now you might plausibly get an effect size large enough to be distinguished from one year’s noise, but not from 20 years’ noise.

Another limitation on the usefulness of all gun control studies is that the underlying data are incomplete and unreliable. Estimates of the number of working firearms in the U.S. differ by a factor of two—from around 250 million to 600 million—and most uses of firearms go unreported unless someone is killed or injured. We have some information on gun sales, but only from licensed dealers, and on gun crimes, but not all crimes are reported to the police, not all police report to the FBI, many non-crimes are reported, and reported crimes often have missing or erroneous details.

Even if you could somehow assemble convincing statistical evidence that gun violence declined after the passage of gun control legislation, there are always many other things that happened around the same time that could plausibly explain the change.

The solution is more basic research on crime and violence, rather than more specific studies on gun control legislation. Better understanding can lead to precise experimentation and measurement to detect changes too small to find in aggregate statistical analyses. 

By way of comparison, take the contribution of cigarette smoking to cancer. For years, smoking was alleged to cause cancer on the basis of aggregate statistics, and the studies were deeply flawed. Eventually, however, medical researchers—not statisticians or policy analysts—figured out how cigarette smoking affected cells in the lungs, and how that developed into cancer. Certain types of cancer and other lung problems were identified that were virtually only found in smokers. With this more precise understanding, it was possible to find overwhelming statistical evidence for each link in the chain.

In terms of studies on gun violence, suppose someday psychological researchers can demonstrate empirically the effect that being abused as a child has on the probability a person will commit a gun homicide. This more specific understanding of why violent crime occurs would allow precise, focused studies on the effect of gun control legislation. Instead of comparing large populations of diverse individuals, researchers could focus on specific groups with high propensities for gun violence.

Only when we know much more about why people kill themselves and each other, and how the presence or absence of guns affects rape, assault, robbery and other crimes, can we hope to tease out the effect of gun control measures.

It’s not just gun control. Nearly all similar research into the effects of specific legislation suffers from the same sort of problem: too much complexity for the available data. Political partisans yearn for statistical backing for their views, but scientists can’t deliver it. Yet researchers flood to favored fields because there is plenty of funding and interest in results, and they peer review each other’s papers without applying the sort of rigor required to draw actual policy conclusions.

This doesn’t mean that gun control legislation is necessarily ineffective. But short of legitimate scientific evidence, belief in the efficacy of additional gun control laws is, and will remain, a matter of faith, not reason.

Tellingly, the studies that have gotten the most media or legislative attention aren’t among the 123 that met RAND’s approval. The best studies made claims that were too mild, tenuous, and qualified to satisfy partisans and sensationalist media outlets. It was the worst studies, with the most outrageous claims, that made headlines.

One prominent study, which was touted from the debate stage by Sen. Cory Booker (D–N.J.) when he was running for president in the 2016 election, made the astounding claim that a permit requirement for handgun purchases in Connecticut reduced their gun murder rate by 40 percent. It is true that the state’s gun murder rate fell rapidly after that law was passed in 1995, but so did gun murder rates throughout the country. The study’s 40 percent claim is the actual murder rate in Connecticut compared to something the researchers call “synthetic Connecticut,” which they constructed for the purpose of their study—a combination of mostly Rhode Island, but also Maryland, California, Nevada, and New Hampshire. 

As it turns out, the authors’ entire claimed effect (the 40 percent reduction they reported) was due to the fact that Rhode Island experienced a temporary spate of about 20 extra murders between 1999 and 2003, and synthetic Connecticut was more than 72 percent Rhode Island.

Even compared to synthetic Connecticut, the decline the authors found didn’t last. Although the law remained on the books, by 2006, the gun murder rate in real Connecticut had surpassed synthetic Connecticut, and then continued to increase to the point where it was 46 percent higher. The authors, despite publishing in 2015, elected to ignore data from 2006 and afterwards. 

This study is typical of the field: strong claims based on complex models and uncertain data. Worse, researchers often cherry pick outcome measures, time periods, and locations to get their preferred results. 

For example, take the studies that look at whether bans on assault-style weapons and large-capacity magazines, which are often passed together, have reduced the frequency or deadliness of mass shootings. Researchers define basic terms like “assault weapons” and “mass shootings” differently. They limit their data by time, place, or other factors, such as classifying an event as an act of terror or gang violence and therefore not considering it a mass shooting.

These studies suffer from even greater data issues than other gun violence research. Mass shootings are extremely rare relative to other forms of gun violence, and most of them don’t involve assault weapons. Though estimates vary depending on the definitions used, mass shootings involving assault weapons constitute a small fraction of one percent of all gun homicides. 

The U.S. federal ban on assault weapons and large capacity magazines, which was the subject of numerous studies that reached widely varying and often contradictory conclusions about its efficacy, was in place for 10 years, from 1994 to 2004. Before, during, and after the time the law was in effect, many societal factors caused crime rates to vary widely, making it impossible to draw useful conclusions about the effect of the ban on anything, and in particular on something as rare as mass shootings. But with all the noise in the data, it is easy for researchers to find weak results that support any conclusion they hope to reach.

Moreover, states and countries with bans define assault weapons and other key elements of laws differently. Combined with the data problems inherent in comparing different populations of people over different periods of time, comparisons between states and countries are almost meaningless.

Another RAND Corporation meta-analysis updated in 2020 found inconclusive evidence that bans on assault weapons and large-capacity magazines have any effect on mass shootings or violent crime.

But how about the more straightforward question of whether owning a gun makes you more or less safe? One widely influential study that has constantly resurfaced in headlines since it was published in the New England Journal of Medicine in 1993 concluded that, “rather than confer protection, guns kept in the home are associated with an increase in the risk of homicide by a family member or intimate acquaintance.” 

There are major problems with this study. First of all, the researchers concluded that keeping a gun at home increases a person’s risk of being killed, but nearly half the murders they included in their analysis were not committed with a firearm. And among gun owners who were killed with a gun, the authors didn’t establish whether the weapon used was the victim’s own gun or if it belonged to another person. 

This points to another explanation for why research on this topic is so often inconclusive: individual differences can’t easily be controlled for in social science research. A gun expert with a gun safe in a high crime neighborhood may well be safer with a gun, whereas a careless alcoholic living in a low crime area who keeps loaded guns in his kids’ closet is certainly going to be less safe. People want a simple overall answer to whether guns make you less safe or more safe in order to inform legislation, but social science cannot deliver that. 

Population averages can be useful when one rule has to be applied to everyone—for example, estimating how many lives would be saved by a pollution control regulation, or how many dental cavities are prevented by fluoridating the water supply. But with guns and personal safety, the relevant question is not whether guns make the average gun owner safer, but which people guns make safer and which people guns make less safe.

Anyone basing a gun control position on scientific evidence of any kind is building on sand. We have no useful empirical data on the subject, no body of work that rises above the level we would expect based on random chance, either for or against gun control measures. And the claim that there are “simple, commonsense” laws we could pass that would significantly reduce gun violence, if only we had the political will to go through with them, is simply false.

These are complex issues that require rigorous scientific investigation to come to any kind of useful conclusion, and they depend far more on individual variation and broad social and cultural factors than on any regulation. We should not look to pass laws that sweep up innocent victims while potentially doing more harm than good, all with the alleged backing of science that can’t possibly tell us what we need to know.

Produced and edited by Justin Monticello. Written by Monticello and Aaron Brown. Graphics by Isaac Reese. Audio production by Ian Keyser.

Music: Aerial Cliff by Michele Nobler, Land of the Lion by C.K. Martin, The Plan’s Working by Cooper Cannell, Thoughts by ANBR, Flight of the Inner Bird by Sivan Talmor and Yehezkel Raz, and Run by Tristan Barton.

Photos: Hollandse-Hoogte/ZUMA Press/Newscom; Robin Rayne/ZUMAPRESS/Newscom; Ted Soqui/Sipa USA/Newscom; YES Market Media/Yaroslav Sabitov/YES Market Medi/Newscom; Chuck Liddy/TNS/Newscom; YES Market Media/Yaroslav Sabitov/YES Market Medi/Newscom; Brett Coomer/Rapport Press/Newscom; Martha Asencio-Rhine/ZUMAPRESS/Newscom; Jebb Harris/ZUMA Press/Newscom; John Gastaldo/ZUMA Press/Newscom; Greg Smith/ZUMA Press/Newscom; Richard Ellis/ZUMA Press/Newscom; Matthew McDermott/Polaris/Newscom; KEVIN DIETSCH/UPI/Newscom; Bill Clark/CQ Roll Call/Newscom; Michael Brochstein/ZUMAPRESS/Newscom; Sandy Macys / UPI Photo Service/Newscom; E. Jason Wambsgans/TNS/Newscom; Eye Ubiquitous/Newscom; Matthew McDermott/Polaris/Newscom

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Blame Insane Government Spending for Inflation


parttime-portraits-NlgKUPoriIE-unsplash

Many people still blame today’s inflation on snags in globe-spanning supply chains. The chief proposed solution is to dismantle decades of globalization and bring production home. Some are also pushing for measures to offset inflation, including robust child subsidies and tax rebates for gas and food.

These proposals are rooted in a misunderstanding of the true cause of inflation: namely, government-induced demand. More spending, therefore, will only fuel the inflation fires.

Over the course of the pandemic, the Treasury Department issued roughly $6 trillion, $2.7 trillion of which was monetized by the Federal Reserve. Americans were sent $5.1 trillion through various programs, including individual checks and unemployment bonuses. Overall federal debt has since risen by about $6 trillion.

This response assumes the 2020 recession was sparked by a demand shock leading to a fall in aggregate demand, rather than the strangling of aggregate supply caused by the pandemic and lockdowns. Under these circumstances, sending people and companies money was never likely to impact output. Instead, it greatly inflated demand for the durable goods still being produced.

Even by the Keynesian economic standards that prompt this sort of fiscal response, COVID-19 relief was larger than any “output gap”—the difference between what the economy is producing and the most it could produce. In March 2020, the gap was $2.3 trillion, and that year alone, the government spent $3 trillion through several relief bills.

In March 2021, Democrats passed the over-the-top $1.9 trillion American Rescue Plan. At the time, the projected output gap was $700 billion through 2023—the period when most of the spending would take place. As such, the bill was two or three times too big, especially considering the economy was mostly reopened and growing, with unemployment dropping fast from 14.8 percent the year before to 6 percent.

A few center-left economists, as well as Sen. Joe Manchin (D–W.Va.), sounded the alarm that an oversized new injection of spending would overheat a growing economy and cause inflation. They were ignored, if not mocked. As a result, almost everyone from the Fed chairman to monetary experts spent most of 2021 explaining away inflation without mention of the roles played by fiscal and monetary policies.

Today, several new studies confirm that this bout of inflation is rooted in demand, not supply. That’s not to say supply-chain chokepoints, originally resulting from the global shutdown imposed by governments and a sudden shift away from services toward goods, played no role.

However, we wouldn’t have such large-scale supply-chain problems without the shutdowns followed by the aforementioned government-fueled increase in demand for durable goods. According to Robert Koopman at the World Trade Organization, artificially inflated demand accounted for as much as two-thirds of supply shortages.

Second, global supply chains are, obviously, global. If inflation were truly the product of supply-chain issues, we would witness roughly the same rates of inflation throughout the industrialized world. But we don’t. Most industrialized countries have lower levels of inflation than the United States. These other countries also implemented significantly lower amounts of COVID-19 spending.

For instance, France, South Korea, and Norway all have inflation rates below 4 percent. Their governments spent less than 10 percent of GDP on fiscal stimulus in response to the pandemic, compared to about 26 percent in the United States.

One also needs to distinguish supply constraints, which increase the price of some goods relative to other goods, and inflation, which occurs when the prices of everything, including labor, rise. Supply shocks and constraints do not cause the same broad-based pattern of price hikes that true inflation causes. In addition, price-level hikes caused by supply-side shocks are generally not ongoing month after month; they are one-time jumps that gradually dissipate when the supply shock is over.

Today, all prices are rising, including wages (though for now at a lower rate), and the inflation is persistent. This is because of overblown fiscal and monetary policies. Tackling the problem requires strong Fed actions and significant fiscal restraint by Congress. Short of both, inflation will persist for much longer, inflicting disproportionate harm on the most economically vulnerable.

This also means that the recent calls to offset inflation with subsidies for gas, housing, child care, and more will require borrowed money. Since fiscal largesse is the source of the problem, and since these efforts make the affected markets more inefficient, the approach raises the risk of a great stagnation spiral.

COPYRIGHT 2022 CREATORS.COM.

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“[We All] Hope Clarence Thomas Dies”: UCLA Faces New Free Speech Controversy Over Social Media Posting

“[We All] Hope Clarence Thomas Dies”: UCLA Faces New Free Speech Controversy Over Social Media Posting

Authored by Jonathan Turley,

UCLA is facing a new free speech controversy after its Director of Race and Equity, Jonathan Perkins, tweeted that he (like many) hoped Justice Clarence Thomas would die rather than recover from his recent illness. UCLA recently disciplined a student for controversial statements, but has stood by the right of Perkins to express such hateful viewpoints. Ironically, Perkins’ office has long posted anti-free speech positions to justify censorship and speech codes.

Perkins is a lawyer (with a J.D. from the University of Virginia) and previously worked in the General Counsel’s office of Harvard University.

When news spread of the hospitalization of Thomas, Perkins declared “No one wants to openly admit [we all] hope Clarence Thomas dies. Whatever you need to tell yourselves.” He further referred to objections to wishing death upon others as “silly” while adding a racist attack: “Uncle Thomas is a sexist token who’s committed himself to making us all share in he and his treasonous wife’s misery,”

Anna Spain Bradley, Vice Chancellor for Equity, Diversity and Inclusion at UCLA, publicly stated that “this tweet does not reflect my or UCLA EDI’s views.”

It was a mild statement to be sure but I still support the right of Perkins and other faculty and students in being able to speak freely on social media. This was a personal viewpoint expressed outside of the school.

However, that was not the approach taken by UCLA in other controversies. Last year, UCLA athlete Chris Weiland was dismissed from the cross country and track & field team after video of him making racist, sexist and homophobic comments appeared on social media. The comments were overheard as Weiland spoke with his mother. 

Avery Anderson, UCLA’s Director of Track and Field and Cross Country reinstated Weiland after a suspension, but then protests led to his dismissal.

UCLA’s Black Student-Athletes Alliance issued a statement that:

“UCLA knew about an incident of blatant racism, homophobia and sexism and did very minimal actions about it. … We do not feel safe with this person on campus, and we demand UCLA athletics take action immediately and remove this student from the team.”

Anderson responded to this and other objections by reversing her decision:

“It became clear that his continued involvement with the team is incompatible with the culture of mutual support and respect we’re fostering. I now realize that the decision to reinstate him was not the right decision, and that the action today is best for the well-being of our team.”

UCLA professors have also been subject to investigations and protests over their private speech or class policies that were denounced as racist. One professor is currently suing UCLA.

There are no such protests or actions taken over the hateful and racist comments of Perkins.

Notably, Perkins’ office espouses distinctly anti-free speech sentiments and calls classic defenses of free speech “myths.”

Myth Busting

Many hold such views of the “myths of free speech” but this is a public university declaring that such views are myths. The official UCLA view that “free speech is [not] everything” and “censorship is [not] a One-Way Street” would not be supported by many citizens, particularly free speech advocates.

When it comes to Perkins, however, free speech will (correctly) protect him.

Tyler Durden
Thu, 03/31/2022 – 17:00

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GME Soars 20% After Announcing Stock Split

GME Soars 20% After Announcing Stock Split

After first Amazon, then Tesla saw their stock prices surge in recent weeks following stock split announcements – which incidentally do absolutely nothing for the intrinsic value of the actual company and merely demonstrate just how broken the market is  – moments ago the original meme stonk, Gamestop, decided to squeeze shorts for the second time in the past two weeks…

… the first time coming right around the time novelty chairman Ryan Cohen bought 100,000 shares a week ago…

… when the retailer (whose core business is more or less worthless) announced it plans to implement a stock split through a dividend, a brilliant ruse by the management team which is far more focused on financial engineering and how to create stock squeezes than actually running the mostly worthless company.

Specifically, GME said it looks to boost the number of authorized shares to 1 billion from 300 million, and since that means that the average price per share will drop by 3.333 – which will somehow make the stock cheaper or more appetizing to the apes – GME stock is up about 20% after hours…

… and adding to the idiocy, its meme stock comp, AMC, is also up about 10% after hours because this is clearly the dumbest of all timelines.

Tyler Durden
Thu, 03/31/2022 – 16:54

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Do Studies Show Gun Control Works? No.


Gun control science

After reaching historic lows in the mid-2010s, gun violence rates in America have gone up in recent years, and they remain higher than in some other parts of the developed world. There are hundreds of laws and regulations at the federal and state level that restrict Americans’ access to guns, yet according to some advocates, social science research shows that a few more “simple, commonsense” laws could significantly reduce the number of injuries and deaths attributed to firearms.

There has been a massive research effort going back decades to determine whether gun control measures work. A 2020 analysis by the RAND Corporation, a nonprofit research organization, parsed the results of 27,900 research publications on the effectiveness of gun control laws. From this vast body of work, the RAND authors found only 123 studies, or 0.4 percent, that tested the effects rigorously. Some of the other 27,777 studies may have been useful for non-empirical discussions, but many others were deeply flawed. 

We took a look at the significance of the 123 rigorous empirical studies and what they actually say about the efficacy of gun control laws. 

The answer: nothing. The 123 studies that met RAND’s criteria may have been the best of the 27,900 that were analyzed, but they still had serious statistical defects, such as a lack of controls, too many parameters or hypotheses for the data, undisclosed data, erroneous data, misspecified models, and other problems. 

And these glaring methodological flaws are not specific to gun control research; they are typical of how the academic publishing industry responds to demands from political partisans for scientific evidence that does not exist.

Not only is the social science literature on gun control broadly useless, but it provides endless fodder for advocates who say that “studies prove” that a particular favored policy would have beneficial outcomes. This matters because gun laws, even if they don’t accomplish their goals, have large costs. They can turn otherwise law-abiding citizens into criminals, they increase prosecutorial power and incarceration, and they exacerbate the racial and socioeconomic inequities in the criminal justice system. 

The 123 papers identified by RAND tested 722 separate hypotheses about the impact of gun control policies for “statistical significance.” Peer-reviewed journals generally accept a result as statistically significant if it has a one-in-20 chance or less of being due to random chance. So if researchers run 100 tests on the relationship between two things that obviously have no connection to each other at all—say, milk consumption and car crashes—by pure chance, they can be expected to get five statistically significant results that are entirely coincidental, such as that milk drinkers get into more accidents. 

In terms of the gun control studies deemed rigorous by RAND, this means that even if there were no relationship between gun laws and violence—much like the relationship between drinking milk and getting into car accidents—we’d nevertheless expect about five percent of the studies’ 722 tests, or 36 results, to show that gun regulations had a significant impact. But the actual papers found positive results for only 18 combinations of gun control measure and outcome (such as waiting periods and gun suicides). That’s not directly comparable to the 36 expected false positives, since some combinations had the support of multiple studies. But it’s not out of line with what we would expect if gun control measures made no difference.

Also concerning is the fact that there was only one negative result in which the researchers reported that a gun control measure seemed to lead to an increase in bad outcomes or more violence. Given the large number of studies done on this topic, there’s a high statistical likelihood that researchers would have come up with more such findings just by random chance. This indicates that researchers may have suppressed results that suggest gun control measures are not working as intended. 

Most inconclusive studies also never get published, and many inconclusive results are omitted from published studies, so the rarity of pro-gun-control results and the near-total absence of anti-gun-control results is a strong argument that, based on the existing social science, we know nothing about the effects of gun control.

The reasons that we have no good causal evidence about the effectiveness of gun control are fundamental and unlikely to be overcome in the foreseeable future. The data on gun violence are simply too imprecise, and violent events too rare, for any researcher to separate the signal from the noise, or, in other words, to determine if changes in gun violence rates have anything to do with a particular policy. 

One common research approach is to compare homicide rates in a state the years before and after gun control legislation was passed. But such legislation can take months or years to be fully implemented and enforced, if ever. Most modern gun control measures only affect a minority of gun sales, and new gun sales are a small proportion of all firearms owned. Very few of the people who would be prevented from buying guns by the legislation were going to kill anyone, and many of the people who were going to kill someone would do it anyway, with another weapon or by getting a gun some other way.

Therefore, the most optimistic projection of the first-year effect of most laws on gun homicides would be a reduction of a fraction of a percent. But gun homicide rates in a state change by an average of six percent in years with no legislative changes, based on FBI Uniform Crime Reporting (UCR) data going back to 1990. As a statistician’s rule of thumb, this kind of before-and-after study can only pick up effects about three times the size of the average year-to-year change, meaning that such studies can’t say anything about the impact of a gun law unless it leads to an 18 percent change or greater in the gun murder rate in a single year. That’s at least an order of magnitude larger than any likely effect of the legislation.

One way to try to get around these limitations is to use what statisticians call “controls,” which are mathematical tools that allow them to compare two things that are different in many ways, and isolate just the effect they’re looking for. In this case, gun control studies often compare the violence rates in two or more states that have stricter versus more lax gun laws, and they try to control for all the differences between the states except for these policies. 

Another option for researchers is to compare violence rates in a single state with national averages. The idea is that factors that change homicide rates other than the legislation will affect both state and national numbers in the same way. Comparing changes in the state rate to changes in the national rate supposedly controls for other factors that are affecting rates of violence, such as a nationwide crime wave or an overall decline in shootings.

The problem here is that national violence rates actually don’t track well with individual states’ violence rates. Based on the FBI’s UCR data, annual changes within states have only about a 0.4 correlation with national rates when there is no change in legislation. That means the difference between any individual state’s rate and the national rate is more volatile than the change in the state’s rate on its own. The control adds noise to the study rather than filtering noise out. The same problem exists if you try to compare the state to similar or neighboring states. We just don’t have good controls for state homicide rates.

To find an effect large enough to be measured, gun control researchers sometimes group together dozens or hundreds of state legislative initiatives and then look for changes in homicide rates. But states with strong gun control regulations are different from states with weaker gun control regulations: they’re generally richer, more liberal, more urban, and they have lower murder and suicide rates. The cultural differences are too big and there’s just too much uncertainty in the data to say anything about what would happen if we enforced Greenwich, Connecticut, laws in Festus, Missouri.

Researchers try to avoid the pitfalls of before-and-after studies or inter-state comparisons by using longer periods of time—say, by studying the change in gun homicide rates in the 10 years after legislation was enacted compared to the 10 years before. Now you might plausibly get an effect size large enough to be distinguished from one year’s noise, but not from 20 years’ noise.

Another limitation on the usefulness of all gun control studies is that the underlying data are incomplete and unreliable. Estimates of the number of working firearms in the U.S. differ by a factor of two—from around 250 million to 600 million—and most uses of firearms go unreported unless someone is killed or injured. We have some information on gun sales, but only from licensed dealers, and on gun crimes, but not all crimes are reported to the police, not all police report to the FBI, many non-crimes are reported, and reported crimes often have missing or erroneous details.

Even if you could somehow assemble convincing statistical evidence that gun violence declined after the passage of gun control legislation, there are always many other things that happened around the same time that could plausibly explain the change.

The solution is more basic research on crime and violence, rather than more specific studies on gun control legislation. Better understanding can lead to precise experimentation and measurement to detect changes too small to find in aggregate statistical analyses. 

By way of comparison, take the contribution of cigarette smoking to cancer. For years, smoking was alleged to cause cancer on the basis of aggregate statistics, and the studies were deeply flawed. Eventually, however, medical researchers—not statisticians or policy analysts—figured out how cigarette smoking affected cells in the lungs, and how that developed into cancer. Certain types of cancer and other lung problems were identified that were virtually only found in smokers. With this more precise understanding, it was possible to find overwhelming statistical evidence for each link in the chain.

In terms of studies on gun violence, suppose someday psychological researchers can demonstrate empirically the effect that being abused as a child has on the probability a person will commit a gun homicide. This more specific understanding of why violent crime occurs would allow precise, focused studies on the effect of gun control legislation. Instead of comparing large populations of diverse individuals, researchers could focus on specific groups with high propensities for gun violence.

Only when we know much more about why people kill themselves and each other, and how the presence or absence of guns affects rape, assault, robbery and other crimes, can we hope to tease out the effect of gun control measures.

It’s not just gun control. Nearly all similar research into the effects of specific legislation suffers from the same sort of problem: too much complexity for the available data. Political partisans yearn for statistical backing for their views, but scientists can’t deliver it. Yet researchers flood to favored fields because there is plenty of funding and interest in results, and they peer review each other’s papers without applying the sort of rigor required to draw actual policy conclusions.

This doesn’t mean that gun control legislation is necessarily ineffective. But short of legitimate scientific evidence, belief in the efficacy of additional gun control laws is, and will remain, a matter of faith, not reason.

Tellingly, the studies that have gotten the most media or legislative attention aren’t among the 123 that met RAND’s approval. The best studies made claims that were too mild, tenuous, and qualified to satisfy partisans and sensationalist media outlets. It was the worst studies, with the most outrageous claims, that made headlines.

One prominent study, which was touted from the debate stage by Sen. Cory Booker (D–N.J.) when he was running for president in the 2016 election, made the astounding claim that a permit requirement for handgun purchases in Connecticut reduced their gun murder rate by 40 percent. It is true that the state’s gun murder rate fell rapidly after that law was passed in 1995, but so did gun murder rates throughout the country. The study’s 40 percent claim is the actual murder rate in Connecticut compared to something the researchers call “synthetic Connecticut,” which they constructed for the purpose of their study—a combination of mostly Rhode Island, but also Maryland, California, Nevada, and New Hampshire. 

As it turns out, the authors’ entire claimed effect (the 40 percent reduction they reported) was due to the fact that Rhode Island experienced a temporary spate of about 20 extra murders between 1999 and 2003, and synthetic Connecticut was more than 72 percent Rhode Island.

Even compared to synthetic Connecticut, the decline the authors found didn’t last. Although the law remained on the books, by 2006, the gun murder rate in real Connecticut had surpassed synthetic Connecticut, and then continued to increase to the point where it was 46 percent higher. The authors, despite publishing in 2015, elected to ignore data from 2006 and afterwards. 

This study is typical of the field: strong claims based on complex models and uncertain data. Worse, researchers often cherry pick outcome measures, time periods, and locations to get their preferred results. 

For example, take the studies that look at whether bans on assault-style weapons and large-capacity magazines, which are often passed together, have reduced the frequency or deadliness of mass shootings. Researchers define basic terms like “assault weapons” and “mass shootings” differently. They limit their data by time, place, or other factors, such as classifying an event as an act of terror or gang violence and therefore not considering it a mass shooting.

These studies suffer from even greater data issues than other gun violence research. Mass shootings are extremely rare relative to other forms of gun violence, and most of them don’t involve assault weapons. Though estimates vary depending on the definitions used, mass shootings involving assault weapons constitute a small fraction of one percent of all gun homicides. 

The U.S. federal ban on assault weapons and large capacity magazines, which was the subject of numerous studies that reached widely varying and often contradictory conclusions about its efficacy, was in place for 10 years, from 1994 to 2004. Before, during, and after the time the law was in effect, many societal factors caused crime rates to vary widely, making it impossible to draw useful conclusions about the effect of the ban on anything, and in particular on something as rare as mass shootings. But with all the noise in the data, it is easy for researchers to find weak results that support any conclusion they hope to reach.

Moreover, states and countries with bans define assault weapons and other key elements of laws differently. Combined with the data problems inherent in comparing different populations of people over different periods of time, comparisons between states and countries are almost meaningless.

Another RAND Corporation meta-analysis updated in 2020 found inconclusive evidence that bans on assault weapons and large-capacity magazines have any effect on mass shootings or violent crime.

But how about the more straightforward question of whether owning a gun makes you more or less safe? One widely influential study that has constantly resurfaced in headlines since it was published in the New England Journal of Medicine in 1993 concluded that, “rather than confer protection, guns kept in the home are associated with an increase in the risk of homicide by a family member or intimate acquaintance.” 

There are major problems with this study. First of all, the researchers concluded that keeping a gun at home increases a person’s risk of being killed, but nearly half the murders they included in their analysis were not committed with a firearm. And among gun owners who were killed with a gun, the authors didn’t establish whether the weapon used was the victim’s own gun or if it belonged to another person. 

This points to another explanation for why research on this topic is so often inconclusive: individual differences can’t easily be controlled for in social science research. A gun expert with a gun safe in a high crime neighborhood may well be safer with a gun, whereas a careless alcoholic living in a low crime area who keeps loaded guns in his kids’ closet is certainly going to be less safe. People want a simple overall answer to whether guns make you less safe or more safe in order to inform legislation, but social science cannot deliver that. 

Population averages can be useful when one rule has to be applied to everyone—for example, estimating how many lives would be saved by a pollution control regulation, or how many dental cavities are prevented by fluoridating the water supply. But with guns and personal safety, the relevant question is not whether guns make the average gun owner safer, but which people guns make safer and which people guns make less safe.

Anyone basing a gun control position on scientific evidence of any kind is building on sand. We have no useful empirical data on the subject, no body of work that rises above the level we would expect based on random chance, either for or against gun control measures. And the claim that there are “simple, commonsense” laws we could pass that would significantly reduce gun violence, if only we had the political will to go through with them, is simply false.

These are complex issues that require rigorous scientific investigation to come to any kind of useful conclusion, and they depend far more on individual variation and broad social and cultural factors than on any regulation. We should not look to pass laws that sweep up innocent victims while potentially doing more harm than good, all with the alleged backing of science that can’t possibly tell us what we need to know.

Produced and edited by Justin Monticello. Written by Monticello and Aaron Brown. Graphics by Isaac Reese. Audio production by Ian Keyser.

Music: Aerial Cliff by Michele Nobler, Land of the Lion by C.K. Martin, The Plan’s Working by Cooper Cannell, Thoughts by ANBR, Flight of the Inner Bird by Sivan Talmor and Yehezkel Raz, and Run by Tristan Barton.

Photos: Hollandse-Hoogte/ZUMA Press/Newscom; Robin Rayne/ZUMAPRESS/Newscom; Ted Soqui/Sipa USA/Newscom; YES Market Media/Yaroslav Sabitov/YES Market Medi/Newscom; Chuck Liddy/TNS/Newscom; YES Market Media/Yaroslav Sabitov/YES Market Medi/Newscom; Brett Coomer/Rapport Press/Newscom; Martha Asencio-Rhine/ZUMAPRESS/Newscom; Jebb Harris/ZUMA Press/Newscom; John Gastaldo/ZUMA Press/Newscom; Greg Smith/ZUMA Press/Newscom; Richard Ellis/ZUMA Press/Newscom; Matthew McDermott/Polaris/Newscom; KEVIN DIETSCH/UPI/Newscom; Bill Clark/CQ Roll Call/Newscom; Michael Brochstein/ZUMAPRESS/Newscom; Sandy Macys / UPI Photo Service/Newscom; E. Jason Wambsgans/TNS/Newscom; Eye Ubiquitous/Newscom; Matthew McDermott/Polaris/Newscom

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Deutsche Bank Execs Fired For Expensing Strip Club Trip Lost Millions In Deferred Compensation

Deutsche Bank Execs Fired For Expensing Strip Club Trip Lost Millions In Deferred Compensation

The senior Deutsche Bank executives who were unceremoniously fired earlier this year after management learned that they had tried to expense a roughly $1,000 receipt from a trip to a NYC strip club will lose out on a combined $6 million in deferred compensation, according to the New York Post.

According to the Post, the bankers partied at Sapphire New York, a strip club on the Upper East Side that also operates a steakhouse (which offers a $25 “body sushi” menu item where patrons can eat raw fish off a stripper’s torso). While the three senior bankers who were ultimately canned over the episode insisted that the check was from the steakhouse, not the strip club, one unnamed junior banker who had been along for the ride ultimately confessed to management – and was spared the axe for his honesty.

Sources inside the bank told the Post that the bank’s decision to keep the junior employee who spilled the beans was intended to emphasize the fact that it wasn’t the crime, but the cover up.

“It really was about the coverup and the deception,” the source said. “The coverup was worse than the crime.”

One DB spokesman said in a statement that “Deutsche Bank thoroughly investigates allegations of possible misconduct comprehensively and without bias. We do not condone violations of our Code of Conduct or Company Policy and take remedial action as appropriate based on the severity of circumstances. The Bank declines to comment further on the circumstances of this particular matter.”

As for the millions of dollars in compensation that the employees lost, at DB (and indeed at most investment banks), bonuses for top employees (typically a mix of stock and cash) are typically deferred for several years while they vest. The point of this practice is to tie top employees to the long-term performance of the firm by withholding at least some of their annual bonus compensation. When a worker is fired for cause, he loses all the deferred compensation he has accrued.

For two of the fired bankers (head of equity capital markets Ben Darsney and the managing director Ravi Raghunathan, responsible for running the bank’s SPAC business) These figures were substantial.

But there’s one silver lining: the loss of their bonuses means the men might have an easier time finding a new job on the Street, since their comparative compensation figures will be lower. The word on the street is that they will all find a new home by the summer.

Tyler Durden
Thu, 03/31/2022 – 16:44

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No, We Don’t Need To Become More Like Putin To Contain Him


PutinX

Anne Applebaum, an author whose Central European perspective and longtime aversion to Russian revanchism I share, has an almost comically pessimistic piece in The Atlantic positing that, “Unless democracies defend themselves, the forces of autocracy will destroy them.”

The essay serves as a useful reminder that civilizational apocalypticism is hardly limited to the right-populist Flight 93 Election set and that the centrist/interventionist fun-house-mirror image has not learned the post-9/11 lesson that wise policy does not automatically tumble forth from mashing the Do Something button.

“Russia is not the only nation in the world that covets its neighbors’ territory, that seeks to destroy entire populations, that has no qualms about the use of mass violence,” Applebaum warns in a statement that has never not been true since the advent of nations. “North Korea can attack South Korea at any time, and has nuclear weapons that can hit Japan. China seeks to eliminate the Uyghurs as a distinct ethnic group, and has imperial designs on Taiwan.”

That indeed sounds scary. Now rewrite that passage after spinning the wheel and landing on any other year in history. Here’s a stab at 1948: “North Korea can attack South Korea at any time (and in fact will in 1950, leading to 3 million deaths, including 54,000 Americans). China is on the verge of a communist revolution, the Soviet Union just engineered a coup in Czechoslovakia and a blockade of West Berlin while beginning the process of Stalinist show trials across all its imperial holdings. Five Arab nations have attacked the newly formed country of Israel, Mahatma Gandhi has just been assassinated, India and Pakistan remain at war, South Africa has just instituted apartheid, the Greek Civil War rages on, most of Europe still lies in shambles.” Do I really need to go on?

We are always, one supposes, only one bad sneeze away from an all-out thermonuclear war, so I get why that can make some people jittery in 2022. (Russian President Vladimir Putin isn’t helping such anxieties by generating such headlines as, “Russian planes ‘armed with nukes’ chased out of Swedish airspace.”)

But it shows a shocking lack of faith in the wealth, power, and institutions of the free world to gaze upon Putin’s military stalemate against a drastically outgunned non-nuclear power with no usable security guarantees and declare that unless democracies make some big changes pronto, Asia’s brutal, behemoth backwaters will not just continue murdering people in their neighborhoods, but literally “destroy” us all.

Like political apocalypticism everywhere, this rhetorical device is designed to frighten people into supporting choices that in calmer times would be unthinkable. And like panicked (or opportunistic) proposals after 9/11, Applebaum’s are filled with government-led force and mobilizations, including those patterned directly on what didn’t work 20 years ago.

“Much as we assembled the Department of Homeland Security out of disparate agencies after 9/11,” she writes, unpromisingly, “we now need to pull together the disparate parts of the U.S. government that think about communication, not to do propaganda but to reach more people around the world with better information and to stop autocracies from distorting that knowledge.”

Where to start? “The Department of Homeland Security is a mess of misconduct and ineptitude,” J.D. Tuccille wrote here in 2019, keying off an inspector general report. In fact, a former senior DHS official wrote a detailed piece for Reason in 2015 about “why we should eliminate” it.

And though it’s largely been memory-holed, 9/11, too, saw the creation of a bunch of new government-funded, foreign-language, please-don’t-call-it-propaganda media outlets. How did those go? Here are our findings from 2011:

In the last ten years you have paid for the Al-Hurra TV network, the Sawa radio network and the teen magazine Hi, among other State Department media ventures in the Arab nations. The TV network has failed to gain viewers and its costs have been going up. The State Department’s inspector general says the radio station has failed to fulfill its mandate. At least the teen magazine was allowed to go out of business.

Applebaum wants to “stop autocracies from distorting…knowledge,” but democracies do plenty of distorting on their own, as anyone who has followed Washington’s COVID-related messaging can attest. Governmental attempts to quash disinformation very easily become governmental successes in quashing dissent.

A perhaps-surprising commonality between Applebaum and the American populists who tend to despise her is that both camps think trading with China was a mistake. “Trading with autocrats promotes autocracy, not democracy,” she italicizes. But Russia’s invasion, and subsequent ejection from the liberal trading order, suggests another conclusion entirely: Maybe autocratic countries, seeing the privations exacted on Russia not just by members of the World Trade Organization but by individuals and companies, will take more seriously the negative consequences to aggressive, murderous imperialism.  

As Cato Institute Director of General Economics and Trade Scott Lincicome told me recently, “The literature on the connection between trade and peace is pretty darn good. It doesn’t say that trade and economic interconnectedness prevents armed conflict; it just simply reduces the chances of it. And there are all sorts of reasons for that.”

Reasonable liberals can agree to disagree (or agree to be ambivalent) about trading with authoritarians. But Applebaum has fire in her eyes:

[W]e can go much further, because there is no reason for any company, property, or trust ever to be held anonymously. Every U.S. state, and every democratic country, should immediately make all ownership transparent. Tax havens should be illegal. The only people who need to keep their houses, businesses, and income secret are crooks and tax cheats.

This is illiberal authoritarianism in the name of fighting illiberal authoritarianism. More plainly, it’s nuts. Hungary is a democracy (albeit one that Applebaum claims is “at war with us,” which is an awkward move from a NATO ally)—does she really believe that only crooks in Budapest have cause to keep some of their assets out of the prying eyes of Viktor Orbán’s government? Financial privacy, which has its roots in Calvinists fleeing religious persecution, is a bulwark not just against despotic governments but also against liberal democratic governments capable of behaving despotically, which is to say, all of them.

Applebaum’s radical, government-imposed transparency proposal is going nowhere, thankfully. But the mindset behind it is a perennial vice. When a situation or a bad actor becomes intolerable, there is a temptation among those empathetic with the victims to let exasperation overwhelm intellect, to drive a bulldozer through every real and imagined bureaucratic, legalistic, diplomatic, or otherwise real-world obstacle.

But those obstacles are often key planks of the liberal order Applebaum claims to be defending. Dismantling them makes liberalism less worth defending.

There have been such acts of impatience all around these past five weeks, both governmental and private. Deplatforming RT, canceling performances by Russian musicians, indicating that due process niceties might be dispensed with in the seizing of Russian oligarchs’ property—none of this is helpful. Lowering judicial standards and engaging in acts of collective punishment is a grotesque way of objecting to a lawless ruler inflicting deadly collective punishment as we speak.

It’s not just possible but preferable to keep our liberal-democratic wits about us even as our hearts break. Russia has a long and ugly history of inflicting brutal war and authoritarian rule on countries that have the bad luck of living near the bear. A century-plus of that has produced a diminished and unloved country flanked by examples of the wealth, democracy, and resolve that come with true independence from Moscow. We need not fear such atavistic outliers; we should recognize them for the Potemkin bullies they are and mindfully protect the liberalism they’re too blinkered to embrace.

The post No, We Don't Need To Become More Like Putin To Contain Him appeared first on Reason.com.

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