Month: April 2022

Bernie Sanders Is Wrong About the American ‘Oligarchs’


dpaphotosfive682978

“Anyone who thinks we do not have an oligarchy right here in America is sorely mistaken,” ranted Sen. Bernie Sanders (I–Vt.) in a speech to Congress. “Today in America, multi-billionaires like Elon Musk, Jeff Bezos, Richard Branson are off taking joyrides on their rocket ships to outer space. They are buying $500 million superyachts.”

“The yachts that [Russian President Vladimir] Putin’s friends have? Well guess what, they have them too, here in this country. [These people are] living in mansions with 25 bathrooms,” continued Sanders.

“The president has proposed a 20 percent minimum tax on those who are worth at least $100 million dollars,” said Sanders, referring to President Joe Biden’s “Billionaire Minimum Income Tax,” proposed this week, which the administration has tried to delicately portray as mere prepayment of future capital gains owed, instead of a wealth tax similar to those proposed by Sanders and Sen. Elizabeth Warren (D–Mass.). “We should go further, though,” he finished.

Sanders’ point is a bad one. We do not have oligarchs in the U.S. the way countries like Russia do. Our millionaires and billionaires are prevented from pulling political puppet strings both by custom and by campaign finance laws which cap their financial contributions to some degree and require disclosures. Though companies do sometimes successfully lobby for government contracts and subsidies—Musk’s hypocrisy has been widely documented on this front—we don’t have widespread, unchecked corporatism where the government always serves to further companies’ bottom lines, or where companies become exempt from government scrutiny for having curried favor with the right people. And free marketeers tend to believe that the existing patchwork of subsidies and handouts ought to be stopped since they serve as market distortions, artificially propping up companies that wouldn’t succeed or be competitive on their own merits.

If Sanders’ point is not merely that wealthy people exercise undue influence on the political process (as oligarch implies) but rather that wealth accumulation always and everywhere ought to be prevented, as he insinuates when he mentions their superyachts, that’s an even weaker critique. People accumulate extreme wealth in this country most often through inventing a product or founding a company that millions or billions of people end up valuing highly. Consider Jeff Bezos, worth $177 billion, per 2021 numbers; Elon Musk, $151 billion; Bill Gates, $124 billion; Mark Zuckerberg, $97 billion; Warren Buffett, $96 billion; Larry Ellison, $93 billion; Larry Page, $91.5 billion; Sergey Brin, $89 billion. More often than not, that process is iterative, with tons of failures before striking gold. When a company is successful, those who were involved in its founding often scatter, taking their earnings and intellect and founding new companies, starting the whole iterative process over again.

In the popular imagination, these shadowy oligarch figures inherited their money or received it through ill-gotten means. But the data don’t bear this out. Financial planning firm Ramsey Solutions’ 2021 millionaire study found that 79 percent of the 10,000 U.S. millionaires surveyed did not receive any inheritance from their families. Of those who did receive inheritances, who are in the top 1 percent, Federal Reserve data show those inheritances were to the tune of $719,000 on average. More than half of America’s billion-dollar countries have at least one immigrant founder who came to the U.S. as a kid. Extreme wealth, by and large, isn’t generated by investing inherited money, but by starting companies that bring value to millions of customers.

As American Enterprise Institute fellow James Pethokoukis pointed out on his blog Faster, Please! many of today’s products and companies we now take for granted may not have even come to exist had a wealth tax been in place. “Would SpaceX and Tesla—combined value of an estimated $1.2 trillion—exist in a world of sharply higher investment taxes and a fat new levy on wealth?” he asks. Pethokoukis thinks not, citing numbers run by Steven Kaplan, an economist at the University of Chicago.

“When PayPal was bought by eBay in 2002, Musk, the largest shareholder, walked away with $250 million before taxes, leaving him with $180 million after taxes,” writes Pethokoukis. “What did Musk do with that cash? Well, he didn’t buy some monstrous Bel-Air mansion or pricey Picasso painting. Instead, he started SpaceX in 2002, putting in $100 million, and Tesla in 2003, putting in $80 million.”

The ’08 financial crisis almost brought Tesla crashing down, and disastrous Falcon 1 launches around that same time almost left SpaceX in pieces. “That historic fourth flight on September 28, 2008 made the Falcon 1 the first privately built liquid-fueled booster to reach orbit,” writes Pethokoukis. “It saved the company. But would that launch have happened if Musk had left PayPal with $60 million less? Would Tesla have muddled into 2009 and beyond? Kaplan doesn’t think so.”

Nor does Musk, in fact.

Central planners like Biden and Sanders don’t appreciate how fragile many of today’s biggest and boldest companies—SpaceX, Tesla, and Amazon—once were. Serial entrepreneurs, who exit one venture and quickly invest their earnings in another, are oftentimes wealthy enough at exit that they would be hit with wealth taxes if the Biden plan or any of its evil twins become law. But two things must be kept in mind: Their wealth is rarely liquid, and that money often gets quickly invested into other ventures that we would lose out on if it had been taxed away.

If Biden is comfortable with those unseen losses and considers the stifling of tomorrow’s innovation to be a price worth paying for wealth seizure today, he should proceed with his plan. Forgive the rest of us for having some trepidation.

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Two Iliberal and Unjust Zelensky Policies the West Should Force Him to End


Zelensky
Ukrainian President Volodymyr Zelensky. March 21, 2022 (Ukrainian Presidential Press Office).

 

Ukraine is fighting a brutal and indefensible Russian invasion. Their cause is just, and the Ukrainian government is vastly preferable to the sort of puppet regime Vladimir Putin would install if he prevails.  Indeed, from the standpoint of liberal democratic values, Ukraine is far better than Putin’s increasingly repressive rule in Russia itself. Ukrainian President Volodymyr Zelensky deserves credit for his inspiring leadership under fire.

But these realities should not blind us to the injustice of two deeply illiberal policies enacted by Zelensky in the wake of the Russian invasion: decrees forbidding all men aged 18-60 from leaving the country, and imposing government control over all previously independent TV channels. Zelensky has appealed for increased Western aid on the ground that “we….are fighting for freedom and in defense of democracy together.” The two decrees are blatantly inconsistent with those principles. The West should use its leverage to force him to end them. Doing so would simultaneously advance liberal values, and strengthen our position in the conflict against Putin’s authoritarian regime.

The exit ban imposed on men has lead to heartrending scenes at Ukraine’s borders, as women and children are forced to separate from their fathers and husbands. In addition to the pain and restrictions on liberty imposed on the men themselves, it has also increased the suffering of female and underage refugees, who are forced to make do without them.

Even most liberal political theorists who who believe governments are justified in restricting entry by immigrants generally agree that they are not justified in barring exit. That’s one of the reasons why virtually all liberal democrats condemned the Berlin Wall and other emigration bans imposed by communist governments. Zelensky’s policy is an obvious violation of that fundamental principle.

The rationale for the travel ban is the supposed need to keep the men in Ukraine, so that they can be drafted into the armed forces, if necessary. Military conscription is itself a grave injustice, incompatible with liberal principles. But even if you believe conscription can be justified in extreme cases where there is no other way to ensure national defense, Zelensky’s decree is still unjustified.

Ukraine is not suffering from a shortage of manpower. Hundreds of thousands of Ukrainians  have volunteered to fight, and Ukrainian military has even had to turn away some of them. Many thousands of foreigners have also volunteered to fight for Ukraine – again to the point that some are being turned away (especially if they lack previous military experience) or forced to wait until weapons become available.

For obvious reasons, volunteers are likely to be better and more highly motivated fighters than conscripts who serve only because they have been compelled to do so. The poor performance of Russian conscripts in Ukraine is a case in point. In addition, many of the men covered by the travel ban are unlikely to prove to be effective soldiers, for any number of reasons related to temperament, skills, and physical ability. Zelensky’s decree goes far beyond any possible conscription-based  rationale, even if the latter were defensible to begin with (which it is isn’t).

At this point, Ukraine needs weapons to arm its large numbers of volunteers, not forced laborers. The West should give them as many weapons as possible – but condition at least some of that assistance on Zelensky’s ending his cruel travel ban imposed on Ukrainian men. No government claiming to fight for freedom should impose such a cruel and pointless restriction on liberty.

The Ukrainian government’s takeover of private TV channels probably causes less suffering. But it is just as illiberal and indefensible. It is a dangerous assault on freedom of speech and press. The government’s rationale for this measure is the need to ensure a “unified information policy” in time of war. The justification actually highlights the illiberal and undemocratic nature of the policy. A “unified information policy” is deeply inimical to democracy, which requires an independent media willing and able to question the government line.

Government takeovers of private media for the purpose of forcing it to toe the official line are a classic tool in the incipient authoritarian’s playbook. For a textbook example, we need look no further than Vladimir Putin, who started by seizing control of private TV networks, and most recently put an end to nearly all independent media.

Ukraine’s media policies – so far – are not nearly as repressive as Putin’s. State control is limited to TV channels, and does not extend to print, radio, and internet outlets. But things are obviously moving in the wrong direction. This, too, is a policy the West should force Zelensky to reverse.

The Ukrainian government’s human rights violations might be rationalized on the grounds that they are just temporary emergency measures that will be repealed when the war is over. Perhaps so. But history shows that repression begun during emergencies often persists long afterwards. Moreover, the emergency might well continue for a long time to come. Even if large-scale fighting ends soon, Russia and Ukraine might remain in a tense military standoff on into the indefinite future. An emergency situation could easily persist for years on end. And it could be used to rationalize the continuation of these repressive policies – and perhaps others, as well.

Forcing Zelensky to end these injustices isn’t just a matter of moral principle. There is a strategic advantage to it, as well. The conflict between liberal democracy and Putin’s authoritarianism is a war of ideas, as well as a military and geopolitical confrontation. One of the reasons why Putin invaded Ukraine in the first place is the fear that a successful liberal democracy there might create a dangerous (from Putin’s perspective!) example for the Russian people. To prevail in the war of ideas, we need a Ukrainian government that actually lives up to liberal values as much as possible, not one that practices a kid of Putinism-lite.

Foreign policy is an often-sordid business. Sometimes, we have little to choice but to put up with illiberal allies, either because we lack the leverage to force them to change, or because the available alternatives to these regimes are even worse. Zelensky’s human rights violations are modest, not only compared to Putin’s, but also relative to those of such longtime US allies as Egypt and Saudi Arabia.

In this case, however, the US and other Western nations have a great deal of leverage by virtue of Ukraine’s need for for large-scale military and economic assistance, that it cannot get anywhere else. And the alternative to Zelensky with these two awful policies is Zelensky without them! The latter is both politically feasible and clearly superior to the former.

Ukraine’s brave resistance to Russian aggression deserves our support. But its people also deserve a government that genuinely respects liberal democratic values. The West can and should use its leverage to help ensure they get it.

 

 

 

 

 

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Bernie Sanders Is Wrong About the American ‘Oligarchs’


dpaphotosfive682978

“Anyone who thinks we do not have an oligarchy right here in America is sorely mistaken,” ranted Sen. Bernie Sanders (I–Vt.) in a speech to Congress. “Today in America, multi-billionaires like Elon Musk, Jeff Bezos, Richard Branson are off taking joyrides on their rocket ships to outer space. They are buying $500 million superyachts.”

“The yachts that [Russian President Vladimir] Putin’s friends have? Well guess what, they have them too, here in this country. [These people are] living in mansions with 25 bathrooms,” continued Sanders.

“The president has proposed a 20 percent minimum tax on those who are worth at least $100 million dollars,” said Sanders, referring to President Joe Biden’s “Billionaire Minimum Income Tax,” proposed this week, which the administration has tried to delicately portray as mere prepayment of future capital gains owed, instead of a wealth tax similar to those proposed by Sanders and Sen. Elizabeth Warren (D–Mass.). “We should go further, though,” he finished.

Sanders’ point is a bad one. We do not have oligarchs in the U.S. the way countries like Russia do. Our millionaires and billionaires are prevented from pulling political puppet strings both by custom and by campaign finance laws which cap their financial contributions to some degree and require disclosures. Though companies do sometimes successfully lobby for government contracts and subsidies—Musk’s hypocrisy has been widely documented on this front—we don’t have widespread, unchecked corporatism where the government always serves to further companies’ bottom lines, or where companies become exempt from government scrutiny for having curried favor with the right people. And free marketeers tend to believe that the existing patchwork of subsidies and handouts ought to be stopped since they serve as market distortions, artificially propping up companies that wouldn’t succeed or be competitive on their own merits.

If Sanders’ point is not merely that wealthy people exercise undue influence on the political process (as oligarch implies) but rather that wealth accumulation always and everywhere ought to be prevented, as he insinuates when he mentions their superyachts, that’s an even weaker critique. People accumulate extreme wealth in this country most often through inventing a product or founding a company that millions or billions of people end up valuing highly. Consider Jeff Bezos, worth $177 billion, per 2021 numbers; Elon Musk, $151 billion; Bill Gates, $124 billion; Mark Zuckerberg, $97 billion; Warren Buffett, $96 billion; Larry Ellison, $93 billion; Larry Page, $91.5 billion; Sergey Brin, $89 billion. More often than not, that process is iterative, with tons of failures before striking gold. When a company is successful, those who were involved in its founding often scatter, taking their earnings and intellect and founding new companies, starting the whole iterative process over again.

In the popular imagination, these shadowy oligarch figures inherited their money or received it through ill-gotten means. But the data don’t bear this out. Financial planning firm Ramsey Solutions’ 2021 millionaire study found that 79 percent of the 10,000 U.S. millionaires surveyed did not receive any inheritance from their families. Of those who did receive inheritances, who are in the top 1 percent, Federal Reserve data show those inheritances were to the tune of $719,000 on average. More than half of America’s billion-dollar countries have at least one immigrant founder who came to the U.S. as a kid. Extreme wealth, by and large, isn’t generated by investing inherited money, but by starting companies that bring value to millions of customers.

As American Enterprise Institute fellow James Pethokoukis pointed out on his blog Faster, Please! many of today’s products and companies we now take for granted may not have even come to exist had a wealth tax been in place. “Would SpaceX and Tesla—combined value of an estimated $1.2 trillion—exist in a world of sharply higher investment taxes and a fat new levy on wealth?” he asks. Pethokoukis thinks not, citing numbers run by Steven Kaplan, an economist at the University of Chicago.

“When PayPal was bought by eBay in 2002, Musk, the largest shareholder, walked away with $250 million before taxes, leaving him with $180 million after taxes,” writes Pethokoukis. “What did Musk do with that cash? Well, he didn’t buy some monstrous Bel-Air mansion or pricey Picasso painting. Instead, he started SpaceX in 2002, putting in $100 million, and Tesla in 2003, putting in $80 million.”

The ’08 financial crisis almost brought Tesla crashing down, and disastrous Falcon 1 launches around that same time almost left SpaceX in pieces. “That historic fourth flight on September 28, 2008 made the Falcon 1 the first privately built liquid-fueled booster to reach orbit,” writes Pethokoukis. “It saved the company. But would that launch have happened if Musk had left PayPal with $60 million less? Would Tesla have muddled into 2009 and beyond? Kaplan doesn’t think so.”

Nor does Musk, in fact.

Central planners like Biden and Sanders don’t appreciate how fragile many of today’s biggest and boldest companies—SpaceX, Tesla, and Amazon—once were. Serial entrepreneurs, who exit one venture and quickly invest their earnings in another, are oftentimes wealthy enough at exit that they would be hit with wealth taxes if the Biden plan or any of its evil twins become law. But two things must be kept in mind: Their wealth is rarely liquid, and that money often gets quickly invested into other ventures that we would lose out on if it had been taxed away.

If Biden is comfortable with those unseen losses and considers the stifling of tomorrow’s innovation to be a price worth paying for wealth seizure today, he should proceed with his plan. Forgive the rest of us for having some trepidation.

The post Bernie Sanders Is Wrong About the American 'Oligarchs' appeared first on Reason.com.

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Fauci Flashback: “The Most Potent Vaccination Is Getting Infected Yourself”

Fauci Flashback: “The Most Potent Vaccination Is Getting Infected Yourself”

Throughout the pandemic, a large contingency of doctors, researchers, and non-mainstream media outlets have been pounding the table over natural immunity as an alternative to vaccination to protect against Covid-19, with the obvious conclusion that vaccine passports are moot if a large percentage of the population has a higher degree of protection than even the vaccinated because they’ve already had the disease.

And as time has gone on, ‘the science’ has validated this theory – with even Bill Gates admitting recently that “the virus itself, particularly the variant called Omicron, is a type of vaccine.”

As the Epoch Times notes, On March 1, the scientific journal Clinical Infectious Diseases published a peer-reviewed article titled “Risk of reinfection after seroconversion to SARS-CoV-2: A population-based propensity-score matched cohort study.” This Swiss study “observed a 94% reduction in the hazard of being infected among SARS-CoV-2 seropositive participants, when compared to seronegative controls, >8 months after serology assessment.”

This level of protection (natural immunity) from SARS-CoV-2 infection (94 percent) is comparable to that of the Pfizer vaccine but lasts longer (eight months and counting).

Yet, the official US government response – led by Dr. Anthony Fauci and echoed worldwide – has excluded virtually all mention of natural immunity as a relevant mitigation against Covid-19, which would of course render vaccination, booster shots, and vaccine passports moot for tens of millions of Americans.

And so, with Fauci pretending like he’s never heard of natural immunity for the past two years, here’s a flashback to the ‘good doctor’ discussing explaining that “The most potent vaccination is getting infected yourself.”

Fast forward years later, and Sen. Ron Johnson (R-WI) says that when he directly asked Fauci about natural immunity, the nation’s top infectious diseases expert did not “have a real firm answer.”

Almost 20 months into the pandemic, it is shocking that the chief medical advisor to the president does not have a firm grasp on the effectiveness of natural immunity, but still promotes freedom-robbing vaccine mandates.  This administration clearly does not want the public to question whether natural immunity is more effective than vaccines. As President Biden revealingly declared, the vaccine mandate ‘is not about freedom or personal choice.’ This administration’s decision to disregard the effectiveness of natural immunity and demand vaccination ignores current data and is an assault on all Americans’ civil liberties.” -Sen. Ron Johnson

Tell me you’re a big phrama / WEF shill without telling me you’re a big pharma / WEF shill…

Tyler Durden
Fri, 04/01/2022 – 10:15

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ISM Manufacturing Unexpectedly Slumps To Lowest In 18 Months, Prices Paid Spikes

ISM Manufacturing Unexpectedly Slumps To Lowest In 18 Months, Prices Paid Spikes

After Markit’s preliminary Manufacturing PMI surprised to the upside, analysts expected ISM Manufacturing in March to rise modestly also… but it didn’t…

  • March (Final) Markit US Manufacturing PMI BEAT 58.8 vs 58.5 exp vs 57.3 in Feb

  • March ISM Manufacturing MISS 57.1 vs 59.0 exp  vs 58.6 in Feb

Source: Bloomberg

That is the lowest print for ISM Manufacturing since Sept 2020 with new orders tumbling and prices paid spiking…

Source: Bloomberg

Breaking down the drivers, new orders and production dominate. The group’s index of prices paid by producers jumped 11.5 points, the largest monthly advance since the end of 2020, to 87.1. The outsized increase points to worsening price pressures after Russia’s invasion of Ukraine further drove up the prices of petroleum and metals.

Source: Bloomberg

ISM’s new orders measure slid nearly 8 points in March to 53.8, and the factory output gauge dropped 4 points to 54.5. The indexes — now both at their lowest levels since May 2020 — signal some softening in demand amid mounting price pressures and increased uncertainty.

Only Steel is lower in price…

One ISM respondent’s comment stood out:

“The supply situation is getting worse, with lead times extending over 12 months, material not available, and suppliers not quoting or taking orders. Prices on the rise daily.”

Chris Williamson, Chief Business Economist at S&P Global, said of the Manufacturing PMI:

“US manufacturing growth accelerated in March as strong demand and improving prospects countered the headwinds of soaring cost pressures and the Russia-Ukraine war.

“Order book growth has picked up as customers look to the further reopening of the domestic and global economies amid signs that the disruptions from the pandemic continue to fade.

“While companies continued to report widespread production constraints due to supply chain bottlenecks, the incidence of such delays is now lower than at any time since January 2021. Jobs growth has also improved as fewer companies reported labor shortages.

“Similarly, although price pressures remain elevated, with surging energy costs pushing firms’ costs higher at an increased rate in March, rates of inflation of both input costs and average selling prices have fallen from the record highs seen late last year to hint that consumer price inflation could likewise soon peak.

“It was especially encouraging to see business optimism about the year ahead improve further in March, despite the new uncertainties, sanctions and geopolitical risks caused by the Ukraine invasion, with optimism among producers now the brightest since late-2020.”

With unemployment rates tumbling, business surveys rising and earnings growth soaring, does The Fed have any excuises but to start hiking 50bps at a clip?

Tyler Durden
Fri, 04/01/2022 – 10:08

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‘Geofence Warrant’ for All Cell Location Data From Area Near Robbery Is Ruled Unconstitutional


dreamstime_l_181786109

“Geofence warrant” was unconstitutional, says judge. Can the cops use Google location data to find anyone in an area at a given time? That’s what a federal court was asked to decide recently.

The case stems from a 2019 bank robbery in Virginia. Police got a “geofence warrant” to find anyone who was near the scene around the time the robbery took place.

U.S. District Judge Hannah Lauck has now held that the search—which relied on cellphone data location histories—violated the Fourth Amendment’s protection against unreasonable searches, since it collected information on myriad people without having any evidence of their involvement in the crime. “The warrant simply did not include any facts to establish probable cause to collect such broad and intrusive data from each of these individuals,” wrote Lauck in her decision.

The judge stressed that she was ruling on this particular situation—not on geofence warrants broadly—and there could be a situation in which their use was constitutional.

But “the decision — believed to be the first of its kind — could make it more difficult for police to continue using an investigative technique that has exploded in popularity in recent years,” the Associated Press reports. Privacy experts told the A.P. that it could influence future rulings on the use of such warrants:

“She’s saying that’s a general search that’s just sweeping up people, most of whom have nothing to do with the thing you are investigating,” said Jennifer Stisa Granick, surveillance and cybersecurity counsel for the American Civil Liberties Union. “You have to seriously consider the impact on uninvolved people and their privacy, and the balance of power between people and law enforcement.”

Jennifer Lynch, surveillance litigation director for the Electronic Frontier Foundation, a nonprofit digital rights group, said attorneys around the country could cite the ruling in their own cases because it is believed to be the first time a federal district court judge has ruled on the constitutionality of a geofence warrant.

“It’s helpful to other judges to see how a judge has dealt with this, especially since the technology is so new,” Lynch said.

That’s important, since police use of geofence warrants has been climbing steeply.

Google told the court that geofence warrants account for more than 25 percent of all U.S. warrants it receives and that Google’s receipt of such warrants rose 1,500 percent between 2017 and 2018 and 500 percent between 2018 and 2019.

Civil liberties and privacy groups tend to oppose geofence warrants. But not everyone who cares about the Constitution is opposed to them.

“I hope the courts do not expand the Fourth Amendment to impede technological tools like geofences that help police conduct more accurate, less discretion-based initial investigations,” wrote University of Arizona law professor Jane Bambauer in March. “With appropriate constraints, geofences and other ‘suspectless search’ technologies can be an integral part of police modernization and reform.”

University of California, Berkeley law professor and Volokh Conspiracy blogger Orin Kerr was also critical of Lauck’s ruling in this case. “I am not sure the execution of geofence warrants involve a Fourth Amendment search at all.  And if they do, then I think the Fourth Amendment standard is a lot less strict than Judge Lauck concludes it is,” he wrote last month. “How the Fourth Amendment applies to geofence warrants raises some tricky issues. But I don’t think [Lauck’s] opinion points in the right direction to help find the answers.” More here.

FREE MINDS

The Biden administration is expected to make a controversial change to rules regarding Title IX, the anti-discrimination law governing sex, gender, and education. From The Washington Post: [Scott wrote about this yesterday, might be worth linking]

Title IX bars discrimination on the basis of sex in education, and the new rules would make clear this includes discrimination based on sexual orientation and gender identity, among other things, according to two people familiar with a draft of the proposed regulation who spoke on the condition of anonymity because they were not authorized to publicly comment on the subject.

Regulations carry the power of law. The rules, if finalized, would set up a clash with state laws that bar transgender women from competing in women’s sports. Those statutes are already being challenged in the courts.

A spokeswoman for the Education Department declined to comment on what will be in the proposed regulation, which the administration has said it expects to publish in April.

The draft text of the proposed regulation reportedly includes this sentence: “Discrimination on the basis of sex includes discrimination on the basis of sex stereotypes, sex-related characteristics (including intersex traits), pregnancy or related conditions, sexual orientation, and gender identity.”

The Biden administration is also expected to revise (yet again, after previous revisions during the Obama and Trump administrations) the rules on how schools adjudicate sexual assault and harassment allegations. The Trump-era rewrite included more due process rights for the accused, which the current administration is expected to revoke.

“A reversal here is bad news,” as Reason‘s Scott Shackford wrote yesterday. “Public universities have consistently been violating the due process rights of students who have been accused of sexual misconduct, depriving them of defenses and the ability to confront accusers. Courts have been slapping down some of the bad practices that were encouraged by the Department of Education under former President Barack Obama.”

FREE MARKETS

Another housing bubble? The Federal Reserve Bank of Dallas is warning that we could be in the midst of another housing bubble. “Rapid real house-price appreciation, such as that observed now, does not in itself signal a bubble,” notes a recent blog post on the Dallas Fed’s website. “But real house prices can diverge from market fundamentals when there is widespread belief that today’s robust price increases will continue.”

This sort of “expectations-driven explosive appreciation (often called exuberance) in real house prices has many consequences” and can produce “economic upheaval,” it warns. And “the current reading indicates that the U.S. housing market has been showing signs of exuberance for more than five consecutive quarters through third quarter 2021.”

So what does that mean?

Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals….

Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom.

Importantly, experience from the housing bubble in the early 2000s and the subsequent development of advanced tools for early detection and deployment of warning indicators—some illustrated in this analysis—mean that market participants, banks, policymakers and regulators are all better equipped to assess in real time the significance of a housing boom. Thus, they are in a more-informed position to react quickly and avoid the most severe, negative consequences of a housing correction.

QUICK HITS

• The U.S. House of Representatives is set to pass a bill legalizing marijuana. But it’s unclear if the measure will go anywhere in the Senate.

• Scientists are trying to unlock the secrets of COVID-19 “super immunity.“

• A large new study looks at claims about moderate drinking and heart health.

• Planned Parenthood is challenging Idaho’s new law that bans abortions after six weeks of pregnancy.

• Pandemic policy turned schools into surveillance states.

• An Iowa school choice bill moves forward.

• Why is the U.S. Department of Justice (DOJ) so determined to ruin useful tech tools that consumers love? The DOJ “has breathed new life into an investigation of Google Maps to determine if bundling the service together with other Google software illegally stifles competition,” Reuters reports.

• A Los Angeles collective is stepping in to do the work the city won’t:

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Why A Freight Recession Is Imminent

Why A Freight Recession Is Imminent

By Craig Fuller, CEO at FreightWaves

Last week, I published an article entitled “Just 3 years after 2019’s trucking bloodbath, another is on the way.”

For anyone who lived through the trucking debacle of 2019 – when carrier after carrier suddenly shut their doors – the thought of experiencing that again is truly frightening. After all, we lost some very large carriers during that period , including Celadon, Falcon and NEMF, just to name a few. In addition, we lost thousands of small and mid-sized trucking companies. In addition, major 3PLs conducted aggressive reductions in force.

A Celadon truck sits after the company’s shutdown

The article stoked controversy. Some disagreed with my call and voiced it directly to FreightWaves or on social media. 

First off, different opinions and disagreements are part of a healthy market. When I started FreightWaves in 2017, the goal was to create transparency in the freight market, much like you see in the financial markets. In order to accomplish transparency, there needs to be an open dialogue between those of us interested in the direction of the freight market. 

When FreightWaves was just beginning, I was told by an editor at a major publication (who has been covering supply chains for many decades) that trucking rates were not volatile and they barely moved. I’m still not sure why he believed that, but I suspect he thinks differently now. 

Trucking has always been volatile. It is one of the most fragmented markets on the planet, with few barriers to entry. Carriers come and go. Booms are followed by busts. The typical trucking cycle is three years and usually what kills it is oversupply – too many trucks chasing high-paying spot freight and high load volumes. 

The problem is that capacity expansion always continues well past the peak and can even continue for a time after the market has entered a recession. In the bloodbath of 2019, the peak of the market took place during the second quarter of 2018. However, it wasn’t until September 2019 that the number of new entrants into the trucking market peaked.  

At FreightWaves, our business is benchmarking, analyzing, monitoring and forecasting freight markets. And much like financial market information services providers, having the freshest insights into the market is incredibly important to our success. 

FreightWaves tends to call inflection points much earlier than other industry observers. It’s a big part of the value we provide our audience and clients.

On February 27, 2020, we warned that the freight market was about to see a massive disruption due to COVID, and that it wasn’t factored into historical data or market sentiment. This was two weeks before the “NBA and NHL moments,” when those sports leagues called off their seasons. At that point, most believed that the U.S. would avoid disruptions from COVID. Unfortunately, two weeks later, the worst health crisis in modern American history began. 

That’s the disadvantage of looking strictly at historical data and shows why having the most up-to-date data in the market is critical, particularly in a market as volatile as the trucking freight market. 

As I wrote back then: “The coronavirus is a black swan event not reflected in historical data. These unforeseen events make it clear why near-time data is crucial for freight operations.”

It turned out that FreightWaves’ analysis was correct and anyone relying on historical data or data without context was going to be wrong. 

Throughout the COVID disruption, FreightWaves continued to provide real-time data and to analyze the trucking market with the freshest perspective on what was happening. This real-time analysis provided insights that were unmatched and unlike any in the history of the freight industry – government agencies, financial institutions, multinational corporations, and transportation providers all relied on FreightWaves to keep them informed during a confusing, dynamic situation.

In the trough of the COVID shutdown, we called for a freight bull market – and nailed it

On April 15, 2020, I wrote the blog post “GOOD NEWS: THE FREIGHT MARKET IS ABOUT TO TURN UP.”  At the time, the global economy had just shut down, most states had implemented drastic measures to contain COVID and unemployment hit new records. It was a dark and scary time, but I was bullish that the freight market was about to accelerate.

As I wrote at the time: 

“So here is the good news. The contract trucking market seems to be bottoming out. The declines we saw in trucking tenders seem to be leveling off and there are signs of a bottom. This makes sense – most of the economy that shut down due to COVID-19 and shelter-in-place orders are largely offline right now.

Over the next few weeks, we can expect that the parts of the economy that impact freight demand will start to come back online. Life won’t return to normal, but the trucking freight markets largely will. The reason is that the parts of the economy that are unlikely to return are the ones involved in sectors that generate little freight demand – concerts, events, sports. In other words, the really fun things that involve large gatherings. Travel is also expected to be all but shut down. All of this will come back eventually, but probably not until there is a coronavirus vaccine. 

Restaurant dining will continue to suffer, but in regard to freight movement, demand is largely fungible between grocery and restaurants. In other words, people are still eating food, just from grocery or takeout versus dining at a restaurant. 

Manufacturers and retailers will start to come back on board. This will be good for freight demand. There is a significant backlog of orders in manufacturing sectors that have been shut over the past few weeks. Even with demand being curtailed, this will return. 

Two stressors are unemployment and consumer sentiment, but this is where the government has stepped up with unprecedented stimulus. The $2 trillion in fiscal stimulus coming from the White House and the estimated $4 trillion in stimulus coming from the Federal Reserve will cycle through our economy. And the U.S. isn’t the only country doing this. Countries all over the world are pumping massive amounts of money into the global economy. 

And since consumers are not able to spend their money on experiences and fewer services, they will have more money to spend on goods. And there is one thing that consumers, especially Americans, will do is to spend their money.” 

This is exactly what happened. Almost to a “T.” 

At the time, many questioned my analysis and forecast of the market. Quite a few believed the U.S. economy would experience a multi-year downturn that would rival the Great Recession – or worse. Some of those same voices are calling me out now.

But I have confidence in our analysis. I wish the answers were different. I would prefer to say the U.S. trucking market was robust and the expansion will continue throughout 2022. But I can’t. Since I wrote the piece about the bloodbath, FreightWaves SONAR’s tender data continues to reinforce the perspective of a declining freight market.  

Tender rejections are the best indicator into real-time supply/demand in the truckload sector. The data comes from actual electronic load requests – “tenders” in the truckload contract market. 

A high rejection rate means that trucking companies have more options to choose from. A low rejection rate means carriers have fewer options in freight to pick from. Since this measures actual load activity and not load board posts or searches, it tells us what the market is actually doing. 

And since it measures the willingness of carriers that are contracted to accept or to reject a load they have a contracted rate for, if the rejection rate declines, it suggests capacity is loosening. 

At the start of March, the rejection rate was 18.7% – today it sits at 13.90%. Even though it has only been a week since I wrote the “bloodbath” article, the rejection rate has fallen another 1.3%. The last week of March is normally one of the best weeks of the year for carriers, but this year it has been one of the worst.

Just wait for April… 

Tyler Durden
Fri, 04/01/2022 – 09:50

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Talks Resume As “Huge” Battles Erupt Near Ukraine’s Capital; France Says “No Change” In Russia’s Aims

Talks Resume As “Huge” Battles Erupt Near Ukraine’s Capital; France Says “No Change” In Russia’s Aims

On Friday Russian Foreign Minister Sergei Lavrov said Moscow is preparing a response to Ukraine’s prior proposals issued in Istanbul early this week on reaching a ceasefire, as the next round of dialogue is currently underway via remote link. 

His statements were generally in a positive direction, saying that in light of Ukraine of late showing “more understanding” as to the Crimea and Donbas issues, Moscow stands ready to engage on Kiev’s proposals on neutral and non-nuclear status for the country, according to Bloomberg. However, France and the UK in particular, are urging the Ukrainians against compromise until Russian troops withdraw from the country.

Image via The Guardian/Shutterstock

Following days of outside speculation in the West over just how “constructive” toward a potential breakthrough the talks in Istanbul were, France – which has been closely involved in pushing a diplomatic resolution hard, particularly through repeat Macron-Putin phone calls – has weighed in pouring cold water on any optimism. 

“I don’t see any signs indicating a real and long-term change in Russia’s position,” Foreign Minister Jean-Yves Le Drian told a French newspaper Thursday. “Even though its troops are moving slower than the Kremlin expected, I don’t currently see any significant retreat or a ceasefire,” Le Drian said.

“The so-called regime of silence that Russia announced for a few hours in Mariupol yesterday was clearly not enough,” he added, in reference to the announced humanitarian evacuation corridor opened Friday at French and German request. The city has been in Russian hands since early this week, but Ukrainian civilians still remain. 

“Around 2,000 civilians are on evacuation buses heading from the coastal city of Berdyansk to the Ukrainian government-held city of Zaporizhzhia, carrying civilians evacuating from the besieged city of Mariupol,” CNN reports. 

“The evacuation convoy left Berdyansk for Zaporizhzhia,” the city of Mariupol announced on Telegram via its council. “Many private vehicles have joined the 42 buses escorted by Red Cross and SES (State Emergency Service) vehicles. Today we expect the arrival of a record number of Mariupol residents.” 

Le Drian also acknowledged that Kiev’s Western backers (France among them) are pushing hard for Ukraine’s negotiators to hold a tough line, even as it’s the Ukrainian people under the bombs:

“We have a very clear objective, to not give up anything and to intensify our efforts until a total ceasefire across the whole of Ukraine’s territory and real negotiations,” the French top diplomat said.

He further repeated by now familiar calls for Europe to boycott Russian hydrocarbons. “While we don’t all have the same dependence on Russian hydrocarbons, we will have the same interest in exiting them (in Europe),” he said. 

Meanwhile on the battlefield, while there are reports of a significant Russian troop drawdown from the Chernihiv region, according to the local governor’s words Friday, even as large-scale fighting has reportedly erupted around the capital of Kiev – from which the Russians earlier vowed they would also withdraw.

As to Chernihiv in the north, the governor assessed…

Chaus said it was still too early for Ukrainian forces in the Chernihiv region to let their guard down as Russian troops “are still on our land”. Russia said on Tuesday it would scale down operations in the Chernihiv and Kiev regions.

And Bloomberg also observes:

Eleven villages in the southern Kherson region and several others in the Chernihiv region northeast of Kyiv have been returned to Ukrainian control, according to the military’s General Staff. Shelling of towns and villages along the contact line in the east continued overnight, with civilian casualties reported after nine apartment buildings and nine private houses were shelled.

The intensity of shelling declined in Chernihiv and Kharkiv, although a missile hit the center of Kharkiv Thursday night

But this same level of draw down doesn’t appear to have yet been initiated near the Ukrainian capital. The city’s mayor, Vitaliy Klitschko, has described there are “huge” battles underway north and east of Kiev, according to Reuters.

“The risk of dying [in Kyiv] is pretty high, and that]s why my advice to anyone who wants to come back is: Please, take a little bit more time,” Mayor Klitschko said, warning area residents. For now at least, this appears to confirm the negative outlook for a major breakthrough ceasefire anytime soon offered by France’s Le Drian. 

Tyler Durden
Fri, 04/01/2022 – 09:34

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‘Geofence Warrant’ for All Cell Location Data From Area Near Robbery Is Ruled Unconstitutional


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“Geofence warrant” was unconstitutional, says judge. Can the cops use Google location data to find anyone in an area at a given time? That’s what a federal court was asked to decide recently.

The case stems from a 2019 bank robbery in Virginia. Police got a “geofence warrant” to find anyone who was near the scene around the time the robbery took place.

U.S. District Judge Hannah Lauck has now held that the search—which relied on cellphone data location histories—violated the Fourth Amendment’s protection against unreasonable searches, since it collected information on myriad people without having any evidence of their involvement in the crime. “The warrant simply did not include any facts to establish probable cause to collect such broad and intrusive data from each of these individuals,” wrote Lauck in her decision.

The judge stressed that she was ruling on this particular situation—not on geofence warrants broadly—and there could be a situation in which their use was constitutional.

But “the decision — believed to be the first of its kind — could make it more difficult for police to continue using an investigative technique that has exploded in popularity in recent years,” the Associated Press reports. Privacy experts told the A.P. that it could influence future rulings on the use of such warrants:

“She’s saying that’s a general search that’s just sweeping up people, most of whom have nothing to do with the thing you are investigating,” said Jennifer Stisa Granick, surveillance and cybersecurity counsel for the American Civil Liberties Union. “You have to seriously consider the impact on uninvolved people and their privacy, and the balance of power between people and law enforcement.”

Jennifer Lynch, surveillance litigation director for the Electronic Frontier Foundation, a nonprofit digital rights group, said attorneys around the country could cite the ruling in their own cases because it is believed to be the first time a federal district court judge has ruled on the constitutionality of a geofence warrant.

“It’s helpful to other judges to see how a judge has dealt with this, especially since the technology is so new,” Lynch said.

That’s important, since police use of geofence warrants has been climbing steeply.

Google told the court that geofence warrants account for more than 25 percent of all U.S. warrants it receives and that Google’s receipt of such warrants rose 1,500 percent between 2017 and 2018 and 500 percent between 2018 and 2019.

Civil liberties and privacy groups tend to oppose geofence warrants. But not everyone who cares about the Constitution is opposed to them.

“I hope the courts do not expand the Fourth Amendment to impede technological tools like geofences that help police conduct more accurate, less discretion-based initial investigations,” wrote University of Arizona law professor Jane Bambauer in March. “With appropriate constraints, geofences and other ‘suspectless search’ technologies can be an integral part of police modernization and reform.”

University of California, Berkeley law professor and Volokh Conspiracy blogger Orin Kerr was also critical of Lauck’s ruling in this case. “I am not sure the execution of geofence warrants involve a Fourth Amendment search at all.  And if they do, then I think the Fourth Amendment standard is a lot less strict than Judge Lauck concludes it is,” he wrote last month. “How the Fourth Amendment applies to geofence warrants raises some tricky issues. But I don’t think [Lauck’s] opinion points in the right direction to help find the answers.” More here.

FREE MINDS

The Biden administration is expected to make a controversial change to rules regarding Title IX, the anti-discrimination law governing sex, gender, and education. From The Washington Post: [Scott wrote about this yesterday, might be worth linking]

Title IX bars discrimination on the basis of sex in education, and the new rules would make clear this includes discrimination based on sexual orientation and gender identity, among other things, according to two people familiar with a draft of the proposed regulation who spoke on the condition of anonymity because they were not authorized to publicly comment on the subject.

Regulations carry the power of law. The rules, if finalized, would set up a clash with state laws that bar transgender women from competing in women’s sports. Those statutes are already being challenged in the courts.

A spokeswoman for the Education Department declined to comment on what will be in the proposed regulation, which the administration has said it expects to publish in April.

The draft text of the proposed regulation reportedly includes this sentence: “Discrimination on the basis of sex includes discrimination on the basis of sex stereotypes, sex-related characteristics (including intersex traits), pregnancy or related conditions, sexual orientation, and gender identity.”

The Biden administration is also expected to revise (yet again, after previous revisions during the Obama and Trump administrations) the rules on how schools adjudicate sexual assault and harassment allegations. The Trump-era rewrite included more due process rights for the accused, which the current administration is expected to revoke.

“A reversal here is bad news,” as Reason‘s Scott Shackford wrote yesterday. “Public universities have consistently been violating the due process rights of students who have been accused of sexual misconduct, depriving them of defenses and the ability to confront accusers. Courts have been slapping down some of the bad practices that were encouraged by the Department of Education under former President Barack Obama.”

FREE MARKETS

Another housing bubble? The Federal Reserve Bank of Dallas is warning that we could be in the midst of another housing bubble. “Rapid real house-price appreciation, such as that observed now, does not in itself signal a bubble,” notes a recent blog post on the Dallas Fed’s website. “But real house prices can diverge from market fundamentals when there is widespread belief that today’s robust price increases will continue.”

This sort of “expectations-driven explosive appreciation (often called exuberance) in real house prices has many consequences” and can produce “economic upheaval,” it warns. And “the current reading indicates that the U.S. housing market has been showing signs of exuberance for more than five consecutive quarters through third quarter 2021.”

So what does that mean?

Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals….

Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom.

Importantly, experience from the housing bubble in the early 2000s and the subsequent development of advanced tools for early detection and deployment of warning indicators—some illustrated in this analysis—mean that market participants, banks, policymakers and regulators are all better equipped to assess in real time the significance of a housing boom. Thus, they are in a more-informed position to react quickly and avoid the most severe, negative consequences of a housing correction.

QUICK HITS

• The U.S. House of Representatives is set to pass a bill legalizing marijuana. But it’s unclear if the measure will go anywhere in the Senate.

• Scientists are trying to unlock the secrets of COVID-19 “super immunity.“

• A large new study looks at claims about moderate drinking and heart health.

• Planned Parenthood is challenging Idaho’s new law that bans abortions after six weeks of pregnancy.

• Pandemic policy turned schools into surveillance states.

• An Iowa school choice bill moves forward.

• Why is the U.S. Department of Justice (DOJ) so determined to ruin useful tech tools that consumers love? The DOJ “has breathed new life into an investigation of Google Maps to determine if bundling the service together with other Google software illegally stifles competition,” Reuters reports.

• A Los Angeles collective is stepping in to do the work the city won’t:

The post 'Geofence Warrant' for All Cell Location Data From Area Near Robbery Is Ruled Unconstitutional appeared first on Reason.com.

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Gas Flows Via Russian Pipeline Reverse As Gazprom Instructs Clients How To Pay In Rubles

Gas Flows Via Russian Pipeline Reverse As Gazprom Instructs Clients How To Pay In Rubles

As Russian President Vladimir Putin ratchets up the pressure on Germany and its EU compatriots to either agree to pay for Russian gas in rubles, or face a devastating shortfall, gas traveling through the Yamal-Europe pipeline has started traveling in reverse, flowing eastward from Germany to Poland.

According to Reuters, physical exit flows at the Mallnow metering point on the German border stood at 2,691,220 kwh/h, according to data from the Gascade pipeline operator.

That figure was slightly larger than the 1,451,155 kwh/h on Tuesday, before gas stopped flowing eastward.

The pipeline reversal comes as Russian gas giant Gazprom has started sending requests to customers to switch their payment currency to rubles. Notifications about the new payment order had been sent to customers on Friday, the Russian gas giant said in a statement on its official Telegram channel, per BBG.

As Bloomberg points out, various European nations and leaders have differing views on Moscow’s demands. While German Chancellor Olaf Scholz initially resisted the request, denouncing it as a breach of contract, French Ecology Minister Barbara Pompili said she doesn’t consider Moscow’s demands for payment in rubles as a violation, since companies would continue to be able to pay for gas in euros, according to the information received from Moscow. The German government said it is still pouring over the details before coming to a decision, while Denmark condemned the request. A senior energy official in Italy said Friday that if the bloc moved to meet Russia’s demands for payment in rubles, “not much would change”.

“Gazprom as a Russian company is unconditionally and fully compliant with Russian law,” which from April 1 stipulates only ruble payments for gas exported in the “unfriendly” states, the company said. “Gazprom is a responsible partner and continues to export gas to clients in a safe manner.”

Europe relies on Russia for roughly 40% of its gas needs, and despite Washington’s promise to try and wean the bloc off its dependence on Russian products, it’s widely believed that supplanting Russian supplies with exports from the West and Middle East (and elsewhere) would likely take years, if it happens at all (since, as we explained earlier this week, exporters might be reluctant to re-route supplies to Europe because of its long-term orientation toward ‘green’ energy). 

What’s more, the US has already been hiking exports to Europe, raising questions about whether the additional 15 billion cubic meters that President Biden has promised to export to the EU this year is even possible.

To underscore the seriousness of the situation, the CEO of Germany’s multinational BASF SE, the world’s largest chemical producer, has warned that curbing or cutting off energy imports from Russia would likely send the Germany economy into its most “catastrophic” economic crisis going back to the end of World War 2.

Tyler Durden
Fri, 04/01/2022 – 09:23

via ZeroHedge News https://ift.tt/XPO9K4T Tyler Durden