Fed Minutes May Reveal Less Than Actions Thousands Of Miles Away

Fed Minutes May Reveal Less Than Actions Thousands Of Miles Away

Authored by Bloomberg News’ Ven Ram,

Treasuries traders will be parsing the minutes of the Fed’s meeting last month, due later Wednesday.

Perhaps they should plough through what the New Zealand central bank said and did earlier Wednesday with as much keenness.

The Reserve Bank of New Zealand was among the first of central banks in the developed world to start raising rates in the current cycle.

Since it began its campaign in October last year, it has increased its benchmark cash rate by an emphatic 275 basis points — including a 50-basis point punch earlier in the day.

Yet, inflation in the economy is still resistant, and if anything, inflation expectations have accelerated. If that’s the challenge for a central bank that began raising rates well before the Fed, maybe there’s a thing or two for interest-rate traders in the US who are busy reading star signs and alignment to divine what they think may be the end of the Fed’s tightening cycle. Never mind that speaker after Fed speaker has pointed out in recent weeks that the monetary authority doesn’t have rate cuts in mind for 2023.

Yes, US inflation decelerated in July, but one swallow doesn’t a summer make. And even if we are past peak inflation, that doesn’t equate to 2% inflation. The Fed’s benchmark rate isn’t even in neutral territory yet, what to say of reaching the restrictive zip code, and it would be foolhardy to conclude that the central bank would leave its inflation battle unfinished because the economy may be losing momentum. You only need to look at a simple gauge to assess the progress the Fed is making.

Taming the worst inflation nightmare in decades has its costs, and the Fed has told us sufficient times that it needs convincing evidence that its 2% goal is well within sight. As of now there is little evidence that such is the case.

Tyler Durden
Wed, 08/17/2022 – 11:25

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In Bizarre Twist, Manchester United Owners Say Open To Minority Sale Just Hours After Elon Musk “Joke”

In Bizarre Twist, Manchester United Owners Say Open To Minority Sale Just Hours After Elon Musk “Joke”

In a bizarro timeline twist, just hours after Elon Musk said on twitter (jokingly as he later admitted) that he was buying Manchester United (which supposedly is a “long-running joke on twitter”) sending MANU stock sharply higher at the open this morning…

… the Glazer family which actually does control Manchester United did not feel like joking and according to Bloomberg “would consider selling a minority stake in Manchester United FC… as pressure mounts on their ownership of the historic English football club.”

Bloomberg’s sources said that the famed soccer club owners have held “some preliminary discussions about the possibility of bringing in a new investor”, which begs the question: did Elon Musk see an RFP, or maybe even a term sheet, from the Glazers, then forget all about the NDA he had signed and in an “altered state of mind” casually “joke” about the upcoming purchase? In any other case we’d say no way, but when it comes to Elon Musk…

In any case, the American Glazer family is not yet ready to cede control of Manchester United, which could be valued at about £5 billion ($6 billion), although it’s market cap is about $2 billion.

Discussions are ongoing and there’s no certainty the Glazers will decide to sell a stake in the club, according to the people. A representative for Manchester United and the Glazer family declined to comment.

Manchester United is one of the best-known and most successful clubs in world football. It has won a record 13 English Premier League titles and has consistently been able to attract the game’s biggest stars, including the likes of Cristiano Ronaldo, Paul Pogba and Zlatan Ibrahimovic. It would thus be difficult for Musk to claim in one month that the team is made up of bots (although we are confident he would try if he signed off on a purchase agreement while high).

According to Bloomberg, “the club would likely attract a host of big-name investors, similar to EPL team Chelsea FC, which was recently sold to American billionaire Todd Boehly and private equity firm Clearlake Capital in a £4.25 billion deal.” Of course, there is always Elon Musk, who hopefully will have a cleaner mind when he wakes up today and decides if he was just “joking” when speaking about the MANU termi sheet, or actually telling the truth

The late Malcolm Glazer bought the club in a 2005 leveraged buyout that saddled it with massive debts and the family has faced distrust from hardcore supporters ever since. While this was mitigated in the early years of their ownership as the team continued to win trophies under Sir Alex Ferguson, resentment has grown steadily after the legendary coach’s retirement in 2013. Since then, the club has cycled through managers and big-money players with only a handful of trophies to show for it.

To make matters worse, their dominance of English football has shifted to crosstown rivals Manchester City FC, which has won multiple honors since being taken over by Abu Dhabi investors in 2008.

Avram Glazer and Joel Glazer are executive co-chairmen and directors at Manchester United, while family members Kevin Glazer, Bryan Glazer, Darcie Glazer Kassewitz and Edward Glazer all sit on the board. Whether or not Elon Musk joins them will depend on how high TSLA stock rises: it appears that the higher it goes, the greater Musk’s appetite for ridiculous M&A.

Which, like in the case of Twitter, will be a welcome change for the club’s long-suffering fans: as BBG notes, tensions have boiled over in recent weeks, with Manchester United losing the first two games of the new EPL season, including a 4-0 drubbing by Brentford FC. At the opening home match of the new campaign — a 2-1 loss to Brighton & Hove Albion FC — a large group of devotees walked toward the stadium with banners that read: “Fight greed. Fight for United. Fight Glazers” and “We want our club back,” the Telegraph newspaper reported.

Supporters are planning to stage fresh protests at the team’s next home match against arch rivals Liverpool FC on Aug. 22. Liverpool won the corresponding fixture 5-0 last season and are the bookmakers’ favorite this time around.

As for MANU stock, please welcome the latest meme stonk…

 

Tyler Durden
Wed, 08/17/2022 – 11:05

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Eco Surprises Show The Consensus Is Wrong About The Cycle

Eco Surprises Show The Consensus Is Wrong About The Cycle

By Simon White, Bloomberg markets live commentator and analyst

Economic surprises imply that economists in the aggregate are incorrectly gauging where we are in the cycle. This could give valuable insight on potential market positioning before data releases.

US economic surprises have been falling, but we can glean additional information about what the consensus is inferring by looking at a breakdown in the surprise indices.

The chart below shows the 12-month change in all of the sub-components of Bloomberg’s US surprise index. Overall, the change in economic surprises is roughly flat, suggesting economists over the last year have been pretty consistent in their forecasts.

However, economists have also been increasingly overestimating leading data over the last year (i.e. eco surprises in more leading components such as the ISM and housing data has fallen), while they have been underestimating more lagging data (e.g employment data). This suggests that economists in the aggregate are incorrectly gauging how late in the cycle we are.

This opens up opportunities for traders able to be nimble. As pointed out earlier, data-release days are becoming riskier for long-only equity portfolios. But they will likely offer more volatility and therefore more opportunity as the importance of data-release days rises due to the Fed’s abnegation of forward guidance.

If the consensus is consistently underestimating how late we are in the cycle, this gives added background about potential positioning before releases, making it easier to be on the right side of the post-data market move.

Tyler Durden
Wed, 08/17/2022 – 10:47

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WTI Spikes After Huge Crude Inventory Draw, US Crude Exports Hit Record High

WTI Spikes After Huge Crude Inventory Draw, US Crude Exports Hit Record High

Despite hopes of an imminent Iran nuke deal (and the subsequent supply), oil prices are higher this morning after the new head of OPEC said gobal oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles.

“We are running on thin ice, if I may use that term, because spare capacity is becoming scarce,” OPEC Secretary-General Haitham Al-Ghais said.

“The likelihood of a squeeze is there.”

In the meantime, all eyes are on the official US data for signs of lagging demand (or not as gas prices have dropped).

DOE

  • Crude -7.06mm – biggest draw since April 2022

  • Cushing +192k

  • Gasoline -4.64mm

  • Distillates +766k

After 2 weeks of builds, US crude stocks crashed over 7 million barrels last week – the biggest draw since April. Cushing inventories rose for the 7th straight week and gasoline stocks also tumbled…

Source: Bloomberg

The headline draw in crude stockpiles was boosted by the withdrawal of another 3.4 million barrels from the SPR last week. Total nationwide oil inventories — including commercial stockpiles and oil held in the SPR — fell by 10.46 million barrels in the week to August 12. That’s the biggest total crude draw since May.

Source: Bloomberg

Additionally, US crude exports set a new record at 5M b/d. That’s from all the replacing that European refiners have been making to offset Russian oil.

Source: Bloomberg

Gasoline demand rose once again last week and is now back near the year’s highs…

 

Source: Bloomberg

US crude production dropped modestly last week as the rig count has stabilized…

Source: Bloomberg

WTI had rallied up to around $88 ahead of the official data and surged higher on the big draw…

Al-Ghais offered more hope for the bulls:

“China is still a source of phenomenal growth,” he said.

“We haven’t seen China open up exactly — there’s a strict Covid Zero policy — I think that will have an impact when China gets back to full steam.”

“We’ve demonstrated time and time again in the past that we’re willing to do whatever it takes to do what the market really requires,” Al-Ghais said.

 

 

Tyler Durden
Wed, 08/17/2022 – 10:36

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Watch Real Assets To See Fed’s Progress On Inflation

Watch Real Assets To See Fed’s Progress On Inflation

By Ven Ram, Bloomberg markets live commentator and reporter

To gauge whether or not the Federal Reserve is approaching the end of its tightening in the current cycle, watch for an increase in real yields across the curve — and for nominal yields to rise in tow.

While the Fed would like to see financial conditions tighten across asset prices, credit spreads and the like, an effective measure of its actions would be how far real rates rise. Chair Jerome Powell himself remarked that “you would have positive real rates” across the curve.

Two-year inflation-adjusted rates, which were around 0.45% as of writing this, peaked at 1.40% in November 2018, one month before the Fed concluded its tightening in the previous cycle. Ten-year real rates, meanwhile, surged to 1.16%.

The two cycles aren’t comparable, not least because headline inflation is running at more than four times the Fed’s target now. But those levels still provide a useful — if minimum — watermark for real rates to approach if financial conditions were to tighten sufficiently.

To decipher what kind of effect that would have on nominal rates, I ran a simulation using real rates and forecast real gross domestic product growth of 1.1% for 2023 — because that’s when I assume the Fed will conclude its tightening — and varying estimates for inflation.

The simulation suggests that Treasury 10-year nominal yields may go past 3.50% if comparable inflation-adjusted rates re-visit the previous cycle high. Should inflation decelerate rapidly and real rates climb to, say, 1.50%, the 10-year nominal yield will rise as high as 3.85%.

How did this simulation fare the previous time I wrote about it? I posited in April last year, when the Treasury 10-year yield was around 1.66%, that it would rise to 2.72% if real rates touched 0.1%. On May 2 this year, inflation-adjusted rates traded at 0.16% — closing above 0.1% for the first time in this cycle — while the nominal rate was 2.98%.

Interest-rate markets intuitively grasp the reality that the Fed is far from done on raising rates. That is why Treasury 10-year yields have proved sticky even though inflation decelerated to 8.5% in July from 9.1% a month earlier.

Fed Richmond President Thomas Barkin said last week that given the uncertainty around the accuracy of the 2.50% neutral rate, the goal is to have interest rates higher than expected inflation, or positive real rates. The Fed’s dot plot in June projected a PCE inflation of 2.7% for next year, which is consistent with headline inflation of around 3.75%-4% based on historical correlations.

If the Fed is serious about seeking positive real rates, it’s clear that its benchmark rate will need to go beyond those levels on headline inflation. That is considerably above what the markets are pricing in at the moment.

Clearly, the Fed’s task is far from done. For markets obsessed with pricing the end game, it may be worth keeping in mind that decelerating inflation isn’t the same as 2% inflation.

Tyler Durden
Wed, 08/17/2022 – 10:25

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Joe Biden’s Inflation Reduction Act “Secretly” Brought To You By Bill Gates

Joe Biden’s Inflation Reduction Act “Secretly” Brought To You By Bill Gates

The Democrats’ “Inflation Reduction Act” – which according to the Congressional Budget Office will raise taxes on the middle class to the tune of $20 billion – not to mention unleash an army of IRS agents on working class Americans over the next decade, was made possible by Bill Gates and (in smaller part) Larry Summers, who have been known to hang out together.

Pals hanging out

The bill, of course, was signed yesterday.

In a Tuesday Bloomberg article that reads more like a newsletter for the Gates fan club, the billionaire Microsoft co-founder recalls how earlier this year, as moderate Democratic Senators Joe Manchin and Kyrsten Sinema continued to block the tax-and-spend legislation over concerns that it would raise taxes on the middle class (it will), Gates says he tapped into a relationship with Manchin that he’d been cultivating since at least 2019.

Gates was banking on more than just his trademark optimism about addressing climate change and other seemingly intractable problems that have been his focus since stepping down as Microsoft’s chief executive two decades ago. As he revealed to Bloomberg Green, he has quietly lobbied Manchin and other senators, starting before President Joe Biden had won the White House, in anticipation of a rare moment in which heavy federal spending might be secured for the clean-energy transition.

Those discussions gave him reason to believe the senator from West Virginia would come through for the climate — and he was willing to continue pressing the case himself until the very end. “The last month people felt like, OK, we tried, we’re done, it failed,” Gates said. “I believed it was a unique opportunity.” So he tapped into a relationship with Manchin that he’d cultivated for at least three years. “We were able to talk even at a time when he felt people weren’t listening.” -Bloomberg

We know, gag us with a spoon.

Apparently Gates and Manchin’s bromance began when the billionaire wooed the West Virgina Senator at a 2019 meal in Seattle, in an effort to garner support for clean-energy policy. Manchin at the time was the senior-most Democrat on the energy committee.

My dialogue with Joe has been going on for quite a while,” said Gates.

After Manchin walked (again) on the bill last December over concerns that it would exacerbate the national debt, inflation, the pandemic, and amid geopolitical uncertainty with Russia, Gates jumped into action. A few weeks later, he met with Manchin and his wife, Gayle Conelly Manchin, at a DC restaurant, where they talked about what West Virginia needed. Manchin understandably wanted to preserve jobs at the center of the US coal industry, while Gates suggested that coal plant workers could simply swap over to nuclear plants – such as those from Gates’ TerraPower.

Manchin apparently wasn’t convinced, announcing on Feb. 1 that “Build Back Better” (the Inflation Reduction Act’s previous iteration) was “dead.”

In an effort to convince him otherwise, Democrats pulled together a cadre of economists and other Manchin influencers – including former Treasury Secretary Lawrence Summers, who convinced Manchin that the bill wouldn’t raise taxes on the middle class, or add to the deficit.

Collin O’Mara, chief executive officer of the National Wildlife Federation, recruited economists to assuage Manchin’s concerns — including representatives from the University of Chicago and the Wharton School of the University of Pennsylvania. Senator Chris Coons of Delaware brought in a heavyweight: former Treasury Secretary Lawrence Summers, who has spent decades advising Democrats. 

The economists were able to “send this signal that [the bill’s] going to help with the deficit,” O’Mara said. “It’s going to be slightly deflationary and it’s going to spur growth and investment in all these areas.” Through this subtle alchemy, clean-energy investments could be reframed for Manchin as a hedge against future spikes in oil and gas prices and a way to potentially export more energy to Europe. -Bloomberg

Gates also sprang into action again on July 7, when Manchin was spotted at the Sun Valley media conference in Idaho – which Gates also attended.

“We had a talk about what was missing, what needed to be done,” Gates said. “And then after that it was a lot of phone calls.”

Gates looks back at the new law with satisfaction. He achieved what he set out to do. “I will say that it’s one of the happier moments of my climate work,” Gates said. “I have two things that excite me about climate work. One is when policy gets done well, and this is by far the biggest moment like that.” His other pleasure comes from interviewing people at climate and clean-tech startups: “I hear about this amazing new way to make steel, cement and chemicals.” -Bloomberg

I don’t want to take credit for what went on,” says Gates – in the article about how he gets credit for what went on.

Tyler Durden
Wed, 08/17/2022 – 10:11

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A Mom Let Her 7-Year-Old Play in the Park. Arizona Arrested Her and Banned Her From Working With Kids.


Kids play at the park

It was a pleasant November day in Tucson, Arizona, and Sarra needed to procure a Thanksgiving turkey. The COVID-19 pandemic was still raging—this was fall 2020, before vaccines had been made available—and the supermarket’s policy was to discourage excess people from entering the premises.

Sarra thus opted to let her 7-year-old son and his 5-year-old friend play at the park while she ran the errand. She instructed the kids to wait for her by the jungle gym; taking note of an adult acquaintance teaching a tai chi class in the park, Sarra told her kids to consult the friend in the event of an emergency. She then left to buy her turkey.

“It seemed like a nice, calm day,” says Sarra. (In order to protect her privacy, her full name is not being used.)

Leaving the kids behind was an easy decision, one any parent might have made. The park was safe and the errand was quick.

And yet the state of Arizona has decided that the incident demonstrates Sarra’s unfitness to care for children. Leaving two kids to fend for themselves even briefly—in a perfectly safe public park, with an acquaintance nearby—was an act of negligence, in the state’s view, and one that warrants Sarra’s placement on a list called the Central Registry.

People who are on the Central Registry are prohibited from working with children, even in a volunteer capacity. The Central Registry violates basic tenets of due process in numerous ways: It is run by an administrative agency, the Department of Child Safety (DCS), and the standard for placement on the Central Registry is probable causemere suspicion of wrongdoing, in other words.

“That’s the standard the government uses to get a search warrant,” says Timothy Sandefur, an attorney and vice president for legal affairs at the Goldwater Institute. “That’s really outrageous.”

The Goldwater Institute, a conservative and libertarian think tank, and the Pacific Legal Foundation (PLF), a libertarian public interest law firm, have filed a motion on Sarra’s behalf to prevent the Central Registry from adding her name to its list—or to remove her name if it’s already there. (The list is so shrouded in secrecy that it’s hard to tell.) If unsuccessful, Sarra’s name will enter the registry for the next 25 years. “It’s really shocking,” she says.

She was in the middle of shopping when a friend found her in the store and informed her that the police were with the kids. She raced back to the park, where the police arrested her on suspicion of endangering a minor. This was surprising, given that the children were never in any danger whatsoever—and no one had claimed they were.

Though there’s not an explicit law against letting kids play by themselves in a public park, Arizona’s minor delinquency laws are especially vague. And even in states where the laws are clearer, parents are customarily prosecuted for leaving kids at home, letting them walk to school by themselves, or dropping them off at the playground for a few minutes of unmonitored play. Thus Sarra joined the ranks of the Meitiv parents, Melissa Henderson, Megan McMurry, and so many others across the country who were wrongly punished by law enforcement for entrusting kids with reasonable levels of autonomy.

Sarra ultimately worked out a plea deal, in which the prosecutor would drop the charges if she took a parenting class.

“I was told you just take this one class and they’ll drop everything, it will all go away,” she says. “But it doesn’t really go away.”

That’s because the police are one matter, and DCS is another. The department operates all on its own and can take action against a parent whether or not the cops file charges.

Moreover, the procedures in DCS trials bear little resemblance to actual courts of law, which have rules of evidence and require a presumption of innocence. Sarra’s case went before a DCS administrative law judge with the sole power to decide her fitness as a parent—a “hired bureaucrat,” according to Sandefur, who described the treatment of parents like Sarra as fundamentally unfair.

“It violates a large number of constitutional protections that are supposed to ensure that innocent people are not railroaded for allowing their children to play outside for half an hour,” he says.

Particularly concerning, notes Sandefur, is the unbelievably low threshold for finding a parent unfit: probable cause. The situation reminds him of civil asset forfeiture abuses, in which police seize property from people merely suspected of crimes. Victims of civil asset forfeiture often have great difficulty recouping their losses, even though in many cases they are never actually convicted of underlying crimes. Police took $8,040, for instance, from a Rochester, New York, woman after raiding her apartment. The cops were investigating her former boyfriend, and never charged her with a crime; they did keep the money, though.

Similarly, parents who were never convicted of child endangerment—nor even reasonably accused of ever putting a child in harm’s way—can nevertheless be prohibited from taking care of children in the state of Arizona.

“You have a system that allows the government to blacklist people based on irrational assertions of harming children,” says Sandefur.

DCS procedures are especially illiberal in that the department’s director can overrule an administrative judge and place a person on the Central Registry even if the judge ruled in the person’s favor.

After a “kangaroo” hearing that Sarra describes as a mere formality—it was a foregone conclusion DCS would determine the probable cause threshold had been reached, she says—her name was slated for registration. She appealed that decision, and now with Goldwater and PLF’s help, she expects her case to reach the Superior Court in the coming months. If they lose there, they will appeal all the way up to the state Supreme Court, says Sandefur.

In the meantime, Sarra’s pending designation as a menace to children hasn’t fazed the Sunday school where she teaches.

“They said, ‘Don’t worry about it, we’re not going to listen to DCS,'” she recalls. The Central Registry is evidently so vast that organizations working with children can’t even rely on it. Sarra said she saw an estimate that one in every 100 Arizonans is on the list for one reason or another.

“It’s so crazy,” she says. “Either we’re all criminals, or the law is not quite right.”

The post A Mom Let Her 7-Year-Old Play in the Park. Arizona Arrested Her and Banned Her From Working With Kids. appeared first on Reason.com.

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Upcoming Speaking Engagements


Public speaking

Below is a list of my upcoming speaking engagements for the next six months or so. Unless otherwise noted, all events are free and open to the public – and in person. Unless otherwise noted, the event times are those in the time zone where the event is being held.

I will add additional events and information to this post, over time. In the meantime if your university, think tank, research institute or other similar organization would like to invite me to speak (either virtually or in person) on any topic within my expertise, I am open for business! You can get an overview of the issues I write and speak about at my website.

August 25, 3-4:15 PM: “Judicial Review of Immigration Policy,” panel on “The Expanding Mandate: Immigration and the Courts,” Bipartisan Policy Center, Washington, DC. Online webinar. Additional information and free sign-up here. The other panelists are Leon Fresco (Former Deputy Assistant Attorney General for the Office of Immigration Litigation, U.S. Department of Justice; Immigration Attorney, Holland & Knight), and Karen Tumlin (Founder and Director, Justice Action Center). Ellen Gilmer (Senior Homeland Security Reporter, Bloomberg Government), will moderate.

September 16, 10:45-12:00 AM: “A Major Question of Power: The Vaccinate Mandate Cases and the Limits of Executive Authority,” panel on “Constitutional Structure,” Cato Constitution Day conference on the 2021-22 Supreme Court term, Cato Institute, Washington, DC. Additional information and free sign-up here.  My presentation will be based on my article of the same title. Other participants in this panel include VC co-blogger Jonathan Adler and my George Mason University colleague Jennifer Mascott.

September 28, 12-1 PM (tentative time): “Team Libertarian Report: Restoring the Guardrails of Democracy.” Scalia Law School, George Mason University, Arlington, VA. Online webinar. Other participants include David French and Prof. Edward Foley (representing the conservative and progressive teams in the National Constitutional Center “Restoring the Guardrails of Democracy” project). Sign-up information forthcoming.

October 27, 12-1 PM: “The Case Against Nationalism,” University of Wisconsin Law School, Madison, WI (sponsored by the University of Wisconsin Federalist Society).

October 29, Time TBA: “Adding to the Anti-Canon of Constitutional Law,” panel on “Controlling the Court Through Precedent,” Conference on “Controlling the Supreme Court: Now and Far into the Future,” University of Wisconsin Law School, Madison, WI (sponsored by the Wisconsin Law Review). The other participants in the panel will be Barry Friedman (NYU), Nina Varsava (Wisconsin), and moderator Bruce Ledewitz (Duquesne).

November 3, Time TBA: “Free to Move: Foot Voting, Migration, and Political Freedom,” University of Calgary. Calgary, Alberta, Canada.

November 3 or 4, Time and topic TBA: I will likely do a second talk in Calgary, on a topic to be determined.

 

 

The post Upcoming Speaking Engagements appeared first on Reason.com.

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A Mom Let Her 7-Year-Old Play in the Park. Arizona Arrested Her and Banned Her From Working With Kids.


Kids play at the park

It was a pleasant November day in Tucson, Arizona, and Sarra needed to procure a Thanksgiving turkey. The COVID-19 pandemic was still raging—this was fall 2020, before vaccines had been made available—and the supermarket’s policy was to discourage excess people from entering the premises.

Sarra thus opted to let her 7-year-old son and his 5-year-old friend play at the park while she ran the errand. She instructed the kids to wait for her by the jungle gym; taking note of an adult acquaintance teaching a tai chi class in the park, Sarra told her kids to consult the friend in the event of an emergency. She then left to buy her turkey.

“It seemed like a nice, calm day,” says Sarra. (In order to protect her privacy, her full name is not being used.)

Leaving the kids behind was an easy decision, one any parent might have made. The park was safe and the errand was quick.

And yet the state of Arizona has decided that the incident demonstrates Sarra’s unfitness to care for children. Leaving two kids to fend for themselves even briefly—in a perfectly safe public park, with an acquaintance nearby—was an act of negligence, in the state’s view, and one that warrants Sarra’s placement on a list called the Central Registry.

People who are on the Central Registry are prohibited from working with children, even in a volunteer capacity. The Central Registry violates basic tenets of due process in numerous ways: It is run by an administrative agency, the Department of Child Safety (DCS), and the standard for placement on the Central Registry is probable causemere suspicion of wrongdoing, in other words.

“That’s the standard the government uses to get a search warrant,” says Timothy Sandefur, an attorney and vice president for legal affairs at the Goldwater Institute. “That’s really outrageous.”

The Goldwater Institute, a conservative and libertarian think tank, and the Pacific Legal Foundation (PLF), a libertarian public interest law firm, have filed a motion on Sarra’s behalf to prevent the Central Registry from adding her name to its list—or to remove her name if it’s already there. (The list is so shrouded in secrecy that it’s hard to tell.) If unsuccessful, Sarra’s name will enter the registry for the next 25 years. “It’s really shocking,” she says.

She was in the middle of shopping when a friend found her in the store and informed her that the police were with the kids. She raced back to the park, where the police arrested her on suspicion of endangering a minor. This was surprising, given that the children were never in any danger whatsoever—and no one had claimed they were.

Though there’s not an explicit law against letting kids play by themselves in a public park, Arizona’s minor delinquency laws are especially vague. And even in states where the laws are clearer, parents are customarily prosecuted for leaving kids at home, letting them walk to school by themselves, or dropping them off at the playground for a few minutes of unmonitored play. Thus Sarra joined the ranks of the Meitiv parents, Melissa Henderson, Megan McMurry, and so many others across the country who were wrongly punished by law enforcement for entrusting kids with reasonable levels of autonomy.

Sarra ultimately worked out a plea deal, in which the prosecutor would drop the charges if she took a parenting class.

“I was told you just take this one class and they’ll drop everything, it will all go away,” she says. “But it doesn’t really go away.”

That’s because the police are one matter, and DCS is another. The department operates all on its own and can take action against a parent whether or not the cops file charges.

Moreover, the procedures in DCS trials bear little resemblance to actual courts of law, which have rules of evidence and require a presumption of innocence. Sarra’s case went before a DCS administrative law judge with the sole power to decide her fitness as a parent—a “hired bureaucrat,” according to Sandefur, who described the treatment of parents like Sarra as fundamentally unfair.

“It violates a large number of constitutional protections that are supposed to ensure that innocent people are not railroaded for allowing their children to play outside for half an hour,” he says.

Particularly concerning, notes Sandefur, is the unbelievably low threshold for finding a parent unfit: probable cause. The situation reminds him of civil asset forfeiture abuses, in which police seize property from people merely suspected of crimes. Victims of civil asset forfeiture often have great difficulty recouping their losses, even though in many cases they are never actually convicted of underlying crimes. Police took $8,040, for instance, from a Rochester, New York, woman after raiding her apartment. The cops were investigating her former boyfriend, and never charged her with a crime; they did keep the money, though.

Similarly, parents who were never convicted of child endangerment—nor even reasonably accused of ever putting a child in harm’s way—can nevertheless be prohibited from taking care of children in the state of Arizona.

“You have a system that allows the government to blacklist people based on irrational assertions of harming children,” says Sandefur.

DCS procedures are especially illiberal in that the department’s director can overrule an administrative judge and place a person on the Central Registry even if the judge ruled in the person’s favor.

After a “kangaroo” hearing that Sarra describes as a mere formality—it was a foregone conclusion DCS would determine the probable cause threshold had been reached, she says—her name was slated for registration. She appealed that decision, and now with Goldwater and PLF’s help, she expects her case to reach the Superior Court in the coming months. If they lose there, they will appeal all the way up to the state Supreme Court, says Sandefur.

In the meantime, Sarra’s pending designation as a menace to children hasn’t fazed the Sunday school where she teaches.

“They said, ‘Don’t worry about it, we’re not going to listen to DCS,'” she recalls. The Central Registry is evidently so vast that organizations working with children can’t even rely on it. Sarra said she saw an estimate that one in every 100 Arizonans is on the list for one reason or another.

“It’s so crazy,” she says. “Either we’re all criminals, or the law is not quite right.”

The post A Mom Let Her 7-Year-Old Play in the Park. Arizona Arrested Her and Banned Her From Working With Kids. appeared first on Reason.com.

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Upcoming Speaking Engagements


Public speaking

Below is a list of my upcoming speaking engagements for the next six months or so. Unless otherwise noted, all events are free and open to the public – and in person. Unless otherwise noted, the event times are those in the time zone where the event is being held.

I will add additional events and information to this post, over time. In the meantime if your university, think tank, research institute or other similar organization would like to invite me to speak (either virtually or in person) on any topic within my expertise, I am open for business! You can get an overview of the issues I write and speak about at my website.

August 25, 3-4:15 PM: “Judicial Review of Immigration Policy,” panel on “The Expanding Mandate: Immigration and the Courts,” Bipartisan Policy Center, Washington, DC. Online webinar. Additional information and free sign-up here. The other panelists are Leon Fresco (Former Deputy Assistant Attorney General for the Office of Immigration Litigation, U.S. Department of Justice; Immigration Attorney, Holland & Knight), and Karen Tumlin (Founder and Director, Justice Action Center). Ellen Gilmer (Senior Homeland Security Reporter, Bloomberg Government), will moderate.

September 16, 10:45-12:00 AM: “A Major Question of Power: The Vaccinate Mandate Cases and the Limits of Executive Authority,” panel on “Constitutional Structure,” Cato Constitution Day conference on the 2021-22 Supreme Court term, Cato Institute, Washington, DC. Additional information and free sign-up here.  My presentation will be based on my article of the same title. Other participants in this panel include VC co-blogger Jonathan Adler and my George Mason University colleague Jennifer Mascott.

September 28, 12-1 PM (tentative time): “Team Libertarian Report: Restoring the Guardrails of Democracy.” Scalia Law School, George Mason University, Arlington, VA. Online webinar. Other participants include David French and Prof. Edward Foley (representing the conservative and progressive teams in the National Constitutional Center “Restoring the Guardrails of Democracy” project). Sign-up information forthcoming.

October 27, 12-1 PM: “The Case Against Nationalism,” University of Wisconsin Law School, Madison, WI (sponsored by the University of Wisconsin Federalist Society).

October 29, Time TBA: “Adding to the Anti-Canon of Constitutional Law,” panel on “Controlling the Court Through Precedent,” Conference on “Controlling the Supreme Court: Now and Far into the Future,” University of Wisconsin Law School, Madison, WI (sponsored by the Wisconsin Law Review). The other participants in the panel will be Barry Friedman (NYU), Nina Varsava (Wisconsin), and moderator Bruce Ledewitz (Duquesne).

November 3, Time TBA: “Free to Move: Foot Voting, Migration, and Political Freedom,” University of Calgary. Calgary, Alberta, Canada.

November 3 or 4, Time and topic TBA: I will likely do a second talk in Calgary, on a topic to be determined.

 

 

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