The Party of Trump Rages On


Liz Cheney and Donald Trump

In this week’s The Reason Roundtable, editors Matt Welch, Katherine Mangu-Ward, Peter Suderman, and Nick Gillespie examine the current state of the GOP in the wake of last week’s primary elections and continue to reprehend the Centers for Disease Control and Prevention (CDC) after it announced lackluster reforms.

1:35: GOP as the “Party of Trump”

12:39: Florida Gov. Ron DeSantis and the “Stop WOKE Act”

24:30 : Weekly Listener Question:

What is the smallest size in which a free market can work? Are three people enough or do you need country-sized populations to reap the benefits? We love free trade, but what about when we trade with slavers and criminal regimes? Why would it not be better to close trade to them and just keep most of our trade internal or with our free-ish pals? Is America’s market not big enough to reap the benefits of free trade internally even if nobody could/would send us imports? Would we not just creatively find replacements for all the products that we used to import?

38:20: CDC announces reorganization

Mentioned in this podcast:

Morris P. Fiorina: Why ‘Electoral Chaos’ Is Here To Stay,” by Nick Gillespie

Federal Judge Blocks Florida Law Banning ‘Woke’ Workplace Training,” by Scott Shackford

Make the CDC an Infectious Disease Epidemic Fighter Again,” by Ronald Bailey

Every Day Is ‘Buy Nothing Day’ in North Korea—and Look Where That’s Gotten Them,” Nick Gillespie

‘Game of Thrones’ Economics: Auburn University’s Matthew McCaffrey says it’s not all Fantasy’,” by Tracy Oppenheimer

Grover Cleveland, The Last Libertarian President,” by Paul Whitfield

Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.

Today’s sponsor:

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Audio production by Ian Keyser

Assistant production by Hunt Beaty

Music: “Angeline,” by The Brothers Steve

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Arkansas Cops Suspended After Video of Beating Goes Viral


Three Arkansas police officers hold down and pummel a man outside a convenience store.

Three Arkansas police officers have been suspended pending an investigation by state police after a video taken by a bystander showed them brutally beating a shoeless man outside of a convenience store.

The video, first posted Sunday afternoon on Twitter, shows two Crawford County sheriff’s deputies and an officer with the Mulberry Police Department holding down and battering a man later identified by state police as Randal Worcester, 27, of Goose Creek, South Carolina. The officers knee, punch, and slam Worcester’s head into the ground.

Arkansas news outlet KSFM-TV reports that, according to Crawford County Sheriff Jimmy Damante, officers were dispatched on Sunday after receiving a call about a man threatening and allegedly spitting on a convenience store employee: 

Sheriff Damante says Worcester then traveled on a bike to Mulberry, near Exit 20, where the Mulberry officer and the deputies met with him. The conversation began calm and Worcester handed them a pocket knife, but the sheriff says Worcester then began attacking one of the deputies by pushing him to the ground and punching the back of his head, leading to what was seen in the video. 

Worcester has been charged with second-degree battery, resisting arrest, refusal to submit, possessing an instrument of crime, criminal trespass, criminal mischief, terroristic threatening, and second-degree assault.

There is no bright-line test for when legal use of force by police crosses over into excessive force. Rather, excessive force claims are evaluated under the Fourth Amendment’s “objective reasonableness” standard, which judges incidents based on individual factors and from the perspective of a reasonable police officer on the scene. However, slamming a person’s head into the pavement is not a standard technique to gain compliance.

“Certainly the blows to the head at the same time you’re trying to get a person to put their hands behind their back—think about it,” former Philadelphia police Commissioner Charles Ramsey told CNN. “It doesn’t make sense. If you’re getting hit in the face, you’re going to lift your hands to try to protect your face.”

“In reference to the video circulating on social media involving two Crawford County Deputies, we have requested that Arkansas State Police conduct the investigation and the Deputies have been suspended pending the outcome of the investigation,” Damante said in a Facebook statement. “I hold all my employees accountable for their actions and will take appropriate measures in this matter.”

Arkansas Gov. Asa Hutchinson has confirmed that the Arkansas State Police are investigating the incident, and in a statement to The New York Times, the agency said its investigation “will be limited to the use of physical force by the deputies and the police officer.”

The incident is just the latest video of apparently excessive force to go viral and lead to police being investigated. In April, bodycam footage of Tulsa police violently arresting an elderly woman with bipolar disorder drew widespread outrage. Last month, a video went viral of a 2016 incident where a Colorado police officer chased and tased a man for holding a “fuck bad cops” sign.

The post Arkansas Cops Suspended After Video of Beating Goes Viral appeared first on Reason.com.

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Stocks & Bonds Slammed As Market Reprices Rate-Hike Trajectory Ahead Of J-Hole

Stocks & Bonds Slammed As Market Reprices Rate-Hike Trajectory Ahead Of J-Hole

Anxiety over what J-Pow will say at J-Hole on Friday is manifesting in multiple markets…

Rate-hike expectations are back at their highest since the ECB chaos in July (and rate-cut expectations have tightened too)…

Source: Bloomberg

US equities extended their recent weakness today with Nasdaq the ugliest horse in the glue factory (futs were sold at the Asia open, EU open, and US open)…

Nasdaq is now down 6% from its rebound highs…

And the S&P is down over 200 points since we advised investors of BofA’s Michael Hartnett’s call to “start shorting now”

And all the majors continue to push back down towards their 100DMAs (blue line) after rejecting their 200DMAs (green line)…

Hedge funds continued to press shorts today with Goldman’s “Most Shorted” basket now down a stunning 18% from last Tuesday’s highs…

Source: Bloomberg

VIX spiked back above 24 today…

Treasury yields were all higher on the day with the long-end outperforming (and the curve flattening/inverting further)…

Source: Bloomberg

10Y Yields topped 3.00% again today, for the first time since July 21st…

Source: Bloomberg

Real rates have been a one-way street higher since touching 0.0% on Aug 2nd…

Source: Bloomberg

Time for stock multiples to re-compress again…

Source: Bloomberg

Euro crashed to its weakest against the dollar since 2002 (dropping below July’s lows)…

Source: Bloomberg

Sending the DXY (dollar index) to its highest close since June 2002…

Source: Bloomberg

Cryptos traded sideways to down today with Bitcoin finding support at $21,000…

Source: Bloomberg

Gold extended its losses below $1800 today as the dollar soared…

Oil prices dumped (on Iran Deal hope) and pumped (on OPEC+ production cut hints) to end higher on the day…

US NatGas front-month neared $10 today, hitting its highest since 2002…

For context, European NatGas is trading at $500 per barrel…

And before we leave commodity land, here’s a look at European 1-year-ahead electricity prices…

Source: Bloomberg

Hyperinflation much?

Finally, we note that the 2008 analog continues to play out…

Source: Bloomberg

Is a reality check in order?

Source: Bloomberg

It’s different this time…

Tyler Durden
Mon, 08/22/2022 – 16:00

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Russian FSB Identifies Alleged Dugina Assassin

Russian FSB Identifies Alleged Dugina Assassin

By BlueApples

At the turn of the 20th century the delicate fabric of social order in Europe rested on a knife’s edge. As imperial powers expanded their empires, it was only a matter of time before conflict between them would shatter peace in Europe. In that era, Russia found itself against Europe’s most powerful empires, namely Austria-Hungary and Germany.

The fissure between those empires was cemented by the Bosnian Crisis of 1908 which saw Austria-Hungary annex Bosnia and Herzegovina by using Bulgaria’s declaration of independence from the Ottoman Empire as an advantageous political catalyst given its destabilization of the Balkan region. Austria-Hungary’s actions would provoke Russia to rise to the defense of its Slavic brethren situated in Serbia and Montenegro in a response that would forever alter how Russia would align itself among the continental powers of Europe. While a widespread conflict was averted by the amending the Treaty of Berlin, the political climate the Bosnian Crisis cast would light the fuse for the inevitable outbreak of WWI which was detonated with the assassination of Archduke Franz Ferdinand by Bosnian-Serb nationalist Gavrilo Princip.

As the war in Ukraine places Russia at familiar odds with the powers of Europe yet again, the precarious position of ostensibly unsustainable peace across the continent echoes on longer than a century following the First World War. The tension illustrates the axiom that nothing is new under the sun as the volatility of Europe in 2022 mirrors that in 1908. Russia’s position against the European hegemony vested in NATO is analogous to its stance in support of the Slavic realm longer than a century ago. Now, following the assassination of Darya Dugina, this century may have found its own Franz Ferdinand.

The Russian Federal Security Service (“FSB”) has claimed that the assassination of Dugina was committed by a covert operative of Ukraine. The FSB has identified Natalia Vovk as the alleged assassin. “As a result of a complex of urgent operational-search measures, the Federal Security Service has solved the murder of Russian journalist Darya Dugina, born in 1992,” the FSB announced, going on to emphasize the culpibility of the Ukrainian government by stating that “the crime was prepared and committed by the Ukrainian special services[.]”

According to the FSB’s investigation, Vovk entered Russia in July before situating herself in the same apartment building that Dugina resided in. Vovk would then follow Dugina to the festival in which the explosive device that led to her death was planted. Vovk, who was accompanied by her 12-year old daughter, fled to Estonia following the assassination, according to Russian intelligence. Following her identification, Russian law enforcement agencies declared their intent to seek her extradition.

FSB alleges that Ukrainian spy Natalia Vovk assassinated Darya Dugina.

Following Dugina’s assassination, Ukraine was naturally implicated as being behind the murder given her father’s significant, albeit enigmatic, reputation as one of Vladimir Putin’s most influential ideologues. Kiev urgently washed its hands of any involvement as advisor Mykhailo Podolyak stated “Ukraine, of course, has nothing to do with yesterday’s explosion[.]” Although Ukrainian officials denied any involvement in the attack, President Volodymyr Zelensky warned of his anticipation that Dugina’s murder would inextricably result in the intensification Russia’s military campaign.

Given the reports of Vovk’s escape to Estonia, the location of the alleged assassin places Russia in a conflict against a NATO member state even more directly than the proxy war in Ukraine has. In 2016, the European Court of Justice set precedent which would justify any extradition request for Vovk by Russia. The case law that set that standard occurred when the court found that any member state of the European Union is obligated to accommodate an extradition request of any third-party non-member state even if the subject of the request is not a citizen of the EU nation itself. This decision followed a case in which Russia requested to have Estonian national Aleksei Petruhhin extradited from Latvia for drug trafficking offenses.

The legal framework set by the European Court of Justice will place Estonia in a crucible if Vovk has indeed found safe haven in the Baltic state. In addition to joining the EU in 2004, Estonia joined NATO that same year. The potential conflict arising between Estonia and the Russian Federation has the potential to trigger Article 5 of the NATO Charter which puts forth a collective defense clause meaning that any military engagement with a NATO member state constitutes action taken against the entire trans-Atlantic body whether it occurs as far east as Tallinn or as far west as Hawai’i.

Article 5 has been constantly dangled before Russia as a Sword of Damicles of sorts designed to dissuade any escalation of the Ukrainian conflict. The veiled threat was most recently invoked in response to Russian attack on Zaporizhzhia Nuclear Power Plant and increased military incursions by Ukrainian military forces into Crimea. “Any deliberate damage causing potential radiation leak to a Ukrainian nuclear reactor would be a breach of NATO’s Article 5,” said UK MP Tobias Ellwood. His sentiments were echoed by US Congressman Adam Kinzinger (R – IL) who followed Ellwood’s declaration by stating “This really isn’t even up for debate; any leak will kill people in NATO countries, that’s an automatic article 5[.]” just hours before Dugina’s assassination.

While Article 5 of the NATO Charter has been used to threaten Russia from intensifying any aggression, the officials who have constantly cited the collective defense policy have done so under the pretense of preventing any further aggression. The assassination of Darya Dugina is a drastically different circumstance as Russia will surely perceive any potential action it takes to have Vovk extradited from Estonia as entirely justified and as a response to the murder, not an offensive attack against a NATO member state. As the manhunt for Vovk ensures, Europe again finds itself in the political crucible that enveloped the continent following Gravrilo Princip’s assassination of Archduke Franz Ferdinand. However, in this historical iteration, it is the European central powers who find themselves in a position of being the aggressor that could provoke a catastrophic conflict with Russia.

Tyler Durden
Mon, 08/22/2022 – 15:45

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“Spend Now, Deal With The Consequences Later” Is The Worst Policy

“Spend Now, Deal With The Consequences Later” Is The Worst Policy

Authored by Daniel Lacalle,

Governments and central banks have become the lender of first resort instead of last resort, and this is immensely dangerous. Global debt soars, inflation creeps in, and many of the so-called “supply chain disruptions” are the result of zombification after years of subsidizing low productivity and penalizing high productivity with increased taxes.

There are many reasons why nations shouldn’t “spend now and deal with the consequences later.”

First, the spending is made by politicians who will not be held accountable for the malinvestment and unwise outlay decisions. Furthermore, the cost will always be paid by taxpayers and businesses.

Think about the irony of promoting an “Inflation Reduction Act” that means spending more and monetizing more debt. But it’s even more ironic to launch an inflation reduction act after creating massive inflation with multi-trillion-dollar stimulus plans and central bank balance sheet expansion. Government presents itself as the solution to the problems it creates and passes the bill twice to taxpayers.

Second, governments are extremely bad at picking winners but even worse at picking losers. Policy nudging, subsidies, and grants are often aimed at obsolete or politically favored sectors, which in turn leads to the rise in zombie companies. Government spending to “save” businesses tends to support those who are already highly indebted and with relevant challenges to paying their debts. This is bad, but picking losers is even worse. The world wouldn’t have a food and energy crisis because of a disruption from countries that account for less than 10 percent of supply if regulation and laws hadn’t placed enormous burdens on investment in farming, energy, and trade in general.

Third, the negative impact outweighs the positive. I remember a conversation in 2021 with Judy Shelton in which she mentioned how the U.S. economy would be stronger if it hadn’t implemented the stimulus plan. She was right. The enormous spending plans have created an unsurmountable structural deficit, as many programs are consolidated and increased, and the negative impact on growth, inflation, and real wages only a year and a half later is undeniable.

It’s undeniable that economies come out of every crisis with higher debt, lower growth, weaker real wage growth, and poorer job creation. Yet, somehow, people think that the next time will be different. They said the same about 2020. And it was different. You had your cheque and paid for it multiple times over with higher inflation and more taxes.

Critics may say that this is easy to say in a recovery, but how do we explain to citizens that governments should do nothing? Herein lies another of the tricks from interventionists. We have grown accustomed to the idea that if the government doesn’t spend massively in a crisis, then it’s doing “nothing.” Enormous demand-side policies are essential even when the problem has nothing to do with demand. Even worse, a trillion-dollar plan must be followed by a two-trillion one or it will seem too small, no matter what the problem of the outcome is.

Policies shouldn’t be judged by their intentions, as Milton Friedman said, but by their results. And when the results are as poor as the ones we have witnessed for almost two decades, we must warn about this constant decision to spend more.

Why is it so dangerous to use central banks and governments as the lender and solution of first resort? Because their main resource to implement those policies is your wealth. Expropriation of wealth is the other side of the “social policy” coin: taxes and inflation, or both. Some readers might think it’s a clever idea to expropriate the wealth of the rich to support the economy, but by now they should know that it’s a lie. When you give extraordinary powers to a government based on the idea that stealing from the rich is valid, you’re giving power to politicians to steal from you as well. And they do. There’s no single example of a massive government spending plan financed with higher taxes on the rich that didn’t end in higher taxes for all or more inflation, the tax on the poor.

When you read “spend now, deal with the consequences later” what you’re reading is give me your wallet, because you will deal with the credit card balance later.

The next time you read that dreaded phrase, remember: There’s nothing that the government gives “for free” that you don’t pay for one way or another.

Tyler Durden
Mon, 08/22/2022 – 15:11

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Apple Employees Form Resistance Against Company’s Return-To-Office Plans

Apple Employees Form Resistance Against Company’s Return-To-Office Plans

Apple employees have banded together to push back against the company’s plans to force them back into the office now that the pandemic is ‘over’ – tweeting a Monday petition which claims that employees have shown they can do “exceptional work” from home.

“Apple leadership recently announced they require a general return to office starting the week of Sept 5 (Labor Day). This uniform mandate from senior leadership does not consider the unique demands of each job role nor the diversity of individuals,” the petition continues, adding reasons that include “disabilities (visible or not); family care; safety, health, and environmental concerns; financial considerations; to just plain being happier and more productive.”

The workers demand that Apple “allows each of us to work directly with our immediate manager to figure out what kind of flexible work arrangements are best for each of us and for Apple,” and “These work arrangements should not require higher level approvals, complex procedures, or providing private information.”

The petition comes on the heels of an announcement from CEO Tim Cook that employees had to return to the office for at least three days a week in a push to restore “in person collaboration.”

As Insider notes, employees have been pushing back against a return to pre-pandemic work arrangements – with dozens of signing a letter to Cook signaling their frustration with the company’s stance.

Employees said in the letter, seen by The Verge last year, that they felt “not just unheard, but at times actively ignored” during communication about remote work at Apple.

In May, Ian Goodfellow, Apple’s former machine learning director reportedly left the company for Google’s DeepMind due to Apple’s return-to-office plans. -Insider

The employees circulating the latest petition want Apple to “encourage, not prohibit, flexible work to build a more diverse and successful company where we can feel comfortable to “think different” together.”

Tyler Durden
Mon, 08/22/2022 – 14:50

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Peter Schiff: Markets Still Operating On False Confidence In The Fed

Peter Schiff: Markets Still Operating On False Confidence In The Fed

Via SchiffGold.com,

The four-week win streak in stocks came to an end last week with all of the major indexes down significantly on Friday. As Peter explained in his podcast, it appears the markets are coming to terms with the fact the Powell Pivot may not come as quickly as anticipated. That means interest rates may go higher as the inflation fight continues. But Peter says the markets still don’t get the big picture. The Fed can’t win this inflation fight without wrecking the bubble economy.

Peter said the wild ride on the so-called meme-stocks such as Bed Bath and Beyond typifies “the casino-like mentality” the Fed has created.

You have so many people mindlessly piling into trades just chasing momentum.”

Bed Bath and Beyond is on the verge of bankruptcy. The company’s bonds are trading around 50 cents on the dollar.

If the bondholders don’t expect to get their money back, there’s no chance that the common stockholders are going to get theirs back. So, people who are paying $30 a share for Bed Bath and Beyond have no idea what they’re doing. The only people who had a clue were the people who were selling the stock on the way up.”

Peter said it’s hard to think of a company in a worse position to weather the current economic storm. Bed Bath and Beyond is a brick-and-mortar company heavily tied to housing and discretionary spending.

Consumers are getting killed with inflation. They’re paying more for food. They’re paying more for energy, for rent. They don’t have money to splurge on some fancy bath products or stuff from their kitchen. … Why this is the stock that people chose to buy makes no sense. They’re only buying it because it’s going up, and it’s only going up because other fools are buying it who don’t understand the fundamentals of the company. They just think they’re going to make money because the price is going to go up. It’s the greater fool theory. And unfortunately, that’s how most people are investing. They’re fools. They just haven’t figured it out yet. But so many fools are in for a rude awakening when the music finally stops on all of these types of trades.”

Peter noted that more broadly, the momentum stocks got beat up the most last week. They were the stocks that went up the most in the recent bear market rally. He said the reason these stocks declined so much is because the markets are coming to terms with the fact that the Powell Pivot may not take place as soon as they thought. The expectation for an end to rate hikes is being pushed back. This is bad for growth stocks for two reasons.

  1. It means higher interest rates. That is a big negative for growth stocks because it discounts their future earnings by a higher interest rate.

  2. If the Fed is going to have to stay higher for longer, that means the economy will be weaker for longer. That will weigh down earnings.

We’re starting to see the shift coming back to value and dividend-paying stocks and away from momentum growth-type stocks. And I believe this is going to gain steam. I’ve always thought that what we were experiencing was a bear market rally, a sucker rally, a correction. And I think that correction has ended and the primary trend has resumed.”

The notion that the Fed pivot will be delayed and the central bank is going to keep pushing rates higher is being felt even more strongly in the bond market. Yields continue to spike.

Oddly, the 2-year is the high point on the yield curve.

What that indicates to me is that markets do believe that the recession, which if it’s not already here will arrive sooner than most people thought, and therefore the Fed will start cutting rates earlier over this 5-year time horizon, and so investors expect rates three or four years from now to be lower than where they are now.”

Peter said that the markets still have a lot of false confidence in the Fed’s ability to bring inflation down to 2% and keep it there for most of the next 30 years.

Now, talk about living in a fantasy land. There is no way the Fed is going to even come close to achieving that for 30 years. They’re not even going to achieve it for three years. Yet, investors are still operating under the delusion that the Federal Reserve can do what it claims it’s going to do. But because the Fed still has that credibility, and because the Fed is still talking tough about its resolve to fight inflation, you’re seeing this reaction in the bond markets.”

The perception of a more hawkish Fed is also driving the dollar higher. Some economic data that wasn’t as weak as expected also buoyed the greenback.

We didn’t really get any strong data. We just got data that wasn’t as weak as people had expected. That, together with the Fed minutes and all this hawkish talk by a lot of FOMC members. But again, it’s all talk. And of course, that’s exactly what you’d expect when you have no stick. You have to scream as loud as you can and pretend that you’ve got one. And that’s exactly what these FOMC guys are doing.”

All of this is having the opposite effect on gold. Gold was down about $50 last week. Peter noted that it wasn’t down nearly as much as other foreign currencies and called that a positive sign.

But why is this happening?

Because investors are confident that the Fed is going to fight harder to win the war against inflation. Investors still don’t understand that no matter how hard the Fed fights, it is going to lose. Because it can’t really fight hard enough to win. Yes, the Fed is going to pretend that they’re willing to put the economy into recession. But that’s only because they believe any recession will be mild and short-lived. They are not prepared for the type of depression that would actually result from a winning fight against inflation. In fact, it’s not just a depression. It’s a far more severe financial crisis than the one we had in 2008. And if the Federal Reserve was not willing to allow the 2008 crisis to run its course, why would it be willing to allow this worse crisis to run its course?”

Instead of taking the hard medicine in 2008, the Fed blew more air into the bubble. We now have a much more dysfunctional economy. There is more malinvestment. More debt. More misallocation of resources.

If the Fed wouldn’t allow the economy to swallow the bitter-tasting medicine back then, why would they force-feed even worse-tasting medicine now?”

In this podcast, Peter talks about how not as weak economic data is the new strong and the continuing woes in the housing market.

Tyler Durden
Mon, 08/22/2022 – 14:30

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1st Circuit Says Maine’s Residency Rule for Medical Marijuana Suppliers Is Unconstitutional Protectionism


A federal appeals court says Maine's residency requirement for medical marijuana businesses is unconstitutional.

Supreme Court Justice Clarence Thomas expressed dismay last year at the “contradictory and unstable state of affairs” created by the federal government’s “half-in, half-out” approach to marijuana, which “simultaneously tolerates and forbids local use.” A federal appeals court recently provided a striking illustration of that confusing situation by ruling that Maine’s residency requirement for medical marijuana suppliers amounts to unconstitutional protectionism.

Maine’s Medical Use of Marijuana Act, enacted in 2009, requires that the “officers” and “directors” of businesses that sell cannabis to patients be residents of the state. Those terms are defined broadly to include managers and anyone with an ownership interest, meaning that even stockholders must be Maine residents.

High Street Capital, a corporation registered in Delaware, wants to buy Northeast Patients Group, a business owned by Maine residents that operates three medical marijuana dispensaries. Because that deal would run afoul of Maine’s residency requirement, the two companies challenged the law in federal court, arguing that it violates the “dormant Commerce Clause,” a doctrine that forbids interstate trade barriers aimed at protecting in-state businesses from competition. Last year, a federal judge agreed, and last week a divided three-judge panel of the U.S. Court of Appeals for the 1st Circuit upheld that decision.

Kirsten Figueroa, who oversees Maine’s medical marijuana program as head of the state’s Department of Administrative and Financial Services, argued that the dormant Commerce Clause does not apply to illegal products. Figueroa, joined by United Cannabis Patients and Caregivers of Maine, noted that federal law classifies marijuana as a Schedule I controlled substance, meaning it has a high potential for abuse, cannot be used safely even under a doctor’s supervision, and has no recognized medical applications. Far from seeking to facilitate cannabis commerce, the Controlled Substances Act (CSA) aims to stamp it out.

Since Congress invoked its powers under the Commerce Clause to prohibit the cultivation, sale, and possession of marijuana, it might seem strange to claim that the same constitutional provision requires Maine to loosen its restrictions on those activities. But notwithstanding the federal ban on marijuana, Congress has repeatedly approved an annual spending rider, known as the Rohrabacher-Farr Amendment, that bars the Justice Department from interfering with the implementation of state laws authorizing medical use.

That restriction was one of the policies Thomas had in mind when he described the federal attitude toward marijuana as “contradictory.” The spending rider also figures prominently in the 1st Circuit’s decision, which was written by Chief Judge David Barron and joined by Judge Sandra Lynch.

The Supreme Court “has long construed the Commerce Clause to be not only an affirmative grant of authority to Congress to regulate interstate commerce but also a negative, ‘self-executing limitation on the power of the [s]tates to enact laws [that place] substantial burdens on [interstate] commerce,'” Barron notes. “The defendants do not dispute that Maine’s residency requirement, if applied to a lawful market, would [violate] the dormant Commerce Clause….We are not persuaded that the dormant Commerce Clause can have no effect in a market in which Congress has made participation criminal, including even one in which, as is the case here, Congress has barred enforcement of the federal criminal prohibition in certain respects.”

The majority rejected Figueroa’s contention that interstate commerce in contraband is a contradiction in terms. In the 2005 case Gonzales v. Raich, Barron notes, the Supreme Court ruled that the Commerce Clause authorizes Congress to ban state-authorized cultivation and possession of medical marijuana even when it is never sold and never crosses state lines. The Court’s reasoning (which Thomas rejected in a vigorous dissent) relied partly on the observation that marijuana is a “fungible commodity for which there is an established, albeit illegal, interstate market.” In other words, the Court took for granted the existence of an interstate marijuana market, which Congress was “regulating” through the CSA.

“The prohibition that Maine’s Medical Marijuana Act seeks to impose on out-of-state actors entering that very market reflects the reality that the market continues to operate,” Barron writes. “That prohibition even indicates that the market is so robust that, absent the Medical Marijuana Act’s residency requirement, it would be likely to attract entrants far and wide.”

The appeals court adds that the Rohrabacher-Farr Amendment “further undermines the notion that no such interstate market exists.” That provision, Barron says, “hardly reflects a congressional understanding that the CSA succeeded in eradicating the interstate market in medical marijuana.” He notes that Congress has included the same rider in every appropriation for the Justice Department since FY 2015, “reflecting the fact that over time more than half of all states have legalized the market for medical marijuana to some extent.” The amendment, Barron says, shows that Congress “contemplates both that an interstate market in medical marijuana may exist that is free from federal criminal enforcement and that, if so, this interstate market may be subject to state regulation.”

Since the Rohrabacher-Farr Amendment implicitly views access to medical marijuana as beneficial, Barron says, the potential harm to consumers from protectionist measures like Maine’s is constitutionally relevant. “Whatever the circumstances may be with respect to other goods that Congress has deemed contraband, this is not a case in which Congress may be understood to have criminalized a national market with no expectation that an interstate market would continue to operate,” he writes. “Quite the opposite. Congress has taken affirmative steps to thwart efforts by federal law enforcement to shut down that very market, through the annual enactment of the Rohrabacher-Farr Amendment. And it has taken those steps, presumably, with an awareness of the beneficial consequences that those steps will have for consumers who seek to obtain medical marijuana.”

Barron sees no evidence that Congress has approved marijuana protectionism, notwithstanding the CSA’s blanket ban. Far from aiding that law’s goals, he says, Maine authorizes conduct that it prohibits.

“Such protectionism does, of course, stop out-of-staters from entering the market,” Barron writes. “But, it does so only by simultaneously insulating in-state actors who do choose to enter that market from competition. It thus threatens, in the way that protectionist measures necessarily do, to encourage precisely what the CSA seeks to stop—trade by in-staters in the relevant market….While Maine’s residency requirement does limit some actors from trading in medical marijuana, it does so in a way that, due to its protectionist nature, in no sense ‘aid[s]’ the policy expressed by Congress in the CSA.”

Writing in dissent, Judge Gustavo Gelpí agrees that Maine’s residency requirement “incontestably constitutes protectionist legislation.” But he argues that “the ‘fundamental objective’ of the dormant Commerce Clause to preserve a competitive national market is inapplicable, because Congress has already outlawed the national market for marijuana.” As Gelpi sees it, “illegal markets are constitutionally different in kind” from markets in legal products such as wine or eggs.

“The law presumes the public interest is best served by maintaining an unencumbered ‘national market for competition’ in legal goods and services,” Gelpi writes. “However, it makes little sense to retain this presumption when Congress has explicitly acted to make the market in question illegal, because the premise that the dormant Commerce Clause enshrines…does not hold. The Commerce Clause does not recognize an interest in promoting a competitive market in illegal goods or services or forestalling hypothetical interstate rivalries in the same.”

In 2020, business immigration lawyer Jack Scrantom notes in a post on Harris Bricken’s website, Maine “issued policy guidance stating it would not enforce the residency requirement for cannabis licensees in the recreational marketplace.” The Maine Attorney General’s Office determined that the state was “unlikely to prevail” in defending that requirement against a dormant Commerce Clause challenge.

Such challenges have been successful in at least two other circuits. Last year, a federal judge in Missouri, which is part of the 8th Circuit, permanently enjoined enforcement of a state rule requiring that medical marijuana businesses be mostly owned by people who have lived in Missouri for at least a year. Also in 2021, a federal judge in Michigan, part of the 6th Circuit, issued a preliminary injunction against Detroit’s preferential treatment of “legacy applicants” for recreational marijuana licenses, defined by residence in the city for at least 10 years.

Scrantom says the 1st Circuit’s decision “may lead to more challenges of similar state cannabis regulations within the First Circuit as well as in other jurisdictions.” Marijuana Moment suggests the ruling could have “far-reaching implications for interstate cannabis commerce” and “could create possible complications for social equity programs.”

Vanderbilt University law professor Robert Mikos, an expert on marijuana federalism, says the same argument that doomed Maine’s residency requirement could be deployed against bans on importation in states that have legalized marijuana. “I think this is going to be the next shoe to drop,” Mikos told Marijuana Moment. “I see no way to distinguish licensing preferences from those bans on imports and exports. I think they’re equally vulnerable.”

The post 1st Circuit Says Maine's Residency Rule for Medical Marijuana Suppliers Is Unconstitutional Protectionism appeared first on Reason.com.

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ACLU Abandons First Amendment in Colorado Gay Wedding Web-Hosting Case


Online album featuring gay wedding

Would you believe the American Civil Liberties Union (ACLU) and Republican Florida Gov. Ron DeSantis have something in common? They both believe that the state should be able to force web companies to host content that these platforms disagree with or find morally objectionable in some fashion.

If that sounds remarkable, check out the amicus brief that the ACLU submitted Friday defending the authority of the state of Colorado to make a small web company host pictures of gay weddings against the will of the company’s owner. Note how similar it is to Florida’s attempts to force web companies to carry campaign messages from political candidates against the platforms’ will.

Lorie Smith, owner of web design firm 303 Creative, is challenging Colorado’s Anti-Discrimination Act, part of which requires businesses in the state to accept customers regardless of race, sex, sexual orientation, and many other categories. Smith has moral objections to the legal recognition of same-sex marriage. She says does not intend to discriminate against any LGBT customers, but she also believes that forcing her to post images of gay weddings on her site is mandating that she carry expressive speech and violates her First Amendment rights.

The Supreme Court agreed in February to hear 303 Creative LLC. v. Elenis later this year. The question at hand is whether a public accommodation law can compel an artist to speak or remain silent without violating the First Amendment.

The brief by the ACLU rejects the central question and instead attempts to reframe the entire argument as whether “an artist who has chosen to open to the business to the public at large” can be prohibited by a public accommodations law from “discriminating against customers on the basis of a protected characteristic.” From the very start, we hit a problem that is consistent throughout this brief. The ACLU repeatedly treats refusing to host a particular image or message (a gay wedding) as discrimination against an individual or couple (a gay person or couple). This is obviously not the same thing, and it strikes at the heart of the flaws of the ACLU’s argument.

Then, the ACLU argues that because 303 Creative is a business that sells services to the public, it must offer those goods in a nondiscriminatory manner according to Colorado law. Again, the ACLU deliberate blends the message and the client: “So, too, here, 303 Creative need not offer any particular website service to the public, but once it chooses to sell wedding-website design services to the public at large, it cannot selectively decline to sell those same services to same-sex couples.”

Smith’s point is that she’s not refusing to sell all services to same-sex couples. She’s refusing to host wedding pictures of same-sex couples because she holds religious objections to gay marriages and, therefore, does not want her company to be forced to be a vehicle for expressing this celebration.

The ACLU would have us see speech discrimination and customer discrimination as the same thing. But if 303 Creative refused a customer’s request to host a bunch of images of an ISIS terrorist attack, is that discrimination against the customer’s religion if the customer is also Muslim? Clearly, it’s not. She’s not turning away the customer because he or she is Muslim. She’s refusing to host images she finds objectionable. In this exaggerated example, it’s very easy to recognize the imposition on free speech and the violation of the business’ First Amendment rights.

Similarly, it was fairly easy to see that Florida’s attempt to mandate that Facebook carry campaign statements by anybody who runs for certain offices in the state would force the tech giant to potentially carry some content it would find truly offensive and display it in front of other customers who probably didn’t want to see it. And so it shouldn’t have come as a surprise that federal judges determined that Florida did not have the authority to make such demands of these businesses and, by attempting to do so, violated their First Amendment rights.

In this case, the ACLU is doing everything in its power to encourage the Court to reject any consideration of Smith’s and 303 Creative’s First Amendment rights, even going so far as attempting to reframe the central question to make it appear as though these rights are not relevant to the case. The ACLU would have us believe this is just a neutral application of an anti-discrimination law and that creating exceptions for businesses that involve creative expressions or customized works is “unworkable.” This is clearly untrue. In 2019, Kentucky’s Supreme Court determined that a T-shirt printer couldn’t be forced to print pro-gay messages on his products in violation of his religious beliefs. The court was easily able to determine the difference between discriminating against a customer vs. rejecting a message. It is not confusing at all!

One of the more depressing inclusions in this ACLU amicus brief is its use of a Supreme Court case from 1968, United States v. O’Brien, to attempt to bolster its argument that the state of Colorado has the power to regulate speech in this way. In that case, David Paul O’Brien was convicted of violating federal law by publicly burning his draft card in protest of the Vietnam War. The Supreme Court determined that the prohibition against burning draft cards didn’t violate the First Amendment because the federal government had a compelling interest in maintaining the draft and the rule was narrowly tailored to achieve that goal.

O’Brien was represented in this case by Marvin M. Karpatkin, who after this case would become an ACLU attorney and join its board of directors. He died in 1975. There’s now a fellowship program at the ACLU named after Karpatkin.

In this brief, the ACLU essentially throws Karpatkin’s arguments in the trash bin all in favor of supporting the power of Colorado to force a web company to carry gay wedding photos. Once, lawyers connected to the ACLU fought for the right to burn draft cards. Today’s ACLU lawyers say, “No one disputed that O’Brien’s burning of a draft card to protest the Vietnam War was expressive. But because the government’s interest in prohibiting destruction of draft cards was unrelated to what any particular act of destruction communicated, intermediate scrutiny applied. And the result would have been precisely the same had O’Brien burned his draft card as performance art rather than political protest,” and apparently believe that this is a good and defensible outcome.

How far they’ve fallen. Take a look at this paragraph:

Any incidental burden these laws impose on public accommodations that sell expressive goods and services is no greater than necessary to vindicate the government’s anti-discrimination interest. Where the goal is to end discrimination in the public marketplace, an exemption for all businesses that might be deemed “expressive” (theaters, bookstores, architecture and law firms, hairdressers, gardeners, florists, caterers, and the like) would defeat the law’s very purpose.

This would seem to argue that Colorado could mandate bookstores and theaters to carry books and movies that contain content that the business owners find objectionable. I’ll do the ACLU a favor here and point out that’s not what they mean. It has again confused messages with customers. They are attempting to argue that businesses that produce “expressive” works can’t turn away customers because they fall under protected characteristics, which is true. But, yet again, they’re deliberately confusing “serving a customer” with “printing and distributing the customer’s message.”

The ACLU’s brief ends by listing a litany of wedding-related customizable products, including custom M&Ms, and wondering if this means that all of these businesses could refuse to serve same-sex couples. Do they want to? It’s worth noting here that most businesses don’t want to refuse service to them. This is not an actual crisis for gay couples. The only people who are potentially harmed here are those who get punished by the state.

If we’re going to push absurd hypotheticals here, let me conclude with some of my own. Could 303 Creative be forced by Colorado law to host pictures of a gay wedding where a Bible is burned as part of the ceremony? What about a Koran? What about an American flag? Or a Russian flag? Would the ACLU defend Colorado’s right to force 303 Creative to host images of a gay couple burning down ACLU headquarters at their wedding ceremony?

This is an embarrassingly bad brief by the ACLU, turning its back on decades of protecting citizens against authoritarian demands on citizen speech. They even threw one of their own lawyers under the bus in the process.

The post ACLU Abandons First Amendment in Colorado Gay Wedding Web-Hosting Case appeared first on Reason.com.

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ACLU Abandons First Amendment in Colorado Gay Wedding Web-Hosting Case


Online album featuring gay wedding

Would you believe the American Civil Liberties Union (ACLU) and Republican Florida Gov. Ron DeSantis have something in common? They both believe that the state should be able to force web companies to host content that these platforms disagree with or find morally objectionable in some fashion.

If that sounds remarkable, check out the amicus brief that the ACLU submitted Friday defending the authority of the state of Colorado to make a small web company host pictures of gay weddings against the will of the company’s owner. Note how similar it is to Florida’s attempts to force web companies to carry campaign messages from political candidates against the platforms’ will.

Lorie Smith, owner of web design firm 303 Creative, is challenging Colorado’s Anti-Discrimination Act, part of which requires businesses in the state to accept customers regardless of race, sex, sexual orientation, and many other categories. Smith has moral objections to the legal recognition of same-sex marriage. She says does not intend to discriminate against any LGBT customers, but she also believes that forcing her to post images of gay weddings on her site is mandating that she carry expressive speech and violates her First Amendment rights.

The Supreme Court agreed in February to hear 303 Creative LLC. v. Elenis later this year. The question at hand is whether a public accommodation law can compel an artist to speak or remain silent without violating the First Amendment.

The brief by the ACLU rejects the central question and instead attempts to reframe the entire argument as whether “an artist who has chosen to open to the business to the public at large” can be prohibited by a public accommodations law from “discriminating against customers on the basis of a protected characteristic.” From the very start, we hit a problem that is consistent throughout this brief. The ACLU repeatedly treats refusing to host a particular image or message (a gay wedding) as discrimination against an individual or couple (a gay person or couple). This is obviously not the same thing, and it strikes at the heart of the flaws of the ACLU’s argument.

Then, the ACLU argues that because 303 Creative is a business that sells services to the public, it must offer those goods in a nondiscriminatory manner according to Colorado law. Again, the ACLU deliberate blends the message and the client: “So, too, here, 303 Creative need not offer any particular website service to the public, but once it chooses to sell wedding-website design services to the public at large, it cannot selectively decline to sell those same services to same-sex couples.”

Smith’s point is that she’s not refusing to sell all services to same-sex couples. She’s refusing to host wedding pictures of same-sex couples because she holds religious objections to gay marriages and, therefore, does not want her company to be forced to be a vehicle for expressing this celebration.

The ACLU would have us see speech discrimination and customer discrimination as the same thing. But if 303 Creative refused a customer’s request to host a bunch of images of an ISIS terrorist attack, is that discrimination against the customer’s religion if the customer is also Muslim? Clearly, it’s not. She’s not turning away the customer because he or she is Muslim. She’s refusing to host images she finds objectionable. In this exaggerated example, it’s very easy to recognize the imposition on free speech and the violation of the business’ First Amendment rights.

Similarly, it was fairly easy to see that Florida’s attempt to mandate that Facebook carry campaign statements by anybody who runs for certain offices in the state would force the tech giant to potentially carry some content it would find truly offensive and display it in front of other customers who probably didn’t want to see it. And so it shouldn’t have come as a surprise that federal judges determined that Florida did not have the authority to make such demands of these businesses and, by attempting to do so, violated their First Amendment rights.

In this case, the ACLU is doing everything in its power to encourage the Court to reject any consideration of Smith’s and 303 Creative’s First Amendment rights, even going so far as attempting to reframe the central question to make it appear as though these rights are not relevant to the case. The ACLU would have us believe this is just a neutral application of an anti-discrimination law and that creating exceptions for businesses that involve creative expressions or customized works is “unworkable.” This is clearly untrue. In 2019, Kentucky’s Supreme Court determined that a T-shirt printer couldn’t be forced to print pro-gay messages on his products in violation of his religious beliefs. The court was easily able to determine the difference between discriminating against a customer vs. rejecting a message. It is not confusing at all!

One of the more depressing inclusions in this ACLU amicus brief is its use of a Supreme Court case from 1968, United States v. O’Brien, to attempt to bolster its argument that the state of Colorado has the power to regulate speech in this way. In that case, David Paul O’Brien was convicted of violating federal law by publicly burning his draft card in protest of the Vietnam War. The Supreme Court determined that the prohibition against burning draft cards didn’t violate the First Amendment because the federal government had a compelling interest in maintaining the draft and the rule was narrowly tailored to achieve that goal.

O’Brien was represented in this case by Marvin M. Karpatkin, who after this case would become an ACLU attorney and join its board of directors. He died in 1975. There’s now a fellowship program at the ACLU named after Karpatkin.

In this brief, the ACLU essentially throws Karpatkin’s arguments in the trash bin all in favor of supporting the power of Colorado to force a web company to carry gay wedding photos. Once, lawyers connected to the ACLU fought for the right to burn draft cards. Today’s ACLU lawyers say, “No one disputed that O’Brien’s burning of a draft card to protest the Vietnam War was expressive. But because the government’s interest in prohibiting destruction of draft cards was unrelated to what any particular act of destruction communicated, intermediate scrutiny applied. And the result would have been precisely the same had O’Brien burned his draft card as performance art rather than political protest,” and apparently believe that this is a good and defensible outcome.

How far they’ve fallen. Take a look at this paragraph:

Any incidental burden these laws impose on public accommodations that sell expressive goods and services is no greater than necessary to vindicate the government’s anti-discrimination interest. Where the goal is to end discrimination in the public marketplace, an exemption for all businesses that might be deemed “expressive” (theaters, bookstores, architecture and law firms, hairdressers, gardeners, florists, caterers, and the like) would defeat the law’s very purpose.

This would seem to argue that Colorado could mandate bookstores and theaters to carry books and movies that contain content that the business owners find objectionable. I’ll do the ACLU a favor here and point out that’s not what they mean. It has again confused messages with customers. They are attempting to argue that businesses that produce “expressive” works can’t turn away customers because they fall under protected characteristics, which is true. But, yet again, they’re deliberately confusing “serving a customer” with “printing and distributing the customer’s message.”

The ACLU’s brief ends by listing a litany of wedding-related customizable products, including custom M&Ms, and wondering if this means that all of these businesses could refuse to serve same-sex couples. Do they want to? It’s worth noting here that most businesses don’t want to refuse service to them. This is not an actual crisis for gay couples. The only people who are potentially harmed here are those who get punished by the state.

If we’re going to push absurd hypotheticals here, let me conclude with some of my own. Could 303 Creative be forced by Colorado law to host pictures of a gay wedding where a Bible is burned as part of the ceremony? What about a Koran? What about an American flag? Or a Russian flag? Would the ACLU defend Colorado’s right to force 303 Creative to host images of a gay couple burning down ACLU headquarters at their wedding ceremony?

This is an embarrassingly bad brief by the ACLU, turning its back on decades of protecting citizens against authoritarian demands on citizen speech. They even threw one of their own lawyers under the bus in the process.

The post ACLU Abandons First Amendment in Colorado Gay Wedding Web-Hosting Case appeared first on Reason.com.

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