Today, a federal judge ordered the FBI to “produce the information it possesses related to Seth Rich’s laptop.”
This case involves a multi-year fight by attorney Ty Clevenger to obtain records relating to the FBI/DOJ investigation of Seth Rich, particularly whether Rich was involved in the hack of the DNC or had communicated with Wikileaks.
This fight dates back to 2017 and includes two FOIA lawsuit. In the first lawsuit, the FBI produced no responsive documents. The parties knew the FBI had something, and so this sparked a second lawsuit – where the FBI somehow found 20,000 pages of potentially responsive documents. The court explains:
Of those 20,000 pages, the government found 1,596 pages of responsive documents, of which the government withheld 1,469 pages under various FOIA exemptions (privacy, law enforcement exemption, etc.).
The FBI also withheld the contents of Seth Rich’s personal laptop, which it possesses, in its entirety, alleging the privacy of Rich’s family in “preventing the public release of this information” outweighs the public interest in disclosure.
The court rejected that argument, stating “the FBI has not satisfied its burden of showing more than a de minimis privacy interest that would justify withholding information from Seth Rich’s laptop.”
It concluded:
What will the laptop reveal? Time will tell. (Time is especially relevant becausethe DOJ will appeal and drag this out.)
What might be more interesting is the FBI’s complete records on Seth Rich. The FBI has fought production of those records – first by failing to “find” its own documents, and now by alleging documents must be withheld due to “national security grounds” and the “basis that disclosure of the information would threaten intelligence-gathering efforts.”
The information in the FBI’s possession includes that which was “provided by foreign government agency authorities under an implied assurance of confidentiality.” It also may – or may not – include whether the FBI used a “code name” associated with Seth Rich. And, if FBI representations are to be believed, it also includes “details of intelligence activities, sources, and methods related to national security.”
Unfortunately, the court won’t require the production of this information. Some questions will remain unanswered. Read the full order here.
This is starting to look a lot like the popping of the dot-com bubble with one big difference — inflation.
Beginning in mid-June, we saw a significant bear market rally in stocks. But the recent declines have wiped out those gains and more. For instance, the Dow jumped 14% during the 2-month rally. By the close on Friday, Sept. 23, it was once again down 20% from its all-time high. That same day, the NASDAQ closed just 2% off its June low after a 23% rally.
As WolfStreet points out, the collapse of this bear market rally was predicated on the fantasy of a Federal Reserve pivot.
The bear-market rally happened because markets – meaning folks and algos playing in them – had this fabulous reaction to the Fed’s aggressive rate-hike scenario: They began fantasizing about a Fed “pivot” and about rate cuts and some even about QE all over again. Asset prices began to jump and yields began to fall.”
WolfStreet points out that this bear market rally is reminiscent of the dot-com era. During a similar two-month rally from May 27 through July 17, 2000, the NASDAQ jumped by 33% without ever getting back to its old high. Ultimately, the NASDAQ collapsed by 78%.
That bear-market rally in the summer of 2000 suckered a lot of people back into the market, thinking that stocks would be going to the moon again, and they got crushed.”
The difference between then and now is we have a CPI over 8%.
The Fed has inflated an everything bubble. Since 2008, the central bank has pumped over $8 trillion into the economy. It got away with this inflation for a long time because most of that money wasn’t getting to consumers. Instead, we saw asset prices spike – particularly the stock market and real estate.
The Fed tried to normalize rates in 2018 and the air started coming out of those bubbles. It had already pivoted back to rate cuts and QE long before COVID. In a sense, the pandemic saved the Fed’s bacon. It gave the central bank an excuse to pump trillions of dollars in new liquidity into the economy and reinflate the bubbles. But the extent of the quantitative easing and the fact that the government handed out trillions to consumers changed the dynamics. Suddenly, the inflation started showing up in the CPI.
The Fed denied it for months, calling inflation “transitory.” But once it became impossible to deny, it launched its inflation fight. Predictably, the markets tanked until they decided the Fed was about finished tightening. Now, reality has set in again and we’re back to the bear market.
WolfStreet sums it up.
These artificially inflated markets cannot even maintain their level amid rate hikes and QT. Even little-bitty rate hikes, just four in a year, and small amounts of QT caused markets to tank, just like interest rate repression and QE had caused them to soar. It was becoming clear to everyone: QT was having the opposite effect of QE.”
The question remains: what will the Fed do. Will it hold the course? Or will it do what it has done in the past — pivot back to inflationary, loose monetary policy to rescue the economy, as it did after the dot-com bust (setting up the 2008 financial crisis).
WolfStreet argues that there will be no Fed pivot. He thinks the central bankers will be willing to tank the economy to get inflation back to 2%, just as Jerome Powell promises.
There have been lots of people who said that the Fed will keep doing QT “until something breaks.” Last time it did QT until the repo market broke. That was when the banks stopped lending to the repo market, which then blew out, which cause the Fed to bail it out in September 2019.
“But this time, the biggest thing that the Fed is in charge of has already broken: price stability. Inflation is the worst it has been in 40 years. And the Fed is tightening in order to fix this huge thing that has broken – to bring this inflation back under control and down to 2% (as per core PCE). This could be a long and tough slog. And other things that might break along the way are by comparison just minor inconveniences.”
This is where I part ways with WolfStreet’s analysis. I think the things that break will be far more and “minor inconveniences.”
Just consider the impact on the national debt. When you run the numbers, it becomes clear the US government can’t operate in a high interest rate environment. And the US government isn’t alone under a big pile of debt. Corporations are overleveraged and consumer debt is at record levels.
So far, the Fed has stayed resolute to follow through with its inflation fight. Peter Schiff said the Fed still thinks it can do the impossible, and it will ultimately pivot. But not until it can no longer deny the impacts of its tighter monetary policy.
I think when Powell is really confronted with how ugly this is going to be, then we’re finally going to get that pivot. But this is a giant game of chicken, and I think Powell is going to keep up this pretense as long as he possibly can.”
The mainstream has conceded a recession looms, although most people say it will be short and shallow. But as Peter Schiff said, the bust needs to be proportional to the boom.
We’ve never had a boom this big. We’ve never had interest rates this low for this long. We’ve never had an economy more screwed up than the one we have right now. We’ve never had bigger asset bubbles, bigger debt bubbles, more misallocations of capital and resources. So, we have more mistakes that we need to fix now than ever before. So, how are we going to do that with a short shallow recession? We’re not. It’s going to be a massive recession. And again, the Fed has no stomach for that, and that’s why the Fed is going to pivot.”
Alan Greenspan was able to engineer a recovery after the dot-com bust with some rate cuts. Ben Bernanke was able to engineer a recovery after 2008 with rate cuts and QE. (And by recovery, I mean reinflate the bubbles.) But they didn’t have to contend with 8.3% CPI. Jerome Powell does. And that changes everything.
SoftBank’s Vision Fund Cutting “At Least” 150 Employees, About 30% Of Its Workforce
It’s officially “belt tightening” time over at SoftBank. Yes, it appears that being a “visionary” can only get you so far and when performance wanes and the cash spigot starts to dry up, real world consequences take hold.
SoftBank is now officially planning for cuts of “at least 30%” from its Vision Fund, new reporting from Bloomberg says this week. The company started to inform some workers on Thursday that the reductions would be taking place, the report says.
At least 150 workers of its roughly 500 employees at its Vision Fund will be affected. SoftBank and Masayoshi Son didn’t comment on the news, but Son noted back in August that he was going to be putting cost saving measures into place after his Vision Fund posted a monstrous $23 billion loss.
Recall, just days ago, we wrote about the “fiercely loyal” top lieutenant to Masayoshi Son that has been behind him and has supported his decisions for years.
The fall guy “guru”, profiled in an FT piece out last weekend, is Yoshimitsu Goto, who was described as being “fiercely loyal” to Masayoshi Son. Masa hired Goto all the way back in 2000 after stating: “I like the look of his eyes. Let’s hire him.”
Perhaps Goto isn’t just getting press now because of SoftBank’s recent troubles – instead, perhaps it is because three of Masa’s top executives have jumped ship over the last 18 months and Goto has been the exception.
As FT notes, SoftBank has lost its chief operating officer Marcelo Claure and strategy chief Katsunori Sago. Rajeev Misra, head of SoftBank’s Vision Fund, all in short order in less than 2 years.
Goto, in the interim, has become “indispensable”, the report says. And that’s not because he continues to defend Masa as the company’s Vision Fund suffers from terrible performance.
Masa’s “guru” says that the plan with the Vision Fund is to “stay the course”: “I won’t be surprised [if Son changed his mind] but I don’t think that’s likely. Investment firm is this company’s ultimate style. The basis of Mr Son’s thinking is that change is the best growth strategy to avert risks.”
We wouldn’t be surprised if Goto winds up being the fall guy for any future layoffs or underperformance…
On Wednesday, Department of Homeland Security Secretary Alejandro Mayorkas announced that the federal government would approve a “temporary and targeted” waiver of the Jones Act to allow a single foreign ship laden with diesel oil to dock there.
Complicating Puerto Rico’s ability to recover is the Jones Act, also known as the Merchant Marine Act of 1920. This deliberately protectionist federal law requires that any ships that transport goods between U.S. ports be American-made from an American-owned company and crewed by Americans. There are fewer than 100 such ships. It shields American domestic maritime shippers from foreign competition. By its very nature, it also drives up the prices of goods in far-flung parts of America like Puerto Rico, Alaska, and Hawaii. It also makes a crisis situation like a natural disaster worse because it limits who is legally permitted to assist these areas.
And so, a BP ship full of fuel to supply the country with power could not legally dock in Puerto Rico because it had already previously stopped in a Texas port. Many public officials and even some members of Congress had been asking DHS to provide blanket waivers allowing foreign ships to assist in resupplying the country. But as Reason noted on Tuesday, the Jones Act was recently amended to actually make it even harder for the federal government to give blanket permission for foreign ships to travel from port to port, even in a time of great crisis. DHS had to analyze the situation and determine that Jones Act–approved vessels were not sufficient to meet current needs and provide limited targeted waivers for specific ships.
That’s what happened Wednesday. “In response to urgent and immediate needs of the Puerto Rican people in the aftermath of Hurricane Fiona, I have approved a temporary and targeted Jones Act waiver to ensure that the people of Puerto Rico have sufficient diesel to run generators needed for electricity and the functioning of critical facilities as they recover from Hurricane Fiona,” Mayorkas announced.
He then insisted that the Jones Act is “vital to maintaining the strength of the American shipbuilding and maritime industries,” the company line in the Biden administration, which implies that it’s apparently government policy to drive up prices of goods for American consumers in order to benefit a much smaller number of people in the maritime industry. It’s anti-competitive cronyism, plain and simple.
Remarkably, the maritime industry loudly resisted even this single ship getting a waiver. The American Maritime Partnership (AMP) put out a press release Wednesday claiming to “debunk” the need for a waiver and that Puerto Rico’s shipping needs were being met, despite the governor of Puerto Rico begging the federal government to provide waivers.
The release contains this remarkable and completely shameless quote from AMP President Ku’uhaku Park that is worthy of some fisking: “This stunt by a foreign oil company showing up unannounced in Puerto Rico while on its way overseas hoping to sell its fuel at a premium to Puerto Ricans in need, and thereby triggering a public and political rush to judgment, is bad precedent, a circumvention of U.S. law, and should never be tolerated. American Maritime is dedicated to Puerto Rico and while foreign oil traders seek to line their pockets at the expense of the Puerto Rican people, we will always be committed to our fellow citizens, including our own employees and their families, in Puerto Rico.”
So, according to AMP, there is no shipping crisis in Puerto Rico that justifies Jones Act waivers. The release is full of quotes insisting that goods from Jones Act ships are getting to Puerto Rico just fine and that supply chain problems are happening due to land transportation issues. While there’s no doubt that there are all sorts of supply chain logistics problems in responding to the hurricane, AMP’s insistence that there isn’t a shipping problem is contradicted by Park’s own words, claiming that this foreign company is attempting to “sell its fuel at a premium to Puerto Ricans in need.” He amazingly goes on to complain about the foreign oil traders who “seek to line their pockets at the expense of the Puerto Rican people” by, you know, selling them fuel they need to turn their lights back on.
How is this at the expense of the Puerto Rican people? It’s complete gibberish attempting to deflect attention away from the cruelty of the anti-competitive practices that financially benefit Park (who is an executive at American shipping company Matson). This ship can’t be “taking advantage” of Puerto Ricans unless there is a shortage of available fuel that would drive up prices. And if that’s the case, then AMP’s insistence that the island is already getting shipped what it needs is not accurate.
This concept that certain companies should be able to control whether their competition is allowed to operate is reminiscent of the loathsome, anti-competitive “Certificate of Need” license regulations that plague the health care industry and drive up prices.
Eric Boehm and others have critiqued these laws here at Reason. Certificate of Need programs put government-mandated limits on health services and equipment by essentially giving health industry incumbents the power to prevent competitors from expanding what they provide. In Virginia, the state’s Certificate of Public Need law was used to stop a hospital in Salem from building specialized neonatal care facilities that just so happen to be offered by a nearby hospital in Roanoke. Despite support by the citizens of Salem, the state balked due to objections by representatives of the nearby hospital. Officials decided that the care unit simply wasn’t “needed” and rejected the license. What the people of Salem wanted and what the marketplace could support was irrelevant to the decision.
And, of course, it gave the other hospital a local monopoly on certain health services, just as the Jones Act gives a small number of shipping firms a monopoly on domestic shipping between U.S. ports. Park is telling the government and the people to ignore market signals, ignore what people in Puerto Rico say they need, and trust him and his buddies to decide whether the island truly needs other ships to come.
It’s like if Pizza Hut had the legal power to decide what companies can deliver food to your house. Perhaps instead of being allowed to enjoy Kung Pao chicken in the comfort of your home, Pizza Hut would decide that what you really “need” is more pizza.
Mayorkas was right to give the ship a waiver. The Jones Act is a plague on the marketplace that really needs to be purged.
Is the Food and Drug Administration (FDA) changing its tune on electronic cigarettes?
In May, Brian King was appointed head of the FDA’s Center for Tobacco Products. King is not known for championing e-cigarettes or reduced-risk alternatives to cigarettes. But after a few months on the job, he’s out on the media and conference circuit giving a clearer idea of how he envisions the future of nicotine regulation.
In an interview with the Associated Press on Monday, King was asked about surveys showing most people think e-cigarettes are just as dangerous as traditional cigarettes and whether that was a problem. “I’m fully aware of the misperceptions that are out there and aren’t consistent with the known science,” King replied. “We do know that e-cigarettes — as a general class — have markedly less risk than a combustible cigarette product.” King went on to say that communication campaigns must use science and evidence and be careful to avoid unintended consequences.
Earlier this year, Clive Bates, a tobacco harm reduction advocate and former chief of the anti-smoking charity Action on Smoking and Health, called the public misperceptions of vaping an “American crime scene.” Bates was referencing the 2020 Health Information National Trends Survey showing just 2.6 percent of Americans accurately believed e-cigarettes were “much less harmful than combustible cigarettes.”
Harm reduction advocates such as Bates believe these misperceptions about the risks of vaping are holding back many smokers from switching to a safer product and causing a rash of bad public policy decisions. These include bans on nontobacco flavors in e-cigarettes, capping nicotine levels, and taxes that make vapes just as expensive as cigarettes.
King’s acknowledgment that much of the public is wrong on the “known science” and that we “know that e-cigarettes — as a general class — have markedly less risk than a combustible cigarette product” is more straightforward than anything you’ll find on the FDA’s website.
“Many studies suggest e-cigarettes and noncombustible tobacco products may be less harmful than combustible cigarettes,” reads the FDA’s main page on e-cigarettes. “However, there is not yet enough evidence to support claims that e-cigarettes and other ENDS [Electronic Nicotine Delivery Systems] are effective tools for quitting smoking.”
After King’s statement Monday, many were hoping to elicit further detail in a speech he gave two days later at the Global Tobacco & Nicotine Forum (GTNF), an annual conference that bills itself as a “global exchange for views and ideas between public health experts, government representatives, the industry, and investors.” The conference’s sponsors and most attendees are drawn from the tobacco and e-cigarette industries.
Those looking for an expansion on King’s remarks to the A.P. were left disappointed. King told attendees that he believes in the “continuum of risk” regarding nicotine products. The idea is that combustible cigarettes are the most dangerous form of nicotine consumption and nicotine replacement therapies are the safest. Toward the safer end of the spectrum are products like e-cigarettes that offer smokers a satisfying nicotine product but without the smoke that may kill them.
But King didn’t mention the public’s misperceptions about the relative risks of e-cigarettes. Instead, King highlighted that the FDA had denied more than 99 percent of e-cigarette applications to stay on the market, and e-cigarettes still present a danger for youth.
When asked by Reason whether the FDA is going to commit any resources to correct misperceptions about e-cigarettes, King simply responded with “I can’t commit to any specific actions.”
When asked for further comment, an FDA spokesperson responded said the “FDA continues to explore how best to communicate with the public about the continuum of risk related to tobacco products. We cannot comment on or commit to any specific actions at this time. However, we do note that it is critical that the development and implementation of public health education campaigns are evidence based to best achieve intended effects on the target population while minimizing adverse consequences for the population as a whole.”
In other words, the FDA has no plan to correct any of the widespread misinformation about e-cigarettes anytime soon. If you want to know the real risks of e-cigarettes vs. combustible cigarettes, you’ll have to look to the U.K. government for that.
Six months before the COVID-19 pandemic prompted mass school closures nationwide, a K-12 district in Brooklyn became the vanguard of a citywide, nationally watchedpush to combat “desegregation” through scrapping selective admissions criteria and instituting the algorithmic lottery system of “controlled choice.” Meaning, families would rank their choices for middle school, and the Department of Education (DOE) would feed those preferences into a complicated sorting process through which government can better control the racial and socioeconomic distribution among the schools.
These admissions changes, which affected incoming middle schoolers the year my eldest daughter was entering sixth grade in that very same district, was prematurely declared a success upon arrival by the progressive Democrats who had pushed them through. It was “the white flight that wasn’t,” declared the Daily Newsheadline on a 2019 op-ed co-bylined by the relevant city councilman (now comptroller for the whole city) Brad Lander, and equity activists Nyah Berg and David Tipson from the advocacy group New York Appleseed. “New data reveal that Brooklyn school integration is working.”
Well, about that.
The pandemic, an asteroid-level event that permanently altered the landscape for public education in the U.S., is the Big Bang when it comes to plummeting enrollment numbers and catastrophic learning loss in government-run K-12. And the big-city systems that were most likely to be closed or to impose onerous COVID-19 restrictions from the fall of 2020 onward were the ones that suffered the most bleed along both measures.
But they are also, as in New York, the most likely districts to adopt such “equity“-driven policy changes as controlled choice for admissions, ending specialized schools and Gifted & Talented programs, and adopting “restorative justice” approaches to student discipline. Some of those policies were already correlating with unforeseen enrollment declines before the pandemic; others became political flashpoints during the COVID years as newly involved public school parents noticed with bewilderment that even shuttered systems were focusing to an obsessive degree on policies related to diversity, equity, and inclusion (DEI).
At the time Brad Lander et al. wrote their triumphant op-ed, the first-year enrollment results of Brooklyn’s District 15 indeed showed no significant difference in the districtwide proportions of the ethnic/racial categories the DOE tracks (white, Hispanic, black, Asian). But as I detailed back then, the overall enrollment of new middle schoolers declined for the first time in at least a half-decade, in part because the lottery/algorithm produced a disproportionately large number of choices that parents did not want for their kids. Sneered Lander & Co.:
Many observers prophesied that this long-overdue correction would cause many white and affluent families, including those in neighborhoods like Park Slope, to exit the public school system altogether.
We have predicted otherwise—both because the new plan hardly lays such a burden on these families as to cause anything so drastic, and, more fundamentally, because we have more faith in our community….
While we may have lost a handful of families who were not interested in building diverse and supportive school communities, we may be gaining some who are.
Or not. District 15, which indeed has some of the most traditionally sought-after middle schools in the city (particularly Park Slope’s M.S. 51, where both Lander and former Mayor Bill de Blasio had already graduated their kids, and where they chose to announce the district’s trailblazing equity policies), has seen since changing the admissions policy the number of enrolled sixth graders plummet by 17.6 percent, compared to a 9.6 percent decline for the rest of the city. (Those data go through the 2021–22 school year; we’re still waiting on the figures from this fall.)
Who bolted? White students and others whose family incomes did not qualify them for Free and Reduced Price Lunches (FRPL). Using income as a proxy for race (K-12 schools have been barred since 2007 by the Supreme Court from taking race as a direct consideration in enrollment), the district reserved spots in desirable schools for poorer kids while removing screens that had disproportionately kept them out, thus doubly decreasing the odds of the nonpoor being assigned their preferred choices.
“[The plan] resulted in a large increase in the shares of White students and non-FRPL students enrolling outside the public school system,” concluded researcher Clémence Idoux in a June 2021 MIT paper. Why? “Because they were assigned on average to schools with lower achieving potential peers after the integration plans….Compared to previous years, White applicants and non-FRPL applicants were offered on average a choice ranked…1.4 position[s] lower in their list.”
The admissions changes by Districts 15 and 3 (the latter of which, on the west side of Manhattan, ushered in a similar system the same year) did succeed in reducing both economic and racial segregation, Idoux concluded. But: “As a result of these white student and high income students enrollment losses, the integration plans’ effects on racial and economic segregation were halved in both districts.”
Keep in mind those were the results after the first year of the admissions change; the district and the city have been bleeding students ever since. New York’s DOE, which temporarily copied District 15’s removal of middle-school admissions screens for the past two years due to the pandemic, has seen K-12 enrollment shrink by 10 percent since the onset of COVID-19. “We have a massive hemorrhaging of students—massive hemorrhaging,” Mayor Eric Adams said in July. “We’re in a very dangerous place in the number of students that we are dropping.”
What’s happening in New York is happening across the country. Big city districts that were disproportionately closed and adopted more stringent COVID restrictions have faced the largest enrollment drops, suffered the worst learning loss, and seen the most unequal results among racial and socioeconomic groups. With funding dollars typically pegged to enrollment numbers, and with federal bailout money coming to an end, districts are sounding bewildered in the face of the enormity of change.
“We’ve never seen anything like this,” Marguerite Roza, the director of the Edunomics Lab at Georgetown University, recently told Education Week. The EdWeek Research Center last month published the results of a study examining enrollment trends in the nation’s 25 largest metropolitan areas from 2019–2020 to 2020–21, concluding in the headline: “Suburban Schools Saw Huge Drops in White Enrollment During the Pandemic.”
Suburban schools that first COVID year lost 5 percent of their white population, compared to 2 percent each for black and Latino kids, and 1 percent of Asians. The overall share of white students in those schools declined by two percentage points in three years, and 14 percentage points since the 2006–2007 school year.
I will admit here to a certain discomfort in using such crude and broad racial/ethnic classifications to sort populations. Race is a dodgy and ever-malleable construct at best, and we have too much experience with the worst, including and especially in schools. But also, these are the categories being measured by government (try as I personally might to opt out), and those categories’ distribution within various systems and outcomes are the object of tangible government policy, which has direct impact on the 50 million–plus K-12 students and their families nationwide, and indirect impact on everyone else, whether taxpayer or resident anywhere near a school.
The most widespread school-integration policy of my childhood—busing—led directly to families evacuating public education and high-tailing out of cities, which then experienced dysfunction and decline. Busing’s contemporary successor of controlled choice is producing a similar result, while failing to deliver measurable improvements in schools or measurable closures in the achievement gaps between racial/ethnic and socioeconomic populations.
And now, with the Big Bang of pandemic policies still fresh in parental minds, public educators are waking up to find their workplace landscape almost unrecognizable from even a few years ago.
“Some of them are scratching their heads, saying ‘This is something we didn’t expect,'” Suzanne Speck, executive vice president of School Services of California, recently told The 74 Million.
A new national survey of 3,100 K-12 parents by the consulting group Tyton Partners showed a one-year, 9 percent drop in the number of parents who said their kids were enrolled in government-run schools. From 2019–2022, the study estimated, private school enrollment increased from 5.7 million to 7.3 million, charter schools jumped from 3.5 million to 5.5 million, and homeschooling more than doubled from 1.9 million to 4.3 million. “This post-pandemic decline in K-12 public school enrollment,” the Tyton researchers concluded, “suggests that this is no temporary anomaly but may instead reflect a tipping point.”
New York City is now trying to tip the point back. This morning, school Chancellor David Banks announced that the citywide two-year suspension of middle-school admissions screening is over, while laying out new admissions criteria for high schools. “We do believe in high standards,” Banks said. Whether parents believe in that belief remains to be seen.
Bonus video: Here’s me at the beginning of 2020 talking about controlled choice.
A majority of Americans would oppose President Joe Biden’s plan to “forgive” billions of dollars of federal student loan debt if it led to higher taxes, according to a recent poll.
The survey (pdf), conducted by British data company YouGov on behalf of the libertarian Cato Institute, found that 64 percent of American adults said they are in favor of the federal government “forgiving” up to $10,000 in federal student loans for people earning less than $150,000 a year, or less than $300,000 per year for married couples.
“However, support for cancelling federal student loan debt plummets when Americans consider its trade-offs,” the Cato Institute said.
When asked whether they would support the same plan if it “raised your taxes,” 64 percent of respondents said they would oppose the move, according to the results.
Meanwhile, 68 percent of respondents said they would oppose the student loan bailout if it would “primarily benefit higher income people.” Seventy-six percent would oppose the plan if it would cause universities to raise their tuition and fees, while 71 percent would oppose it if that means more employers would require college degrees even when they are not necessary for the job.
“These data show that Americans don’t like the costs that many experts believe are associated with federal student loan forgiveness,” said Cato’s Director of Polling Emily Ekins.
The poll also shows some differences between Democrats and Republicans in their response to the trade-offs. “Without considering trade‐offs, Democrats strongly support (88 percent) federal student debt cancellation, as do a majority (58 percent) of independents,” a summary of the finding reads. “However, Republicans oppose about 2 to 1, with 63 percent opposed.”
“A majority (56 percent) of Democrats would continue to support student debt cancellation even if it raised taxes,” it continued. “But Democrats turn against forgiving $10,000 in student debt per borrower if doing so meant colleges would raise their prices (67 percent) or if it led to credential inflation (64 percent).”
The poll was conducted online between Aug. 17 and Aug. 23 among 2,227 American adults, with an error margin of plus/minus 2.39 percentage points.
Plan Faces Legal Challenge
Under the plan unveiled Aug. 25 by U.S. Education Secretary Miguel Cardona, individual borrowers earning less than $125,000 a year or families earning less than $250,000 will be eligible for up to $10,000 in debt cancellation, while Pell Grant recipients who meet those income standards will be eligible for relief of up to $20,000. Pell Grants are typically awarded to students from low-income households to help them cover their college expenses.
In a memo released the day before the announcement, Cardona said the plan is justified under what’s known as the HEROES Act, a 2003 higher education law created as a response to the Iraq War.
Specifically, the law states that the education secretary may “waive or modify any statutory or regulatory provisions” relating to federal student financial aid for those serving in the military during a war, those living or working in an area affected by a disaster, or those who “suffered direct economic hardship as a direct result of a war or other military operation or national emergency.”
According to Cardona, the federal government has declared the COVID‐19 pandemic a national emergency that encompasses the entire country, which means that his government can invoke the HEROES Act to provide relief for every borrower living in the United States.
The U.S. Education Department has failed to prove that “the broad class of 43 million borrowers ‘suffered direct economic hardship as a direct result of a war or other military operation or national emergency’ with respect to the COVID-19 pandemic,” reads the complaint filed Sept. 12 by Daniel Laschober, who ran in the Republican primary for Georgia’s U.S. Senate seat in 2016.
“[The HEROES Act] states the Secretary of Education is not required to exercise the waiver or modification authority on a case-by-case basis; however, the amount of student loan forgiveness per person or per household as determined by [the Education Department] is arbitrary and capricious,” it added.
Just days after a North Dakota man admitted to killing an 18-year-old because he was a Republican, supporters of the ultra-progressive Democratic group known as The Squad, attacked a group of Republicans holding a vigil in Boston on Sept. 24.
Pressley, along with Congresswomen Alexandria Oscar-Cortez, Ilhan Omar, Rashida Tlaib, and Cori Bush of Missouri—all of whom make up The Squad—were holding a sold-out event inside the Somerville Theatre when some of their supporters allegedly attacked Palmer and other men with him.
At least one of the men was hospitalized from the injuries he sustained from the attack and can be seen in the video laying on the ground and bleeding.
“These people are despicable and they are terrorists,” said Palmer, who accused Pressley of sending the men “to shut us up.”
Pressley’s office did not return multiple phone calls made by The Epoch Times about the incident.
Palmer said he is outraged that no one in the Democratic party or liberal media is talking about the death of 18-year-old Cayler Ellingson, killed last week by 41-year-old Shannon Brandt.
According to police reports, Brandt admitted to killing Ellingson after deciding he was a member of a “Republican extremist group.”
Brandt, who admitted to getting in his car, seeking out Ellingson, and then running over him, told police he was afraid the 18-year-old was coming to get him.
“If this was a black kid killed by a white cop it would be all over the news,” said Palmer, who is black.
The violence against Palmer and the others broke out as Dr Ibram Kendi, author of the book “How to Be an Antiracist” was hosting The Squad event.
Jim Lyons, chairman of the Massachusetts Republican Party attended the vigil for Ellingson earlier in the day. He told The Epoch Times that he is outraged by the double standards behind the way Ellingson’s death is being handled.
Shortly after admitting to killing Ellingson, Brandt was released on bail.
“It is an absolute outrage that the people on Jan. 6 are still in jail and this man is already free,” said Lyons, referring to people arrested last year outside the Capitol in what Democrats refer to as the “Insurrection.”
“Horrendous” CarMax Results Confirm Fed Has Successfully Pushed US Economy Off A Cliff
So much for that used-car price bubble, one of the main drivers – pardon the pun – behind the inflationary surge of 2022.
Shares of US auto dealers cratered today after CarMax’s Q2 reported catastrophic results which wildly missed estimates, sparking concern about the whole group. EPS of only 79c, almost half the $1.40 consensus estimate, shocked markets, while net sales of $8.14 billion also missed expectations. The stock lost a quarter of its value on Thursday.
A soundbite from the Vital Knowledge newsletter set the tone: it said that KMX “horrendous report” was bad for the stock and autos, but would be welcomed by Fed Chair Jerome Powell as proof the Fed has successfully pushed the economy into a recession. That’s because vehicle affordability issues stemmed from inflationary pressures, higher interest rates and low consumer confidence.
On the other hand, the results will exacerbate concern about the automotive industry. Indeed, the entire US automotive industry is being hammered by soaring interest rates and a stretched consumer. GM and Ford are also among the biggest decliners with Ford warning last week on inflation costs.
The silver lining: used car prices – which as noted above had an outsized contributed to high inflation – are finally tumbling as the next Manheim Used Car index update will undoubted show. But, as Bloomberg notes, the overall pain in a cyclical industry will outweigh that point. The auto complex and cruise lines (another consumer proxy) made consumer discretionary the worst performer in early US trading. Tech and real estate continue to get smacked by rising yields. This is just the latest confirmation that crushing inflation comes at a cost, which is usually a collapse in demand and a recession.
There was another silver lining: since it was unbridled consumer spending (thanks trillions in Biden stimmies) that prompted the Fed’s erratic response to crush the economy, observing first hand just how hard the US consumer is being crushed by soaring rates (as a reminder, the average mortgage just rose above 7% for the first time in 22 years earlier this week), may finally force the Fed to recognize that nuking inflation in a world where there is nothing more than smouldering, recessionary rubble, may not be the best strategy.
During my many battles fighting against cronyism, I have often been accused of being hard on government while letting businesses off the hook. This accusation is weird. Defending the free market is quite different from a blanket defense of businesses. I am pro-business only insofar as I am pro-market—that is, I’m “pro”-allowing consumers to spend their money as they choose and “anti”-special privileges given by government to any business.
As usual, Nobel Prize-winning economist Milton Friedman said it best: “You must separate out being ‘pro-free enterprise’ from being ‘pro-business.’…Almost every businessman is in favor of free enterprise for everybody else, but special privilege and special government protection for himself. As a result, they have been a major force in undermining the free enterprise system.”
Indeed, when you advocate for the free market system, you quickly learn that businesses are all in favor of competition, tax cuts, and deregulation only until they aren’t—meaning only until subsidies might benefit them. A good example is their well-known champion, the Chamber of Commerce. On one hand, you can always count on the Chamber to join in fights to reduce the burdens government imposes on its members. However, its leadership also frequently embraces loads of special favors for its members—favors such as export subsidies and targeted subsidies or tax credits.
The Chamber’s messaging says as much by highlighting that it is a group of businesses that supports the interests of its members. Like most business organizations, it doesn’t exist to support the free market and will sometimes defend all sorts of government-granted privileges.
With rare exceptions, individual companies act similarly. If a subsidy is good for a particular business, it will seek it out. Sometimes a specific firm might even demand more regulation on its industry if it believes that it can better absorb the costs than its smaller or more innovative competitors can.
This reality is in play at all levels of government. Local occupational licensing boards, which decide who is eligible to work in dozens of different professions, are often occupied by professionals from within the same industry. These board members angle to keep their competition out, either by outright refusing license applications or by increasing the burdens that newcomers must overcome. This is an easy way for incumbent firms to close the door behind themselves and lock out competitors who, were they allowed to enter, would offer more choices and cause the industry to better serve consumers.
Remember the fight between the monks of St. Joseph Abbey in Covington, Louisiana, and the embalmers and funeral directors of that state? The monks wanted to sell unadorned, handmade pine and cypress caskets. Funeral directors and embalmers didn’t like this competition and resorted to using the power of the state licensing board to forbid it. Eight of the nine board members worked in the funeral industry.
Thankfully, the Institute for Justice represented the monks and in 2013 won a victory against the cronies. Unfortunately, many businesses in many industries around the country that are oppressed by licensing boards continue to be victimized without recourse.
For all these reasons, I, like many other free market advocates, do not consider myself pro-business. In fact, those who read me regularly know that I would like to get rid of all forms of government handouts, whether that means subsidies, loans or loan guarantees, entry restrictions such as those created by occupational licensing, and protectionist barriers like tariffs.
However, as shameless as many businesses are about lobbying for privileges, it’s silly to think that they are somehow as responsible as politicians for the rampant cronyism that exists. If politicians were not so willing to hand out favors to influential or popular firms, then businesses would spend little time trying to get those favors. Without the carrot, businesses would instead dedicate more of their time and resources to pleasing consumers.
So, let’s be honest: The decision to grant privileges to businesses rests exclusively in the hands of government officials. The ones with the power to say yes or no are in government. The ones getting rewarded with campaign contributions from special interest groups or votes are in government. The ones with the power to end cronyism, but who refuse to do so, are in government.
That’s why those of us who fight cronyism direct our fire chiefly toward the government. We want it to stop being so “pro-business” and instead be pro-competition and consumers.
