Watch: Climate ‘Czar’ John Kerry Lauds China, Says They Have More Electric Cars

Watch: Climate ‘Czar’ John Kerry Lauds China, Says They Have More Electric Cars

Authored by Steve Watson via Summit News,

In an MSNBC interview Wednesday, Biden’s so called ‘climate car’ John Kerry refused to criticise China for being the globe’s biggest polluter, and instead defended the Communist state, reasoning that it has more electric vehicles than the U.S.

Kerry was asked about China’s repeated refusal to act in accordance with other nations in reducing carbon emissions.

“What can be done about China and their seeming reluctance to participate in affairs of climate control with other nations?” the host asked.

Kerry claimed that “China, interestingly enough … has a plan,” while admitting that “they could be doing more.”

Could be doing more?

That’s some understatement. China is the biggest emitter of fossil fuel carbon dioxide emissions on the globe, accounting to close to A THIRD of all emissions.

China emits more greenhouse gas than the entire developed world combined, research by the Rhodium Group has concluded.

If you believe that is killing the planet, as Kerry claims he does, then China should be repeatedly criticised as the primary culprit.

Instead, Kerry lauded the communist state, further claiming that “more electric vehicles will be put on the road over the next year or so in China than in all of the rest of the world put together.”

“I’m not excusing China,” Kerry said, adding “I’m just telling you that China is moving to do additional things. They are deploying renewable power at a rate that exceeds all other nations, they are the largest manufacturer of renewables in the world, and so China is moving.”

Watch:

Kerry, along with other Biden officials, has repeatedly touted electric cars, which cost on average close to 70 thousand dollars and in many cases lead to more carbon emissions than regular cars.

While Kerry repeatedly claims climate change is a grave existential threat that is worth hundreds of thousands of Americans losing their jobs to combat, he refuses to give up traveling on private jets:

Indeed, Kerry’s family private jet has emitted over 300 metric tons of carbon since Biden took office, federal data shows

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Tyler Durden
Fri, 09/30/2022 – 13:23

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Carnival Shares Crash As Cruise Rebound Sinks

Carnival Shares Crash As Cruise Rebound Sinks

Carnival Corp. shares crashed Friday morning as fuel prices and inflation delayed its return to profitability. There’s concern that the cruise ship rebound post-Covid has stalled amid waning consumer demand. 

The world’s largest cruise ship operator missed EPS and EBITDA estimates for the third quarter. It expects advance bookings for the fourth quarter to fall below average trends — a surprise to estimates just weeks ago.

The cruise ship operator has been discounting tickets and increasing advertisements to attract passengers. Still, the occupancy rate for the third quarter was 84%, coming in short of the 86.5% average estimate analysts surveyed by Bloomberg. 

“We are continuing to close the gap to 2019 as we progress through the year, building occupancy on higher capacity and lower unit costs,” said CEO Josh Weinstein.

Revenue in the third quarter increased to $4.31 billion from $546 million in the same quarter last year but missed Wall Street analysts’ average estimate of $4.90 billion, according to IBES data from Refinitiv. Net losses were $770 million, or 65 cents per share, from $2.84 billion, or $2.50 per share, a year earlier. Revenue has missed expectations for ten consecutive quarters. 

Similarweb travel and leisure analyst Jim Corridore told Reuters the downward revision to the fourth quarter is not as much due to slowing demand or revenue problems but rather soaring costs to operate vessels, such as higher fuel, food, and labor prices. 

Carnival expects 2023 bookings “slightly above the historical average and at considerably higher prices” than 2019 when normalized for future cruise credits. 

The demand outlook is very ominous. Here’s what the Miami-based company said: 

Events and conditions around the world, including war and other military actions, such as the current invasion of Ukraine, inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel, have led, and may in the future lead, to a decline in demand for cruises, impacting our operating costs and profitability.

The stock crashed as much as 23% this morning to levels not seen since 1993. 

Also, several of Carnival’s bonds were the largest decliners in the junk bond space. Equity and bond prices for other cruise liners also fell. 

This is the latest example of consumer-sensitive companies warning about downbeat earnings, inflationary woes, and weakening consumers. 

Tyler Durden
Fri, 09/30/2022 – 13:00

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“Yes, The Market Is Categorically Unfun And Ugly” – What JPMorgan’s Traders Think Happens Next

“Yes, The Market Is Categorically Unfun And Ugly” – What JPMorgan’s Traders Think Happens Next

Today is the last day of Q3 2022, and so far this quarter, the S&P is down 25% from its all time highs, and down 15% from its peak of the summer rally, it is also set for a -3.8% quarterly loss – the third negative quarter in a row – the longest such stretch since 2008.

“So where we go from here?” That’s the question JPMorgan market intelligence trader Andrew Tyler asks this morning, and to answer it he quotes from a handful of JPM strategists and traders. We start with the JPM trading desk:

Ronald Alder (TMT)

Yes, the market is categorically unfun and ugly. Equities remain at the mercy of eco data and the bond market. Economic data remains solid (PCE, Jobs, etc.) albeit backwards looking and, in concert with the fed commentary, won’t allow for the market to be constructive just yet (even as high frequency data points to lower inflation). Yesterday’s Long-Only buyers in TMT (primarily the megacaps) are notably absent or more passive, while see more defensive buying in Telco, etc. AAPL breaking is making things a bit precarious for everyone and everything. The desk is 1.3:1 better for sale now with volumes down in the HSD% range. It’s early, but conversations continue to skew bearish with the challenge to find the bullish narrative. I still think the risk-reward is fairly balanced here at 3600-3700.

  • The tape remains very choppy and macro driven. ETF volumes are currently in the high-30%s (and were >40% this am). Liquidity in S&P futures is ok while Treasuries (and from what I hear in the bond market) remains abysmal. The strength in the MOVE Index and the sustained VIX Index levels have led to risk management challenges (which typically leads to de-risking) and broad frustration. It’s hard to fight the Fed commentary (and CBs more broadly) + hot global macro data. It remains The Fed Funds ceiling – which was a tailwind for the past two days – has crept back up today to ~4.53%.
  • We have been consolidating for a little while this am 3620-3650. Our supply is drying up a bit (we are now 1.2:1 better to buy on the desk) and there’s a lot of hope (again, per [@Jack Johnston] perhaps not the best strategy – but sometimes you must work with what you have) that we could rally post the European close

Brian Heavey (Consumer)

NKE: Overall the print is mixed; the top-line is very strong (NA nearly doubled our estimate at 10% FXN vs. St. 4.5%, EMEA in-line and sequential improvement in China). EPS beat JPM and missed Street by a penny (.93 vs. St. .94 and JPMe .87). Higher tax rate hurt EPS by 5 cents – so revenues and operational EPS beat vs Street. The GM was down ~220bps which offset the revenue beat and is tied to the inventory clearing actions NKE has been undertaking (recall Boss has been previewing this has seasonal inventory has being cleared). We will guide on the call which will be the main driver of the stock (as well as information on inventory clearance).

  1. The desk was very active yesterday w/ primarily LO demand in discretionary and supply in Staples (i.e. much more “risk on” in nature). Client activity is down substantially today as the daily volatility remains paralyzing.
  2. I think the magnitude of the KMX miss shows just how much downside remains in SPX earnings estimates. Yes, I think expectations were low, but KMX embodies all of the issues facing the market right now: Weakening consumer demand, higher SG&A (primarily Labor), and difficulty in forecasting given a rapidly changing macro environment. This follows an EPS cut from VFC yesterday, and while a lot of VFC’s issues are company and brand specific, it was another data point that the $230 EPS estimate for the SPX that even the bulls are clinging to is probably too high.
  3. It’s not all bad today… we are finally seeing the DXY stop making new highs. I think if we can move the USD into a downtrend it will provide some relief to EPS estimates (especially in the more FX sensitive staples names). Today’s move lower is immaterial in the context of the last few weeks rip, but something to watch going forward

Stuart Humphrey (TMT)

MU | Bad Q, worse guide. Q4 revs in at $6.64B vs STe at $6.73B and JPMe at $6.56B (we lowered estimates into the print) with Q1 guide well below as revs for Q1 to be $4.25B at midpt vs STe of $5.71B came in well below expectations – GMs down below 30%, likely cutting utilization. Double ordering and supply chains are easing. Stock might be down more prob if not for positioning and the 50% capex cut vs last year.

Then we move on to the JPM strategists and economists: 

Nikolaos Panigirtzoglou (strategist)

Nikolaos reminds us that cash allocation for non-bank investors has risen sharply this year due to simultaneous decline in both equities and bonds, and “a backdrop of high cash allocation may provide backstop for both equities and bonds likely limiting any further downside from here.” JPM still feels like a bear rally would be difficult to launch without a better CPI print to boost the market sentiment. As we are closer to Q3 earnings, a better-than-expected earnings and companies outlooks may also trigger a rally, but the margin shrinking and FX risks are still the biggest unknowns. More bullets from his note below:

Following this year’s unprecedented rise in bond yields, we find that non-bank investors globally have erased 14 years of previous bond overweights and lowered their allocation to bonds to only 17% currently, even below the pre-Lehman crisis average of 18%.

We see two main implications from this low bond allocation. First, going forward a sustained bull market in equities could require a bull market in bonds. Second, the pressure on multi asset investors to sell equities to offset the mechanical increase in their equity allocations stemming from bond price declines has diminished.

Outside any interplay between equity and bond allocations, a backdrop of high cash allocations provides in our opinion a backstop to both equities and bonds, likely limiting any further downside from here.

BoE calms concerns over collateral calls for now.

Revenue has declined for ethereum block makers post merge, yet the staking yield has increased

This year’s rise in bond yields is of historic proportions. The 250bp YTD rise in the Global Agg bond index yield that took place in a period of nine months, represents the steepest and largest rise in the history of the index, exceeding the bond yield rise of 1994. What is even more unprecedented is the decline in the return of the Global Agg bond index on a currency unhedged basis. Effectively more than a decade of previous returns has been unwound in a period of only nine months.

Similar to previous large bond selloffs, this year’s bond selloff has been taking place against a backdrop of very low liquidity. This is shown in Figure 3, which shows that, for most of this year, the market depth for USTs has been even lower than that seen in March 2020 at the peak of the pandemic crisis.

In other words, at the current juncture of very low market depth and elevated rate volatility one is feeding the other in an intense way: as rate volatility rises bond market makers step back from their market making role and raise bid offer spreads inducing low market depth and lower liquidity, which in turns creates even more rate volatility.

Michael Feroli (economist, discussing net trade)

So far the factory sector has held up well in the face of a surging dollar. But that’s unlikely to last, as lagged exchange rate effects and a European recession hit exporters. We expect net trade will subtract a little more than 1%-pt from GDP growth in ‘23.

Fans of Kung Fu movies will be familiar with the delayed touch of death: a lethal blow whose effects are only realized after the passage of time. The closest equivalent among the various monetary transmission channels has to be the exchange rate channel. Whereas some financial conditions (e.g., mortgage rates) manifest themselves in the economy in a matter of months, historically it can take several quarters for the effect of moves in the exchange rate to play out in export and import growth.

In this note we discuss what these lags—combined with the recent strength of the dollar— imply for the outlook for trade and manufacturing next year. Layered on top of the dollar appreciation is a looming recession in the Eurozone, one of the US’s largest trading partners. We also discuss why the lags from the dollar to trade may be even longer than usual now, and that when the dollar effects do hit they may hit with even more force than usual. All in, we think trade could subtract more than a percentage point from GDP growth next year, with more drag to come in ’24.

Trade models are pretty simple, as far as economic models go. Demand for exports is determined by foreign income (GDP) and by the relative price of domestically-produced goods, i.e., the real exchange rate. Demand for imports is similarly a function of domestic income and the real exchange rate. Looking at the first of these, foreign income, Europe – both the Eurozone and other Europe—accounts for about a quarter of exports and appears to be heading into recession.

More generally, the J.P. Morgan forecast for our trading partners next year looks for one of the slowest growth years outside of global recessions (Figure 2).

The other main driver of US trade performance is the real, trade-weighted dollar. The real exchange weight is the nominal exchange weight adjusted for the price level differential between countries. Since various price indices can be used, there are various real exchange rates. The J.P. Morgan real dollar indices are up between 13% and 18% since the beginning of the year. Taking the average, and using our estimated trade elasticities, over time this should reduce the level of GDP—through both lower exports and more domestic demand shifted to imports—by over 1.5%-pts.

Tyler Durden
Fri, 09/30/2022 – 12:40

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Guns Aren’t a Public Health Issue


nyt-gun-control

The New York Times published an 11-minute documentary in June titled “‘It Was Really a Love Story.’ How an N.R.A. Ally Became a Gun Safety Advocate,” which tells a heartwarming story of how friendship transcended political differences and convinced a right-wing partisan to come to terms with the truth about firearms.

The film stars a couple of improbable friends: Dr. Mark L. Rosenberg, who for many years oversaw research on gun violence at the Centers for Disease Control and Prevention (CDC) as the director of its National Center for Injury Prevention and Control, and “NRA Pointman” Rep. Jay Dickey (R–Ark.), who was the author of an amendment inserted into a 1996 spending bill that prohibited the CDC from using federal funds to advocate for gun control.

The story is also framed by the findings of a famous (or infamous) 1993 CDC-funded study, which was “the first piece that we funded by external scientists,” Rosenberg recounts. It allegedly showed that owning guns made Americans overwhelmingly less safe. According to the film, the National Rifle Association (NRA) lobbied for the Dickey Amendment because of the 1993 study’s damning results. The organization “didn’t think it would be good for business,” Rosenberg says, “and they went to Congress, and they said, ‘You have got to stop this research because it’s going to result in all Americans losing their right to have a gun in their homes.'”

Dickey and Rosenberg started out as “mortal enemies,” but after making small talk about their kids during a chance conversation they developed “an incredible friendship,” as Rosenberg recounts. Years later, they were habitually ending their conversations by telling each other “I love you,”  and “we really meant it,” Rosenberg says. Through the power of this human connection, Dickey ends up seeing reason and changing his mind. He comes to believe that the amendment bearing his name was a mistake. 

It’s a story of redemption through friendship that’s well-tuned to our own hyperpolarized times. The lesson is that if blind partisans aren’t swayed by empirical evidence, human connection might just do the trick. “Underneath what people think are such opposing forces are some very important shared values,” Rosenberg says.

Although the moral of the documentary is undoubtedly true, every other detail is wrong. The takeaway from the story of Dickey, Rosenberg, and the 1993 gun study at the center of the piece is that the congressman was correct to begin with. The CDC shouldn’t be studying gun violence.

Titled “Gun Ownership as a Risk Factor for Homicide in the Home” and published in The New England Journal of Medicine, the 1993 study looked at 388 people who had been killed in their homes and matched them to 388 neighbors of similar age, sex, and race. One hundred and seventy-four of the victims lived in houses where at least one gun was present versus only 139 of the matched controls.

With scary music and breathless claims, the video tells viewers that if you had a gun in your house, you were 200 percent more likely to be killed with a gun in your home and 400 percent more likely to kill yourself. 

These are both exaggerations and misstatements of the study results. It didn’t address suicide risk at all, nor gun homicides. It found households in which a resident had been murdered at home by any means had a 25 percent greater frequency of having a gun, not 200 percent. But this doesn’t mean owning a gun increases your risk of being killed by 25 percent. 

This is a classic statistical error known as the “base rate fallacy” and is particularly important when studying rare events, like people murdered in their homes. Suppose 10 people are murdered in their homes, and five of those homes had guns. A matched set of 10 people who were not murdered in their homes found only four homes had guns. So there are 25 percent more guns in the homes of murder victims than matched nonmurder victims (Five vs. four).

But what if you put those 20 people in the context of another million, none of whom were murdered in their homes, half of whom had guns in their homes and half of whom didn’t. The rate for gun owners to be murdered at home becomes five out of 500,009, while the rate for non-gun owners becomes five out of 500,011. So now we find that the risk is 0.0004 percent higher.

In other words, being murdered in your home means you have a 25 percent higher chance of having a gun, but having a gun means you have only a 0.0004 percent greater chance of being murdered in your home. Those are not the same thing.

The finding that owning a gun made study subjects less safe was also a conclusion selected from much stronger statistical results that didn’t fit the authors’ political views and, thus, weren’t mentioned in the study. Yes, 25 percent more victims’ homes had guns than control homes, but 38 percent more victims had controlled security access to their property. Why not lobby against gates as a public health matter? Twenty times as many victims had gotten in trouble at work because of drinking, so why worry about guns when drinking at work is two orders of magnitude more dangerous? Renting and living alone were far more dangerous than having a gun. Victims were less likely than controls to own a rifle or a shotgun, so why not a government program to trade in handguns for long guns?

Another issue is the study design. Comparing victims to nonvictims can make sense in medicine. When a new disease appears, for example, researchers compare victims to outwardly similar nonvictims to get clues about the cause. In the early days of AIDS, the CDC identified a “4H club” of Haitians, homosexuals, hemophiliacs, and heroin addicts. Most of the sick fell under one of those four categories, whereas non-“4H” members were seldom infected. While the first H turned out to be a false clue, the last three suggested correctly a blood-to-blood or blood-to-mucous membrane transmission.

With a new disease, we don’t know much about transmission. But with gun ownership, we can identify obvious mechanisms, such as the gun owner shooting himself, or an attacker stealing the gun and shooting the gun owner. But if the gun in the house wasn’t the murder weapon, that homicide shouldn’t be included in the study.

Therefore, for guns, it’s silly to lump all deaths together. The majority of the deaths in the households included in the study were not caused by guns, and when a gun was used, the researchers did not determine who owned it. We also don’t care equally about all deaths. If a woman kills a violent attacker threatening her family, that’s a bad thing only to a tunnel-vision public health researcher adding up total deaths.

A more technical criticism is that the study uses flawed statistical methodology. Most journals require research to demonstrate the results are unlikely to result from random chance. Overall, 40.6 percent of subjects and controls had guns in the house. If gun ownership has no effect on homicide rates, there’s a 4 percent chance that 174 or more of the subjects would own guns. That’s less than the arbitrary 5 percent threshold many journals use, so the results are deemed statistically significant. The researchers did a more complex statistical analysis to arrive at the same 4 percent significance.

The issue with both my simple calculation and the researchers’ more complex one is they are only accurate if there are no errors in the data, the precise effect of all controls is known, and all relevant controls are included. We know there are significant errors in this kind of data, we have little idea about the effects of controls, and we know there are many relevant factors that were not measured. 

A good rule of thumb many practicing statisticians use is to ignore any odds ratio below three—that is, you’d want to see three times as many victims as controls owning guns before you took the result seriously. A 25 percent difference can easily be attributed to random chance.

Another technical criticism is the 1993 study ignores the vast literature by psychologists, sociologists, criminologists, and statisticians on crime and violence. It cites only public health studies and general references. This is a general problem with most public health literature. It exists in a closed world that does not learn from other fields, nor do researchers in other fields build on it.

Despite the study’s problems, which have been written about widely (see here, here, here, and here), Rosenberg attributes all of the criticism to gun manufacturers concerned about potential loss of sales. Though the Dickey amendment prohibited the CDC’s Injury Center from spending money on gun control promotion and advocacy, Rosenberg blames it for shutting off all research into gun violence.

Rosenberg sums up the Dickey amendment as follows: “If you do research in this area, we will harass you.” An example of the harassment Rosenberg gives is “the threat of congressional inquiries” that can “wreak havoc with your research.” 

Why does Rosenberg think that taxpayer-funded research shouldn’t be subject to congressional inquiry? Rather than stating that he was willing to answer sensible and relevant questions, Rosenberg wanted to be shielded from congressional Republicans like Dickey, who he deemed ignorant and evil. 

“Worse than not understanding,” Rosenberg says, “he doesn’t care.”

The Dickey amendment didn’t prevent the CDC from gathering and analyzing data on gun injuries and deaths. Many gun control researchers rely on CDC data. But gun control is part of a much larger issue of crime, violence, rights, and policy effects; it’s not something that can be studied usefully with only infectious disease models, methods, and data.

Much of the screen time of the video is devoted to entirely irrelevant scary scenes of shooting and shells with threatening graphics. It ends with text on screen noting that the $25 million restored to the CDC for gun control research is only a fraction of a percent of its budget. (Gun homicides are also a fraction of a percent of total U.S. deaths.)

Dickey, who died of Parkinson’s disease in 2017, may have come to regret pushing for the amendment that bears his name, but he remained concerned about the 1993 study, which would have complicated The New York Times‘ narrative and which the film left out. It uses a clip from CNN in which Dickey says he had a “change of heart” because of “the weight of all of the incidents that have occurred…. The kids and the innocent people who are being killed deserve our attention.”

What’s not included is a moment from that same clip in which Dickey states his ongoing concerns about the 1993 study and how it was carried out. “We wanted research done for gun violence, and that’s what the money was paid for,” he says. “But we found out that as we went along, that not only was the research being done just to support gun control, but we weren’t even given access to what the collected data was. So it was clear that we needed to do something and to stop what was being done.” 

Dickey was right. Guns are not a pathogen and violence is not a disease to be controlled. What is needed is not propagandistic films or sloppy research. It’s cross-disciplinary research on what drives human beings to violence, whether with a gun or without one.

Written by Aaron Brown and John Osterhoudt; edited by Osterhoudt; graphics by Adani Samat; additional graphics by Regan Taylor and Isaac Reese.

Photos: Associated Press; Cottonbro/Pexels; Roll Call/Newscom

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Federal Judge Decides Safe Deposit Boxes Aren’t Safe From FBI


FBI agents open and search safe deposit boxes seized from U.S. Private Vaults in Beverly Hills, California

The FBI seemingly misled a federal magistrate judge to obtain a warrant that let it seize the contents of hundreds of safe deposit boxes. But a federal judge says the raid did not violate the box owners’ Fourth Amendment rights.

Judge Gary Klausner ruled Thursday that attorneys representing several victims of the FBI’s March 2021 raid of U.S. Private Vaults in Beverly Hills, California, have “failed to prove” that the FBI’s inventory of the safe deposit boxes’ contents was “an impermissible investigatory motive” intended to uncover additional crimes beyond those alleged in the warrant that allowed the raid.

As Reason has previously detailed, the warrant for the raid explicitly forbade law enforcement from seizing or searching the private property contained in the safe deposit boxes held at U.S. Private Vaults, which was the target of the FBI’s investigation. Despite that, field agents cracked open the boxes and rifled through them—and even ran some of the contents past the noses of drug-sniffing dogs—in what the FBI claims were a necessary inventory of the property but looks more like a fishing expedition. Attorneys for the box owners noted that FBI agents admitted during depositions that they planned to forfeit cash and other valuables from the boxes, even though they did not include those plans in the warrant application.

“There can be no question that the government expected, or even hoped, to find criminal evidence during its inventory,” Klausner wrote in Thursday’s ruling. Elsewhere, the judge pointed out that the plaintiffs’ attorneys “have certainly shown that the government had a dual motive in inventorying the contents of each deposit box.”

“But that is not enough.” he added. “They must demonstrate that the improper investigatory motive was the only reason that the government opened the safe deposit boxes, and they have not done so.”

That conclusion effectively relegates any protections for private property to the trash can. What Klausner says, in effect, is that as long as law enforcement had at least one legitimate reason (the inventory) for opening the boxes, it can use that reason to cover all manner of rights violations.

Of course, that’s not how the federal prosecutors who handled the case see it.

“Contrary to the assertions made by the plaintiffs and adopted by some in the media, investigators were open and honest with the court that authorized the search and seizure warrants,” Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles, in a statement. “This ruling demonstrates that the actions taken in relation to a business that catered to criminals were legally authorized, adhered to policy, and were conducted in full compliance with the Constitution.”

Rob Johnson, a senior attorney with the Institute for Justice, a libertarian law firm that is representing the box owners, says there is “no question” that Klausner’s ruling will be appealed to the Ninth Circuit Court of Appeals in the near future.

“The decision will give a blueprint for the government to pry open safe deposit boxes, storage lockers, and other private spaces—and to take the contents with civil forfeiture,” Johnson declared in a statement. “In other words, the decision gives law enforcement a license to concoct bogus reasons to seize and forfeit millions of dollars in property from people who have not been accused of doing anything wrong.”

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California’s Housing Crisis Hasn’t Spared the State’s College Students


UCLA

For many California college students, navigating homelessness or overcrowding has become part of getting the degree.

Five percent of University of California (U.C.) students and 10 percent of California State University (CSU) students are homeless during the academic year, according to one state estimate. The two public university systems have a combined 16,000-person waiting list for on-campus student housing.

Meanwhile, those in search of private, off-campus housing describe a punishing months-long grind of Craigslist searches and competing with 40 other applicants for the chance to rent a single room in a 50-year-old home.

“You’d regularly see the street lined with students sleeping in cars,” says Nolan Gray, research director at California YIMBY and a PhD student at UCLA. “I had students in classes that I helped teach who were sleeping in cars, sleeping two to three people to a bedroom while still paying $1,000 a rent. “

This has prompted some policy makers to remove regulatory obstacles to building more on-campus student housing.

On Wednesday, Gov. Gavin Newson signed a new bill, S.B. 886, that exempts some on-campus student housing projects from the arduous environmental review process mandated by the California Environmental Quality Act (CEQA).

CEQA requires government agencies to study the environmental impacts of projects, both public and private, that they have discretion over. The law also allows third parties to appeal or even sue over the approval of said projects if they think an agency hasn’t done enough to study its environmental impacts.

Anti-growth activists frequently use the law to stop new housing, including new student housing.

In one 2018 case, UCLA agreed to shrink a new dormitory project by three floors—that’s 200 beds—to stave off complaints from neighbors. That didn’t stop those residents from filing a CEQA suit targeting the diminished project.

Sometimes these lawsuits stop students as well as the student housing.

Earlier this year, some Berkeley townies convinced the California Supreme Court to freeze student enrollment at U.C.–Berkeley on the logic that admitting more students was a “project” whose environmental impacts required studying under CEQA.

That lawsuit attracted nationwide ire, confirming for many the view that California’s NIMBYs were successfully choking off progress and opportunity in the state. The outrage proved enough that the California Legislature—usually loath to touch CEQA—quickly passed a bill undoing Berkeley’s enrollment freeze.

Some legislators at the time argued that such a narrow fix was insufficient.

“The triage legislation we passed today will solve that immediate problem. But it’s not enough just to solve this immediate problem; we need to ask ourselves how we got here,” said S.B. 886’s author, state Sen. Scott Wiener (D–San Francisco), in a statement issued in March. “When it comes to CEQA, this UC Berkeley trainwreck isn’t a bug. It’s a feature.”

To prevent future trainwrecks, the bill Wiener authored exempts new university housing projects from CEQA, provided they adopt stringent energy and environmental design standards, aren’t replacing existing housing, aren’t in flood zones and historic districts, and contain fewer than 2,000 units or 4,000 beds. The university would also have to hold a public hearing on the project.

That doesn’t make all dormitories bulletproof from CEQA lawsuits. It wouldn’t save U.C.–Santa Barbara’s infamous 4,500-bed cube dormitory. But the legislation still routes around the worst forms of CEQA obstructionism for obviously necessary and environmentally low-impact housing.

As Gray notes, it doesn’t fix a more general problem of low-density zoning near major universities.

“If you look at almost every U.C. campus, in many cases they are hemmed in by single-family zoning,” he tells Reason. “That’s a policy that makes it illegal to build apartments, which is exactly the kind of housing stock that students need.”

Earlier this year, the state did implement a new law that allows homeowners in single-family-zoned neighborhoods to divide their lots in two and build a duplex on each half. But local governments retain the ability to block larger apartment buildings and the single-room occupancy housing that students would typically rent.

California’s housing crisis is a multifaceted thing. It requires multifaceted fixes.

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Artificial Intelligence Will Change Jobs—For the Better


Garry Kasparov with chess board on left side of the image, while an old computer is on the right.

The ramifications of advances in artificial intelligence (A.I.) are being felt further afield than anyone expected. A.I. perhaps entered the public consciousness in the 1990s thanks to chess competitions, but it’s now infiltrating art competitions and, soon, the written word. Some commercial offerings can provide paragraphs of text based on brief prompts, keywords, and tone parameters. Users of Google’s email service have, of course, been microdosing on A.I. since 2018, when Gmail rolled out Smart Compose.

What these developments bring home is that people in the so-called “creative class” are now facing the first-person reckoning that automation has long presented to blue-collar workers: Technology is going to radically change the way we work.

As an analyst at a think tank, my job consists of processing policy trends, formulating new ideas to tackle economic and social problems, and advancing them through the written word. If programs like Midjourney, DALL-E, and Voyager can already captivate human audiences, I haven’t the slightest doubt that my modest ability to metabolize the policy landscape, reason my way to novel solutions, and manipulate language in provocative, engaging ways will soon be matched—and then surpassed—by A.I. programs designed for the task. 

While I am under no illusion that my work merits any blue ribbons, putting thoughts into words that persuade or stir emotion entails a certain artistry. It’s an engrossing and gratifying process, one from which I derive identity. When I contemplate that a computer could soon do it better, I, like the Lancashire handloom weavers of the early 19th century, feel more than a bit threatened. 

Garry Kasparov dealt with this conundrum two decades ago and has had a head start in managing the prospect of obsolescence. Kasparov, an all-time great chess player, had the distinction of holding the world title just at the same moment that computer chess programs ramped up their prowess. In 1996, Kasparov beat what was then the strongest chess engine ever created, IBM’s Deep Blue. But as he recounts in his memoir, Deep Thinking: Where Machine Intelligence Ends and Human Creativity Begins, he knew then that his reign would soon end. Indeed, in a 1997 rematch for which Kasparov was handsomely compensated, an updated Deep Blue brought the age of A.I. to global attention, dealing the champion a stunning defeat in the match’s decisive sixth game.

In Deep Thinking, published in 2017, Kasparov explains how his perspective on A.I. has evolved and why. Despite the anguish the 1997 loss caused him, he views A.I. as one of the greatest opportunities for humanity to advance its well-being. The reason is that Kasparov has observed in the intervening years that the highest level of performance, on the chessboard and elsewhere, is reached when humans work with smart machines.

After Deep Blue’s programmers established that it could see deeper into the game than the human mind, Kasparov and a group of partners came up with a new concept: What if instead of human vs. machine, people played against one another but with the assistance of chess software?

They called the new style of play “advanced chess,” and the outcomes surprised Kasparov. It wasn’t the player with the best chess software that necessarily won, nor was it the best human player. Rather, the top performers were the players who were able to use the machines most effectively, those who were able to get the most out of the chess engines and their own creative abilities.

Operating on the premise of Moravec’s Paradox, i.e., where machines are strong is where humans are weak and vice versa, what Kasparov took away from the advanced chess experiment is that a clever working process beats both superior human talent and superior technological horsepower.

The same insight can be leveraged by artists, composers, writers, designers, and the like. Rather than viewing A.I. as the end of our livelihoods, we ought to see the opportunities it presents for better work.

For the creative class, the answer to the A.I. challenge is to make the most of the programs available to us. Is artistry lost because of A.I., or is it unlocked, as we are freed from some of the more formulaic structuring processes that drain energy? By delegating these aspects of creation to A.I., I anticipate having more mental space available to generate the rhetorical flourishes and the witty bits of embroidery that make writing enjoyable.

Yes, people deploying A.I. in the writing world, art competitions, and elsewhere will likely face scorn. But while a level playing field is appropriate in defined competitions, in open-ended fields to accuse a rival of cheating would be no more meaningful than in that of the textile industry. For the intrepid writer, A.I. will create opportunities to produce better work at a faster clip, just as the power loom did for the weavers of Lancashire.

Rather than fear, and certainly rather than Luddite suppression, this ought to be a moment of optimism. A.I. is coming for our jobs. Its arrival, however, will not be a harbinger of obsolescence but a catalyst for greater achievement.

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Guns Aren’t a Public Health Issue


nyt-gun-control

The New York Times published an 11-minute documentary in June titled “‘It Was Really a Love Story.’ How an N.R.A. Ally Became a Gun Safety Advocate,” which tells a heartwarming story of how friendship transcended political differences and convinced a right-wing partisan to come to terms with the truth about firearms.

The film stars a couple of improbable friends: Dr. Mark L. Rosenberg, who for many years oversaw research on gun violence at the Centers for Disease Control and Prevention (CDC) as the director of its National Center for Injury Prevention and Control, and “NRA Pointman” Rep. Jay Dickey (R–Ark.), who was the author of an amendment inserted into a 1996 spending bill that prohibited the CDC from using federal funds to advocate for gun control.

The story is also framed by the findings of a famous (or infamous) 1993 CDC-funded study, which was “the first piece that we funded by external scientists,” Rosenberg recounts. It allegedly showed that owning guns made Americans overwhelmingly less safe. According to the film, the National Rifle Association (NRA) lobbied for the Dickey Amendment because of the 1993 study’s damning results. The organization “didn’t think it would be good for business,” Rosenberg says, “and they went to Congress, and they said, ‘You have got to stop this research because it’s going to result in all Americans losing their right to have a gun in their homes.'”

Dickey and Rosenberg started out as “mortal enemies,” but after making small talk about their kids during a chance conversation they developed “an incredible friendship,” as Rosenberg recounts. Years later, they were habitually ending their conversations by telling each other “I love you,”  and “we really meant it,” Rosenberg says. Through the power of this human connection, Dickey ends up seeing reason and changing his mind. He comes to believe that the amendment bearing his name was a mistake. 

It’s a story of redemption through friendship that’s well-tuned to our own hyperpolarized times. The lesson is that if blind partisans aren’t swayed by empirical evidence, human connection might just do the trick. “Underneath what people think are such opposing forces are some very important shared values,” Rosenberg says.

Although the moral of the documentary is undoubtedly true, every other detail is wrong. The takeaway from the story of Dickey, Rosenberg, and the 1993 gun study at the center of the piece is that the congressman was correct to begin with. The CDC shouldn’t be studying gun violence.

Titled “Gun Ownership as a Risk Factor for Homicide in the Home” and published in The New England Journal of Medicine, the 1993 study looked at 388 people who had been killed in their homes and matched them to 388 neighbors of similar age, sex, and race. One hundred and seventy-four of the victims lived in houses where at least one gun was present versus only 139 of the matched controls.

With scary music and breathless claims, the video tells viewers that if you had a gun in your house, you were 200 percent more likely to be killed with a gun in your home and 400 percent more likely to kill yourself. 

These are both exaggerations and misstatements of the study results. It didn’t address suicide risk at all, nor gun homicides. It found households in which a resident had been murdered at home by any means had a 25 percent greater frequency of having a gun, not 200 percent. But this doesn’t mean owning a gun increases your risk of being killed by 25 percent. 

This is a classic statistical error known as the “base rate fallacy” and is particularly important when studying rare events, like people murdered in their homes. Suppose 10 people are murdered in their homes, and five of those homes had guns. A matched set of 10 people who were not murdered in their homes found only four homes had guns. So there are 25 percent more guns in the homes of murder victims than matched nonmurder victims (Five vs. four).

But what if you put those 20 people in the context of another million, none of whom were murdered in their homes, half of whom had guns in their homes and half of whom didn’t. The rate for gun owners to be murdered at home becomes five out of 500,009, while the rate for non-gun owners becomes five out of 500,011. So now we find that the risk is 0.0004 percent higher.

In other words, being murdered in your home means you have a 25 percent higher chance of having a gun, but having a gun means you have only a 0.0004 percent greater chance of being murdered in your home. Those are not the same thing.

The finding that owning a gun made study subjects less safe was also a conclusion selected from much stronger statistical results that didn’t fit the authors’ political views and, thus, weren’t mentioned in the study. Yes, 25 percent more victims’ homes had guns than control homes, but 38 percent more victims had controlled security access to their property. Why not lobby against gates as a public health matter? Twenty times as many victims had gotten in trouble at work because of drinking, so why worry about guns when drinking at work is two orders of magnitude more dangerous? Renting and living alone were far more dangerous than having a gun. Victims were less likely than controls to own a rifle or a shotgun, so why not a government program to trade in handguns for long guns?

Another issue is the study design. Comparing victims to nonvictims can make sense in medicine. When a new disease appears, for example, researchers compare victims to outwardly similar nonvictims to get clues about the cause. In the early days of AIDS, the CDC identified a “4H club” of Haitians, homosexuals, hemophiliacs, and heroin addicts. Most of the sick fell under one of those four categories, whereas non-“4H” members were seldom infected. While the first H turned out to be a false clue, the last three suggested correctly a blood-to-blood or blood-to-mucous membrane transmission.

With a new disease, we don’t know much about transmission. But with gun ownership, we can identify obvious mechanisms, such as the gun owner shooting himself, or an attacker stealing the gun and shooting the gun owner. But if the gun in the house wasn’t the murder weapon, that homicide shouldn’t be included in the study.

Therefore, for guns, it’s silly to lump all deaths together. The majority of the deaths in the households included in the study were not caused by guns, and when a gun was used, the researchers did not determine who owned it. We also don’t care equally about all deaths. If a woman kills a violent attacker threatening her family, that’s a bad thing only to a tunnel-vision public health researcher adding up total deaths.

A more technical criticism is that the study uses flawed statistical methodology. Most journals require research to demonstrate the results are unlikely to result from random chance. Overall, 40.6 percent of subjects and controls had guns in the house. If gun ownership has no effect on homicide rates, there’s a 4 percent chance that 174 or more of the subjects would own guns. That’s less than the arbitrary 5 percent threshold many journals use, so the results are deemed statistically significant. The researchers did a more complex statistical analysis to arrive at the same 4 percent significance.

The issue with both my simple calculation and the researchers’ more complex one is they are only accurate if there are no errors in the data, the precise effect of all controls is known, and all relevant controls are included. We know there are significant errors in this kind of data, we have little idea about the effects of controls, and we know there are many relevant factors that were not measured. 

A good rule of thumb many practicing statisticians use is to ignore any odds ratio below three—that is, you’d want to see three times as many victims as controls owning guns before you took the result seriously. A 25 percent difference can easily be attributed to random chance.

Another technical criticism is the 1993 study ignores the vast literature by psychologists, sociologists, criminologists, and statisticians on crime and violence. It cites only public health studies and general references. This is a general problem with most public health literature. It exists in a closed world that does not learn from other fields, nor do researchers in other fields build on it.

Despite the study’s problems, which have been written about widely (see here, here, here, and here), Rosenberg attributes all of the criticism to gun manufacturers concerned about potential loss of sales. Though the Dickey amendment prohibited the CDC’s Injury Center from spending money on gun control promotion and advocacy, Rosenberg blames it for shutting off all research into gun violence.

Rosenberg sums up the Dickey amendment as follows: “If you do research in this area, we will harass you.” An example of the harassment Rosenberg gives is “the threat of congressional inquiries” that can “wreak havoc with your research.” 

Why does Rosenberg think that taxpayer-funded research shouldn’t be subject to congressional inquiry? Rather than stating that he was willing to answer sensible and relevant questions, Rosenberg wanted to be shielded from congressional Republicans like Dickey, who he deemed ignorant and evil. 

“Worse than not understanding,” Rosenberg says, “he doesn’t care.”

The Dickey amendment didn’t prevent the CDC from gathering and analyzing data on gun injuries and deaths. Many gun control researchers rely on CDC data. But gun control is part of a much larger issue of crime, violence, rights, and policy effects; it’s not something that can be studied usefully with only infectious disease models, methods, and data.

Much of the screen time of the video is devoted to entirely irrelevant scary scenes of shooting and shells with threatening graphics. It ends with text on screen noting that the $25 million restored to the CDC for gun control research is only a fraction of a percent of its budget. (Gun homicides are also a fraction of a percent of total U.S. deaths.)

Dickey, who died of Parkinson’s disease in 2017, may have come to regret pushing for the amendment that bears his name, but he remained concerned about the 1993 study, which would have complicated The New York Times‘ narrative and which the film left out. It uses a clip from CNN in which Dickey says he had a “change of heart” because of “the weight of all of the incidents that have occurred…. The kids and the innocent people who are being killed deserve our attention.”

What’s not included is a moment from that same clip in which Dickey states his ongoing concerns about the 1993 study and how it was carried out. “We wanted research done for gun violence, and that’s what the money was paid for,” he says. “But we found out that as we went along, that not only was the research being done just to support gun control, but we weren’t even given access to what the collected data was. So it was clear that we needed to do something and to stop what was being done.” 

Dickey was right. Guns are not a pathogen and violence is not a disease to be controlled. What is needed is not propagandistic films or sloppy research. It’s cross-disciplinary research on what drives human beings to violence, whether with a gun or without one.

Written by Aaron Brown and John Osterhoudt; edited by Osterhoudt; graphics by Adani Samat; additional graphics by Regan Taylor and Isaac Reese.

Photos: Associated Press; Cottonbro/Pexels; Roll Call/Newscom

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Federal Judge Decides Safe Deposit Boxes Aren’t Safe From FBI


FBI agents open and search safe deposit boxes seized from U.S. Private Vaults in Beverly Hills, California

The FBI seemingly misled a federal magistrate judge to obtain a warrant that let it seize the contents of hundreds of safe deposit boxes. But a federal judge says the raid did not violate the box owners’ Fourth Amendment rights.

Judge Gary Klausner ruled Thursday that attorneys representing several victims of the FBI’s March 2021 raid of U.S. Private Vaults in Beverly Hills, California, have “failed to prove” that the FBI’s inventory of the safe deposit boxes’ contents was “an impermissible investigatory motive” intended to uncover additional crimes beyond those alleged in the warrant that allowed the raid.

As Reason has previously detailed, the warrant for the raid explicitly forbade law enforcement from seizing or searching the private property contained in the safe deposit boxes held at U.S. Private Vaults, which was the target of the FBI’s investigation. Despite that, field agents cracked open the boxes and rifled through them—and even ran some of the contents past the noses of drug-sniffing dogs—in what the FBI claims were a necessary inventory of the property but looks more like a fishing expedition. Attorneys for the box owners noted that FBI agents admitted during depositions that they planned to forfeit cash and other valuables from the boxes, even though they did not include those plans in the warrant application.

“There can be no question that the government expected, or even hoped, to find criminal evidence during its inventory,” Klausner wrote in Thursday’s ruling. Elsewhere, the judge pointed out that the plaintiffs’ attorneys “have certainly shown that the government had a dual motive in inventorying the contents of each deposit box.”

“But that is not enough.” he added. “They must demonstrate that the improper investigatory motive was the only reason that the government opened the safe deposit boxes, and they have not done so.”

That conclusion effectively relegates any protections for private property to the trash can. What Klausner says, in effect, is that as long as law enforcement had at least one legitimate reason (the inventory) for opening the boxes, it can use that reason to cover all manner of rights violations.

Of course, that’s not how the federal prosecutors who handled the case see it.

“Contrary to the assertions made by the plaintiffs and adopted by some in the media, investigators were open and honest with the court that authorized the search and seizure warrants,” Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles, in a statement. “This ruling demonstrates that the actions taken in relation to a business that catered to criminals were legally authorized, adhered to policy, and were conducted in full compliance with the Constitution.”

Rob Johnson, a senior attorney with the Institute for Justice, a libertarian law firm that is representing the box owners, says there is “no question” that Klausner’s ruling will be appealed to the Ninth Circuit Court of Appeals in the near future.

“The decision will give a blueprint for the government to pry open safe deposit boxes, storage lockers, and other private spaces—and to take the contents with civil forfeiture,” Johnson declared in a statement. “In other words, the decision gives law enforcement a license to concoct bogus reasons to seize and forfeit millions of dollars in property from people who have not been accused of doing anything wrong.”

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California’s Housing Crisis Hasn’t Spared the State’s College Students


UCLA

For many California college students, navigating homelessness or overcrowding has become part of getting the degree.

Five percent of University of California (U.C.) students and 10 percent of California State University (CSU) students are homeless during the academic year, according to one state estimate. The two public university systems have a combined 16,000-person waiting list for on-campus student housing.

Meanwhile, those in search of private, off-campus housing describe a punishing months-long grind of Craigslist searches and competing with 40 other applicants for the chance to rent a single room in a 50-year-old home.

“You’d regularly see the street lined with students sleeping in cars,” says Nolan Gray, research director at California YIMBY and a PhD student at UCLA. “I had students in classes that I helped teach who were sleeping in cars, sleeping two to three people to a bedroom while still paying $1,000 a rent. “

This has prompted some policy makers to remove regulatory obstacles to building more on-campus student housing.

On Wednesday, Gov. Gavin Newson signed a new bill, S.B. 886, that exempts some on-campus student housing projects from the arduous environmental review process mandated by the California Environmental Quality Act (CEQA).

CEQA requires government agencies to study the environmental impacts of projects, both public and private, that they have discretion over. The law also allows third parties to appeal or even sue over the approval of said projects if they think an agency hasn’t done enough to study its environmental impacts.

Anti-growth activists frequently use the law to stop new housing, including new student housing.

In one 2018 case, UCLA agreed to shrink a new dormitory project by three floors—that’s 200 beds—to stave off complaints from neighbors. That didn’t stop those residents from filing a CEQA suit targeting the diminished project.

Sometimes these lawsuits stop students as well as the student housing.

Earlier this year, some Berkeley townies convinced the California Supreme Court to freeze student enrollment at U.C.–Berkeley on the logic that admitting more students was a “project” whose environmental impacts required studying under CEQA.

That lawsuit attracted nationwide ire, confirming for many the view that California’s NIMBYs were successfully choking off progress and opportunity in the state. The outrage proved enough that the California Legislature—usually loath to touch CEQA—quickly passed a bill undoing Berkeley’s enrollment freeze.

Some legislators at the time argued that such a narrow fix was insufficient.

“The triage legislation we passed today will solve that immediate problem. But it’s not enough just to solve this immediate problem; we need to ask ourselves how we got here,” said S.B. 886’s author, state Sen. Scott Wiener (D–San Francisco), in a statement issued in March. “When it comes to CEQA, this UC Berkeley trainwreck isn’t a bug. It’s a feature.”

To prevent future trainwrecks, the bill Wiener authored exempts new university housing projects from CEQA, provided they adopt stringent energy and environmental design standards, aren’t replacing existing housing, aren’t in flood zones and historic districts, and contain fewer than 2,000 units or 4,000 beds. The university would also have to hold a public hearing on the project.

That doesn’t make all dormitories bulletproof from CEQA lawsuits. It wouldn’t save U.C.–Santa Barbara’s infamous 4,500-bed cube dormitory. But the legislation still routes around the worst forms of CEQA obstructionism for obviously necessary and environmentally low-impact housing.

As Gray notes, it doesn’t fix a more general problem of low-density zoning near major universities.

“If you look at almost every U.C. campus, in many cases they are hemmed in by single-family zoning,” he tells Reason. “That’s a policy that makes it illegal to build apartments, which is exactly the kind of housing stock that students need.”

Earlier this year, the state did implement a new law that allows homeowners in single-family-zoned neighborhoods to divide their lots in two and build a duplex on each half. But local governments retain the ability to block larger apartment buildings and the single-room occupancy housing that students would typically rent.

California’s housing crisis is a multifaceted thing. It requires multifaceted fixes.

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