US Services PMI Signals Inflation Re-Accelerating In Feb, Return To Expansion

US Services PMI Signals Inflation Re-Accelerating In Feb, Return To Expansion

With both manufacturing sector surveys still in contraction (and signaling a staglfationary drop in production while prices paid rebound), expectations were for both Services sector surveys to signal growth in February.

The final print from S&P Global’s US Services PMI was 50.6, up from the flash print of 50.5, and a big rebound from the 46.8 print in January.

After a big rebound in January (from the sudden plunge in December), ISM’s Services PMI dipped very modestly from 55.2 to 55.1 (better than the expected 54.5).

Source: Bloomberg

This is a return to expansion (albeit barely) for S&P Global’s survey after seven months of contraction.

While S&P Global’s survey reports an increase in prices paid for services and manufacturing  (and ISM’s manufacturing survey also showed an increase in prices paid), the ISM Services signal was a continued drop in the prices paid, while new orders and employment picked up…

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

A return to growth of US service sector business activity in February for the first time in eight months has offset a decline in manufacturing output, helping stabilize the economy and hopefully avert a downturn in the first quarter.

“The upturn was led by a revival in spending on services by consumers and improved activity in the tech sector, but was also aided by a marked cooling in the recent downturn in financial services.

“Across both services and manufacturing, jobs growth has risen to a five-month high as business confidence about the year ahead has perked up to its highest since last May, reviving further from the low-point seen last October. Clearly the gloom heading into the winter has been replaced with brighter prospects moving into the spring.

“This improving picture has, however, added to firms’ pricing power. Having fallen to a 27-month low in January, the rate of inflation for goods and services reaccelerated in February to its highest since last October as companies reported greater success in passing higher costs on to customers.”

Finally, the S&P Global US Composite PMI Output Index posted 50.1 in February, up from 46.8 in January.

The latest data signalled an end to a seven-month sequence of contraction and indicated broadly stable levels of business activity at private sector firms.

Tyler Durden
Fri, 03/03/2023 – 10:05

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

Judge James Ho’s Revised Concurrence in the Second Amendment / Restraining Order Case

Yesterday, the Fifth Circuit released an updated version of its opinion in U.S. v. Rahimi, which held that people can’t be disarmed just based on a civil restraining order. The changes to the majority are comparatively minor, but Judge Ho used the release of the new opinion as an occasion to put out a substantially enlarged version of his concurrence, which I thought was worth passing along:

The right to keep and bear arms has long been recognized as a fundamental civil right. Blackstone saw it as an essential component of “‘the natural right'” to “‘self-preservation and defence.'”And the Supreme Court has repeatedly analogized the Second Amendment to other constitutional rights guaranteed to every American. See, e.g., Johnson v. Eisentrager (1950) (describing the First, Second, Fourth, Fifth, and Sixth Amendments as the “civil-rights Amendments”); Konigsberg v. State Bar of Cal. (1961) (comparing “the commands of the First Amendment” to “the equally unqualified command of the Second Amendment”); N.Y. State Rifle & Pistol Ass’n v. Bruen (2022) (quoting Konigsberg).

But lower courts have routinely ignored these principles, treating the Second Amendment as “a second-class right.” So the Supreme Court has now commanded lower courts to be more forceful guardians of the right to keep and bear arms, by establishing a new framework for lower courts to apply under the Second Amendment.

“When the Second Amendment’s plain text covers an individual’s conduct, the Constitution presumptively protects that conduct.” “The government must then justify its regulation by demonstrating that it is consistent with the Nation’s historical tradition of firearm regulation.” “[T]his historical inquiry that courts must conduct will often involve reasoning by analogy—a commonplace task for any lawyer or judge. Like all analogical reasoning, determining whether a historical regulation is a proper analogue for a distinctly modern firearm regulation requires a determination of whether the two regulations are ‘relevantly similar.'”This framework “is neither a regulatory straightjacket nor a regulatory blank check.” It requires the government to “identify a well-established and representative historical analogue, not a historical twin.

Our court’s decision today dutifully applies Bruen, and I join it in full. I write separately to explain how respect for the Second Amendment is entirely compatible with respect for our profound societal interest in protecting citizens from violent criminals. Our Founders firmly believed in both the fundamental right to keep and bear arms and the fundamental role of government in combating violent crime.

[I.] “[T]he right to keep and bear arms … has controversial public safety implications.” But it’s hardly “the only constitutional right” that does. To the contrary, “[a]ll of the constitutional provisions that impose restrictions on law enforcement and on the prosecution of crimes fall into the same category.”

So any legal framework that involves any of these constitutional provisions can have significant and controversial public safety consequences. A framework that under-protects a right unduly deprives citizens of liberty. But a framework that over-protects a right unduly deprives citizens of competing interests like public safety.

Take, for example, the exclusionary rule. See Mapp v. Ohio (1961). Since its inception, the rule has been sharply criticized for over-protecting the accused and releasing dangerous criminals into our neighborhoods. It’s often said that nothing in the Constitution requires the criminal to “go free because the constable has blundered.” “The exclusionary rule generates substantial social costs” by “setting the guilty free and the dangerous at large.”

The same can be said about Miranda v. Arizona (1966). The Supreme Court has “repeatedly referred to the Miranda warnings as ‘prophylactic’ and ‘not themselves rights protected by the Constitution.'”What’s more, “[i]n some unknown number of cases the Court’s rule will return a killer, a rapist or other criminal to the streets and to the environment which produced him, to repeat his crime whenever it pleases him.”

So it’s easy to see why decisions like Mapp and Miranda have been criticized for over-protecting constitutional rights and harming public safety.

But there’s a big difference between the first criticism and the second, at least as far as the judiciary is concerned. It’s our duty as judges to interpret the Constitution based on the text and original understanding of the relevant provision—not on public policy considerations, or worse, fear of public opprobrium or criticism from the political branches.

And that’s precisely the problem here: Members of the Supreme Court have repeatedly criticized lower courts for disfavoring the Second Amendment. The Supreme Court has now responded by setting forth a new legal framework in Bruen. It is incumbent on lower courts to implement Bruen in good faith and to the best of our ability.

Bruen calls on us to examine our Nation’s history and traditions to determine the meaning and scope of the Second Amendment. It’s hardly the first time that the Supreme Court has looked to history and tradition to interpret constitutional provisions. And it surely won’t be the last.

[II.] Those who commit violence, including domestic violence, shouldn’t just be disarmed—they should be detained, prosecuted, convicted, and incarcerated. And that’s exactly why we have a criminal justice system—to punish criminals and disable them from engaging in further crimes.

The Constitution presumes the existence of a criminal justice system. That system allows the government to deny convicted criminals a wide range of liberties that it could not deny to innocent, law-abiding citizens. For example, the government cannot deprive innocent citizens of their liberty of movement. But it can certainly arrest and incarcerate violent criminals.

Arrest and incarceration naturally entail the loss of a wide range of liberties—including the loss of access to weapons. See, e.g., Chimel v. California (1969) (“When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape.”); State v. Buzzard (1842) (Ringo, C.J.) (“Persons accused of crime, upon their arrest, have constantly been divested of their arms, without the legality of the act having ever been questioned.”).

The Supreme Court has also made clear that our Nation’s history and traditions include “longstanding prohibitions on the possession of firearms by felons”—and that such measures are “presumptively lawful.” So the government can presumably disarm dangerous convicted felons, whether they’re incarcerated or not, without violating the Second Amendment.

The Second Amendment is not “a second-class right.” It is not “subject to an entirely different body of rules than the other Bill of Rights guarantees.” That principle guides us here: The government can impose various restrictions on the rights of dangerous convicted felons, consistent with our Nation’s history and traditions—and that includes the right to keep and bear arms.

[III.] The power to incarcerate violent criminals is not just constitutionally permissible—it’s imperative to protecting victims. After all, anyone who’s willing to break the law when it comes to domestic violence is presumably willing to break the law when it comes to guns as well. The only way to protect the victim may be to detain as well as disarm the violent criminal.

For example, the government can detain and disarm, not just after conviction, but also before trial. Pre-trial detention is presumed by the Excessive Bail Clause and the Speedy Trial Clause. And it plays a significant role in protecting citizens from violence, including domestic violence.

In addition, the government can detain and disarm, based not just on acts of violence, but criminal threats of violence as well. After all, to the victim, such actions are not only life-threatening—they’re life-altering, even if they don’t eventually result in violence.

[IV.] 18 U.S.C. § 922(g)(8) disarms individuals based on civil protective orders—not criminal proceedings. As the court today explains, there is no analogous historical tradition sufficient to support § 922(g)(8) under Bruen.

Moreover, there are additional reasons why disarmament based on civil protective orders should give us pause. Scholars and judges have expressed alarm that civil protective orders are too often misused as a tactical device in divorce proceedings—and issued without any actual threat of danger. That makes it difficult to justify § 922(g)(8) as a measure to disarm dangerous individuals.

[A.] “Many divorce lawyers routinely recommend pursuit of civil protection orders for clients in divorce proceedings … as a tactical leverage device.” Jeannie Suk, Criminal Law Comes Home, 116 YALE L.J. 2, 62 n.257 (2006). See also, e.g., Randy Frances Kandel, Squabbling in the Shadows: What the Law Can Learn from the Way Divorcing Couples Use Protective Orders as Bargaining Chips in Domestic Spats and Child Custody Mediation, 48 S.C. L. REV. 441, 448 (1997) (civil protective orders are deployed as “an affirmative element of divorce strategy”).

That’s because civil protective orders can help a party in a divorce proceeding to “secure [favorable] rulings on critical issues such as [marital and child] support, exclusion from marital residence and property disposition.” Protective orders can also be “a powerful strategic tool in custody disputes.”

That makes civil protective orders a tempting target for abuse. Judges have expressed “concern[ ] … with the serious policy implications of permitting allegations of … domestic violence” to be used in divorce proceedings. And for good reason. “[N]ot all parties to divorce are above using [protective orders] not for their intended purpose but solely to gain advantage in a dissolution.” Scott A. Lerner, Sword or Shield? Combating Orders–of–Protection Abuse in Divorce, 95 ILL. BAR J. 590, 591 (2007). Anyone who is “willing to commit perjury can spend months or even years … planning to file a domestic violence complaint at an opportune moment in order to gain the upper hand in a divorce proceeding.” David N. Heleniak, The New Star Chamber: The New Jersey Family Court and the Prevention of Domestic Violence Act, 57 RUTGERS L. REV. 1009, 1014 (2005). So “[a] plaintiff willing to exaggerate past incidents or even commit perjury can have access to a responsive support group, a sympathetic court, and a litany of immediate relief.” Peter Slocum, Biting the D.V. Bullet: Are Domestic-Violence Restraining Orders Trampling on Second Amendment Rights?, 40 SETON HALL L. REV. 639, 662–63 (2010).

Moreover, these concerns are exacerbated by the fact that judges are too often ill-equipped to prevent abuse. Family court judges may face enormous pressure to grant civil protective orders—and no incentive to deny them. For example, family court judges may receive mandatory training in which they’re warned about “the unfavorable publicity” that could result if they deny requests for civil protective orders. As one judge has noted, “[a] newspaper headline can be death to a municipal court judge’s career.” So “the prospect of an unfavorable newspaper headline is a frightening one.” To quote another judge: “Your job is not to become concerned about all the constitutional rights of the [defendant] you’re violating as you grant a restraining order. Throw him out on the street, give him the clothes on his back and tell him, ‘See ya’ around.'”Yet another judge said: “If there is any doubt in your mind about what to do, you should issue the restraining order.”

As a result, “[r]estraining orders … are granted to virtually all who apply.” So there’s a “tremendous” risk that courts will enter protective orders automatically—despite the absence of any real threat of danger. In one case, for example, a family court judge granted a restraining order on the ground that the husband told his wife that he did not love her and was no longer attracted to her. See Murray v. Murray (N.J. App. Div. 1993). “There was no prior history of domestic violence,” yet the judge issued the order anyway. Another judge issued a restraining order against David Letterman on the ground that his presence on television harassed the plaintiff. See Todd Peterson, David Letterman Fights Restraining Order, PEOPLE (Dec. 21, 2005).

[B.] Moreover, the consequences of disarming citizens under § 922(g)(8) may be especially perverse considering the common practice of “mutual” protective orders.

In any domestic violence dispute, a judge may see no downside in forbidding both parties from harming one another. A judge “may think that mutual restraining orders are not substantially different from regular restraining orders—after all, the goal is to keep the parties away from one another so that the violence will not continue.” Jacquie Andreano, The Disproportionate Effect of Mutual Restraining Orders on Same-Sex Domestic Violence Victims, 108 CAL. L. REV. 1047, 1054 (2020). “Judges may also feel that issuing a mutual restraining order saves time because they do not have to hear testimony and make a finding regarding which party is a primary aggressor or even that one party has committed domestic violence.”

But “[t]hese judicial assessments have often led to the issuance of unmerited mutual restraining orders, namely in situations where one party is the abuser and the other party is a victim.” Id. (emphasis added). As a result, “both parties are restrained even if only one is an abuser.See also Elizabeth Topliffe, Why Civil Protection Orders Are Effective Remedies for Domestic Violence but Mutual Protective Orders Are Not, 67 Ind. L.J. 1039, 1055–56 (1992) (“[J]udges often issue a mutual protection order without any request from the respondent or his lawyer…. [J]udges and lawyers … may be tempted to resort to mutual protective orders frequently. However, when they do this in cases where there truly is one victim and one batterer, they ignore some of the real difficulties of mutual protection orders.”).

The net result of all this is profoundly perverse, because it means that § 922(g)(8) effectively disarms victims of domestic violence. What’s worse, victims of domestic violence may even be put in greater danger than before. Abusers may know or assume that their victims are law-abiding citizens who will comply with their legal obligation not to arm themselves in self-defense due to § 922(g)(8). Abusers might even remind their victims of the existence of § 922(g)(8) and the entry of a mutual protective order to taunt and subdue their victims. Meanwhile, the abusers are criminals who have already demonstrated that they have zero propensity to obey the dictates of criminal statutes. As a result, § 922(g)(8) effectively empowers and enables abusers by guaranteeing that their victims will be unable to fight back.

[* * *]

We must protect citizens against domestic violence. And we can do so without offending the Second Amendment framework set forth in Bruen.

Those who commit or criminally threaten domestic violence have already demonstrated an utter lack of respect for the rights of others and the rule of law. So merely enacting laws that tell them to disarm is a woefully inadequate solution. Abusers must be detained, prosecuted, and incarcerated. And that’s what the criminal justice system is for. I concur.

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TikTok Admits It’s as Clueless on Teens as the Rest of Us


TikTok app on a cell phone

Users under 18 years old on TikTok will soon face a hurdle on their way to averaging nearly two hours per day in the popular video app, the company announced Wednesday. But the hurdle is a low one, so low as to barely deserve the name. 

In the coming weeks, underage users’ accounts will automatically opt into TikTok’s new 60-minute screen time limit. At the one-hour mark, they’ll be served a prompt to stop using the app—unless, of course, they don’t want to stop, in which case they can re-enter their password and keep right on watching. 

And if that’s too much of an inconvenience, as more dedicated teenage TikTokers might well decide, they can opt out of the limit entirely and ignore the subsequent suggestion, delivered to those who pass the 100-minute mark in a day, to set a screen time limit of their own choosing. Other pieces of TikTok’s announcement run along similar lines: Lots of well-meaning nudges, lots of if you want to‘s, lots of ways to opt out and continue exactly as you were.

For all their practical impotence, however, TikTok’s changes are exemplary of the present state of America’s kids-and-phones debate in two key senses: First, that a major tech company is even making a show of self-regulating like this—complete with a tacit admission that unlimited screen time is bad, especially for children—is indicative of where research results and public opinion are trending. And second, all the large-scale ideas for regulation in this space are toothless, terrible, or both.

It wasn’t always obvious that we’d come to the current consensus on smartphones and the social media they make perpetually available to us. Think back to the 2008 presidential election, for instance. Then-candidate Barack Obama’s team was using Facebook as no campaign had before. People were posting weird fan videos for Ron Paul on YouTube. It was exciting! It felt like real engagement, real access. There was a broad sense of optimism that massively increasing our intake of information and communication with one other was a good thing. It would make us better-informed citizens more capable of holding power to account.

A decade and a half later, what can you do but laugh at the naiveté of digital youth? Recent years—and the last two weeks in particular—have seen a rapid convergence, spanning much of the political spectrum, on the conclusion that the technological and information environment we’ve made has serious downsides for politics, mental health, and more. 

That’s not to say there are no benefits of smartphones and social media. Obviously, they have advantages, and I myself use both. But it turns out spending one’s life, from age 2 onward, with a screen affixed to one hand is actually not fun, not healthy, and not terribly conducive to rational thought, good citizenship, or enjoying time with friends and family in real life

So now there’s an urge to regulate, but the regulatory ideas are lacking, to say the least. Some are as useless as TikTok’s screen time “limits,” which aren’t really limits at all. TikTok’s language around one new feature, a sleep time reminder, is particularly revealing on this point: It can “help you get to bed when you want to,” and you can also “delay your sleep time,” if you like. 

As I know from personal experience—having repeatedly set and ignored screen time limits on my iPhone—regulations of this kind can at most play a supporting role. They only work if you want their help to control your own behavior hour after hour, day after day, forever. Do we expect to find that kind of habitual self-discipline in screen-obsessed children?

Worse than regulations that would accomplish little, though, are the regulatory ideas that would do far too much. Some proposals would violate the First Amendment. Others would put millions of people’s privacy and personal documents at risk, give prosecutors overbroad latitude to hassle tech companies, or upend the whole internet as we know it. As is often the case, involving the state in this problem will almost certainly make it worse.

I continue to think personal, familial, and voluntary communal regulation of our tech use is by far the best choice we have. Yet even there the ideas on offer are messy at best. Take the single biggest question I see discussed among parents of children school-aged and younger: When do you let them get a smartphone?

It seems simple enough: Pick a reasonable age and hold the line, just as you do with any number of childhood milestones. My own inclination is to pin phone ownership to college or a first job or car.

But phones and social media have a unique place in kids’ social lives. As social psychologist Jonathan Haidt recently explained, parents face “a trap—a collective action problem”: Because so much social activity and coordination happens asynchronously online, forcing one kid to go without a phone or a given app can leave them worse off, though all the kids “would be better off if everyone quit.”

Being the sole child of Luddites in your friend group is a major social detriment. It’s isolating. It’s lonely. Living in a red-eyed thrall to “a little bit of everything all of the time” sucks, but missing out on the group chat sucks too.

In the long run, it’s reasonable to hope we’ll figure out how to handle these new technologies better than we do now, to more reliably reap their benefits while avoiding their risks. I don’t know that I share that hope, but I do find it reasonable. Ideas for fixes might get better. Companies like TikTok might adapt their business models to make temperance and profit more compatible goals.

But parents grappling with how to raise their kids in the digital age can’t wait for society writ large to adapt itself to the truly novel means of communication which have so completely infiltrated our lives in the last 30 years. That will be a project on the scale of decades, if history is any guide, and childhood doesn’t happen in the long run.

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All Porn Is ‘Violence Against Women,’ U.K. Parliamentary Committee Says


man shocked by something on laptop screen

An All-Party Parliamentary Group (APPG) studying sexual exploitation in the United Kingdom says that not only is porn a major contributor to real-world violence, it is violence. The group is calling on U.K. lawmakers to enact a bevy of new laws regulating porn.

Their concerns are not just about coercion in the porn industry, porn’s availability to minors, or other common worries. Rather, the group echoes old radical feminist tropes about pornography—that there is no such thing as ethical porn, that it’s all “exploitation,” and its mere existence is “a form of violence against women.”

Sigh.

All-Party Parliamentary Groups “have no official status within Parliament,” according to the Parliament website. Nonetheless, “these groups can sometimes be influential,” it says. A 2022 report from the House of Commons Committee on Standards called them “a vital part of how Parliament works.”

So it’s worrying to see statements like these from Diana Johnson, a member of Parliament and chair of the APPG on Commercial Sexual Exploitation: “It’s now high time that Government acted and recognised the damage caused by the pornography industry to the lives and the safety of women.”

The committee calls for things such as mandatory age verification for porn websites (a scheme that may sound good but is almost impossible to implement—and has tons of privacy concerns, since it means all visitors turning over identification—in practice) and also more vague changes, like addressing porn “as commercial sexual exploitation, and a form of violence against women, in legislation and policy.”

The group also calls for giving all performers a right to veto their images being online at any time, even if they have previously consented and been paid for their work. This would not only create major problems for porn producers and distributors but be completely unworkable in practice, since something uploaded to the internet has a way of traveling even if folks later wish it wouldn’t.

The committee’s new report—Pornography regulation: The case for Parliamentary reform—repeats a number of unfounded or debunked theses about porn, like the idea that it’s a major driver of off-screen violence against women and sexist attitudes.

In fact, there’s research showing that people who watch porn may hold more egalitarian views than those who don’t.

And while some research has shown a potential link between high levels of sexual aggression and high levels of porn consumption (among both women and men), there’s nothing proving that this is causal (that is, that porn consumption drives aggression). Aggression could drive people to watch more porn, or some third factor could drive both.

And if pornography were really fueling real-world violence, we would expect to see violent crime rising as the internet has made porn much more widely accessible over the past three decades. Instead, this is a period in which murder, sexual assault, and other violent crime rates have largely decreased.

Some research has shown that people who commit rape actually consume less porn than those who aren’t rapists. And the failure to find links between viewing porn—in the olden days or now—and committing violence goes way back.

“Exposure to pornography during adolescence had little effect on persons who later became rapists and child molesters,” the Associated Press reported 53 years ago on the findings of a presidential commission on pornography. Rather, “sexual deviates generally came from homes where pornography was restricted and sex was never discussed,” and “most deviates had been severely punished as teenagers by their parents when caught with pornographic material.”

Taken together, evidence suggests that banning pornography or severely punishing people who watch it could even lead to an increase in violence against women. Meanwhile, cracking down on internet porn platforms could not only hurt the livelihoods of many independent performers and content creators, it could also drive people into riskier avenues of sex work.

Perhaps the U.K. porn commission would know this if they actually talked to anyone in the porn industry or to a variety of researchers on porn, sexual violence, and media effects. Instead, the committee concluded its inquiry after hearing “from leading figures in the US Christian anti-porn lobby but no sex workers,” notes Vice.

“The inquiry did hear from individuals specialising in children’s safety,” points out Vice‘s Sophia Smith Galer. “But the inquiry also heard from prominent figures in anti-porn advocacy, such as Dr Gail Dines, and figures associated with the Christian-backed anti-porn lobby in the US.”

These are not figures taking a cool-headed look at the effects of pornography but people—like Laila Mickelwait of Traffickinghub and Haley McNamara of the National Center on Sexual Exploitation (formerly Morality in Media)—who explicitly call for abolishing all sex work and say all sex work is sex trafficking, even when participants do not claim to be forced or coerced. (See Reason‘s May 2022 cover story, “The New Campaign for a Sex-Free Internet,” for more on these crusaders.)

And the academic researchers the committee talked to were not folks actually studying porn effects themselves but, largely, men who have made a name for themselves being Good Male Feminist Allies, talking about things like “toxic masculinity,” or women whose work is focused on defining all sex work as exploitation.

There are definitely discussions to be had about best practices for preventing children from viewing porn, the (unfortunately outsized) role of porn in sex education, how best to prevent exploitation and coercion within the porn industry, how to best help people who feel “addicted” to porn, and things like that. But these are complex topics that require nuanced discussion and viewpoints, and none is helped by a simplistic “all porn is bad” narrative.


FREE MINDS

The SAFE TECH Act is anything but safe. A new proposal from Democrats in Congress would upend the internet as we know it. Dubbed the “Safeguarding Against Fraud, Exploitation, Threats, Extremism and Consumer Harms (SAFE TECH) Act,” the bill—introduced by Mark Warner (D–Va.) in the Senate and Kathy Castor (D–Fla.) in the House—is a redux of a bill first introduced in 2021. Techdirt Editor in Chief Mike Masnick called the earlier version “a dumpster fire of cluelessness.” And this year’s bill doesn’t appear to be any better:

The SAFE TECH Act is yet another stab at undermining Section 230 of federal communications law. As it stands, Section 230 protects tech platforms—large and small—and their users from civil liability for content created by others.

[…] The first change the SAFE TECH Act would make is to say [Section 230] doesn’t apply when “the provider or user has accepted payment to make the speech available or, in whole or in part, created or funded the creation of the speech.”

This would open up a huge range of tech companies to more liability. Blogging platforms like WordPress and newsletter and podcast distributors like Substack would be vulnerable, as would any social media platform that provides a paid tier level (like Twitter Blue).

So would all sorts of web hosting services—creating huge incentives for providers to cut off web hosting access to any person or group even slightly controversial.

And this change “would also threaten liability on any service that shares its advertising revenue with creators, for instance as YouTube does,” as law professor and blogger Eugene Volokh pointed out when the SAFE TECH Act first came out. This would create incentives for platforms to cut off or severely limit creator monetization schemes, meaning “creators would thus be less likely to earn money from their works.”

In addition, “the section would threaten liability whenever any providers provide grants to support local journalism or other such projects (something like the Google News Initiative),” noted Volokh. “Providers would thus become less likely to directly or indirectly support journalism and other expression.”

So, already, the SAFE TECH Act would usher in an array of negative incentives—and that’s just with its first change. Alas, the bill would also change a lot more.

Read the rest here.


FREE MARKETS

Do young conservatives still care about the free market? A depressing dispatch from the 2023 Conservative Political Action Conference, courtesy of Reason‘s Emma Camp:

Of the dozen young conservative voters Reason interviewed at the Conservative Political Action Conference (CPAC), a significant majority voiced waning support for free market values, instead favoring regulation, protectionism, and cultural war zeal to battle abortion, “wokeness” in schools, “cancel culture,” and globalism. 

“There has been a rethinking throughout the movement of the laissez faire–style economics. And that rethinking is to use more regulation toward things that Republicans feel are targeting them,” said Zachary Wanuga, a senior at Salisbury University. “So, for instance, Republicans are for free markets, they’re against breaking up businesses and regulating them. However, they’re taking a different approach now to the issue of Big Tech censorship, and they would like to see more censorship, they would like to see regulation.”

Jacob Ashley, a 19-year-old student at Ohio Northern University, repeated the sentiment. “I tend more nationalistic and ‘America First’ than opening up the free market completely,” said Ashley. “Globalization has done some damage, particularly to our culture and national identity.”

See also: Conservatives at CPAC Criticize—and Misunderstand—Section 230


QUICK HITS

• The U.S. is expected to announce even more aid for Ukraine today. The new military aid package will be “worth roughly $400 million and comprised mainly of ammunition,” Reuters reports.

• Documents released by Arizona’s new Attorney General show that “former Republican Arizona Attorney General Mark Brnovich declined to publish investigative findings by his office that disproved 2020 election fraud claims.”

• “A government watchdog has found that the Secret Service and ICE’s Homeland Security Investigations (HSI) unit repeatedly failed to obtain the correct legal paperwork when carrying out invasive cell phone surveillance,” reports TechCrunch.

• TikTok is introducing a 60-minute screen time limit for minors.

• Sen. Tammy Baldwin (D–Wis.) attempts some dairy industry protectionism once again:

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Lessons from One of History’s Biggest Scumbags

Two weeks ago, I told you that the US government had just published its annual financial report.

The government by its own admission lost $4.1 TRILLION in FY 2022. And this is 34% worse than the the previous year’s $3.1 trillion loss.

And the rest of the financial report only gets worse from there…

They describe Social Security’s extreme insolvency, projecting total unfunded liabilities of the program to be $76 trillion.

And they forecast that US government debt will one day reach 566% of GDP.

I’ve written about this extensively over the years, because history tells us that the consequences of this type of financial mismanagement are severe.

This is not the first time that a country has had a lot of debt, nor the first time incompetent leadership has consistently failed to recognize and solve big problems.

So in today’s podcast episode we go back in time thousands of years to heed the lessons of one of history’s biggest scumbag rulers.

Unsurprisingly, he raised taxes, debased the currency, violated the rule of law, confiscated property, eliminated dissent, vastly expanded the government, and created all sorts of idiotic and destructive laws.

BUT, this is fixable.

And today we actually discuss some common sense ideas to demonstrate how easy it should be, at least conceptually, to take giant leaps in the right direction once again.

Unfortunately, the people in charge seem to have zero interest in doing any of that.

So I wouldn’t hold my breath waiting for politicians and bureaucrats to ride to the rescue.

But at the same time, as I often point out, this is not a bad news story.

The world is not coming to an end.

In fact, I believe the world is still full of abundant and incredible opportunities, despite the trajectory of its largest superpower.

And we close this episode with the core central message of this organization: we have control over our own lives.

Regardless of what they do or how badly they screw up, you do not have to go down with a sinking ship. You have the power to solve these problems for yourself.

You can listen to today’s podcast here.

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Russia Has No Immediate Plans To Repair Or Reactivate Nord Stream Pipelines

Russia Has No Immediate Plans To Repair Or Reactivate Nord Stream Pipelines

Six months ago, a series of explosions caused damage to Russia’s undersea Nord Stream gas pipeline. The pipeline’s future has been uncertain due to rising tensions between Moscow and Washington, particularly with an anticipated spring offensive in Ukraine. Earlier this year, there were discussions about the possibility of repairs within a year by the German energy company Uniper. However, sources now tell Reuters that Russia plans to “seal up” the pipelines. 

Russia’s Gazprom, a state-controlled oil company, constructed Nord Stream 1 and Nord Stream 2, which consist of two pipes each. These pipelines were designed to transport 110 billion cubic meters of natural gas annually from Russia to Germany via the Baltic Sea. 

In September, three of the pipelines were severely damaged by explosions, resulting in ruptures. One of the Nord Stream 2 pipes remained intact. 

Although Gazprom has stated that repairing the damaged pipelines is possible, two sources told Reuters that Moscow does not expect relations with the West to improve sufficiently in the near future to warrant the pipelines being repaired. 

In January, outgoing Uniper CEO Klaus-Dieter Maubach, which was Russia’s top gas customer before pipeline flows were reduced, said Nord Stream could be repaired within a year. But that’s not politically popular in the EU as countries race to find supplies elsewhere. 

However, the Russians aren’t abandoning Nord Stream. Sources said even though repairs might not be imminent, there is a plan for conserving the pipelines “for possible reactivation in the future.” This means that Gazprom would seal the ruptured ends of the damaged lines and coat the insides with an anti-corrosion lubricant. 

The possibility of reopening Nord Stream might come if Europe’s ability to offset Russian gas supplies fails. A source said this might push Europe back to buying cheap gas from Russia. 

Meanwhile, the investigation into the Nord Stream explosions at the end of September continues amid accusations from Moscow that Western intelligence services are “hiding something.”

Famed journalist and Pulitzer prize winner Seymour Hersh, who for decades was a star reporter writing for The New York Times and New Yorker, published a bombshell report on his Substack last month about the US sabotaging Nord Stream under the guise of a military exercise in 2022. 

In recent Senate testimony, US Under Secretary of State for Political Affairs Victoria Nuland praised the Nord Stream sabotage act. 

… and then there’s this. 

Tyler Durden
Fri, 03/03/2023 – 09:44

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It’s Now Impossible To Keep Politics Out Of Central Banks

It’s Now Impossible To Keep Politics Out Of Central Banks

By Michael Every of Rabobank

The court of public opinion

Years ago, the start of quantitative easing caused a backlash over concerns that the central banks were prioritizing the asset-rich over the average Joe. It raised questions about mandates and the independence of the monetary authority, particularly in Europe where the ECB was the only actor to prevent a fragmentation of the Eurozone. And it even raised questions of ethics, after some of the FOMC members’ trading activities came to light.

Plus, for years their policy was unable to revive inflationary pressures. But then, due to circumstances outside the control of central banks, inflation did return – with a vengeance. And while some of these supply-driven inflation shocks do not fall within the realm of control of central banks, it is the monetary policymakers who are now being looked at for last year’s erosion of households’ purchasing power.

The number of news articles in mainstream media related to monetary policy has increased with the rise in inflation, and central banks are under the microscope. Their credibility is tarnished, and they are behind in the court of public opinion.

You would therefore expect monetary policymakers to be a bit more cautious, for example when selecting new executives. The recent appointment of Austan Goolsbee to the position of President of the Federal Reserve Bank of Chicago has stirred up quite some dust, though.

First of all, his appointment adds to the concerns that central banks are increasingly becoming politicized, putting the independence of the monetary authorities at risk.

The new head of the Chicago Fed is a prominent Democrat and outspoken critic of the GOP. Now, that of itself shouldn’t be an issue – we all have our political beliefs. And considering that the government picks the national monetary policymakers, that usually results in nominees who are at least to some extent aligned with the political incumbent. This is not just true in the US; the appointment of ECB board members has seen similar horse trading in the highest circles of the EU. And after that pick has been made, it is quite uncommon to see politics in the voting process.

Yet, that is exactly what appears to have happened over the Chicago Fed presidency. Bloomberg News unveiled that the FOMC’s Bowman and Waller, both appointed to the Federal Reserve board by former President Trump, abstained from the confirmation vote. Moreover, the news agency discovered that several of the Chicago Fed directors who nominated Goolsbee to head the institution have been donors to Democratic candidates.

Secondly, and to make matters worse, Bloomberg News followed up on that story yesterday with the news that the executive search consultancy that helped select Goolsbee for the job employs his wife. Responding to the Bloomberg reporters, a spokesperson for the Chicago Fed stated that “members of the search committee, […] were made aware Robin Goolsbee was an employee of the search firm”, and that she didn’t play a role in the selection process. However, none of this information was disclosed during the search or after the choice was made – despite the fact that the regional central bank has been relatively open and transparent about the search process.

Yes, Goolsbee has great papers to lead the institution. And of course, neither of the above may have actually influenced the outcome of the selection process, as the Chicago Fed has stressed too. But the optics sure aren’t great.

The commotion surrounding the appointment of the regional Fed’s executive only adds to President Biden’s headache trying to fill the vacancy left by the departure of Lael Brainard, which is already a contentious pick between inflation (a hawk) and employment (a dove) for the US president. Within his own party, Senator Warren has called for the appointment of a person who will balance some of Powell’s ‘extreme’ rate hikes, to avoid that the Fed’s obsessive inflation fight “puts millions of people out of work”. Keeping politics out of the doors of central banks has become increasingly difficult in the current economic environment.

This more general notion not only holds for the world’s biggest central bank. The ECB, for example, is taking some flak for their insistence that wages are a key risk for the future inflationary process. European central bankers have acknowledged that there should be some wage increases to compensate households for the lost purchasing power, but they have also cautioned labour unions against asking for too much. Last year, the ECB even found itself in a pay dispute with its employees.

While wages, through their impact on inflation, are tied to the bank’s objectives, their recent comments also put the ECB more in the political arena. At a recent retreat, the Governing Council was presented a slide pack detailing how company profit margins have been increasing rather than shrinking, despite the sharp rise in input costs. As the Reuters article summarizes, “the idea that companies have been raising prices in excess of their costs at the expense of consumers and wage earners is likely to anger the general public.” It also implies that the ECB is at risk of overtightening, since profit margins do not have the same self-reinforcing effect on inflation as wages might.

That is particularly true if the ECB continues to point to wages as the main risk for the inflation outlook – which have increasingly become the subject of Lagarde’s press conferences. This assessment not entirely fair, though. The accounts of the October meeting already mentioned an “unusual resilience of profits and profit margins in the light of deteriorating cyclical conditions”   and the accounts of the February ECB meeting released yesterday do note that “developments in profits and mark-up warranted constant monitoring and further analysis on an equal footing with developments in wages.”

For now, though, the ECB’s focus remains very much on wages: “until a few months ago wage growth had remained moderate, but now there was a clear acceleration, which had to be taken into account in the outlook for core inflation.” The Council added that the labour market remains tight despite the slowdown in activity. “Therefore, while there was wide agreement that there were no signs of a wage-price spiral, it was argued that current wage growth was clearly not consistent with a 2% inflation target.”

This is the ECB suggesting that they may need to do more to lean against wage developments and a tight labor market – which comes down to depressing demand: a better than expected growth outlook would contribute to continued inflationary pressures, which were unlikely to abate by themselves without further significant policy tightening.”

Indeed, yesterday’s inflation data for February, which saw core HICP accelerating to 5.6% unexpectedly, may dash some of the doves’ hopes that “the recent dynamics of core inflation showed that there had been a levelling-off of momentum.” That increases the upside risks for the ECB’s policy rate.

Tyler Durden
Fri, 03/03/2023 – 09:25

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The SAFE TECH Act Is Anything but Safe


Sen. Mark Warner

The latest anti-tech legislation in Congress (S.560) would seriously threaten free speech online and creators’ ability to monetize content while also subjecting tech companies to a flood of frivolous or unfair lawsuits.

The bill—dubbed the “Safeguarding Against Fraud, Exploitation, Threats, Extremism and Consumer Harms (SAFE TECH) Act”—comes from Democratic Sens. Mark Warner (Va.), Mazie Hirono (Hawaii), Amy Klobuchar (Minn.), Tim Kaine (Va.), and Richard Blumenthal (Conn.). It has a companion in the House sponsored by Reps. Kathy Castor (D–Fla.) and Mike Levin (D–Calif.).

This year’s SAFE TECH Act is a redux of a bill first introduced in 2021. That version—which Techdirt Editor-in-Chief Mike Masnick called “a dumpster fire of cluelessness”— failed to go anywhere (thank goodness). But now the SAFE TECH Act is back, and it doesn’t appear to be any better this time around.

The SAFE TECH Act is yet another stab at undermining Section 230 of federal communications law. As it stands, Section 230 protects tech platforms—large and small—and their users from civil liability for content created by others. It does not protect against liability for content that a tech entity or user creates, nor does it protect against liability for federal crimes.

Significant Changes to Section 230 

Section 230 has two main sections, one which protects against liability for third-party speech allowed (or overlooked) on a web platform and one which protects against liability for content moderation (that is, blocking certain speech). The first main part of Section 230—sometimes referred to as c(1)—says “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The second main part—c(2), or the “Good Samaritan clause”—says internet platforms and users won’t be held liable on account of “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.”

The first change the SAFE TECH Act would make is to say c(1) doesn’t apply when “the provider or user has accepted payment to make the speech available or, in whole or in part, created or funded the creation of the speech.”

This would open up a huge range of tech companies to more liability. Blogging platforms like WordPress and newsletter and podcast distributors like Substack would be vulnerable, as would any social media platform that provides a paid tier level (like Twitter Blue).

So would all sorts of web hosting services—creating huge incentives for providers to cut off web hosting access to any person or group even slightly controversial.

And this change “would also threaten liability on any service that shares its advertising revenue with creators, for instance as YouTube does,” as law professor and blogger Eugene Volokh pointed out when the SAFE TECH Act first came out. This would create incentives for platforms to cut off or severely limit creator monetization schemes, meaning “creators would thus be less likely to earn money from their works.”

In addition, “the section would threaten liability whenever any providers provide grants to support local journalism or other such projects (something like the Google News Initiative),” noted Volokh. “Providers would thus become less likely to directly or indirectly support journalism and other expression.”

So, already, the SAFE TECH Act would usher in an array of negative incentives—and that’s just with its first change. Alas, the bill would also change a lot more.

Throwing Fuel on the Speech Suppression Fire

In essence, the SAFE TECH ACT “takes nearly every single idea that people who want there to be less speech online have had, and dumped it all into one bill,” noted Masnick of the (nearly identical) original version (emphasis his). “Everything about the bill is designed in a way that opens it up to abuse by the rich, powerful and privileged. Everything about the bill allows them to file costly lawsuits (or threaten to do so) and pressure websites to pull down all sorts of criticism.”

The SAFE TECH Act also says that Section 230 c(1) protection wouldn’t apply (regardless of whether payment or funding was involved) “to any request for injunctive relief arising from the failure of a provider of an interactive computer service to remove, restrict access to or availability of, or prevent the dissemination of material that is likely to cause irreparable harm.”

Injunctive relief means someone bringing a lawsuit is not asking for monetary damages but simply for some sort of action to be taken—in online speech cases, likely that the speech in question be removed.

Keep in mind that this provision isn’t about lawsuits stemming from illegal content, just content likely to cause “irreparable harm.” And while “irreparable harm” sounds serious, it simply means harm that couldn’t be compensated for with money, including harm to someone’s reputation.

It’s a vague phrase that could open a floodgate of lawsuits over anything and everything objectionable on social media—perhaps particularly speech that is unflattering to the rich and powerful.

The SAFE TECH Act “would not protect users’ rights in a way that is substantially better than current law,” warned the digital rights advocacy group Electronic Frontier Foundation (EFF) back in 2021. “And it would, in some cases, harm marginalized users, small companies, and the Internet ecosystem as a whole.”

Carveouts, Carveouts, Carveouts

Lastly, the bill would carve out a bunch of exceptions to Section 230 protection, including for “any action alleging discrimination on the basis of any protected class, or conduct that has the effect or consequence of discriminating on the basis of any protected class, under any Federal or State law.”

As Masnick wrote about a similar provision in the 2021 version of SAFE TECH, “while it may sound good to say this can’t be used to block civil rights cases, in actual practice a bunch of recent ‘civil rights’ cases have involved white supremacists, out-and-out misogynists, and other terrible people claiming that their civil rights were violated by being kicked off of platforms. Enabling such lawsuits seems incredibly short sighted.”

And in some states, political affiliation is a protected class, meaning Section 230 wouldn’t apply to cases where someone claims their content was blocked or restricted because of their politics. Again: floodgates.

And that’s still not all.

The SAFE TECH Act would also amend Section 230 to state that it “shall be construed to prevent, impair, or limit any action brought under Federal or State antitrust law,” “any civil action for wrongful death,” any action brought under international human rights law, or any “action alleging stalking, cyberstalking, harassment, cyberharassment, or intimidation based, in whole or in part, on sex (including sexual orientation and gender identity), race, color, religion, ancestry, national origin, or physical or mental disability.”

If you look at that and think, well, tech companies shouldn’t be allowed to violate laws with impunity—well, no, and they aren’t. If they create illegal content, they can already be held liable. If they are guilty of federal crimes, they can already be charged just like anyone else. What the SAFE TECH Act would do is open up internet companies to civil lawsuits from individuals and governments if third parties use their services in the course of causing certain harms.

Even if many lawsuits against tech companies over user speech would not stand up to the First Amendment, the absence of Section 230 protection would make these suits more labor- and resource-intensive to fight—upping the likelihood that platforms may decide to crack down on more speech rather than defend themselves in more lawsuits.

The SAFE TECH Act is a dangerous bill that would have far-reaching consequences for content creators, activists, people exposing police violence, whistleblowers, citizen journalists, and basically anyone who uses the internet. Not to mention how it would burden our courts with questionable lawsuits and make life miserable for tech companies large and small.

The post The SAFE TECH Act Is Anything but Safe appeared first on Reason.com.

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Oil Slides After Report Of ‘Growing Rift’ Inside OPEC, UAE “Debating” About Leaving Cartel

Oil Slides After Report Of ‘Growing Rift’ Inside OPEC, UAE “Debating” About Leaving Cartel

Following recent snubs, The Wall Street Journal reports a growing rift between two of OPEC’s largest producers – Saudi Arabia and the United Arab Emirates.

Still formally allies, Saudi Arabia and the U.A.E. have diverged on several fronts, competing for foreign investment and influence in global oil markets and clashing on the direction of the Yemen war.

The disagreements once unfolded behind closed doors but are increasingly spilling out into the open, threatening to reorder alliances in the energy-rich Persian Gulf at a time when Iran is trying to exert more sway across the region and Russia’s war in Ukraine has raised crude prices and roiled OPEC decision-making.

Crude prices tumbled on the news as fears of a crack in OPEC’s production promises may lead to more supply…

Crucially, within OPEC, the U.A.E. is obligated to pump much less than it is capable of, hurting its oil revenue.

It has long pushed to pump more oil, but the Saudis have said no, OPEC delegates have said.

Now, some Emirati officials say, the U.A.E. is having an internal debate about leaving OPEC, a decision that would shake the cartel and undermine its power in global oil markets.

And most recently, the Emiratis clashed with the Saudis last October when OPEC+ decided to dramatically reduce oil production to prop up crude prices.

“Up until a few years ago, this sort of division and openly pursuing objectives that are counter to what their brothers are pursuing was unheard of,” said Dina Esfandiary, senior adviser for the Middle East and North Africa at the International Crisis Group.

“Now it’s becoming increasingly normal.”

The Emiratis are “worried about a Saudi that works against their interests,” said Ms. Esfandiary. She said the Saudis are concerned the U.A.E. poses a threat to Saudi dominance in the Gulf.

Tyler Durden
Fri, 03/03/2023 – 09:04

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“It’s Going To Bite Us” – Upside-Down Auto Loans Surge

“It’s Going To Bite Us” – Upside-Down Auto Loans Surge

Consumers face increasing financial difficulties due to high inflation, rising interest rates, maxed-out credit cards, lack of personal savings, and nearly two years of negative real wage growth, resulting in an emerging distress cycle for subprime auto loans.

According to S&P Global, more than 6% of subprime auto loans were at least 60 days overdue in December, a more significant percentage than during the 2008-09 GFC. 

Bloomberg reported that auto dealers had noticed an alarming rise in customers who trade in their vehicles with negative equity of $10,000. 

“As trade-in values begin to cool, each month more and more consumers will find themselves falling from positive to negative equity.

“Unless American car shoppers break their habit of buying again too soon, we’ll see the negative equity tide continue to rise,” Ivan Drury, director of insights at auto-market researcher Edmunds, said. 

About one month ago, when discussing the “perfect storm” hitting the US auto market, we showed that according to Fitch, “More Americans Can’t Afford Their Car Payments Than During The Peak Of Financial Crisis“…

… which was to be expected: after all, the latest consumer credit report from the Fed revealed an exponential spike in the number of new car loans, which increased by more than $2,000 in one quarter, from just over $38,000 (a record) to $40,155 (a new record).

And purchasing a new car has become less feasible for the average person. Approximately two out of every 13 individuals are making monthly car payments of $1,000 or more. The average loan rate for new car loans just hit a 13-year high and will soon rise even higher. 

Yet a giant wave of auto loan defaults among subprime Americans has yet to hit. Perhaps the negative-equity surge is the tipping point. Edmunds data shows average negative equity on trade-ins is approaching pandemic highs of $5,500. 

“Because these car loans are generally unaffordable at the outset, that means that every month, borrowers are getting closer to the financial edge,” said Kathleen Engel, a law professor at Suffolk University.

Pete Kesterson, the general manager of a car dealership in Falls Church, Virginia, warned:

“It’s going to come, and it’s going to bite us,” referring to negative equity, which he believes will worsen.

“Now, we’re selling the cars for so much more, and financing for longer, at a much higher interest rate. There are some challenges coming down the pike.”

The rising delinquency rates for subprime auto loans are unexpectedly happening at the current record-low unemployment rates. Too many borrowers with low credit scores took on too much auto debt during Covid. Now the payback period has arrived. 

Tyler Durden
Fri, 03/03/2023 – 08:45

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