New government report says Social Security will be broke in 10 years

Paris. Such a romantic city.

Sip cafe at a sidewalk bistro, while you take in the wafting smell of burning rubber from the street fires.

Take a picture with the Eiffel Tower, as you dodge incoming tear-gas canisters.

Enjoy the ambiance as you stroll the alleys between 5,600 metric tons of garbage currently rotting on the sidewalks.

See, the sanitation workers’ union is one of several currently on strike in Paris.

They and over a million protesters have lit fires in the streets, destroyed property, and sparred with riot police over the past weeks.

All in an effort to stop the government from raising the retirement age from 62 to 64 by 2030. (Or from 57 to 59 for professions considered dangerous, such as garbage collectors.)

Like essentially all Western countries, France’s population is aging. And the retirement system depends on more workers paying into the system than retirees collecting.

In 1950, four French workers were paying for just one retired French pensioner.

Today, the ratio is less than two workers for each retiree— and by 2040 it could be about 1:1.

Now, it’s understandable that people are angry over broken promises.

But the public refuses to understand or accept basic financial realities.

They exist in a world where all this stuff is free, and they simply shouldn’t have to worry about things like saving for retirement.

And of course, France is far from unique. It is simply a mild preview of the social chaos that is coming to the US…

Three days ago (last Friday March 31st) the Board of Trustees for Social Security released its annual report.

According to the report, Social Security has been paying out more than it takes in since 2021, and “Social Security’s total cost is projected to be higher than its total income in 2023 and all later years.

And at that rate, “reserves become depleted in 2033, one year earlier than projected in last year’s report.”

So the situation is actually getting worse.

Keep in mind these aren’t some random fringe economists writing this. The Board of Trustees of Social Security include, for example, US Treasury Secretary Janet Yellen.

So what happens when Social Security’s trust funds run out of money?

Well, the program won’t disappear entirely; there will still be incoming payroll tax revenue to partially fund the program (FICA taxes that are paid by workers).

But just like the situation in France, there simply aren’t enough workers in the system to keep paying full benefits to the program’s 51+ million retirees.

This means that, even factoring in payroll tax revenue, Social Security recipients are going to have to take an enormous cut in their monthly benefit of around 25%.

And that might be wildly optimistic; in their annual report the Social Security lists the key assumptions of their projections… and those assumptions look like they could be grossly incorrect.

For example, the agency assumes that inflation in the US will return to 2%-3%, and basically stay there forever. Fat chance.

They also assume that the US fertility rate (which is a critical indication of the number of future taxpayers) will be 2.0; this is another outrageously bad assumption, given that the US fertility rate hasn’t consistently been above 2.0 since the late 1960s!

The trustees’ are clearly making bad assumptions… so even when they say the trust fund will run dry in 2023, but that they’ll still be able to make roughly 3/4 of the payments, the reality is likely much, much worse.

But right now, with all these obvious problems rapidly approaching, politicians are promising voters that they WON’T touch Social Security.

Even the ones talking about balancing the budget vow not to touch Social Security…

(To balance the budget without touching the sacred cows of Social Security, Medicare, and Defense would require cutting 85% of ALL other federal spending.)

Of course, reality is reality, and places like France show us the inevitable outcome:

  • The retirement age will go up
  • Benefits will be cut substantially
  • Payroll taxes will increase

We might also expect the same, or worse, reaction as in France— massive protests, strikes, riots, property destruction, and social chaos.

And all that will do nothing.

Because there are really two institutions which Americans could realistically expect to solve this problem:

One, the US government, currently saddled with $31.5 trillion of debt and rapidly increasing, with a total net worth (assets versus liabilities) of NEGATIVE $34 trillion.

Two, the Federal Reserve, which last year reported ‘unrealized losses’ of more than $330 billion against just $42 billion in capital, making it completely and totally insolvent.

So there are really only two plays left to make…

The US government could raise taxes to cover the gap.

The Federal Reserve could print money to cover the gap, creating massive inflation.

Without responsible leadership willing to make tough decisions, this is their default option.

There are a few takeaways here.

1. Prepare to fund a portion of your own retirement.

Between inflation and benefit cuts, you simply cannot rely on the promises the government has made to you about your retirement.

It’s probably not going away entirely, but you should consider Social Security as a supplement to your retirement, and not the primary source. You certainly won’t be any worse off if by some miracle Social Security manages to pay the full benefits.

2. Prepare for a future with higher taxes.

And take every legal step at your disposal to reduce what you owe.

3. Prepare for a future with higher inflation.

Again, the government’s inevitable solution is to go deeper into debt, and print the money to fund it. As we’ve already seen, more money printing means more inflation.

That doesn’t necessarily mean inflation will be at 10-15% levels for years to come. But it probably won’t be the 2% average we’ve gotten used to over the past two decades.

The good news is you can control your own fate by having your own retirement funds, which puts you in the drivers street.

And at the same time, you can lower your taxable income significantly by, for example, contributing to a Traditional 401(k) retirement account.

As of 2023, you can contribute up to $22,500 per year, or $30,000 per year if you’re over 50.

For those who are self employed, earn money through a side businesses, or own a business without any employes, using a Solo 401(k) is even more beneficial.

In 2023, the tax-free limit for contributions rises to $66,000 (or $73,500 for those age 50 and older) because you can make both the employer and employee contributions.

A self-directed Solo 401(k) also provides a wider range of investment options such as real estate, foreign investments, private equity, and more.

And this barely even scratches the surface of the options you have available to shore up your retirement, beat inflation, and legally reduce your tax rate.

You don’t have to protest, or vote harder. You simply have to understand the magnitude of the problem, and use the tools at your disposal to fix it.

Source

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Rand Paul Is Right: Banning TikTok Would Be Idiotic


Rand Paul is right: Banning TikTok would be idiotic.

Why is the government trying to ban TikTok? The popular social media app, which is owned by ByteDance, a Chinese company, has come under fire from both Republicans and Democrats who are determined to get rid of it. They’re worried the Chinese government has too much influence on the platform.

Never mind that more than 150 million Americans use TikTok to express themselves creatively, consume news they wouldn’t find elsewhere, and keep themselves entertained—nanny state politicians like Sen. Josh Hawley (R–Mo.) and President Joe Biden think they should have the power to control what kinds of foreign content you’re allowed to see.

Not everyone in Washington thinks banning TikTok is a good idea. Sen. Rand Paul (R–Ky.) recently denounced the idea of giving the Biden administration more power to control social media.

Paul is right. Here are three reasons why letting the federal government prohibit TikTok is an idiotic idea.

First off, the dangers of TikTok have been overstated. Yes, it’s true you can find really vile content on the platform—it’s not all dance videos, recipes, and makeup tutorials. But that’s not unique to TikTok; there’s bad stuff in all corners of the internet. Just because a website or an app is bad sometimes for some people doesn’t mean we should violate the First Amendment rights of millions of others. Censorship is censorship, even if it’s well-intended. We should leave it to individuals, families, and schools to set restrictions on social media usage—not the federal government.

It’s true that TikTok is unique in that the Chinese Communist Party (CCP) can pressure the company in ways that are bad. It’s very likely that TikTok mutes certain controversial subjects, and takes down the accounts of dissidents in order to protect the CCP.

But the sad truth is that the U.S. government has applied similar pressure to American social media companies like Facebook and Twitter. Journalists have discovered that federal agencies like the FBI and the Department of Homeland Security regularly asked Twitter to delete content the government didn’t approve of. My own reporting for Reason has revealed that the White House and the Centers for Disease Control and Prevention applied constant pressure on Facebook during the pandemic to restrict speech. If members of Congress are really so worried about government propagandists controlling the discourse on social media, they should start by putting their own house in order.

Lastly, any new law that gives the feds the power to ban TikTok could easily be weaponized against other companies. The RESTRICT Act, which is co-sponsored by Sens. John Thune (R–S.D.) and Mark Warner (D–Va.), empowers the Commerce Department to take action against foreign threats on social media. But lawmakers, national intelligence experts, and mainstream media pundits are constantly accusing Facebook of allowing too much foreign misinformation on the platform. This is the PATRIOT Act 2.0: If we give the government more tools to police TikTok, it’s going to use them against all of us.

So let’s leave TikTok alone. Not just because of the dance videos—but also because of the First Amendment.

Edited by John Osterhoudt; camera by Isaac Reese

Photo: Imagine China/Newscom; Petr Svancara/ZUMAPRESS/Newscom; Ron Sachs/CNP/ SplashNews/Newscom; Chris Kleponis—CNP/picture alliance / Consolidated News Photos/Newscom; Tom Williams/CQ Roll Call/Newscom; Graeme Sloan/Sipa USA/Newscom

The post Rand Paul Is Right: Banning TikTok Would Be Idiotic appeared first on Reason.com.

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Large Libel Models: The CheckBKG Analogy

To better understand the debate about possible defamation liability for OpenAI, based on its Large Libel Models tendency to sometimes communicate entirely made-up quotes about people—supposedly (but not actually) drawn from leading media outlets— let’s consider this hypothetical:

Say a company called OpenRecords creates and operates a program called CheckBKG, which does background checks on people. You go to CheckBKG.com, enter a name, and the program reviews a wide range of publicly available court records and provides a list of the criminal and civil cases in which the person has been found liable, including quotes from relevant court records. But unfortunately, some of the time the program errs, reporting information from an entirely wrong person’s record, or even misquoting a record. CheckBKG acknowledges that the information may be erroneous, but also touts how good a job CheckBKG generally does compared to ordinary humans.

Someone goes to CheckBKG.com and searches for someone else’s name (let’s say the name Jack Schmack, to make it a bit unusual). Out comes a statement that Schmack has been convicted of child molestation and found liable in a civil case for sexual harassment, with quotes purportedly from the indictment and the trial court’s findings of fact. The statement accurately notes Schmack’s employer and place of residence, so readers will think this is about the right Schmack.

But it turns out that the statements about the court cases are wrong: The court records actually refer to someone entirely different (indeed, not someone named Schmack), or the software missummarized the court records and wrongly reported an acquittal as a conviction and a dismissal of the civil lawsuit as a finding of liability. The quotes are also entirely made up by CheckBKG. It also turns out that Schmack has informed OpenRecords that its software is communicating false results about him, but OpenRecords hasn’t taken steps to stop CheckBKG from doing so.

It seems to me that Schmack would be able to sue OpenRecords for defamation (let’s set aside whether there are any specialized statutory schemes governing background checks, since I just want to explore the common-law defamation tort here):

  1. OpenRecords is “publishing” false and reputation-damaging information about Schmack, as defamation law understands the term “publishing”—communication to even one person other than Schmack is sufficient for defamation liability, though here it seems likely that OpenRecords would communicate it to other people over time as well.
  2. That this publication is happening through a program doesn’t keep it from being defamatory, just as physical injuries caused by a computer program can be actionable. Of course, the program itself can’t be liable, just as a book can’t be liable—but the program’s developer and operator (OpenRecords) can be liable, just like an author or publisher can be liable.
  3. OpenRecords isn’t protected by 230, since it’s being faulted for errors that its software introduces into the data. (The claim isn’t that the underlying conviction information in court records is wrong, but that OpenRecords is misreporting that information.)
  4. OpenRecords’ noting that the information may be erroneous doesn’t keep its statements from being defamatory. A speaker’s noting that the allegation he’s conveying is a rumor (which signals a risk of error) or that the allegation he’s conveying is contradicted by the person being accused (which likewise signal a risks of error) doesn’t keep the statements from being defamatory; likewise here.
  5. OpenRecords now knows that its software is outputting false statements about Schmack, so if it doesn’t take steps to prevent that or at least to diminish the risk (assuming some such steps are technologically feasible), it can’t defend itself on the grounds that this is just an innocent error.
  6. Indeed, I’d say that, OpenRecords might be liable on a negligence theory even before being alerted to the specific false statement about Schmack (if Schmack isn’t a public official or public figure), if Schmack can show that it carelessly implemented algorithms that created an unreasonable risk of error—for instance, created algorithms that would routinely make up fake quotes, in a situation where a reasonably effective and less harmful alternative was available.

If I’m right on these points, then it seems to me that OpenAI is likewise potentially liable for false and reputation-damaging communications produced by ChatGPT-4 (and Google is as to Bard). True, CheckBKG is narrower in scope than OpenAI, but I don’t think that matters to the general analysis (though it might influence the application of the negligence test, see below). Both are tools aimed at providing useful information—CheckBKG isn’t, for instance, specifically designed to produce defamation. Both may, however, lead to liability for their creators when they provide false and reputation-damaging information.

I say “potentially” because of course this turns on various facts, including whether there are reasonable ways of blocking known defamatory falsehoods from ChatGPT-4’s output (once OpenAI is informed that those defamatory falsehoods are being generated), and whether there are reasonable alternative designs that would, for instance, prevent ChatGPT-4’s output from containing fake defamatory quotes. But I think that the overall shape of the legal analysis would be much the same.

The post Large Libel Models: The CheckBKG Analogy appeared first on Reason.com.

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Chinese Spy Balloon Gained Intel On US Military Sites, Transmitted To Beijing In Real Time

Chinese Spy Balloon Gained Intel On US Military Sites, Transmitted To Beijing In Real Time

US officials say the verdict is finally in after the government probe into the Chinese spy balloon shot down off the coast of South Carolina on Feb. 4. While Beijing has long insisted it was a benign unmanned civilian airship that accidentally strayed off course, during which time it was observed over sensitive American military installations, a Monday NBC report says it was able to obtain intelligence

“The Chinese spy balloon that flew across the U.S. was able to gather intelligence from several sensitive American military sites, despite the Biden administration’s efforts to block it from doing so, according to two current senior U.S. officials and one former senior administration official,” the NBC report begins.

U.S. Air Force/Department of Defense/Handout via Reuters

One key question has been whether the balloon’s collection technology was capable of transmitting information back to the Chinese government in real time. There was much speculation at the time that the Chinese would have to physically recover the device in order to access whatever data it may have picked up. 

But US officials now say that Beijing did receive information in real time. “China was able to control the balloon so it could make multiple passes over some of the sites (at times flying figure eight formations) and transmit the information it collected back to Beijing in real time, the three officials said,” the report underscores.

“The intelligence China collected was mostly from electronic signals, which can be picked up from weapons systems or include communications from base personnel, rather than images, the officials said.”

Another interesting aspect which US investigators say they’ve uncovered following much of the balloon debris’ retrieval from the ocean in the aftermath of the shootdown is that it had a self-destruct mechanism.

Officials say it “could have been activated remotely by China,” but also explained that “it’s not clear if that didn’t happen because the mechanism malfunctioned or because China decided not to trigger it.”

The sources which spoke to NBC attributed intelligence countermeasures deployed by the Biden administration as having successfully blocked the balloon’s ability to gather more intelligence than it did. In some cases this involved the Pentagon acting quickly to halt electronic signals and communications being admitted from sensitive sites. But it flew over US territory for a significant amount of time, having first entered airspace over Alaska on Jan.28.

Despite the report seeking to present President Biden’s response to the balloon saga as somewhat of a ‘success’, the key question which is still unanswered is how the balloon was able to linger over the US unhindered for that long and why there was no Pentagon intervention earlier – especially if it was suspected of being under operation by a foreign adversary with nefarious intent.

Biden previously downplaying the balloon…

Tyler Durden
Mon, 04/03/2023 – 09:55

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Key Events This Week: Good Friday Payrolls, JOLTS, ISM And Even More Fed Speakers

Key Events This Week: Good Friday Payrolls, JOLTS, ISM And Even More Fed Speakers

Before we look at the main events of this week, a quick recap of this weekend’s highlight: OPEC+ “unexpected”, or rather  expected by some…

… decision to cut output starting in May that will exceed 1 million barrels a day. Russia agreed to keep production at their current reduced level, while Saudi Arabia will see the largest cuts, slowing production by 500k barrels a day. The White House naturally came out strongly against the move, due to concerns with consumer prices and the inflationary effects of higher fuel costs. It will take some time to see exactly how much this impacts global prices as demand concerns linger, but as DB’s Jim Reid notes, this is another potential factor exerting upward pressure on inflation after largely being an ameliorating factors this year. As we will show shortly, oil prices fell every month for the last quarter, leading to the worst Q1 performance since 2020 when global shutdowns throttled demand. Brent crude futures are starting this quarter up +5.60% to $84.24/bbl, with WTI futures up +5.58% to $79.89/bbl after both initially were more than 8% higher at the start of trading.

So looking ahead to this week, the US jobs report on Friday (when the US and most global markets will be closed for Good Friday) should be the main focus. It will be the last jobs numbers before the next Fed meeting on May 3rd and markets will be looking for signs of cooling in the labor market after 475bps of tightening from the Fed over the last year. The report follows recent strong nonfarm payrolls beats, hotter-than-expected inflation data, and a 25bps Fed hike despite US regional bank concerns. Economists expect nonfarm payrolls to gain +240k (vs +311k in February) and the unemployment rate to remain unchanged (3.6%), while expecting hourly earnings growth to rise modestly to 0.3% from +0.2%. Prior to the Friday’s report, JOLTS (Tuesday) and ADP (Wednesday) data will also be in focus.

Today we will get a sense of how global growth evolved over the course of the month with the release of US ISM manufacturing data later on, followed by services on Wednesday. Coupled with the jobs report, whether the ISM indices also show robust growth, especially in components like employment and prices, will be key to assess economy’s resilience. Still, factors like the recent banking turmoil may not yet feed through to major economic indicators. DB’s US economists see both gauges declining from February levels (manufacturing 47.1 vs 47.7 and services 54.4 vs 55.1).

In Europe, the key data releases include trade balance (Tuesday), factory orders (Wednesday) and industrial production (Thursday) for Germany, industrial production (Wednesday) and trade balance (Friday) in France as well as retail sales and PMIs for Italy. Our European economists overview what the latest prints on those indicators, among others, say about the European economy here, providing context for this week’s readings. Going forward, they underscore the recent banking stress as a new headwind and see risks as being tilted to the downside.

The major data points out of Asia include the China Caixin PMI data and Japan Tankan indices which we highlight below along with Japanese labour cash earnings and household spending on Friday. Friday’s data are expected to show total cash earnings per worker at 0.9% YoY, up from January’s 0.8%, and real household spending down -0.2% MoM vs 2.7% in January.

Courtesy of DB, here is a aay-by-day calendar of daily events

Monday April 3

  • Data: US March ISM index, total vehicle sales, February construction spending, China March Caixin manufacturing PMI, Japan Q1 Tankan indices, Italy March manufacturing PMI, new car registrations, budget balance, France February budget balance, Canada Q1 BoC business outlook survey, March manufacturing PMI
  • Central banks: ECB’s Vujcic and Simkus speak

Tuesday April 4

  • Data: US February JOLTS report, factory orders, Japan March monetary base, Germany February trade balance, Eurozone February PPI, Canada February building permits
  • Central banks: Fed’s Mester speaks, BoE’s Tenreyro and Pill speak

Wednesday April 5

  • Data: US March ISM services index, ADP report, February trade balance, UK March official reserves changes, new car registrations, Italy March services PMI, Q4 deficit to GDP, February retail sales, Germany February factory orders, France February industrial production, Canada February international merchandise trade
  • Central banks: BoE’s Tenreyro speaks

Thursday April 6

  • Data: US initial jobless claims, UK March construction PMI, China March Caixin services PMI, Germany March construction PMI, February industrial production, Canada March jobs report
  • Central banks: Fed’s Bullard speaks

Friday April 7

  • Data: US March jobs report, China March foreign reserves, Japan February labor cash earnings, household spending, France February trade balance

* * *

Finally, looking at just the US, Goldman notes that the key economic data releases this week are the ISM manufacturing report on Monday, JOLTS job openings on Tuesday, and the employment situation report on Friday. There are several speaking engagements from Fed officials, including Governor Cook and presidents Mester and Bullard.

Monday, April 3

  • 09:45 AM S&P Global US manufacturing PMI, March final (consensus 49.3, last 49.3)
  • 10:00 AM Construction spending, February (GS +0.2%, consensus flat, last -0.1%): We estimate construction spending increased 0.2% in February.
  • 10:00 AM ISM manufacturing index, March (GS 47.3, consensus 47.5, last 47.7): We estimate that the ISM manufacturing index fell 0.4pt to 47.3 in March, reflecting the lackluster rebound in East Asian manufacturing activity and a sentiment drag from US banking stresses. Our GS manufacturing tracker edged up by 0.2pt to 47.8.
  • 04:15 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will discuss the economic outlook and monetary policy at an event hosted by the University of Michigan. A moderated Q&A is expected. On March 31, Cook said, “On the one hand, if tighter financing conditions restrain the economy, the appropriate path of the federal funds rate may be lower than it would be in their absence. On the other hand, if data show continued strength in the economy and slower disinflation, we may have more work to do…I am closely watching developments in the banking sector, which have the potential to tighten credit conditions and counteract some of that momentum.”
  • 05:00 PM Lightweight motor vehicle sales, March (GS 14.5mn, consensus 14.6mn, last 14.9mn)

Tuesday, April 4

  • 10:00 AM Factory orders, February (GS -0.7%, consensus -0.5%, last -1.6%); Durable goods orders, February final (last -1.0%); Durable goods orders ex-transportation, February final (last flat); Core capital goods orders, February final (last +0.2%); Core capital goods shipments, February final (last flat): We estimate that factory orders decreased 0.7% in February following a 1.6% decline in January.
  • 10:00 AM JOLTS job openings, February (GS 10,300k, consensus 10,500k, last 10,824k): We estimate that JOLTS job openings declined to 10,300k in February.
  • 01:30 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will deliver pre-recorded introductory remarks at a Fed conference on economics careers. A Q&A is not expected.
  • 06:45 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Fed President Loretta Mester will speak at an event hosted by the Money Marketeers of New York University. Speech text and audience Q&A are expected. Mester last spoke on February 24th, noting “The inflation readings are still not where we need them to be.”

Wednesday, April 5

  • 08:15 AM ADP employment report, March (GS +185k, consensus +210k, last +242k); We estimate a 185k rise in ADP payroll employment in March, reflecting softening in Big Data indicators and the persistent underperformance of ADP relative to nonfarm payrolls in recent months.
  • 08:30 AM Trade balance, February (GS -$68.7bn, consensus -$68.8bn, last -$68.3bn): We estimate that the trade deficit widened to $68.7bn in February.
  • 09:45 AM S&P Global US services PMI, March final (consensus 53.8, last 53.8)
  • 10:00 AM ISM services index, March (GS 54.1, consensus 54.3, last 55.1): We estimate that the ISM services index declined by 1.0pt to 54.1 in March, reflecting snowier weather, a sentiment drag from banking stresses, and the pullback in our survey tracker (-1.7pt to 51.1).

Thursday, April 6

  • 08:30 AM Initial jobless claims, week ended April 1 (GS 240k, consensus 200k, last 198k); Continuing jobless claims, week ended March 25 (consensus n.a., last 1,689k): We estimate that seasonal factor revisions in the upcoming jobless claims report could result in a boost as large as 40-50k to initial jobless claims if the seasonal distortions that we have highlighted over the past year (and that the BLS is aware of; see slide 23 here) are eliminated. As a result, we forecast that initial jobless claims will increase by 42k to 240k in the week ended April 1, though we note that there could be a much less meaningful upward revision if the existing residual seasonality persists.
  • 10:00 AM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will discuss the economic outlook and monetary policy at an event hosted by the Arkansas State Bank Department. Speech text and Q&A with audience and media are expected. On March 28, Bullard said, “In my view, continued appropriate macroprudential policy can contain financial stress in the current environment, while appropriate monetary policy can continue to put downward pressure on inflation…Financial stress has been on the rise since [early March] in the wake of recent bank failures and turmoil. The macroprudential policy response to these events has been swift and appropriate. Regulatory authorities have used some of the tools that were developed or first utilized in response to the 2007-09 financial crisis in order to limit the damage to the macroeconomy, and they’re ready to take additional action if necessary.”

Friday, April 7

  • 08:30 AM Nonfarm payroll employment, March (GS +260k, consensus +240k, last +311k); Private payroll employment, March (GS +245k, consensus +223k, last +265k); Average hourly earnings (mom), March (GS +0.35%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), March (GS +4.32%, consensus +4.3%, last +4.6%); Unemployment rate, March (GS 3.6%, consensus 3.6%, last 3.6%); Labor force participation rate, March (GS 62.5%, consensus 62.5%, last 62.5%): We estimate nonfarm payrolls rose by 260k in March (mom sa). When the labor market is tight, job growth tends to normalize in March from a strong winter pace, and Big Data employment indicators indeed decelerated in the month. We also assume a 40k drag from snowier weather in the Northeast and Midwest. On the positive side, we expect high but falling labor demand to more than offset rebounding layoffs in the information and financial sectors, and we believe the March survey week (ended March 18) was too early to reflect the impact of recent banking stresses. The March seasonal factors have also evolved favorably in recent years and represent a tailwind worth 50-100k, in our view. We estimate the unemployment rate was unchanged at 3.6%, reflecting a modest rise in household employment offset by flattish labor force participation (we estimate unchanged on a rounded basis at 62.5%). We estimate a 0.35% increase in average hourly earnings (mom sa) that lowers the year-on-year rate to 4.32%, reflecting continued but waning wage pressures and neutral calendar effects.

Source: Deutsche Bank, Goldman, BofA

Tyler Durden
Mon, 04/03/2023 – 09:44

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Death By 1.15 Million Cuts

Death By 1.15 Million Cuts

By Benjamin Picton, senior macro strategist at Rabobank

OPEC stunned the market late on Sunday by announcing oil production cuts of around 1.15 million barrels per day. The announcement, strangely, came ahead of the actual OPEC meeting scheduled for today, and throws another spanner in the works for central bankers who may have just started to unclench their jaws a little with regards to the inflation situation. Indeed, US PCE inflation on Friday fell to 5.4% y-o-y, down from 5.3% a month earlier and a tick better than expected, but preliminary Eurozone core CPI actually lifted from a month earlier even as the headline figure fell by more than the Bloomberg survey had predicted.

The durability of declining headline inflation must now be seriously questioned if oil producing countries are determined to ensure that oil prices have already bottomed. Rabobank’s energy expert, Joe DeLaura, had already seen Brent crude prices testing $85/bbl by the end of the year –as it is already is today– and $100/bbl in 2025. The critical factor for central banks may now shift to the level at which those declines are likely to stop. Is it really going to be 2%?

The OPEC+ production cuts come on top of the 500,000 bbl per day reduction announced by Russia in early March, and highlight how susceptible the economic outlook remains to (deliberate) supply shocks. The US response until now has been to release oil from its Strategic Petroleum Reserve (SPR), which has reduced stocks to its lowest level since the early 1980s. US Energy Secretary Granholm recently told Congress that it could take “years” to refill the SPR: the OPEC cuts may stretch Granholm’s timeline even further as crude prices get pushed further away from the levels at which the Biden Administration is happy to be a buyer.

There is clearly an element of ‘oils ain’t oils’ about this, as energy is intensely political. For one example, the $60/bbl EU price cap on Russian exports, which Japan has just breached with permission, may soon have to be addressed by others if price rises are sustained. For another, see recent Japanese criticisms of Australia “quiet-quitting” the LNG market.

But far more importantly, the new OPEC+ cuts are led by Saudi Arabia, which will drop output by 500,000 bbl, which is likely to further stoke tensions with the Biden administration, who were unhappy with Saudi unwillingness to increase oil output last year to help bring inflation under control, and as recent diplomatic developments in the Middle East show a closer relationship between Riyadh and Beijing.

Naturally, against this backdrop we also hear renewed chatter of the CNY challenging the US Dollar’s dominance. However, this certainly isn’t the first time that fears over the Dollar reserve system have flared, and as Michael Every describes here, the death of the Dollar-based system is much exaggerated, and will likely end badly for those challenging it even if it were to occur.

Nonetheless, this issue is clearly likely to linger through the week after the OPEC+ headline, even for those who don’t pay much attention to these kind of paradigmatic issues, at least as long as it is centered on oil, and hence inflation.

Tyler Durden
Mon, 04/03/2023 – 09:25

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Weekend Horror: Death Toll Rises To 32 After Tornado Outbreak Across Midwest, South

Weekend Horror: Death Toll Rises To 32 After Tornado Outbreak Across Midwest, South

Folks across the South and Midwest are waking up Monday morning to assess the destruction from powerful storms that spawned dozens of tornados over the weekend, killing at least 32, according to AP News

“While we are still assessing the full extent of the damage, we know families across America are mourning the loss of loved ones, desperately waiting for news of others fighting for their lives, and sorting through the rubble of their homes and businesses,” President Biden said in a statement Sunday. 

The severe storm outbreak began on Friday, which impacted at least seven states and resulted in at least 50 tornado reports. These twisters destroyed homes, businesses, and infrastructure. 

There have been 15 weather-related deaths in Tennessee. In Arkansas, at least five people lost their lives, prompting President Biden to approve an emergency declaration following the storms that affected Little Rock and other areas in the state. Another five died in Indiana, while four people perished in Illinois. Fatalities were also reported in Alabama and Mississippi; even one person died in Deleware after a tornado strike. 

Assessment of the damage is still underway in several states impacted by tornadoes. The number of deaths could continue to grow on Monday. 

“I’ve directed my team to bring every element of the federal government together to help with immediate needs and long-term rebuilding. Early this morning, I approved an expedited major disaster declaration to quickly provide Federal assistance to the people of Arkansas,” Biden said. 

The latest tornado outbreak across the South and Midwest comes just a week after a powerful twister devastated Rolling Fork, Mississippi, killing at least another 26 people and damaging much of the small town

Tyler Durden
Mon, 04/03/2023 – 09:10

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

WWE And UFC Parent Endeavor To Combine In $21 Billion Mega-Merger

WWE And UFC Parent Endeavor To Combine In $21 Billion Mega-Merger

Shares of WWE spiked higher during the premarket session this morning, before eventually moving lower, on a report that the company is going to be entering into a $21 billion tie up with UFC parent company, Endeavor.

The deals values both companies at more than $21 billion, Yahoo reported Monday morning, and the new conglomerate will trade under the ticker TKO. The deal values WWE at $9.3 billion and Endeavor at $12.1 billion. 

Shares had been on a six month rally from near $70 per share to over $90 per share by Friday’s close on news that former Chairman Vince McMahon could be returning. Shares have almost doubled off late 2020 lows near $40 per share. 

WWE majority owner and Executive Chairman Vince McMahon is now expected to assume the executive chairman role of the new company. Endeavor CEO Ari Emanuel will be the company’s CEO.

Emanuel said in a statement: “This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed. For decades, Vince and his team have demonstrated an incredible track record of innovation and shareholder value creation, and we are confident that Endeavor can deliver significant additional value for shareholders by bringing UFC and WWE together.”

McMahon added: “Given the incredible work that Ari and Endeavor have done to grow the UFC brand – nearly doubling its revenue over the past seven years – and the immense success we’ve already had in partnering with their team on a number of ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders.”

The companies are predicting synergies of about $50 million to $100 million, mostly from “back office consolidation”, the report says. 

Jefferies analyst Randy Konik said on Monday: “We like the announced transaction to merge UFC with WWE as it creates a separate contained live sport entity that can maximize long-term value and valuation for shareholders and no incremental debt usage is a major positive in terms of transaction structure. In our view, the UFC is in the early stages of its growth trajectory and EDR’s expertise in sports, marketing representation, and live events can take WWE’s fundamentals incrementally higher.”

Part of the reason shares are lethargic Monday morning is that no one is expecting a counter-offer. Steve Cahall of Wells Fargo said: “The premium is solid and if McMahon is on board then it’s done as WWE is a controlled company (and McMahon would need a hefty premium for a cash deal). We would view a deal with Endeavor favorably for WWE.”

Tyler Durden
Mon, 04/03/2023 – 08:45

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

Study: Around the World, Internet Use Linked to Greater Well-Being


two happy women on laptops

Research links internet use to global well-being. In a new paper, researchers from Tilburg University and the University of Oxford look at how internet access and use are linked to well-being in countries around the world. Overall, their results showed that across eight well-being outcomes, “individuals who had access to, or actively used the internet reported meaningfully greater well-being than those who did not,” the authors wrote.

For the study, authors, Matti Vuorre and Andrew K. Przybylski examined measures of well-being across more than 2.4 million people for the time period of 2006 through 2021. Their data come from the Gallup World Poll, a nationally representative annual survey of about 1,000 people from each of 164 countries.

The key questions for the purposes of this research were whether respondents had home internet access (a question Gallup asked in the 2006 through 2015 surveys) or whether they had “access to the internet in any way, whether on a mobile phone, a computer, or some other device” (asked from 2016 onward). From 2017, Gallup also asked, “Can your mobile phone be used to access the Internet?” Additionally, later surveys looked at internet use by asking respondents if they had used the internet in the past seven days.

In all of the Gallup World Poll surveys, respondents were asked about life satisfaction, reports of daily negative and positive experiences, and two measures of social support (“someone in your life always encourages you to be healthy” and “your friends and family give you positive energy every day”). The researchers also used data from the Gallup-Sharecare Global Well-being Index taken in 2013–2015. These included questions related to purpose (“liking what one does each day and being motivated to achieve one’s goals”), community well-being (“liking where one lives, feeling safe and having pride in one’s community”), physical well-being (“having good health and enough energy to get things done daily”), and social well-being (“having supportive relationships and love in your life”).

“The associations between internet access and well-being were consistently positive,” reported Vuorre and Przybylski:

For the average country, individuals who had access to the internet reported on average approximately 0.08 units greater life satisfaction, positive experiences, and social life satisfaction, and 0.06 units lower negative experiences than individuals who did not have access. Results regarding the more temporally restricted (2013-2015) GWBI outcomes portrayed a similar picture: Individuals with internet access reported approximately 0.08 units greater experiences of purpose, 0.1 unit greater physical, 0.02 units greater community, and 0.08 units greater social well-being than individuals without access.

One big confounding factor here is obviously income—those with lower incomes may be less likely to have internet access and less likely to report positively on measures of well-being. For what it’s worth, the authors attempted to adjust for income and other potentially confounding variables, including education status, work status, relationship status, whether they had health problems, and whether they were able to meet basic food and shelter needs.

The researchers also found strong links between active internet use and other measures of well-being. “Being an active internet user was associated with 0.03 to 0.08 unit increases in life satisfaction, positive experiences, social well-being and physical well-being, and with a 0.04 unit decrease in negative experiences,” they reported.

The amount of internet use is less obviously linked to socioeconomic status, so these results may be more compelling.

The authors note that the magnitude of the difference between internet users and nonusers was not huge, but it was also “not negligible” (“e.g. the median life satisfaction difference was 0.36 standard deviations between individuals who had access to the internet and those who did not”). And the links held across different types of analyses (“in a multiverse of 33,792 analysis specifications. 84.9% of these resulted in positive and statistically significant associations between internet connectivity and well-being”) and across demographic groups.

If nothing else, the results suggest that internet access doesn’t cause an overall decrease in well-being.

The only “notable group of negative associations” between internet use and well-being was found in the category of community well-being (“liking where one lives, feeling safe and having pride in one’s community”). Among 15-to-24-year-olds, and particularly women in this age group, the association between internet access or usage and perceptions of community well-being was negative.

The authors expressed caution about making too much of their results for several reasons, including the fact that self-reported technology usage isn’t terribly reliable and the fact that “there are likely myriad other features about the human condition that are associated with both uptake of internet technologies and well-being in such a manner that they might cause positive associations to be observed.” While a causal relationship between internet access or usage and well-being cannot be assumed, “we nevertheless remain hopeful that the clarity with which we hoped to address this issue will provide a solid foundation for future work on internet technologies causal effect,” they wrote.


FREE MINDS 

Federal judge halts Tennessee drag law. Tennessee’s anti–drag performance law has been temporarily halted. Judge Thomas L. Parker of the U.S. District Court for the Western District of Tennessee ruled in favor of the LGBTQ theater group Friends of George’s, which sought a temporary injunction against enforcement of the law as it challenges the law’s constitutionality. “Drag is not a new art form; nor is it inherently – or even frequently – indecent,” the group argued.

The new Tennessee law deems “male or female impersonators who provide entertainment that appeals to a prurient interest, or similar entertainers” to be adult cabaret performers, a category that also includes “topless dancers, go-go dancers, exotic dancers, [and] strippers.” The law also bans “adult-oriented performances that are harmful to minors” from taking place on public property or in places where they may be viewed by kids. Violators are subject to misdemeanor charges on a first offense and felony charges for subsequent offenses.

“The inclusion of ‘male and female impersonators’ is intended to block children from attending drag performances, but the addition of the clause ‘that appeals to a prurient interest’ makes the meaning vague,” noted Scott Shackford for Reason in March. The Volokh Conspiracy‘s Eugene Volokh has more on the legal issues pertaining to the law here.

“The Court can think of at least three scenarios in which Plaintiff is likely to succeed on the merits,” wrote Parker in his decision. These include Friends of George’s arguments that “the regulation here is content-based,” which means it’s presumptively unconstitutional unless “it is justified by a compelling government interest, and it is narrowly drawn to serve that interest.”

“If Tennessee wishes to exercise its police power in restricting speech it considers obscene, it must do so within the constraints and framework of the United States Constitution,” Parker wrote in his conclusion. “The Court finds that, as it stands, the record here suggests that when the legislature passed this Statute, it missed the mark.”


FREE MARKETS 

More micromanaging business from Biden’s FTC. Continuing President Joe Biden’s fixation with managing the minutiae of the American consumer experience, his administration is now turning its attention to subscription services that are hard to cancel. The Federal Trade Commission (FTC) wants “to penalize overly complicated subscription cancellations at $50,000 a pop,” reports Reason‘s Matt Welch. A proposed FTC rule “requires negative-option sellers to provide, under maximum penalty of $50,120 per violation per day, a mechanism for cancellation that’s ‘at least as simple as the one used to initiate the charge,’ via the same medium (app, website, phone, mail, etc.).”

Negative option marketing refers to transactions in which a failure to take proactive action represents consent to continue services or purchase an item, such as in the case where a free trial must be canceled within a given time frame or else a consumer will be charged.

“The click-to-cancel rule is guaranteed to jack up compliance costs (which hurt small entities hardest) and drive some current practitioners out of the negative-option market altogether,” warns Welch. “No more easy-peasy renewals for your favorite poetry magazine or coffee roaster.”

Christine Wilson, the FTC’s only Republican appointee (who stepped down at the end of March), voted against the proposed rule, noting that it went way beyond the way FTC Chair Lina Khan and other proponents were portraying it:

The Notice explains that “the proposed Rule prohibits any person from misrepresenting, expressly or by implication, any material fact regarding the entire agreement—not just facts related to a negative option feature.” It further explains that “[s]uch deceptive practices may involve misrepresentations related to costs, product efficacy, free trial claims, processing or shipping fees, billing information use, deadlines, consumer authorization, refunds, cancellation, or any other material representation.”

Consequently, marketers using negative option features in conjunction with the sale of a good or service could be liable for civil penalties or redress under this Rule for product efficacy claims or any other material representation even if the negative option terms are clearly described, informed consent is obtained, and cancellation is simple.

The federal government getting overly involved in small details of consumer transactions may seem eyeroll-worthy but not much of a big deal. But it’s a sign of a bigger problem, suggests Welch: “Governments that are big enough to police the language of magazine auto-renewals are guaranteed to intrude on personal consumption choices in ways that even corporationophobes find uncomfortable.”

Welch points out that the Biden FTC has also been guilty of “asking Twitter to rat out the names of all journalists involved in working on the #TwitterFiles series of investigations,” proposing a near-total ban on noncompete contracts in the workplace, “attempting (before being thwarted by a federal judge) to block Meta’s acquisition of a virtual reality company on the legally adventurous grounds that in doing so the Facebook owner would prevent itself from innovating in the virtual reality space,” and investigating Amazon for dubious reasons, among other overreach.


QUICK HITS

• A report released last Friday reveals that Social Security will be insolvent even sooner than was previously thought, “with automatic benefit cuts now projected to occur in 2033,” notes Reason‘s Eric Boehm.

• Former Arkansas Gov. Asa Hutchinson is running for the 2024 Republican presidential nomination.

Reason‘s latest Peter Bagge comic deals with Maria Montessori and “the freedom to learn.”

• On the same day that House members interrogated TikTok’s CEO about whether the app and its parent company were a national security threat, the White House “embraced another popular app owned by the same Chinese company,” reports NBC News. “Last week the White House’s official Instagram account posted a flashy video of Biden and former President Barack Obama…created using the app CapCut, which, like TikTok, is owned by the Chinese company ByteDance.”

The post Study: Around the World, Internet Use Linked to Greater Well-Being appeared first on Reason.com.

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Florida Libel Law Reform Bills, Post 1: The Challenge to New York Times v. Sullivan

I thought I’d blog this week about the Florida libel law reform bills, the House version (which was favorably reported out of the Civil Justice Subcommittee to the Judiciary Committee) and the Senate version (which passed by an 8-3 vote in the Judiciary Committee and is now in the Rules Committee). There are many different parts to them, so I thought I’d take them one at a time. I also thought I’d start with the most ambitious changes.

Under current First Amendment law, articulated in New York Times v. Sullivan (1964) and follow-up cases, public officials or public figures suing over libels on matters of public concern must show “actual malice.” But “actual malice” isn’t actually malice; rather, it’s a legal term of art that, in this context, means publishing with the knowledge that the statement was false or likely false. (Publishing with knowledge that the statement is likely false is often labeled “reckless disregard” in this context.) This is a subjective test, focused on what the speaker actually believed, rather than on what a reasonable person would have believed.

The New York Times standard has recently been quite controversial. Justice White (generally viewed as one of the Court’s centrists) long led the charge against it; though he joined the New York Times decision at the outset, he “came to have increasing doubts about the soundness of the Court’s approach and about some of the assumptions underlying it.” He didn’t persuade a majority back in his day, but in recent years Justices Thomas and Gorsuch have echoed Justice White’s arguments. And while the issue has mostly broken down along conservative-liberal lines, that isn’t entirely so (as Justice White’s example also helps show): Early in her career then-Professor Kagan had expressed skepticism about the New York Times rule as well, at least in some measure; likewise, see, e.g., Prof. David McGowan’s A Bipartisan Case Against New York Times v. Sullivan.

In any event, some critics of the “actual malice” requirement think that it’s possible that there will be five votes on the Court to shift to, for instance, a negligence test, where a plaintiff could recover based on a jury finding that the defendant had acted unreasonably in investigating the facts, even if the defendant sincerely believed its statement was true. Section 6 of each of the Florida bills seems aimed at bringing the matter to the Court. In relevant part, it provides that a plaintiff (public official, public figure, or private figure) can prevail if

(a) The defamatory allegation is fabricated by the defendant, is the product of his or her imagination, or is based wholly on an unverified anonymous report;

(b) An allegation is so inherently implausible that only a reckless person would have put it into circulation; or

(c) There are obvious reasons to doubt the veracity of the defamatory allegation or the accuracy of an informant’s reports. There are obvious reasons to doubt the veracity of a report when:

  1. There is sufficient contrary evidence that was known to or should have been known to the defendant after a reasonable investigation; or
  2. The report is inherently improbable or implausible on its fact.

(The House version also adds to this list, “(d) The defendant willfully failed to validate, corroborate, or otherwise verify the defamatory allegation.”)

Some of these elements might be enough to show knowledge or recklessness even under existing law (e.g., if “the defamatory allegation is fabricated by the defendant”). But (c)(1) would likely call for some kind of a negligence standard, since it focuses on what a reasonable investigator should have known, not on what the defendant actually knew. (It might even call for strict liability, if courts read it as saying that, once “sufficient contrary evidence” is known, that’s enough for liability even if the author reasonably considers the evidence and contrary evidence and comes to a reasonable though mistaken conclusion. But I expect that courts would likely focus on “reasonable investigation” standard coupled with “obvious reasons to doubt,” and treat the standard as basically a negligence standard.)

The proposal thus clearly calls for Florida courts to apply a less speaker-protective standard than the one mandated by New York Times v. Sullivan. Here’s how it would likely play out procedurally, if the bills are enacted:

(1) I don’t think anyone could challenge the new rule before enforcement, since such pre-enforcement remedies generally aren’t available for challenging civil liability schemes.

(2) Instead, when a libel case is brought by a public figure or public official, the defendant will likely move to dismiss, arguing that there aren’t enough credible allegations of knowing or reckless falsehood to satisfy New York Times. Alternatively, after discovery, the defendant may move for summary judgment, arguing that there isn’t enough credible evidence of knowing or reckless falsehood.

(3) The court ought to at that point apply New York Times, notwithstanding the new Florida rule, because the new Florida rule is inconsistent with settled federal constitutional law; and if there isn’t enough to show knowing or reckless falsehood, it ought to throw out the lawsuit. At that point, the plaintiff will appeal (I oversimplify here slightly), and will presumably lose on appeal, for the same reason.

(4) After the appeal, the plaintiff can petition the Supreme Court for certiorari, asking the Court to overrule New York Times, thus validate the new Florida rule, and send the case down for proceedings in light of that rule. And this (hypothetical) overruling of New York Times will potentially affect the whole country, not just Florida, except in states that have, as a matter of their own state constitutional law or common law, adopted a New York Times-like rule.

This isn’t the only way that the Court can choose to reconsider New York Times; but it seems an especially likely way, assuming the Justices are indeed interested in revisiting that precedent (and assuming such a bill does indeed get enacted).

Let me close with excerpts from some of the classic arguments by the Justices in this area (I should note that I tentatively support keeping the New York Times rule, as likely the lesser of the evils, but I think there are important arguments on both sides).

[1.] First, Justice Brennan in New York Times, arguing for the “actual malice” test:

“Cases which impose liability for erroneous reports of the political conduct of officials reflect the obsolete doctrine that the governed must not criticize their governors…. The interest of the public here outweighs the interest of appellant or any other individual. The protection of the public requires not merely discussion, but information…. Errors of fact, particularly in regard to a man’s mental states and processes, are inevitable…. Whatever is added to the field of libel is taken from the field of free debate.”

Injury to official reputation affords no more warrant for repressing speech that would otherwise be free than does factual error…. [Government officials] are to be treated as “men of fortitude, able to thrive in a hardy climate” …. Criticism of their official conduct does not lose its constitutional protection merely because it is effective criticism and hence diminishes their official reputations….

The state rule of law [which generally imposed strict liability for defamation] is not saved by its allowance of the defense of truth…. A rule compelling the critic of official conduct to guarantee the truth of all his factual assertions—and to do so on pain of libel judgments virtually unlimited in amount—leads to … “self-censorship.” Allowance of the defense of truth, with the burden of proving it on the defendant, does not mean that only false speech will be deterred. {Even a false statement may be deemed to make a valuable contribution to public debate, since it brings about “the clearer perception and livelier impression of truth, produced by its collision with error.” Mill, On Liberty.} …

Under such a rule, would-be critics of official conduct may be deterred from voicing their criticism, even though it is believed to be true and even though it is in fact true, because of doubt whether it can be proved in court or fear of the expense of having to do so. They tend to make only statements which “steer far wider of the unlawful zone.” The rule thus dampens the vigor and limits the variety of public debate….

The constitutional guarantees require, we think, a federal rule that prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with “actual malice”—that is, with knowledge that it was false or with reckless disregard of whether it was false or not….

[2.] Some more from Justice Brennan in Garrison v. Lousiana (1964), explaining why he wouldn’t go all the way to abolishing libel claims even as to knowing or reckless falsehoods (as Justices Black, Douglas, and Goldberg had argued, at least for speech on matters of public concern):

Although honest utterance, even if inaccurate, may further the fruitful exercise of the right of free speech, it does not follow that the lie, knowingly and deliberately published about a public official, should enjoy a like immunity. At the time the First Amendment was adopted, as today, there were those unscrupulous enough and skillful enough to use the deliberate or reckless falsehood as an effective political tool to unseat the public servant or even topple an administration….

[T]he use of the known lie as a tool is at once at odds with the premises of democratic government and with the orderly manner in which economic, social, or political change is to be effected. Calculated falsehood falls into that class of utterances which “are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality….” Chaplinsky v. New Hampshire….

[3.] Then still more from Justice Brennan’s dissent in Gertz v. Robert Welch, Inc. (1974), arguing against a negligence standard (which the Gertz majority adopted when private figures sought proven compensatory damages):

Adoption … of a reasonable-care standard … will likewise lead to self-censorship since publishers will be required carefully to weigh a myriad of uncertain factors before publication. The reasonable-care standard is “elusive”; it saddles the press with “the intolerable burden of guessing how a jury might assess the reasonableness of steps taken by it to verify the accuracy of every reference to a name, picture or portrait.” Under a reasonable-care regime, publishers and broadcasters will have to make pre-publication judgments about juror assessment of such diverse considerations as the size, operating procedures, and financial condition of the newsgathering system, as well as the relative costs and benefits of instituting less frequent and more costly reporting at a higher level of accuracy….

And, most hazardous, the flexibility which inheres in the reasonable-care standard will create the danger that a jury will convert it into “an instrument for the suppression of those ‘vehement, caustic, and sometimes unpleasantly sharp attacks,’ … which must be protected if the guarantees of the First and Fourteenth Amendments are to prevail.”

[4.] And now Justice White in his concurrence in the judgment in Dun & Bradstreet v. Greenmoss Builders (1985), arguing against the “actual malice” test:

I have … become convinced that the Court struck an improvident balance in the New York Times case between the public’s interest in being fully informed about public officials and public affairs and the competing interest of those who have been defamed in vindicating their reputation…. Criticism and assessment of the performance of public officials and of government in general … are not at all served by circulating false statements of fact about public officials. On the contrary, erroneous information frustrates these values. They are even more disserved when the statements falsely impugn the honesty of those men and women and hence lessen the confidence in government….

Yet in New York Times cases, … [t]he lie will [often] stand, and the public continue to be misinformed about public matters … because the putative plaintiff’s burden is so exceedingly difficult to satisfy and can be discharged only by expensive litigation. Even if the plaintiff sues, he frequently loses on summary judgment [or on appeal] … because of insufficient proof of malice…. [And when the plaintiff gets before a jury], the jury will likely return a general verdict [because of insufficient proof of actual malice] and there will be no judgment that the publication was false ….

The public is left to conclude that the challenged statement was true after all. Their only chance of being accurately informed is measured by the public official’s ability himself to counter the lie, unaided by the courts. That is a decidedly weak reed to depend on for the vindication of First Amendment interests—”it is the rare case where the denial overtakes the original charge. Denials, retractions, and corrections are not ‘hot’ news, and rarely receive the prominence of the original story.”

{It might be suggested that courts, as organs of the government, cannot be trusted to discern what the truth is. But the logical consequence of that view is that the First Amendment forbids all libel and slander suits, for in each such suit, there will be no recovery unless the court finds the publication at issue to be factually false.

Of course, no forum is perfect, but that is not a justification for leaving whole classes of defamed individuals without redress or a realistic opportunity to clear their names. We entrust to juries and the courts the responsibility of decisions affecting the life and liberty of persons. It is perverse indeed to say that these bodies are incompetent to inquire into the truth of a statement of fact in a defamation case.}

Also, by leaving the lie uncorrected, the New York Times rule plainly leaves the public official without a remedy for the damage to his reputation. Yet the Court has observed that the individual’s right to the protection of his own good name is a basic consideration of our constitutional system, reflecting “our basic concept of the essential dignity and worth of every human being—a concept at the root of any decent system of ordered liberty.” The upshot is that the public official must suffer the injury, often cannot get a judgment identifying the lie for what it is, and has very little, if any, chance of countering that lie in the public press….

[I]f protecting the press from intimidating damages liability that might lead to excessive timidity was the driving force behind New York Times[,] … the Court engaged in severe overkill…. [I]nstead of escalating the plaintiff’s burden of proof to an almost impossible level, we could have achieved our stated goal by limiting the recoverable damages to a level that would not unduly threaten the press. Punitive damages might have been scrutinized … or perhaps even entirely forbidden. Presumed damages to reputation might have been prohibited, or limited, as in Gertz v. Robert Welch, Inc….

It could be suggested that even without the threat of large presumed and punitive damages awards, press defendants’ communication will be unduly chilled by having to pay for the actual damages caused to those they defame. But other commercial enterprises in this country not in the business of disseminating information must pay for the damage they cause as a cost of doing business, and it is difficult to argue that the United States did not have a free and vigorous press before the rule in New York Times was announced….

The post Florida Libel Law Reform Bills, Post 1: The Challenge to <i>New York Times v. Sullivan</i> appeared first on Reason.com.

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