Warming To Duration As Large Specs Are Record Short Stocks

Warming To Duration As Large Specs Are Record Short Stocks

Authored by Steven Vannelli via Knowledge Leaders Capital blog,

Leading into the weekend, where the debt ceiling had not been settled, markets were exhibiting very interesting positioning. To start, US Treasuries across the maturity spectrum were hugely out of favor. Net speculator positioning in options and futures were as short as they have every been.

The charts below show the 2-year, 5-year and 10-year US Treasury.

At the same time, investors were very short stocks. The next couple charts show speculator net positioning in the S&P 500 and the MSCI EAFE Index (a proxy for the developed world ex-US).

[ZH: The most recent positioning data from CFTC shows that these participants hold a net short futures position of nearly 405,000 contracts, the most since September 2007. Additionally, their short positioning has increased over each of the most recent four weeks. Just for context, the S&P 500 peaked on Oct. 11, 2007 at 1576 points, triggering the Great Financial Crisis of 2008-2009, a month after bearish positioning was as high as it is today.]

Hopefully, a successful debt ceiling deal brings some risk-taking back into the markets. At present, all money flows are going into money market funds, which is good news and bad news. The bad news of course is that these are money flows not going into risky assets. The good news is that, should the inflation fever break convincingly and US Treasury rates roll over, there is a tremendous amount of money that will be looking for higher returns.

While early indications seem to suggest that spending will be curbed in the next few years relative to the baseline by about $50 billion, while at the same time the US Treasury may issue a flood of US Treasury bills to rebuild its coffers, perhaps the more attractive play right now is the medium-to-longer dated US Treasuries.

Tyler Durden
Wed, 05/31/2023 – 14:20

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Rejoice Georgians: You Don’t Need a Government Permit To Advise Breastfeeding Moms


A woman breastfeeding while a consultant assists.

Georgia’s Supreme Court today struck down a state law that required people who provide lactation consulting to obtain costly and time-consuming state licenses.

In a unanimous ruling, the justices determined that a law passed in 2016 unconstitutionally deprived Mary Jackson of work. Jackson had been providing lactation care consulting services for more than 30 years and started a nonprofit, Reaching Our Sisters Everywhere (ROSE), to provide breastfeeding education.

Georgia Supreme Court Chief Justice Michael P. Boggs wrote the ruling in Jackson v. Raffensperger, and he was critical of attempts to declare that the state has a “public welfare” interest for every licensing law it passes: “Georgia’s Due Process Clause requires more than a talismanic recitation of an important public interest.” Here the court examined whether the licensing requirement protected the public from unsafe or harmful health practices. They found the state’s evidence wanting:

Certainly, there is nothing inherently harmful in the practice of lactation care, and there is no evidence of harm to the public from the provision of lactation care and services by individuals who lack an [International Board Certified Lactation Consultant] license.

To get this license through a private credentialing body, the court notes, requires 14 different health courses (some college level), 95 hours of training, 300 supervised clinical hours, and up to $700 in costs. Boggs notes in his ruling that only 162 of Georgia’s 470 lactation consultants have gone through the process to get licensing.

The state admitted to the court that they had no evidence that anybody was harmed by unlicensed or incompetent lactation care before or after the law’s passage. An analysis of a version of the law that was considered in 2013 (and not passed) noted that there was no evidence of any harm caused by the state’s failure to license or regulate lactation consultants.

Thus, the Court concludes that the law “violates Plaintiffs’ due process rights under the Georgia Constitution to practice the chosen profession of lactation care provider.”

This is the second time the law has come before the Georgia Supreme Court. Jackson, represented by the Institute for Justice, has been fighting the law since 2018. In 2020 the state’s Supreme Court pushed back on an effort by the state to get the case dismissed entirely under the argument that the state’s due process protections did not guarantee the constitutional right to pursue a particular occupation. In 2020, Boggs wrote, “[W]e have long recognized that the Georgia Constitution’s Due Process Clause entitles Georgians to pursue a lawful occupation of their choosing free from unreasonable government interference.”

That’s good news for Jackson and other similarly situated people who may be lactation experts but haven’t spent hundreds of hours and thousands of dollars on an International Board Certified Lactation Consultant certification.

“Mary and ROSE’s five-year battle to defend their rights has culminated in today’s decision, which confirms their unwavering determination and courage to stand against protectionism and fight for every Georgian’s right to earn an honest living,” said Institute for Justice (IJ) Senior Attorney Renée Flaherty in a prepared statement. “This case sets a precedent that the Georgia Constitution demands the government justify restrictions on economic liberty. IJ will continue to challenge laws infringing on this essential right under other state constitutions so that every American can enjoy the same freedom.”

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Clea Conner: America Needs More and Better Debates


more-debates

In On Liberty, John Stuart Mill wrote, “he who knows only his own side of the case knows little of that.” He was laying out the case for robust, good-faith, and systematic debate as essential to an open society. If you don’t test your beliefs by engaging with people who disagree with you, you’re more likely to make weak, incomplete, self-serving, or irrelevant arguments, leading to ruinous outcomes in policy matters or acrimonious misunderstandings in social life.

That’s where the group Open to Debate comes in. Founded in 2006 as Intelligence Squared U.S., Open to Debate has hosted hundreds of debates with the goal of “restor[ing] critical thinking, facts, reason, and civility to American public discourse.” Through a mix of online and in-person events, Open to Debate brings together artists, officials, public intellectuals, scientists, and entrepreneurs from across the ideological spectrum to work through contentious, heated, and seemingly irresolvable issues of the day.

Reason‘s Katherine Mangu-Ward, for instance, was part of a debate that asked, “Is Capitalism a Blessing?” Over the years, I’ve argued for legalizing all drugs and against Medicare for All, net neutrality, and forgiving student loan debt. I also moderate debates for them, including one in New York about millennials taking place on June 7. Open to Debate invites audience participation, and it airs all its programming on public radio, YouTube, and the group’s own website, where it provides voluminous notes and materials, all designed to help audience members reach independent and informed conclusions.

My guest today is Open To Debate’s CEO, Clea Conner, who tells me about her group’s mission, its name change, and its push to host actual presidential debates rather than “joint press conferences with really rehearsed talking points.”

Today’s sponsors:

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New York District Attorney Bragg Argues That President Trump Was Not An “Officer Of The United States”

[This post was co-authored with Seth Barrett Tillman]

Last month, a Manhattan grand jury indicted Donald J. Trump for violating state law based on alleged “hush money” payments to Stormy Daniels. Trump moved to remove that case to federal court. Trump’s lawyers invoked the federal officer removal statute. This statute allows an “Officer of the United States” to remove a prosecution from state court to federal court. But the former president can only remove the case to federal court if he was an “Officer of the United States.”

On Tuesday, Alvin Bragg, the New York District Attorney filed a brief in federal court opposing the removal motion. Bragg made various arguments for why removal was not proper. But the final section of the brief contended that Donald Trump, while serving as President, was not an “Officer of the United States.” Part IV of the brief (pp. 30) explains this position:

The arguments above defeat defendant’s attempt to remove this state criminal prosecution and require remanding this matter to state court. Although this Court need not go further, remand would also be independently mandated by defendant’s failure to establish that he was an “officer . . . of the United States” entitled to invoke removal at all under 28 U.S.C. § 1442(a)(1).

In construing a variety of other constitutional and statutory provisions, the Supreme Court has long interpreted “officer” to exclude the President and Vice President because those officials are elected to their positions rather than appointed. See Free Enter. Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477, 497-98 (2010) (“The people do not vote for the ‘Officers of the United States.'” (quoting U.S. Const. art. II, § 2, cl. 2)); United States v. Mouat, 124 U.S. 303, 307 (1888) (“[A] person in the service of the government” who does not “hold[] his place by virtue of an appointment . . . is not, strictly speaking, an officer of the United States.”). (emphasis added).

We are very sympathetic to this argument. Indeed, we have contended for years that the President is not an “Officer of the United States.” We made this point most recently two weeks ago on Lawfare. And on Lawfare, we observed that the District Court should call for the views of the Department of Justice. That observation is even more salient since Bragg stated that the Department of Justice shares his view that the President is not an “Officer of the United States.”

The Executive Branch shares this view. See, e.g., Memorandum from Antonin Scalia, Assistant Attorney General, Office of Legal Counsel, U.S. Dep’t of Justice to Kenneth A. Lazarus, Associate Counsel to the President, Applicability of 3 C.F.R. Part 100 to the President and Vice President 2 (Dec. 19, 1974) (“[W]hen the word ‘officer’ is used in the Constitution, it invariably refers to someone other than the President or Vice President. . . . This use of the word ‘officer’ in the Constitution has led the Department of Justice consistently to interpret the word [‘officer’] in other documents as not including the President or Vice President unless specifically stated.”) (Ex. 23). (emphasis added).

Tillman wrote about this Scalia memo in December 2016. 

Bragg concludes:

The Court should therefore conclude—consistent with the views of the Supreme Court, the Executive Branch, and defendant himself—that the President is not an “officer” of the United States, and thus may not invoke federal-officer removal under 28 U.S.C. § 1442(a)(1). (emphasis added).

In the short-term, Bragg’s argument may harm Trump in the removal motion. If Trump is not an “Officer of the United States” for purposes of the federal removal case, then the criminal prosecution will remain in a New York criminal court. Indeed, the court could only grant the removal motion if it affirmatively finds that Trump was an “Officer of the United States.” 

In the long run, such a finding, however, may have ramifications in the not-so-distant future. Specifically, Section 3 of the Fourteenth Amendment would only apply to President Trump if he took the presidential oath as an “Officer of the United States.” And we have written that the President is not an “Officer of the United States” for purposes of Section 3. If Bragg is successful here, and the federal courts adopt the argument that Trump is (or was) not an “Officer of the United States” for purposes of the federal removal statute, then that precedent could be cited by Trump in debates and litigation involving Section 3. Perhaps this potential for setting precedent on this issue is even more reason to call for the views of the Department of Justice. 

There are many grounds on which the federal court can rule here. And certainly the federal district court might not reach the “officer” issue. Still, it may reach that issue, and for that reason, we will keep a close eye on this litigation in Manhattan.

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Debt Ceiling Deal Will End The Student Loan Repayment Pause


bright green money with someone on a laptop in the middle on a bright red background

After over three years, federal student loan borrowers will likely have to start repaying their debt. According to the terms of a debt ceiling deal struck by House Speaker Kevin McCarthy and President Biden, the extended pause on student loan repayment will end on August 30th. 

While a previous announcement from the Education Department had vowed to end the pause on August 29provided the Supreme Court had not yet released a decision on Biden’s student loan forgiveness planthe debt ceiling deal solidifies this promise. If the bill passes, the Education Department will be statutorily barred from announcing yet another last-minute extensionas officials have done on eight occasions since August 2020, including two separate continuations of supposedly “final” extensions.

While fiscal conservatives have decried the recent debt ceiling deal due to its lackluster cap on non-defense discretionary spending, solidifying a start date for student loan repayment is a clear win for anyone concerned by the extended pause in student loan repayment.

“The president says that it was his plan all along to return to repayment by the end of the summer,” Rep. Virginia Foxx (R-NC) told The Hill. “While I wish I could take his words at face value, his past actions have showed me otherwise. Passing the Fiscal Responsibility Act is the only sure-fire way to force a return to repayment and prevent the president from issuing another illegal extension.”

But the Biden Administration has also claimed the student loan-related portions of the debt ceiling deal as a victory, focusing on the fact that critical elements of Biden’s student loan forgiveness proposal were spared, including the supercharged Income-Driven Repayment plan. 

“President Biden protected the student debt relief plan in its entirety,” one White House spokesperson told Newsweek. “The Administration announced back in November that the current student loan payment pause would end this summer—this agreement makes no changes to that plan.”

Many progressives are framing the end of a nearly three-and-a-half-year pause on paying their student loans as disastrous.

“Borrowers got sold out. That’s, I mean, the general feeling that I’m having, and I know a lot of our supporters are having today,” Natalia Abrams, president of the Student Debt Crisis Center, told The Hill. “Trying to say you’ve won here when, in fact, for so many borrowers, that payment pause has actually been by far more relief for borrowers that owe $100,000 or $200,000 than the one-time debt cancellation—and plus a lot of people don’t have faith in that.”

According to the Committee for a Responsible Federal Budget, the student loan pause costs taxpayers about $5 billion every month–bringing the total cost to almost $200 billion by the time repayment goes into effect. 

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Even Pennsylvanians Can Now Buy Wine in Grocery Stores, but New Yorkers Still Can’t


Wine section

When I lived in New York City a couple of decades ago, you could buy beer in grocery stores but not wine. Although that remains true, a bill introduced by state Sen. Liz Krueger (D–Manhattan) would finally allow New Yorkers to buy wine in stores that also sell food—an option that shoppers in most states (including Texas, where I live) already take for granted.

As usual, the opposition to alcohol liberalization in New York is led by independent liquor merchants, who see competition as an existential threat. The chief backer of Krueger’s bill is Wegmans, the Rochester-based grocery chain that also played a central role in making beer more accessible in my home state of Pennsylvania.

Both of these stories illustrate how a company pursuing profit can promote consumer choice while businesses that benefit from the legal status quo squeal in outrage at the possibility of new competition. These struggles against absurd alcohol rules also show how such irksome restrictions can inspire bipartisan support for deregulation, scrambling the usual assumptions about which party tends to favor government control over economic activity.

Pennsylvania’s alcohol regulations are even more restrictive and convoluted than New York’s. Distribution is controlled by the state, which operates stores that sell liquor and wine but not beer. Prior to 2007, Pennsylvanians had two options for buying beer: They could pick up an overpriced six-pack or two at a restaurant, or they could buy a keg or a case from a state-authorized distributor. But thanks to Wegmans and a Pennsylvania Supreme Court decision triggered by its innovative end run around the state’s arbitrary rules, Pennsylvanians were able to begin buying beer at grocery stores, like the residents of all but a few other states.

Since state law allowed restaurants to sell malt beverages, Wegmans created cafés inside several of its Pennsylvania stores where shoppers could buy beer. The Pennsylvania Liquor Control Board (PLCB) approved the use of restaurant liquor licenses at those locations. Unsurprisingly, the Malt Beverage Distributors Association (MBDA), which represents businesses that sell beer by the case, was not pleased. It sued the PLCB, arguing that Wegmans was effectively selling beer in grocery stores, contrary to state law.

In 2010, the Pennsylvania Supreme Court unanimously rejected that argument. It acknowledged that a state regulation said a restaurant with a liquor license “may not conduct another business” or “permit other persons to operate another business on licensed premises.” But the regulation also said “licensed premises may not have an inside passage or communication to or with any business conducted by the licensee or other persons except as approved by the Board” (emphasis added).

Two other regulations explained the conditions of such approval. “Where the Board has approved the operation of another business which has an inside passage or communication to or with the licensed premises,” one said, “the extent of the licensed area shall be clearly indicated by a permanent partition at least 4 feet in height.” Another required that “storage and sales of liquor and malt or brewed beverages” be “confined strictly to the premises covered by the license.” Pennsylvania also required that restaurants, to be eligible for a liquor license, “have an area within a building of not less than four hundred square feet, equipped with tables and chairs, including bar seats, accommodating at least thirty persons at one time.”

Since Wegmans had met all the relevant regulatory requirements and was “operating legitimate, fully-functioning restaurants within their grocery stores,” the court concluded, those beer outlets were legal. “Refusing to acknowledge the validity of these restaurants,” it said, “would violate, rather than vindicate, legislative intent.”

The court also addressed the MBDA’s claim that letting Wegmans sell beer would result in “unfair competition,” which was really the crux of the distributors’ complaint:

MBDA presented testimony of its chief counsel and of owners of neighboring beer distributors, which established their concern that the grant of licenses will directly result in unfair competition in the beer sale market, causing a number of Pennsylvania beer distributors to go out of business. They asserted that there is a difference between Wegmans and a typical restaurant licensee because customers who patronize Wegmans are there to buy grocery items, which beer distributors cannot sell. MBDA further presented testimony suggesting that Wegmans would attract customers who desired to purchase beer solely for takeout purposes, thus infringing on their market share of beer sales.

The Pennsylvania Supreme Court did not reject that argument because it was nakedly protectionist and plainly contrary to the interests of consumers. Rather, it questioned the premise that Wegmans’ beer sales would have a substantial impact on the distributors.

“Wegmans presented the testimony of an economist who opined that beer distributors would not suffer a negative economic impact if Wegmans began selling beer in its restaurants,” the court noted. “With Wegmans being limited to selling two six-packs per takeout purchase, the economist asserted that such sales would not impact distributors’ sale of larger quantities, as there are different customer bases for the sale of beer in six-packs and sales by the case. The economist further testified that distributors may actually benefit from Wegmans’ licensure because Wegmans, as a ‘destination retailer,’ attracts a large number of customers, which is an advantage to nearby businesses based on the economic benefit of ‘clustering’ retailers.”

Six years after that decision, then-Gov. Tom Wolf, a Democrat, signed a bill that authorized grocery stores to sell beer without going into the restaurant business. The law—which was sponsored by Rep. Mike Turzai (R–Allegheny), a longtime champion of liquor privatization in Pennsylvania—also loosened restrictions on wine sales, allowing direct sales by producers, to-go sales by restaurants and hotels, and sales by specially licensed grocery stores, which must buy their bottles from the PLCB. While that’s clearly an improvement on the legal situation that inspired an ill-fated PLCB experiment with wonky automated wine kiosks in grocery stores, wine prices are still relatively high in Pennsylvania.

What about those poor beer distributors? “While beer distributors’ worries about having a raft of new competitors have come true, fears about a sales slump forcing distributors to close haven’t materialized,” Lancaster Online reported in 2021. “Today, there are 29 beer distributors in Lancaster County, the same number in 2013. In fact, helped by a new ability to sell singles and six-packs and boosted by home-drinking during the pandemic, beer distributors that revamped their stores and focused on craft beer and expanding selection say they’re doing better than ever.”

Back in New York, meanwhile, you still can’t buy wine at the grocery store. In trying to change that, Wegmans is encountering familiar resistance from entrenched interests.

Krueger’s bill is limited to stores that cover at least 5,000 square feet and specialize in “foodstuffs,” conditions aimed at excluding convenience stores and multipurpose retailers like Walmart and Costco. But the bill still could allow wine sales at an additional 1,900 locations statewide.

That prospect dismays the owners of New York’s 3,700 or so privately operated liquor stores. Krueger’s bill, The New York Times notes, has reignited “a perennial skirmish against mom-and-pop liquor stores that see the legislation as a threat to their very existence.”

The three companies that have a legal monopoly on wholesale distribution of alcoholic beverages in New York are also opposed to wine in grocery stores. Gothamist reports that the distributors share their customers’ worry that the reform “would change the paradigm for wine sales in New York and put many shops out of business.” Wegmans “spent over $30,000 in May alone pushing the measure,” the Times notes, while “the two main alcohol distributors in the state, Southern Glazer’s Wine & Spirits and Empire Merchants, have collectively spent at least $120,000” on lobbying.

“Somehow this becomes this huge controversy because New York is one of the few states that you can’t go into a supermarket and buy wine, even though you can buy beer,” Krueger told the Times. “The underlying issue is that you’ve got a monopoly control of wholesale distribution of liquor in this state, and the three wholesalers who control all liquor distribution think that this disadvantages them.”

Krueger and Assemblymember Pamela J. Hunter (D–Syracuse), who is sponsoring the wine bill in her chamber, cite a recent Siena College poll that found 76 percent of New Yorkers “support changing this antiquated law.” Consumers “want the convenience of purchasing wine in grocery stores—where they buy their food and other beverages, such as beer,” Hunter says.

Gov. Kathy Hochul, a Democrat whose election campaign received $25,000 from Southern Glazer’s last year, has been noncommittal on the bill. “I’m waiting to see what the Legislature does,” she told reporters a couple of weeks ago.

Krueger’s experience suggests further reason for pessimism. “I have been championing this issue—allowing consumers to buy wine in their local grocery stores—for many years,” she says. “When friends come to visit from places like Virginia, North Carolina, Pennsylvania, or DC, they’re often dismayed to discover the law won’t let them buy wine in the grocery store. But it’s time to change that this year.” Since special interests have managed to defeat a reform that is overwhelmingly popular with consumers “for many years,” it may not be time to break out the Champagne that Krueger’s bill would allow New Yorkers to buy at Wegmans.

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Spurred by Uvalde, Texas Legislature Passes Bill To Finally Close ‘Dead Suspect Loophole’


Police officers guarding the location of the Uvalde, Texas school shooting

Following outrage over the lack of transparency surrounding the mass shooting in Uvalde, Texas, last year, the Texas legislature passed a bill Monday to close a notorious loophole in the state’s public record law that allows police to hide records of deaths in custody.

The bill, H.B. 30, now goes to Republican Texas Gov. Gregg Abbott’s desk. It would clarify that an exception that allows police to withhold records in cases where the suspect of an investigation was never convicted of a crime does not apply to deceased individuals. Texas enacted the statute in 1997 to protect the privacy of innocent suspects. Still, police departments quickly figured out they could also use it to indefinitely withhold information on deaths in police custody since a dead suspect will never be convicted.

Previous bills to close this so-called “dead suspect loophole” failed because of intense opposition from police unions. However, outrage over the botched police response to the mass shooting last year in Uvalde, Texas—and subsequent refusal to release public records about the shooting—finally pushed the most recent version of the law over the finish line.

Texas state Rep. Joe Moody (D-El Paso), who has introduced the bill for the past several years, tweeted that “Uvalde elevated the issue for the last one.”

In practice, the loophole prevented loved ones from accessing information about how family members died and protected police from scrutiny from lawyers and reporters. A 2018 Reason investigation found at least 81 instances where police departments cited the statute to withhold records of deaths in police custody from reporters, lawyers, and family members of the deceased.

Another years-long investigation by news outlet KXAN identified at least 154 public information requests related to 52 in-custody deaths in which the authorities cited the exemption for withholding records. 

And the Texas Tribune and ProPublica reported earlier this month on how a town used the loophole to withhold suicide reports from families of dead soldiers.

The most infamous case is that of Graham Dyer, an 18-year-old who died in 2013 after being arrested in Mesquite, Texas, while having a bad acid trip. Dyer’s parents fought unsuccessfully for years to get video footage of their son’s final hours, but Mesquite police refused to hand it over, citing the loophole.

Dyer’s parents eventually got the footage from the FBI through a federal Freedom of Information Act request. It showed Dyer slamming his head against the interior of a police cruiser after he wasn’t properly restrained. An officer repeatedly tased him in the testicles to try and make him stop. The Mesquite Police Department neglected to mention the tasings in the incident report filed after Dyer’s death.

The report also claimed it took several officers to subdue Dyer, who was 5 feet 4 inches and 110 pounds, and put him in a restraint chair in a padded cell. The video showed Dyer being left handcuffed on the concrete floor of the jail’s sally port, where he continued to smash his head against the ground. Jail officials didn’t request medical assistance until he was found unresponsive in his cell.

Dyer’s parents repeatedly testified in favor of the legislation, but the loophole survived all previous attempts to close it because of lobbying from the Combined Law Enforcement Associations of Texas (CLEAT). CLEAT argued that Moody’s bill was “pushed by anti-police groups who want access to the information so they can post it on social media and trash officers who are involved in high profile incidents.”

However, the Uvalde shooting put the issue of police transparency under a spotlight. Texas police agencies largely relied on an exemption concerning ongoing investigations to withhold records related to the Uvalde shooting, where a gunman murdered 19 schoolchildren and two teachers. However, the City of Uvalde invoked the loophole, along with many other exemptions, when it denied public records requests from Texas Public Radio.

If Abbott signs the bill, Texas jails and police departments will have one less way to avoid accountability.

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Georgia S. Ct.: Right to Pursue Lawful Occupation Invalidates License Requirement for Lactation Consultants

Today’s unanimous decision in Raffensperger v. Jackson, written by Chief Justice Boggs, strikes down the 2016 Georgia Lactation Consultant Practice Act, which requires lactation consultants to have an International Board Certified Lactation Consultant (IBCLC) license, issued by a private licensing organization (or “a license issued by another jurisdiction if the requirements for that license are equal to or greater than” the IBCLC requirements):

IBCLC certification may be obtained in three different pathways, each of which requires that a person pass a written examination and complete 14 courses in health sciences, eight of which must be college-level courses; 95 hours of lactation-specific education, including five focused on communication skills; and at least 300 supervised clinical hours. The IBCLC examination costs approximately $600-$700.

{According to the affidavit of the Secretary’s expert, the eight required college-level courses are biology; human anatomy; human physiology; infant and child growth and development; introduction to clinical research; nutrition, psychology, counseling skills, or communication skills; and sociology, cultural sensitivity, or cultural anthropology. The other six courses, which may be completed as continuing education courses, are basic life support, medical documentation, medical terminology, occupational safety and security for health professionals, professional ethics for health professionals, and universal safety precautions and infection control.}

A Certified Lactation Counselor (CLC) license, offered by another organization, doesn’t suffice; that license requires that the licensee “complete a 52-hour course; demonstrate competency in breastfeeding assessments, counseling, teaching, infant weight gain, contraindications, and the CLC Code of Ethics; and pass a written examination, which costs approximately $120.” Likewise, it doesn’t suffice to have training from a separate group, such as ROSE (Reaching Our Sisters Everywhere), which sued to challenge the law:

ROSE, which was founded in 2011, trains individuals to provide breastfeeding education and support to mothers, primarily in African-American communities, through a research and evidence-based curriculum in a free 16-hour course.

The Georgia Supreme Court began by noting that it had long held that the Georgia Constitution’s Due Process Clause protects a right to pursue a lawful occupation:

Across each successive Constitution following the addition of the Due Process Clause in 1861, we articulated a consistent and definitive understanding of how the Due Process Clause applied to occupational licensing and the ability to pursue a lawful occupation. This understanding begins as far back as 1896, Odell v. City of Atlanta, 97 Ga. 670 (25 SE 173) (1896), past the turn of the century, Bazemore v. State, 121 Ga. 619, 620 (49 SE2d 701) (1905), through the 1930s, Southeastern Elec. Co. v. City of Atlanta, 179 Ga. 514 (1934) and Bramley v. State, 187 Ga. 826, 832 (2 SE2d 647) (1939), the 1950s and 1960s, Jenkins v. Manry, 216 Ga. 538, 541-546 (1) (118 SE2d 91) (1961), all the way up to the middle of the committee meetings to revise Article 1 of the Constitution, Rockdale County v. Mitchell’s Used Auto Parts, Inc., 243 Ga. 465, 465 (254 SE2d 846) (1979); Transcripts of Mtgs., Committee to Revise Article I, Vol., 1 (Meetings 1977-1981). Our cases, in sum, display a consistent and definitive understanding of the Constitution’s Due Process Clause, reaffirmed at least once under the 1945 Constitution’s Due Process Clause, and referenced approvingly under the short-lived 1976 Constitution. Thus, “[the] history reveal[s] a consistent and definitive construction” of the Due Process Clause, “whose words remain materially unchanged since [they] first appeared” in their present form, and (since we have been offered no evidence to the contrary) “we presume[ ] that construction was carried forward into the 1983 constitution.”

This right, the court held, has the following elements:

[1.] The challenger must show that the occupation sought is, at a minimum, lawful but for the challenged restriction. See Odell, 97 Ga. at 671 (“[T]he keeping of an establishment for the purpose of enabling persons to bet upon horse-races is not a useful or necessary occupation which any citizen has either a common law or constitutional right to carry on.”); Schlesinger v. City of Atlanta, 161 Ga. 148, 159 (129 SE 861, 866) (1925) (the right to pursue a lawful occupation “has no application to the inhibition of that which the individual has no natural or inherent right to do. If the individual has no such inherent right to conduct the business of a common carrier by jitneys or busses upon the streets of the city, his case does not fall within this principle.”).

[2.] And the challenger must also show that the regulation “unreasonabl[y] … interfere[s]” with the ability “to pursue a lawful occupation of their choosing free from unreasonable government interference[.]” Jackson I, 308 Ga. at 740 (2) (emphasis added); see also Bramley, 187 Ga. at 832 (the defendant in a criminal prosecution for violating occupational licensing restrictions on photographers successfully argued that “the statute on which the accusation was based [was] unconstitutional and void” because it was “an arbitrary and unreasonable interference with a lawful and harmless business”).

[3.] [If those elements are shown], the government must offer a legitimate interest behind the regulation justifying some interference with the ability to pursue the occupation. This is not an open-ended exercise in interest-balancing—our consistent and definitive understanding of the Due Process Clause shows well-settled limits on what government interests are sufficient for these purposes: a burden on the ability to practice a lawful occupation is only constitutional if it is reasonably necessary to advance an interest in health, safety, or public morals. See Bramley, 187 Ga. at 835-836 (listing government interests as “health, safety, morality, or other phase of the general welfare”); Jenkins, 216 Ga. at 540 (“The right to work and make a living …. may be abridged to the extent, and only to the extent, that is necessary reasonably to insure the public peace, safety, health, and like words of the police power.”). And while this same understanding does not require the challenger to disprove “any reasonably conceivable state of facts that could provide a rational basis for the classification,” as the rational basis test does under federal law, neither does it call on courts to analyze whether a justification offered in litigation is the “real” one. There is no requirement that the government must compile or offer evidence in the course of enacting such a regulation, nor that the government defend such an act solely by reference to some purported legislative intent.

Conversely, this same consistent and definitive understanding makes clear that certain interests are decidedly not sufficient to justify a burden on the ability to practice a lawful profession. These include (1) protectionism and (2) generic interests of quality or honesty of goods and services, especially when this latter sort of interest is unmoored from the particular profession—i.e., when the given profession does not create special need to deal with the quality or honesty of goods and services, but shares those risks on the same terms as some other business not so regulated. See, e.g., Bramley, 187 Ga. at 836 (speaking of licensing photographers: “No business, however innocent and harmless, is entirely free from the possibility of becoming, under improper or dishonest management, in some degree inimical to the public interest …. If this should be held to be a sound argument[,] the police power could be used to lay upon any business, however unrelated to the general welfare, [and however] burdensome and unreasonable [the] restrictions.” (cleaned up)). In short, once the challenger has made a prima facie case, the government must offer (but not necessarily prove the veracity or efficacy of) a specific interest in health, safety, or public morals. If the government fails to offer such an interest, or offers only an illegitimate interest, the regulation violates the right to pursue an occupation free from unreasonable government interference.

{None of our prior cases resolving state due process challenges to occupational licensing statutes expressly adopted the federal due process test, which generally gives extraordinary deference to the legislature in determining whether a stated interest is legitimate. Therefore, our prior cases applying that test to state due process challenges in other contexts are not controlling here. See, e.g., Women’s Surgical Ctr., LLC v. Berry, 302 Ga. 349, 354-355 (806 SE2d 606) (2017) (applying federal due process test to state constitutional due process challenge to statute requiring certificate of need for new healthcare facility); Quiller v. Bowman, 262 Ga. 769, 770-771 (425 SE2d 641) (1993) (applying federal due process test to state constitutional due process challenge to state statute requiring suspension of driver’s license upon conviction for possession of controlled substance or marijuana).}

[4.] Finally, the challenger has the ultimate burden to prove that the regulation unreasonably interferes with her right to practice the occupation of her choosing. Because statutes are presumed to be constitutional, this burden starts and remains with the challenger throughout.

Indeed, not every burden on the ability to pursue a lawful occupation will be unconstitutional—sometimes a regulation will be “rational” in the sense that it is reasonably necessary (either actually or because of the failure of the challenger to meet her burden). See, e.g., Cooper, 152 Ga. at 593-594 (rejecting a challenge to an occupational regulation of barbers to prevent “[t]he spread of disease by unsanitary … barber shops”). But if the challenger can establish that a regulation imposing restrictions on a lawful occupation does not advance the articulated public purpose by means that are reasonably necessary for that purpose, then the regulation cannot stand.

The court then applied this framework to the lactation consultant licensing requirement. It held that lactation consulting was a lawful occupation, that the law substantially burdened people who wanted to engage in it. But it went on to conclude that the law wasn’t sufficiently justified by the government’s “proffered rationale for the Act—promoting access to quality care”:

[The interest in promoting access to quality care] is an insufficient basis upon which to authorize only IBCLCs to provide lactation care and services for compensation given our consistent and definitive understanding of the scope of the due process right to practice one’s chosen profession free from unreasonable government restrictions. The Secretary does not contend that the Act is inherently a health and safety regulation—that, say, unlicensed lactation consultants would do affirmative harm (in the way a surgeon might), as opposed to merely failing to help, their patients. Certainly, there is nothing inherently harmful in the practice of lactation care, and there is no evidence of harm to the public from the provision of lactation care and services by individuals who lack an IBCLC license. Compare Coker, 188 Ga. at 174 (acknowledging obvious risk of fire from defectively installed electrical wiring and so authorizing regulation of installation of electrical wiring for safety of public).

Moreover, the record supports the trial court’s conclusion that CLCs and the individuals educated by ROSE are trained to provide safe and competent lactation care and services within their respective scopes of practice. The Secretary admitted that he is not aware of any evidence of harm from a person providing lactation care and services either prior to or after the passage of the Act and that the advisory group set up under the Act has not received any complaints regarding untrained or incompetent providers of lactation care and services. And careful review of the affidavits and depositions of experts and lactation care providers entered into the record fails to reveal any injury to mothers or babies caused by lactation care providers of any type.

Finally, we note that the record contains the Review Council’s report of the 2013 version of the Act. That report concludes that there is evidence that having access to proper lactation support has many benefits; that in its review, which included hearings, there was “no substantive evidence of harm identified” that flowed from the unregulated provision of lactation care; and that prohibiting CLCs from providing lactation care may cause “a greater risk of harm because the majority of lactation consultant providers would no longer be able to provide care.”

In the absence of evidence of harm, the Secretary relies on speculation to suggest that there is a danger to breastfeeding mothers and nursing babies from “unqualified and untrained” lactation care providers. At oral argument, the Secretary contended that a lactation care provider without the IBCLC certification might lead to the premature cessation of breastfeeding, which would result in the baby and mother not receiving the benefits of breastfeeding or to the continuance of breastfeeding that is inadequate for a baby’s nutritional needs. Such speculation, in the face of substantial evidence that the provision of lactation care and services by non-IBCLC providers is safe for and beneficial to nursing mothers and babies, is insufficient to authorize the regulatory scheme adopted, which greatly restricts those able to be employed as lactation care providers.

{We note that while statutes in other states provide for the licensing of lactation care providers, no other state has enacted a statutory scheme that categorically prohibits a CLC from providing lactation care services for compensation, contrary to the Secretary’s assertion.}

Congratulations to the Institute for Justice lawyers Renée Flaherty and Jaimie Cavanaugh, and local counsel Yasha Heidari (Heidari Power Law Group), who represent the challengers.

The post Georgia S. Ct.: Right to Pursue Lawful Occupation Invalidates License Requirement for Lactation Consultants appeared first on Reason.com.

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As Debt Deal Inches Towards Senate, McConnell Prepares For Battle With Conservative Holdouts

As Debt Deal Inches Towards Senate, McConnell Prepares For Battle With Conservative Holdouts

As the deal to raise the debt ceiling works its way through the House, Senate Republican leader Mitch McConnell (KY) is preparing for battle with Senate conservatives who are calling for amendments to the bill and threatening to delay the legislation until changes are made.

As The Hill reports, the bill is likely to get over 40 Senate Democratic votes, meaning it will likely need at least 10-20 “yes” votes from Senate Republicans in order for it to move to President Biden’s desk before the June 5 “X-date” deadline set by Treasury Secretary Janet Yellen for the US to run out of funds.

On Sunday, McConnell came out in favor of the deal negotiated between House Speaker Kevin McCarthy (R-CA) and President Biden’s team, however he faces strong opposition from actual conservatives. Chief among them, Sen. Mike Lee (R-UT), who has threatened to use “every procedural tool at my disposal” to slow down the bill. Sen. Rand Paul (R-KY) has similarly thrown a wrench in the gears – demanding a vote on his “conservative alternative” that would cut total federal spending by $545 billion over two years.

“It’s time to go back to the drawing board or, even better, go back to what the House already passed,” said Lee on Tuesday – referring to the Limit, Save, Grow Act, which would cut $4.8 trillion from the future deficit. According to Lee, the current bill “simply does not do what its proponents claim it does — not even close.”

Last week, Lee said that if the bill doesn’t include substantial budgetary and spending reforms, it “will not face smooth sailing in the Senate.”

McConnell has pledged the nation will not default on its debts but he also has a responsibility as leader to help Republican colleagues who want to amend the legislation, which could delay it past the June 5 “X-date.”   

The Senate must act swiftly and pass this agreement without unnecessary delay,” he said in a statement Sunday. -The Hill

Rand Paul, meanwhile, says he won’t vote for any bill to raise the debt ceiling that doesn’t balance the federal budget in five years – which would require over $500 billion in future cuts.

To us, it doesn’t look like cuts at all. In fact, spending will go up every year under that debt plan,” he said of the Biden-McCarthy deal, adding “Mandatory spending is enormous; it’s over half of the spending every year. It’s going up at five percent a year.”

That said, Paul says he won’t use procedural amendments to slow down passage of the debt bill, which caps federal spending for two years, and allows Congress to decide how to meet those targets at a later date.

Also opposing the current deal are Sens. Rick Scott (R-FL) and Mike Braun (R-IN).

This bill leaves us with trillions more in debt & no clear path to less inflation or a balanced budget. I appreciate the work @SpeakerMcCarthy did to try & negotiate a good deal when @JoeBiden refused to engage, but I cannot support this bill,” Scott tweeted Tuesday.

Braun, meanwhile, told reporters that he wouldn’t vote for the bill unless it similarly contains major changes and amendments, adding that he won’t object to speeding up the debate on the legislation if he and his GOP colleagues can submit amendments – even if they’re unlikely to pass.

“You want amendments because you know they’re not going to pass, let’s be real here. The Democrats and the neo-cons in our party are going to get this thing across the finish line, but I want the process of being able to amend it. To me, that is a step in the right direction, because this all gives information to the public in terms of what could be done, even though it doesn’t get incorporated,” said Braun.

Other GOP Senators on the fence include John Cornyn, John Kennedy and Mike Rounds.

“From my perspective, there’s not really anything to support until the House passes the bill. I’m waiting to see what the House sends us,” said Cornyn.

Tyler Durden
Wed, 05/31/2023 – 11:00

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Texas Services Sector Survey Signals 12th Straight Month Of Contraction

Texas Services Sector Survey Signals 12th Straight Month Of Contraction

For the 12th straight month, The Dallas Fed Services Outlook Survey printed negative in

Source: Bloomberg

Perceptions of broader business conditions continued to worsen in May. The general business activity index remained negative and fell three points to -17.3. The company outlook index remained the same at -9.5, while the outlook uncertainty index was flat at 15.8—close to its series average of 13.6.

Respondents were more mixed but all noted issues with hiring and inflation

  • Congressional inaction on raising the debt limit is disconcerting to clients, which impacts the prospects of utilizing our services.

  • [There is] increased uncertainty and stress due to the lack of qualified workers to meet growing demand. [There are] enough disruptions and remote work; we need the stability of an in-office workforce to manage productivity and work ethic.

  • Our clients are continuing to delay decisions to work with us.

  • Businesses are preparing for a recession by looking for ways to cut back, which in some ways, works to create a self-fulfilling prophecy.

  • Inflation has really been a concern for us and our vendors. It’s becoming very difficult to absorb the increase in prices at every level.

  • We are seeing a noticeable slowdown in the level of business activity in our manufacturing industry clients, especially in the consumer goods and auto-industry-related companies.

  • Our two main challenges have been employee related and the increasing cost of technology.

  • The banking crisis and compounding impact of the high cost of capital, general commercial uncertainty and consumer spending fluctuations are culminating to place heavy pressure on our business, which has moved us to lay off hundreds of employees this year.

  • We are seeing signs of slower consumer spending at restaurants, and our sales have been slowing since March.

  • Interest rates have killed business along with high inflation.

But…

  • Despite talk of recession and economic downtown, there is no apparent evidence of such.

Finally, the survey also notes that retail sales declined in May, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell six points to -3.2.

But of course, there’s no recession in AI, right?

Tyler Durden
Wed, 05/31/2023 – 10:54

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