Supreme Court to Biden: You Can’t Just Forgive $400 Billion in Student Loan Debt Without Asking Congress

The Supreme Court has struck down President Joe Biden’s student loan forgiveness plan, ruling 6–3 that the plan, which had promised up to $20,000 in federal student loan forgiveness per borrower, was not authorized under existing law. It was widely expected that the Court would halt Biden’s proposal.

Last August, Biden announced that the Department of Education would launch a sweeping student loan forgiveness plan, forgiving $10,000 in federal student loan debt for single borrowers making up to $125,000 per year and married couples making up to $250,000. Borrowers who received Pell Grants would be eligible for $20,000 in loan forgiveness.

Almost immediately, the plan was met with legal challenges. The Supreme Court agreed to hear two cases, one filed jointly by six Republican-led states that wished to block the measure, and another filed in Texas by two state residents who were not eligible for the maximum relief provided by the plan.

The Supreme Court unanimously ruled that the plaintiffs in the Texas case had no standing. But it ruled in favor of the coalition of Republican states, deciding that Biden’s attempt at legitimizing the proposal through the HEROES Act—and the billions in federal spending that it would entail—fell flat on the merits and was unconstitutional.

The HEROES Act is a 9/11-era law designed to allow the government to grant student loan relief to soldiers who withdrew from college to enter active duty. The law gives the Department of Education the authority to “waive or modify” any “requirement or regulation” of a federal student loan plan for individuals who “suffered direct economic hardship as a direct result of a war or other military operation or national emergency.”

While the Department of Education argued that this granted it broad authority to cancel student loan debt, citing COVID-19 as the “national emergency” in question, the Supreme Court didn’t buy it. “The Secretary’s plan has ‘modified’ the cited provisions only in the same sense that ‘the French Revolution “modified” the status of the French nobility,'” wrote Chief Justice John Roberts in the majority opinion. “It has abolished them and supplanted them with a new regime entirely.”

Roberts continued: “The Secretary has not truly waived or modified the provisions in the Education Act authorizing specific and limited forgiveness of student loans. Those provisions remain safely intact in the U. S. Code, where they continue to operate in full force. What the Secretary has actually done is draft a new section of the Education Act from scratch by ‘waiving’ provisions root and branch and then filling the empty space with radically new text.”

Roberts further asserted that only Congress could authorize such extensive student loan forgiveness. He even cited former Speaker of the House Nancy Pelosi (D–Calif.), who told reporters in 2021, “People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”

The ruling marks a decisive halt to a proposal that would have cost taxpayers an estimated $400 billion. While higher education—and particularly graduate school—is too expensive for many students, loan forgiveness does nothing to address the root cause of inflated college tuition. Instead, Biden’s plan would have primarily benefited wealthier Americans, and it would have resulted in outstanding student loan debt returning to current levels by 2028.

Policies that restrict the supply of federal student loans—for example, lowering the cap on the amounts individuals can borrow, or refusing to provide federal loans for programs and colleges that leave students financially worse off—are the clearest way to improve the situation in the long term. Unfortunately, long-term solutions aren’t nearly as attractive as the short-term appeal of giving a payout to a group of Americans that also happens to comprise a significant part of the Democratic base, with the announcement coming shortly before the 2022 midterms.

From the beginning, Biden’s plan was doomed to fail. As Roberts wrote, “Our precedent— old and new—requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy.” Biden surely knew—or should have known—this. But instead of attempting to enact his policy goals through Congress, he embarked on a 10-month boondoggle that has met its predictable end.

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If “Any Government Again Resorts to Racial or Ethnic Classifications to Ration Medical Treatment”

So writes Justice Alito, joined by Justice Thomas, in a statement today respecting the denial of certiorari in Roberts v. McDonald:

The circumstances underlying the dispute below have long since come and gone, and I therefore agree with the Court’s decision to deny review. But I write to note that this case involves an issue of ongoing importance: whether the Equal Protection Clause permits governments to use race or ethnicity as a proxy for health risk and therefore “prioritize the treatment of patients” on that basis. Roberts v. Bassett (2d Cir. 2022) (Cabranes, J., concurring) (noting the “portentous legal issues” implicated by such policies).

When “several new COVID–19 treatments for high-risk patients” were approved in late 2021, the treatments were “briefly in short supply” relative to need. New York State “instruct[ed] providers to follow” its guidance on “higher priority risk group[s]” so long as the “supply shortage persisted.” Echoing similar guidance from the federal Centers for Disease Control and Prevention, the State’s guidance specified that “‘[n]onwhite race or Hispanic/Latino ethnicity should be considered a risk factor'” when prioritizing patients. The State justified the use of race and ethnicity as proxies for health risk by appealing to “‘longstanding systemic health and social inequities.'”

As we have stated many times and have recently reaffirmed, the Equal Protection Clause places a “daunting” obstacle in the way of any government seeking to allocate benefits or burdens based on race or ethnicity, typically giving way only when the measure in question is “‘narrowly tailored'”—that is, “‘necessary'”—to “remediat[e] specific, identified instances of past discrimination that violated the Constitution or a statute.” Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (2023). Therefore, government actors may not provide or withhold services based on race or ethnicity as a response to generalized discrimination or as a convenient or rough proxy for another trait that the government believes to be “‘characteristic'” of a racial or ethnic group.

Under that precedent, New York’s general reference to “longstanding systemic health and social inequities” would not have sufficed to allow the State to deny a person medical treatment simply because that person is viewed by the State as being a member of the wrong racial or ethnic group. The shortage at issue in this case appears, thankfully, to have concluded. But in the event that any government again resorts to racial or ethnic classifications to ration medical treatment, there would be a very strong case for prompt review by this Court.

The post If “Any Government Again Resorts to Racial or Ethnic Classifications to Ration Medical Treatment,” appeared first on Reason.com.

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S. Ct. Will Review Whether Second Amendment Allows Disarming of People Subject to Civil Restraining Orders

The Supreme Court just announced that it will consider this issue, in U.S. v. Rahimi; this is unsurprising, since the Court is generally inclined to review cases where a court held that a federal statute was unconstitutional, and where the federal government asks for review. Here’s my post from February, when the Fifth Circuit decided the case (see also Stephen Halbrook’s post after the denial of en banc rehearing, where he noted that Supreme Court review was likely):

From U.S. v. Rahimi, decided today by the Fifth Circuit, in an opinion by Judge Cory Wilson, joined by Judges Edith Jones and James Ho:

The question presented in this case is not whether prohibiting the possession of firearms by someone subject to a domestic violence restraining order is a laudable policy goal. The question is whether 18 U.S.C. § 922(g)(8), a specific statute that does so, is constitutional under the Second Amendment of the United States Constitution. In the light of N.Y. State Rifle & Pistol Ass’n, Inc. v. Bruen (2022), it is not.

The court rejected the view that, under Heller and Bruen, legislatures can disarm anyone who isn’t a “law-abiding, responsible citizen[]”:

There is some debate on this issue. Compare Kanter v. Barr (7th Cir. 2019) (Barrett, J. dissenting), abrogated by Bruen, 142 S. Ct. 2111, with Binderup v. Att’y Gen. (3d Cir. 2016) (en banc) (Hardiman, J., concurring in part and concurring in the judgments). As summarized by now-Justice Barrett, “one [approach] uses history and tradition to identify the scope of the right, and the other uses that same body of evidence to identify the scope of the legislature’s power to take it away.” The Government’s argument that Rahimi falls outside the community covered by the Second Amendment rests on the first approach. But it runs headlong into Heller and Bruen, which we read to espouse the second one.

Unpacking the issue, the Government’s argument fails because (1) it is inconsistent with Heller, Bruen, and the text of the Second Amendment, (2) it inexplicably treats Second Amendment rights differently than other individually held rights, and (3) it has no limiting principles….

Heller explained that the words “the people” in the Second Amendment have been interpreted throughout the Constitution to “unambiguously refer[] to all members of the political community, not an unspecified subset.” Further, “the people” “refer[] to a class of persons who are part of a national community or who have otherwise developed sufficient connection with this country to be considered part of that community.” … Heller‘s exposition of “the people” strongly indicates that Rahimi is included in “the people” and thus within the Second Amendment’s scope.

To be sure, as the Government argues, Heller and Bruen also refer to “law-abiding, responsible citizens” in discussing the amendment’s reach (Bruen adds “ordinary, law-abiding citizens”). But read in context, the Court’s phrasing does not add an implied gloss that constricts the Second Amendment’s reach. Heller simply uses the phrase “law-abiding, responsible citizens” as shorthand in explaining that its holding (that the amendment codifies an individual right to keep and bear arms) should not “be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings ….” …

The Government’s reading of Heller and Bruen also turns the typical way of conceptualizing constitutional rights on its head. “[A] person could be in one day and out the next: the moment he was convicted of a violent crime or suffered the onset of mental illness, his rights would be stripped as a self-executing consequence of his new status.” Kanter (Barrett, J., dissenting). This is “an unusual way of thinking about rights [because i]n other contexts that involve the loss of a right, the deprivation occurs because of state action, and state action determines the scope of the loss (subject, of course, to any applicable constitutional constraints).” “Felon voting rights are a good example: a state can disenfranchise felons, but if it refrains from doing so, their voting rights remain constitutionally protected.” The Government fails to justify this disparate treatment of the Second Amendment.

Perhaps most importantly, the Government’s proffered interpretation lacks any true limiting principle. Under the Government’s reading, Congress could remove “unordinary” or “irresponsible” or “non-law abiding” people—however expediently defined—from the scope of the Second Amendment. Could speeders be stripped of their right to keep and bear arms? Political nonconformists? People who do not recycle or drive an electric vehicle? One easily gets the point: Neither Heller nor Bruen countenances such a malleable scope of the Second Amendment’s protections; to the contrary, the Supreme Court has made clear that “the Second Amendment right is exercised individually and belongs to all Americans.” Rahimi, while hardly a model citizen, is nonetheless part of the political community entitled to the Second Amendment’s guarantees, all other things equal….

The court concluded that therefore, under Bruen, § 922(g)(8) could be upheld only if it were sufficiently analogous to historically accepted limitations on guns; and it held that none of the proposed analogies worked:

[W]e focus on these key features of [§ 922(g)(8): (1) forfeiture of the right to possess weapons (2) after a civil proceeding (3) in which a court enters a protective order based on a finding of a “credible threat” to another specific person, (4) in order to protect that person from “domestic gun abuse.” … To sustain § 922(g)(8)’s burden on Rahimi’s Second Amendment right, the Government bears the burden of proffering “relevantly similar” historical regulations that imposed “a comparable burden on the right of armed self-defense” that were also “comparably justified.” …

The Government offers potential historical analogues to § 922(g)(8) that fall generally into three categories: (1) English and American laws (and sundry unadopted proposals to modify the Second Amendment) providing for disarmament of “dangerous” people, (2) English and American “going armed” laws, and (3) colonial and early state surety laws. We discuss in turn why each of these historical regulations falter as “relevantly similar” precursors to § 922(g)(8)….

Under the English Militia Act of 1662, officers of the Crown could “seize all arms in the custody or possession of any person” whom they “judge[d] dangerous to the Peace of the Kingdom.” Citing scholarship, the Government thus posits that “by the time of American independence, England had established a well-practiced tradition of disarming dangerous persons—violent persons and disaffected persons perceived as threatening to the crown.”

But the Militia Act’s provenance demonstrates that it is not a forerunner of our Nation’s historical tradition of firearm regulation. Under Charles I (who reigned 1625–1649), the Crown and Parliament contested for control of the militia. After the resulting civil war and Oliver Cromwell’s interregnum, the monarchy was restored in 1660 when Charles II took the throne. Charles II began using the militia to disarm his political opponents. The Militia Act of 1662 facilitated this disarmament, which escalated under the Catholic James II once he took the throne in 1685. After the Glorious Revolution, which enthroned Protestants William and Mary, the Declaration of Rights, codified as the 1689 English Bill of Rights, qualified the Militia Act by guaranteeing “[t]hat the subjects which are Protestants may have arms for their defence suitable to their Conditions and as allowed by Law.” “This right,” which restricted the Militia Act’s reach in order to prevent the kind of politically motivated disarmaments pursued by Charles II and James II, “has long been understood to be the predecessor to our Second Amendment.” This understanding, and the history behind it, defeats any utility of the Militia Act of 1662 as a historical analogue for § 922(g)(8).

The Government next points to laws in several colonies and states that disarmed classes of people considered to be dangerous, specifically including those unwilling to take an oath of allegiance, slaves, and Native Americans…. [But t]he purpose of these “dangerousness” laws was the preservation of political and social order, not the protection of an identified person from the specific threat posed by another. Therefore, laws disarming “dangerous” classes of people are not “relevantly similar” to § 922(g)(8) such that they can serve as historical analogues.

Finally, the Government offers two proposals that emerged in state ratification conventions considering the proposed Constitution. A minority of Pennsylvania’s convention authored a report in which they contended that citizens have a right to bear arms “unless for crimes committed, or real danger of public injury.” And at the Massachusetts convention, Samuel Adams proposed a qualifier to the Second Amendment that limited the scope of the right to “peaceable citizens.”

But these proposed amendments are not reflective of the Nation’s early understanding of the scope of the Second Amendment right. While they were influential proposals, neither became part of the Second Amendment as ratified. Thus, the proposals might somewhat illuminate the scope of firearm rights at the time of ratification, but they cannot counter the Second Amendment’s text, or serve as an analogue for § 922(g)(8) ….

The Government also relies on the ancient criminal offense of “going armed to terrify the King’s subjects.” This common law offense persisted in America and was in some cases codified…. [But] those laws only disarmed an offender after criminal proceedings and conviction. By contrast, § 922(g)(8) disarms people who have merely been civilly adjudicated to be a threat to another person. Moreover, the “going armed” laws, like the “dangerousness” laws discussed above, appear to have been aimed at curbing terroristic or riotous behavior, i.e., disarming those who had been adjudicated to be a threat to society generally, rather than to identified individuals. Thus, these “going armed” laws are not viable historical analogues for § 922(g)(8)….

Lastly, the Government points to historical surety laws. At common law, an individual who could show that he had “just cause to fear” that another would injure him or destroy his property could “demand surety of the peace against such person.” The surety “was intended merely for prevention, without any crime actually committed by the party; but arising only from probable suspicion, that some crime [wa]s intended or likely to happen.” If the party of whom surety was demanded refused to post surety, he would be forbidden from carrying a weapon in public absent special need….

The surety laws come closer to being “relevantly similar” to § 922(g)(8) than the “dangerousness” and “going armed” laws discussed supra. First, they are more clearly a part of our tradition of firearm regulation. And they were “comparably justified,” in that they were meant to protect an identified person (who sought surety) from the risk of harm posed by another identified individual (who had to post surety to carry arms). Put simply, the why behind historical surety laws analogously aligns with that underlying § 922(g)(8).

Aspects of how the surety laws worked resemble certain of the mechanics of § 922(g)(8) as well. The surety laws required only a civil proceeding, not a criminal conviction. The “credible threat” finding required to trigger § 922(g)(8)’s prohibition on possession of weapons echoes the showing that was required to justify posting of surety to avoid forfeiture. But that is where the analogy breaks down: As the Government acknowledges, historical surety laws did not prohibit public carry, much less possession of weapons, so long as the offender posted surety. See also Bruen (noting that there is “little evidence that authorities ever enforced surety laws”). Where the surety laws imposed a conditional, partial restriction on the Second Amendment right, § 922(g)(8) works an absolute deprivation of the right, not only publicly to carry, but to possess any firearm, upon entry of a sufficient protective order. At bottom, the historical surety laws did not impose “a comparable burden on the right of armed self-defense.” …

Doubtless, 18 U.S.C. § 922(g)(8) embodies salutary policy goals meant to protect vulnerable people in our society. Weighing those policy goals’ merits through the sort of means-end scrutiny our prior precedent indulged, we previously concluded that the societal benefits of § 922(g)(8) outweighed its burden on Rahimi’s Second Amendment rights. But Bruen forecloses any such analysis in favor of a historical analogical inquiry into the scope of the allowable burden on the Second Amendment right. Through that lens, we conclude that § 922(g)(8)’s ban on possession of firearms is an “outlier[] that our ancestors would never have accepted.” …

Judge Ho joined the majority but concurred; an excerpt:

I write separately to point out that our Founders firmly believed in the fundamental role of government in protecting citizens against violence, as well as the individual right to keep and bear arms—and that these two principles are not inconsistent but entirely compatible with one another.

Our Founders understood that those who commit or threaten violence against innocent law-abiding citizens may be arrested, convicted, and incarcerated. They knew that arrest and incarceration naturally entails the loss of a wide range of liberties—including the loss of access to arms. {See, e.g., Chimel v. California (1969) (“When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape.”); State v. Buzzard (Ark. 1842) (Ringo, C.J.) (“Persons accused of crime, upon their arrest, have constantly been divested of their arms, without the legality of the act having ever been questioned.”).}

So when the government detains—and thereby disarms—a member of our community, it must do so consistent with the fundamental protections that our Constitution affords to those accused of a crime. For example, the government may detain dangerous criminals, not just after conviction, but also before trial. Pre-trial detention is expressly contemplated by the Excessive Bail Clause and the Speedy Trial Clause. And it no doubt plays a significant role in protecting innocent citizens against violence. See, e.g., United States v. Salerno (1987) (permitting “the detention prior to trial of arrestees charged with serious felonies who … pose a threat to the safety of individuals or to the community”).

Our laws also contemplate the incarceration of those who criminally threaten, but have not (yet) committed, violence. After all, to the victim, such actions are not only life-threatening—they’re life-altering.

In sum, our Founders envisioned a nation in which both citizen and sovereign alike play important roles in protecting the innocent against violent criminals. Our decision today is consistent with that vision….

The post S. Ct. Will Review Whether Second Amendment Allows Disarming of People Subject to Civil Restraining Orders appeared first on Reason.com.

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Europe’s Large Caps Are Outperforming the S&P 500

Europe’s Large Caps Are Outperforming the S&P 500

By Ksenia Galouchko, Bloomberg Markets Live reporter

European equities are broadly falling behind this year’s powerful rally in the US market, but a deeper dive shows that the region’s blue-chip stocks can help investors outperform the S&P 500.

With mounting recession fears and still hawkish central banks, some European stocks may be better positioned than others for a bumpy ride in the second half of the year. Among investor favorites are defensives, as well as companies with strong fundamentals.

The Euro Stoxx 50 gauge of large caps has climbed 14.8% this year, beating both the Stoxx 600 and the S&P 500. While sector gains in the broader European gauge have been led by travel and retail, corporate heavyweights like LVMH, ASML and SAP have contributed the most to its advance, signaling favor for safer bets.

Betting on quality and high-growth companies with strong pricing power in Europe has helped Comgest Growth Europe gain a 17% total return so far in 2023 including reinvested dividends, according to Alistair Wittet, one of the fund’s managers. The fund, whose top holdings include ASML, Novo Nordisk and LVMH, has beaten 97% of peers this year, according to data compiled by Bloomberg.

Luxury companies like LVMH, L’Oreal and Ferrari are among the top gainers in Europe this year. While Chinese demand — a key driver — has been uneven, Wittet says their high margins, strong pricing power and wealthy consumers’ resilience to downturns will allow them to maintain market leadership. The stocks are also less rate-sensitive, given low debt and high free cash flow levels.

A factor in Europe’s favor is that gains are distributed more broadly than in the US, making the broader market less vulnerable to selloffs in a particular sector or group. While 15 of the biggest companies have driven 86% of the returns in the US stock market, the same number of stocks in Europe have accounted for just 39%, according to Goldman Sachs strategists.

The more diverse sectoral exposure protects the European stock market from a sudden selloff in case tech shares fall out of favor, says Lode Devlaminck, managing director for equities at DuPont Capital. He has a preference for European equities over the US due to cheaper valuations and lower market expectations.

The question investors are asking is whether the gains in bigger companies can expand to the rest of the market or if large caps will succumb to recession fears that have been pressuring smaller peers. According to Goldman strategists, when European stocks rally with narrow leadership, the subsequent 12-month returns for the aggregate index are positive in more than two-thirds of the instances.

For the broader European market, headwinds remain. Weakening activity data and a technical recession in Germany have fueled an unwinding of bullish positions in European stocks and there may be more redemptions to come, says Barclays strategist Emmanuel Cau. The bank notes that Europe was the only major equity region to see fund outflows in June.

“If the second half of the year proves to me more challenging than the first half of the year because inflation stays stubbornly high or because interest rates continue to rise, or because the economy weakens, we think these businesses will prove resilient in that environment,” Comgest’s Wittet said, highlighting quality stocks.

Tyler Durden
Fri, 06/30/2023 – 12:20

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$15BN US Arms Sale To Poland Amid Continued NATO ‘Eastern Flank’ Build-Up

$15BN US Arms Sale To Poland Amid Continued NATO ‘Eastern Flank’ Build-Up

Authored by Kyle Anzalone via The Libertarian Institute, 

The State Department announced it authorized selling $15 billion in advanced air defense systems to Poland. The deal comes as Washington wants to increase NATO’s military presence in Eastern Europe. 

A press release distributed by the State Department on Wednesday says, “This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a NATO Ally that is a force for political stability and economic progress in Europe.”

US and NATO leaders argue the alliance must build up its military presence in countries that border Russia to deter President Vladimir Putin’s desire to expand his nation’s border.

The US press release stated further, “Poland will use the IBCS-enabled Patriot missile system to improve its missile defense capability, defend its territorial integrity, and deter regional threats.”

“The proposed sale will increase the defensive capabilities of the Polish Military to guard against hostile aggression and shield the NATO allies who often train and operate within Poland’s borders,” the readout continued. “Poland will have no difficulty absorbing this system into its armed forces.”

However, Moscow has not indicated it plans to expand its border beyond eastern Ukraine, where the Russian military has struggled to secure territory annexed by the Kremlin.   

The sale is for an estimated $15 billion in Patriot air defense systems, radars, and communications equipment.

The primary contractors are Raytheon and Lockheed Martin. Raytheon has been accused of price gouging the Pentagon for Patriot intercepts. Secretary of Defense Lloyd Austin was a board member at the arms manufacturer before becoming the Pentagon chief. 

After Russia invaded Ukraine last year, Washington and Brussels demanded NATO members increase military spending. The increase in defense budgets has been a boon to the weapons industry in the US.

Tyler Durden
Fri, 06/30/2023 – 12:00

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Back To The Drawing Board

Back To The Drawing Board

By Teeuwe Mevissen, Senior Macro Strategist at Rabobank

As we are about to approach the end of this trading week it sometimes leads us to reflect on all that has happened; especially when a lot has happened, like this week.

Clearly, we started the week with news about a coup attempt in Russia. Where would we have been, had this attempt been successful? Was it even a coup attempt or was it really about Gerasimov and Shoigu, as Prigozhin claims it was? And how would a successful attempt have affected the war in Ukraine? All interesting counterfactuals for historians, but for now we can only conclude that Putin’s position might not be as solid (anymore) as many thought it was. Therefore there is still more than enough reasons for Putin to worry and to maybe get back to the drawing board regarding the course that he chose since the 24th of February 2022.

We had to wait until Thursday for real macro-economic news but the monetary news from this week was exciting enough. It seemingly took markets quite some time to properly assess the monetary impact of what has been said during Europe’s Central Bank Forum in Sintra, Portugal. Initially we saw a sharp rise in interest rates along the whole curve, this was quickly followed by declining rates at the end of Wednesday’s trading session. But it was yesterday at 14:00CET after it turned out that inflation in Germany was rising again that rates started their ascend. Interestingly enough it were the longer maturities that saw the sharpest rise in yields. Clearly markets were busy positioning themselves for the inflation data from both the Eurozone and the US that will come out today.

But there was more than higher-than-expected inflation in Germany that resulted in significantly higher rates yesterday. Data from the US, which also came out yesterday, showed that annualized quarterly growth over the first quarter of this year turned out to be 2% QoQ instead of the 1.4% QoQ reported earlier. And, maybe even more important, personal consumption came out at 4.2% instead of the earlier estimate of 3.8%. In other words, demand was much stronger than anticipated and this means more work for the Fed since apparently the restrictive area that we are supposed to be in is not so restrictive after all. While European yields rose between 6 and 8 basis points, the 2-year yield on US bonds jumped no less than 16 basis points.

For those who were hoping for lower rates, yesterday’s jobless claims must have been yet another disappointment. The benefit applications fell the most since October last year and that week (ending on the 24th of June) even included the Juneteenth holiday. While we have to wait until Friday next week to get a better picture of the US labour market it still doesn’t seem that the labour market is cooling off in earnest. For now, expectations that the Fed could hike more than previously anticipated resulted in a strong dollar, pushing EUR/USD lower and below a level of 1,09.

Meanwhile China is dealing with its own challenges that are wildly different from the challenges that the West is facing. While both China and the West have to deal with a slump in the manufacturing sector, China does not have an inflation battle to fight. At least not yet. China’s economy is struggling because local governments, the real estate sector and households have too much debt. China seeks to transform its economy from an export based model to a model of dual circulation that also relies on domestic consumption.

However, given the circumstances outlined above, the latter will prove to be everything but easy. Currently, consumers are mainly busy with deleveraging. This is reflected in higher savings ratios and early mortgage repayments that hit a 5 year high according to Fitch Bohua. While it is a necessary step for households to deleverage, it does put a lot of pressure on the expected interest rate returns of China’s banking sector.  Moreover, today’s PMI’s coming from China shows a continuous cooling of the manufacturing sector and a lower than expected value for the services sector (53.2 vs 53.5 expected) in June which also came out lower than the survey for the previous month.

Tyler Durden
Fri, 06/30/2023 – 11:40

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Anheuser-Busch Responds After Dylan Mulvaney Throws Tantrum

Anheuser-Busch Responds After Dylan Mulvaney Throws Tantrum

Anheuser-Busch has responded after Dylan Mulvaney, the transgender influencer whose ditzy female persona was featured in a Bud Light ad campaign which destroyed the brand, bashed the beer company for abandoning him in his time of need.

One thing I will not tolerate people saying about me is that I don’t like beer because I love beer and I always have,” Mulvaney said in a new Instagram video, adding that the initial partnership sparked more “bullying and more transphobia” than he could have ever imagined.

I should’ve made this video months ago but I didn’t,” said Mulvaney. “And I was scared, and I was scared of more backlash, and I felt personally guilty for what transpired, so I patiently waited for things to get better. But surprise, they didn’t. And I was waiting for the brand to reach out to me, but they never did.”

“And for months now, I’ve been scared to leave my house, I have been ridiculed in public, I’ve been followed, and I have felt a loneliness that I wouldn’t wish on anyone,” the influencer continued. “And I’m not telling you this because I want your pity, I am telling you this because this is my experience from a very privileged perspective, know that it is much, much worse for other trans people.”

Mulvaney then transitioned into a rant about Bud Light not being supportive enough.

“For a company to hire a trans person and then not publicly stand by them is worse in my opinion than not hiring a trans person at all, because it gives customers permission to be as transphobic and hateful as they want,” he continued, adding that it will have “serious and grave consequences” for the LGBTQ community.

Watch:

In response, the beermaker told the Daily Beast that it’s “committed to the programs and partnerships we have forged over decades with organizations across a number of communities, including those in the LGBTQ+ community.” 

So, another robotic, ‘approved-by-legal’ focus group response.

As Breitbart notes;

Corporations have been put into a difficult corner amid backlash over massive Pride Month campaigns, especially in markets directed at children. A recent report from CNBC showed that companies will have to make difficult decisions in the years ahead. As Breitbart News reported, Bud Light has been a floundering brand since it partnered with Mulvaney and has been replaced by Modelo as America’s number-one beer. Anson Frericks, who previously served as president of sales and distribution at Anheuser-Busch, said that some corporations need to have a better understanding of their audience.

“Anheuser-Busch has lost sight of who its customer is. A brand like Bud Light is a brand that has never been political, but now they’re being shunned by customers on the right, who see this partnership as a very politicized position they’ve taken, and also customers on the left who don’t feel supported amid the backlash,” said Frericks.

Earlier this week Anheuser Busch CEO Brendan Whitworth gave a robotic, non-committal answer when asked if his company would continue the relationship with Mulvaney, to which he told CBS Mornings;

“It’s been a challenging few weeks. I think the conversation surrounding Bud Light has moved away from beer, and the conversation has become divisive. And Bud Light really doesn’t belong there. Bud Light should be all about bringing people together. And there’s an impact on the business, and I think that’s publicly covered on Bud Light specifically.”

Watch:

Tyler Durden
Fri, 06/30/2023 – 11:22

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Largest Discrepancy Between GDP And GDI In 20 Years

Largest Discrepancy Between GDP And GDI In 20 Years

By Mish Shedlock of MishTalk

The BEA released its final estimate of first-quarter 2023 GDP. The GDP vs GDI discrepancy is one of the largest ever.

Gross Domestic Product (GDP) and Gross Domestic Income (GDI) are two measures of the same thing. They are supposed to match, and will over time, with revisions in at least one of the measures.

Real Final Sales is the bottom line estimate of Real GDP. The word real, means inflation-adjusted.

Today the BEA released its Third Estimate of First Quarter 2023 GDP and an update on GDI as well.

BEA Highlights

  • Real GDP increased at an annual rate of 2.0 percent in the first quarter of 2023 according to the “third” estimate released by the Bureau of Economic Analysis.
  • In the fourth quarter of 2022, real GDP increased 2.6 percent.
  • Real gross domestic income (GDI) decreased 1.8 percent in the first quarter, an upward revision of 0.5 percentage point from the previous estimate.
  • The increase in first-quarter real GDP was revised up 0.7 percentage point from the second estimate, reflecting upward revisions to exports, consumer spending, state and local government spending, and residential fixed investment that were partly offset by downward revisions to nonresidential fixed investment, federal government spending, and private inventory investment. Imports were revised down.
  • The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.1 percent in the first quarter, an upward revision of 0.6 percentage point from the previous estimate.

The BEA averages GDP and GDI on the basis that it does not know which measure is more accurate. The NBER, the official arbiter of US recessions does the same thing.

However, the NBER is so late in issuing its recession calls, it will be clear which one of the current estimates is more accurate.

Largest Discrepancy in at Least 20 Years

Q&A on the Discrepancy

The average is very weak, near-zero growth letting everyone believe what they want about the strength of the economy. The divergence between jobs and employment is also in play.

Jobs vs Employment Discrepancy

I have been covering the discrepancy between jobs and employment for over a year.

My most recent update was on June 2, in Huge Jobs Divergence Returns, Jobs +339,000 but Employment -310,000

Payrolls vs Employment Since May 2022

  • Nonfarm Payrolls: +4,063,000
  • Employment Level: +2,422,000
  • Full Time Employment: +1,734,000

Of the 894,000 rise in employment in January, 810,000 was due to annual benchmark revisions. And the BLS does not say what months were revised, just poof, here you go.

Think There’s a Strong Labor Market? Then Think Again

Hours worked data from the BLS

Across the board, people are working much fewer hours per week than pre-pandemic. 

The hours view and the employment vs jobs view hints that the GDI view is closer to the mark than the GDP view. For discussion, please see Think There’s a Strong Labor Market? Then Think Again

Tyler Durden
Fri, 06/30/2023 – 11:00

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Future Headline: California to Require Mandatory Drag Instruction in K-12 Schools

In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads.

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything we write is based on actual events, news stories, personalities, and pending legislation.

June 30, 2028: California to Require Mandatory Drag Instruction in K-12 Schools

It started back in 2023 when Texas Christian University began offering its pioneering course, “The Queer Art of Drag”.

TCU’s original course included such texts as Kravitz Marshall’s The Gender Binary is a Tool of White Supremacy; and each student was required to put on a public drag performance at the end of the semester.

California’s state legislators were caught flat footed and surprised that an otherwise conservative university in a conservative state had leapfrogged ahead them.

But politicians in Sacramento did not take the challenge to their progressive authority lying down. And they responded in late 2023 with a statewide mandate to offer Drag instruction at all public and private universities in California.

The law was immediately challenged in federal court, however it was upheld by the San Francisco-based Ninth Circuit Court last year after a protracted legal battle.

In its final opinion, the court ruled that “cisgender-blindness is not a constitutional right” and that mandatory drag instruction was “the right thing for an advanced society to pursue.”

After losing in the Ninth Circuit, the main plaintiff promised to appeal the case to the US Supreme Court. However he was assisinated by an Antifa activist before being able to do so.

Emboldened by its victory, the California state government is now set to pass the Deconstructing Roles and Adjusting Gender, or DRAG Act, which will take effect statewide this fall.

The law requires K-12 students to complete at least 1,000 hours of classroom instruction under the tutelage of drag queens, over the course of their 13-year public education.

900 of the 1,000 hours of instruction may be in any subject— science, mathematics, foreign language, etc. as long as the teacher is a Drag Diva. The other 100 hours must be Drag training, which, under the law, will now fulfill physical education requirements.

California’s State Superintendent for Public Instruction, Taye Q. Kidd, said this is the bare minimum necessary to prepare children for the real world.

“Even under the new requirements, less than 10% of classroom time will be spent with Drag Divas,” Mx. Kidd said. “It would be a disservice not to allow Drag Divas to expose themselves to our children.”

Source

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S. Ct. Holds That Creators (e.g. Web Designers) Can’t Be Required to Create Material They Object to

The logic of today’s 303 Creative LLC v. Elenis should apply, I think, to photographers, videographers, calligraphers, freelance writers, and the like (as well as performers such as wedding singers). It wouldn’t apply to businesses that provide nonspeech goods and services, such as wedding venues, limousine drivers, caterers, and the like. It is thus a narrow case, authorizing First Amendment defenses to only a limited set of applications of antidiscrimination law, when speech creators want to choose the particular content of speech that they seek to create.

At the same time, it provides strong protection for speech creators, whether their motivations are religious or not: The decision rests on the Free Speech Clause and not on the Free Exercise Clause. And it provides protection regardless of whether the antidiscrimination law bans discrimination based on sexual orientation, religion, race, political belief, and so on. The Court reasoned that, if the Free Speech Clause here was rejected:

The government could require “an unwilling Muslim movie director to make a film with a Zionist message,” or “an atheist muralist to accept a commission celebrating Evangelical zeal,” so long as they would make films or murals for other members of the public with different messages. Equally, the government could force a male website designer married to another man to design websites for an organization that advocates against same-sex marriage.

The Court’s decision thus entitles these hypothetical freelance movie director, muralist, and website designer to refuse to create such works.

The opinion doesn’t resolve what would happen to products or services that aren’t traditionally speech but that may be seen as symbolic, such as flower arrangements and wedding cakes. (Dale Carpenter’s and my view, which we’ve expressed in a past amicus brief, is that decisions not to create wedding cakes, at least ones without writing or other visual ideological messages, are not protected by the First Amendment, while decisions to create photographs, web sites, and the like are. We analogize in that brief to speech restrictions, where First Amendment law must decides what’s a restriction on speech and what on constitutionally unprotected conduct: A town, for instance, can’t ban live performances, newspapers, or photographers, or limit their number; but the First Amendment doesn’t stop it from banning or limiting hotels, caterers, limousine drivers, bakers, florists, and the like. Dale and I also filed an amicus brief, together with others, on the web site designer’s side in this case.)

Here are excerpts from Justice Gorsuch’s majority opinion:

[A.] Like many States, Colorado has a law forbidding businesses from engaging in discrimination when they sell goods and services to the public. Laws along these lines have done much to secure the civil rights of all Americans. But in this particular case Colorado does not just seek to ensure the sale of goods or services on equal terms. It seeks to use its law to compel an individual to create speech she does not believe. The question we face is whether that course violates the Free Speech Clause ….

[B.] The framers designed the Free Speech Clause … to protect the “freedom to think as you will and to speak as you think.” They did so because they saw the freedom of speech “both as an end and as a means.” An end because the freedom to think and speak is among our inalienable human rights. A means because the freedom of thought and speech is “indispensable to the discovery and spread of political truth.” ..

[C.] [T]he wedding websites Ms. Smith [the owner of 303 Creative LLC] seeks to create qualify as “pure speech” under this Court’s precedents…. [The parties] have stipulated that Ms. Smith’s websites promise to contain “images, words, symbols, and other modes of expression.” They have stipulated that every website will be her “original, customized” creation. And they have stipulated that Ms. Smith will create these websites to communicate ideas—namely, to “celebrate and promote the couple’s wedding and unique love story” and to “celebrat[e] and promot[e]” what Ms. Smith understands to be a true marriage.

A hundred years ago, Ms. Smith might have furnished her services using pen and paper. Those services are no less protected speech today because they are conveyed with a “voice that resonates farther than it could from any soapbox.” All manner of speech—from “pictures, films, paintings, drawings, and engravings,” to “oral utterance and the printed word”—qualify for the First Amendment’s protections; no less can hold true when it comes to speech like Ms. Smith’s conveyed over the Internet….

[T]he wedding websites Ms. Smith seeks to create involve her speech…. Ms. Smith intends to “ve[t]” each prospective project to determine whether it is one she is willing to endorse. She will consult with clients to discuss “their unique stories as source material.” And she will produce a final story for each couple using her own words and her own “original artwork.”

Of course, Ms. Smith’s speech may combine with the couple’s in the final product. But for purposes of the First Amendment that changes nothing. An individual “does not forfeit constitutional protection simply by combining multifarious voices” in a single communication….

{[The State argues that t]o comply with Colorado law, … all Ms. Smith must do is repurpose websites she will create to celebrate marriages she does endorse for marriages she does not. She sells a product to some, the State reasons, so she must sell the same product to all…. Colorado says[] this case involves only the sale of an ordinary commercial product and any burden on Ms. Smith’s speech is purely “incidental.” On the State’s telling, then, speech more or less vanishes from the picture—and, with it, any need for First Amendment scrutiny….

[But] the State has stipulated that Ms. Smith does not seek to sell an ordinary commercial good but intends to create “customized and tailored” speech for each couple. The State has stipulated that “[e]ach website 303 Creative designs and creates is an original, customized creation for each client.” The State has stipulated, too, that Ms. Smith’s wedding websites “will be expressive in nature, using text, graphics, and in some cases videos to celebrate and promote the couple’s wedding and unique love story.”}

[D.] Colorado seeks to compel speech Ms. Smith does not wish to provide…. [I]f Ms. Smith offers wedding websites celebrating marriages she endorses, the State intends to “forc[e her] to create custom websites” celebrating other marriages she does not. Colorado seeks to compel this speech in order to “excis[e] certain ideas or viewpoints from the public dialogue.” Indeed, the [court below] recognized that the coercive “[e]liminati[on]” of dissenting “ideas” about marriage constitutes Colorado’s “very purpose” in seeking to apply its law to Ms. Smith….

Colorado [may not] compel speech from Ms. Smith consistent with the Constitution …. In Hurley v. Irish-Am. Gay, Lesbian & Bisexual Group of Boston, Inc. (1995), the Court found that Massachusetts impermissibly compelled speech in violation of the First Amendment when it sought to force parade organizers to accept participants who would “affec[t] the[ir] message.” In Boy Scouts of Am. Dale (2000), the Court held that New Jersey intruded on the Boy Scouts’ First Amendment rights when it tried to require the group to “propound a point of view contrary to its beliefs” by directing its membership choices. And in W. Va. Bd. of Ed. v. Barnette (1943), this Court found impermissible coercion when West Virginia required schoolchildren to recite a pledge that contravened their convictions on threat of punishment or expulsion.

Here, Colorado seeks to put Ms. Smith to a similar choice: If she wishes to speak, she must either speak as the State demands or face sanctions for expressing her own beliefs, sanctions that may include compulsory participation in “remedial … training,” filing periodic compliance reports as officials deem necessary, and paying monetary fines. Under our precedents, that “is enough,” more than enough, to represent an impermissible abridgment of the First Amendment’s right to speak freely.

Consider what a contrary approach would mean. Under Colorado’s logic, the government may compel anyone who speaks for pay on a given topic to accept all commissions on that same topic—no matter the underlying message—if the topic somehow implicates a customer’s statutorily protected trait. Taken seriously, that principle would allow the government to force all manner of artists, speechwriters, and others whose services involve speech to speak what they do not believe on pain of penalty. The government could require “an unwilling Muslim movie director to make a film with a Zionist message,” or “an atheist muralist to accept a commission celebrating Evangelical zeal,” so long as they would make films or murals for other members of the public with different messages. Equally, the government could force a male website designer married to another man to design websites for an organization that advocates against same-sex marriage. {[The dissent] asserts that CADA does not apply to “[m]any filmmakers, visual artists, and writers” because they do not “hold out” their services to the public. But … Colorado’s law today applies to “any place of business engaged in any sales to the public.” And … many artists and writers accept commissions from the public.}

Countless other creative professionals, too, could be forced to choose between remaining silent, producing speech that violates their beliefs, or speaking their minds and incurring sanctions for doing so. As our precedents recognize, the First Amendment tolerates none of that.

[E.] In saying this much, we do not question the vital role public accommodations laws play in realizing the civil rights of all Americans. This Court has recognized that governments in this country have a “compelling interest” in eliminating discrimination in places of public accommodation. This Court has recognized, too, that public accommodations laws “vindicate the deprivation of personal dignity that surely accompanies denials of equal access to public establishments.” … States may “protect gay persons, just as [they] can protect other classes of individuals, in acquiring whatever products and services they choose on the same terms and conditions as are offered to other members of the public. And there are no doubt innumerable goods and services that no one could argue implicate the First Amendment.” …

At the same time, this Court has also recognized that no public accommodations law is immune from the demands of the Constitution. In particular, this Court has held, public accommodations statutes can sweep too broadly when deployed to compel speech. [Hurley; Dale.]…

[F.] Nor is it any answer, as the Tenth Circuit seemed to suppose, that Ms. Smith’s services are “unique.” In some sense, of course, her voice is unique; so is everyone’s. But that hardly means a State may coopt an individual’s voice for its own purposes. In Hurley, the veterans had an “enviable” outlet for speech; after all, their parade was a notable and singular event. In Dale, the Boy Scouts offered what some might consider a unique experience. But in both cases this Court held that the State could not use its public accommodations statute to deny speakers the right “to choose the content of [their] own message[s].” Were the rule otherwise, the better the artist, the finer the writer, the more unique his talent, the more easily his voice could be conscripted to disseminate the government’s preferred messages….

[G.] Of course, as the State emphasizes, Ms. Smith offers her speech for pay and does so through 303 Creative LLC, a company in which she is “the sole member-owner.” But none of that makes a difference. Does anyone think a speechwriter loses his First Amendment right to choose for whom he works if he accepts money in return? Or that a visual artist who accepts commissions from the public does the same? Many of the world’s great works of literature and art were created with an expectation of compensation. Nor, this Court has held, do speakers shed their First Amendment protections by employing the corporate form to disseminate their speech. This fact underlies our cases involving everything from movie producers to book publishers to newspapers.

[H.] Colorado next urges us to focus on the reason Ms. Smith refuses to offer the speech it seeks to compel. She refuses, the State insists, because she objects to the “protected characteristics” of certain customers. But … [the parties have stipulated] that Ms. Smith “will gladly create custom graphics and websites for gay, lesbian, or bisexual clients or for organizations run by gay, lesbian, or bisexual persons so long as the custom graphics and websites” do not violate her beliefs. That is a condition, the parties acknowledge, Ms. Smith applies to “all customers.” Ms. Smith stresses, too, that she has not and will not create expressions that defy any of her beliefs for any customer, whether that involves encouraging violence, demeaning another person, or promoting views inconsistent with her religious commitments. Nor, in any event, do the First Amendment’s protections belong only to speakers whose motives the government finds worthy; its protections belong to all, including to speakers whose motives others may find misinformed or offensive. {While [the Free Speech Clause] does not protect status-based discrimination unrelated to expression, generally it does protect a speaker’s right to control her own message—even when we may disapprove of the speaker’s motive or the message itself.}…

[I.] Colorado suggests that this Court’s decision in Rumsfeld v. FAIR (2006) supports affirmance. In FAIR, a group of schools challenged a law requiring them, as a condition of accepting federal funds, to permit military recruiters space on campus on equal terms with other potential employers. The only expressive activity required of the law schools, the Court found, involved the posting of logistical notices along these lines: “‘The U. S. Army recruiter will meet interested students in Room 123 at 11 a.m.'” And, the Court reasoned, compelled speech of this sort was “incidental” and a “far cry” from the speech at issue in our “leading First Amendment precedents [that] have established the principle that freedom of speech prohibits the government from telling people what they must say.”

It is a far cry from this case too. To be sure, our cases have held that the government may sometimes “requir[e] the dissemination of purely factual and uncontroversial information,” particularly in the context of “commercial advertising.” But this case involves nothing like that. Here, Colorado does not seek to impose an incidental burden on speech. It seeks to force an individual to “utter what is not in [her] mind” about a question of political and religious significance. And that, FAIR reaffirmed, is something the First Amendment does not tolerate. No government, FAIR recognized, may affect a “speaker’s message” by “forc[ing]” her to “accommodate” other views; no government may “‘alter'” the “‘expressive content'” of her message; and no government may “interfer[e] with” her “desired message.” …

[J.] Doubtless, determining what qualifies as expressive activity protected by the First Amendment can sometimes raise difficult questions. But this case presents no complication of that kind. The parties have stipulated that Ms. Smith seeks to engage in expressive activity. And the Tenth Circuit has recognized her services involve “pure speech.” {The dissent observes that public accommodations laws may sometimes touch on speech incidentally as they work to ensure ordinary, nonexpressive goods and services are sold on equal terms. But as Hurley observed, there is nothing “incidental” about an infringement on speech when a public accommodations law is applied “peculiar[ly]” to compel expressive activity…. [O]ur case law has not sustained every First Amendment objection to an antidiscrimination rule, as with a law firm that sought to exclude women from partnership. But … very different considerations come into play when a law is used to force individuals to toe the government’s preferred line when speaking (or associating to express themselves) on matters of significance. Dale.}  …

And from Justice Sotomayor’s dissent, joined by Justices Kagan and Jackson:

[A.] A business open to the public seeks to deny gay and lesbian customers the full and equal enjoyment of its services based on the owner’s religious belief that same-sex marriages are “false.” The business argues, and a majority of the Court agrees, that because the business offers services that are customized and expressive, the Free Speech Clause … shields the business from a generally applicable law that prohibits discrimination in the sale of publicly available goods and services. That is wrong. Profoundly wrong…. [T]he law in question targets conduct, not speech, for regulation, and the act of discrimination has never constituted protected expression under the First Amendment. Our Constitution contains no right to refuse service to a disfavored group….

The First Amendment does not entitle petitioners to a special exemption from a state law that simply requires them to serve all members of the public on equal terms. Such a law does not directly regulate petitioners’ speech at all, and petitioners may not escape the law by claiming an expressive interest in discrimination….

This Court has long held that “the First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech.” “Congress, for example, can prohibit employers from discriminating in hiring on the basis of race. The fact that this will require an employer to take down a sign reading ‘White Applicants Only’ hardly means that the law should be analyzed as one regulating the employer’s speech rather than conduct.” FAIR. This principle explains “why an ordinance against outdoor fires might forbid burning a flag and why antitrust laws can prohibit agreements in restraint of trade.”

Consider United States v. O’Brien (1968). In that case, the Court upheld the application of a law against the destruction of draft cards to a defendant who had burned his draft card to protest the Vietnam War. The protester’s conduct was indisputably expressive. Indeed, it was political expression, which lies at the heart of the First Amendment. Yet the O’Brien Court focused on whether the Government’s interest in regulating the conduct was to burden expression. Because it was not, the regulation was subject to lesser constitutional scrutiny. The O’Brien standard is satisfied if a regulation is unrelated to the suppression of expression and “‘promotes a substantial government interest that would be achieved less effectively absent the regulation.'” …

[Likewise, t]he law schools in FAIR claimed that the Solomon Amendment infringed the schools’ First Amendment freedom of speech. The schools provided recruiting assistance in the form of emails, notices on bulletin boards, and flyers. As the Court acknowledged, those services “clearly involve speech.” And the Solomon Amendment required “schools offering such services to other recruiters” to provide them equally “on behalf of the military,” even if the school deeply objected to creating such speech. But that did not transform the equal provision of services into “compelled speech” of the kind barred by the First Amendment, because the school’s speech was “only ‘compelled’ if, and to the extent, the school provides such speech for other recruiters.” Thus, any speech compulsion was “plainly incidental to the Solomon Amendment’s regulation of conduct.” …

The same principle resolves this case…. [A] public accommodations law like the [Colorado law] does not “target speech or discriminate on the basis of its content.” Rather, “the focal point of its prohibition” is “on the act of discriminating against individuals in the provision of publicly available goods, privileges, and services.” …

Crucially, the law “does not dictate the content of speech at all, which is only ‘compelled’ if, and to the extent,” the company offers “such speech” to other customers. Colorado does not require the company to “speak [the State’s] preferred message.” Nor does it prohibit the company from speaking the company’s preferred message. The company could, for example, offer only wedding websites with biblical quotations describing marriage as between one man and one woman. (Just as it could offer only t-shirts with such quotations.) The company could also refuse to include the words “Love is Love” if it would not provide those words to any customer. All the company has to do is offer its services without regard to customers’ protected characteristics. Any effect on the company’s speech is therefore “incidental” to the State’s content-neutral regulation of conduct.

Once these features of the law are understood, it becomes clear that petitioners’ freedom of speech is not abridged in any meaningful sense, factual or legal. Petitioners remain free to advocate the idea that same-sex marriage betrays God’s laws. Even if Smith believes God is calling her to do so through her for-profit company, the company need not hold out its goods or services to the public at large. Many filmmakers, visual artists, and writers never do. (That is why the law does not require Steven Spielberg or Banksy to make films or art for anyone who asks.)

Finally, and most importantly, even if the company offers its goods or services to the public, it remains free under state law to decide what messages to include or not to include…. All the company may not do is offer wedding websites to the public yet refuse those same websites to gay and lesbian couples. See Runyon v. McCrary (1976) (distinguishing between schools’ ability to express their bigoted view “that racial segregation is desirable” and the schools’ proscribable “practice of excluding racial minorities”).

Another example might help to illustrate the point. A professional photographer is generally free to choose her subjects. She can make a living taking photos of flowers or celebrities. The State does not regulate that choice.

If the photographer opens a portrait photography business to the public, however, the business may not deny to any person, because of race, sex, national origin, or other protected characteristic, the full and equal enjoyment of whatever services the business chooses to offer. That is so even though portrait photography services are customized and expressive.

If the business offers school photos, it may not deny those services to multiracial children because the owner does not want to create any speech indicating that interracial couples are acceptable. If the business offers corporate headshots, it may not deny those services to women because the owner believes a woman’s place is in the home. And if the business offers passport photos, it may not deny those services to Mexican Americans because the owner opposes immigration from Mexico.

The same is true for sexual-orientation discrimination. If a photographer opens a photo booth outside of city hall and offers to sell newlywed photos captioned with the words “Just Married,” she may not refuse to sell that service to a newlywed gay or lesbian couple, even if she believes the couple is not, in fact, just married because in her view their marriage is “false.” …

[B.] Because any burden on petitioners’ speech is incidental to CADA’s neutral regulation of commercial conduct, the regulation is subject to the standard set forth in O’Brien. That standard is easily satisfied here because the law’s application “promotes a substantial government interest that would be achieved less effectively absent the regulation.” … [B]y prohibiting only “acts of invidious discrimination in the distribution of publicly available goods, services, and other advantages,” the law “responds precisely to the substantive problem which legitimately concerns the State and abridges no more speech … than is necessary to accomplish that purpose.” …

[C.] The majority attempts to distinguish this clear holding of FAIR by suggesting that the compelled speech in FAIR was “incidental” because it was “logistical” (e.g., “The U. S. Army recruiter will meet interested students in Room 123 at 11 a.m.”). This attempt fails twice over. First, the law schools in FAIR alleged that the Solomon Amendment required them to create and disseminate speech propagating the military’s message, which they deeply objected to, and to include military speakers in onand off-campus forums (if the schools provided equally favorable services to other recruiters). The majority simply skips over the Court’s key reasoning for why any speech compulsion was nevertheless “incidental” to the Amendment’s regulation of conduct: It would occur only “if, and to the extent,” the regulated entity provided “such speech” to others….

Second, the majority completely ignores the categorical nature of the exemption claimed by petitioners. Petitioners maintain, as they have throughout this litigation, that they will refuse to create any wedding website for a same-sex couple. Even an announcement of the time and place of a wedding (similar to the majority’s example from FAIR) abridges petitioners’ freedom of speech, they claim, because “the announcement of the wedding itself is a concept that [Smith] believes to be false.” Indeed, petitioners here concede that if a same-sex couple came across an opposite-sex wedding website created by the company and requested an identical website, with only the names and date of the wedding changed, petitioners would refuse. That is status-based discrimination, plain and simple….

[D.] The majority, however, analogizes this case to Hurley and Dale. The law schools in FAIR likewise relied on Hurley and Dale to argue that the Solomon Amendment violated their free-speech rights. FAIR confirmed, however, that a neutral regulation of conduct imposes an incidental burden on speech when the regulation grants a right of equal access that requires the regulated party to provide speech only if, and to the extent, it provides such speech for others.

Hurley and Dale, by contrast, involved “peculiar” applications of public accommodations laws, not to “the act of discriminating … in the provision of publicly available goods” by “clearly commercial entities,” but rather to private, nonprofit expressive associations in ways that directly burdened speech. The Court in Hurley and Dale stressed that the speech burdens in those cases were not incidental to prohibitions on status-based discrimination because the associations did not assert that “mere acceptance of a member from a particular group would impair [the association’s] message.”

Here, the opposite is true. 303 Creative LLC is a “clearly commercial entit[y].” The company comes under the regulation of CADA only if it sells services to the public, and only if it denies the equal enjoyment of such services because of sexual orientation. The State confirms that the company is free to include or not to include any message in whatever services it chooses to offer. And the company confirms that it plans to engage in status-based discrimination. Therefore, any burden on the company’s expression is incidental to the State’s content-neutral regulation of commercial conduct….

A content-neutral equal-access policy is “a far cry” from a mandate to “endorse” a pledge chosen by the Government. FAIR. This Court has said “it trivializes the freedom protected in Barnette” to equate the two. Requiring Smith’s company to abide by a law against invidious discrimination in commercial sales to the public does not conscript her into espousing the government’s message. It does not “invad[e]” her “sphere of intellect” or violate her constitutional “right to differ.” All it does is require her to stick to her bargain: “The owner who hangs a shingle and offers her services to the public cannot retreat from the promise of open service; to do so is to offer the public marked money. It is to convey the promise of a free and open society and then take the prize away from the despised few.” …

[E.] Although the consequences of today’s decision might be most pressing for the LGBT community, the decision’s logic cannot be limited to discrimination on the basis of sexual orientation or gender identity. The decision threatens to balkanize the market and to allow the exclusion of other groups from many services. A website designer could equally refuse to create a wedding website for an interracial couple, for example…. A stationer could refuse to sell a birth announcement for a disabled couple because she opposes their having a child. A large retail store could reserve its family portrait services for “traditional” families. And so on.

{The potential implications of the Court’s logic are deeply troubling. Would Runyon v. McCrary have come out differently if the schools had argued that accepting Black children would have required them to create original speech, like lessons, report cards, or diplomas, that they deeply objected to? What if the law firm in Hishon v. King & Spalding had argued that promoting a woman to the partnership would have required it to alter its speech, like letterhead or court filings, in ways that it would rather not? Once you look closely, “compelled speech” (in the majority’s facile understanding of that concept) is everywhere.}

Wedding websites, birth announcements, family portraits, epitaphs. These are not just words and images. They are the most profound moments in a human’s life. They are the moments that give that life personal and cultural meaning…. [H]ear the story of Cynthia and Sherry, a lesbian couple of 13 years until Cynthia died from cancer at age 35. When Cynthia was diagnosed, she drew up a will, which authorized Sherry to make burial arrangements. Cynthia had asked Sherry to include an inscription on her headstone, listing the relationships that were important to her, for example, “daughter, granddaughter, sister, and aunt.” After Cynthia died, the cemetery was willing to include those words, but not the words that described Cynthia’s relationship to Sherry: “‘beloved life partner.'” N. Knauer, Gay and Lesbian Elders 102 (2011)….

[F.] The unattractive lesson of the majority opinion is this: What’s mine is mine, and what’s yours is yours. The lesson of the history of public accommodations laws is altogether different. It is that in a free and democratic society, there can be no social castes. And for that to be true, it must be true in the public market. For the “promise of freedom” is an empty one if the Government is “powerless to assure that a dollar in the hands of [one person] will purchase the same thing as a dollar in the hands of a[nother].” …

The post S. Ct. Holds That Creators (e.g., Web Designers) Can’t Be Required to Create Material They Object to, appeared first on Reason.com.

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