Tag: in-the-news

Enes Kanter Freedom knows firsthand how important it is that citizens be allowed to criticize their governments.

Born in Zurich, the basketball player spent most of his young life in Turkey—a place to which he can no longer safely return. Freedom, who now lives in the U.S. and has played for a decade in the NBA, made a name for himself as an outspoken critic of President Recep Tayyip Erdogan’s government. His family has been targeted for retribution, and Freedom can no longer safely contact them. But he hasn’t slowed his roll, choosing to criticize the basketball world’s close ties with the Chinese Communist Party, which carries out some of today’s most heinous atrocities: interning Uyghur ethnic minorities in prison camps, stripping Hong Kongers of their most fundamental civil liberties, surveilling political dissidents, and censoring speech. But China is filled with basketball fans who give the NBA a lot of money—and full of factories, possibly even those using forced Uyghur labor, where athletic companies like Nike produce their shoes.

When Freedom was growing up in Van and Ankara, it was a tough sell getting his family to support his basketball dreams. “I want you to be a good student before being a good basketball player,” his dad told him. His dad, a scientist, and his mom, a nurse, were all about education. “They wanted me to go to school, then focus on nothing else, just studying all day—until I made my first check. After that, they’re like, ‘OK. You’re playing basketball from now on.'” He moved to the U.S. in 2009 to attend a California prep school for one year before signing with the University of Kentucky, where he studied for a short time before the Utah Jazz  drafted him in 2011.

Since then, Freedom has also played for the Oklahoma City Thunder, the New York Knicks, the Portland Trail Blazers, and the Boston Celtics. In February, the Celtics traded Freedom to the Houston Rockets. The Rockets waived him, releasing Freedom before his contract was over. Freedom claims this was due to his outspoken criticism of the Chinese government, something NBA Commissioner Adam Silver has denied.

During his time in the NBA, Freedom has feuded with players like LeBron James, criticizing him for his “money over morals” attitude—in Freedom’s words—and James’ reluctance to criticize the NBA’s relationship with China. “Sad & disgusting how these athletes pretend they care about social justice,” tweeted Freedom last year. “They really do ‘shut up & dribble’ when Big Boss [Chinese flag emoji] says so,” he continued. “Did you educate yourself about the slave labor that made your shoes or is that not part of your research?”

Freedom says he got little pushback from the NBA when he was speaking out about the Turkish government’s atrocities. But his commentary on China has drawn the ire of both NBA higher-ups and star players.

In June, Reason‘s Noor Greene spoke with Freedom about his new last name, his antagonism toward companies and players who cozy up to China, and the Turkish government’s enmity toward free speech.

Reason: You said in one of your interviews the name Freedom was inspired by a visit that you made to the U.S. in 2009.

Freedom: In 2009, I was going to prep school for the first time. We had a really tough practice. After the practice, we were all sitting around in the locker room checking our phones. Back then, we all had Facebook. So I saw one of my teammates criticize the president and was very scared for him. I was like, “Dude, what are you doing?”

He’s like, “What happened?” I was like, “I saw your post.” And he’s like, “OK.” And I was like, “Well, you might be in jail tomorrow.” He started to laugh and he was like, “This is not Turkey. This is America.”

He started to explain to me about freedom of speech, religion, expression, protest. I still didn’t get it. If you did that in Turkey, you’d be in jail the next day, so I was very confused. People explained to me: You are not going to be thrown in jail, your family won’t be tortured just because you talk about some of the problems that are happening in America.

I was like, “Wow, this is so beautiful.” I think after water and food, freedom is the most important thing human beings can have. So I was like, “I want to make this part of me. I want to make that word part of me and inspire millions of kids out there.”

So you changed your name. Do you get an option during your U.S. citizenship process to change your name?

They showed me a paper and they were like, “Would you like to change your name? Would you want to add another name?” so I was like, “Yeah, I do,” and I made Freedom my last name.

You became a U.S. citizen in November. But you had a problem in the past with your application. Why was it so hard for you to become a U.S. citizen?

I started to talk about some of the problems in Turkey. Back in 2013, there was a big corruption scandal. President Erdogan and some of his family members were involved in it. After that scandal, he started to go around putting innocent people in jail—prosecutors, lawyers, judges, and police and some innocent people. After that, he started to shut down media outlets, magazines, newspapers, TV channels. I was like, “This is unacceptable, and I’m going to say something about it.”

I literally put a tweet out there. Because of the NBA platform, it became a conversation. I was like, “Wow, even one single tweet can affect this much. From now on, I’m going to start to pay attention about what’s going on in my country more and more.”

I started to study about what’s going on in my country, in America, the relationship between America and Turkey, the things that are happening in the Middle East. I started to talk more.

Because of the NBA platform, many media outlets wanted me to interview and write op-eds for them. The things I talked about really bothered the Turkish government and affected me and my family. My dad got fired from his job. My sister went to medical school for six years; until this day, she still cannot find a job.

The saddest one was my little brother. He wanted to be an NBA player like his big brother, but he was getting kicked out of every team. He was telling me, “I’m the tallest one in my team” or “I’m the best player in our team. Why am I getting kicked out?”

They were getting affected so much, they had to put a statement out there saying, “We are disowning Enes.” I remember going to practice that day. It was definitely one of the toughest days of my life.

The Turkish government didn’t believe that. They sent police to my [parents’] house in Turkey and raided the whole house. They took electronics away because they wanted to see if I was still in contact with my family. Phones, computers, laptops, iPads—they took all of them. They couldn’t find evidence, but they still took my dad to jail for a while. But we put so much pressure from here, with politicians and media, that they had to let him go.

After that, they revoked my passport and put my name on the Interpol list. I still count as an international criminal. I didn’t have any passport and I wasn’t an American citizen; I just had a green card. So that’s why, because my name was on the Interpol list, I couldn’t really travel anywhere outside of America. I had to wait five, six years to become a citizen.

How is your family back in Turkey?

Well, because my dad was in jail, they’re really scared. Because [the Turkish government] listens to everything—all the phones, they track down phones, I.P. numbers, and they try to see if there’s still contact with me or not—if there is any communication, they’ll all be in jail.

The last time I saw my family, it was back in 2015. But my brother plays basketball in Poland, so I ask him, “How’s my family doing? How’s my mom? How’s my dad?” He sends me pictures sometimes of them and stuff, so that’s the situation.

Do you remember the last time you talked to them?

To be honest, I can’t even remember. It’s been that long.

You are passionate about human rights and civil liberties. You focused for a while on the Uyghur issue in China. How did that come about?

Last summer, I was at a basketball camp in New York. After the basketball camp, all the kids and parents were lined up, getting pictures and autographs one by one. I took a picture with this kid.

While I was taking a picture, his parent called me out in front of everybody and said, “How can you call yourself a human rights activist when your Muslim brothers and sisters are getting tortured and raped every day in concentration camps in China?”

I was just shocked. I took a picture, I turned around, and I was like, “I promise I’m going to get back to you.” I canceled everything that day. I went back to my hotel and I started to study about what’s going on, not just Uyghurs. I started with Uyghurs.

First of all, I was like, “I cannot believe that I have not or no one has said anything about this issue before.” I called my manager. I was like, “I need you to find me a concentration camp survivor.” He was like, “What are you talking about?” Because on the internet, you can find all news—good news, bad news, fake news. You don’t know which one is true. So he found me one. Actually, the woman that he found [Tursunay Ziyawudun], you just interviewed.

So I sit down on a Zoom and start to have a conversation with her. She was telling me about all the tortures, gang rapes, forced sterilization, abortion, and how many people were actually inside, the numbers, and how many people are getting killed inside, how are they brainwashed. She told me about organ harvesting and surveillance cameras.

If a human being carries a heart, you have to talk about it. It doesn’t matter what it costs.

At the end of our conversation, I asked her, “OK, what can I do for you?” She said, “Nothing.” I was like, “What do you mean ‘nothing’?” She said, “Well, I’m in America. I’m here. I’m safe. But there are millions of people in concentration camps right now, waiting for your help. Help those people, not me.” I was like, “Whoa.”

While I was studying Uyghurs, obviously other links popped up. I clicked on it. It was about Tibet. I was always hearing about Taiwan on the news, and Hong Kong. I hear about Mongolia.

So I was like, “You know what? These are the biggest human rights abuses in the world today and I’m going to say something about it.” It was the perfect time because it was right before the [Beijing] Winter Olympics.

What was the most controversial tweet you put out there?

The most attention that I had was about Nike, because it was the first time ever that a player called what Nike—the biggest sponsor of the NBA—is doing modern-day slavery. They stand up for Black Lives Matter in America, the Latino community, no Asian hate, LGBTQ community. But when it comes to China, they remain silent. And I was like, “We have to expose this.”

When I was a kid, whenever I watched an NBA game, the first thing that I was watching was the shoes. What color? What brand? Then I was going out there and buying it.

So I wanted to do it in a very unique way where I could put all these abuses on a shoe and go out there and play. There’s no rule against it in the NBA. A lot of people were putting Black Lives Matter, Breonna Taylor, “I can’t breathe,” and all these phrases, so I was like, there’s no rule against it.

So we worked with this artist who had been oppressed by his government and he created the shoes. Free Tibet, Free Uyghurs, stop organ harvesting and surveillance camps. It was getting so much attention. I remember my first game. It was on ESPN, Madison Square Garden. The whole world was watching that game. I put the shoes on, I went out there, and I started to warm up and all the players were looking at my shoes. They’re like, “This is very interesting. I’ve never seen this color,” because it was so colorful and there was a flag on it and it was saying, “Free Tibet.”

Right before the game, we sang the national anthem, we came in a huddle, and two gentlemen from the Celtics came to me and said, “You have to take your shoes off.” I’m like, “What are you talking about?” He said, “Your shoes have been getting so much attention. We’ve been getting so many calls. You have to take your shoes off.”

I was like, “I cannot believe they’re telling me to take my shoes off.” It was a perfect moment because I was just getting ready for my citizenship test. I closed my eyes. I was, “OK. There are 27 amendments: First Amendment, freedom of speech.” I was like: “No, I’m not taking my shoes off. I don’t care if I get fined.”

They said, “We are not talking about a fine. We’re talking about getting banned.” Literally they were threatening me with getting banned just because I was wearing those shoes.

At halftime, I went back to my locker room. I had thousands of notifications on my phone. I clicked on my manager’s text message. He said, “Every Celtics game is banned in China for the rest of the year.” I was like, “That shows my point.”

There’s 24 minutes in one half. It took China 24 minutes to ban every Celtics game on television. That’s literally the censorship and dictatorship that I was talking about.

After the game, obviously there was a huge media storm and I told my manager, “I’m not going to do any media,” because I didn’t want my teammates to think I’m doing this for attention. For the next one or two months, we did not do any media.

After the game, I was getting calls from the NBA and the players association. They told me, “Take your shoes off. You’re not going to wear this ever again.”

I talked about the problems that were happening in Turkey for the last 10 years, and I did not get one phone call. I talked about the things that happened in China, and my phone was ringing once every hour, me and my manager’s.

They were harassing us so much that I was like, “OK, I promise you I’m not going to wear Free Tibet shoes ever again.” So the next game, I wear Free Uyghur shoes. They call me after the game. They’re like, “You’re a liar. You lied to us. You said you’re never going to wear Free Tibet shoes.” I was like, “I did not wear Free Tibet shoes. I wore Free Uyghur shoes.” At that point, they understood that they’re not going to handle me because they’re not going to make me apologize or take my tweet down. They’re not going to make me say, “Oh, I didn’t know enough. I was not educated enough.” I was like, “I’m going all in.”

I wore Winnie the Pooh shoes. Winnie the Pooh is banned in China. People were making fun of the president, Xi Jinping—they were telling him, “You look like Winnie the Pooh.” So he literally banned the whole cartoon in the whole country.

And then the next one we talk about Nike. And the next one, we talk about Hong Kong and Taiwan and stop organ harvesting. Everyone was asking me, “Where can I buy these shoes?” I was like, “I’m not going to even sell them because I’m literally doing this just for human rights.”

You mentioned earlier that you were concerned that some people might view this as a bid for attention. Was there any indication to you that some people thought that?

I didn’t want to put the shoes out there for sale or anything like that, because I didn’t want anyone to think that I’m doing this for attention, especially my teammates. I was talking about very uncomfortable situations that the NBA never wanted to talk about.

I remember my teammates were coming to me one by one in the locker room and saying, “You know this is your last year, right? You are not going to be able to get any contract after this.” They were telling me, “Listen. You attack Nike, you attack China, you won’t play another minute in this league ever again.”

I was like, “Well, this is the right thing to do. I’m just going to continue to keep doing what I’m doing.”

Was there any truth to what they were telling you?

Of course. Obviously, the NBA’s not going to come out there and say, “We released him because of that.” In February, I got traded to not just any team, but the Houston Rockets. The Houston Rockets was the first time that a general manager tweeted something about Hong Kong. Then he had to pull his tweet down and apologize.

Houston Rockets was China’s team because of [former NBA player] Yao Ming. It was the first team that went to China and played a friendly game, I believe it was against the Lakers.

When was the last time you played?

February.

Where are you with the NBA now?

Good question. Obviously, before everything, I’m a basketball player. I am very thankful for the NBA for giving me this huge platform worldwide. But if they’re going to do something wrong, I’m going to expose them.

Where am I with the NBA right now? I don’t even know. I’m just waiting to hear from them. And I told every team, I told my agent to tell every general manager in the NBA, every owner, every coach, “I’m ready to play. I want to play.”

Obviously playing basketball is very important to you. Do you have any regrets?

I played 11 years in this league and I want to continue to play. I’m healthy. I’m 30. I can play.

But this is bigger than basketball, this is bigger than myself, and this is bigger than the NBA. While we are dribbling a ball on the other side of the ocean, people are losing their loved ones, losing their lives, and losing their hopes. How can anyone tell me to stop talking about the problems that are happening around the world and just focus on your game?

I’m coming from a country where if you say anything against the government, you’ll be in jail the next day. If you say you don’t like the president, your family might be tortured. My manager’s wife’s dad liked one of my posts on Twitter; he was in jail for 13 days. So I have seen the pain. I experienced it firsthand. So no one should tell me to just stop talking about all the problems and focus on your game. This is bigger than basketball and I have no regrets.

This interview has been condensed and edited for style and clarity.

The post Enes Kanter Freedom on China and Free Speech: 'This Is Bigger Than Basketball' appeared first on Reason.com.

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As co-blogger Jonathan Adler points out, the US Court of Appeals for the Sixth Circuit recently ruled,  in Hall v. Meisner, that the government cannot seize $300,000 in home equity to pay off a $22,000 property tax delinquency. Such “home equity theft” qualifies as a taking and therefore requires payment of “just compensation” under the Takings Clause of the Fifth Amendment. The ruling was written by prominent conservative Judge Raymond Kethledge, who is sometimes considered a potential Republican Supreme Court nominee.

In some key ways, this ruling follows the reasoning ofRafaeli, LLC v. Oakland County, a 2020 decision by the Michigan Supreme Court, which reached a similar conclusion under the Michigan state constitution in a case with facts even more egregious than those of Hall (Oakland County, Michigan had seized the entire value of a $24,500 home in order to pay off a mere $8.41 tax delinquency).

There are two notable differences between the two cases. First, the Sixth Circuit decided the case under the Takings Clause of Fifth Amendment of the federal constitution, not merely a state constitution. Second, the Sixth Circuit makes clear that states cannot avoid takings liability by passing a law redefining “long-established” property interests. The government had argued that this latter consideration differentiated Hall from the state supreme court case:

The government may not decline to recognize long–established interests in property as a device to take them. That was the effect of the Michigan Act as applied to the plaintiffs here; and we agree with the plaintiffs that, on the facts alleged here, the County took their property without just compensation….

The Fifth Amendment’s Takings Clause provides that “private property” shall not “be
taken for public use, without just compensation…” The plaintiffs argue that Oakland County did precisely that when it took “absolute title” to their homes as payment for tax delinquencies that amounted to a mere fraction of their homes’ values. Specifically, they argue that they each had a vested property right in what is ordinarily called the equity in one’s home—meaning the property’s value beyond any liens or other encumbrances upon it.

The district court, for its part, disagreed….. Specifically, the court held that, in the event of foreclosure, the former property owner has a property right only to any surplus proceeds (meaning proceeds in excess of the tax delinquency) obtained by the “foreclosing governmental unit” after a foreclosure sale—if in fact there was one. For that proposition the court relied upon the Michigan Supreme Court’s opinion inRafaeli, which arguably said as much… And here the foreclosing governmental unit—the County—had not obtained any surplus at all from its disposition of the plaintiffs’ homes, because it conveyed them (to the City of Southfield) for merely the amounts of their tax delinquencies.

Where we respectfully disagree with the district court, however, is in its assumption that the question whether the County took the plaintiffs’ property is answered solely by reference to Michigan law. True, the federal “Constitution protects rather than creates property interests,” which means that “the existence of a property interest,” for purposes of whether one was taken, “is determined by reference to existing rules or understandings that stem from an independent source such as state law.” Phillips v. Washington Legal Foundation, 524 U.S. 156, 164 (1998…  But the Takings Clause would be a dead letter if a state could simply exclude from its definition of property any interest that the state wished to take. To the contrary, rather, “a State may not sidestep the Takings Clause by disavowing traditional property interests long recognized under state law…”Id. at 167.

The question, then, is whether Michigan likewise disavowed traditional property interests merely by defining them away in its General Property Tax Act. The interest that the plaintiffs invoke here, again, is an entitlement to the equity in their homes—pursuant to principles long articulated by courts of equity, before their merger centuries later with courts of law….

Judge Kethledge goes on to explain that longstanding principles of the Anglo-American legal tradition hold that foreclosure does not entitle the government to appropriate the entire home equity held by the owners, as opposed to merely the amount needed to pay off the tax delinquency or other obligation at issue.

This ruling is part of a longstanding debate over the extend to which the property rights protected by the Takings Clause are purely defined by state law (in which case the state can often avoid takings liability simply by redefining them), or whether they are also defined by some combination of general legal tradition, and natural law. The Sixth Circuit  is right to conclude that broader legal principles constrain the states here. But I would add that, at least as a matter of original meaning, states are also constrained by natural law understandings of property rights. I briefly cover this point in this article (pp. 52-53), and also in Chapter 2 of my book The Grasping Hand.

Given the high value the Founders placed on property rights, it would be strange—to say the least—if these constitutional rights were left entirely at the mercy of state governments to redefine as they please, because state law protects them and role in defining their scope. The same logic would equally justify allowing states to redefine the scope of many other constitutional rights. For example, rights to speech and bodily autonomy could similarly be left to the discretion of the states on the theory that state law historically defined the scope of protection against assault and battery, and the extent to which speech could be restricted by laws against libel, slander, sedition, and blasphemy.

NOTE: Both the Sixth Circuit case and the Michigan Supreme Court case were litigated on behalf of the property owners by the Pacific Legal Foundation, which is also my wife’s employer. She, however, was not involved in either case.

The post Sixth Circuit Rules Government Cannot Seize $300,000 in Home Equity to Pay $22,000 Tax Debt appeared first on Reason.com.

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One of the stranger phenomena related to the official government racial and ethnic classifications we have all gotten used to (Hispanic, White, Black, Native American, Asian, Native Hawaiian/Pacific Islander) is the way people treat them as true sociological or anthropological classifications. Ironically, when the government established these classifications (with minor modifications in the interim), they came with the warning that the “classifications should not be interpreted as being scientific or anthropological in nature.”

Nevertheless, when Steven Spielberg wanted to show he was being “culturally sensitive” to Puerto Ricans in casting West Side Story, he hired a half-Columbian, half-European actress to play Maria because, after all, Puerto Ricans and Columbians are both “Hispanic.” This is like showing respect for Quebecois culture by hiring someone of half-Walloon and half-Mexican descent.

Similarly, when Michelle Malkin, a Filipina American, published her book defending the internment of Japanese Americans during World War II, many critics tut-tutted that they couldn’t understand how an “Asian American” could write a book defending racism against other “Asian Americans.” (E.g., “Her take on the racial politics of the internment of Japanese Americans during World War II is quite outrageous, especially for an Asian American. Even though she has a white name, it doesn’t make her so.”)

I found it remarkable at the time that it did not occur to any of of these critics that few people think of themselves primarily as “Asian Americans.” (Indeed, research shows that fewer than forty percent of “Asian Americans” accept that identity even as a secondary one.) Many Filipinos, meanwhile, still resent (to put it mildly) the brutal Japanese invasion, occupation, and defense of the Philippines during World War II. So, if we looked beyond the government label of “Asian American,” it was perhaps less surprising that a Filipina American wrote a book defending mistreatment of Japanese Americans during World War II than if a white author had written it.

Four side notes. First, the West Side Story remake was entertaining, but wholly superfluous given the original. Second, the joke that gave me the post title’s can be found here. Third, Malkin has since more explicitly gone off into far right racist looney land, and that may be explanation enough in retrospect. Finally, if you are interested in how our arbitrary classification came about and spread through society, you will want to check out my recent book on the subject.

The post Iceberg, Weisberg, Golberg, What's the Difference? appeared first on Reason.com.

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A federal lawsuit filed last week by the Center for Science in the Public Interest, the Consumer Federation of America, and the National Consumers League seeks to force alcohol beverage makers to include nutrition information—including alcohol content (ABV), calorie, and ingredient information—on their products. One food website suggested the suit was timed to coincide with President Joe Biden’s proposed development of a national food strategy, which I largely panned last week.

The groups sued the government after the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), which administers alcohol taxes and oversees most alcohol labeling, failed to take action in response to a 2003 petition and subsequent communications filed over nearly two decades. CSPI has pushed for mandatory nutrition labeling on alcohol beverage containers nearly since its inception in the early 1970s. As a Treasury document published earlier this year declares, “Treasury has considered ingredient labeling requirements since at least 1972, when the Center for Science in the Public Interest petitioned for it.” Most recently, CSPI, CFA, and other groups wrote last year to Treasury Secretary Janet Yellen about what they say was a need to “improv[e] alcohol labeling to protect public health.”

The plaintiffs are correct that the federal government has improperly ignored and failed to address or reject the issues raised in their petition. Their lawsuit also rightly notes the tangled and confusing web of federal alcohol labeling requirements, which can differ dramatically for various beverages (from beers and wines to ciders and seltzers) depending on factors such as which agency regulates them (TTB in most cases, FDA in others) and where they’re sold (i.e., a local restaurant versus a chain restaurant). 

But it’s also true that one steadfast opponent of ABV labeling in years past was none other than… the Center for Science in the Public Interest. Indeed, CSPI submitted an amicus brief in Rubin v. Coors, a First Amendment lawsuit decided in 1995 by the Supreme Court that overturned a federal ban on the rights of the beer maker to provide honest and accurate ABV information on its product labels. In a 1995 Florida Law Review article on commercial speech published in the wake of that ruling, even “the government admitted that [Coors’s] proposed alcohol content disclosure related to a lawful activity and was not misleading.” But, the authors also noted, “one amicus made the argument that alcohol content disclosure is inherently misleading.” That would be CSPI, which claimed that even though such disclosure would be “‘technically true, such labeling would deceptively make beer appear to be less intoxicating than wine and liquor when in fact beer is not’ because of its larger average serving size.” 

Thankfully, in a 9-0 opinion, the Supreme Court saw otherwise. Honest and accurate labels—and consumers—won the day.

In a column last year, I criticized CSPI and the Consumer Federation of America for sending a letter to the FDA seeking to restrict the First Amendment rights of the makers of Vizzy, a hard seltzer. Vizzy had marketed a seltzer that contained Vitamin C as containing Vitamin C. That truthful claim was too much for CSPI and CFA, who told the FDA, I summarized, that Vizzy “shouldn’t be allowed to share truthful information about the addition of vitamin C with consumers because, well, alcohol is bad.” (CFA’s justification last year for hiding truthful information from consumers reads a lot like CSPI’s Court-rejected explanation for doing the same in 1995.)

Ultimately, it appears the operating principle (if you want to call it that) of the litigants here, when it comes to booze, is largely Orwellian. It appears to be something like this: If the truth makes a product containing alcohol appear good, then the truth is bad. But if the truth makes a product containing alcohol appear bad, then the truth is good.

CSPI and others are right to point out that the state of alcohol beverage labeling can confuse consumers. They’re also right that if labeling requirements exist, they should be consistent. But I wish they also saw the value of voluntary labeling options and how their own actions, over decades, have helped to muddy the waters for consumers and the drinking public.

The post Activist Groups Demand Feds Require Nutrition Labels on Booze appeared first on Reason.com.

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10/15/1883: The Civil Rights Cases are decided.

The post Today in Supreme Court History: October 15, 1883 appeared first on Reason.com.

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The Business Roundtable—an association of America’s leading CEOs—committed itself in 2019 to “modernizing its principles on the role of a corporation.” In the past, the group explained, it held that “corporations exist principally to serve their shareholders.” But “it has become clear that this language on corporate purpose does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable.”

That term—stakeholder—represents a significant shift. But it did not emerge from nowhere. There is an entire historical and political apparatus underlying it that has led to results that are decidedly unfriendly to free markets.

Who are these stakeholders? The Business Roundtable statement invokes “customers, employees, suppliers, communities, and shareholders,” but that isn’t the only definition. One scholar identified no fewer than 593 different interpretations of who qualifies as a stakeholder. R. Edward Freeman, a prominent stakeholderism booster, has argued that stakeholders include “any group or individual who can affect or is affected by the achievements of the firm’s objectives.” Such all-embracing conceptions underpin what is called pluralistic stakeholderism: the theory that companies must consider the effects of their choices on potentially infinite numbers of stakeholders—even to the point of requiring businesses to consult with, if not receive approval from, such constituencies before making any significant decisions.

Shareholders and investors are thus effectively reduced to one of several entities to whom boards of directors and CEOs are accountable. This is to be realized through “pluralistic governance structures,” which might range from advisory boards to councils endowed with governance teeth.

From Voluntary to Compulsory

One way the stakeholder model is being advanced in American business, especially in publicly traded companies, is through efforts to mandate environmental, social, and governance (ESG) disclosures. For individual and institutional investors especially concerned about, for instance, how the companies they invest in treat the environment, ESG allows them to align their investment choices with their environmental commitment.

Many businesses have responded to investor demand for such alignments by setting up funds described as ESG-compliant. Other businesses have voluntarily embraced ESG disclosure principles put forward by nonprofit groups like the Sustainability Accounting Standards Board. These companies freely disclose how their internal practices and investment choices align with principles that such nonprofits regard as important. Examples might include sufficient adherence to transparency requirements, or whether a business has embraced quotas based on race, gender, etc., in its hiring practices.

If a business chooses to embrace such approaches to investment, to submit itself to assessment by various activist groups, or to adopt hiring practices that actively discriminate on grounds of race, gender, etc., it is free to do so—though it might find itself liable to anti-discrimination lawsuits for violating the equal protection principles of the Constitution and the Civil Rights Act of 1964. But what happens when these approaches are not voluntarily chosen?

ESG principles have been thoroughly incorporated into strategies for making businesses accountable to large numbers of stakeholders. One article in The Harvard Law School Forum on Corporate Governance outlined this possibility: “If the stakeholder model represents an emerging model for the strategic vision of a company, ESG…metrics can be used to assess and measure company performance and its relative positioning on a range of topics relevant to the broader set of company stakeholders in the same way that financial metrics assess company performance for shareholders.” Some of the criteria the article identifies for assessing stakeholder performance include human rights, employee engagement, fair wages, minority representation, gender equality, sensitivity training, corporate philanthropy, equal opportunity and participation, and alliances with key organizations, councils, and institutions.

And this, in turn, can feed into efforts to mandate various ESG requirements as a way to force businesses to embrace expansive stakeholderism. Diversity requirements for work forces and boards of directors, for instance, feature prominently in ESG guidelines and have been embraced by institutions such as the Nasdaq stock exchange.

In December 2020, Nasdaq announced that it had filed a proposal with the Securities and Exchange Commission (SEC) to embrace new listing rules related to board diversity and disclosure. These included requirements “to publicly disclose consistent, transparent diversity statistics regarding their board of directors” and to adhere to rules requiring “most Nasdaq-listed companies to have—or explain why they do not have—at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+.” The new rules required Nasdaq-listed firms to provide annual reports and aggregated statistical information about the self-identified gender and racial composition of their boards of directors using a board diversity matrix.

Nasdaq, it could be argued, is a privately owned financial services corporation and is free to require its members to embrace particular disclosure requirements. But it isn’t as simple as that. Nasdaq has been designated as a self-regulatory organization and thus delegated a high degree of regulatory authority by the SEC and Congress. Some courts have held that this means Nasdaq is therefore a state actor and regulator and thus not purely a private entity.

Whatever the legal debates, eight months after Nasdaq announced its new diversity requirements, the SEC formally approved these rules. This didn’t just give them legal teeth; it sent a message to the rest of the financial sector about the agency’s priorities. This went together with efforts by social and environmental activists and particular institutional investors to persuade the SEC to mandate even wider ESG requirements across the entire investment industry.

As the legal scholars Paul G. Mahoney and Julia D. Mahoney noted last year in the Columbia Business Law Review, this would be a substantial and unauthorized departure from the SEC’s “stated mission of ‘protecting Main Street investors’ and ‘maintaining fair, orderly, and efficient markets’.” It would, they argued, effectively require the agency to pursue public policy goals for which it “neither has expertise nor the political accountability to pursue.”

It would also give executives and corporate boards more opportunities to ignore shareholder expectations by claiming their hands are legally tied. Indeed, in the 1980s and 1990s, many boards and CEOs lobbied for laws to let them appeal to stakeholder interests as a means of warding off investors demanding better performance or even to resist hostile takeovers. After all, the more stakeholders there are for a company’s management to answer to, the less accountable those executives can be to any one in particular.

Corporatism, Hard and Soft

The goals of those seeking to entrench political agendas into business operations do not stop here. While running for president in July 2020, Joe Biden declared it “way past time we put an end to the era of shareholder capitalism.” That same year, Rebecca Henderson of Harvard Business School contended that America needed a new capitalism with “a pro-social purpose beyond profit maximization and taking responsibility for the health of the natural and social systems.” Similar sentiments have been echoed by progressive senators such as Bernie Sanders (I–Vt.) and Elizabeth Warren (D–Mass.), by conservatives who want employees to be allocated seats on company boards, and by World Economic Forum chief Klaus Schwab.

Schwab effectively revealed what he has in mind by reminiscing about postwar Europe: “There was a strong linkage between companies and their community. In Germany, for example, where I was born, it led to the representation of employees on the board, a tradition that continues today.”

Here Schwab is alluding to “corporatism”: an approach to organizing society whose roots can be traced back at least to the Middle Ages. As a modern set of ideas, it emerged in the 19th century, shaped by such thinkers as the French sociologist Emile Durkheim and the German theologian Heinrich Pesch. It attracted support from socialists, nationalists, Christians, progressives, and fascists.

Though there were many schools of corporatist thought, they have several prominent sentiments in common. Corporatists generally hold that private enterprise and markets generate excessive wealth disparities, weaken communities, diminish security, and undermine “solidarity.” They believe that private property and free exchange are useful, but that they must be embedded in a legal and political framework that builds a consensus around specific social and economic goals. Corporatists often espouse the notion that every industry and profession should have organizations that embrace everyone who works in it. These corporate bodies would have the prime responsibility for deciding wages and conditions, and they would be the principal place for resolving disputes within industries, assisted by special tribunals that issue binding resolutions. These corporate bodies’ activities would be coordinated by the state.

Different corporatists emphasized some of these ideas more than others. Many focused on establishing “codetermination,” in which employees (invariably union officials) are allocated seats on company boards. Others were more concerned with creating those industry-wide, government-guided corporate bodies pursuing national goals.

That often included goals of an authoritarian nature. In a 1935 article for the journal Economica, the German economist Wilhelm Röpke demonstrated how Benito Mussolini was using corporatism to reinforce his fascist regime’s grip on the economy and society. What might be called “hard corporatist” policies were also pursued in other fascist countries—Spain, Austria, Vichy France—and, following World War II, in Juan Perón’s Argentina.

After 1945, European corporatism took softer forms. Christian Democrat–led governments sought to foster consensus among employers and workers within industries. They consequently established structures like work councils (whose leadership was dominated by union officials) that management was legally bound to consult.

In some nations, soft corporatism achieved constitutional expression. Article 41 of Italy’s 1947 Constitution states that the “law shall provide for appropriate programs and controls so that public and private-sector economic activity may be oriented and coordinated for social purposes.” Another corporatist provision appears in Article 46: “For the economic and social betterment of workers and in harmony with the needs of production, the Republic recognizes the rights of workers to collaborate in the management of enterprises, in the ways and within the limits established by law.” Corporatist aspirations have even been integrated into the European Union’s Charter of Fundamental Rights. Article 27 refers to the right of workers “or their representatives” (union officials) to be consulted about an enterprise’s operations.

Some historians argue that soft corporatism helped Western Europe recover from World War II. Such arrangements, they maintain, secured the buy-in of businesses and unions into policies that helped many European nations overcome their grave postwar challenges. Over time, however, the same corporatist arrangements have had, or are likely to have, seriously negative effects.

Is Woke Capitalism Just for Show?

When businesses endorse progressive positions on political and social issues—as when Nike recalled its Betsy Ross flag–emblazoned shoes in 2019 after being counseled by activist advisers that the flag represented slavery, or when almost 200 CEOs of major firms signed a full-page New York Times ad that year describing abortion restrictions as “bad for business”—it is sometimes called “woke capitalism.” In some cases, internal activism within these companies likely dovetailed with pressures from institutional shareholders who wanted their investments to cohere with progressive priorities.

Amid those developments, it’s telling that corporate America’s dalliance with the language and priorities of stakeholderism often turns out to be largely rhetorical. In their analysis of the corporate documents of the over 130 U.S. public companies that signed onto the 2019 Business Roundtable statement, the Harvard legal scholars Lucian Bebchuk and Roberto Tallarita found that none had added “any language that improves the status of stakeholders and, indeed, most of them chose to retain in their guidelines a commitment to shareholder primacy.” The statement, they suspected, was “mostly for show.”

Given these findings, why do CEOs sign such documents in the first place? The UCLA law professor Stephen Bainbridge has suggested three reasons. The first is that business leaders are trying to attract wealthy investors who see themselves as socially responsible. The second is to fend off regulation from progressive politicians. The third is that some CEOs want to insulate themselves from pressures from investors dissatisfied with their performance by suggesting that profit sometimes has to be sacrificed to promote various causes. Bebchuk and Tallarita agree with much of Bainbridge’s analysis. CEOs, they argue, often engage in these activities to insulate themselves from investor oversight and to deflect political pressures for regulations that would diminish their autonomy.

Some on the right such as Sen. Ted Cruz (R–Texas) have indicated that they are considering using legislation to push back on ESG, an idea which has received verbal support from GOP figures like former Vice President Mike Pence. Here, they are following the lead of states that have stopped doing business with companies like BlackRock who, they argue, are using their weight as institutional investors to advance woke causes or to put pressure on the fossil fuel industry. It is unclear how Republican legislators would reconcile, for example, constraining investors from exercising their shareholder votes with once-standard conservative support for property rights and free markets.

Whatever conservatives decide to do, it is unlikely the various progressive groups pushing companies and institutional investors to embrace ESG will ever express deep satisfaction with corporations’ efforts in this area. They are more likely to swear that the failure of American businesses to embrace stakeholder capitalism properly, or to integrate progressive priorities sufficiently into their internal company operations, simply proves the need to use government regulation to corral businesses down these paths.

Meanwhile, these trends will undermine the most important way businesses really do contribute to the common good. By pursuing shareholder value and maximizing profit, publicly traded companies facilitate choice in goods and services for consumers, provide wages and benefits to their employees, repay their loans to banks, and pay their taxes. They increase the total material wealth in society, allowing people who have never owned a share in their lives to realize goods ranging from health care to education.

Just as protectionism and industrial policy significantly compromise the workings of market exchange by using state power to privilege connected groups of businesses and political leaders, so too would a capacious, government-enforced vision of stakeholder capitalism. By blending politics and business, it would further shift the economy’s focus away from meeting the needs and wants of 330 million American consumers and toward promoting the interests of politically connected businesses.

The post How Corporations' Good Social and Environmental Intentions Undermine the Common Good appeared first on Reason.com.

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In a surprising twist, Florida Gov. Ron DeSantis’ move last month to fly dozens of migrants to Martha’s Vineyard may end up putting those migrants on a pathway to obtaining a special visa—and potentially lawful permanent residence in the United States.

Legal questions quickly arose after DeSantis used state funds to transport nearly 50 migrants from San Antonio, Texas, to the island of Martha’s Vineyard in September. Several of those migrants filed a lawsuit against DeSantis soon after the flights, alleging that Florida officials “made false promises and false representations” in order to entice them to board the planes.

The sheriff’s office in Bexar County, where San Antonio is located, also announced that it would investigate whether the migrants were duped. “They feel like that was done through deceptive means,” Sheriff Javier Salazar said. “That could be a crime here in Texas and we will handle it as such.”

Yesterday, Salazar certified that the migrants flown to Martha’s Vineyard were the victims of a crime. “Based upon the claims of migrants being transported from Bexar County under false pretenses, we are investigating this case as possible Unlawful Restraint,” Salazar said in a statement to GBH News. Under the Texas penal code, unlawful restraint, or restricting someone’s movement without consent, includes actions that involve “force, intimidation, or deception.” Salazar noted that his office had “submitted documentation through the federal system to ensure the migrants’ availability as witnesses during the investigation.”

The sheriff’s certification move is notable because it clears the way for the migrants to apply for a U visa, which is devoted to victims or witnesses of crimes, through U.S. Citizenship and Immigration Services (USCIS). “Once certified, the crime victim can apply to USCIS for a U visa, which, if approved, allows them to remain in the US in nonimmigrant status and eventually can lead to Lawful Permanent Residence,” said immigration attorney Rachel Self, who has been assisting the migrants legally.

But backlogs spell a lengthy process for migrants who hope to obtain U visas. There were over 285,000 U visa petitions pending as of FY 2021, per USCIS data. According to a March report by the Niskanen Center, it would take more than 17 years for the government to process all U visa applications at its current pace. What’s more, Congress caps the number of visas at 10,000 annually. But as Politico notes:

Once the Venezuelans submit their applications, they will likely be allowed to work and protected from deportation. Last year, the federal appellate court that covers Massachusetts ruled that a Honduran man could not be removed from the country while his U visa application was pending.

“Ironically by choosing to transport the migrants to Martha’s Vineyard…all of these victims are now protected from removal while their U visa application is pending due to the Granados Benitez case,” Self wrote in her statement.

This development in DeSantis’ Martha’s Vineyard stunt speaks to how counterproductive showy immigration enforcement schemes can be. Often done in the name of fiscal responsibility, moves in Texas and Florida have racked up massive bills at taxpayers’ expense. The Martha’s Vineyard flights have also landed DeSantis in the Treasury Department inspector general’s crosshairs: The governor is now under investigation for potential misuse of federal COVID-19 funds to cover the flights.

Judging by his actions, DeSantis is no champion of immigrants. But because of how the migrant flights have backfired, he could prove to be an inadvertent helper to some.

The post Ron DeSantis' Martha's Vineyard Stunt Might Help Migrants Stay in the U.S. on Special Visas appeared first on Reason.com.

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The fallout from the COVID-19 pandemic continues: This week, the Food and Drug Administration (FDA) announced that there is a shortage of Adderall. The pharmaceutical stimulant is prescribed to treat attention-deficit/hyperactivity disorder (ADHD), a neurological disorder that inhibits focus in children and adults alike.

In its announcement, the FDA contended that Teva Pharmaceuticals, the largest manufacturer of Adderall and its generic equivalents, is “experiencing ongoing intermittent manufacturing delays,” and while other companies also make the drug, “there is not sufficient supply to continue to meet U.S. market demand through those producers.” Shortages may persist until March.

The FDA’s announcement misses one important detail: the government’s own role in the shortage.

During the pandemic, ADHD diagnoses skyrocketed. The Drug Enforcement Administration (DEA) had opened up the field of telemedicine by allowing physicians to issue prescriptions without an in-person visit. Then the sudden shift to Zoom schooling and parents doing double duty as their child’s primary instructor revealed symptoms of hyperactivity and inattentiveness that may otherwise have gone unnoticed.

Adderall is classified as a Schedule II drug, meaning it has medicinal value but “a high potential for abuse.” The DEA is empowered by federal law to “determine the total quantity of each basic class of controlled substance…necessary to be manufactured during the following calendar year.” It then sets an Aggregate Production Quota (APQ) to “determine the annual quantities of controlled substances…available for national medical, scientific, and industrial use.”

The Wall Street Journal reported today that even though the FDA only announced the shortage this week, “manufacturers and retailers have been signaling for months” that it was becoming harder and harder to fill Adderall prescriptions. Bloomberg reported in early August that “packaging capacity constraints” at a Teva factory were causing Adderall supply disruptions. Last month, NPR reported that a “labor shortage” was the culprit.

Despite the shortage, the DEA has indicated that it does not intend to raise the limit next year.

The persistent supply chain issues may genuinely have been the cause of the shortage. But it’s worth contemplating whether there would have been an issue at all if the DEA didn’t intentionally constrain the supply of Adderall that can even be produced. Teva and the other drug manufacturers know their own potential output best, and they’re also better equipped to plan for any externalities like labor or packaging disruptions.

In fact, a Teva spokesperson mentioned DEA quotas as a contributing factor in the continuing shortage. In 2011, Shire similarly charged that the DEA caused shortages by not approving supply increases in a timely manner.

If untreated, ADHD can cause a child to fall behind in school, and adults’ job performance may suffer.

Adderall is indeed ripe for abuse: In its 2021 APQ proposal, the DEA said that “approximately 5-10 percent of high school students and 5-35 percent of college students” use the drug without a prescription. But as with any controlled substance, limiting the supply does not remove demand; users simply look elsewhere, including more unsavory sources. Earlier this year, Ohio State University warned that two students died after ingesting counterfeit Adderall that contained fentanyl.

The post Blame the Government for the Adderall Shortage appeared first on Reason.com.

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Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

New on the Short Circuit podcast: a pretextual traffic stop turns deadly and standing to sue under the ADA.

• Beauty may only run skin deep, but the circuit split on the interplay between the First Step Act and “compassionate release” is getting close to the bone. Add the D.C. Circuit to those holding that the Act’s changes to “stacking” may not be considered for whether a prisoner who was sentenced before the Act may now qualify for compassionate release. (The Ninth Circuit is on the other side. You can hear our discussion of that case and this issue on last week’s edition of the podcast.)
• Last year, Maine legislators barred motor carriers and landowners owning at least 50k acres of forest land from employing non-residents to haul timber in-state—lest Canadian truck drivers depress the wages of in-state timber truckers. First Circuit: Enjoined! Employers must run a gauntlet to secure H-2A visas for the truckers from the feds, and any additional state regulatory burdens are probably pre-empted. (And there’s no need to reach the equal protection arguments, which the district court found persuasive.)
• In flagrante delicto: In 2009, man is caught in the act of Philadelphia home invasion, but his trial does not commence for over four years. A violation of his fundamental right to a speedy trial? Applying the requisite four-factor test, the Third Circuit says yes; release him forthwith.
• Haitian opposition party activist flees to the U.S. after he receives death threats and his house is burned down by, he says, members of the government. But his lawyer fails to present easily obtainable and relevant evidence, and he’s ordered removed. Third Circuit: Vacated. He received ineffective assistance of counsel. Concurrence (via Ambro, J.): The immigration judge messed up as well.
• Allegation: To interdict suspected marijuana possessor, phalanx of Harris County, Tex. officers jump curb, drive vehicles through park that is crowded with families. The suspect quits the park but eventually stops and raises his hands. Without warning or command, an officer tases him. He falls and hits his head on the asphalt, suffering a traumatic brain injury. After which, though he’s writhing on the ground in pain and bleeding from the ears, nose and mouth, the officer tases him again. Fifth Circuit: Don’t run from the police.
• In the latest “give me a refund for a lousy Spring 2020 educational experience” case, the Fifth Circuit says that some Tulane students might have claims for breach of contract, unjust enrichment, and conversion under Louisiana law resulting from the university shutting down in-person services due to the COVID-19 pandemic.
• Is it a Fifth Amendment “taking” for Oakland County, Mich. officials to take title to a woman’s ~$300k home to satisfy a ~$22k tax debt—and refuse to refund her any of the difference? Sixth Circuit: Quite possibly. And what we know for sure is that the government can’t circumvent the Fifth Amendment simply by “exclud[ing] from its definition of property any interest that the state wishe[s] to take.” The takings claim may proceed.
• Sixth Circuit (last month, unpublished): A Colerain Township, Ohio woman doesn’t have standing to challenge the local police department’s prohibition of posting “inappropriate” comments on its Facebook page because her Facebook comments were deleted for totally different reasons. Sixth Circuit (this week, published): We now deem this opinion suitable for publication.
• Pulaski County, Ky. constable, an elected official, planted evidence, lied on warrant applications, threatened suspects, and kept heaps of meth in his house (for planting to get false arrests). He’s convicted and sentenced to (a below-guidelines) 140 months. Sixth Circuit (via Sutton, C.J.): Conviction and sentence affirmed. Concurrence (via Sutton, C.J.): I’m not sure that planting drugs counts as distributing them under the statute. But the constable didn’t raise quite that argument, so we’ll leave it for another day.
• Spooky! On Halloween 2018, two St. Louis men distributed bologna sandwiches and bottled water to the homeless without a permit. Police cite them for violating the city’s food code despite their protestations that they’re fulfilling a religious duty. Eighth Circuit: The ordinance does not run afoul of the First Amendment.
• Allegation: Inmate at Atwater, Calif. federal prison is beaten up after a guard tells other inmates he’s a snitch and offers a bounty to assault him. An Eighth Amendment violation? Can’t say, says the Ninth Circuit; except for some exceptions not relevant here, you can’t sue federal officials for violating the Constitution.
• Under California law, professional door-knockers and signature gatherers are regulated as employees with all the attendant benefits, while door-to-door salesmen are regulated as independent contractors. But wait! Isn’t there a First Amendment problem with imposing additional burdens on employers just because their workers tout candidates and ballot initiatives instead of vacuum cleaners and knife sets? Ninth Circuit: Nope, the law distinguishes based on the work they do. Dissent: Which you determine based on what they say.
• Until recently, the state of Oregon automatically suspended the driver’s licenses of folks with unpaid traffic debt, which has the rather perverse effect of making it even harder to pay off that debt. But if the state can’t jail debtors who lack the ability to pay, can it nevertheless take their transportation to and from work? Ninth Circuit (over a dissent): Yes it can, though Oregon repealed this law while the case was ongoing. (IJ filed an amicus brief in this case.)
• Oregon prisoner has a grievance: Prison officials improperly confiscated mail from his lawyer. He wants to complain, but the prison has a policy of not entertaining more than four simultaneous grievances from any prisoner. To proceed, he has to dismiss one of his pending grievances and forgo any remedy on it. Ninth Circuit: Which means that administrative remedies were unavailable to him, and he can come to federal court.
• Florida couple marries. Husband freezes sperm, dies. Wife later conceives through in vitro fertilization, gives birth to child. Does the child qualify for child’s insurance benefits under the Social Security Act? Well, it depends on whether Florida law lets the child inherit a share of the father’s intestate personal property. Eleventh Circuit: What a chewy, super-interesting question for the Florida Supreme Court to sort out. Certification!
• And in en banc news, the Fourth Circuit will not reconsider its decision that a trans woman can sue Fairfax County, Va. prison officials under the ADA for failing to accommodate her gender dysphoria.
• And in more en banc news, the Fifth Circuit will reconsider its decision (and, one expects, its precedent) requiring female Dallas jail officers to be fired, demoted, or otherwise adversely treated before they can challenge a policy whereby they cannot have full weekends off work but male officers can.
• And in further en banc news, the Ninth Circuit will not reconsider its decision that the Board of Immigration Appeals must send noncitizens notices to appear that include both the date and time of their removal proceedings, or else any in absentia proceedings are invalid.
• And in additional en banc news, the Ninth Circuit will not reconsider its decision that a Muslim inmate did not have a right under RLUIPA to be housed exclusively with other Muslim inmates in order to avoid harassment by non-Muslim inmates during his daily prayers.

The post Short Circuit: A Roundup of Recent Federal Court Decisions appeared first on Reason.com.

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Has Liz Truss blown it already? After just over a month in the job, Great Britain’s new prime minister finds herself in crisis—with worse approval ratings than her predecessor. Friday brought another twist, when Truss made the dramatic decision to fire her most senior cabinet minister, Chancellor of the Exchequer Kwasi Kwarteng, as part of an attempt to reset her premiership. But it may all be too late.

Where did it all go wrong for Truss? In Britain, it’s conventional wisdom to point to the infamous “mini budget” of September 23, in which Truss marked her arrival with a sudden package of unfunded tax cuts. The mini budget may have spooked the markets—but does it tell the whole story?

Both the Truss tax cuts and their economic fallout have their roots in this summer’s Tory leadership battle. Truss and her rival Rishi Sunak entered the contest agreeing that Britain’s tax burden had become too high (35.5 percent of GDP, a peacetime record). They disagreed, though, on how to go about dealing with that situation.

Sunak’s position was that tax cuts could only come after Britain had dealt with its other economic headaches: reducing the fiscal deficit and bringing down inflation. For Truss, this was the wrong way around. Britain’s deficit, she argued, was the result of the country’s anemic economic performance, partially caused by the cumbersome tax burden. She thought it better to cut taxes now and let the market work its magic.

After beating Sunak in the membership vote, Truss quickly put her hypothesis into action. But while most forecasters agree that her package of tax cuts and energy handouts (the latter set to cost £150 billion, or almost $168 billion, over two years) will help mitigate the immediate downturn, they balked at what it meant for our fiscal stability. Most see “Trussonomics” as a recipe for more borrowing and a greater risk of eventual default.

In Truss’ defense, Britain isn’t the only country dealing with this conundrum. Across Western Europe, major economies face the problem of aging populations, rising interest rates, and an addiction to printing money. While much of the continent remains impressively complacent in the face of this ticking time bomb, Truss’ government has been the first of its peers to choose its particular lever—the old Reaganite fix of supply-side economic reforms.

Right now, the markets are nervous as yields on U.K. bonds accelerate much faster than France, Germany, or Japan, adding billions to the nation’s already painful borrowing costs. But the picture is exaggerated by nervousness among flighty investors, few of whom would claim to know how this will play out in the long term.

But Truss’ bigger problems are political, with a flurry of high-profile blunders raising questions about her judgment. Just 10 days after announcing she would scrap the higher tax rate levied on anyone earning more than £150,000 a year, Truss performed a screeching U-turn, conceding that the tax would stay after all.

Friday’s sacking of Kwarteng was the most dramatic development yet: He was a close ideological ally who now has the honor of being the second-shortest-serving chancellor. In a calamitous press conference from Downing Street (never a good sign in British politics), Truss insisted her economic mission had not changed—even if some of her colleagues are speculating she will be gone within weeks.

Truss was meant to be a conviction politician. Yet for its short time in office her administration has been unable to balance its ideological instincts against the more humdrum political realities—hence the current paralysis over whether to increase state benefits in line with inflation or not, or whether to loosen immigration rules to boost growth. By scrapping her flagship tax cuts, she has telegraphed extreme weakness to her opponents within the Conservative Party.

The political realities aren’t easy. As I’ve argued before, the British Conservative Party is increasingly wedded to big spending, at least for certain groups. In such circumstances, governing as a low-tax Tory is as difficult as navigating the laser beams you see in action movies.

Even before Friday, Truss was in an unenviable position: 30 points behind the Labour Party ahead of a (likely) 2024 election. In other words, she and her party are on the verge of an electoral wipeout. The big question, though, is whether she even makes it that far.

Having removed three sitting prime ministers in six years, the Conservative Party has gotten strangely used to deposing its leaders, all while retaining its power. The problem is that it’s proving impossible to work out what party members actually want. As we enter winter, Truss may well prove to be the latest casualty of that conundrum.

The post Liz Truss Is Flailing, Politically and Economically appeared first on Reason.com.

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