Germany faces a looming threat of deindustrialisation

Sun, September 11, 2022 

08 September 2022, Lower Saxony, Hanover: A bakery saleswoman stands in the early morning in the Fahrenhorst bakery, which is deliberately lit sparingly. The North German guild bakeries draw attention to increased energy costs, which threaten the existence of many businesses, with the campaign "We're running out of light - today the light and tomorrow the oven?" on September 8. Photo: Julian Stratenschulte/dpa

In a book from 1945 entitled “Germany Is Our Problem”, Henry Morgenthau, America’s treasury secretary, presented a proposal to strip post-war Germany of its industry and turn it into an agricultural economy. Though his radical proposal had some influence on Allied plans for the occupation of Germany after Hitler’s defeat, it was never implemented.

Almost 80 years later Vladimir Putin might achieve some of what Morgenthau, whose parents were both born in Germany, had in mind. By weaponising the natural gas on which Germany’s mighty industrial base relies, the Russian president is eating away at the world’s fourth-biggest economy and its third-biggest exporter of goods. It doesn’t help that at the same time, Germany’s largest trading partner, China, which bought €100bn of Germany goods last year, including cars, medical equipment and chemicals, is in the midst of a severe slowdown, too. A national business model built in part on cheap energy from one autocracy and abundant demand from another faces a severe test.

The consequences could be dire for Deutschland ag: German blue chips have suffered more amid this year’s market turmoil than counterparts elsewhere, dropping 27% year to date in dollar terms, almost twice the fall in Britain’s ftse 100 or America’s s&p 500 index. “The substance of our industry is under threat,” warned Siegfried Russwurm, boss of the bdi, the association of German industry, last month. The situation was looking “toxic” for many businesses, he said. And through globalised supply chains the poison could spread to the rest of the industrialised world, which relies heavily on German manufacturers.

German industry’s biggest problem is the spiralling cost of energy. The electricity price for next year has already increased 15-fold, and the price of gas ten-fold, says the bdi. In July industry consumed 21% less gas than in the same month last year. That is not because companies used energy more efficiently. Rather, the fall was due to a “dramatic” reduction in output. Since June the Kiel Institute for the World Economy, a think-tank, has revised down its forecast of gdp growth in 2022 by 0.7 percentage points, to 1.4%. It now expects the economy to contract in 2023 and inflation to exceed this year’s with 8.7%.

Smaller firms are hardest hit. According to a survey in July fti Andersch, a consultancy, of 100 medium-sized “pocket multinationals” of Germany’s Mittelstand, smaller companies are struggling more than bigger ones. Almost a quarter of firms with fewer than 1,000 employees have cancelled or declined orders or are planning to do so, compared with 11% of those with more than 1,000 staff. In the land of more than 3,000 types of bread, around 10,000 bread producers are struggling as never before in post-war Germany. They need electricity and gas to heat ovens and run kneading machines, even as they contend with the higher costs of flour, butter and sugar, as well as of bakers. A shop assistant at the 127-year-old Wiedemann chain of bakeries in Berlin reports that the firm is desperately short-staffed and trying to save energy by, for instance, keeping outlet ovens cool and baking all the loaves at headquarters.

Another recent survey, by the bdi, of 600 medium-sized companies found that almost one in ten interrupted or reduced output because of high input costs. More than nine in ten said that rocketing prices of energy and raw materials is a big or existential challenge. One in five is thinking about transferring part or all of their production to another country. Two-fifths said investments in greener production methods will have to wait.

Bigger energy-intensive business such as chemicals or steel face a similar predicament, exacerbated by the need to compete with rivals in other countries where the cost of energy is lower. basf, a chemicals giant which uses natural gas for both energy and as an input, has already cut production and may need to slash it further. Thyssenkrupp, another big steelmaker, has lost half its market value since January.

Big multinational companies often have factories in other countries where energy is cheaper. But many, including basf, with its vast city-sized complex in Ludwigshafen, nevertheless continue to produce a lot at home. Even if costs of raw materials moderate, as some have begun to, and the government comes to the rescue with energy-related support, as it has vowed, cost pressures will not disappear. In particular, companies are bracing for a brutal round of annual wage negotiations with Germany’s powerful unions. Those between ig Metall, Germany’s biggest union, and employers in the mighty car industry, are about to kick off. “The ig Metall will not accept anything below an 8% increase,” predicts Ferdinand Dudenhöffer of the Centre Automotive Research, a think-tank.

The higher costs are becoming harder to pass on to consumers. Hakle, a big maker of loo paper, has filed for insolvency after being unable to pass onto clients the huge increase of production costs. After several fat years, carmakers’ order books are thinning as inflation burns a hole in car buyers’ wallets. The next two or three years will be very lean, predicts Mr Dudenhöffer. Car companies cannot easily modify production processes. Instead, they will cut costs by slashing spending on administration, and research and development. As with the Mittelstand, the car industry’s belated efforts to reimagine itself for an era of electric and self-driving cars are likely to suffer a setback as a result. Some will probably relocate production to lower-cost countries.

Holger Schmieding, chief economist of Berenberg, a private bank, predicts that, with energy prices likely to remain high for a while, 2-3% of Germany’s industrial companies that use energy-intensive production processes will relocate aboard. A higher share of industrial firms will reduce their production this winter and next. ArcelorMittal, another steel behemoth, has announced plans to close down two mills in northern Germany and put employees on furlough. Stickstoffwerke Piesteritz, Germany’s largest producer of ammonia and urea, two important chemical inputs, shut down its ammonia factories in Saxony-Anhalt.

In a demonstration of how such moves ripple through supply chains, the shutdown has triggered an shortage of AdBlue, a basf product that is crucial for cleaning the engines of the diesel trucks that help connect Germany to markets abroad. Stefan Kooths of the Kiel institute forewarns of “an economic avalanche is rolling towards Germany”. Before long the reverberations will be felt by German companies’ global customers.

© 2022 The Economist Newspaper Limited. All rights reserved.

Quiet quitting has a polar opposite:

The FatFIRE movement of people

 working hard to retire early on a

 ‘massive stash’

Sophie Mellor 

Sun, September 11, 2022 

Getty Images

Joshua decided to take stock of his life around a year ago. He had just turned 33 and, after almost a decade of working six days a week at a startup that had reached a nine-figure valuation, he had squirreled away $2 million in liquid capital, $10 million in illiquid stock options, and a couple of real estate investments.

The bulk of his saving came from a recent equity sale of his startup, but Joshua has lived what he calls a "fairly modest life." He didn't buy new clothes, he put money into long-term investments whenever he could, and as he was working all the time, he took very few holidays and didn't have many hobbies.

To build up the level of capital required to retire, Joshua had sacrificed a lot.

"I guess I am 33 and unmarried," he jokingly told Fortune. "But the biggest sacrifice is free time. There is no work-life balance. That's gone."

Once he realized he had made enough to never have to work again, Joshua decided it was time to retire. He had always dreamed of building a house in the country and living off his passive investments as he traveled the world. Who doesn't?

While retiring at 33 is uncommon in any part of the world, stopping young was always Joshua's ultimate goal. “Life is short, and allowing myself to live life to its fullest, to go with the flow and give space for it, to be free from the system, that has been my focus,” Joshua told Fortune.

Joshua, who did not wish to use his last name, is a believer in FatFIRE, which stands for Fat Financial Independence and Retirement Early.

While "quiet quitting" has dominated headlines and young workers flock to social media to vent their frustrations over the downsides of employment and capitalism, people like Joshua have instead turned to FatFIRING.

If quiet quitting is simply doing the minimum a job requires in a quest for a more equal work/life balance, FatFIRING advocates the opposite. It tells people to lean into work rather than lean out, and hustle as much as they can to achieve the same thing most workers want: freedom.

How does FatFIRE work?

The online forum subreddit r/fatFIRE is filled with people discussing investments, sharing tips, and telling stories of getting FatFIRED—the day when they retire in their 30s or 40s after having stockpiled millions of dollars in liquid and illiquid investments.

Described with the tagline “retire with a fat stash,” FatFIRErs try to retire with a budget that allows them to spend around $100,000 a year.

They often work at large tech companies, corporate law firms, or their own startups, earning millions over their career. They then invest their money in small businesses and properties that make good, reliable margins, in order to get to the point where working for money is never something to think about again.

The concept of FIRE is not new, and first emerged in the United States in a 1990s newsletter called The Tightwad Gazette. Since then, the movement has grown online and has expanded its definition to include LeanFIRING—where one looks to live frugally in order to escape the 9 to 5 via early retirement—and FatFIRE.

FatFIRE split from the FIRE movement in 2016, motivated by people who were interested in FIRE but wanted a much higher standard of living. It was launched by a Reddit user who said he had grown tired of all the “noise of ‘just cut your expenses down to the bone and buy vanguard index funds’ parroted endlessly” and wanted to make a smaller community of richer FIRErs.

The subreddit r/fatFIRE ended up overtaking both the FIRE and leanFIRE versions and now has over 325,000 members who are ambitious, career-oriented, and value time and freedom above all else.

Generational divide

As different as they seem, both quiet-quitters and FIRERS want the same thing, according to Alex Bryson, a professor of quantitative social science at the University College of London.

To understand what that is, he points to Maslow’s hierarchy of needs—the five-tier model often depicted in a pyramid shape.

At the bottom of the pyramid there are physiological needs like food and shelter; one higher there is safety—which often comes in the form of financial security; above that is love and belonging; then esteem; and finally self-actualization, or the highest level of physiological development.

Bryson argues that the new generation of workers are "questioning the link between paid work and reaching the top of that pyramid,” which causes trends such as quiet quitting and FatFIRING to emerge.

Age often determines which group people join. While young people early on in their careers may look towards quiet quitting and disengaging as a means to a more fulfilling life, millennials and older generations who have worked for years might be more inclined to subscribe to FatFIRING.

Job satisfaction across all generations is the lowest it’s been in 20 years, according to a report from insurance and benefits company MetLife. A recent survey from Gallup also found that around 50% of 15,000 U.S. workers above the age of 18, were “not engaged" at work, meaning they felt detached from work and were doing the bare minimum.

As disengagement from work reaches an all-time high and employers are hanging onto their employees by a thread, it may pave the way for a generation of new FIRERs.

Be careful what you wish for

FatFIRING is not open to everyone, of course—and may be unrealistic (and unhealthy) for many.

According to Bryson, those who can FatFIRE are a subset of people who “are fortunate enough to be in the position, who have valuable skills or opportunities that allow them to max out on income early on.

"Most people are never in that position.”

Dana J. Menard, founder and financial planner at Twin Cities Wealth Strategies, puts a number on it: He says that only around 10% of the population have what it takes to achieve FatFIRE status. And for those who do, there are dangers.

Menard argues the major risk of following a FatFIRE way of life is what happens after FIRING is achieved: “One of the biggest downsides that I see…is that once they attain that ultimate goal of 'retirement', they’re miserable. The idea of retirement is much better than the reality of retirement.”

Taking away the social construct that traditional work gives people can have a negative impact on mental health, he says, and leaves some people finding themselves “just plain bored.”

Bryson from Oxford University agrees, arguing that “maxing out and then stopping is fraught with problems.” There is an inherent risk of burnout with trying to work as much as you can to retire early, he says, and even when successful, FatFIRERs “have no real idea of how you're going to feel if you go from one to zero.”

Indeed, on the r/fatFIRE community board there are many warnings from people who have suddenly decided to quit all work and go travel, only to find themselves racked with mental health issues caused by loneliness.

But for many others, the goal of FatFIRING is still a dream worth pursuing. For these, one of the highest ranking posts ever made on r/fatFIRE subreddit, from user Snoo68013, could act as the rallying cry of the movement: "Have good food. Enjoy the relations. Workout and enjoy sex. Sleep well. Call your parents. That’s all there is to life. Greed has no end.

"Repeat after me. Time is the currency of life. Money is not."

This story was originally featured on Fortune.com

How Justice Antonin Scalia created this chaos
Paul Rosenberg, Salon
September 11, 2022

Justice Antonin Scalia (Flickr/Stephen Masker)

LONG READ

A string of recent election results — including the Kansas abortion amendment and special elections for House seats in New York and Alaska — make it clear that the Supreme Court's decision overturning Roe v. Wade has enormous political consequences, and could even end up preserving the Democrats' hold on Congress this year. But the court's decision in Dobbs v. Jackson Women's Health Organization wasn't the only earth-shaking break with precedent in the last two weeks of its term. Even if Democrats do hold onto Congress and somehow codify Roe into law (an unlikely set of outcomes) that would only affect one aspect of the vast sweep of policy change the court's rulings portend.

The new book by UC Berkeley Law School dean Erwin Chemerinsky, "Worse Than Nothing: The Dangerous Fallacy of Originalism," shows how fundamental those changes could be and focuses on the bogus legal reasoning known as "originalism," which plays such a crucial role in justifying this sudden and sweeping assertion of judicial power.

Originalists claim to be guided by the original meaning of the Constitution and argue that everyone else is swayed by their own subjective values in groping for other kinds of reasoning. Chemerinsky, as it happens, has first-hand experience in drafting a constitution of sorts. He chaired the Los Angeles Charter Commission, an elected body that rewrote the charter for the second-largest city in the U.S. (in collaboration with a parallel appointed body) just over 20 years ago. So his argument that originalists' key claims about constitutional meaning are simply false carries significant weight. Even while writing the L.A. charter, Chemerinsky says, there often wasn't one unanimously agreed-upon meaning for its specific language, and that was even less true after the fact. Over the course of the last 20 years, he reports, questions have arisen that weren't even considered in the drafting process.

There's considerable evidence that the same was true of the Constitution written in Philadelphia 235 years ago as well, but none of the framers are still around to confirm that. Chemerinsky doesn't use his personal experience as the central argument of his book, but it clearly underscores the gap between the sweeping claims made by originalists and the granular, often difficult-to-discern nature of constitutional reality. That should make all of us willing and eager to seek understanding from a variety of different approaches and points of view. which is what the vast majority of judges have done throughout most of our constitutional history.

Much of Chemerinsky's book is devoted to explaining the five biggest problems that originalists face, any one of which is arguably fatal to their dogmatic claims. The argument mentioned above is part of the epistemological problem, meaning the impossibility of finding a single fixed meaning that simply does not exist. What's just as bad is the abhorrence problem, meaning that sometimes the original meaning of the Constitution is clear enough, but the results of an "originalist" interpretation would be morally abhorrent to most Americans today. Then there's the incoherence problem: If originalism is the correct approach, then originalism itself must be written into the Constitution. But it isn't, and Chemerinsky concludes that the only true originalist position, paradoxically or otherwise, is to reject strict originalism.

Chemerinsky explores these and two other problems in five central chapters of his book, while also providing a historical introduction and a discussion of why originalism is attractive to so many conservatives. Ultimately, he argues forcefully for an alternative view, a more pluralistic approach that seeks understanding from different sources, as judges have been doing for hundreds if not thousands of years. He concludes with a reflection on the dangers that originalism poses to the rights and freedoms that Americans today have come to cherish or, perhaps foolishly, have taken for granted.

This transcript has been edited for clarity and length.

The title of your book, "Worse Than Nothing," is a direct response to Justice Antonin Scalia's claim that whatever the faults of originalism's faults may be, he had a theory, while the critics of originalism had nothing. Before digging into the details, what's your bottom-line response to this claim?


As the title suggests, I think originalism is a very dangerous approach to constitutional law, and in this instance I think it really is worse than nothing.

The core of your book lays out five key problems with originalism, but you begin by describing its rise in the first chapter and its allure in the second. What drove that rise and how did it proceed?

In large part it was the conservative political movement that drove originalism. The Federalist Society embraced originalism, and nurtured a belief in it. Also, I think it was simply about who has won elections. If Hillary Clinton had won the presidency in 2016 and if she had replaced Justices Scalia, Kennedy and Ginsburg, we wouldn't be talking about originalism today. It would be a fringe theory on the Supreme Court that a group of conservative law professors kept alive. But Trump appointed three conservatives, joining conservatives who were already there, and that is causing originalism to be in the ascendancy.


Why is originalism worrying, and how does this echo the 19th-century dominance of the legal doctrine known as "formalism"?

I think it's a simplistic theory. It says, "We don't want judges to impose their own values. We want judges to discover the law and mechanically apply it." That's formalism, which has always had an intuitive appeal, because it seems to take out of decision-making individual biases, preferences and ideology. So originalists say, "We're going to discover the original meaning of the constitutional provision and apply it. These other people are all making it up, imposing their own values."

The first of the key problems you tackle is the epistemological problem. You begin by talking about your experience as chair of the elected L.A. Charter Commission. How did that experience illuminate the problem of determining meaning in the Constitution?


Some scholars have persuasively argued that the framers of the Constitution didn't believe in originalism, and therefore if one is to follow the framers' intent or the original understanding, one has to abandon originalism.

A charter for a city in California is much like its Constitution. It creates the institutions of government, it allocates power and it even provides more protection of rights than exist under federal or state law. I went through the two-year experience of chairing a commission to draft the charter and inevitably, issues of interpretation arose. They came up soon after the charter was adopted, and they continue to arise now. Just yesterday I got a memo concerning certain issues in the Los Angeles charter that are much in the news. What I have discovered was that, almost always, the issues that are arising now are ones that we didn't consider then, even though the "then" was very recent. And when we did consider them, there was a difference of opinion about what we intended and what we meant.

The reason this informs me is that, if we couldn't decide the original meaning of the charter right after it was adopted, when all the commissioners were then still alive, how can we do so for a constitution that was written in 1787?


One of the key problems in establishing "original meaning" is the level of abstraction. How does shifting the level of abstraction change the meaning?

If the original meaning of the constitutional provision is stated at a very abstract level, then any result can be justified. At the most abstract level, the Constitution is about liberty and equality, separation of powers. But the constraint that originalists purport to get is gone when the original meaning is stated in a very abstract way. On the other hand, if we focus on the original meaning at a very concrete and specific level, then the Constitution becomes unacceptable. Then Brown v. Board of Education [on school desegregation] was wrongly decided, Loving v. Virginia [on interracial marriage] was wrongly decided.

In Chapter 4, "The Incoherence Problem," you argue that there's no indication the Constitution meant to create judicial review, much less originalist judicial review, and in fact that there's evidence to the contrary. So an originalist reading actually requires abandoning originalism. Can you elaborate on that?


An originalist would say that all aspects of the Constitution are to be determined by its original meaning. That would have to include the question of whether there should be the power of judicial review at all. In fact, the text of the Constitution says nothing about the power of judicial review, and it wasn't explicitly discussed at the Constitutional Convention. It would seem, then, that from an originalist perspective there shouldn't even be judicial review. But if there is judicial review, then how, from an originalist's perspective, should courts go about interpreting the Constitution? Scholars such as Jeff Powell at Duke have, I think, persuasively argued that the framers of the Constitution didn't believe in originalism, and therefore if one is to follow the framers' intent or the original understanding of the Constitution, one has to abandon originalism.

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In Chapter 5, "The Abhorrence Problem," you focus on three repugnant results of originalism: If we go by clear and original intention, then segregation and racial discrimination generally are permissible, for example, and the First Amendment allows government to prohibit blasphemy and seditious libel. I'd like to focus on the first example. because it involves the landmark case of Brown v. Board of Education. You quote from Chief Justice Earl Warren's opinion, which explicitly rejected originalism. Talk about the originalists' problem with the Brown decision — how they try to deal with it and how they fail.


The central problem with Brown, from an originalist perspective, is that the result can't be justified under originalism. The same Congress that voted to ratify the 14th Amendment also voted to segregate the District of Columbia public schools. There's no indication whatsoever that Congress, in proposing the 14th Amendment — or the states, in ratifying it — saw it as outlawing segregation. Brown v. Board of Education was first argued to the Supreme Court in the October term of 1952. The justices couldn't come to a decision and asked for re-argument, focusing on the intent of the framers with regard to segregation. Those briefs were filed, the case was re-argued and then Chief Justice Warren, writing for the unanimous court, said, "We can't focus on originalism, we can't turn the clock back. Education plays a far different role in society today than it did in 1868."

From an originalist perspective, the result of Brown v. Board of Education can't be justified. There's no indication whatsoever that Congress saw the 14th Amendment as outlawing segregation.

Originalists try to get around this embarrassment in some ways. They try to state the goal of equal protection at an abstract enough level that Brown becomes permissible — but then originalism becomes indistinguishable from non-originalism. There's another attempt at this: The most famous one is by Stanford Law professor Michael McConnell in the Virginia Law Review, where he points especially to a statute adopted in 1875 that outlawed segregation. There are many problems with McConnell's approach. As he himself concedes in the article, there's no evidence that when Congress ratified the 14th Amendment, it meant to outlaw segregation. Also, 1875 is not 1868, when the 14th Amendment was adopted. There's no reason to believe that what they did in adopting a statute in 1875 is the same as what they meant to accomplish with a constitutional provision.


In chapter 6, "The Modernity Problem," you highlight three issues. Two of those deal with specific kinds of technological development — surveillance and communication — and one is much broader, the question of how the country's growth in size and complexity changes how it must be governed. Can you address both of those? Pick one of the technological developments to talk about and then take up the broader problem of growth, and explain how originalism fails to deal with these developments.

When the Constitution was ratified and the Fourth Amendment was adopted, it was thought that a search required a physical intrusion by the police. When the Supreme Court first defined a search, it wasn't until 1928, in Olmstead v. U.S., when the court said that wiretapping was not a "search" if it's done without going on somebody's premises. That makes no sense in terms of the current methods of police gathering information.

One of the most important recent Fourth Amendment cases was Carpenter v. U.S. in 2018, where the police obtained 127 days of cellular location information about a person and used it as key evidence in a prosecution that led to a sentence of 100 years. There was no physical trespass on a property, but it was an enormous invasion of privacy. When we look at other technology that exists now for police to accomplish searches — drones, surveillance airplanes, cameras on utility poles that monitor was going on 24 hours a day, seven days a week — it makes no sense to think of the Fourth Amendment solely as about physical trespass. The Supreme Court found in Carpenter that obtaining that cellular location information was a search, but Justices Thomas and Gorsuch, who are originalists, said it should take an invasion of property rights to count as a search. That just doesn't make sense when the government now can gather so much information without a physical trespass.


In terms of the growth in the size of the country, the United States in 1787 was 13 states. There was nothing like the methods of transportation or communication that exists today, so there could be a very small federal government. But in our modern technological world, the country spans the continent and includes territory as far away as Guam and Saipan. We need a government that has the tools to be able to deal with this. So the Thomas approach, which would radically limit federal government power, makes no sense in the current world.

Expansion the federal government dates back to the 1870s, at least. How has that balance changed over time and how has the reasoning about it shifted?

The size of the federal government has dramatically expanded as the country has expanded, as technology has developed, as the problems become more complex. In 1787, the framers wouldn't have thought of the need to have an Environmental Protection Agency to deal with the problem of pollution or greenhouse gas emissions. Today, climate change and greenhouse emissions, imperil human life on the planet. So we need a government that is has the tools to deal with the problems that we face. Unfortunately, the conservatives on the court, following originalism, have a very narrow view of congressional power. Justice Thomas, especially, would greatly limit the federal government's authority to deal with key social problems.

You write about the court striking down regulation during the New Deal, and then doing very little of that for generations, until just recently. What can we learn from that history?

the Supreme Court declared some key New Deal legislation unconstitutional for delegating too much power to the executive branch. The last time the Supreme Court invalidated a federal law as an improper delegation of power was in 1935. Now I think we have a majority on the court that wants to revive the non-delegation doctrine. They've also created something new called the "major questions" doctrine, saying that an agency can't rule on a major question of economic or political significance unless Congress gives clear direction. This is a sibling to the non-delegation doctrine. In fact, on June 30, 2022, in West Virginia v. EPA, the Supreme Court limited the EPA's power to regulate emissions from coal-fired power plants, using the major questions doctrine.

In Chapter 7 you deal with the hypocrisy problem, meaning that conservatives abandon originalism when it doesn't suit their purposes. Because of its central importance, I'd like to focus on the invalidation of the Voting Rights Act, which was not grounded in original intent or meaning. How do you explain what happened?

The Voting Rights Act of 1965 was one of the most important laws adopted in my lifetime. It dealt with pervasive, long-standing disenfranchisement of voters of color, especially Black voters. In section 2 of the Voting Rights Act, it prohibits state and local governments from election practices or systems that discriminate based on race. But Congress knew that authorizing lawsuits to challenge race discrimination wouldn't be sufficient. Congress was aware that Southern states kept changing the voting practices to disenfranchise minority voters, and decided to create a preventative mechanism. Section 5 of the act said that jurisdictions with a history of race discrimination in voting had to get pre-approval or "pre-clearance" from the attorney general or a three-judge federal court before changing their election system.

Chief Justice Roberts said the Voting Rights Act violated the principle of "equal state sovereignty." But where is this found in the Constitution? Nowhere.

This provision was tremendously effective. There were hundreds of instances where pre-clearance was denied and there were thousands where state or level governments didn't even try because they knew they wouldn't get pre-clearance. This was enacted and upheld as constitutional, and when it was scheduled to expire it was re-enacted in 1982 for another 25 years. Then, when it was scheduled to expire in 2007, Congress held over 15 hearings and compiled a legislative history of over 10,000 pages documenting a continued need for pre-clearance. Congress then extended pre-clearance for another 25 years. It passed the Senate 98-0. There were only 33 "no" votes in the House. George W. Bush signed it into law.

But in Shelby County v. Holder in 2013, the Court declared the pre-clearance law unconstitutional. What constitutional principle or provision did the Voting Rights Act violate? Chief Justice Roberts said it violated the principle of "equal state sovereignty," which holds that Congress must treat all states alike. But where is this found in the Constitution? Nowhere. It doesn't say that. In terms of original meaning, the same Congress that ratified the 14th Amendment also voted to segregate the District of Columbia public schools. In fact, the same Congress that ratified the 14th Amendment imposed military rule on Southern states, showing it didn't believe in equal state sovereignty.

After laying out all those arguments, you move into a threefold affirmative defense of non-originalism. I'd like to ask you to elaborate a bit on each of those arguments. The first one being that a pluralist epistemology is desirable.

My argument is that throughout American history, the Supreme Court has looked at many sources. Of course it looks at the text of the Constitution, it always was looking at the original meaning. It should look at history, look at precedents, look at modern social needs. I think to ignore any of those is undesirable. Why believe that all wisdom stopped in 1787, when the Constitution was adopted? Or when the Bill of Rights was adopted? Why not believe that there is wisdom to be gained from all of these different sources? That's my argument: It's desirable for the court not to be limited just to historical original meaning.

Your second argument is that a living Constitution that evolves by interpretation as well as amendment is desirable.

I think a preeminent purpose of the Constitution is to safeguard minorities of all sorts. Yet I think it is very difficult for the Constitution to do that unless there is evolution by interpretation. We shouldn't require a supermajority to protect the rights of minorities. Let me give you an example. We've already talked about Brown v. Board of Education, which would not have been decided in the same way under originalism. Loving v. Virginia, where the Supreme Court declared unconstitutional state laws prohibiting interracial marriage, wouldn't have been decided the same way under originalism. Using the Constitution to combat sex discrimination wouldn't work under originalism. Using the Constitution to combat sexual-orientation discrimination — the right to marriage equality for gays and lesbians — wouldn't work that way under originalism. It makes no sense to me to say that those changes can happen only through the amendment process. Then you're saying a minority can be constitutionally protected only if it has a supermajority behind it.

Finally, you argue that candor and transparency in constitutional decisions are desirable.

I think what originalists do is to impose their conservative values and then hide behind the originalist rhetoric to claim that they're just following the original meaning. I think that conservatives, as much as liberals, are imposing their values on constitutional decisions. Consider the cases in June of 2022. The book was finished in the summer of 2021, so it doesn't cover these. But the conservatives on the court found that there's no constitutional right to abortion, that there's very broad protection of gun rights, that there is a right of teachers to pray at high school football games and that the state is obligated to support parochial school education in certain circumstances. All of that is consistent with current Republican conservative ideology. It's not that the framers of 1787 to 1791 thought the same way as the current Republican Party. Conservatives are just imposing their values.

So what I say is: Let's all be transparent. Let's acknowledge that the court is making value judgments. No one should hide behind the guise of originalism.

It strikes me that all these arguments are important, because without honest argument, everything else is suspect. You frame it as "candor and transparency," but at bottom isn't it simply about honesty?

Yes. I think there is a dishonesty, a disingenuousness, in conservatives pretending that they're just following the original meaning and not making value choices. They're making value choices just as much as any liberal justice would.

Chapter 9 is titled "Why We Should Be Afraid." You focus on three areas where dramatic changes should be expected from originalist judges. Say a little bit about each of those. The first area is about rights of privacy and autonomy.

Originalists are imposing conservative values and hiding behind their originalist rhetoric. ... What I say is: Let's all be transparent. Let's acknowledge that the court is making value judgments.

As I mentioned, I finished the book in the summer of 2021. What I predict in the book that given the originalist views of the court in the conservative justices, that the court would overrule Roe v. Wade. It did that on June 24 in the Dobbs decision, where Justice Alito said that a right should be protected under the Constitution only within the text, part of the original meaning or to safeguard a long unbroken tradition. Justice Thomas wrote a concurring opinion in which he said the court should now overrule Griswold v. Connecticut, which allowed purchase of contraceptives; Lawrence v. Texas, which established the right of consenting adults to engage in private same-sex sexual activity; and Obergefell v. Hodges, where the court found a right to marriage equality for gays and lesbians. I think if one follows an originalist view, that is the conclusion. All of these rights protecting privacy and autonomy are endangered.

The second area concerns the scope of congressional power.

Originalists like Justice Thomas believe the federal government has very limited authority, but that doesn't work in the world of 2022. We need the federal government to be able to deal with things like air pollution and climate change, or technology. I worry that what we're going to see from the conservative justices is significant constraints on federal power to deal with urgent social problems.

Finally, the third area is about the Constitution's religion clauses.

Again, I finished the book in the summer of 2021, but I predicted you'd see aggressive protection of free exercise of religion. And we saw it at the end of June 2022 in Carson vs Makin, where the Supreme Court said that whenever the government gives aid for private secular education, the government is constitutionally required, even mandated, to provide that aid for religious education. The court said in Kennedy v. Bremerton Schools that a high school football coach had the First Amendment right to go onto the field after games and engage in prayer, even when joined by teammates and members of other teams. I think we're going to see in the next term rulings on the ability to violate anti-discrimination laws, based on free speech and religion.

Given all of the above, what conclusions do you draw about how the public should respond? What do we do?

I think it's important to see, when it comes to the Supreme Court, that it's an emperor with no clothes. It's a conservative court, it's conservative justices imposing their conservative values. It's not about originalism at all. They write opinions in terms of originalism, but we should see that as the fig leaf to cover what's really going on — conservative justices imposing conservative values.

It seems that you have a pluralistic approach to law, and to epistemology as well. You argue that there's no one right way to do things, no determinate outcome, but that a tradition can evolve out of diverse views coming into conflict with with some kind of self-regulation. That pluralism seems inherent in a liberal as opposed to conservative view of the nature of human knowledge and law. Do you have any broader thoughts about that?

Let me take an example. The Second Amendment says, "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." Do gun control laws violate that? If the government says that people need a concealed weapons permit, or if the government prohibits handguns, does it violate that? It depends on how you want to read the Second Amendment. If you read it as primarily about militia service, then those government regulations are allowed. If you read it as being about the right of individuals to keep and bear arms, those regulations aren't allowed. There's not an inherently right or wrong answer to the question. It's a choice.

It shouldn't surprise us the conservatives who embrace gun rights strike down gun control laws and liberals who favor gun control would uphold those laws. It's not about neutral methodology, but value choices by who's on the court. Virtually all constitutional provisions get litigated. There are arguments on both sides, and it's a mistake to think there's a right answer out there, waiting to be discovered.

I always like to end by asking: What's the most important question that I didn't ask? And what's the answer?

I think the most important question to ask is: What should we expect in the future? It's likely we're going to have a Supreme Court that is highly originalist for a long time to come. You look at the conservative justices: Clarence Thomas is 74, Samuel Alito is 72, John Roberts is 67, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett are all in their 50s. So the rise of originalism that we've seen on the Supreme Court is likely to be followed for many years to come.

Doesn't this argue for the need to think about court expansion and other possible reforms, such as term limits? Elie Mystal of the Nation has suggested expanding the Supreme Court to the size of a district court, so you have a panel system that would decentralize its power.

I favor expanding the size of the Supreme Court. I think the current court is a result of Republican court packing — blocking Merrick Garland and rushing through Amy Coney Barrett. I think we're not going to see an expansion in the size of the Supreme Court, because we know Republicans would filibuster that in the Senate and there aren't the votes among Democrats to remove the filibuster.

I favor 18-year nonrenewable terms for justices. Too much depends on the accident of history and when vacancies occur, and life expectancy is a lot longer now than it was in 1787. Clarence Thomas was appointed to the court in 1991 when he was 43 years old. If he stays on the court until he's 90, he'll be a justice for 47 years. Amy Coney Barrett was 48 when she was confirmed. if she stays on the court until she's 87, the age that Justice Ginsburg was, she will be a justice until 2059. It's just too much power in too few people's hands for too long a period of time. But I don't think we're going to get 18-year term limits. I believe it would take a constitutional amendment and I don't see a constituency that cares enough to do the work.

I would oppose having a court with panels deciding cases. We have too much of a need for consistency and resolution, and I think when you have panels inevitably they disagree with one another. It would cause chaos.

'The work of a dilettante': Foreign policy expert dismantles Jared Kushner book claims

Tom Boggioni
September 11, 2022

Ivanka Trump, Jared Kushner (Photo by Mandel Ngan for AFP)

In a column for Foreign Policy, international affairs analyst Steven Cook called out Donald Trump's son-in-law Jared Kushner for attempting to pass himself off as an innovative diplomat for his Middle East efforts, with Cook saying he broke no new ground and inflated his resume in his new book "Breaking History."

Admitting that Kushner "was a real player in a presidential administration of consequence," Cook explained that, in the former White House advisor's book, he offers neither a thoughtful reflection on the Trump team’s encounter with the Middle East or an explication of the intellectual underpinnings of the 'disruption' it claimed to bring to bear on the region’s thorniest problems."

Writing that the Kushner book is instead a "tedious" recounting of his days working on the Middle East for Trump, Fisher noted that what Trump's son-in-law boasted was his greatest achievement was just a rehash of previous efforts.

"The Trump administration’s efforts in the Middle East bore a striking resemblance to the bipartisan U.S. approach to the region that existed on Sept. 10, 2001: support for Israel and Washington’s Arab partners—regardless of the character of their regimes—and sustained pressure on Iran using mostly, but not exclusively, economic sanctions," he wrote before adding, "The gap between what Kushner imagined he was doing and what he was actually doing is not the only weakness of Breaking History."


RELATED: Jared Kushner's 'soulless' White House memoir torn to pieces in New York Times review

The Middle East expert added, "Kushner does not even pause to offer any insight into Mohammed bin Salman or the contradictions between the brutality of the crown prince’s approach and the positive changes he has wrought in the kingdom. And although Kushner wants to break from history, he accepts the parameters of the U.S.-Saudi relationship as they are and have long been: oil and security. He never considers the possibility that there might be risks for Washington by being so tightly bound to the crown prince."

"Still, when it comes to his and the Trump administration’s signature accomplishment in the Middle East, Kushner demonstrates a lack of self-awareness and depth," he wrote. "Looking back, Kushner cannot provide a single insight about how the Abraham Accords could or should affect the U.S. approach to the region."

Summing up the book, he concluded, "Breaking History is just words on 512 pages with no lessons, no meaning, and no new way of looking at old problems. If a book can be white noise, Kushner has produced it. If it was meant to set the record straight, it failed," before ending with a brutal: " It is the work of a dilettante.

You can read the whole piece here.

PRISON NATION U$A

Advocates seek to make prison work voluntary
2022/09/11

Florida inmates take a lunch break during their work shift.

 - Carl Juste/Miami Herald/TNS

Prisoners making license plates is a popular stereotype, but most of the nation’s 800,000 incarcerated workers hold jobs more similar to those on the outside: They cook and serve food, mop floors, mow lawns and cut hair.

Unlike other workers, though, the incarcerated have little say, if any, in what jobs they do. They face punishment if they refuse to work and are paid pennies per hour — if that.

The nation’s racial reckoning of the past few years has prompted a reevaluation of penal labor as a legacy of slavery, spurring people to question whether incarcerated people should be required to work in 2022. Activists are pressing for an end to work requirements or, if they continue, for higher wages.

Among the proponents of fully voluntary work in prison are the American Civil Liberties Union and the Global Human Rights Clinic at the University of Chicago’s School of Law. The groups released a report in June calling, among other recommendations, for the elimination of any laws and policies that punish incarcerated people who are unwilling to work.

Other groups and lawmakers insist it’s appropriate to require prisoners to work to maintain prison facilities.

“We still have to run our prisons,” California state Sen. Steve Glazer, a Democrat, said in an interview. “We need hygiene, kitchen service and groundskeeping to keep our prisons going. Those are all appropriate work elements to being in prison.”

Glazer favors different legislative solutions to inequities in the criminal justice system. The California Senate recently asked the state Department of Corrections and Rehabilitation for a plan to raise inmate pay.

“That is exactly the way we should be approaching this issue,” Glazer said.

Other states also are considering whether and how to improve prison work and pay.

In March, Colorado enacted a law that will pay the state minimum wage of $12.56 an hour to inmates who are within a year of their release date and work for private companies through the state-run Take TWO (for Transitional Work Opportunity) program.

“This is actually a very conservative approach,” Colorado state Rep. Matt Soper, the Republican sponsor of the bipartisan measure, said in an interview. “We need workers, and they need to gain skills before release.”

To pass the bill, though, Soper first had to explain why paying prisoners the minimum wage was a good idea.

“Some victims and victims’ advocacy groups opposed the idea at first, and then they wanted every dollar to come back in restitution,” he said. “But that’s not a good system, because we want (the former offenders) to have savings as seed money to restart their lives. My goal is to disrupt the current model of recidivism.”

But no Colorado inmates are participating right now. Take TWO, which began in 2019 and reportedly had about 100 participants in March, is “on a pause while we review and update logistics and criteria and address some of our immediate staffing shortages,” the Colorado Department of Corrections said in an email.

Prison minimum wage bills are pending in New York and Illinois. Since 2019, bills have failed in Arizona, Maryland, Mississippi, Nevada, Texas and Virginia, according to the ACLU.

Former inmate Samual Nathaniel Brown seeks more sweeping change. When COVID-19 struck, Brown had served more than 20 years of a life sentence in California state prisons for attempted murder and had a parole hearing coming up.

A janitor in a health care facility at the prison in Los Angeles County known as Lancaster, he was ordered to clean rooms that had blood, feces and other bodily fluids on the floors and walls.

“I was terrified for my life. I didn’t want to die this close to going home,” Brown, who suffers from asthma and has had a collapsed lung, said in an interview.

He was told if he did not work, he would be written up with a 115 disciplinary report, which Brown calls “the modern-day equivalent of the whip on your back.” A 115 signifies a serious violation of prison rules and can result in loss of “good time” credits for good conduct, delaying an inmate’s release date. Brown went to work despite, he said, a lack of social distancing and inadequate personal protective equipment.

Then, encouraged by his wife, he wrote a proposed amendment to the state constitution prohibiting involuntary servitude. Brown earned a bachelor’s degree in communications from California State University, Los Angeles while he was in prison. He was granted parole last December.

Brown’s amendment, introduced by California state Sen. Sydney Kamlager, failed in the legislature in June after the state Department of Finance estimated it would cost $1.5 billion in 2022 to pay the state’s $15 minimum wage to the 65,000 incarcerated Californians.

A similar push in Illinois also has stalled.

“Yes, it’s expensive,” Illinois state Sen. Robert Peters, a Democrat who twice has introduced a prison minimum wage bill in his state, told Stateline. “But we always find the money to build other things. Why are we not able to find the money for this? The challenge is: Why are there so many people in prison doing work that you can’t afford to pay them?”

State prisoners in Illinois did receive a pay increase last year — their first in 11 years. It was about 14 cents a day, on wages that average 85 cents to $2.50 a day. Peters wants the state to pay prisoners the state minimum wage of $12 an hour.

“There’s a disproportionate impact on Black and Hispanic people. It hits at class and race and gender,” he said.

A study last year by The Sentencing Project, a nonprofit that works on criminal justice issues, found that Black people are incarcerated in state prisons at nearly five times the rate of White people, and Hispanic people are incarcerated at a rate 1.3 times than White people.

But even though Illinois has a Democratic governor and Democrats control both chambers of the legislature, Peters’ bill, the End Prison Slavery Act, has gone nowhere.

“It’s very complicated,” Peters said. “We do have some legislators who want to do it, but they think the electorate is against it.”

Three Republican Illinois state legislators who are typically involved in criminal justice matters did not respond to requests for comment on the prison minimum wage bill.

Peters argues that incarcerated workers deserve wages sufficient to purchase essentials at the prison commissary, the only market to which they have access. He is also looking for ways to reduce commissary prices.

Proponents of making prison work more remunerative and meaningful also argue it’s not productive for society to keep incarcerated workers in dead-end jobs that fail to prepare them for employment outside the prison walls or allow them to accumulate some savings for when they are released. Studies show poverty and unemployment lead to recidivism.

Some crime victims groups also support raising prison wages, said Lenore Anderson, founder and president of the Alliance for Safety and Justice, an Oakland, California-based group that works to end mass incarceration, reduce crime and support survivors of violent crime.

The public assumes that people hurt by crime and violence would want the worst possible prison experience for those who committed the crimes, Anderson said.

“But that’s not what we find. People want them to succeed,” she said. “How do we know after someone has served time they’re prepared for living in society? That’s what rehabilitation, work and education programs do. Wages are part of that. It would be very consistent with smart rehabilitation to align prison wages with wages on the outside.”

The average wage nationwide for incarcerated workers who maintain prison facilities ranges from 13 cents to 52 cents an hour, according to the ACLU and Global Human Rights Clinic. In seven Southern states — Alabama, Arkansas, Florida, Georgia, Mississippi, South Carolina and Texas — almost all work by prisoners goes unpaid.

“It’s not hard to imagine that’s a vestige of slavery,” said Jennifer Turner, the ACLU’s principal human rights researcher and primary author of the report, “Captive Labor: Exploitation of Incarcerated Workers.”

An inmate survey by the federal Bureau of Justice Statistics, cited in “Captive Labor,” found 80% of state and federal prison workers have jobs that maintain the prison facilities. Only about 6.5% work in “correctional industries,” state-run programs that provide goods for state and local agencies, and less than 1% in private company work programs.

Cheap prison labor is profitable for states. The value of goods and services produced by correctional industries programs totaled $2 billion in 2021, according to the “Captive Labor” report, citing the National Correctional Industries Association. The value of labor to maintain prisons is unknown, although it was estimated in 2004 at $9 billion, according to the report.

New York Democratic state Sen. Zellnor Myrie introduced a bill last year that would increase prison wages to $3 an hour.

“In the depths of the pandemic, incarcerated New Yorkers, making 16 cents an hour, produced 11 million bottles of hand sanitizer for the rest of us while COVID raged inside our prisons and jails, killing dozens and sickening thousands,” Myrie said in an email. “We shouldn’t need a once-in-a-century virus to awaken us to the moral indignity of paying slave wages to those doing essential work.”

Myrie’s wage bill though, was eclipsed by other legislative efforts to change the criminal justice system in New York.

Advocates of prison changes put energy into mobilizing against a proposal floated by New York Democratic Gov. Kathy Hochul in February to bring back contract labor to New York state prisons, after it had been banned for 100 years. Hochul’s proposal went nowhere, leaving the state’s incarcerated labor situation unchanged.

Worth Rises, a group based in New York City that works to end exploitation of incarcerated people and their loved ones, also found more enthusiasm to push the U.S. Congress to repeal the 13th Amendment to the U.S. Constitution, which allows slavery and involuntary servitude as punishment for crime, and for making phone calls for incarcerated people in state prisons free.

“We had to go with what resonates with the public — and it wasn’t the minimum wage” for incarcerated workers, said Bianca Tylek, founder and executive director of Worth Rises.

———

In Louisiana, the first US climate refugees find new safe haven

Agence France-Presse
September 02, 2022

An aerial view of the Isle de Jean Charles in Louisiana, which is rapidly falling victim to climate change

Joann Bourg stands in front of her new home, about an hour's drive from the low-lying Louisiana island where she grew up -- an area gradually sinking into the Gulf of Mexico.

"I'm very excited. I can't wait to just move on in," Bourg told AFP. "I've been waiting for this day forever."

Bourg is one of about a dozen Native Americans from the Isle de Jean Charles who have been relocated to Schriever, less than 40 miles (60 kilometers) to the northwest -- the maiden beneficiaries of a federal resettlement grant awarded in 2016.

They are the first so-called "climate refugees" in the United States, forced from their homes due to the consequences of climate change.

"The house we had back there on the island -- well, that has been home forever. Me and my siblings all grew up there, went to school down there," Bourg recalls. "It was peaceful."

But the family home -- as with many others on the island -- was destroyed.

There is only one road connecting Isle de Jean Charles to the mainland, and it is sometimes impassable due to high winds or tides.

Residents are mainly of Native American descent -- several tribes sought shelter on the island from rampant government persecution in the 1800s.

But climate change has transformed the island into a symbol of the scourge that plagues much of hurricane-prone Louisiana -- coastal erosion.

90 percent under water

Eventually, 37 new homes will be built in Schriever to accommodate about 100 current or former residents of Isle de Jean Charles, thanks to a $48 million federal grant initially allocated in 2016.

"This is the first project of its kind in our nation's history," state Governor John Bel Edwards, who was on site to see the residents close on their new properties, told AFP.

"We've had people over the years that we would buy their homes out and move them. But we've not done whole communities like this and moved them to one place before because of climate change."


Since the 1930s, Isle de Jean Charles has lost "about 90 percent" of its surface area to the encroaching bayou waters, explains Alex Kolker, an associate professor at the Louisiana Universities Marine Consortium.

The island was already fragile, but climate change heightens the risks, he says -- sea levels are rising, the ground is sinking and erosion is rampant. More frequent and fiercer storms intensify the problem.

"This community is one of the most vulnerable communities in Louisiana, and Louisiana is one of the most vulnerable places in the US," Kolker says.

Dead trees

The road to Isle de Jean Charles is lined with dozens of homes, many of which are stripped down to the pilings.

A year ago, Hurricane Ida slammed into Louisiana as a dangerous category 4 storm; it was the second most damaging hurricane on record in the state, after the devastation of Katrina in 2005.

The storm ripped part of Chris Brunet's roof off his home.

The 57-year-old placed a sign in front of his home: "Climate change sucks."

Seemingly indifferent to the voracious and omnipresent mosquitos, and occasionally speaking the old Acadian French associated with the area, Brunet says hurricanes are nothing compared to so-called "saltwater intrusion" destroying canals and other waterways.

A few years ago, he finally agreed to relocation, adopting the view of the leader of his Choctaw tribe that it was the only way to preserve the island's dwindling community.

But those whose homes remain upright do not want to completely abandon their ancestral land.

Bert Naquin, who is moving into one of the new federally funded houses in Schriever, hopes to repaint her family dwelling in Isle de Jean Charles, despite her joy at being a first-time full homeowner.


"I plan on being down there a lot, because it's still my home," the 64-year-old Naquin said.

"This house up here is my house. But the island is always going to be my home in my heart."

© Agence France-Presse

Deal partner for Trump's Truth Social fails to get backing for SPAC extension -sources

Reuters
September 05, 2022


By Svea Herbst-Bayliss

(Reuters) - The blank-check acquisition firm that agreed to merge with Donald Trump's social media company failed to secure enough shareholder support for a one-year extension to complete the deal, people familiar with the matter said on Monday.

At stake is a $1.3 billion cash infusion that Trump Media & Technology Group (TMTG), which operates the former U.S. president's Truth Social app, stands to receive from Digital World Acquisition Corp, the special purpose acquisition company (SPAC) that inked a deal last October to take TMTG public.

The transaction has been on ice amid civil and criminal probes into the circumstances around the deal. Digital World had been hoping that the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal, would have given its blessing by now for the transaction to proceed.

Most of Digital World's shareholders are individual investors and getting them to vote through their brokers has been challenging, Digital World Chief Executive Patrick Orlando said last week.

Digital World needs 65% of its shareholders to vote in favor of the proposal to extend its life by 12 months for the move to become effective. By Monday evening, far fewer Digital World shareholders than those required had voted in favor, the sources said.

The outcome of the vote is set to be announced at a special meeting of Digital World shareholders on Tuesday. Digital World executives do not believe they will be able to muster enough shareholder support in time and have started to consider alternative options, according to the sources.

The sources requested anonymity because the vote tally figures have not been publicly announced. Representatives for Digital World and TMTG did not immediately respond to requests for comment.

One option being considered by Digital World is to postpone the vote deadline in a final bid to boost more shareholder support, the sources said. Without further action, the SPAC is set to liquidate on Thursday and return the money it raised in its September 2021 initial public offering.

Were Digital World to fail in its bid to get its shareholders to back the one-year extension, its management has the right to extend its life without shareholder approval by up to six months. It is unclear whether Digital World will pursue this option and if it would provide enough time for regulators to reach a conclusion on whether to allow the deal to proceed.

Digital World has disclosed that the SEC, the Financial Industry Regulatory Authority and federal prosecutors have been investigating the deal with TMTG, though the exact scope of the probes is unclear.

Among the information sought by regulators are Digital World documents on due diligence of potential targets other than TMTG, relationships between Digital World and other entities, meetings of Digital World's board, policies and procedures relating to trading, and the identities of certain investors, Digital World has said.

INDEBTEDNESS CAPPED

Were the deal to be completed, TMTG would receive $293 million that Digital World has on hand plus $1 billion committed from a group of investors in the form of a private investment in public equity (PIPE).

The PIPE is scheduled to expire on Sept. 20 unless the deal is completed. Investment bankers for Digital World have been reaching out to investors in the last few weeks to gauge their interest in extending the PIPE, a person familiar with the matter said.

It is unclear how TMTG is getting by without having access to Digital World's funding. It raised $22.6 million through convertible promissory notes last year and an additional $15.4 million through bridge financing in the first quarter of this year. The agreement with Digital World caps the indebtedness that TMTG can assume prior to the deal closing at $50 million.

Digital World has said it believes TMTG will have "sufficient funds" until April 2023. TMTG said last week that Truth Social is "on strong financial footing" and would begin running advertisements soon.

Trump started using Truth Social in April, two months after it launched on Apple Inc's app store. He currently has more than 4 million followers - a fraction of the 89 million he had on Twitter Inc before he was banned over his role in the January 2021 U.S. Capitol riots by thousands of his supporters.

(Reporting by Svea Herbst-Bayliss in Rhode Island; Additional reporting by Echo Wang and Krystal Hu in New York; Editing by Greg Roumeliotis and Edwina Gibbs)

Opinion | What the Truth Social Flop Says About Trump

He’s a bad businessman who has worn out his meme.


Another inherent Truth Social liability that Trump and company should have considered was Truth Social’s unavoidable posturing as a Trumpian site for conservatives. | Leon Neal/Getty Images


Opinion by JACK SHAFER
09/10/2022 
Jack Shafer is Politico’s senior media writer.

The slow-cooking financial disaster that has been simmering in Donald Trump’s business Crock-Pot is now coming to a boil. Truth Social — the Twitter knock-off the former president launched six months ago in reaction to Twitter, Facebook, and YouTube’s decision to deplatform him — might reduce itself to the smoke and char of bankruptcy, according to recent business press reports.

The swill the site serves attracts only a fraction of what Twitter does. Google has yet to approve downloads of its app from the Play Store over moderation issues, blocking it from 40 percent of the smartphone market. It lost $6.5 million in the first year and seems unable to pay its bills. But worst of all, the merger plan that would give it a stock market listing and the $1.3 billion it hoped to raise has stalled.

Once upon a time, Trump fed his 89 million Twitter followers a several-times-a-day mash of insult, provocation and bombast. But he has attracted only an estimated 3.9 million to his Truth Social account, making him one of the biggest social media flops of the decade. Where did the magic go? Why have Trump’s followers forsaken him? Is Truth Social doomed?

Trump deserves credit for marketing his Twitter account to its Everestian heights. He’s always known how to play to the crowds, titillate them and leave them wanting more. During his first campaign and presidency, even a garden-variety Trump tweet could convulse newsrooms. But that was a function of his front-runner status and later his place in the Oval Office. He drew an enormous audience not because he was Donald Trump tweeting but because he was the tweeting president. The power of the office endowed his tweets with muscle that could move financial markets, bury political careers, inspire death threats against his enemies and make the press snap to attention. But exiled to Mar-a-Lago and denied his social media accounts rendered him just another celebrity squeaking noises from a tiny soapbox. When his profile shrank, he became easier to ignore.

Trump announces his own social media platform

Even so, why didn’t the tens of millions of the 89 million who followed him on Twitter or the 74 million who voted for him in 2020 make more of an effort to visit his new address? Blame it on the network effect. If you already have a Twitter account, it takes just a millisecond to click and add another person’s feed to your account. But downloading a new app just to follow a single somebody takes mental energy, especially if there aren’t many other accounts on the app you wish to follow. Trump out of office proved to be as boring as Trump in office was disruptive. Everything we’re learning about Trump’s inability to convene a large-scale audience on Truth Social we learned in miniature from the failure of his mid-2021 blog, which he killed after 29 days. Like most media figures, Trump needs the boost of the network effect provided by Twitter (or CNN or Fox News Channel) to build a mass audience. All by his lonesome, he’s just a political carny on a lightly trafficked midway shouting invitations to his freak show.

Plenty of Trump’s followers were either agnostic about his tweets or politically hostile to them. Many followed him just to stay in the know or for the hate clicks.

This is not to say you can’t build a good business serving mostly Trumpians or mostly conservatives or mostly liberals. But such narrowcasting comes at the expense of winning the largest potential customer base. Twitter wisely places no political litmus tests, real or implied, between aspiring account-holders and an account as long as they promise not to spew bilge from their perch. Everybody is accepted. By appearing exclusionary, Truth Social resigned itself to marginal appeal.

Nothing about Truth Social’s disastrous beginnings should surprise us. Donald Trump has proved himself again and again to be a wreck of an entrepreneur. Steaks, his university, water, an airline, casinos, the USFL, a mortgage company, vodka — the list reads like a guide on how not to succeed in business. Associating Trump with a new venture has become a business death wish.

Trump is still the frontrunner for the Republican presidential nomination in 2024 and could well wind up in the White House (assuming he’s not behind bars). But there’s also evidence that Trump has simply exhausted the Trump meme he invented. Trump’s deranged outrage style once contained real entertainment value — which explains why moderates and liberals followed him on Twitter even if they wouldn’t vote for him. But in his post-presidency and especially in the weeks following the Mar-a-Lago search and investigation, the show has gone stale. Vainly, he has sought to top himself by sharing QAnon-related material on Truth Social, denouncing the FBI like a madman trapped in a bunker, and calling for his reinstatement as the “rightful winner“ of the 2020 election. He’s become a carnival geek biting the heads off of snakes, which can be a fabulous show the first couple of times you see it, but after that, meh. Could today’s Trump devise enough fresh outrage to produce even a brief TikTok?

Louisiana Republican: I'm terrified of 'evil' Danny DeVito

Matthew Chapman
September 06, 2022

Satan

On Tuesday, The Huffington Post reported that a Republican congressman from Louisiana is going out of his way to condemn "Little Demon," an upcoming animated sitcom on the FX Network starring Danny DeVito and Aubrey Plaza, as "evil" for portraying Satan — and that he had to do his utmost to prevent his child from being corrupted by it.

"U.S. Rep Mike Johnson objected to the sitcom aired by FX Networks. Its website says the series is about a woman and her 13-year-old daughter who are trying to live normal lives even though Satan is the girl’s father and wants custody of her soul," reported Janet McConnaughey. "A trailer for the show, which airs its fourth episode late Thursday, played during Sunday night’s TV broadcast of Louisiana State University’s football opener against Florida State."

“I couldn’t get to the remote fast enough to shield my 11-year-old from the preview, and I wonder how many other children were exposed to it — and how many millions more will tune in to the new series, owned and marketed by DISNEY,” wrote Johnson on Facebook.

"FX Networks and Hulu, where the show is streamed, are among entertainment assets that Disney bought from Fox in a stock deal worth about $52.4 billion in late 2017," said the report. "On the show, DeVito voices the role of Satan and his daughter, Lucy DeVito, plays Satan’s daughter, Chrissy the Antichrist. Aubrey Plaza plays the mother. New episodes are broadcast at 10 p.m. Thursdays on FX."

Johnson is the vice chair of the House Republican Conference. He was known for making a list of Republicans who wanted to sign onto an amicus brief for a controversial, failed lawsuit by Texas Attorney General Ken Paxton asking the Supreme Court to throw out the 2020 election results.

A number of Republican lawmakers and candidates seriously believe in, and fear, the existence of Satan, and that certain aspects of pop culture are infused with his dark influence. Michigan Secretary of State candidate Kristina Karamo, for instance, has suggested that Cardi B, Billie Eilish, Beyoncé, and Ariana Grande are all placing children "under a Satanic delusion" with their music.

COMPASSIONATE PROTESTANT

Kari Lake outlines 'compassionate' plan to ban homelessness by forcing people to 'move along'

David Edwards
September 07, 2022

Real America's Voice/screen grab

Kari Lake, the Republican nominee for governor of Arizona, said on Wednesday that homeless people will have to leave the state unless they stop sleeping in public if she wins

"There are tents along the side of the road and this is happening in Arizona now," Lake told conservative podcaster Charlie Kirk. "Our homeless population is nearly doubled in the past four or five years and that's why we put together a great plan to tackle the chronic street homelessness."

Lake said that she would "ban" camping in urban areas.

"We're actually going to build enough shelter beds to get people help," she continued. "We're going to tell them they've got to get help. They're no longer allowed to live and use drugs on the street. But we will get them help. We are compassionate people."

The candidate added: "And if they refuse that help, they're going to have to move along."

Lake said that she was "going to start going hard on these small crimes."

"Because we need to restore quality of life in Arizona," she insisted. "The hard-working, tax-paying citizens deserve a little bit of compassion. And they want their parks back and they want their streets back."

Watch the video below from Real America's Voice.