The arbitrariness of the SEC's misguided enforcement-driven approach to crypto + federal bank regulators, [& their] State-level counterparts, abusing their supervisory authority to label businesses unworthy of having a bank account and worked in secret to purge disfavored lines of commerce from the financial system

Overdue: Statement of Dissent on LBRY. Commissioner Hester M. Peirce. SEC, Oct 27 2023. https://www.sec.gov/news/statement/peirce-statement-lbry-102723

The Commission has brought many troubling crypto enforcement actions, but the LBRY, Inc. (“LBRY”) case has especially unsettled me. A statement on the case is overdue. I did not support bringing the case, but have been unable to speak publicly about my concerns while the case has been in litigation. Last week, after losing in federal district court on the question of whether the sale of LBRY tokens was an unregistered securities offering, LBRY announced that it will not move forward with an appeal of the decision.[1] Instead, the company will shut down and its assets will be placed in receivership and used to satisfy its debts, including the civil money penalty owed to the Commission.[2] Are investors and the market really better off now after the Commission’s litigation contributed to the demise of a company that had built a functioning blockchain with a real-world application running on top of it? This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.

One does not have to dig deep to find fraudulent crypto projects that sold tokens with promises that they did nothing to fulfill. This sad reality makes the Commission’s decision to bring a case against LBRY especially puzzling. LBRY’s approach was more conservative than the approach many other projects took.[3]Here, the blockchain was up and running at the time most tokens were sold, and the Commission’s complaint did not allege, and the court did not find, evidence of fraud. LBRY built a blockchain to facilitate data sharing, afford greater control to content creators, and make censorship more difficult. LBRY created a popular platform on the blockchain for sharing videos and other media.[4] The open-source LBRY blockchain was available for anyone else to use.[5] Why go after a company that sold a token for a functioning blockchain with an established use when we could have pursued plenty of other projects that were outright frauds and did not attempt to comply with the securities laws? To make matters worse, the Commission took an extremely hardline approach in this case. For example, after winning on summary judgment, the Commission sought monetary remedies of $44 million and asserted that LBRY’s offer to burn all tokens in its possession was not sufficient assurance that LBRY would not violate the registration provisions in the future.[6] The Commission’s requested remedies were entirely out of proportion to any harm. Indeed, the court stated during the remedies hearing that “the absence of fraud allegations, [and] the fact that there was some measure of uncertainty” regarding the application of the securities laws when LBRY commenced its offering were facts that “should be taken into account when considering a penalty.”[7] After the remedies hearing, the Commission pared its penalty request back to a significantly lower $111,614, which the court approved.[8]

The application of the securities laws to token projects is not clear, despite the Commission’s continuous protestations to the contrary. There is no path for a company like LBRY to come in and register its functional token offering.[9] Even if a company did manage to register its token offering, it would not be a particularly useful effort. Compliance with the securities laws is important because we want to ensure that people buying securities receive accurate and reliable information so they can assess the risks and rewards of an investment. Here, LBRY made significant disclosures outside of the registration process—disclosures that the Commission did not allege were fraudulent or misleading—and there is little to indicate that LBRY’s disclosures did not provide token purchasers with information adequate to assess whether the tokens were a good fit for them.[10] The time and resources we expended on this case could have been devoted to building a workable regulatory framework that companies like LBRY could have followed. Then the market could have decided LBRY’s fate.

Even if, as the judge ruled here, the offering of tokens should have been registered, our scorched earth approach in remedying the violation was completely out of proportion to any investor harm. How does the result in this case protect LBRY investors, who likely would have preferred that the company continue to exist to support the blockchain, which is still in its infancy? The judge did not rule on whether the token itself was a security or on the status of secondary sales of LBRY tokens,[11] which means that the LBRY blockchain may live on, but its path forward is difficult. The Commission’s action forced a group of entrepreneurs to abandon what they built. Our disproportionate reaction in this case will dissuade people from experimenting with blockchain technology, which LBRY aptly describes as “technology that enables dissent.”[12] A government of a free people should welcome dissent and the technologies that enable it.

Earlier this year, LBRY tweeted: “It’s the year 2028, hundreds of thousands of Americans have been jailed for using illegally cryptocurrency instead of CBDCs, and Hester Pierce [sic] is still just writing dissenting memos.”[13] Although I will be tending bees, not writing dissents, in 2028, I think often about the crux of that criticism and ask myself: “What could I do to help prevent another group of people with a big idea for changing the world from going through what LBRY has over the past several years?” I have not come up with an answer to that question; however, I urge people who have suggestions about how the Commission can right its course on crypto and innovation more broadly, to send them my way.[14]

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[1] The End of LBRY, Oct. 19, 2023, https://odysee.com/@lbry:3f/theendoflbryinc:d?fbclid=IwAR1bBr_IiP-iP9F3hapkGWcn0D0rOpMG9B8mxN2L73DkJDA77B24uNGt52I.

[2]Id. (“LBRY must die, there is no escaping this. It has lost a judgment to the federal government, has several million dollars in debts, and has pledged to shut down.”).

[3] See, e.g., DAO Today with Alexa Mil Podcast (Dec. 27, 2022), at approximately minute 12 (comments of Jonathan Schmalfeld) (“Lots of people looked at LBRY as doing things the right way. They weren’t doing the ICO. When they released the fully developed platform. The tokens were consumptive. There was an actual use for them on release date. They did a traditional investment raise. They brought on shareholders. They used securities and venture investing. And they didn’t sell tokens as part of that. There wasn’t any kind of pre-token rounds as part of that. And then they waited a year until after the platform was actually working and functional and there was a good amount of videos on there.”).

[4]See Odysee, https://help.odysee.tv/category-basics/whatisodysee/ (last visited Oct. 24, 2023). LBRY subsequently transferred this platform to its Odysee subsidiary.

[5] See LBRY, https://lbry.com/faq/what-is-lbry (last visited Oct. 24, 2023) (describing the LBRY protocol). As the district court noted when it granted summary judgment to the Commission, it was “generally uncontested” that “(1) LBC is a utility token designed for use on the LBRY Blockchain, and (2) some unknown number of purchasers of LBC acquired it at least in part with the intention of using it rather than holding it as an investment.” SEC v. LBRY, Inc., 639 F.Supp.3d 211, 220 (D.N.H. 2022).

[6] Commission’s Opposition to LBRY’s Motion to Limit the Commission’s Remedies at 9-11, 13-15, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. Dec. 19, 2022), ECF No.94 (requesting $22 million in disgorgement and a $22 million civil money penalty).

[7]Transcript of Motions Hearing Before the Honorable Paul J. Barbadoro at 50, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. Jan. 30, 2023), ECF No. 105; see also id. at 17 (“Let’s be fair here. You are not alleging that LBRY engaged in any fraudulent activity, first. Second, although I held that LBRY had fair notice sufficient to allow for the enforcement of the Securities Act against it for those offerings, the fact of the matter is that this was one of the first non-fraud cases that did not involve an initial coin offering . . .”); and id. at 51 (“You have to go back to the time this action was filed. This was relatively early on in the development of the SEC’s position with respect to crypto offerings . . .”).

[8]Commission’s Supplemental Brief on Remedies at 3-4, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. May 12, 2023), ECF No. 107 (requesting a $111,614 civil money penalty and withdrawing the request for disgorgement); SEC v. LBRY, Inc., 2023 WL 4459290 *5 (D.N.H. July 11, 2023) (imposing $111,614 civil money penalty).

[9] See, e.g., Rodrigo Seira, Justin Slaughter, and Katie Biber, The Current SEC Disclosure Framework Is Unfit for Crypto (Apr. 20, 2023), https://policy.paradigm.xyz/writing/secs-path-to-registration-part-iii (“As we have shown above, the current securities framework was tailor-made to regulate fundraising by centralized legal entities issuing securities, such as a company selling shares to the public in its ‘IPO.’ However, crypto assets differ fundamentally from securities and therefore raise different investor disclosure considerations.”).

[10]See, e.g., Coinbase, Re: Petition for Rulemaking – Digital Asset Securities Regulation at 5-6 (Jul. 21, 2022), https://www.sec.gov/rules/petitions/2022/petn4-789.pdf (“The SEC disclosure regime has historically focused on ensuring that investors have material information necessary to make an informed investment decision. Current disclosure requirements, however, do not cover a number of features unique to digital assets that would undoubtedly be considered important when making an investment decision. For example, investors would likely find information about the risk of a network attack, what kind of governance rights are embedded in which tokens, who has the ability to change the code underlying the assets or the network, and other features that do not exist with respect to traditional securities to be material. Additionally, investors would benefit from comparable disclosures across each digital asset security to assist in identifying differences among investment opportunities.”).

[11]SEC v. LBRY, Inc., 2023 WL 4459290, *3 (D.N.H. July 11, 2023).

[12] The End of LBRY, Oct. 19, 2023, https://odysee.com/@lbry:3f/theendoflbryinc:d?fbclid=IwAR1bBr_IiP-iP9F3hapkGWcn0D0rOpMG9B8mxN2L73DkJDA77B24uNGt52I.

[13]LBRY Inc, LLC (@LBRYcom), X (Feb. 9, 2023, 4:39 PM), https://twitter.com/LBRYcom/status/1623798813881163778. Public blockchains eliminate the need for reliance on a central intermediary, which makes censoring information stored on a blockchain more difficult.

[14]Email suggestions to [...].

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And before... Operation Choke Point 2.0: The Federal Bank Regulators Come For Crypto. Cooper & Kirk, Layers. Mar 2023. https://www.cooperkirk.com/wp-content/uploads/2023/03/Operation-Choke-Point-2.0.pdf

[As summarized by Alex Tabarrok, Mar 30 2023, https://marginalrevolution.com/marginalrevolution/2023/03/the-government-conspiracy-against-crypto.html]

Recent stories in the financial press have uncovered a coordinated campaign by prudential bank regulators to drive crypto businesses out of the financial system. Bank regulators have published informal guidance documents that single out cryptocurrency and cryptocurrency customers as a risk to the banking system. Businesses in the cryptocurrency marketplace are losing their bank accounts, or their access to the ACH network, suddenly, and with no explanation from their bankers. The owners and employees of cryptocurrency firms are even having their personal accounts closed without explanation. And over the past two weeks, federal regulators have shut down a solvent bank that was known to be serving the crypto industry and, although it is required to resolve banks through the “least cost resolution” to the Deposit Insurance Fund, the FDIC chose to shutter rather than sell the part of the bank that serves digital asset customers, costing the Fund billions of dollars.

This pattern of events is not random, and we have seen it before. This is not the first time that federal bank regulators, working with their State-level counterparts, have abused their supervisory authority to label businesses unworthy of having a bank account and worked in secret to purge disfavored lines of commerce from the financial system. Beginning in 2012, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System carried out a coordinated campaign to weaponize the banks against industries that had fallen out of favor with the administration—including gun stores, pawn shops, tobacco stores, payday lenders, and a host of other brick and mortar businesses. That campaign was called Operation Choke Point.

Our firm successfully challenged Operation Choke Point, and it was brought to a halt. The current bout of regulatory overreach against the crypto industry is illegal for much the same as reason as its predecessor. Specifically:

• Operation Choke Point 2.0 deprives business of their constitutional rights to due process in violation of the Fifth Amendment. It is well settled that when a federal agency attaches a derogatory label to an individual or business, and this stigmatizing label causes the business to lose a bank account or broadly precludes them from the pursuit of their chosen trade, the agency has violated the Due Process Clause of the Fifth Amendment, unless if first afforded the individual or business a right to be heard. This is precisely what the federal bank regulators responsible for Operation Choke Point 2.0 have done and continue to do by labeling crypto businesses a threat to the financial system, a source of fraud and misinformation, and a risk to bank liquidity.

• Operation Choke Point 2.0 violates both the non-delegation doctrine and the anticommandeering doctrine, depriving Americans of key structural constitutional protections against the arbitrary exercise of governmental power.

• By leveraging their authority over the banks to acquire the power to pick and choose the customers whom the banks may serve, the bank regulators have exceeded their statutory authority. The bank regulators are charged with supervising the safety and soundness of the banks; their effort to anoint themselves the gatekeepers of the financial system and the ultimate arbiters of American innovation and American economic life cannot be permitted to stand.

• The federal bank regulators are also refusing to perform their non-discretionary duties when doing so will benefit the cryptocurrency industry. State banks that are statutorily entitled to access the federal reserve system are being denied their rights solely because they serve the crypto industry. The federal bank regulators are not free to pick and choose which statutory obligations they duties they wish to perform.

• The federal bank regulators are evading the notice and comment rulemaking requirements of the administrative procedure act by imposing binding requirements on the banking industry through informal guidance documents. This is undemocratic, since it deprives the public of the right to comment on proposed rules, and it also runs contrary to the principle of judicial review, since courts lack the power to review “informal” agency actions.

• Finally, the federal bank regulators are acting in an arbitrary and capricious fashion by failing to adequately explain their decisions, by failing to engage in reasoned decision making, and by failing to treat like cases alike. It is difficult to imagine a more arbitrary and capricious agency action than simultaneously placing a solvent bank into receivership solely because it provided financial services to the crypto industry, while permitting insolvent institutions not tied to the crypto industry to continue operating.

...The persistent unwillingness of the nation’s bank regulators to follow the law and obey the Constitution calls out for Congressional action. Cracks are starting to form in the American financial system as its regulators increasingly abuse their power to achieve aims outside their authority and beyond their competence....We therefore urge Congress to perform its oversight role and hold these agencies to account.

The observed effect sizes of cash transfers on cognitive performance (short-term 2-5 wk, long-term 12-13 mos) were roughly three and four times smaller than suggested by prior non-randomized research

Does alleviating poverty increase cognitive performance? Short- and long-term evidence from a randomized controlled trial

Author links open overlay panel

, , , , , , , 

Cortex, Oct 2023. https://www.sciencedirect.com/science/article/abs/pii/S0010945223002241

Abstract

In this Registered Report, we investigated the impact of a cash transfer based poverty alleviation program on cognitive performance. We analyzed data from a randomized controlled trial conducted on low-income, high-risk individuals in Liberia where a random half of the participants (n = 251) received a $200 lump-sum unconditional cash transfer – equivalent approximately to 300% of their monthly income – while the other half (n = 222) did not. We tested both the short-term (2–5 weeks) and the long-term (12–13 months) impact of the treatment via several executive function measures. The observed effect sizes of cash transfers on cognitive performance (b = .13 for the short- and b = .08 for the long-term) were roughly three and four times smaller than suggested by prior non-randomized research. Bayesian analyses revealed that the overall evidence supporting the existence of these effects is inconclusive. A multiverse analysis showed that neither alternative analytical specifications nor alternative processing of the dataset changed the results consistently. However cognitive performance varied between the executive function measures, suggesting that cash transfers may affect the subcomponents of executive function differently.

Significance Statement

Prior non-randomized studies observed that alleviating poverty can largely improve the cognitive functioning of the poor by unburdening their cognitive bandwidth. Based on that, they also argued that unconditional cash transfers can be effective at breaking poverty traps. We tested this account both in the short- and the long-term in a randomized controlled trial using a one-off cash transfer – equivalent approximately to 300% of the participants' monthly income. Although we observed a small effect of receiving cash transfers both one month and a year after the treatment, cash transfers, in our study, did not significantly increase the cognitive performance of the poor. These findings suggest that the positive effects of poverty-alleviation policies on cognition are smaller than previous non-randomized research suggested.

Several studies that claim heat suppresses economic growth fall apart under scrutiny; but the debunker thinks it is astonishing "that eminent economists, in universities with vast resources available to marshal evidence, chose to ignore [his] critique"

Climate Change and ‘Poor’ South Korea. By David Barker

https://www.wsj.com/articles/debunking-study-saying-climate-change-hurts-economic-growth-16e07ec3

A study claims heat suppresses economic growth. It falls apart under scrutiny.

The WSJ, Oct. 12, 2023

[Temperature Shocks and Economic Growth: Comment on Dell, Jones, and Olken https://econjwatch.org/File%20download/1287/BarkerSept2023.pdf?mimetype=pdf]

Climate change hurts the economy, according to a celebrated 2012 paper by economists Melissa Dell, Benjamin Jones and Benjamin Olken. That paper is in the top 1% of all academic economics publications by citation count, and it has received glowing coverage in the media. The authors teach at Harvard, Northwestern and the Massachusetts Institute of Technology, respectively, and have received some of the highest awards in the profession. I took a closer look at their study, and it doesn’t hold up.

The study claims that higher temperatures suppress economic growth in poor countries. The claim falls apart when you look at their definitions. The authors study the period 1961-2003 and assign each country a binary designation as “poor” or “rich” based on whether their per capita gross domestic product was below or above the median for countries in 1960.

But some countries faced drastic changes in fortune at the time.

South Korea is “poor,” according to the authors. In reality, it was very poor in the early 1960s and then became very wealthy. When I simply reclassified South Korea as poor from 1961-76 and rich from 1977-2003, the study’s results nearly disappeared. When I allowed classifications of all countries to change when they moved either above or below median GDP per capita, the results disappeared completely. Any study with results that collapse after such a simple specification change shouldn’t be published in a peer-reviewed academic journal.

I also found that unusual economic circumstances greatly influenced countries’ results. Per capita GDP in Rwanda dropped by 63% in 1994, the year of the genocide. That year happened to be warmer than average, tricking the model into showing that high temperatures cause GDP to fall. Dropping 16 unusual country/year observations out of 4,924 eliminated the main effect the study reported. Other seemingly arbitrary aspects of their technique, when changed, weakened or eliminated their results.

I extended their data from 2003 to 2017 and added additional countries to the sample. I found again that correctly classifying countries as poor or rich eliminated their results. Going back to their original data source, I discovered that monthly temperatures are available, although they used only annual temperature data. If high temperatures really reduce GDP growth, it seems likely that this effect would be greatest in the warmest months of the year. I found no evidence to support that hypothesis in the original or the extended data. I also used a completely different set of data on GDP by country and found no effect of temperature on growth.

Climate activists need evidence that high temperatures reduce economic growth to advance their policies. Responsible economists have found that high temperatures have only small effects on the level of GDP. If temperatures rise as the Intergovernmental Panel on Climate Change expects—assuming no CO2 mitigation at all—then according to responsible economists, global GDP in 2100 will be about 2.6% lower than if there was no temperature increase. With normal economic growth, GDP per capita in 2100 will be five times today’s level. A 2.6% reduction in GDP in 2100 would mean GDP growth of 4.9 times instead of 5—hardly a catastrophe. But if researchers claim to show that higher temperatures will affect the rate of GDP growth, then the effects of heat by the year 2100 could be significant. That is why pro-climate researchers are so desperate to find an effect of temperature on growth.

Econ Journal Watch, which published my debunking, contacted the authors and gave them an opportunity to respond to my work. They declined. [Reviewer: Same happened with previous papers in which this author claimed to have debunked other papers]

It is astonishing that eminent economists, in universities with vast resources available to marshal evidence, chose to ignore my critique. But the mainstream media will ignore anything that reveals the weaknesses of climate research, and academic journals will continue to publish shoddy research that confirms the dogma of climate hysteria.

Mr. Barker runs a real-estate and finance company. He has taught economics and finance at the University of Chicago and the University of Iowa and worked as an economist at the Federal Reserve Bank of New York.

Pacifist ChatGPT-3.5 on Christian Wolff's views of civil war. Reflection on corruption of truth.

Question... Summarize Ch Wolff's position on civil war in Jus Gentium

Answer... Christian Wolff, a prominent 18th-century German philosopher, addressed the concept of civil war in his work "Jus Gentium." Wolff's position on civil war can be summarized as follows:

 

Wolff viewed civil war as a significant breach of the social contract and a breakdown of the rule of law within a society. He believed that the natural state of humanity was to live in a state of peace and that the fundamental purpose of political authority and government was to maintain that peace and order. Civil war, according to Wolff, was a grave threat to this essential objective.

 

Wolff argued that civil war was a manifestation of a failure of government, where a breakdown in the administration of justice, protection of rights, and maintenance of public order led to internal conflicts. He emphasized the importance of legitimate authority in preventing civil war, and he advocated for the establishment of just and effective legal systems as a means to prevent such conflicts.

 

In Wolff's view, civil war was destructive not only in terms of human lives and property but also because it hindered the development of human society and prosperity. He believed that societies could only flourish when governed by just laws and institutions, and civil war posed a direct threat to this development.

 

Overall, Wolff's position on civil war can be characterized as a rejection of such conflicts and a call for the establishment and maintenance of lawful and just governance to prevent them. His ideas were rooted in the broader Enlightenment emphasis on reason, order, and the rule of law as the foundations of a well-functioning society.

 

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More than a bit inaccurate. The breach was in rebellion, a form of unjust war: 1010, "Rebelles dicuntur fubditi, qui arma injufta fumunt adverfus Rectorem civitatis"; also 1011, "rebellio bellum civile non est [...] nec fubditi bellum civil excitantes funt rebelles."

But just revolt against the prince was civil war and could be justified: 1011, "Bellum vero civile dicitur , quo jufta arma adverfus Rectorem civitatis fumunt fubditi."

As expected, trash in, trash out.

[M]any witches she knew were talking about the degree program, announced last week, and were thinking about enrolling

Bad times in several fronts:

Christina Oakley Harrington, a retired academic of medieval history and the founder of Treadwell’s, a London bookstore specializing in literature on magic and spiritualism, said that many witches she knew were talking about the degree program, announced last week, and were thinking about enrolling.

This gal tries to deflect criticism:

“Not because they’re idiots and think it’s going to teach them how to wave a magic wand and do a spell,” Dr. Oakley Harrington said. “They’re people who have just a huge curiosity about the world and the way we perceive the seen and the unseen worlds.”

, but she doesn't succeed, IMHO.

Also, this guy adds:

Magic is sometimes thrown around as a synonym for false thinking, said Prof. Jeffrey J. Kripal, who helped to create the Rice University certificate program. “People have been practicing magical rituals and thinking about the world in magical terms much longer and deeper than the world religions,” Dr. Kripal said.

The pirates at Exeter Univ. even promise careers, "The recent surge in interest around topics pertaining to magic and occultism means that many of these professions have experienced a similar surge in demand for this expertise.":

In:

The New York Times, Oct 13 2023: A U.K. University Will Confer a New Title: A Master’s Degree in the Occult.  https://www.nytimes.com/2023/10/13/world/europe/exeter-university-magic-degree.html

The postgraduate degree, to be offered at the University of Exeter starting next year, will focus on the history of magic, folklore and rituals.

The Washington Post & Gavin Schmidt on Sept 2023 temps

1  Honesty at the WaPo...: A sudden spike in global warmth is so extreme, it’s mysterious, Oct 13 2023, https://www.washingtonpost.com/weather/2023/10/13/explaining-record-september-global-extreme-heat.

2  but, as expected because of our constitutional glitches, Gavin Schmidt, on this summer's "extreme" (we don't know!!!) temps breaks things with the hind legs:

'“It is indeed hard to give a good and informed answer to why this is happening — possibly for the first time.'

FIRST TIME? You are so good that you didn't have until now a hard time giving a good why? This guy went to the lawmaker for decades, it seems, saying he has good and informed answers to the whys he was working on...

Reminds me of Paul Krugman:

On election night 2016, I gave in temporarily to a temptation I warn others about: I let my political feelings distort my economic judgment. A very bad man had just won the Electoral College; and my first thought was that this would translate quickly into a bad economy. I quickly retracted the claim, and issued a mea culpa. (Being an old-fashioned guy, I try to admit and learn from my mistakes.) [Can the Economy Keep Calm and Carry On? Paul Krugman. The New York Times, Jan 01 2018, https://www.nytimes.com/2018/01/01/opinion/can-the-economy-keep-calm-and-carry-on.html]

Check other amusing comments at https://www.bipartisanalliance.com/2018/01/this-man-is-superhuman-and-very-rarely.html.

Until election night 2016, an economist's record was flawless :-) :-) :-). Amazing.

Gavin, honey, the tenor f your remarks is totally expected, but nauseating the same, n'kay?

Update: as of Oct 16 2023, he didn't update his X/Twitter account with his own contribution to the WaPo.

Chicago was once the "City of the Big Shoulders," the "Freight Handler to the Nation"

Chicago was the "City of the Big Shoulders" in 1914, the "Freight Handler to the Nation" [1]:

Laughing the stormy, husky, brawling laughter of Youth, half-naked, sweating, proud to be Hog Butcher, Tool Maker, Stacker of Wheat, Player with Railroads and Freight Handler to the Nation.

Now, the supermarkets leave the city ("Grocery store closures," says his press statement), so the mayor wants the city to own a supermarket:

"All Chicagoans deserve to live near convenient, affordable, healthy grocery options," said Mayor Brandon Johnson in a statement [2]. "A better, stronger, safer future is one where our youth and our communities have access to the tools and resources they need to thrive. My administration is committed to advancing innovative, whole-of-government approaches to address these inequities. I am proud to work alongside partners to take this step in envisioning what a municipally owned grocery store in Chicago could look like."

"The impact of inadequate food retail reaches beyond food access. Grocery stores serve as anchors in communities by employing community members and acting as a catalytic business for nearby commercial activity. Grocery store closures, especially in areas that rely on one grocery store provider, force residents to leave their neighborhoods and spend money outside of their communities to find healthy, affordable, enjoyable food options."

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Notes

1  Carl Sandburg's Chicago (1914): https://www.poetryfoundation.org/poetrymagazine/poems/12840/chicago

2  Mayor Johnson Announces The Exploration Of A Municipally Owned Grocery Store: Exploring a municipally owned grocery store is part of the Johnson administration’s goal of promoting food equity and accessibility for all Chicagoans. Sep 13 2023. https://www.chicago.gov/city/en/depts/mayor/press_room/press_releases/2023/september/MayorJohnsonAnnouncesTheExplorationOfAMunicipallyOwnedGroceryStore.html

Hopelessly optimistic despite the known evidence... "the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept"

We knew this already, although we didn't pay attention, and Tversky & Kahneman certified this before 1974 (Nobel for Kahneman in 2000+ for that work)... The formation and revision of intuitions https://www.sciencedirect.com/science/article/pii/S0010027723000148

Conclusion by these intelligent scholars... "the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept"

Abstract: This paper presents 59 new studies (N = 72,310) which focus primarily on the “bat and ball problem.” It documents our attempts to understand the determinants of the erroneous intuition, our exploration of ways to stimulate reflection, and our discovery that the erroneous intuition often survives whatever further reflection can be induced. Our investigation helps inform conceptions of dual process models, as “system 1” processes often appear to override or corrupt “system 2” processes. Many choose to uphold their intuition, even when directly confronted with simple arithmetic that contradicts it – especially if the intuition is approximately correct.

5 Concluding remarks

When we began studying the bat and ball problem, we assumed respondents missed it because they didn't bother to check. Accordingly, we assumed that they'd be able to solve it if we directed their attention to the features of the problem that differentiate it from the problem we thought they were unwittingly solving instead (bat and ball “lite”) or to the constraint the typical answer violates (that the prices differ by 100).

We discovered instead that many respondents maintain the erroneous response in the face of facts that plainly falsify it, even after their attention has been directed to those facts. Although subjects' apparent sensitivity to the size of the heuristic error merits further research, the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept; those whose thoughts most require additional deliberation benefit little from whatever additional deliberation can be induced.

Governmental chutzpah at a maximum: Before, insulation was a must, for the homeowner and for the planet; now, to qualify for a heat pump grant you don't need to install loft or cavity wall insulation

Press release: Boost to heat pump rollout with plans for cheaper and easier installation. Department for Energy Security and Net Zero and Lord Callanan, August 31 2023. https://www.gov.uk/government/news/boost-to-heat-pump-rollout-with-plans-for-cheaper-and-easier-installation

Simplified approach to qualifying for a heat pump grant could save consumers time and money, and variable grants will improve access.

Excerpts (my emphasis):

"Homeowners and small businesses could find it cheaper and easier to install heat pumps under new proposals set out today [...].

Proposed measures could mean varying the levels of grants that are made available, depending on the customer’s property type or existing fuel source.

This would make heat pump installations more affordable for even more households and small businesses, enabling them to benefit from low-cost and low-carbon heating.

Households could also save time and money through a simplified approach to qualifying for a heat pump grant by ***removing the need to install loft or cavity wall insulation first***.

These changes will help more homes and businesses move away from costly foreign fossil fuels and onto cleaner, cheaper homegrown energy [...] 

[...]

However, to make sure that new homes are zero carbon ready we plan to set the performance standard of the Future Homes Standard at a level which will effectively preclude new homes being built with fossil fuel heating."

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My comments & my emphasis:

1  It is sad that the governments put in writing with such ease that they will set performance standards "***at a level which will effectively preclude*** new homes being built with fossil fuel heating," regardless of what the citizen wishes;

It is amazing that, first, your needs or preferences play no part at all on your future, and second, this is done with so much peace of mind and comfort by the bureaucrats.

2  It seems the writer have great confidence in our inability to sum two and two, but we all realize that this plan is an admission that the costs of those systems the lawmaker favors are higher than the old systems' costs. All this gibberish of moving "away from costly foreign fossil fuels and onto cleaner, cheaper homegrown energy" is just that.

You need to add costs in the future gas boilers (via the new performance rules) & reduce costs in the newest systems because if not the citizen and the builders would not make the transition, which will make homes more expensive.

3  Also, supposedly the insulation that until now was mandatory to have had installed before qualifying for the taxpayer discounts (vouchers) was a consumer protection and and environmental must. But now, at the stroke of a pen, with no new law, the requirement is cancelled. What about those non-insulated homes that will make costlier the heat? And what the excess energy spent means to Pachamama's health?

4  In addition, what happens to the grantees that first insulated their homes? Will the taxpayer compensate them for the unnecessary costs?

5  And last... Will someone's head roll for the past lies about how cheaper it was to be to transition to the new systems?

But this is how we humans are. Even more when in power and have the others' lives and freedom at our disposal to play with them, as if we were gods.

The main reason why people—even introverted people—feel most authentic when they act extraverted is that it feels good

Why is authenticity associated with being and acting extraverted? Exploring the mediating role of positive affect. Joshua A. Wilt,Jessie Sun,Rowan Jacques-Hamilton & Luke D. Smillie. Aug 13 2023. https://doi.org/10.1080/15298868.2023.2246672

Abstract: Extraversion is linked to higher levels of authenticity. Why? Across four studies, we examined positive affect as a potential mediator. In Study 1 (N = 205), we tested our mediation model at the trait level. Then, focusing on the within-person state level: Study 2 (N = 97) involved a 10-week lab-based experience sampling protocol; Study 3 (N = 147) involved a preregistered week-long daily-life experience sampling protocol; and Study 4 (N = 129) involved a two-week naturalistic experience sampling protocol. In all four studies, positive affect explained moderate to high proportions of the effects of extraversion on authenticity (Study 1 = 29%, Study 2 = 38%, Study 3 = 87%, Study 4 = 86%). We discuss several theoretical interpretations.

Many studies tout interventions as effective when all that was observed was a rise in self-reported desire to learn more about how to reduce suicide or general knowledge about it; there is scant evidence that most suicide prevention strategies are effective, and the public doesn’t know

McCaffree, Kevin. 2023. “Pulling Back the Curtain on Suicide Research: Understanding Why People Die by Suicide Is a Harder Problem to Solve Than Most Social Scientists Admit.” SocArXiv. August 13. https://osf.io/preprints/socarxiv/vs8f4

Abstract

Suicide researchers often present their research in misleading ways to the public. In this short piece, I pull back the curtain on this behavior and explore why it might occur, and what might be done to improve our knowledge on this critically important issue.

Chapter 9 - On the Randomness of Suicide

Chapter 9 - On the Randomness of Suicide. C. A. Soper , Pablo Malo Ocejo and Matthew M. Large. Current Perspectives on Evolution and Mental Health, pp. 134 - 152

DOI: https://doi.org/10.1017/9781009030564.011[Opens in a new window]

Cambridge University Press

Print publication year: 2022

Summary

Converging theoretical and empirical evidence points to suicide being a fundamentally aleatory event – that risk of suicide is opaque to useful assessment at the level of the individual. This chapter presents an integrated evolutionary and clinical argument that the time has come to transcend efforts to categorise peoples’ risk of taking their own lives. A brighter future awaits mental healthcare if the behaviour’s essential non-predictability is understood and accepted. The pain-brain evolutionary theory of suicide predicts inter alia that all intellectually competent humans carry the potential for suicide, and that suicides will occur largely at random. The randomness arises because, over an evolutionary timescale, selection of adaptive defences will have sought out and exploited all operative correlates of suicide and will thus have exhausted those correlates’ predictive power. Completed suicides are therefore statistical residuals – events intrinsically devoid of informational cues by which the organism could have avoided self-destruction. Empirical evidence supports this theoretical expectation. Suicide resists useful prediction at the level of the individual. Regardless of the means by which the assessment is made, people rated ‘high risk’ seldom take their own lives, even over extended periods. Consequently, if a prevention treatment is sufficiently safe and effective to be worth allotting to the ‘high-risk’ subset of a cohort of patients, it will be just as worthwhile for the rest. Prevention measures will offer the greatest prospects for success where the aleatory nature of suicide is accepted, acknowledging that ‘fault’ for rare, near-random, self-induced death resides not within the individual but as a universal human potentiality. A realistic, evolution-informed, clinical approach is proposed that focuses on risk communication in place of risk assessment. All normally sapient humans carry a vanishingly small daily risk of taking their own lives but are very well adapted to avoiding that outcome. Almost all of us nearly always find other solutions to the stresses of living.

Democratic Republic of Congo: CMOC, the Chinese operator of the Tenke-Fungurume mine, agreed in April to pay $800mn to the government to settle a tax dispute (plus an export ban for the previous 10 months)

The new commodity superpowers. Leslie Hook in London, Harry Dempsey in Lualaba Province, and Ciara Nugent in Buenos Aires. Financial Times, Aug 8 2023

In the first part of a series, countries that produce the metals central to the energy transition want to rewrite the rules of mineral extraction

https://www.ft.com/content/0d2fba79-940f-4a28-8f4f-68f1e755200f

The red-brown landscape of Tenke-Fungurume, one of the world’s largest copper and cobalt mines in the Democratic Republic of Congo, is covered by tens of thousands of dusty sacks.

The bags stacked up by the roadside and piled next to buildings contain a stash of cobalt hydroxide powder equivalent to almost a tenth of the world’s annual consumption — and worth about half a billion dollars.

The haphazard stockpiles of this bright green powder, a key ingredient in electric car batteries, point to how the DRC, the world’s largest producer of cobalt, is starting to flex its muscles when it comes to the metals needed for the energy transition.

CMOC, the Chinese operator of the Tenke-Fungurume mine, agreed in April to pay $800mn to the government to settle a tax dispute which had seen the company slapped with an export ban for the previous 10 months.

And now the DRC government is undertaking a sweeping review of all its mining joint ventures with foreign investors. “We’re not satisfied. None of these contracts create value for us,” says Guy Robert Lukama, head of the DRC’s state-owned mining company Gécamines. He would like to see more jobs, revenue and higher-value mineral activities captured by the DRC.

The new energy order

At the entrance to his office, a cabinet display of highly mineralised rocks makes his point about the riches on offer. Lukama also advocates government intervention to keep cobalt prices high: “Excess of supply needs to be organised properly. Some export quotas will be useful,” he says. 

The DRC is far from alone. As the world moves from an energy system built on fossil fuels to one powered by electricity and renewables, global demand for materials such as copper, cobalt, nickel and lithium is transforming the fortunes of the countries that produce them.

The mining of certain metals is highly concentrated among just a few countries. For cobalt, the DRC accounts for 70 per cent of global mining. In nickel, the top three producers (Indonesia, the Philippines and Russia) account for two-thirds of the market. While for lithium, the top three producers (Australia, Chile and China) account for more than 90 per cent. 

Demand is only going to grow in coming years. Under current plans, none of these key commodities will have enough operating mines by 2030 to build the infrastructure necessary to limit global warming to 1.5C above preindustrial levels, according to the International Energy Agency.

By the end of this decade, the nascent lithium market needs to triple in size, while copper supply will be short by 2.4mn tonnes, it says. 

The growing demand for these commodities is starting to shake up both the economics and the geopolitics of the energy world.

The supply chains for some of these metals are becoming entangled in the rising tensions between the west and China, which dominates processing capacity for lithium, cobalt and rare earths and is considering restricting exports of some materials. Governments from Washington to Brussels to Tokyo are assessing where they can reliably source critical minerals without going through Beijing’s orbit.

This shift is also transforming some smaller and historically under-developed countries into commodity superpowers. And their governments are now intent on rewriting the rules of mineral extraction.

Many are trying to capture more of the value of their minerals, by doing more processing and value-added manufacturing domestically. Some are also attempting to control the supply, by nationalising mineral resources, introducing export controls, and even proposing cartels.

Where once some of these resource-rich countries were victims of exploitation that can date back to colonial times, now they are becoming empowered to take back control of their fates.

Just in the past 12 months, Zimbabwe and Namibia banned exports of raw lithium; Chile increased state control over lithium mining; while Mexico plunged its nascent lithium industry into uncertainty with a new review of mining concessions. Meanwhile, Indonesia added export controls on bauxite (a key ingredient in aluminium) to its pre-existing ban on exports of raw nickel ore.

“Every government will seek a deal with the mining industry that’s a fair one, that is a winner for the country and the winner for the industry,” says Jakob Stausholm, chief executive of Rio Tinto, which has itself recently been to the negotiating table in Chile and in Mongolia.

While he dismisses the idea that rising “nationalism” is behind this, he does acknowledge there has been a change. “It’s probably going to be more and more difficult just to mine and extract and export; very often a nation wants to have some processing facilities associated with the mining.”

The subtle shift in power towards the producers of sought-after battery metals is similar to other commodities shifts of the past, like the rise of coal during 19th century or the rise of tin during the 20th. But how far will producers go to take advantage of this moment? And how long can they make it last?

Indonesia’s opportunity

The poster child for harnessing value from materials is Indonesia, which produces nearly half of the world’s nickel, a key ingredient in electric car batteries.

Years of export controls on raw nickel have already succeeded in building an extensive domestic smelting industry, as well as battery plants and several electric vehicle factories. 

After the country banned exports of raw nickel in 2014, it attracted more than $15bn of foreign investment in nickel processing, primarily from China. Today Indonesia has banned exports of everything from nickel ore to bauxite, with an export ban on copper concentrate coming into effect next year.

Not everyone agrees with these policies, however: the EU has challenged them at the World Trade Organization and won an initial hearing. Indonesia is appealing against the verdict.

But government officials say the country’s efforts to build domestic industry and encourage manufacturing are straight from the same playbook that western countries used a century ago.

“This is not something we are doing out of the blue,” says Investment Minister Bahlil Lahadalia. “We are learning from our developed country counterparts, who in the past have resorted to these unorthodox policies.”

He points to the way the UK banned exports of raw wool during the 16th century, to stimulate its domestic textile industry. Or the US, which used high import taxes during the 19th and 20th centuries to encourage more manufacturing to take place domestically.

Lahadalia wants to take things one step further, by creating an Opec-style cartel to keep prices high for nickel and other battery materials. “Indonesia is studying the possibility to form a similar governance structure [to Opec] with regard to the minerals we have,” he says.

Whether or not that happens, the rise of nickel has certainly given Indonesia a higher profile. When President Joko Widodo, or “Jokowi” as he is typically known, visited the US last year, he met both President Joe Biden in Washington and Tesla CEO Elon Musk in an out-of-the way stopover in Boca Chica, Texas.

Jokowi later said he encouraged Musk to build Tesla’s entire supply chain in the country, “from upstream to downstream.”

Window of opportunity

Not every country will follow the same trajectory as Indonesia, however.

A new report from the International Renewable Energy Agency finds that metals producers will be able to wield influence in the short term, while production is concentrated and demand is growing, but they are unlikely to have the kind of lasting geopolitical power enjoyed by oil and gas producers.

One challenge is that battery metals like lithium are well distributed around the globe — at least in terms of geological reserves, if not in actual mine production. Today’s high lithium prices are making it efficient to develop deposits that were previously too expensive to access, and fuelling the broader expansion of hard-rock lithium mining in places like China and Australia.

An example of how mineral production can shift is lithium mining in South America. Chile is today the region’s dominant producer, but neighbouring Argentina, which has more business-friendly mining policies, could eventually overtake it.

Argentina’s 23 provinces control their own natural resources and have enthusiastically courted mining business. With roughly $9.6bn of lithium investment announced in the past three years, and 38 projects in the pipeline, officials say Argentina’s production should go up six-fold over the next five years.

“Investment in lithium has never stopped and I think that has to do with the fact that we are open to private investment, and with uncertainty about the policies being rolled out in other countries,” says Fernanda Ávila, Argentina’s mining minister.

Argentina’s position as an anomaly among South American lithium-holding countries has helped it attract investment, even as it has dried up in other sectors of the economy amid triple-digit inflation.

While some politicians in South America’s “lithium triangle” — Chile, Argentina and Bolivia — have floated the idea of an Opec-style lithium cartel, Ávila is less than enthusiastic about the idea. Although “we have a very good relationship with our neighbouring countries”, she says, “that’s not a topic that’s on the agenda.”

This is another reason why producing battery metals is different from producing oil: it is very hard to form a successful cartel.

During the 20th century, several key commodities were controlled by cartels. Tin was managed through the International Tin Council from the 1950s to the 1980s — and Indonesia, Bolivia and the then Belgian Congo were all producer members. Likewise coffee producers banded together in a cartel during the 1960s and ‘70s; and natural rubber producers maintained a cartel until the 1990s.

John Baffes, head of the Commodities Unit at the World Bank, who has studied these groups, says successful cartels have three characteristics: a small number of producers, who share a well-defined objective, over a short timetable.

He thinks it will be difficult for battery metals producers to form cartels. “You may have some countries that come together, to create an environment that may be beneficial for them, such as keeping prices high,” says Baffes. “But that will be the seeds of failure, because more entities will come in, from outside of the group.”

The speed at which battery technologies are evolving, and their ingredients changing, could also undercut efforts at cartelisation.

Unlike oil, which is very hard to replace as a fuel source, battery metals have a much higher risk of substitution. The laboratories developing new battery chemistries are constantly evolving their formulas to use less of the metals that are expensive or hard to acquire.

This is already starting to happen with cobalt, which carmakers are trying to reduce in their batteries due to its high cost, as well as concerns about human rights in the DRC.

In a cautionary tale of how quickly the demand outlook can change, the use of cobalt-free batteries in China has surged from 18 per cent of the EV market in 2020, to 60 per cent this year, according to Rho Motion, an EV consultancy. Manganese-rich batteries are also on the horizon, which could further reduce cobalt use.

“One of the consequences of the rise in non-cobalt batteries is that shortages previously forecast for cobalt for around 2024 and 2025 may not materialise,” says Andries Gerbens, a trader at Darton Commodities. “It may suggest cobalt prices remain lower.”

The recent fall in prices of cobalt, nickel and lithium could damp efforts by producer countries to extract more rent and build up domestic manufacturing. After cobalt and lithium experienced a huge price rally in 2021 and 2022, driven primarily by demand from electric vehicle batteries, the market this year has been much calmer.

A slowdown in China’s production of electric vehicles, combined with an increase in production of cobalt hydroxide and lithium carbonate, has brought their prices down 30 per cent and 40 per cent, respectively, during the first six months of the year, according to Benchmark Mineral Intelligence. 

Veteran miners say this cycle has played out many times before. Resource nationalism tends to increase when commodity prices are high, or when elections are approaching, says Mick Davis, founder of Vision Blue Resources and former chief executive of Xstrata. 

During these times, “[politicians] inevitably try to capture more of the rent than they initially envisioned and agreed,” says Davis. “The result always ends in tears. It means that the development of their mineral resources takes longer and longer to happen.”

Carpe diem

Yet while the cycle still allows producer countries to flex their powers, they are intent on seizing the moment however they can.

Earlier this year Chile, the world’s second-largest lithium producer, announced a plan to semi-nationalise the industry: it will give greater control of two giant lithium mines in the Atacama Desert to a state mining company when the current contracts end in 2030 and 2043, with both those projects and all future ones becoming public-private partnerships.

Chilean President Gabriel Boric said the plan to increase state control of lithium is the best chance Chile has to become a “developed economy” and to distribute wealth in a more just way. “No more ‘mining for the few’. We have to find a way to share the benefits of our country among all Chileans,” he said. 

And many producers are succeeding in taking steps up the value chain, in a bid to create sustainable economic growth. In the DRC, construction of the country’s second copper smelter is under way near the Kamoa-Kakula copper mine.

Chile, meanwhile, is offering preferential prices on lithium carbonate to companies who set up value-added lithium projects in the country. The first taker is China’s BYD, one of the world’s largest electric vehicle manufacturers, which announced in April that it would build a lithium cathode factory in northern Chile, with 500 jobs expected in the investment phase.

Argentina is set to open a small lithium ion battery factory — Latin America’s first — in September, with a larger plant to follow next year. Owned by state energy research company Y-TEC, the plant in the province of Buenos Aires will use lithium mined in Argentina by US firm Livent to produce the equivalent of 400 EV batteries a year.

Indonesia’s attempts to build out an electric vehicle industry are bearing fruit at an even larger scale. Earlier this year, Ford announced an investment in a multibillion-dollar nickel processing facility. This summer, Hyundai broke ground on a battery plant, its second manufacturing facility in the country.

As the energy transition starts to recast the systems of power and wealth that dominated the 20th century, the new battery metals producers are just getting started. Many see this shift in the power dynamic as a welcome change.

“It is absolutely essential that we rewrite the legacy of the mining industry, so that mineral rich countries can capture more of the economic value,” says Elizabeth Press, director of planning at Irena, and author of the report on critical minerals. “We see a greater awareness from both sides that things cannot continue as they were."

People underestimated how often their romantic partner toyed with the idea of breaking up the relationship

When one's partner wants out: Awareness, attachment anxiety and accuracy. Kenneth Tan, Laura V. Machia, Christopher R. Agnew. European Journal of Social Psychology, July 5 2023. https://doi.org/10.1002/ejsp.2969

Abstract: Can a person tell whether their romantic partner wants to break up and, if so, how is such accuracy associated with their own attachment anxiety? We examined these questions by proposing and assessing the construct of perceived partner dissolution consideration (PPDC), including its validity. We then assessed the extent to which partners were accurate in their perceptions of each other's dissolution consideration, focusing on the perceiver's attachment anxiety as a potential moderator. Specifically, in two studies involving couples, dyadic analyses of couple data showed that couple members significantly underestimated (negative mean-level bias) partner dissolution consideration and also projected their own dissolution consideration onto their partners. Couple members higher in anxiety were particularly accurate (tracking accuracy) in their assessments of dissolution consideration. Implications for partner perceptions and judgements of dissolution consideration on relationship functioning are considered.