Category Archives: Fiscal Freedom

Travelling is intrinsic to humankind. It is a human right. This right is enshrined under Article 15 of the Constitution of Pakistan. It stipulates that every citizen has the right to enter and move freely throughout Pakistan

Every citizen is free to walk on a footpath or drive on the roads. Additionally, several human rights are dependant on the right to freedom of movement. These include inter alia, the right to food, education, health care and employment. In the beautiful city of Karachi, one might like to see the stunning view of the sea and would be within their rights to drive from North Nazimabad to Clifton and enjoy some leisure time. However, how can one exercise any of these rights without proper and safe civil infrastructure? A simple twelve-minute commute from home to a workplace can turn fatal due to the dangerously crumbling of the civil infrastructure of Pakistan.

22 people, including three children, lost their lives in the three days of rain in Karachi. Some lost their lives due to electrocution, others due to the accumulated rainwater and billboards falling and collapsing. Many have faced the same fate in the previous year. Yet, the government failed to take any relevant and appropriate measures to prevent the unfortunate casualties. Who will look after the dependents of the (below) minimum wage earners who left their homes to go to work but never returned?

A three-member bench, headed by Chief Justice of Pakistan (CJP), while hearing a case about billboards and hoardings installed in Karachi, noted that the mayor of Karachi, Wasim Akhtar, always complained about lack of authority. He stated, Go home if you do not have authority; why are you sitting as a mayor? The CJP further stated, The mayor of Karachi seems to have a vendetta against the city, [even though] people voted for him so that he could do something for Karachi.

Mr Akhtar claimed that all powers of the KMC, including transport, building control and master plan were controlled by the Sindh government. Furthermore, he believed that the people of Karachi were suffering from the issue of transport and that Karachi was being neglected deliberately. He added that no department of the provincial government was performing, that is why the people were facing severe problems. Sadly, the blame continuously shifts from one political party to the other.

According to a report by the World Health Organisation (WHO), Pakistan ranked first in Asia for most deaths caused by traffic accidents. Furthermore, the Global Competitiveness report of 2019 ranked Pakistan at 105 for its infrastructure, 52 for its road connectivity and 67 for the quality of its road infrastructure. Even easily fixable issues such as potholes and sewers without vent covers are a common sight and have been the cause of many casualties, especially during the rain. Each year, several areas in Karachi such as Ayesha Manzil, Karsaz Road, II Chundrigar Road, Shara -e- Faisal, MA Jinnah Road get flooded due to the rain. Daily wage earners are left with no option but to either risk their lives or lose an earning day. Citizens are already struggling due to the pandemic. This adds on to their miseries.

The right to public transport is severely restricted. In a Case (2020 S C M R 622) concerning non-functioning of Karachi Circular Railway (KCR), the Supreme Court highlighted the issues relating to public transportation in Karachi.

The often untouched but real complexity of the concept of justice, however, is its duality

It was held that Article 9 (right to life) included the provision of transportation for citizens. The State is required to provide citizens with safe, humane and dignified means of travelling from one destination to another, within and outside cities. This right is essential towards ensuring the equality of citizens to eradicate social evils and to promote the social and economic well-being of the people. CJP Ahmed stated, the real issue for the people of Karachi is about making the KCR available to them and that too, at the earliest possible date, for that, transportation of the people from one area of the city to another area has almost become impossible due to absolute non-availability of road transport. The city is choked by motorcycles, on which, at times, the whole family of a poor person travels, which of course is very dangerous for their lives. Whatever other transport is there, it is altogether inhuman and below the dignity of a citizen. We note that no planning has been made so far for addressing the unending misery of the people of Karachi, as they are altogether starved of transportation. He further added, The mega city like Karachi, where the bulk of the population of the province of Sindh is settled, needs optimum and immediate attention by the State to provide these constitutional rights and safeguards to the people. The State, by rendering such services to the citizens, does not give any favour to them but such is the right of the citizens under the Constitution, which the State and its organ are duty-bound to perform.

The Court directed that Pakistan Railways, with the aid and assistance of all agencies in the country, had to revive and operate KCR and it shall do so positively within a period of six months, otherwise, the Court may take action against all relevant Government Executives and officials of Pakistan Railways for contempt of court and for not complying with mandatory provisions of the Constitution.

Th divisional superintendent of Pakistan Railways Karachi, Arshad Salam Khattak stated in July of this year that, as per the directives of Supreme Court, restoration of KCR, was the top priority of Pakistan Railways while claiming that the trackwork has been initiated. He added that the federal government has allocated Rs. 1.8 billion for the mass transit project in the Public Sector Development Programme, for the Fiscal Year 2020-21.

It has been revealed that Karachi ranks fourth in road accident deaths in the world (ref. department of geography, KU). While the restoration of KCR seems like a ray of hope amidst despair, a lot more needs to be done for the 14.91 million (as per UN) people that reside in the city. Restoration of KCR is a progressive step, but it is not enough.

The writer is Barrister of the Honourable Society of Lincolns Inn and teach United States constitutional law and civil law to Pakistani LLB students

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The right to freedom of movement in the City of lights - Daily Times

Today, America has a choice of two paths. We can embrace the foundational principles that created this nation of limited government and individual liberty. Or we can veer down the path of bigger, more intrusive government that promises to solve all our problems if we just turn over more of our freedom and our paychecks.

The difference between the two paths recently has become even starker as those on the left have gotten more radical. They have sought to destroy the lives of those who disagree with them, rewrite history to teach our children that America was illegitimate from the start, and express solidarity with those rioting across the country.

This future-altering choice reminds me of 1964 whenRonald Reaganspoke about a similar decision the American people faced. A Time for Choosing was Mr.Reagans indictment of big government policies and the deceptive lure of socialism. Amazingly, his warnings are just as applicable today as they were nearly six decades ago.

He gave A Time for Choosing shortly after President Lyndon Johnson introduced his Great Society proposal, which created new welfare programs, expanded food stamps, gave birth to Medicaid and Medicare, and inserted the federal government into local education, among other massive expansions of government.

Like conservatives of today, Mr.Reaganexpressed a grave concern that too many Americans saw more government as the solution to their problems, even though by 1964, history had already shown that bigger government actually was the problem.

For example, he spoke of how government programs to eradicate poverty hadnt solved much of anything: If government planning and welfare had the answer and theyve had almost 30 years of it, shouldnt they be telling us about the decline each year in the number of people needing help?

In recent years, weve spent about a trillion dollars a year on federal welfare programs. Divide that up among the 40 million or so Americans considered poor, and we could have given a family of four $100,000 a year. Yet, the poverty rate has stayed about the same as it was when the War on Poverty began in 1964. Tragically, most welfare programs have only been successful at creating perpetual reliance on government.

Mr.Reaganalso pointed out that, despite the fact that Washington was collecting unprecedented amounts of money from taxpayers in 1964, it never seemed to be enough: Today, 37 cents of every dollar earned in this country is the tax collectors share, and yet our government continues to spend $17 million a day more than the government takes in.

Washingtons poor fiscal restraint has only gotten worse. In 2019, the government spent $2.7 billion a day more than it took in, and currently, the national debt exceeds $80,000 for every man, woman, and child.

Yet today, despite years of failures, just like back then, the left continues to promote policies that usurp our freedom, harm our economy, endanger our security, and create an unhealthy dependence on government.

Today, theyre proposing government-run single-payer health care and cutting our military when those who want to do us harm are increasing theirs. They want to defund the police across America, putting out the neighborhood welcome mat for criminals everywhere. Theyve proposed climate legislation that would eliminate gas-powered cars, ground all airplanes, and forbid beef consumption. Their proposals would guarantee every person in America access to free health care, free college, and even a free paycheckpaid for with massive tax increases.

Mr.Reaganurged Americans to resist the lure of these types of big government programs coming from their leaders. He said that the issue was whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

As polls show more Americans warming up to socialism, conservatives need to take a few lessons from The Great Communicator. We must better convey how policy solutions based on the principles of free enterprise, limited government, individual liberty, traditional American values, and a strong national defense are what made this nation greatand what will continue to make life better for all Americans.

This is another time for choosing for America, and the path we choose will affect generations of Americans to come.

Those who promote socialism havent given up on their plans for America, and neither can we. If we are able to succeed in taking a coherent, compelling argument to the American people that spells out why free market, conservative solutions are better for them than the false promises of socialist Utopianism, we will, in Mr.Reagans words, preserve for our children this, the last best hope of man on earth.

That must be our mission, and the future of America surely depends on our success.

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Why Reagan's Call to Conservatism Needs to Be Heard Again Today - Heritage.org

Recently millionaires from different countries signed a petition under the name Millionaire for Humanity demanding their respective governments to raise taxes on them to help with the coronavirus pandemic. More than 80 individuals have signed the letter, and most signatories belong to the developed nations like the US, UK, and Germany. One of the key aspects of the petition is that taxes can only create a huge impact against charitable contributions, no matter how generous these contributions are. It might be a rare and historic moment to witness wealthy individuals quoting Tax us, Tax us, Tax us to fund the social sector like health, education, and security. The phrase rebalance our world through wealth tax seems like a unique moment of truth for the wealthy to play their part towards humanity.

But is the voluntary action enough to counter the states inaction to tax the wealthy? A few individuals voluntary actions are a drop in the ocean that might not even make a dent to make all wealthy accountable?Wealthy do indeed pay proportionate taxes according to their state laws in many parts of the world. But the bitter truth is that there are also increased tax avoidance cases by the wealthy, which the Paradise Papers, Panama Papers, and other evidence show. That is why there is a rigorous debate on taxing the rich even more.

According to Oxfams 2020 report worlds 2,153 dollar billionaires had more wealth than 4.6 billion people or 60% of the world population in 2019. Even in the aftermath of COVID-19 there has been no change in the millionaires status quo who actually saw their wealth grow exponentially. According to Forbes magazine report, 10 billionaires gained $51.3 billion or Rs 3.9 lakh crore (at exchange rate of Rs 76) in just a week between April 2 and 9 when the global economy was almost shut (except for a few essentials) and millions were losing their incomes and jobs.They did this through the stock market. These billionaires included Jeff Bezos, Mark Zuckerberg, Warren Buffett, Elon Musk, Bill Gates, and Mukesh Ambani.

Thus the paper analyses two main issues in relation to the petition. Firstly, why similar actions were not taken by the wealthy in the developing nations, with focus on India? Secondly, will a voluntary compliance mechanism via a petition resolve the ongoing issue of tax evasion by the wealthy?

The petition seems to appear as a global movement, but in reality, it is a mere representative of the few wealthy individuals residing in developed economies. The less participation and debate amongst the developing countries on taxing the rich can be understood in terms of their societal and cultural background. In India, it is easier to project it as a home to the poorest, but it is also a home for some of the worlds wealthiest people. In this context, it is essential to understand how the wealthier populations nature changed significantly since Independence and how a favourable tax system helped them to grow.

1.1. From Inherited wealth to private enterprise:

When the British left, a handful of business families and dynastic royalties were in charge of key economic industries. These dynastic royalties had amassed and inherited great fortunes over time due to their close ties to the colonial administration. Although there was poverty amongst the general population, the most lavish lifestyles were only enjoyed by the princely classes, some business houses and large zamindars (landlords).

Primarily the inherited wealth was the primary source of wealth amongst the wealthier population.

However, between 1961 and 1986, Indias notorious macroeconomic plight undermined a progressive effort to reduce the incumbent richs size and importance. Low economic growth was accompanied by a sharp reduction of the real value of wealth held by the top 0.1%. The backdrop for this decline was itself rooted in the integration of India when the government quickly took steps to abolish inherited wealth amongst the super-rich royalty. Hence inflation, progressive taxation, and nationalization that characterized the late 1960s and 1970s punished the outdated rentier class and expropriated much-existing wealth.

In the 1990s, domestic and external liberalization happened in India, resulting in the deregulation of taxation and private investment. This led to a rapid increase in stock market capitalization relative to GDP. In fact, given the tremendous rise in stock market capitalization, it seems possible that wealth concentration in India may have surpassed its pre-1970 levels in recent decades. This transformative wealth dynamics of the 1960s and 1970s are crucial to understanding how the elite class, once populated by inherited wealth, is now made up of private enterprises.

However, the rise of the new private enterprise did not address income inequality, only to make the rich richer and the poor more miserable. According to Oxfams January 2020 report Time to Care said, in 2019, the wealth of top 1% Indians went up by 46% while that of the bottom 50% by 3%. In 2019, the top 1% Indians held 42.5% of national wealth, which is, more than 4 times the wealth of 953 million people constituting the bottom 70%. The bottom 50% held just 2.5% of national wealth. According to the Credit Suisses Global Wealth Report of 2019, there were 7,59,000 dollar millionaires in India 2019, up from 725,000 in 2018 and 34,000 in 2010. This shows that even as a developing economy we do not have a dearth of wealthy people who are unable to participate in the petition.

1.2. How the tax system works favourably for the wealthy?

In developing countries, the governments primary focus is on resource mobilization, which dictates their tax system. This is due to the unequal income distribution. However, the tax system is also designed in such a way that makes it harder to tax the rich. This is because wealthy taxpayers political and economic power often prevents the government from developing fiscal reforms to increase their tax burdens.

Moreover, there are high personal exemptions and the plethora of other exemptions and deductions that benefit those with high incomes (for example, the exemption of capital gains from tax, generous deductions for medical and educational expenses, the low taxation of financial income). India has been an active recipient of FDI for decades. As a result, it results in lower effective tax rates for MNCs.

Simultaneously, the government keeps on slashing the corporate income tax rate during every budget, providing strong incentives for taxpayers to choose the corporate form of doing business for purely tax reasons. For instance, the Indian government slashed corporate tax to 22% (without exemptions) for domestic companies in September 2019, bringing the effective rate to 25.17% (with surcharge and cess). Such a move happened when the economy had nose-dived for several consecutive quarters.

According to the IMF, the combination of tax incentives and low corporate tax rates leads to the following:

Hence, it can be observed that wealthy individuals are provided with a plethora of tax incentives in a developing economy to prevent capital flight. However, this does not translate into high tax morale for these individuals due to increased tax evasion incidences. Now is the time for the wealthy to take part in the petition to share responsibility in rebuilding the economy.

2.1. Assessing the problem of tax evasion by the wealthy

Empirical data has shown (e.g., E. Hofmann, Voracek, Bock,& Kirchler, 2017b[1]), that the motivation to engage in tax avoidance and evasion increases with wealth. Recent studies indicate that tax evasion is directly proportional to wealth, with the top 0.01% of the wealth distribution (i.e., households with more than $40 million in net wealth) evades almost 30% of their wealth and income tax versus 3% by taxpayers overall (Altstaeder, Johannesen, & Zucman, 2017[2]). With the aim to minimize their taxes, it is easier for the wealthy to hire tax agents who are skilled in devising ways to achieve that(Sakurai & Braithwaite, 2001[3]).

Tax avoidance is a huge issue that amounts to $240 billion every year (Rs 18.24 lakh crore), according to OECD-G20s anti-tax avoidance initiative, Action Plan on Base Erosion and Profit Shifting (BEPS). Recent data by Fair Tax Mark shows that Facebook, Google and four other US tech giants, described as the Silicon Six (others being Netflix, Amazon, Microsoft, and Apple) had avoided paying $100 billion tax (Rs 760,000 crore) between 2010 and 2019. Due to tax evasion, according to 2019 IMF study, the non-OECD countries are losing 1.3% of their GDP or $200 billion of revenue every year while the OECD countries about 1% of GDP or close to $450 billion.

Nonetheless, the blame cannot be squarely put on the wealthy for causing tax evasion. It is the legal, political, and economic context of national tax loopholes which not only give the wealthy many more opportunities to avoid taxes than the average citizen but might also create an ideal environment that legitimises aggressive tax avoidance behaviour.

2.2. How the petition will help in combating massive tax evasion problem?

It can be said that the petition is an example of committed motivation by the wealthy which drives them to pay taxes because of a felt moral duty(Gangl et al., 2015[4]) or due to emotional stress, caused by anticipated guilt or shame (Blaufus, Bob, Otto, & Wolf, 2017[5]). However before delving into the question whether such an initiative will be effective to combat tax evasion in the long run, it is important to understand the social psychological process that motivates the wealthy to either pay or evade taxes.

The wealthy can easily identify and compare themselves with other wealthy individuals as a result of pychological process in relation to belonging to a particular group. As a result they imitate not only lifestyles but also tax behviours out of comparison and competition, because one does not want to fall behind in the financial race (Mols & Jetten, 2017[6]).For instance, if all wealthy friends move money to offshore tax havens, then the individual will also more likely do that.

Also, wealthy individuals do acquire a heightened sense of self-esteem, freedom, and perceived control, which increases the willingness to resist anything that hinders freedom (Brehm, 1966[7]). Taxes on the wealthy is a classical case where the rich find it as an attack on their personal freedom for which they look for ways to fight against it. In fact, experimental research shows that coercive fines and audits increase taxpayer reactance more than less coercive attempts by the tax authorities (Gangl, Pfabigan, Lamm, Kirchler, & Hofmann, 2017). Thus, when faced with coercive form of taxation wealthier individuals will be motivated to employ more resources (compared to the average taxpayers) to escape this situation. This might make the classical coercive attempts to increase the tax honesty less effective.

In such a scenario, the voluntary form of tax compliance might appear as the ultimate solution to fight against reactance. Such a form of compliance comes with trust in the tax system, and thus, people accept their tax obligations without threatening audits and fines. However, state measures like suspending fines and audits or tax amnesties, which gives leeway to rich taxpayers to repatriate their money from tax havens without being fined, also show no longterm positive effect (Alm & Beck, 1993[8]; Toro, Story, Hartnett, Russell, & VanDriessche, 2017[9]). Thus, it is important to combine voluntary and coercive tax measures to ensure fair taxation with a sense of tax honesty on the part of the wealthy individuals.

3. Conclusion

In view of the COVID-19 it is apparent that the petition by the few wealthy individuals brings in a wave of hope towards achieving fair taxation for the sake of humanity. However, the outreach is still not global, with a participation of a fraction of wealthy individuals from a few developed economies.Thus, there is a need to ensure the huge participation of wealthy people, not only from developing economies but those involved in tax evasion.

As discussed in the article, tax-related decisions of the wealthy are different from average taxpayers due to social psychological differences of belonging to a particular community. So a unique approach must be followed to motivate the wealthier population to pay their share of taxes.

3.1. Possible solutions:

There are many ways to motivate the wealthy, either in developed or in developing countries, to contribute more taxes to the benefit of society. It is true that mere public plea to join the campaign will not attract the attention of majority of wealthy individuals. On the other hand, coercive audit or fines to ensure fair taxation also does not help much towards the cause. For example, a fine of 18.8 million Euros imposed on Portugals football superstar Cristiano Ronaldo did not diminish the fame and positive image associated with the player.

One possible solution to influence the tax decisions of the wealthy is to combine coercive and voluntary state measures by publicly naming and shaming the wealthy individuals who resist to be part of the global campaign or pay their fair share of taxes. Thus, if such accusations on famous wealthy individuals like Chief Executive Officers or politicians violate ordinary citizens tax morale, these latter might start questioning the reasons for their tax honesty. For instance, after Greece published a blacklist of over 4,000 citizens who owed tax money to the state (Aswestopoulos, 2012[10]), it experienced a decline in the shadow economys size from 25.4% in 2010 to 22.0% in 2016 (Schneider, 2016[11]). This way, identifying evaders publicly may act as punishment and a deterrent from engaging in aggressive tax avoidance. However, it is equally true that shaming needs active public support and media coverage, without which the debate towards fair taxation will lose its grip. So the time is ripe for citizens to join their hands in the global movement towards fair tax and compel the wealthy to be accountable.

[1]Ackermann, L.,Becker, B.,Daubenberger, M.,Faigle, P.,PolkeMajewski, K.,Rohrbeck, F., Schrm, O.(2017, June).Cumex. The great tax robbery.Zeit Online.

[2]Altstaeder, A.,Johannesen, N., &Zucman, G.(2017).Tax evasion and inequality. Retrieved fromhttp://www.nielsjohannesen.net/wp-content/uploads/AJZ2017.pdf

[3]Sakurai, Y., &Braithwaite, V.(2001).Taxpayers perceptions of the ideal tax adviser: Playing safe or saving dollars?Working Paper No 5, The Australian National University, Centre of Tax System Integrity.

[4]Gangl, K.,Hofmann, E., &Kirchler, E.(2015).Tax authorities interaction with taxpayers: A conception of compliance in social dilemmas by power and trust.New Ideas in Psychology,37,1323.https://doi.org/10.1016/j.newideapsych.2014.12

[5]Blaufus, K.,Bob, J.,Otto, P. E., &Wolf, N.(2017).The effect of tax privacy on tax compliance An experimental investigation.European Accounting Review,26(3),561580.

[6]Mols, F., &Jetten, J.(2017).The wealth paradox. Economic prosperity and the hardening of attitudes.Cambridge, UK: Cambridge University Press.

[7]Brehm, J. W.(1966).A theory of psychological reactance.Oxford, UK: Academic Press.

[8]Alm, J., &Beck, W.(1993).Tax amnesties and compliance in the long run: A time series analysis.National Tax Journal,46(1),5360.

[9]Toro, J.,Story, T.,Hartnett, D.,Russell, B., &VanDriessche, F.(2017).Italy. Enhancing governance and effectiveness of the fiscal agencies. Interantional Monetary Fund. Fiscal Affairs Department. Retrieved fromhttp://www.mef.gov.it/inevidenza/documenti/Rapporto_FMI_Eng.pdf

[10]Aswestopoulos, W.(2012, January).Finanzamt stellt Liste der Schande ins Netz.Focus Online. Retrieved fromhttp://www.focus.de/finanzen/news/staatsverschuldung/liste-der-schande-viele-deutsche-unter-griechischen-steuersuendern_aid_706059.html

[11]Schneider, F.(2016).Estimating the size of the shadow economies of highlydeveloped countries: Selected results.CESifo Dice Report,14(4),4453.

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Pandemic Recovery: The Wars of Our Times - Modern Diplomacy

Five years after its inception in 2016-17, the Pradhan Mantri Fasal Bima Yojana (PMFBY) has run into rough weather. If farmers are dissatisfied with both the level of compensation and delays in settlement, insurance companies have shown no interest in bidding for clusters that are prone to crop loss. States (Bihar, West Bengal and Andhra Pradesh, Telangana, Jharkhand and now Gujarat) are opting out of the scheme and launching their own versions. They are unable to deal with a situation where insurance companies compensate farmers less than the premium they have collected from them and the Centre. The sums can be serious (about 2,700 crore in Gujarats case, according to the Chief Minister) for the States, given the current levels of fiscal stress. If this amount is not to benefit farmers directly, States run the risk of being accused of aiding insurance companies rather than farmers. In Maharashtras Beed cluster, farmers are up against the State government and insurance companies for not settling earlier claims, while the latter have decided to stay out of bids for this region for the current season. That said, it is in the nature of the insurance business for entities to make money when crop failures are low and vice-versa. Over the last three years, insurance companies have collectively paid claims amounting to about 85 per cent of the premium collected. The task ahead is to sweeten the deal for farmers and insurance companies. Madhya Pradesh is struggling to find insurers for its 11 clusters, having reportedly finalised just five so far (BusinessLine, August 14).

Insurance companies should bid for a cluster for about three years, so that they get a better chance to handle both good and bad years. The bids should be closed before the onset of the kharif/rabi season. At present, bids remain open even as the monsoon is in progress. As a result, farmers may feel persuaded to buy an insurance policy (the February 2020 guidelines have made the scheme optional) when the weather is adverse, even as the insurer feels persuaded to exit the cluster. There is also the troublesome issue of 50 per cent of farmers insurance dues being funnelled into less than 50 districts, raising questions on whether the scheme is being gamed by a few.

If the farmer is not enthused by crop insurance despite the 95-98 per cent subsidy on premium, it means that the product per se needs improvement. Farmers deserve a better choice of insurance products to meet the specifics of each crop or region. For this, insurance companies should be offered more freedom to operate. For now, the Beed model, where a company assumes liability only up to 110 per cent of the premium collected or shares gains in a good year with the State government, can emerge as a way out of the current mess.

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PM Fasal Bima Yojana needs a relook, as many States are opting out of it - BusinessLine

Emile DeWeaver has been counting his blessings during the pandemic. The 42-year-old has a good job with Pilot, a successful tech startup that helps companies handle bookkeeping and tax preparation. As a product specialist who deals with clients online and over the phone, he can work remotely, from a place in East Oakland he shares with four housemates. He pays his rent and owns some stock. He even has a handful of chickens in his backyard, in a small coop next to mature lemon and orange trees that pop with fruit.

Very few people from Oakland can afford to live in Oakland. I live in Oakland, DeWeaver told me on a recent evening, sitting in a chair in the backyard and drinking a mug of green-black tea. A wiry, bookish Black man, he wore glasses and a T-shirt that said Democracy Needs Everyone. Im very lucky, and thats generally the tenor of my life since being out of prison.

DeWeaver is one of only a few hundred Californians in the last decade who have had their criminal sentences commuted by the governor. When he was just 18, in a flash of violence in Oakland, he shot and killed a neighborhood rival at a dice game, resulting in a conviction for first-degree murder; he was also convicted of shooting and injuring a witness, and received a sentence of 67 years to life. Twenty years later, he was a published writer, the founder of his own justice-reform nonprofit and a leader of the first Society of Professional Journalists chapter at San Quentin State Prison. Everyone from Stanford professors to tech-industry professionals testified that he had transformed himself and was serving the community. In 2017, Gov. Jerry Brown agreed, commuting DeWeavers sentence to a lesser charge and allowing him to walk free a year later.

DeWeavers experience suggests that a violent act doesnt freeze someone in amber, that an offender is more than just the offense, and he says hes not an exception. There are tens of thousands of others in Californias 35 prisons who could be safely returned to their communities, he said, if the governor wanted to do it and if the public supported him. Which, judging by opinion polls, it wouldnt, because many people have an idea of violent offenders that are based on what media has built in our head, and based on our worst fears, DeWeaver said. People are reasonably afraid of that image.

But its not the image he has seen and lived: This idea of violent offender is way more complicated and counterintuitive than people understand.

Justice-reform groups have been shouting about the harms of mass incarceration for decades. But the need to rethink our idea of violent offenders has grown more urgent during the pandemic, when the virus has turned prisons into hot zones, killing incarcerated people and staff, straining hospital resources and putting entire communities at risk. COVID-19 has proved the point of the reformers Americas jam-packed prisons are threats to public safety and at the same time, it has created a window for change. It wont stay open for long, though, and no one wants to waste the chance.

In June, after touring San Quentin and documenting a range of unsafe conditions that were allowing the virus to burn through the buildings, a team of University of California health experts said that the prison should be substantially emptied, its population reduced by 50%, amounting to about 1,700 men. The same logic, the experts said, would apply to other overcrowded state prisons.

The total number of people incarcerated in California prisons is about 100,000; getting to a 50% reduction would mean letting go of 50,000 humans.

Is this possible? The short answer is yes.

The state has the power. The main obstacle is political: Three-fourths of all prisoners have been convicted of violent acts. This means that decarcerating the state system by 50% would require the release of large numbers of people convicted of violent crimes. Is it possible to do that safely? A wealth of evidence suggests that the answer, again, is yes. All it would require is a fresh look at the data. And some political courage.

The first thing to understand is that prison systems have been emptied before, successfully, in foreign countries and the U.S. including California.

Rewind to 2006, four years into Arnold Schwarzeneggers first term as governor. Decades of tough-on-crime policies had left Californias 35 prisons dangerously overcrowded: Designed to hold 80,000 souls, they teemed with 170,000, making it impossible for prison health care workers to provide decent medical care. In October 2006, Gov. Schwarzenegger declared a state of emergency, saying people in prison were in extreme peril, and a lawsuit filed by prisoners over the dangerous conditions, known as the Plata case, went all the way to the U.S. Supreme Court. The justices ruled in 2011 that crowding creates unsafe and unsanitary conditions and upheld an earlier court decision that required California to empty its prisons of almost 40,000 bodies within two years.

California pulled it off, making a series of policy changes. The corrections system redirected large numbers of people convicted of nonviolent crimes to county jails, and most parole violators were also diverted to jails instead of being returned to prison. Then, in 2014, state voters passed Proposition 47, which turned some felony drug and theft crimes into misdemeanors. Together, these efforts slashed the states prison population by a remarkable 45,000 souls by 2015.

Before the releases a process now known as Realignment California prison officials warned that the violent crime rate would surely rise. Instead, according to detailed studies by the nonpartisan Public Policy Institute of California and academic researchers, the states violent crime continued to hover at about the same level it was in the 1960s a historic low. There were no impacts on violent crime, said Magnus Lofstrom, the institutes policy director of criminal justice. Another way of putting this: Today there is about the same amount of violent crime in California as when the state incarcerated five times fewer people. After Realignment, data did show a brief uptick in property crimes like car theft, but even that fluctuation soon disappeared, returning to a baseline that is also historically low, Lofstrom said.

Realignment didnt touch the violent offender population. No one wanted to go there, California politicians least of all. For someone like Gov. Gavin Newsom, who grew up in the Willie Horton era, The idea of having 20,000 potential Willie Hortons out there is scary, said Jonathan Simon, professor of criminal justice law at UC Berkeley.

But according to Simon and other researchers who have put the system under the microscope, the picture isnt so black-and-white, and the hard lines drawn by the state are made of myth, not science.

The distinction were always making between violent and nonviolent people? We have to let go of it, because it has no correlation with public safety, said Hadar Aviram, professor of law at UC Hastings in San Francisco.

Aviram has spent decades gathering data on violent offenders and their journeys through the system. Over and over again, across states and eras, she has found that there is no link between a persons crime and the risk they may pose to the public. People who commit more serious crimes may be less of a risk, depending on how long they have been in prison and how old they are. Even those who committed murder can be safe to release: According to a study by the Stanford Criminal Justice Center, between 1995 and 2010, 48.7% of all paroled prisoners in California went on to commit new crimes, but among prisoners convicted of murder who were released, the rate was a minuscule 0.58%.

Some of the starkest evidence comes from Maryland. In 1996, a man serving a life sentence for murder, Merle Unger, claimed in a legal petition that his trial judge had given improper instructions to the jury. After years of court battles, the Maryland Court of Appeals finally agreed with Unger in 2012, opening a door for hundreds of other state prisoners most convicted of murder to challenge their own sentences on the same grounds. Since then, about 200 Ungers have won their freedom, and a study performed six years after the court decision found that less than 3% of those released had gone back to prison for a new crime or parole violation, well below the 40% recidivism rate for all Maryland offenders. The Ungers are just old men the same kind of men who mentored a young Emile DeWeaver.

Landing in the corrections system as a teenager, waiting in a county jail to be transferred to a state prison, DeWeaver received some crucial guidance from an older man there, he recalled. The man was connected to a prison gang known as the Black Guerrilla Family; his fingertips, as DeWeaver later wrote, were blunt and burned from hard labor and the hot glass of crack pipes. But instead of recruiting DeWeaver, the man gave him pointers on how to avoid joining a gang, and that advice allowed DeWeaver to stay independent and avoid physical altercations in dangerous prison yards for 21 years.

He saved my life, DeWeaver said. Everything I have ever learned, I learned from a violent offender.

Once you accept that some violent offenders can be safely returned to their communities, mass decarceration suddenly looks plausible, Aviram said, because now you can release broad categories of people. The state has already dipped its toe in this strategy during the pandemic, selecting a few limited groups no violent offenders, no sex offenders and no one convicted of domestic violence and speeding their already-scheduled releases, to free up space for social distancing. A few thousand have gotten out through these programs.

If you just zhush the categories a little bit, Aviram said, the few thousands turn into tens of thousands.

For instance, she said, you could release 5,000 people in custody who are older than 65. A slew of studies shows that offenders age out of street crime in their mid- to late-twenties, growing less violent as they get older, like the Ungers. So you wouldnt need to stop at 65. Prison life is brutal on bodies; the food is bad, the days are stressful. When youre 50 and youve spent 30 years in prison, she said, youve aged much faster than people on the outside. About a quarter of all those incarcerated are over the age of 50.

Aviram was just warming up. She kept zhushing the categories, reeling off numbers.

Next she wanted to talk about people with medical conditions like cancer, diabetes, bad lungs, heart issues sitting ducks for the virus. According to the states prison health care system, 50,000 incarcerated people have at least one high risk factor making them especially vulnerable to COVID-19.

And speaking of risk, she continued, what about the 60,000 prisoners considered low risk to reoffend?

The state gives incarcerated people a score from 1 to 5, with 1 being the lowest risk and 5 the highest. The score is supposed to measure the likelihood that a person will commit new crimes once released. Half of all people in the California system have the lowest score, 1.

Risk, of course, is a relative concept. According to the state, 48% of the lowest-risk offenders will be arrested on a new felony charge within three years of release; a score of 1 doesnt mean theyre safe. Avirams response: So what? Lots of people in the outside world are committing crimes, too.

I can do this all day, she said.

Next she talked about ways to speed up the existing release process. People get out of prison every day under normal circumstances simply because their sentences end. Already this year, the California Department of Corrections and Rehabilitation has expedited the release of a few thousand people who were within 180 days of freedom. By the same logic, Aviram said, the state could stretch that window from 180 days to a full year. Thats 30,000 more people.

How about releasing 4,000 women?

A few categories of incarcerated people who could safely be released, according to the experts.

Red light: While the logic behind releasing 50,000 inmates from state prisons is reasonable, the political hurdles are too great for this to happen.

105.9k: Total number incarcerated in California prisons

54.7k: Total number out on parole

46.9%: 2019 recidivism rate for offenders released from state prison in the 2014-2015 fiscal year

Today, the state locks up enough women to fill two entire prisons. But typically, when women are convicted of felonies, theyre the accomplices of men or theyre victims of abuse themselves, said Simon, the Berkeley professor. Recidivism rates for women are lower than for men, CDCR data show. Simon argued that most every woman now in a state prison could safely be sent home with some limitations on their mobility.

Altogether, by pulling people from some or all of these categories, the California prison system could identify the 50,000 people necessary to achieve a 50% cut in population. In May, Californians United for a Responsible Budget, a prison-reform coalition, urged the governor to conduct the releases in multiple waves, recommending that a minimum of 50,000 people be included in the first wave.

Amber-Rose Howard, the groups executive director, said that the virus has shown the prison system to be overstuffed, brittle and deadly. Now is the time that we fix things.

If the governor wanted to decarcerate at scale, he could. There are a few levers to pull. One is to declare an emergency, like Schwarzenegger did in 2006 to alleviate overcrowding; multiple groups have asked Newsom to do the same in the COVID-19 crisis.

Reformers say that large releases could also be achieved through the existing clemency process a kind of sword in the stone of the state Constitution, an awesome power there for Newsoms taking. Article 5 allows the governor to substitute less severe punishments for existing ones, giving him wide latitude to alter peoples fates by commuting their sentences. Legal experts say the power could be wielded to release entire categories of incarcerated people; in a 2016 paper, Simon pointed out that European countries have done this successfully to relieve prison overcrowding.

The legal scaffolding is there, said the Bay Areas Kate Chatfield, senior adviser with the Justice Collaborative, a national group that advocates decarceration. Somebody just needs to utilize it.

Unfortunately for those in prison, governors in California and other states tend to use their clemency powers sparingly, commuting the sentences of a few dozen handpicked individuals per year. Gov. Jerry Brown granted 283 commutations during eight years, more than his predecessors; so far, Newsom has issued 65 commutations in almost two years. The process is not based on science but on outmoded narratives of redemption; the application for a commuted sentence is submitted by the prisoner himself, and the core of it is a series of personal essays, which helps explain how Emile DeWeaver was able to win back his life.

Soon after landing in prison, he decided to become a professional writer. He had to do it mostly alone I was, for the most part, an island, he recalled because until he got to San Quentin, he didnt have access to writing groups or classes in other prisons. He learned sentence structure and comma placement from The Elements of Style, the famous writing guide by William Strunk and E.B. White. DeWeaver borrowed a copy of the book from another incarcerated man and stayed up all night writing down every word in longhand, creating a version for his own cells library.

Over the years, through writing, he agonized over the crime for which he was deeply sorry, processing the mistakes he had made and the traumas of his youth: It was my therapy.

And as he found healing, his literary skills improved. After about five years, he sent his first short stories to contests and literary journals. After nine years, he received his first kind, handwritten rejection letter from an editor. Then, three years later, he published his first piece of fiction, in the Lascaux Review: I had never felt better in my life.

Transferred to San Quentin in 2011, DeWeaver helped launch a nonprofit group called Prison Renaissance there that supports rehabilitation programs led by incarcerated people, and along the way, he built relationships with media and tech professionals who would boost his clemency application and help him land on his feet after his 2018 release.

This is another way that DeWeaver was lucky: Thanks to the strength of the network he created while locked up, he didnt struggle to find housing or a job when he got out. As many as 30% of those released under normal circumstances dont have a place to go, according to the state, and those returning to their communities from prison often need assistance with everything from finding an apartment to applying for a government I.D. and medical benefits.

A common argument against decarceration is that these reentry services cost a lot of money, and they do. But right now, the state invests almost nothing in reentry programs a few million here or there and because state taxpayers spend an average of $81,000 per year just to keep a single relatively healthy person locked up, decarceration would save money, too.

Think about how expensive it is now, Aviram said. Its always more expensive to keep people behind bars.

In the last two months, DeWeaver has been thinking and worrying about friends who are still inside. Everyone he knows at San Quentin has been infected.

He says he wishes people could see what he saw during his 21 years. Inside prison, he said, there is genius and theres compassion and theres creativity. There are models for compassionate living in prison that we could give to society. There are fathers we could give to their families. There are mothers we could give to their families. There are teachers, there are mentors, and the difference between him and them is that I spent a lot of time learning to write, DeWeaver said in his yard as the sun faded beyond the fence. And thats it. He paused. And that is a tragedy.

Editors note: This story has been updated by clarifying that Jonathan Simon favors sending women prisoners home with some limitations on their mobility, not necessarily through electronic monitoring.

Jason Fagone is a San Francisco Chronicle staff writer. Email: jason.fagone@sfchronicle.com Twitter: @jfagone

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California could cut its prison population in half and free 50,000 people. Amid pandemic, will the state act? - San Francisco Chronicle

Theres little chance of agreement on a new federal coronavirus relief plan without a compromise on the roughly $1 trillion in aid to beleaguered state and local governments that Democrats demand and the White House opposes.

Democrats have offered to cut their original stimulus proposal totaling $3.5 trillion by roughly one third, but insist on keeping help for states, cities, and other municipalities. President Donald Trumps negotiators, in addition to rejecting the Democrats topline number, have offered to put in no more than $150 billion for local assistance.

Negotiations are at a standstill heading into two weeks in which the Democratic Party then the Republican Party hold their respective presidential nominating conventions.

Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday the Senate is in recess and will not hold votes until Sept. 8 although senators, like members of the House, can be called back on 24 hours notice if a stimulus deal has been made.

Im still hoping well have some kind of bipartisan agreement here, some time in the coming weeks, McConnell said as he left the Senate floor.

The chasm between the two sides, and potential for the impasse to stretch well into September, has governors and mayors from both parties on the edge.

Although there are other areas of disagreement among them, McConnells plan to shield employers from liability for Covid-19 infections, and Speaker Nancy Pelosis (D-Calif.) drive to bolster the U.S. Postal Service the question of state aid may be the biggest stumbling block.

Senate Republicans included no aid for local governments in their initial proposal for the next stimulus bill released at the end of July. It did include $105 billion for schools, which are mostly funded by states and cities, and $16 billion in grants to states for coronavirus testing, contact tracing and surveillance. Read more from Billy House.

Photographer: Amanda Andrade-Rhoades/Bloomberg

McConnell at the Capitol on Thursday

Trump Says He Wont Veto Postal Funds: Trump said at a White House briefing he wouldnt veto a stimulus bill with funds for the U.S. Postal Service over his criticism of efforts to encourage mail-in voting during the coronavirus pandemic, Teaganne Finn reports. Earlier Trump directly tied his opposition to a proposed $25 billion financial lifeline for the Postal Service to his criticism of efforts to encourage mail-in voting during the coronavirus pandemic.

N.Y. Projects $62 Billion Tax Loss from Virus Over Four Years: New York is facing $62 billion in tax losses over the next four fiscal years as a direct consequence of the coronavirus pandemic, the state Budget Division said in a quarterly estimate. State Budget Director Robert Mujica called for the federal government to put an end to its months of dithering and deliver funding to states to avoid permanent cuts in services. Read more from John Herzfeld.

Schumer Backs $120 Billion Restaurant Fund: Senate Minority Leader Chuck Schumer (D-N.Y.) is backing a bipartisan bill that would create a $120 billion fund for restaurants, which have been ravaged by the coronavirus pandemic. Schumer said in a statement today that lawmakers should act now to pass this important legislation and other critical assistance that struggling small businesses and workers are in desperate need of.

His support increases the possibility that the bailout for restaurants could move forward on its own. The hospitality industry, which has had millions of job losses as states and cities instituted lockdowns and indoor dining restrictions to control the spread of the novel coronavirus, is central to the economy of Schumers home state, but food and drinking establishments have struggled with existing relief programs for small businesses. Read more from Ben Brody.

The House will meet in a pro forma session at 2 p.m.

The Senate will meet in a pro forma session at 10 a.m. The Senate will next return for business on Sept. 8 at 3 p.m.

Trump heads to Bedminster, N.J., where he is scheduled to deliver remarks at 5 p.m. to the City of New York Police Benevolent Association. The president earlier said in a New York Post interview he is campaigning in the New York because he believes it is in play during his re-election after sometimes violent protests erupted in New York City following the death of George Floyd,Justin Sink reports. Trump lost New York by 22 points in 2016.

Trump Clashes With Biden on Mask Requirements.: Trump clashed with Democrat Joe Biden over requirements to wear masks to prevent the spread of the coronavirus after the former vice president called for governors to issue mandates in their states. Every single American should be wearing a mask when they are outside for the next 3 months at a minimum, Biden told reporters yesterday in Delaware. Its not about your rights, its about your responsibilities as an American.

Trump rejected Bidens approach later in the day. If the president has the unilateral power to order every single citizen to cover their face in nearly all instances, what other powers does he have? Trump said. We want to have a certain freedom, thats what were about. Read more from Mario Parker and Jordan Fabian.

Reopening Indian Country Schools Called Risky: The federal governments September goal for reopening 53 American Indian schools for in-person classes is premature and may be politically motivated, Democrats said, even as access to broadband for virtual learning lags. The Bureau of Indian Education plans to reopen brick-and-mortar schools in 10 states on Sept. 16, it told tribal leaders in a memo last week. Trump has pressured K-12 schools for weeks to reopen this fall. While many districts have rejected Trumps pressure, the 53 schools are run by federal officials. Read more from Andrew Kreighbaum and Tripp Baltz.

Covid-19 Shaping Up to Be Battle for Years: The coronavirus pandemic is likely to be a challenge for years to come even with a vaccine, according to pharmaceutical and public-health experts. While a vaccine will provide some measure of protection to societies around the globe, the virus is likely to flare up from time to time and be constantly battled, much like the flu and other pathogens.

We know this virus is not going away any time soon. Its established itself and is going to keep on transmitting wherever its able to do so, Soumya Swaminathan, chief scientist for the World Health Organization, at the How Covid-19 Is Reshaping the Global Healthcare Ecosystem event hosted by Bloomberg Prognosis. We know we have to live with this. Read more from Drew Armstrong and Riley Griffin.

Fake Shot Could Be Ticket to Front of Vaccine Line: Thousands of Americans who volunteer for coronavirus vaccine trials, only to get a placebo, should jump toward the front of the line when a shot is available, bioethicists said. Front-line health workers will likely get the vaccine first once one is ready, but parsing out who should go next for limited shots among 300 million Americans is something medical experts and policymakers are already wrestling with. One of the groups up for some extra consideration is volunteers who received a placebo in clinical trials. Jeannie Baumann has more.

Vaccine Rush Leaves Little Recourse for Anyone Harmed: Americans who suffer adverse reactions to coronavirus vaccines that the U.S. is racing to develop will have a hard time getting compensated for injuries from the drugs. Thats because pandemic-related claims for vaccines will be routed to a rarely used federal program set up to encourage drugmakers to help combat public health emergencies. It spares pharmaceutical and device makers from costly liability lawsuits in exchange for taxpayers compensating injured patients though it doesnt guarantee theres funding to do so.

Since it began in 2009, the program has paid out less than $6 million, and it has yet to receive any dedicated U.S. government funding for Covid-19. Read more from Valerie Bauman and Susan Decker.

What Kamala Harris Did on Climate and Fossil Fuel: An unlikely consensus developed soon after Biden selected Sen. Kamala Harris (D-Calif.) as his running mate. Trump and his petroleum-industry allies fell into near perfect agreement with climate activists and environmental groups on one thing: Harris is an aggressive crusader against fossil fuels. While that position might be useful for riling political bases on both sides, a review of evidence from her career as a prosecutor and legislator indicates that Harris appears more moderate than either side admits. And her record shows that her motivation has been driven more by climate justice than climate change. Read more from Leslie Kaufman.

Biden Campaign Raising $1 Million an Hour Since Harris Pick: Bidens deputy campaign manager Rufus Gifford said in a Twitter post last night the campaign had raised $48 million in the 48 hours since Harris was announced as Bidens vice presidential pick, Chelsea Mes reports.

Trumps Net Worth in Office Is Down $300 Million: As the presidential election nears, American voters are sure to be asked if theyre better off financially than they were four years ago. Trump isnt. The presidents net worth has declined $300 million in the past year to $2.7 billion, erasing 10% of his fortune since he took office, according to the Bloomberg Billionaires Index, Caleb Melby and Tom Maloney report.

Trump to Deliver Speech From White House Lawn: Trump plans to accept the Republican presidential nomination from the lawn of the White House, saying the location would save money on security costs. Some critics including Sen. John Thune (R-S.D.), the second highest-ranking Republican in the Senate had suggested giving the nominating speech on federal grounds could be problematic. Read more from Justin Sink.

Bloomberg Joins Lineup of Speakers: More speakers, including two former Democratic presidential candidates, have been added to the lineup for next weeks virtual Democratic National Convention: Former New York City Mayor Michael Bloomberg and entrepreneur Andrew Yang. Other speakers will be Michigan Gov. Gretchen Whitmer, Los Angeles Mayor Eric Garcetti, and Rep. Cedric Richmond (D-La.), among others, Misyrlena Egkolfopoulou reports. Michael Bloomberg is the majority owner of Bloomberg Governments parent company.

Scott to Speak at GOP Convention: Sen. Tim Scott (R-S.C.) will make a speech at the Republican National Convention the week of Aug. 24 as the party seeks to make Honoring the Great American Story its overarching theme, according to an official with Trumps campaign. Its unclear which night Scott, the only Black senator who is frequently discussed as a potential 2024 Republican presidential candidate, will speak. Read more from Kevin Cirilli.

Judge Demands Evidence of Mail Voting Fraud: A federal judge appointed by Trump gave the presidents campaign one day to turn over evidence to support its claims of widespread mail-in voting fraudor admit that it doesnt exist. The Trump campaign and Republican National Committee are suing Pennsylvanias secretary of state, Kathy Boockvar, and local election boards over their plan for mail-in balloting for the Nov. 3 elections. Trumps team said the plan provides fraudsters an easy opportunity to commit fraud. Bob Van Voris has more.

Trump Claims Foreign-Policy With UAE-Israel Deal: Trump hasnt yet delivered the deal of the century hes long sought in the Middle East, but his administrations efforts have produced an agreement between Israel and the United Arab Emirates that even opponent Biden is calling a historic step. Its an accomplishment that comes with plans for a White House signing ceremony on the cusp of the November presidential election after Trump failed to deliver on efforts to secure a nuclear deal with North Korea or force Irans leaders to the negotiating table through a maximum pressure campaign of sanctions. Read more by David Wainer, Glen Carey and Jordan Fabian.

Trump Team Wades Again Into Balkan Mediation: Serbia and Kosovo accepted an invitation by Trumps envoy to meet at the White House next month even as the European Union leads the efforts to reconcile the wartime foes amid recurring U.S. attempts to mediate as well. Richard Grenell, Trumps point man for the region, scheduled the meeting for Sept. 2, more than two months after a similar US initiative fell through when an EU-backed court unveiled war crimes charges against Kosovo President Hashim Thaci. Top officials of the neighbors later convened in Brussels to jumpstart long-stalled negotiations in talks both sides described as difficult. Theyre expected to convene again under EU auspices on Sept. 7. Read more from Misha Savic and Gordana Filipovic.

Kim Jong Un Replaces Premier Amid Flood, Virus: North Korean leader Kim Jong Un replaced the premier he named about a year ago and lifted a lockdown on the border city of Kaesong put in place on concerns a former defector who crossed back from South Korea brought coronavirus with him. The moves announced in state media reports come as North Korea is facing flooding set to wipe out farmland and deal another blow to its already staggering economy. Read more Jeong-Ho Lee and Seyoon Kim.

Jimmy Lai Says He Was Arrested on Trumped Up Charges: Hong Kong media tycoon Jimmy Lai said he was arrested on trumped up charges, pushing back against landmark national security legislation that has raised questions about press freedoms and the future of the democracy movement. Theyre trumped up. I cant go further on the details, Lai said in an interview with Bloomberg Television today. Read more from Iain Marlow and Stephen Engle.

Retailers Are Amazons New Washington Foe: More than a dozen trade groups are launching a new coalition aimed at forcing e-commerce companies such as Amazon to take stronger measures to fight stolen or counterfeit goods sold on their platforms. The industry associations, which represent Walmart, Target, and Best Buy, among other companies, announced today they are founding The Buy Safe America Coalition to back legislation that would require digital marketplaces to verify information about third-party merchants.

The lobbying push by retailers will only add to the scrutiny facing companies such as Amazon and EBay over their role in allowing counterfeit products from bicycles to jeans to be sold around the world. Lawmakers, Trump and companies have all been exploring ways to curb the deluge of fake goods online. Read more from Naomi Nix and Rebecca Kern.

U.S. Faces Bumpy Antitrust Road With Big Tech: Tech giants have enormous influence over what we buy, read, see and think. But is their market power illegal? At a July 29 House hearing, lawmakers leveled monopoly-abuse accusations at the leaders of Amazon, Apple, Google and Facebook. David McLaughlin, Ben Brody and Naomi Nix sift through the charges, compile the evidence, summarize the CEOs defenses and ask the experts if the lawmakers made their case. Read more.

DOJ Says Yale Discriminates Against Asians, Whites: The Justice Department said it has notified Yale that the school illegally discriminates against White and Asian American applicants in its admissions process, after a two-year probe. The government said Yale violates federal civil rights law by discriminating against applicants based on race and national origin because race is the determinative factor in hundreds of admissions decisions each year, Patricia Hurtado reports.

Methane Curbs Axed in Reboot of Obama Rules: The Trump administrations withdrawal of curbs on methane emissions from oil wells and other equipment threatens to disadvantage U.S. energy producers touting natural gas as a green alternative to coal. The final rules, unveiled by Environmental Protection Agency Administrator Andrew Wheeler yesterday, may provoke a backlash in Europe, where regulators have developed a tougher methane strategy. Jennifer A. Dlouhy has more.

CFPB Penalties Decline: The Consumer Financial Protection Bureaus penalties against companies have significantly decreased in recent months as the agency has pivoted its focus to small-time violators. The bureaus enforcement actions, under Director Kathy Kraninger, have slowed down compared to former Director Richard Cordrays tenure. Monetary penalties and consumer redress amounts have also declined under Kraninger, in part because the CFPB has targeted smaller companies that in many instances are unable to pay. Read more from Evan Weinberger.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com

Continued here:

What to Know in Washington: Stimulus Talks Stuck in $1T Ditch - Bloomberg Government

Getty Images U.S. President Donald Trump said on Sunday: I dont agree with the statement that if everyone wears a mask everything disappears. But he appears to be softening his stance on the issue.

President Trumps resolve may be cracking at least when it comes to face masks.

On Monday, Trump tweeted (TWTR)a photo of himself wearing a mask with a presidential seal, writing, Many people say that it is Patriotic to wear a face mask when you cant socially distance. CNN (T)reported that the presidents falling poll numbers likely played a role in his latest decisions to wear a mask and resume his daily 5 p.m. update on the coronavirus pandemic.

On April 3, the Trump administration and the Centers for Disease Control and Prevention reversed their policies on face masks and said all Americans not, as they previously said, just medical workers should wear cloth face coverings. As of Tuesday, COVID-19 had claimed at least 140,909 lives in the U.S. and infected at least 3.8 million people.

Unlike New York Mayor Bill de Blasios mandate to wear masks in stores, however, the federal governments recommendations are voluntary. Whats more, Trump at the time signaled his resistance to wearing a mask. I dont think Im going to be doing it, he said. Wearing a face mask as I greet presidents, prime ministers, dictators, kings, queens I just dont see it.

During an interview on Fox News on Sunday, journalist Chris Wallace asked Trump if he would introduce a federal mandate to wear face masks in public places where social distancing is not possible. No, I want people to have a certain freedom, Trump replied. I dont agree with the statement that if everyone wears a mask everything disappears.

Asked if he took responsibility for not having a federal policy on coronavirus during the interview, Trump replied, Look, I take responsibility always for everything because its ultimately my job too. I have to get everybody in line. Some governors have done well, some governors have done poorly. We have more testing by fair than any country in the world.

As of Tuesday, COVID-19 had infected 14.7 million people globally. It had killed more than 610,149 people worldwide, according to Johns Hopkins Universitys Center for Systems Science and Engineering. New York, once the epicenter of the virus in the U.S., has still had the most deaths of any state (32,506), followed by New Jersey (15,715) and Massachusetts (8,433).

CityWatch: CDC confirms that coronavirus already spreading in New York City when European travel ban went into effect in March

On Feb 29, the surgeon general tweeted his opposition to the public wearing masks. Seriously people: STOP BUYING MASKS! he wrote. They are NOT effective in preventing general public from catching #coronavirus, but if health-care providers cant get them to care for sick patients, it puts them and our communities at risk! He reversed course in April.

The public was, understandably, confused. N95 masks appear to be effective for health-care workers. One study says N95 medical-grade masks do help filter viruses that are larger than 0.1 micrometers. (One micrometer, um, is one millionth of a meter.) The coronavirus is 0.125 um. The masks have efficacy at filtering smaller particles and are designed to fit tightly to the face, the study said.

The markets appear torn between optimism on vaccine research and the economic impact of new infection surges, particularly in California, Arizona, Florida and Texas. The Dow Jones Industrial Index (DJIA)closed higher Monday as investors looked toward the prospect of further fiscal stimulus. The S&P 500 (SPX)and Nasdaq Composite (COMP)also ended higher.

Video: Masks or not? Doctors debate best way to get economy back to normal (Fox Business)

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In apparent U-turn, Trump tweets photo of himself wearing a mask: 'Many people say that it is Patriotic to wear a face mask' - MSN Money

On July 14, U.S. president Donald Trump signed an executive order ending Hong Kongs preferred trading status. In it, Trump cited several reasons in support of his decision that are nothing more than political rhetoric and slogans based on twisted facts. In essence, by enacting the Hong Kong National Security Law (NSL), the Chinese Government was said to have violated the Sino-British Joint Declarationthe announcement signifying Hong Kongs handover from British to Chinese sovereignty in 1997as well as the autonomy promised to Hong Kong under that agreement.

There could be nothing further from the truth.

Firstly, the Joint Declaration made no reference to matters of national security, nor did it say which power had the exclusive right to make national security laws. It is an affront to common sense to suggest that the high degree of autonomy granted to Hong Kong should somehow deprive Beijing from legislating for the safety of the whole nation. Article 18 of Hong Kongs constitution, the Basic Law, stipulates that national laws can be applied to Hong Kong by way of promulgation and thus holds open the possibility that there are matters outside the autonomy of Hong Kong. National security is precisely such a matterand it is the responsibility of any federal government, including that of U.S., to legislate on it.

Secondly, the NSL strikes a proper balance between safeguarding the interest of the entire nation and protecting individual rights of people of Hong Kong under the one country, two systems political formula.

Article 4 of the NSL confirms that the two most respected international conventions on human rights, and other similar safeguards in the Basic Law, will continue to apply.

Article 5 further confirms that the rule of Law will also continue to apply.

Most significantly, Article 40 stipulates that Hong Kong will have jurisdiction over all cases under the NSL save those rare situations covered by Article 55which, essentially, are cases in which China is facing a major and imminent threat to national security, where there is foreign involvement, or when the Hong Kong government is unable to govern.

These clear provisions suggest that the central government is showing considerable respect for the special situation in Hong Kong.

In the vast majority of cases, the main responsibility for the enforcement, application and adjudication of the NSL will lie with Hong Kong enforcement agencies and courts. Thus, any suggestion that that the NSL will not be properly appliedor applied in such a way as to be in breach of human rights standards or the rule of lawis a serious accusation totally without basis or evidence against the integrity of our enforcement agencies and judges.

In any event, let us not forget human rights and freedoms are not without limits. The International Covenant on Civil and Political Rights, which applies to Hong Kong, says very clearly that every right and freedom enshrined therein is subject to legal restraint by reason of national security. This is a universal standard, understood even in the U.S.

Lastly, it is worse than superficial to think Hong Kongs high degree of autonomy is just about freedom of speech or expression. The autonomy of Hong Kong is about our ability to maintain our own financial, economic, and legal systemsand having our own independent judicial, currency, fiscal, logistics, international flight management, land, health care and social welfare systems. Its about having our own economic, trading, cultural and sports status internationally, not to mention our own electoral system, our own independent right to carry out political reform, and more as defined in the Basic Law.

Even as regards the freedom of speech and expression, any visitor in recent days will testify that after the passing of NSL nothing much has changed. People and the press continue to vilify the SAR and central government in Beijing if they want to without repression. Media that are leaving are doing so of their own accord, not because they have been expelled. Those who want to come or leave are free to come or leave. There have been no mass arrests and no exodus. These facts speak for themselves. And they all show that Hong Kong is freer than you think. Today and tomorrow.

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Contact us at editors@time.com.

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Hong Kong is Freer Than You Think - TIME

Eakinomics:Death and Your Federal Government

Eakinomics apologizes for its recent obsession withdeath, but Ive been in search of topics cheerier than the pandemic, Congress, or the administration. The occasion for todays observations is Gordon Grays superbpieceon Numident and the Death Master File (DMF), a piece that was, in turn, prompted by the fact that Treasury recently sent on the order of 1 million checks, totaling about $1.4 billion, to dead people. This is actually a pretty low error rate since there were roughly 160 million checks sent out, but it did raise the question: How was Treasury supposed to knowwho had died?

As it turns out, the Social Security Administration (SSA) is the chief curator of death records in the federal government with the obvious goal of ceasing payment of Social Security benefits upon death. According to Gray, the SSA maintains a master registry containing identifying information of all holders of assigned Social Security numbers, known as the Numerical Index File, or Numident. When an individual dies, that fact is denoted in their Numident record with a date of death and a death indicator to facilitate a stoppage in paid benefits. It obtains data largely from states (as well as funeral homes, families, etc.).

Sounds like a plan. Unfortunately, over time state data increasingly has come in the from the state-based Electronic Death Registration System (EDRS), and the Social Security Act prohibits sharing data obtained from the states with benefit-paying agencies. This prohibition presumably would halt the flow of the death data across the government except for the fact that in 1978 a Federal Postal Service official realized that the Service might be spending millions on pension benefits to deceased postal workers.He sued the SSA for access to the death data under the Freedom of Information Act (FOIA), under the logic that dead people did not have privacy protection under FOIA.

The suit was never decided; instead SSA agreed to a consent decree that remains in place to this day. Under the decree, the SSA produces a subset of the Numident that strips out the state-supplied data and is shared with other agencies. This subset goes by the nifty name of Death Master File. Among the agencies restricted to using the DMF instead of the full Numident is the Treasury Bureau of the Fiscal Service, which sent the checks. As Gray notes, Beginning with the 4thbatch of payments, the IRS did provide the Bureau of the Fiscal Service with temporary access to the full death file until the IRS was able to set up its own internal process for doing so thereafter.

In short, there was a patch on the system for purposes of sending the checks, but the larger information-sharing challenge remains.

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Death and Your Federal Government - AAF - American Action Forum

President Trumps resolve may be cracking at least when it comes to face masks.

On Monday, Trump tweeted TWTR, +0.48% a photo of himself wearing a mask with a presidential seal, writing, Many people say that it is Patriotic to wear a face mask when you cant socially distance. CNN T, +1.74% reported that the presidents falling poll numbers likely played a role in his latest decisions to wear a mask and resume his daily 5 p.m. update on the coronavirus pandemic.

On April 3, the Trump administration and the Centers for Disease Control and Prevention reversed their policies on face masks and said all Americans not, as they previously said, just medical workers should wear cloth face coverings. As of Tuesday, COVID-19 had claimed at least 140,909 lives in the U.S. and infected at least 3.8 million people.

Unlike New York Mayor Bill de Blasios mandate to wear masks in stores, however, the federal governments recommendations are voluntary. Whats more, Trump at the time signaled his resistance to wearing a mask. I dont think Im going to be doing it, he said. Wearing a face mask as I greet presidents, prime ministers, dictators, kings, queens I just dont see it.

During an interview on Fox News on Sunday, journalist Chris Wallace asked Trump if he would introduce a federal mandate to wear face masks in public places where social distancing is not possible. No, I want people to have a certain freedom, Trump replied. I dont agree with the statement that if everyone wears a mask everything disappears.

Asked if he took responsibility for not having a federal policy on coronavirus during the interview, Trump replied, Look, I take responsibility always for everything because its ultimately my job too. I have to get everybody in line. Some governors have done well, some governors have done poorly. We have more testing by fair than any country in the world.

As of Tuesday, COVID-19 had infected 14.7 million people globally. It had killed more than 610,149 people worldwide, according to Johns Hopkins Universitys Center for Systems Science and Engineering. New York, once the epicenter of the virus in the U.S., has still had the most deaths of any state (32,506), followed by New Jersey (15,715) and Massachusetts (8,433).

CityWatch:CDC confirms that coronavirus already spreading in New York City when European travel ban went into effect in March

On Feb 29, the surgeon general tweeted his opposition to the public wearing masks. Seriously people: STOP BUYING MASKS! he wrote. They are NOT effective in preventing general public from catching #coronavirus, but if health-care providers cant get them to care for sick patients, it puts them and our communities at risk! He reversed course in April.

The public was, understandably, confused. N95 masks appear to be effective for health-care workers. One study says N95 medical-grade masks do help filter viruses that are larger than 0.1 micrometers. (One micrometer, um, is one millionth of a meter.) The coronavirus is 0.125 um. The masks have efficacy at filtering smaller particles and are designed to fit tightly to the face, the study said.

The markets appear torn between optimism on vaccine research and the economic impact of new infection surges, particularly in California, Arizona, Florida and Texas. The Dow Jones Industrial Index DJIA, +1.14% closed higher Monday as investors looked toward the prospect of further fiscal stimulus. The S&P 500 SPX, +0.57% and Nasdaq Composite COMP, -0.35% also ended higher.

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Trump tweets photo of himself wearing a mask in apparent U-turn: Many people say that it is Patriotic to wear a face mask - MarketWatch