Authored by Simon White, Bloomberg macro strategist,

The Swiss franc is poised to continue falling against the Japanese yen as the Swiss National Bank shifts its focus from inflation to growth, while the Bank of Japan moves closer to tightening policy.

The Swiss-yen is a great macro FX pair that has risen relentlessly in this cycle – to near all-time highs – as the policies of the respective central banks diverged.

But at its meeting last week, the SNB unexpectedly held rates steady, while emphasizing growth concerns. It also reduced its 2025 inflation forecast to under 2% from 2.1% previously, intimating it now believes current policy settings are sufficient to bring inflation back to target.

This will give the SNB more leeway with the currency. While accelerating inflation was a concern, FX weakness was not tolerated, but now the SNB may be happier to allow some weakening in the franc.

Sight deposits at the SNB – since liquidity support for Credit Suisse ended – continue to show broad downwards momentum, suggesting the SNB is not heavily intervening to support the franc.

The Swiss central bank, though, is unlikely to let the franc fall too much against the euro, but there is less of a constraint versus the yen. Not only has the Swiss currency rallied strongly against it over the last three years, on a long-term REER basis the franc is one of the most structurally undervalued currencies, while the yen is the most structurally undervalued. The scope for the currency pair to converge to long-term underlying values is large.

The BOJ has not yet exited its negative interest-rate policy, but it is heading in that direction as inflation and inflation expectations remain uncomfortably high. When it does so, the yen is biased higher, as domestic yields become incrementally more favorable.

Swiss-yen bounced on Friday after the BOJ decided not to raise rates, but notably the pair is now below the lows when the SNB held rates steady on Thursday.

That’s suggestive the upwards trend is over, with potentially significant downside ahead as the BOJ and the SNB’s policies become less divergent.

At a moment some key European allies, Poland chief among them, have shown signs they could scale back defense aid to Ukraine (Poland chief among them, which recently declared it’s done), Germany’s Foreign Minister has admitted that some “advanced” Germany systems supplied to Kiev are faulty. 

Annalena Baerbock admitted in a fresh interview with CNN that some Leopard 1 tanks sent to Ukraine are outdated and “not really functioning”. She said this when pressed over why Berlin has thus far rejected approval for supplying Taurus long-range missiles. 

Sophisticated journalist Amanpour asks 560 Baerbock about faulty Leopard tanks.
560 Baerbock replies, some German systems were ‘really old fashioned’ and not ‘functioning.’ pic.twitter.com/8xnnBtnEUr

— Alex Christoforou (@AXChristoforou) September 26, 2023

“We have to be clear on every detail, how does it work, who can actually operate them (the missiles),” Baerbock told CNN’s Christiane Amanpour. “Yes, it takes some time. I totally understand there is not enough time in Ukraine, but when we deliver it, it has to work.”

Her logic was that given past German systems have not been effective and even proved faulty, there should be no rush to provide even more, especially if they are sophisticated missile systems.

In many cases Ukrainian operators have been rushed through hasty training programs, and problems become more acute when not enough time is spent. And it’s not just operators that have to be caught up to speed, but the necessary assisting and support crews. 

She said in the interview that all this can be explained by Europe not having been confronted “with a brutal war lately.”

It must be recalled that the German government was among the first to declare that it wouldn’t “stand in the way” in Eastern European countries like Poland if they wanted to transfer German-produced tanks to the Russia-Ukraine war zone. 

Since then, Russian media has aired multiple examples of Leopard tanks being destroyed and burning while declaring a ‘victory’ over West-supplied main battle tanks. 

Baerbock’s surprise admission of sending faulty and old tanks to Kiev comes the same week that the Zelensky government announced the arrival of M1 Abrams tanks from the US. In this case too, training provided by US instructors out of Germany was likely hasty – given it takes sometimes years for crews to be combat ready. 

Recently, Baerbock was humiliated in a press conference while standing alongside a frustrated and irate Ukrainian foreign minister, who said this….

Kuleba wipes his feet on Annalena Baerbock. When asked if she gave him any hope that Germany will supply Ukraine with Taurus missiles:

“No, she didn’t go beyond the official position of the German government… but you’ll do it anyway, it’s just a matter of time”

Embarrassing. pic.twitter.com/9oSChwxJ1e

— Olga Bazova (@OlgaBazova) September 11, 2023

Authored by Richard Cook via ScheerPost.com,

It is likely that billions of people around the world view the conflict in Ukraine as a proxy war being waged by the U.S. against Russia. US President Joe Biden has pledged to aid Ukraine’s pursuit of victory “for as long as it takes,” without defining what the end state might be. Russian President Vladimir Putin has interpreted U.S. intentions to mean a fight “to the last Ukrainian.” 

Anyone with a discernible pulse is aware of the danger that the conflict could escalate into a conflagration large and destructive enough to morph into World War III. The threshold would likely be crossed once nuclear weapons were unleashed. The military doctrines of all nuclear powers stipulate that such an attack would justify an in-kind response, though without always ruling out the same for lesser provocations of a potentially existential nature. 

President Biden has said “the world faces the biggest risk of nuclear Armageddon since the 1962 Cuban Missile Crisis.” The context of Biden’s statement came a month earlier on September 21, 2022, when Putin warned the West he was not bluffing when he said he would be ready to use nuclear weapons to defend Russia against what he said was “nuclear blackmail.” Earlier, in an April 21, 2021, speech, Putin said:

We really do not want to burn bridges. But if someone mistakes our good intentions for indifference or weakness and intends to burn or even blow up these bridges, they must know that Russia’s response will be asymmetrical, swift, and tough. Those behind provocations that threaten the core interests of our security will regret what they have done in a way they have not regretted anything for a long time. 

Another to speak of nuclear war has been former Russian president and prime minister Dmitry Medvedev, now deputy head of the Russian Security Council and one of Putin’s top advisers. Commenting on Ukraine’s highly touted but now failed 2023 “spring offensive,” Medvedev said in July 2023 that if Ukraine succeeded in taking Russian sovereign territory—including Crimea plus the four Donbass oblasts (regions) annexed by Russia last year—Russia “would have to use nuclear weapons by virtue of the Russian Presidential Decree.” This decree stated that any assault on Russian territory justified a nuclear response.

On Hiroshima Day, August 6, 2023, UN Secretary General Antonio Guterres said, “The drums of nuclear war are beating once again. Mistrust and division are on the rise. The nuclear shadow that loomed over the Cold War has re-emerged.” One who has predicted world war has been UK Defense Minister Ben Wallace. On May 19, 2023, he warned “that the UK could enter a direct conflict with Russian and China in the next seven years and has called for an increase in military spending to counter the potential threat.” Speaking to London’s Financial Times, Wallace said “a conflict is coming with a range of adversaries around the world.”

More recently, independent commentator Tucker Carlson, who has said the U.S. is intentionally seeking war with Russia, remarked in a September 2023 interview on The Adam Corolla Show that the Biden administration would attempt to stay in power by starting a “hot war” with Russia before the 2024 election. Carlson argued that the U.S. was “already at war” with Russia in Ukraine. He added, “I don’t think we’ll win it.” 

Meanwhile, Russia’s new generation of Sarmat ballistic missiles, capable of carrying ten or more nuclear warheads, have been deployed for combat duty.

Of course we now must wait and see if recent action by House Republicans to launch an impeachment inquiry against Biden, along with his worsening senility, put enough of a crimp in his style to force a postponement of any irretrievable decisions. 

But feeding into Carlson’s fears are statements by U.S. Acting Deputy Secretary of State Victoria Nuland in a September video clip supporting Ukrainian strikes against Russian territory. Nuland said that one “axis” of U.S. strategy is to “put some of Russia’s most precious assets at risk.” 

This comes as the U.S. is planning to send long-range Army Tactical Missile Systems (ATACMS) to Ukraine, with Germany promising Jupiter missiles, and as the UK plans to send RAF fighters to the Black Sea. Russian Defense Minister Sergey Shoigu said in June 2023 that use of Western-supplied weapons to launch such attacks” would mean the full involvement of the United States and the United Kingdom in the conflict.” 

So was Biden correct? Is nuclear Armageddon looming? Or is “brinkmanship” today merely “bluffmanship?”

75 YEARS OF CONFLICT

Of course, potential nuclear war between the U.S. and Russia, especially in its previous iteration as the Soviet Union, is nothing new. World War II was scarcely over before figures like Winston Churchill and U.S. banker Bernard Baruch began raising alarms about the existence of an “Iron Curtain” across Europe and the start of a “Cold War.” 

But even before World War II began, the Roosevelt administration accepted the recommendation of studies by the Council of Foreign Relations, financed by the Rockefeller Foundation, that the U.S. should aim for  postwar global military domination. Note that there was nothing in the U.S. Constitution that even remotely supports such a goal. The closest the U.S. might have come was the myth of “Manifest Destiny” that once supplied the ideology for coast-to-coast expansion; i.e., “from sea to shining sea.”

At the end of World War II, with the British Empire crumbling and Europe in ruins, there were two clear victors: the U.S. and the Soviet Union. The accepted logic of U.S. planners now dictated that the latter must go. 

Stalin is said to have asked to join the newly-formed NATO but was rebuffed. He responded by forming the Warsaw Pact. The post-war standoff had begun and, 75 years later, has not ended. With the Soviets being accused of fomenting leftist revolutions around the world, the U.S. military has been laying plans for a U.S.-Russian nuclear exchange ever since. While the military sought an advantage favorable to a nuclear first strike, the everyday working objective toward the Soviets was “containment.” Meanwhile, the U.S. began its own long history of generating coups friendly to its interests with the CIA’s overthrow of governments in Iran in 1953 and Guatemala in 1954. 

In 1956, Eisenhower’s Secretary of State John Foster Dulles proclaimed a U.S. policy of “brinkmanship.” Speaking of the potential for nuclear war in a Life magazine interview, he said, “If you are scared to go to the brink, you are lost.”  In 1961, President John F. Kennedy seemed to have stared down Soviet Premier Nikita Khrushchev over the planned installation of nuclear weapons in Cuba. Unknown publicly, JFK had already pulled U.S. nukes out of Turkey.  

Nor are proxy wars anything new. They began with the Korean War. Of course, there were U.S. “boots on the ground,” but North and South Korea also fought against each other with Russia/China and the U.S./UN having the backs of each respectively. The Vietnam War was fought with U.S. troops and weapons aiding the South Vietnamese against the Russian-backed Hanoi regime and its ally, South Vietnam’s Viet Cong. The Korean conflict became a stalemate; Vietnam, a debacle. 

But change was in the wind. JFK moved to revolutionize the discourse with his now-famous proposal for world peace delivered at American University on June 10, 1963. In the Soviet Union, Khrushchev denounced Stalin and proposed a new era of “Peaceful Coexistence” with the West. In the early 1970s, President Richard M. Nixon and his national security advisor Henry Kissinger sought détente with the Soviets along with their epochal opening to China. 

Rapprochement with the Soviets was sabotaged by the Reagan military build-up in the 1980s and the lies of Soviet supremacy promulgated by the Committee on the Present Danger. The U.S. was also creating the Mujahedeen to attack the Soviet military presence in Afghanistan. This was part of Reagan’s engagement in his own proxy wars—called the “Reagan Doctrine”—against leftist regimes in Asia, Africa, and Central America, with U.S.-supported “death squads” in El Salvador and elsewhere. 

It was under Reagan that the faction known as the “Neocons” began their infiltration of the national security apparatus. These included “Trotskyite” intellectuals from New York like Irving Kristol; alumni of Democratic Senator Henry “Scoop” Jackson’s staff like Paul Wolfowitz and Richard Perle; “Team B” CIA analysts empowered by short-term Director George H.W. Bush, leading to the future prominence of Bob Gates; icons of the military-industrial complex like “Father of the H-Bomb” Edward Teller; Donald Rumsfeld and Dick Cheney, who’d been joined at the hip to each other and to President Gerald Ford; Reagan’s Director of Central Intelligence William Casey; and many future dark personages like John Bolton. 

It was Casey who famously said at one of Reagan’s early staff meetings, “We will know our disinformation program is complete when everything the American people believes is false.” This statement defined perfectly the future program of what we call today the “Deep State” and its mass media megaphone, especially outlets like The New York Times, the Washington Post, and CNN. 

One of the first major Neocon projects—Iran-Contra—devolved into scandal, with Reagan and Vice-President Bush both claiming ignorance under the “plausible deniability” fiction. Another was Reagan’s pet project—the Strategic Defense Initiative—lampooned as “Star Wars.” 

Purporting to be offended by the U.S.-Soviet nuclear standoff, whereby peace was assured only by the logic of “Mutually-Assured Destruction,” Reagan proposed an armada of “defensive” weapons in space. The military-industrial complex seized on Star Wars as a cornucopia of lucrative research and development projects that ended when space shuttle Challenger blew up. The space shuttle was being converted to a testing platform for space weaponry, as I saw personally at NASA when I worked there in 1985-1986. One of the war planners’ bright ideas was to send the president to orbit in the space shuttle, from which he could safely direct military operations. 

But the Star Wars project, which was not revived until the 21st century, nevertheless witnessed vast planning of space battle stations, nifty theoretical space weaponry like the X-ray laser and devices later called “rods from God,” and cost-benefit studies that included calculations of how many tens of millions of Americans could die in a space-based nuclear war against the Soviets while still allowing the U.S. to claim victory. 

Meanwhile, it was after the horrendous exposures of CIA assassinations, media subversion, poisoning of subjects with LSD, and other misdeeds arising from the Church Committee hearings in 1975, that the CIA began to retreat into the shadows. Under Reagan came authorization of the National Endowment on Democracy, whose signature mission became “color revolutions” and later the “Arab Spring.” Amid the horrors, though, Reagan was yet able to sign the Intermediate-Range Nuclear Forces Treaty with Soviet Premier Mikhail Gorbachev, rolling back the number of nuclear weapons for the first time. 

But things took a decided turn for the worse under President George H.W. Bush with the 1992 Wolfowitz Doctrine that reformulated the old CFR plans for global U.S. military dominance and contained the ominous warning that Russia was the only nation on earth with the power to destroy the U.S. By now, the U.S. had begun its next phase of global conquest with Bush’s war against Iraq—Desert Storm. The goal was total military colonization of the Middle East, with the “Greater Israel” project so near and dear to the hearts of the Neocons an obvious beneficiary. The Iran-Iraq War of 1980-6, with the U.S. arming both sides, doubtless had the same underlying purposes. 

The oddity in the designation of Russia as the worst of enemies named in the Wolfowitz Doctrine was that a year earlier, the Soviet Union had collapsed, ceasing to exist in 1991, with U.S. hawks declaring that the Cold War was over and that the U.S. had won. Their corollary was that the Reagan military build-up had forced the Soviet economy into receivership because they couldn’t keep up with U.S. military spending. 

But in a December 17, 2022, interview on the online news platform, The Duran, Jack F. Matlock, former U.S. ambassador to the Soviet Union, said that “the idea that we spent them to defeat was absolutely wrong.” He said the U.S. “did not win the Cold War.” He said the Soviet Union broke up because the Cold War was over by 1989 and that it was local nationalism that tore it apart. He added that the end of the Cold War was “negotiated as equals.”

But here was the rub: the Wolfowitz Doctrine proved that it wasn’t “communism” that the U.S. wanted to defeat, as Russia was no longer a communist state. Matlock said that Gorbachev had abandoned communism in his UN speech of December 7, 1988. Nor was the U.S. really pushing for “democracy.” Overnight Russia had become more democratic than many of the authoritarian regimes the U.S. had been supporting around the world for decades, such as those in Saudi Arabia and Turkey. Rather it was Russia as a geopolitical enemy that the U.S. was targeting; meaning, in Russia’s eyes, its very existence as a territory, a state, and a civilization.

In order to promote peace with the West, Gorbachev had agreed to the reunification of East and West Germany as one nation and part of NATO, given U.S. Secretary of State James Baker’s agreement that NATO would not advance “one inch eastward” from the German border. This pledge was violated by the next three presidents—Clinton, Bush II, and Obama. Veteran U.S. statesman George Kennan opposed the expansion of NATO, while Ambassador Matlock called it “a great tragedy.”

Meanwhile, 9/11, the Neocons’ “new Pearl Harbor,” produced the “War on Terror,” the Patriot Act, the Department of Homeland Security, the military doctrine of Full-Spectrum Dominance, and the assaults on Afghanistan, Iraq, and later Libya. The ideological focal point was demonization of all things Islam. The rationale? “They hate our freedoms.”

But the 9/11 Truth Movement began to poke holes in the official conspiracy theory of terrorists with box cutters that over time became gaping abysses. The anti-Islam narrative began to wear thin when stacked up against U.S. military overkill, the CIA’s torture chambers, the useless expenditure of trillions of dollars shooting at goat herders, the absence of any evidence of WMDs in Iraq or co-conspirators anywhere, and Israel’s endless strife with the Palestinians. 

Now Russia itself had begun to make a stand. At the 2007 Munich Security Conference, Putin challenged the attempt by the U.S. to achieve hegemony through creation of a “unipolar” world “in which there is one master, one sovereign.” He said, “at the end of the day this is pernicious.” 

There was never any indication that Putin, in making his Munich declaration or afterwards, had any intention of restoring the Soviet “empire.” But he was absolutely determined to preserve Russia’s sovereignty and security despite the declared intention of factions in the West to break up Russia’s territory and gain control of its resources. He had also lamented the fact that with the collapse of the Soviet Union, 25 million ethnic Russians had been left out of what was now a unified and strengthening nation-state, blending a multiplicity of races, languages, and religions.  

The “War on Terror” ended up being a tragic failure. So now the Western mainstream media jumped at their next big chance by depicting Putin as the bad guy du jour, even more “authoritarian,” and “evil” than either Saddam Hussein or Osama bin Laden. But they would have done the same had Donald Duck been president of Russia—a nasty, duck-billed, feathered tyrant who was attacking democracy, freedom, human rights, and, yes, the “New American Century” the Neocons had dreamt up. 

UKRAINE — THE CROSSROADS

Now the U.S., with the Neocons firmly entrenched in the State Department and elsewhere, surrounded Russia with military bases and attacked its perimeter with color revolutions in Georgia, Ukraine, and Kyrgyzstan, following on the dismemberment of Yugoslavia in the late 1990s and early 2000s. President Barack Obama then situated the Aegis Missile Defense System in Poland and Romania with the potential to activate missiles that could reach Moscow with nuclear warheads in six minutes. Talk was current of a possible “decapitation” strike against the Russian leadership.

Finally, in 2014, with “cookies” Victoria Nuland and Vice President Joe “Burisma” Biden in charge, the U.S. fomented a coup in Ukraine with the aid of paid snipers to drive out a president friendly toward Russia and his replacement with a NeoNazi junta that put Ukraine on a war footing. In response, Russia annexed the Crimean Peninsula, where Sevastopol is the home of its Black Sea fleet, with 85 percent popular approval, while the eastern Ukrainian Donbass provinces of Donetsk and Lugansk, ethnically-Russian, declared independence. 

Finally, after eight years of Ukrainian provocations, the death from Ukrainian shelling of more than 10,000 Donbass civilians, and the treachery of Germany and France in failing to uphold the Minsk agreements they had guaranteed, Russia entered Ukraine with its military forces in February 2022. The conflict was on, a conflict that Russia is winning. U.S.-led sanctions against Russia failed to bring down its economy or force regime change against Putin. But each Ukrainian setback on the battlefield has been followed by more weapons and money supplied to the Volodymyr Zelensky regime by the U.S., UK, Germany, France, and other NATO members. 

But who was calling the shots? In March 2022, Russian and Ukrainian negotiators reached agreement on a tentative settlement at meetings in Istanbul. UK prime minister Boris Johnson then rushed to Kiev to induce Zelensky to tear up the agreement and continue the war. Western escalation has included billions of dollars worth of heavy tanks and other weapons to Ukraine, along with cluster munitions and depleted uranium projectiles. There have been drone attacks on Russia itself and on Crimea. But the Ukrainian counteroffensive has collapsed, with speculation increasing of a major Russian counterattack, possibly even cutting Ukraine off from the Black Sea. 

We have now come full circle. Warnings from Washington continue that Putin had better not go nuclear, which can be read as inviting him to do so. This is obviously a new phase of brinkmanship that could give the U.S. a pretext for themselves moving to nuclear war. Meanwhile, the U.S. understands that it could in no way challenge Russia in a conventional war even with the entire NATO alliance being activated. Even then, divisiveness within NATO and the absence of sufficient military force anywhere in Europe make this impossible at present. Veteran military analyst Scott Ritter writes in Sputnik News on September 21, 2023, that even were the U.S. to activate its entire military force stationed in Europe against Russia, it would be defeated within one to two weeks of intensive combat. The only alternative would then be to activate a gigantic airlift of additional forces into Europe with U.S. cargo planes sitting ducks for destruction en route. Impossible. 

There are now signs that the U.S. may be pressuring Ukraine to agree to a cease-fire, with a “freeze” along the lines of the decades-old Korean settlement. But all this would do would be to “kick the can down the road”—possibly until after the 2024 U.S. presidential election, likely to be preceded by elections in Ukraine in March. There are no signs that the U.S. is ready to concede a Russian victory involving the redrawing of the European security apparatus with Russia a respected party. The Ukrainian government speaks of a “long-term” conflict lasting decades. So there is no way to aver that the war in Ukraine is ending or to speculate about the next phase. 

So, is a nuclear World War III a possibility? 

Next: Part II Are the Military-Industrial Complex and Deep State Driving Us to War? 

*  *  *

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Authored by Matthew Lysiak via The Epoch Times (emphasis ours),

Presidential candidate Robert F. Kennedy’s declaration that he may be open to running as a third-party candidate has the potential to completely shift the political landscape ahead of the 2024 election, according to a party official.

“If he made the decision and did the work that needs to be done within the party, I could see him having a massive impact,” Angela McArdle, the chair of the Libertarian Party, told The Epoch Times.

Mr. Kennedy, currently running second behind President Joe Biden in the Democratic primary, has flirted with a potential Libertarian Party candidacy. In July, Mr. Kennedy met privately with Ms. McArdle, at a conference they were both attending, where he notably expressed his admiration.

“He told me he wants to run as a Democrat but said that he is very libertarian in a lot of ways,” said Ms. McArdle. “We are definitely on friendly terms.”

In a June interview with the libertarian magazine Reason, Mr. Kennedy acknowledged his ideological leanings, saying, “I’ve always been aligned with libertarians on most issues.”

Mr. Kennedy had already garnered the support of some of the party faithful, many who were won over by his populist messaging and who are currently volunteering in his campaign, according to Ms. McArdle.

“Some of the things he has done over the last several years are admirable,” she added.

“We love his anti-war position, how he is a strong advocate of free speech, and that his track record on medical freedom is not contrived. And as a Kennedy, he placed himself in a very vulnerable position speaking out about forced vaccination. As libertarians we appreciate his courage and see ourselves as aligned on a lot of issues.”

However, although there was much in common, there remained significant differences in policy positions. Ms. McArdle cited his stance on the Environmental Protection Agency and certain regulations, which, in some instances, he is looking to expand.

“We don’t want to see policies that would hurt small businesses and entrepreneurs,” she said. “I talked with him about our concerns as libertarians and he was open to hearing us out, which was important.”

In recent months Mr. Kennedy has appeared increasingly frustrated by what he perceives as an unlevel playing field within the Democratic Party. Asked by a voter at a town hall earlier this month in North Charleston, South Carolina, whether he’d launch an independent bid for the White House he replied that he is open to the possibility.

“They’re trying to make sure that I can’t participate at all in the political process, and so I’m going to keep all my options open,” Mr. Kennedy said.

In a general election, Democrats worry that a third-party run by Mr. Kennedy could draw votes away from President Biden and help elect former President Donald Trump.

A poll released last week found that one-third of Democrats would vote for Mr. Kennedy if he were to run as an independent.

The Libertarian Party is currently the third-largest political party in the United States and is based on freedom and the belief “that respect for individual rights is the essential precondition for a free and prosperous world,” according to the party platform. In the 2020 Presidential Election, the party’s candidate, Jo Jorgensen, received 1.2 percent of the popular vote. However, in the 2016 presidential election, candidate Gary Johnson secured over three percent of the popular vote.

The slightest uptick in votes cast for a third-party candidate could prove to be a determining factor in the 2024 election where many swing states were decided by razor-thin margins. In Wisconsin, the official tally put President Biden at less than 21,000 votes ahead while in Georgia the margin was even tighter, with President Biden having been declared to have won the state’s sixteen electoral votes by under 12,000 votes.

Most polls currently have the 2024 election as another likely toss-up.

Mr. Kennedy would have to make a final decision on whether he wants to join the Libertarian Party by early next year at latest. The Libertarian Party will select its presidential nominee until May 26 at the 2024 Libertarian National Convention in Washington, D.C.

However, if Mr. Kennedy does enter the race on the Libertarian ticket, he should expect to have to earn the nomination, according to Ms. McArdle.

“The presidential nomination for the libertarian party isn’t going to be handed to anyone,” said Ms. McArdle. “The candidate is going to have to earn the votes and that will take a lot of work. It is really going to depend on what he wants and how serious he is about it.”

“He is a Democrat right now, but we all know how quickly things can change in today’s political climate.”

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The FBI is being sued after seizing the contents of safe deposit boxes and allegedly failing to return all of what it seized.

Donald Mellein was storing 110 gold coins in one of the boxes. The FBI initially said it did not have the coins, but Mr. Mellein’s legal action resulted in the agency acknowledging it did have 47 of them.

The FBI returned the coins but still has not given back the other 63, which are worth an estimated $123,419, according to one of the new lawsuits.

“Don’s gold coins were completely secure until FBI agents broke open the safe-deposit box looking for property that could be forfeited. Their disappearance can only be explained by the acts or omissions of the FBI agents who broke into the box and rummaged through it. The FBI never should have broken into the safe-deposit boxes in the first place but, once it did, it became responsible for returning everything it had custody of, unless it had a lawful reason to keep it,” the suit, filed in U.S. court in California, states.

Jeni Pearsons and Michael Storc were storing silver and cash in another one of the boxes. The FBI tried keeping the items, but eventually gave up. Agents returned the $20,000 in silver, but held on to $2,000 in cash, according to another suit.

In both cases, the FBI has denied responsibility, stating there was “no evidence of negligence or wrongful acts on the part of any FBI employee.”

“Jeni and Michael are entitled to have their cash returned, or to be reimbursed for its loss, regardless of whether they can prove that some FBI employee did something wrong or was negligent. Whatever the reason for the cash disappearing, the government is responsible for either returning the cash to Jeni and Michael or compensating them for what it took,” the other suit states.

The FBI said it cannot comment on pending litigation. It pointed to a previous statement on a ruling that found agents investigating U.S. Private Vaults did not mislead the court.

Lawyers at the Institute of Justice, which are representing the plaintiffs, are asking the court to award damages to the plaintiffs and declare federal law unconstitutional as applied by the FBI in the raids.

In warrant applications, FBI officials said they would “end up with custody” of the safe deposit boxes and the contents of the boxes. Officials promised the FBI would protect the contents and return them to their owners. The warrant allowed agents to perform an inventory of the boxes to “protect their agencies and the contents of the boxes” and directed agents to identify owners so the property could be returned.

During depositions, though, one of the FBI officials has said the government planned to try to keep some of the contents that were worth at least $5,000. The FBI worked to find evidence that would support keeping the contents, such as evidence that money “smelled like drugs.”

FBI official Lynne Zellhart, the official, acknowledged that no video recordings existed of when agents broke into some of the boxes. “Reality got in the way,” she testified.

Detailed inventories of the boxes were also not created. One agent said the operation was aimed at “processing boxes quickly.” Vague terms like “miscellaneous general items” were used in a number of instances. Inventory forms for Mr. Mellein’s box did not refer to the 110 gold coins, according to the suit.

Mr. Mellein applied to get his property back and soon received a notice of forfeiture proceedings that outlined how the government was working to keep cash and a gold bar that was also in his box. His lawyers convinced the FBI to abandon the effort, and the agency returned the cash and gold bar.

Attempts to secure the coins were not fruitful, prompting a lawsuit. The government then said it had “found” 47 coins, but could not locate the other coins. Mr. Mellein withdrew his suit and filed an administrative claim, which was rejected.

Ms. Pearsons and Mr. Storc went through a similar ordeal. They received their silver back, but not the cash they kept in the box.

Mr. Mellein said in a statement: “The FBI had no reason to go through my box and they were careless in losing my savings. For months I was told they didn’t have any of my coins before they eventually found some of them. I’m disappointed that I have to sue again in order to get property back that should have been given back to me over two years ago.”

Ms. Pearsons added: “We’re fighting for our money, but also to hold the government accountable when it takes people’s property and then steals or loses it.”

There’s an old saying: everyone thinks that they’re middle-class.

But how many people think, or know, that they really belong to the top 1% in the country?

Using data from personal finance advisory services company, SmartAsset, Visual Capitalist’s Pallavi Rao and Miranda Smith reveal the annual income threshold at which a household can be considered part of the top 1% in their state.

Some states demand a much higher yearly earnings from their residents to be a part of the rarefied league, but which ones are they, and how much does one need to earn to make it to the very top echelon of income?

Ranking U.S. States By Income to Be in the Top 1%

At the top of the list, a household in Connecticut needs to earn nearly $953,000 annually to be part of the one-percenters. This is the highest minimum threshold across the country.

In the same region, Massachusetts requires a minimum annual earnings of $903,401 from its top 1% residents.

Here’s the list of all 50 U.S. states along with the annual income needed to be in the 1%.

California ($844,266), New Jersey ($817,346), and Washington ($804,853) round out the top five states with the highest minimum thresholds to make it to their exclusive rich club.

On the other end of the spectrum, the top one-percenters in West Virginia make a minimum of $367,582 a year, the lowest of all the states, and about one-third of the threshold in Connecticut. And just down southwest of the Mountain State, Mississippi’s one-percenters need to make at least $381,919 a year to qualify for the 1%.

A quick glance at the map above also reveals some regional insights.

The Northeast and West Coast, with their large urban and economic hubs, have higher income entry requirements for the top 1% than states in the American South.

This also correlates to the median income by state, a measure showing Massachusetts households make nearly $90,000 a year, compared to Mississippians who take home $49,000 annually.

How Much Do the Top 1% Pay in Taxes?

Meanwhile, if one does make it to the top 1% in states like Connecticut and Massachusetts, expect to pay more in taxes than other states, according to SmartAsset’s analysis.

The one-percenters in the top five states pay, on average, between 26–28% of their income in tax, compared to those in the bottom five who pay between 21–23%.

And this pattern exists through the dataset, with higher top 1% income thresholds correlating with higher average tax rates for the wealthy.

These higher tax rates point to attempts to reign in the increasing wealth disparity in the nation where the top 1% hold more than one-third of the country’s wealth, up from 27% in 1989.

Authored by Naveen Ahtrappully via The Epoch Times (emphasis ours),

Sen. Ted Cruz (R-Texas) said he approved of software firm Intuit’s decision to reverse a ban on gun companies from accessing its payroll and payment processing services.

Prior to Aug. 1, 2023, Intuit had prohibited gun sellers and manufacturers from using the full features of its QuickBooks service, an accounting software. Firearm manufacturers were not allowed to access QuickBooks’ payroll services, while entities that sold guns were ineligible for QuickBooks’ payment processing services.

However, the company has now changed course.

“I welcome Intuit’s reversal of its policy that had forbidden gun manufacturers and sellers from using certain QuickBooks services,” Mr. Cruz said in a Sept. 25 letter (pdf) to the company. “Intuit’s recent decision to allow such businesses to use the company’s payroll and payment services—a change prompted by my staff’s oversight investigation—was long overdue.”

Mr. Cruz became aware of Intuit’s “discriminatory policies” when Dawson Precision, a Texas firearms parts manufacturer, informed his office that Inuit had, “without warning,” terminated the business’ subscription to QuickBooks payroll services, the letter said.

“Dawson Precision only discovered what had happened after it submitted payroll and, rather than receiving confirmation that payroll had been processed, received a notification that its payroll subscription had been terminated,” Mr. Cruz wrote. “Intuit later said that it canceled Dawson Precision’s account because, as a firearm manufacturer, it was in violation of Intuit’s acceptable use policy.”

Even when Gunsite Academy pointed out that it only shipped firearms to dealers and not directly to customers, Intuit refused to reverse its ban.

“Intuit’s policy effectively prohibited small businesses that sell firearms from operating online, even though such sales are entirely legal and heavily regulated,” the letter said.

“My staff have not yet received a satisfactory explanation as to why restrictions were necessary for businesses that ship firearms to another licensed firearms dealer, or why a private entity desired to impose an extra-governmental, quasi-regulatory requirement on a lawful industry.”

Following an investigation conducted by Mr. Cruz’s staff, Intuit reversed the policy.

“My staff will continue their investigation to ensure that no financial services firm unnecessarily limits the firearm industry’s access to accounting or banking products,” the letter stated.

It was Bank of America that asked Intuit to block firearms manufacturers from using QuickBooks payroll services, while JPMorgan asked it to restrict payment processing service for firearms sellers, the letter said.

JPMorgan acknowledged to Mr. Cruz’s staff that it did issue such a directive. “Bank of America, however, denied that it had ever given Intuit any instructions relating to firearm manufacturers or sellers,” the letter stated.

“Intuit insisted that Bank of America did. Regardless of who originated these discriminatory policies against gun manufacturers, Intuit was right to end them.”

On Sept. 8, New Mexico Gov. Michelle Lujan Grisham announced a 30-day gun carry ban for counties over a certain size. However, U.S. District Judge David Urias put the governor’s declaration on hold, calling the order unconstitutional. Gun Owners of America and its legal arm, the Gun Owner’s Foundation, had sued to block the order.

On Sept. 22, a federal judge from California determined that the state’s ban on gun magazines that hold more than 10 rounds of ammunition is unconstitutional.

“The history and tradition of the Second Amendment clearly supports state laws against the use or misuse of firearms with unlawful intent, but not the disarmament of the law-abiding citizen,” U.S. District Judge Roger Benitez, appointed by President George W. Bush, wrote in the decision.

Meanwhile, the Biden administration recently announced the formation of the White House Office of Gun Violence Prevention, which has raised concerns among gun rights groups.

The office will be led by Vice President Kamala Harris and will be run with the help of gun safety advocates, White House officials stated.

“This new White House Office of Gun Violence Prevention … will drive and coordinate a government and a nationwide effort to reduce gun violence in America,” President Joe Biden said, adding that he was “determined to send a clear message about how important this issue is to me and to the country.”

‘Missing’ Israeli whistleblower Gal Luft, who was indicted by the Biden administration for failing to register under the Foreign Agents Act (FARA), has offered new evidence to the House impeachment inquiry about an FBI mole who tipped off Hunter Biden that his Chinese partners were about to be indicted, according to the NY Post‘s Miranda Devine.

Luft was also charged with conspiracy to illegally sell weapons to Chinese individuals and companies, as well as aerial bombs and rockets to the UAE, Chinese weapons to Kenya, and Iranian oil to other countries in violation of sanctions.

He was initially arrested Feb. 17 in Cyprus, but fled after being released on bail. He faces up to 100 years in prison if convicted.

In a stunning twist, the Biden DOJ indicts Dr. Gal Luft, a Biden corruption whistleblower, for not registering as an agent of CEFC China Energy, while Hunter, James, and Sara Biden simultaneously collected millions from CEFC China Energy without registering, also violating FARA.… pic.twitter.com/WfLP9j9feN

— KanekoaTheGreat (@KanekoaTheGreat) July 11, 2023

The Israeli professor and former Israel Defense Forces officer has been on the run for six months after skipping bail in Cyprus, where he was awaiting extradition to the United States on gun-running and foreign lobbying charges, also brought by the SDNY.

In an open letter to Reps James Comer (R-Ky.), Jim Jordan (R-Ohio) and Jason Smith (R-Mo.), the three House committee chairmen running the impeachment inquiry, Luft claims that the tipoff to Chinese executives of CEFC came on the same day that the first son wrote a WhatsApp message shaking down another CEFC employee for millions of dollars over a “highly confidential and time sensitive” matter while claiming his father was in the room with him.

“I am sitting here with my father, and we would like to understand why the commitment made has not been fulfilled,” Hunter wrote in a July 30, 2017 message to CEFC employee Raymond Zhao, which was presented to Congress during June testimony by IRS whistleblower Gary Shapley.

“I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”

That night, after Hunter’s threatening message, CEFC executive Partrick Ho received an urgent call from CEFC president Chan Chauto, who told him to leave the United States immediately, according to Luft, who frequently spoke with Ho.

Ho flew to Hong Kong the next day.

In a follow-up WhatsApp, Zhao told Hunter that “CEFC is willing to cooperate with the family. He thinks now the priority is to solve the problem mentioned last night.”

According to Luft, the “problem” and the “highly confidential and time sensitive” matter was the secret indictments from the SDNY which Hunter was tipped off about.

Nine days after Hunter’s WhatsApp shakedown, CEFC wired $5.1 million to entities in the US to transfer to Hunter.

Luft – who flew to Hong Kong to deal with Ho on Aug. 14, 2017 (two weeks after Ho fled), says the Chinese nickname for the FBI mole was “One-Eye.”

“The existence of a potential mole within the FBI and/or Justice Department who conveyed to Chinese individuals information about sealed indictments has, apparently, to this day never been solved,” Luft wrote to Comer, adding “Perhaps Congress should investigate the issue as part of its impeachment inquiry.”

The tipoff to CEFC executives came at a crucial stage in their negotiations to buy into Russian state-owned energy company Rosneft and came just 10 days before a curious meeting between a CEFC employee in Albania and disgraced G-man Charles McGonigal, then counterintelligence boss at the FBI’s New York Field Office, which had been surveilling Ho and his associates. McGonigal pleaded guilty Friday to concealing at least $225,000 in cash payments from a former Albanian intelligence official.

On Sept. 8, 2017, CEFC announced its plans to acquire a $9.1 billion stake in Rosneft.

On Sept. 9, 2017, McGonigal met Dorian Ducka, a CEFC employee and Hunter Biden associate, in Albania, according to his indictment. Albanian Prime Minister Edi Rama also was at the meeting. At Ducka’s request, McGonigal urged Rama to be careful about awarding oil field drilling licenses in Albania to Russian front companies.

On Sept. 10, 2017, Hunter signed an attorney engagement letter to represent CEFC’s Ho for a $1 million retainer. -NY Post

Luft also says that sometime around September 2017, Hunter and his uncle Jim Biden flew to Hong Kong to meet with Ho, who they asked to buy them two “burner” phones. They told him that the coast was clear to return to the US, however upon his arrival at JFK Airport on Nov. 17, 2017, Ho was arrested by the Trump DOJ on charges of bribery and money laundering.

Ho’s first call? Jim Biden, looking for Hunter.

Hunter reached out to lawyer Edward Kim, who asked Hunter in an email the afternoon of Ho’s arrest to “find the names of the FBI agents you spoke with, that would be helpful.”

“Working on it,” Hunter replied.

I’ve been arrested in Cyprus on a politically motivated extradition request by the US.

The US, claiming I’m an arms dealer. It would be funny if it weren’t tragic.

I’ve never been an arms dealer.

DOJ is trying to bury me to protect Joe,Jim&Hunter Biden.

Shall I name names?

— Gal Luft (@GalLuft) February 19, 2023

FBI Agent testifies

And in yet another breadcrumb of corruption, an FBI supervisor has corroborated key aspects of testimony by two IRS whistleblowers, who say that federal prosecutors slow-walked Hunter’s criminal probe, and refused to bring tax charges in LA and Washington DC, according to a transcript of an interview reviewed by Just the News.

The female FBI supervisor, whose name the Justice Department asked be kept private in the transcript, was interviewed recently by the House Judiciary Committee, and she chronicled her interactions with IRS agents Gary Shapley and Joseph Ziegler and Delaware U.S. Attorney David Weiss, the lead prosecutor in the Hunter Biden probe.

While the agent said she had different recollections than her IRS colleagues about certain aspects of the case and did not believe politics caused any delays, she confirmed there were instances in which prosecutors slowed the investigation.

Specifically, she confirmed agents were concerned that the DOJ tried to use the 2022 midterm elections to delay action in the Hunter Biden case even though his father was not up for election last year.

“I know that that had come up,” said the agent, who worked in the Baltimore office which supervised cases in Delaware.

“Delays related to the election?” she was asked.

“Yes, I noted that had come up,” she replied.

Read the rest here…

Authored by Mario Loyola via RealClear Wire,

The U.S. Supreme Court’s ruling in West Virginia v. EPA last year was a historic defeat for the Environmental Protection Agency. Not only did the Court rule that the 2015 Clean Power Plan, President Obama’s signature climate regulation, was unconstitutional; it also dramatically limited EPA’s power to regulate carbon emissions under the Clean Air Act (CAA) moving forward. 

That left the agency with two courses of action. It could take its lumps and focus on proposing regulations with a high chance of surviving federal court review. Or it could stake everything on a final desperate attempt to decarbonize America’s power sector, and go for the win in keeping with President Biden’s commitment to net zero carbon emissions. 

On May 23, 2023, EPA chose the latter, proposing carbon emissions standards for power plants far more ambitious than those struck down by the Supreme Court last year. Like other EPA climate regulations, the proposed emissions standards under Section 111 of CAA are not designed to reduce emissions from standard power plants, but rather to force a rapid transition away from reliable and affordable sources of dispatchable power—natural gas and coal—to intermittent renewables and new kinds of power plants that don’t even exist yet. Together with EPA’s electric vehicle mandates, the proposed rule would be a train wreck for the American electricity grid and society as a whole, endangering economic competitiveness and energy security while yielding no measurable climate benefit. 

Those hoping for a dramatic finish to Biden’s climate action will not be disappointed: the proposal has so many legal vulnerabilities that it would be a miracle if the rule survives federal court review. 

Under the proposed rule, which President Biden hopes to finalize by next summer, large new or modified natural gas plants and existing coal plants would be required to virtually eliminate carbon emissions by 2038, at the latest. Under Section 111(a) “New Source Performance Standards” (NSPS), large new or modified combined-cycle natural gas plants, which currently supply roughly 30% of the nation’s electricity, would be required to achieve close to zero carbon emissions, either by implementing carbon capture and storage (CCS) to capture 90% of carbon emissions by 2035, or by switching from natural gas to 98% “green” hydrogen co-firing by 2038. In addition, under Section 111(d) emissions guidelines, existing coal plants, which currently supply more than 20% of America’s electricity, would be required to virtually eliminate carbon emissions by implementing CCS by 2035. 

Interestingly, EPA declined to promulgate NSPS for coal plants because, as it explains, there are no plans to build any new coal plants in the U.S. It declined to promulgate emissions guidelines for existing natural gas plants out of concern for feasibility. Even more interesting, when EPA sent the proposed rule to the White House for regulatory review under E.O. 12866, it contained no emissions guidelines for existing plants at all, and therefore would not have applied to coal plants at all. The White House reportedly sent it back to EPA with orders to put a Section 111(d) rule for existing coal plants in the proposal. This suggests that EPA itself is not very confident in the ability of the Section 111(d) rule to survive court review. 

Section 111 of CAA, the same provision at issue in West Virginia v. EPA, authorizes EPA to mandate “the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.” 

Section 111 sets a high bar, especially after West Virginia v. EPA. The proposed rule falls woefully short. It has at least three major legal vulnerabilities, any one of which would be sufficient for a court to strike the rule down. 

First, neither CCS nor green hydrogen is anywhere near “adequately demonstrated” within the meaning of Section 111. Second, EPA has systematically ignored crucial costs and impacts that it is required to take into account in setting emissions standards under Section 111. Third, like the “best system of emission reduction” struck down in West Virginia v. EPA, the new rule would require sweeping regulatory action and infrastructure investments entirely outside the fence line of the regulated facilities, thereby raising the “major question” doctrine’s presumption against the agency’s interpretation of the law. 

The Mandated Technologies Have Not Been “Adequately Demonstrated” 

The linchpin of Section 111 of CAA is that the “best system of emission reduction” (BSER) must be an “adequately demonstrated” technology. The D.C. Circuit Court of Appeals, the principal venue for judicial review of agency action in the U.S., explicated the provision’s meaning. In Portland Cement v. Ruckelshaus (1973), for example, the D.C. Circuit wrote that in determining whether a technology is adequately demonstrated, “[t]he Administrator may make a projection based on existing technology, though that projection is subject to the restraints of reasonableness and cannot be based on ‘crystal ball’ inquiry.” 

Subsequent decisions of the D.C. Circuit, particularly the ones that EPA relies on in the preamble to the proposed rule, have emphasized that BSER must be based on technology demonstrated at the scale and for the purpose for which it will be used by regulated entities to comply with the new standards. Unlike other provisions of CAA, Section 111 is not designed to force industry to develop new technologies. “[A] standard cannot both require adequately demonstrated technology and also be technology-forcing,” said the D.C. Circuit in NRDC v. Thomas (1986). 

Contrary to the unambiguous pronouncements of the D.C. Circuit, EPA treats Section 111 as if it were a technology-forcing provision throughout the proposed rule. For example, EPA claims that CCS has been “adequately demonstrated” for natural gas plants based on small-scale demonstrations at coal plants. But the coal demonstrations cited involve only small slipstreams (carbon captured from a small percentage of the plant’s total emissions) for use in the food industry. Moreover, the coal plant demonstrations do not involve the sophisticated combined-cycle configurations of large natural gas plants—in which the exhaust from the primary combustion cycle is used to heat the steam generator of the second cycle—that the new standards focus on. 

In the several hundred pages laying out the proposed rule, EPA provides just two examples of demonstrations at natural gas plants. One, at Bellingham, Massachusetts, captured only a 10% slipstream and closed in 2005 because it was not economical. That was a decade before the Obama-era Clean Power Plan, in which EPA correctly rejected CCS as inadequately demonstrated and too costly. The other, a project at Peterhead, Scotland, is still in planning and may not even be built. Neither can be used as the basis for an adequately demonstrated BSER. 

Furthermore, EPA’s CCS mandate would require a massive buildout of carbon transport and storage infrastructure, which has not been adequately demonstrated and would require sweeping investments and regulatory changes by developers and government authorities unrelated to the entities subject to regulation under Section 111 of CAA. Like the measures “beyond the fence line” of regulated entities that were struck down in West Virginia v. EPA, this massive infrastructure buildout would be beyond the ability of EPA-regulated entities to implement.

Co-firing with low-carbon hydrogen is even further from being adequately demonstrated. Nearly all hydrogen today is produced using carbon-intensive methods. Indeed, electrolysis from renewable and nuclear power produces only trivial quantities, and EPA doesn’t even bother to estimate the cost, feasibility, or time it would take to build out the vast amount of new renewable and nuclear power capacity that would be needed to make the low-GHG hydrogen a practicable option for power plants. 

In the meantime, no existing natural gas plant can co-fire anywhere near EPA’s proposed 96% hydrogen because hydrogen burns much hotter and faster, making current turbines unsuitable for most hydrogen feedstock. Indeed, EPA admits that hydrogen-capable turbines will require a major redesign of combined-cycle natural gas plant turbines, another way in which EPA’s BSER fails to meet the requirement of adequate demonstration. Even the intermediate standard of 30% co-firing, while tested on small industrials facilities, has not been demonstrated at utility scale. 

Finally, EPA explicitly states that its hydrogen BSER is technology-forcing, which, according to controlling precedent in the D.C. Circuit, is not “adequately demonstrated” by definition. Beyond the fence line of regulated facilities, EPA admits that hydrogen faces obstacles of infrastructure limitations, as well as inadequate storage and delivery. All this undermines the claim of adequate demonstration, not to mention the fact that such investments would be entirely beyond the competence of regulated entities. 

The same D.C. Circuit cases that EPA relies on to explicate adequate demonstration clearly show that EPA has fallen well short of the minimum statutory standard. EPA alludes to “the D.C. Circuit’s view that EPA may determine a system of emission reduction to be adequately demonstrated if EPA reasonably projects that it will be available by a future date certain.” But the agency cites no case for that proposition, and a close reading of Sierra Club v. Costle(1981) shows that that is not the D.C. Circuit’s view.

In Sierra Club v. Costle, the D.C. Circuit indicated that dry scrubbing, which, at that time, was an emerging clean coal technology, was not adequately demonstrated because, as an “emerging technology,” there were “crucial issues such as … demonstration of commercial-scale systems, which may continue to limit the overall acceptability of this technology.” The court noted that “major uncertainty” existed with the technology “in the absence of experience at large-scale facilities” and that EPA could not extrapolate from smaller pilot-scale facilities. Just as in that case, EPA here admits that CCS and green hydrogen are emerging technologies. Its catalog of demonstrations at different scales, different sources, and different industries does not amount to much, since those scales, sources, and industries are not the ones it now seeks to regulate. What EPA’s own examples show is that considerable uncertainty remains with respect to the overall feasibility and acceptability of its proposed technologies. 

The one case that EPA discusses in some detail is the per curiam opinion in Lignite Energy Council v. EPA. According to EPA, the court then held that technology could be “adequately demonstrated through a ‘reasonable extrapolation of performance in other industries.’ ’’ What EPA neglects to mention is the reason that the D.C. Circuit allowed such extrapolation in that case: namely, that the pollution sources in the other industry were similar in design, scale, and emissions profile to the sources that EPA had sought to regulate. By EPA’s own admission, that is not the case here. 

In short, neither CCS nor “green” hydrogen co-firing meets the Section 111 legal standards of “adequately demonstrated” BSER. 

EPA Has Ignored the Proposed Rule’s Costs, as well as Its Health, Environment, and Energy Impacts

In determining that a technology is “adequately demonstrated” under Section 111, EPA must take into account the costs of the rule, as well as the health, environment, and energy impacts of the rule. Courts have interpreted this as requiring that costs be reasonable. That poses a threshold problem for EPA’s proposed rule because EPA can point to no measurable environmental benefit that would result from compliance. EPA has based all its greenhouse gas regulations on the same original 2010 Endangerment Finding, which has serious problems of its own, as William Happer and Richard Lindzen note in their July 2023 comment letter to the proposed rule. It has not been demonstrated that the sources subject to the rule make a significant contribution to a condition of air pollution that endangers human health, and the finding mentions the 2021 Technical Support Document on Social Cost of Carbon only in connection with a regulatory impact analysis that is unrelated to the requirements of CAA. Under such circumstances, there is a threshold question of whether any significant costs could be reasonable. 

There are other problems with EPA’s estimate of costs and impacts, too. First, its estimate of costs is highly speculative. The rule would affect a host of entities and government authorities across the whole society, the vast majority of them not subject to regulation under CAA, and EPA has little clue as to how they will adjust to the rule. If its cost estimates are off by any significant amount, regulated entities could well react by shuttering, rather than attempting to comply, which would create a situation of dangerous energy scarcity with skyrocketing prices. In parts of the country where fossil energy is restricted as a matter of policy, such as California, the electricity grid is on the verge of dangerous blackouts almost every evening in the summer. And those restrictions are modest, compared with those now contemplated by EPA.

EPA’s most egregious failure to properly account for costs is that it subtracts the amount of federal subsidies from the cost estimate, a nominal reduction of $369 billion based on CBO’s score. That figure will likely turn out to be much greater, given the subsidies’ lack of date-certain sunset. 

EPA’s practice of reducing cost estimates under Section 111 by the amount of federal subsidies amounts to an accounting trick that vitiates the purpose for which cost considerations were included in the provision. To see why, consider an emissions standard that costs 10% of gross domestic product to achieve every year. Congress could pass a law subsidizing the entire cost of achieving the standard. By EPA’s logic, the cost of the standard would then be “zero,” even though the subsidy would actually cost more than $2 trillion every year, increasing the overall federal budget by half. To say that the costs of such a standard are “zero” would be tantamount to fraud on the public. 

The practice certainly violates Section 111, a fact that EPA tries to cover up with what can only be described as an intentionally misleading characterization of congressional intent: “The legislative history of the [Inflation Reduction Act] makes clear that Congress was well aware that EPA may promulgate rulemaking under CAA Section 111 based on CCS and explicitly stated that EPA should consider the tax credit to reduce the costs of CCUS (i.e., CCS).” But the only “explicit statement” to that effect in the entire legislative history is a statement by a single congressman, Representative Frank Pallone (D–NJ). A statement by a single congressman simply cannot be attributed to Congress. 

On the contrary, federal courts have consistently recognized that, in contrast to other provisions of CAA, “costs” in Section 111 mean all costs, direct and indirect, regardless of who ends up paying for them. EPA cites no legal basis for reducing the cost estimates under Section 111 by the amount of federal subsidies, which merely shift the costs of compliance from consumers in their guise as ratepayers to consumers in their guise as taxpayers. Given the clear statutory requirement to consider all costs, EPA’s invocation of congressional intent would be unavailing even if it were not misleading. 

As for the impact on electricity prices, EPA estimates that the rule would lead to a price increase of 13%. That is almost certainly a woeful underestimate. In California, where a much milder form of renewable energy mandate has been in place for years, end-user electricity costs are twice the national average. The costs of compliance with the new rules could be far more exorbitant. As further explained below, CCS would reduce the power output of the relevant plants by at least 30%, while green hydrogen would likely be three to four times more expensive to produce and deliver as current demonstrations using natural gas. 

The CCS infrastructure alone would require a massive buildout of at least 60,000 miles of pipelines and thousands of injection wells, according to the estimates in the Princeton Net Zero America study. The Congressional Research Service has noted that even small demonstrations of CCS have raised significant safety issues and triggered fierce local opposition. Similarly, the hydrogen BSER would require enormous amounts of new renewable energy capacity in order to produce the “green” hydrogen dreamed of in the rule, along with tens of thousands of miles of highly specialized pipelines for delivery to the power plants. Given the number of factors outside EPA’s expertise and jurisdiction that would determine how much time and money all that infrastructure would cost, EPA’s estimates are little more than conjecture.

While EPA discusses other proposed rules in its preamble, it curiously avoids all mention of several recently proposed vehicle emissions standards that would force two-thirds of all new vehicles produced in the U.S. to be electric by 2032. If implemented as proposed, those rules would shift most of the transportation sector’s energy requirements onto the electricity grid, at the same time as the power plant rule will almost certainly be significantly diminishing the overall capacity of the grid. If implemented simultaneously, the new vehicle and power plant rules would be a catastrophic train wreck for the nation’s electricity grid. Nonetheless, EPA appears to be totally unaware of the danger—another failure to meet the minimum requirements of a standard under Section 111. 

The rule also ignores other impacts. It would force generation shifting from large baseload generators to simple-cycle intermediate and “peaker” plants, which are normally used to provide electricity during times of the day when demand is highly variable. Those plants get a pass under the proposed rule because, according to EPA, they are not compatible with CCS for engineering reasons, or with green hydrogen for cost reasons. Under the rule, it will be far cheaper for utilities to rely on intermediate and peaker generators and simply avoid the costly CCS and hydrogen co-firing requirements that will apply to baseload generators. 

That is a major loophole in the rule, and one that could well result in more pollution of all kinds, including the toxic and other dangerous pollutants that CAA was originally designed to reduce. Intermediate and peaker plants are far less efficient than combined-cycle plants and, correspondingly, produce more emissions of all pollutants per unit of power output. Furthermore, carbon capture is an energy-intensive process that relies heavily on steam-generated power and reduces the electrical output of a power plant by as much 30%, which would also increase the emissions rate per unit of output. Yet EPA casually dismisses concerns about increased emissions of toxic and other dangerous pollutants. 

The Power Plant Rule Raises the Same “Major Question” as in West Virginia v. EPA

In West Virginia v. EPA, the Supreme Court struck down a very similar attempt to regulate carbon-dioxide emissions from power plants under Section 111 of CAA—namely, Obama’s Clean Power Plan. The key issue there was whether EPA’s expansive definition of “best system of emission reduction” could be squared with the statute. 

Section 111’s concept of BSER had always been interpreted to refer to technologies, such as scrubbers, that polluters could feasibly install within the facility to reduce emissions. But in the Clean Power Plan, EPA decided that BSER could extend “beyond the fence line” to the whole economy, encompassing utilities’ choice of power sources and other matters beyond EPA’s jurisdiction. Under this novel interpretation of Section 111, EPA was, in effect, claiming the power to reorganize a significant portion of the American economy. 

The Court held that EPA’s interpretation raised a “major question” and that, in the absence of clear congressional authorization, the claimed power exceeded EPA’s statutory authority. The Court noted that EPA’s approach to BSER allowed it to set emissions standards at whatever level the agency wanted, regardless of whether any regulated entity could feasibly comply with the new standards. The Court noted that the Clean Power Plan would result “in numerical emissions ceilings so strict that no existing coal plant would have been able to achieve them without engaging in [generation-shifting].”

EPA’s new power plant rule relies on a similarly expansive definition of BSER to establish standards that can be met only by shifting generation away from fossil sources. The only way that regulated sources could comply with the rule would be if states or utilities (or other developers) would build a major interstate infrastructure for CCS and “green” hydrogen, including tens of thousands of miles of specialized pipelines, massive underground storage facilities for CO₂, and large-scale facilities for the production and transport of hydrogen gas from renewable sources. Whether to develop such infrastructure is a decision totally beyond the control of regulated entities. 

In West Virginia v. EPA, the Court held that EPA’s sudden discovery of a “transformative expansion” in its regulatory authority based on an obscure provision of a “long-extant statute” raised a “major question” about the agency’s authority, requiring Congress to speak with far greater clarity than it had in the statute. EPA’s expansive definition of BSER entailed impacts of great political significance and sought to regulate a significant portion of the American economy. 

Just so, EPA’s new interpretation of its authority under Section 111 of CAA—departing from an almost infinitely elastic concept of both BSER and “adequately demonstrated”—presents a major question. The claimed power would regulate a significant portion of the American economy, entails political impact of great significance, and intrudes on matters that are the traditional domain of the states.

EPA’s Persistent Usurpation of Congressional Authority

EPA’s efforts to restrict greenhouse gas emissions from power plants and other sources represent a dangerous overreach of executive power. Congress never authorized EPA to regulate greenhouse gases in this expansive manner. By trying to reorganize the country’s electricity-sector limits through executive fiat, rather than the legislative process, EPA is abusing its authority and circumventing democracy. Net zero climate policy raises novel issues that affect every American citizen in almost every aspect of modern life. Policy requiring such transformative change should be left to Congress. 

Mario Loyola is a professor at Florida International University and senior fellow at the Heritage Foundation. He served in the Trump administration as Associate Director for Regulatory Reform at the White House Council on Environmental Quality.