Declaration of the Occupation of New York City Posted on September 30, 2011 by NYCGA
THIS DOCUMENT WAS ACCEPTED BY THE NYC GENERAL ASSEMBLY ON SEPTEMBER 29, 2011 TRANSLATIONS: FRENCH, SLOVAK, SPANISH, GERMAN, ITALIAN As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies.
As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known.
They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.
They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses.
They have perpetuated inequality and discrimination in the workplace based on age, the color of one’s skin, sex, gender identity and sexual orientation.
They have poisoned the food supply through negligence, and undermined the farming system through monopolization.
They have profited off of the torture, confinement, and cruel treatment of countless animals, and actively hide these practices.
They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions.
They have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right.
They have consistently outsourced labor and used that outsourcing as leverage to cut workers’ healthcare and pay.
They have influenced the courts to achieve the same rights as people, with none of the culpability or responsibility.
They have spent millions of dollars on legal teams that look for ways to get them out of contracts in regards to health insurance.
They have sold our privacy as a commodity.
They have used the military and police force to prevent freedom of the press. They have deliberately declined to recall faulty products endangering lives in pursuit of profit.
They determine economic policy, despite the catastrophic failures their policies have produced and continue to produce.
They have donated large sums of money to politicians, who are responsible for regulating them.
They continue to block alternate forms of energy to keep us dependent on oil.
They continue to block generic forms of medicine that could save people’s lives or provide relief in order to protect investments that have already turned a substantial profit.
They have purposely covered up oil spills, accidents, faulty bookkeeping, and inactive ingredients in pursuit of profit.
They purposefully keep people misinformed and fearful through their control of the media.
They have accepted private contracts to murder prisoners even when presented with serious doubts about their guilt.
They have perpetuated colonialism at home and abroad. They have participated in the torture and murder of innocent civilians overseas.
They continue to create weapons of mass destruction in order to receive government contracts. *
To the people of the world,
We, the New York City General Assembly occupying Wall Street in Liberty Square, urge you to assert your power.
Exercise your right to peaceably assemble; occupy public space; create a process to address the problems we face, and generate solutions accessible to everyone.
To all communities that take action and form groups in the spirit of direct democracy, we offer support, documentation, and all of the resources at our disposal.
Join us and make your voices heard!
*These grievances are not all-inclusive.
Update 10/1/11 – Minor updates to some wording in the facts.
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Arizona V. United States
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
ARIZONA ET AL. v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
No. 11–182. Argued April 25, 2012—Decided June 25, 2012
An Arizona statute known as S. B. 1070 was enacted in 2010 to address pressing issues related to the large number of unlawful aliens in the State. The United States sought to enjoin the law as preempted. The District Court issued a preliminary injunction preventing four of its provisions from taking effect. Section 3 makes failure to comply with federal alien-registration requirements a state misdemeanor; §5(C)makes it a misdemeanor for an unauthorized alien to seek or engage in work in the State; §6 authorizes state and local officers to arrest without a warrant a person “the officer has probable cause to believe . . . has committed any public offense that makes the person removable from the United States”; and §2(B) requires officers conducting a stop, detention, or arrest to make efforts, in some circumstances, to verify the person’s immigration status with the Federal Government. The Ninth Circuit affirmed, agreeing that the United States had established a likelihood of success on its preemption claims.
Held:
1. The Federal Government’s broad, undoubted power over immigration and alien status rests, in part, on its constitutional power to” establish an uniform Rule of Naturalization,” Art. I, §8, cl. 4, and on its inherent sovereign power to control and conduct foreign relations, see Toll v. Moreno, 458 U. S. 1, 10. Federal governance is extensive and complex. Among other things, federal law specifies categories of aliens who are ineligible to be admitted to the United States, 8
U. S. C. §1182; requires aliens to register with the Federal Government and to carry proof of status, §§1304(e), 1306(a); imposes sanctions on employers who hire unauthorized workers, §1324a; and specifies which aliens may be removed and the procedures for doing so, see §1227. Removal is a civil matter, and one of its principal features 2 ARIZONA v. UNITED STATES
Syllabus
is the broad discretion exercised by immigration officials, who must decide whether to pursue removal at all. Immigration and Customs Enforcement (ICE), an agency within the Department of Homeland Security, is responsible for identifying, apprehending, and removing illegal aliens. It also operates the Law Enforcement Support Center ,which provides immigration status information to federal, state, andlocal officials around the clock. Pp. 2–7.
2. The Supremacy Clause gives Congress the power to preempt state law. A statute may contain an express preemption provision, see, e.g., Chamber of Commerce of United States of America v. Whiting, 563 U. S. ___, ___, but state law must also give way to federal law in at least two other circumstances. First, States are precluded from regulating conduct in a field that Congress has determinedmust be regulated by its exclusive governance. See Gade v. National Solid Wastes Management Assn., 505 U. S. 88, 115. Intent can be inferred from a framework of regulation “so pervasive . . . that Congress left no room for the States to supplement it” or where a “federalinterest is so dominant that the federal system will be assumed topreclude enforcement of state laws on the same subject.” Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230. Second, state laws are preempted when they conflict with federal law, including when theystand “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U. S. 52, 67. Pp. 7–8.
3. Sections 3, 5(C), and 6 of S. B. 1070 are preempted by federal law. Pp. 8–19.
(a) Section 3 intrudes on the field of alien registration, a field in which Congress has left no room for States to regulate. In Hines, a state alien-registration program was struck down on the ground that Congress intended its “complete” federal registration plan to be a “single integrated and all-embracing system.” 312 U. S., at 74. That scheme did not allow the States to “curtail or complement” federallaw or “enforce additional or auxiliary regulations.” Id., at 66–67. The federal registration framework remains comprehensive. Because Congress has occupied the field, even complementary state regulationis impermissible. Pp. 8–11.
(b) Section 5(C)’s criminal penalty stands as an obstacle to the federal regulatory system. The Immigration Reform and Control Act of 1986 (IRCA), a comprehensive framework for “combating the employment of illegal aliens,” Hoffman Plastic Compounds, Inc. v. NLRB, 535 U. S. 137, 147, makes it illegal for employers to knowingly hire, recruit, refer, or continue to employ unauthorized workers, 8
U. S. C. §§1324a(a)(1)(A), (a)(2), and requires employers to verify prospective employees’ employment authorization status,
3 Cite as: 567 U. S. ____ (2012)
Syllabus
§§1324a(a)(1)(B), (b). It imposes criminal and civil penalties on employers, §§1324a(e)(4), (f), but only civil penalties on aliens who seek, or engage in, unauthorized employment, e.g., §§1255(c)(2), (c)(8).IRCA’s express preemption provision, though silent about whether additional penalties may be imposed against employees, “does not bar the ordinary working of conflict pre-emption principles” or impose a “special burden” making it more difficult to establish the preemptionof laws falling outside the clause. Geier v. American Honda Motor Co., 529 U. S. 861, 869–872. The correct instruction to draw from the text, structure, and history of IRCA is that Congress decided it would be inappropriate to impose criminal penalties on unauthorized employees. It follows that a state law to the contrary is an obstacle tothe regulatory system Congress chose. Pp. 12–15.
(c) By authorizing state and local officers to make warrantless arrests of certain aliens suspected of being removable, §6 too createsan obstacle to federal law. As a general rule, it is not a crime for aremovable alien to remain in the United States. The federal scheme instructs when it is appropriate to arrest an alien during the removal process. The Attorney General in some circumstances will issue awarrant for trained federal immigration officers to execute. If no federal warrant has been issued, these officers have more limited authority. They may arrest an alien for being “in the United States inviolation of any [immigration] law or regulation,” for example, but only where the alien “is likely to escape before a warrant can be obtained.” §1357(a)(2). Section 6 attempts to provide state officers with even greater arrest authority, which they could exercise with no instruction from the Federal Government. This is not the system Congress created. Federal law specifies limited circumstances in which state officers may perform an immigration officer’s functions. This includes instances where the Attorney General has granted that authority in a formal agreement with a state or local government. See, e.g., §1357(g)(1). Although federal law permits state officers to “cooperate with the Attorney General in the identification, apprehension, detention, or removal of aliens not lawfully present in the UnitedStates,” §1357(g)(10)(B), this does not encompass the unilateral decision to detain authorized by §6. Pp. 15–19.
4. It was improper to enjoin §2(B) before the state courts had anopportunity to construe it and without some showing that §2(B)’s enforcement in fact conflicts with federal immigration law and its objectives. Pp. 19–24.
(a) The state provision has three limitations: A detainee is presumed not to be an illegal alien if he or she provides a valid Arizonadriver’s license or similar identification; officers may not consider race, color, or national origin “except to the extent permitted by the 4 ARIZONA v. UNITED STATES
Syllabus
United States [and] Arizona Constitution[s]”; and §2(B) must be “implemented in a manner consistent with federal law regulating immigration, protecting the civil rights of all persons and respecting the privileges and immunities of United States citizens.” P. 20.
(b) This Court finds unpersuasive the argument that, even with those limits, §2(B) must be held preempted at this stage. Pp. 20–24.
(1) The mandatory nature of the status checks does not interfere with the federal immigration scheme. Consultation between federal and state officials is an important feature of the immigration system. In fact, Congress has encouraged the sharing of informationabout possible immigration violations. See §§1357(g)(10)(A), 1373(c). The federal scheme thus leaves room for a policy requiring state officials to contact ICE as a routine matter. Cf. Whiting, 563 U. S., at ___. Pp. 20–21.
(2) It is not clear at this stage and on this record that §2(B), in practice, will require state officers to delay the release of detaineesfor no reason other than to verify their immigration status. This would raise constitutional concerns. And it would disrupt the federal framework to put state officers in the position of holding aliens incustody for possible unlawful presence without federal direction and supervision. But §2(B) could be read to avoid these concerns. If the law only requires state officers to conduct a status check during the course of an authorized, lawful detention or after a detainee has been released, the provision would likely survive preemption—at least absent some showing that it has other consequences that are adverse tofederal law and its objectives. Without the benefit of a definitive interpretation from the state courts, it would be inappropriate to assume §2(B) will be construed in a way that conflicts with federal law. Cf. Fox v. Washington, 236 U. S. 273, 277. This opinion does not foreclose other preemption and constitutional challenges to the lawas interpreted and applied after it goes into effect. Pp. 22–24.
641 F. 3d 339, affirmed in part, reversed in part, and remanded.
KENNEDY, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. SCALIA, J., THOMAS, J., and ALITO, J., filed opinions concurring in part and dissenting in part. KAGAN, J., took no part in the consideration or decision of the case. _________________ _________________ 1 Cite as: 567 U. S. ____ (2012)
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in thepreliminary print of the United States Reports. Readers are requested tonotify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in orderthat corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 11–182
ARIZONA, ET AL., PETITIONERS v. UNITED STATES
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[June 25, 2012]
JUSTICE KENNEDY delivered the opinion of the Court.
To address pressing issues related to the large number of aliens within its borders who do not have a lawful right to be in this country, the State of Arizona in 2010 enacted a statute called the Support Our Law Enforcement and Safe Neighborhoods Act. The law is often referred to as
S. B. 1070, the version introduced in the state senate. See also H. 2162 (2010) (amending S. 1070). Its stated purpose is to “discourage and deter the unlawful entry and presence of aliens and economic activity by persons unlawfully present in the United States.” Note following Ariz.Rev. Stat. Ann. §11–1051 (West 2012). The law’s provisions establish an official state policy of “attrition through enforcement.” Ibid. The question before the Court is whether federal law preempts and renders invalid four separate provisions of the state law.
I The United States filed this suit against Arizona, seeking to enjoin S. B. 1070 as preempted. Four provisions of the law are at issue here. Two create new state offenses. Section 3 makes failure to comply with federal alienregistration requirements a state misdemeanor. Ariz. 2 ARIZONA v. UNITED STATES Opinion of the Court
Rev. Stat. Ann. §13–1509 (West Supp. 2011). Section 5, in relevant part, makes it a misdemeanor for an unauthorized alien to seek or engage in work in the State; this provision is referred to as §5(C). See §13–2928(C). Two other provisions give specific arrest authority and investigative duties with respect to certain aliens to state and local law enforcement officers. Section 6 authorizes officers to arrest without a warrant a person “the officer has probable cause to believe . . . has committed any public offense that makes the person removable from the United States.” §13–3883(A)(5). Section 2(B) provides that officers who conduct a stop, detention, or arrest must in some circumstances make efforts to verify the person’s immigration status with the Federal Government. See §11–1051(B) (West 2012).
The United States District Court for the District of Arizona issued a preliminary injunction preventing thefour provisions at issue from taking effect. 703 F. Supp. 2d 980, 1008 (2010). The Court of Appeals for the Ninth Circuit affirmed. 641 F. 3d 339, 366 (2011). It agreed that the United States had established a likelihood of success on its preemption claims. The Court of Appeals was unanimous in its conclusion that §§3 and 5(C) were likely preempted. Judge Bea dissented from the decision to uphold the preliminary injunction against §§2(B) and 6.This Court granted certiorari to resolve important questions concerning the interaction of state and federal power with respect to the law of immigration and alien status.565 U. S. ___ (2011).
II A
The Government of the United States has broad, undoubted power over the subject of immigration and the status of aliens. See Toll v. Moreno, 458 U. S. 1, 10 (1982); see generally S. Legomsky & C. Rodríguez, Immigration 3 Cite as: 567 U. S. ____ (2012)
Opinion of the Court
and Refugee Law and Policy 115–132 (5th ed. 2009). This authority rests, in part, on the National Government’s constitutional power to “establish an uniform Rule of Naturalization,” U. S. Const., Art. I, §8, cl. 4, and its inher- ent power as sovereign to control and conduct relations with foreign nations, see Toll, supra, at 10 (citing United States v. Curtiss-Wright Export Corp., 299 U. S. 304, 318 (1936)).
The federal power to determine immigration policy is well settled. Immigration policy can affect trade, investment, tourism, and diplomatic relations for the entire Nation, as well as the perceptions and expectations of aliens in this country who seek the full protection of its laws. See, e.g., Brief for Argentina et al. as Amici Curiae; see also Harisiades v. Shaughnessy, 342 U. S. 580, 588–589 (1952). Perceived mistreatment of aliens in the United States may lead to harmful reciprocal treatment of American citizens abroad. See Brief for Madeleine K. Albright et al. as Amici Curiae 24–30.
It is fundamental that foreign countries concerned about the status, safety, and security of their nationals in the United States must be able to confer and communicate on this subject with one national sovereign, not the 50 separate States. See Chy Lung v. Freeman, 92 U. S. 275, 279– 280 (1876); see also The Federalist No. 3, p. 39 (C. Rossiter ed. 2003) (J. Jay) (observing that federal power would be necessary in part because “bordering States . . . under the impulse of sudden irritation, and a quick sense of apparent interest or injury” might take action that would undermine foreign relations). This Court has reaffirmed that “[o]ne of the most important and delicate of all international relationships . . . has to do with the protection of the just rights of a country’s own nationals when those nationals are in another country.” Hines v. Davidowitz, 312
U. S. 52, 64 (1941).Federal governance of immigration and alien status is 4 ARIZONA v. UNITED STATES
Opinion of the Court
extensive and complex. Congress has specified categories of aliens who may not be admitted to the United States. See 8 U. S. C. §1182. Unlawful entry and unlawful reentry into the country are federal offenses. §§1325, 1326. Once here, aliens are required to register with the Federal Government and to carry proof of status on their person. See §§1301–1306. Failure to do so is a federal misdemeanor. §§1304(e), 1306(a). Federal law also authorizes States to deny noncitizens a range of public benefits, §1622; and it imposes sanctions on employers who hire unauthorized workers, §1324a.
Congress has specified which aliens may be removed from the United States and the procedures for doing so. Aliens may be removed if they were inadmissible at the time of entry, have been convicted of certain crimes, or meet other criteria set by federal law. See §1227. Removal is a civil, not criminal, matter. A principal feature of the removal system is the broad discretion exercised by immigration officials. See Brief for Former Commissioners of the United States Immigration and Naturalization Service as Amici Curiae 8–13 (hereinafter Brief for Former INS Commissioners). Federal officials, as an initial matter, must decide whether it makes sense to pursue removal at all. If removal proceedings commence, aliens may seek asylum and other discretionary relief allowing them to remain in the country or at least to leave without formal removal. See §1229a(c)(4); see also, e.g., §§1158(asylum), 1229b (cancellation of removal), 1229c (voluntary departure).
Discretion in the enforcement of immigration law embraces immediate human concerns. Unauthorized workers trying to support their families, for example, likely pose less danger than alien smugglers or aliens who commit a serious crime. The equities of an individual case may turn on many factors, including whether the alien has children born in the United States, long ties to the 5 Cite as: 567 U. S. ____ (2012) Opinion of the Court
community, or a record of distinguished military service. Some discretionary decisions involve policy choices that bear on this Nation’s international relations. Returning an alien to his own country may be deemed inappropriate even where he has committed a removable offense or fails to meet the criteria for admission. The foreign state maybe mired in civil war, complicit in political persecution, or enduring conditions that create a real risk that the alien or his family will be harmed upon return. The dynamic nature of relations with other countries requires the Executive Branch to ensure that enforcement policies are consistent with this Nation’s foreign policy with respect to these and other realities.
Agencies in the Department of Homeland Security playa major role in enforcing the country’s immigration laws. United States Customs and Border Protection (CBP) is repossible for determining the admissibility of aliens and securing the country’s borders. See Dept. of Homeland Security, Office of Immigration Statistics, Immigration Enforcement Actions: 2010, p. 1 (2011). In 2010, CBP’s Border Patrol apprehended almost half a million people. Id., at 3. Immigration and Customs Enforcement (ICE), a second agency, “conducts criminal investigations involving the enforcement of immigration-related statutes.” Id., at
2. ICE also operates the Law Enforcement Support Center. LESC, as the Center is known, provides immigration status information to federal, state, and local officials around the clock. See App. 91. ICE officers are responsible “for the identification, apprehension, and removal of illegal aliens from the United States.” Immigration Enforcement Actions, supra, at 2. Hundreds of thousands of aliens are removed by the Federal Government every year. See id., at 4 (reporting there were 387,242 removals, and 476,405 returns without a removal order, in 2010). 6 ARIZONA v. UNITED STATES
Opinion of the Court
B The pervasiveness of federal regulation does not diminish the importance of immigration policy to the States. Arizona bears many of the consequences of unlawful immigration. Hundreds of thousands of deportable aliens are apprehended in Arizona each year. Dept. of Homeland Security, Office of Immigration Statistics, 2010 Yearbook of Immigration Statistics 93 (2011) (Table 35). Unauthorized aliens who remain in the State comprise, by one estimate, almost six percent of the population. See Passel & Cohn, Pew Hispanic Center, U. S. Unauthorized Immigration Flows Are Down Sharply Since Mid-Decade 3(2010). And in the State’s most populous county, these aliens are reported to be responsible for a disproportionate share of serious crime. See, e.g., Camarota & Vaughan, Center for Immigration Studies, Immigration and Crime: Assessing a Conflicted Situation 16 (2009) (Table 3) (estimating that unauthorized aliens comprise 8.9% of the population and are responsible for 21.8% of the felonies in Maricopa County, which includes Phoenix). Statistics alone do not capture the full extent of Arizona’s concerns. Accounts in the record suggest there is an” epidemic of crime, safety risks, serious property damage, and environmental problems” associated with the influx of illegal migration across private land near the Mexican border. Brief for Petitioners 6. Phoenix is a major city of the United States, yet signs along an interstate highway30 miles to the south warn the public to stay away. One reads, “DANGER—PUBLIC WARNING—TRAVEL NOT RECOMMENDED / Active Drug and Human Smuggling Area / Visitors May Encounter Armed Criminals and Smuggling Vehicles Traveling at High Rates of Speed.”App. 170; see also Brief for Petitioners 5–6. The problems posed to the State by illegal immigration must not be underestimated. These concerns are the background for the formal legal 7 Cite as: 567 U. S. ____ (2012)
Opinion of the Court
Analysis that follows. The issue is whether, under preemption principles, federal law permits Arizona to implement the state-law provisions in dispute.
III Federalism, central to the constitutional design, adopts the principle that both the National and State Governments have elements of sovereignty the other is bound to respect. See Gregory v. Ashcroft, 501 U. S. 452, 457 (1991); U. S. Term Limits, Inc. v. Thornton, 514 U. S. 779, 838 (1995) (KENNEDY, J., concurring). From the existence of two sovereigns follows the possibility that laws can be in conflict or at cross-purposes. The Supremacy Clause provides a clear rule that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Art. VI, cl. 2. Under this principle, Congress has the power to preempt state law. See Crosby v. National Foreign Trade Council, 530 U. S. 363, 372 (2000); Gibbons
v. Ogden, 9 Wheat. 1, 210–211 (1824). There is no doubt that Congress may withdraw specified powers from the States by enacting a statute containing an express preemption provision. See, e.g., Chamber of Commerce of United States of America v. Whiting, 563 U. S. ___, ___ (2011) (slip op., at 4).
State law must also give way to federal law in at least two other circumstances. First, the States are precluded from regulating conduct in a field that Congress, acting within its proper authority, has determined must be regulated by its exclusive governance. See Gade v. National Solid Wastes Management Assn., 505 U. S. 88, 115 (1992).The intent to displace state law altogether can be inferred from a framework of regulation “so pervasive . . . that Congress left no room for the States to supplement it” or where there is a “federal interest . . . so dominant that the 8 ARIZONA v. UNITED STATES Opinion of the Court
federal system will be assumed to preclude enforcement of state laws on the same subject.” Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947); see English v. General Elec. Co., 496 U. S. 72, 79 (1990).
Second, state laws are preempted when they conflict with federal law. Crosby, supra, at 372. This includes cases where “compliance with both federal and state regulations is a physical impossibility,” Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 142–143 (1963), and those instances where the challenged state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” Hines, 312 U. S., at 67; see also Crosby, supra, at 373 (“What is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects”). In preemption analysis, courts should assume that “the historic police powers of the States” are not superseded “unless that was the clear and manifest purpose of Congress.” Rice, supra, at 230; see Wyeth v. Levine, 555 U. S. 555, 565 (2009).
The four challenged provisions of the state law each must be examined under these preemption principles.
IV
A
Section 3
Section 3 of S. B. 1070 creates a new state misdemeanor. It forbids the “willful failure to complete or carry an alien registration document . . . in violation of 8 United States Code section 1304(e) or 1306(a).” Ariz. Rev. Stat. Ann. §11–1509(A) (West Supp. 2011). In effect, §3 adds a state-law penalty for conduct proscribed by federal law. The United States contends that this state enforcement mechanism intrudes on the field of alien registration, a field in which Congress has left no room for States to Cite as: 567 U. S. ____ (2012) 9
Opinion of the Court
regulate. See Brief for United States 27, 31.
The Court discussed federal alien-registration requirements in Hines v. Davidowitz, 312 U. S. 52. In 1940, as international conflict spread, Congress added to federal immigration law a “complete system for alien registration.” Id., at 70. The new federal law struck a careful balance. It punished an alien’s willful failure to register but did not require aliens to carry identification cards. There were also limits on the sharing of registration records and fingerprints. The Court found that Congress intended the federal plan for registration to be a “single integrated and all-embracing system.” Id., at 74. Because this “complete scheme . . . for the registration of aliens” touched on foreign relations, it did not allow the States to “curtail or complement” federal law or to “enforce additional or auxiliary regulations.” Id., at 66–67. As a consequence, the Court ruled that Pennsylvania could not enforce its own alien-registration program. See id., at 59, 74. The present regime of federal regulation is not identical to the statutory framework considered in Hines, but it remains comprehensive. Federal law now includes a requirement that aliens carry proof of registration. 8
U. S. C. §1304(e). Other aspects, however, have stayed the same. Aliens who remain in the country for more than 30days must apply for registration and be fingerprinted. Compare §1302(a) with id., §452(a) (1940 ed.). Detailed information is required, and any change of address has to be reported to the Federal Government. Compare §§1304(a), 1305(a) (2006 ed.), with id., §§455(a), 456 (1940 ed.). The statute continues to provide penalties for the willful failure to register. Compare §1306(a) (2006 ed.), with id., §457 (1940 ed.).
The framework enacted by Congress leads to the conclusion here, as it did in Hines, that the Federal Government has occupied the field of alien registration. See American Ins. Assn. v. Garamendi, 539 U. S. 396, 419, n. 11 (2003) 10 ARIZONA v. UNITED STATES
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(characterizing Hines as a field preemption case); Pennsylvania v. Nelson, 350 U. S. 497, 504 (1956) (same); see alsoDinh, Reassessing the Law of Preemption, 88 Geo. L. J.2085, 2098–2099, 2107 (2000) (same). The federal statutory directives provide a full set of standards governing alien registration, including the punishment for noncompliance. It was designed as a “‘harmonious whole.’” Hines, supra, at 72. Where Congress occupies an entire field, as it has in the field of alien registration, even complementary state regulation is impermissible. Field preemption reflects a congressional decision to foreclose any state regulation in the area, even if it is parallel to federal standards. See Silkwood v. Kerr-McGee Corp., 464
U. S. 238, 249 (1984).
Federal law makes a single sovereign responsible for maintaining a comprehensive and unified system to keep track of aliens within the Nation’s borders. If §3 of the Arizona statute were valid, every State could give itself independent authority to prosecute federal registration violations, “diminish[ing] the [Federal Government]’s control over enforcement” and “detract[ing] from the ‘integrated scheme of regulation’ created by Congress.” Wisconsin Dept. of Industry v. Gould Inc., 475 U. S. 282, 288–289 (1986). Even if a State may make violation of federal law a crime in some instances, it cannot do so in a field (like the field of alien registration) that has been occupied by federal law. See California v. Zook, 336 U. S. 725, 730– 731, 733 (1949); see also In re Loney, 134 U. S. 372, 375– 376 (1890) (States may not impose their own punishment for perjury in federal courts).
Arizona contends that §3 can survive preemption because the provision has the same aim as federal law and adopts its substantive standards. This argument not only ignores the basic premise of field preemption—that States may not enter, in any respect, an area the Federal Government has reserved for itself—but also is unpersuasive 11 Cite as: 567 U. S. ____ (2012)
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on its own terms. Permitting the State to impose its own penalties for the federal offenses here would conflict with the careful framework Congress adopted. Cf. Buckman Co. v. Plaintiffs’ Legal Comm., 531 U. S. 341, 347–348 (2001) (States may not impose their own punishment for fraud on the Food and Drug Administration); Wisconsin Dept., supra, at 288 (States may not impose their own punishment for repeat violations of the National Labor Relations Act). Were §3 to come into force, the State would have the power to bring criminal charges against individuals for violating a federal law even in circumstances where federal officials in charge of the comprehensive scheme determine that prosecution would frustrate federal policies.
There is a further intrusion upon the federal scheme. Even where federal authorities believe prosecution is appropriate, there is an inconsistency between §3 and federal law with respect to penalties. Under federal law, the failure to carry registration papers is a misdemeanor that may be punished by a fine, imprisonment, or a term of probation. See 8 U. S. C. §1304(e) (2006 ed.); 18 U. S. C. §3561. State law, by contrast, rules out probation as a possible sentence (and also eliminates the possibility of a pardon). See Ariz. Rev. Stat. Ann. §13–1509(D) (West Supp. 2011). This state framework of sanctions creates a conflict with the plan Congress put in place. See Wisconsin Dept., supra, at 286 (“[C]onflict is imminent whenever two separate remedies are brought to bear on the same activity” (internal quotation marks omitted)).
These specific conflicts between state and federal law simply underscore the reason for field preemption. As it did in Hines, the Court now concludes that, with respect to the subject of alien registration, Congress intended to preclude States from “complement[ing] the federal law, or enforc[ing] additional or auxiliary regulations.” 312 U. S., at 66–67. Section 3 is preempted by federal law. 12 ARIZONA v. UNITED STATES
Opinion of the Court
B
Section 5(C)
Unlike §3, which replicates federal statutory requirements, §5(C) enacts a state criminal prohibition where no federal counterpart exists. The provision makes it a state misdemeanor for “an unauthorized alien to knowingly apply for work, solicit work in a public place or perform work as an employee or independent contractor” in Arizona. Ariz. Rev. Stat. Ann. §13–2928(C) (West Supp. 2011).Violations can be punished by a $2,500 fine and incarceration for up to six months. See §13–2928(F); see also §§13–707(A)(1) (West 2010); 13–802(A); 13–902(A)(5). The United States contends that the provision upsets the balance struck by the Immigration Reform and Control Act of 1986 (IRCA) and must be preempted as an obstacle to the federal plan of regulation and control.
When there was no comprehensive federal program regulating the employment of unauthorized aliens, this Court found that a State had authority to pass its own laws on the subject. In 1971, for example, California passed a law imposing civil penalties on the employment of aliens who were “not entitled to lawful residence in the United States if such employment would have an adverse effect on lawful resident workers.” 1971 Cal. Stats. ch. 1442, §1(a). The law was upheld against a preemption challenge in De Canas v. Bica, 424 U. S. 351 (1976). De Canas recognized that “States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State.” Id., at
356. At that point, however, the Federal Government had expressed no more than “a peripheral concern with [the] employment of illegal entrants.” Id., at 360; see Whiting, 563 U. S., at ___ (slip op., at 3).
Current federal law is substantially different from the regime that prevailed when De Canas was decided. Congress enacted IRCA as a comprehensive framework for
Plastic Compounds, Inc. v. NLRB, 535 U. S. 137, 147 (2002). The law makes it illegal for employers to knowingly hire, recruit, refer, or continue to employ unauthorized workers. See 8 U. S. C. §§1324a(a)(1)(A), (a)(2). It also requires every employer to verify the employment authorization status of prospective employees. See §§1324a(a)(1)(B), (b); 8 CFR §274a.2(b) (2012). These requirements are enforced through criminal penalties and an escalating series of civil penalties tied to the number of times an employer has violated the provisions. See 8 U. S. C. §§1324a(e)(4), (f); 8 CFR §274a.10.
Cite as: 567 U. S. ____ (2012)
13
Opinion of the Court
“combating the employment of illegal aliens.”
Hoffman
The National Debt US Department of Treasury
6/30/1976 620,433,000,000.00 Ford
9/30/1977 698,840,000,000.00 Carter
9/30/1978 771,544,000,000.00 Carter
9/30/1979 826,519,000,000.00 Carter
9/30/1980 907,701,000,000.00 Carter
9/30/1981 997,855,000,000.00 Reagan
9/30/1982 1,142,034,000,000.00 Reagan
9/30/1983 1,377,210,000,000.00 Reagan
9/30/1984 1,572,266,000,000.00 Reagan
9/30/1985 1,823,103,000,000.00 Reagan
9/30/1986 2,125,302,616,658.42 Reagan
9/30/1987 2,350,276,890,953.00 Reagan
9/30/1988 2,602,337,712,041.16 Reagan
9/29/1989 2,857,430,960,187.32 Bush
9/28/1990 3,233,313,451,777.25 Bush
9/30/1991 3,665,303,351,697.03 Bush
9/30/1992 4,064,620,655,521.66 Bush
9/30/1993 4,411,488,883,139.38 Clinton
9/30/1994 4,692,749,910,013.32 Clinton
9/29/1995 4,973,982,900,709.39 Clinton
9/30/1996 5,224,810,939,135.73 Clinton
9/30/1997 5,413,146,011,397.34 Clinton
9/30/1998 5,526,193,008,897.62 Clinton
9/30/1999 5,656,270,901,615.43 Clinton
9/30/2000 5,674,178,209,886.86 Clinton
9/30/2001 5,807,463,412,200.06 bush
9/30/2002 6,228,235,965,597.16 bush
9/30/2003 6,783,231,062,743.62 bush
9/30/2004 7,379,052,696,330.32 bush
9/30/2005 7,932,709,661,723.50 bush
9/30/2006 8,506,973,899,215.23 bush
9/30/2007 9,007,653,372,262.48 bush
9/30/2008 10,024,724,896,912.40 Obama
9/30/2009 11,909,829,003,511.70 Obama
9/30/2010 13,561,623,030,891.70 Obama
AIG; President talk on 24th. 03/18/2009 I am not surprised that detailed explanations of the roots of the Great Recession are now being discussed among the various ‘talk media’. (I just invented this term so give me credit when you use or hear it elsewhere.) The discussion has moved beyond the single topic segments of the mini hour documentaries and involved into discussions of the causal relations and the interaction of the various agents that contributed to this situation.
Time lines of the cause and effect are being provided with an objective explanation of how the recession happened and how it reaches into our lives. This open discussion has begun to leave behind those single subject commentators who simply change the lyrics of their old songs but use the same hooks trying to sell their song as new.
I hope this discussion will continue among the talk media since I felt ahead of the subject with my first blog and trying to keep fresh and ahead of the discussion feeds my prophetic ego which scares me when I’m proven right. (By the way, there is no reason for this rally in the market and I will not get back in before 6500.) Sadly this development is fighting for attention with the latest villain who we look to point our anger towards while ignoring our own culpability.
AIG did not load up their balance sheet with debt security swaps and mortgage back securities in October 08 when the market began to tank. They were the engine that supported our demand for equity home loans, Alt-A, and Sub-Prime mortgages. They may have taken advantage of their position as a financial organization free to engage in speculative financial instruments but now we see who their customers were. These clients are not being victimized as badly as the senor staff who ran the operations that supported the needs of these clients.
The question not being discussed is why Bank of America, Lehman Brothers, etc needed these types of securities. What were they selling and why? The foreign customers list is a whose who of international banking. What was the condition of their domestic housing and industrial markets? Where did Eastern Europe get the funding to dream about EU membership? Listen to where the loss of liquidity has had the greatest impact and follow the money back to those lending in that market. Does the change in our consumer appetites somehow reflected in the current economic environment. We are reducing our exuberance and inventing a new economy? What will our new desires bring fourth?
President Obama will talk to the nation on March 24, 2009.
He will nationalize banks and the financial system to prop up the economy and stop an impending economic decline.
Foreign policy initiative, lead by Secretary of State Clinton, will be announced opening up talks with major middle east nations to include Europe and Russia.
Major theme will be the militarization of the U.S. Mexican boarder.
Democrats will eventually lose majority of Mexican political support in the U.S. breathing life back into the RINO party.
The Great Recession 03/18/2009 0 Comments Edit | Settings | DeleteAre you sure you want to delete this post? This action is permanent. Yes, delete postNo, keep postI find the discussion by the mass communication media failing to heed Nixon’s advise and continues to talk down to us on a matter so important to the future of our way of life. Both sides of the argument are guilty. The subject is covered in generalities or by repeating the key words and phrases used by the pundits and public to address the Great Recession. I am not blind to the business model of talking to the lowest common denominator to attract the greatest audience, but an issue of this gravity attracts audiences on its’ own.
One side addresses the fear of liberty loss by a change in the political economic order. Individual freedoms are in jeopardy and initiative is being taxed by growing government involvement in the nation’s life. The only salvation is to let market forces take their natural course. Their main point is change is coming and that’s bad. I’m reminded what President Kennedy said in his speech at Vanderbilt University “all things yield to change, except change itself.”
Just as simplistic is the other side of the argument. Originally, it appeared to be turning up the conversation but soon turned down to take advantage of the juxtaposition of the various agents vying to lead the choir of the oppositions’ song. Recent public display of this position has either enticed the dysfunction of the leader of the band, or simply recited the litany of prayers of the public scared of the lack of tomorrows promise and the angry against the most recent supposed villain architect of this tragedy.
What is missing is plan talk and an open explanation of how we arrived at our present situation and what can be expected in the near future? A conversation free from hyperbole and jingoist catch phrases intent only on rallying crowds of torch and pitch fork weaving loyalist but rather clear thought provoking prose and an openness to give equal weight to opposing beliefs because, truly, this is an argument for the hearts and minds of the country. This is what I intend to offer you.
The cause of the Great Recession was born out of the unbridled deregulation that was the touch stone of a generation. Free rain (yes, water falling from the sky) to act was first principal. Housing might have been the visible tip of the iceberg that hit our economy but our unwillingness to enforce existing regulations that required uniformity of lending best practices was the current that brought this lumbering threat to bear down upon us.
As far back as the 90’s the Congress had enacted rules that required nontraditional home mortgage lenders to act in a more responsible manner under the direction of the Federal Reserves authority. The inaction of Federal Reserve Chairman Greenspan to enforce more conservative lending practices under his authority to act was more an expression of his microeconomic belief system (attitude) towards regulation then the general attitude that the U.S. economy was unsinkable. Congress attempted to compel enforcement, but then House Speaker Delay block this initiative, and the housing industry continued on course at full speed.
The largest part of the housing iceberg was the new financial instruments created to improve the efficiency of capital markets. The success of these new instruments resulted in trillions in new capital to be lent with the promise of future income building up balance sheets with empty promises. Greatly was the promise of above average returns that investment blocks entered with leverage take over’s of corporations. Investment backers found rewards based on short-term profits not long term growth and were encouraged to engage in like behavior that increased leverage capital growth. These factors became a marriage of convenience
Mortgages and loans were conveniently provided. The original terms were of less importance then the belief that better terms were available, eventually. The immediate profit from the fees collected and the bundling and collateralizing of the mortgages, the added warranties sold with the bonds, fed the need to repeat the cycle to generate additional income. This story is well known and repeated as further justification to oppose any plan that rewords bad behavior. If the situation we currently find our economy in is the result of bad behavior or a belief in the promise of a way of life that is no longer in reach of every citizen, I have yet to determine.
The excess of the past years cannot be ignored simply because they are not the headline news. The action by Chairman Greenspan to reduce and keep interest rates low as a function of monetary policy and government involvement to stimulate and maintain the economy is no less intervention despite its’ percentage of GDP. The growth of private equity funds capable of moving capital across boarders in an instant and leaving a whole in domestic credit markets is good business when opportunities move from one country to another. The policy of investors leveraging the balance sheet of Mervyns Departments Stores to finance it’s take over and sale its retail property, only to lease it back at a higher cost, further reduced Mervyns profitability to cause its’ bankruptcy can be seen as extremely rewarding bad behavior if not good business.
The resulting unemployment, reduced consumer spending, and lost or foreclosed homes is only the first of many of the same that continue to be the story of the Great Recession.
End part one.
The tip of the iceberg is housing, but the base is financial innovation that built wealth on the promise of future earning. Traditional capitalist economics requires increasing demand that drives profits that allow for increased capital expenditures to provide greater capacity to meet increasing demand and help reduce inflationary pressures.
The profitability built into the housing market came from fees to brokers and the ability to then commoditize the loans. This provided additional fees to the brokers when the mortgages were converted into bonds further increasing the distant between the lender and the borrower. The source of the funds provided to lenders was also borrowed from investment funds looking for easy profits as U.S. interest rates were lowered to support the economy.
All this activity drew capital into the U.S. increasing the availability of cheap money. Lending spilled over into Alt-A and eventually the Sub-prime mortgage. Eventually, home equity and real estate speculation help to inflate real estate prices creating the now infamous “exuberance.” Unfortunately, the housing bubble had already taken off and brokerage firms were in over their head with long term Mortgage Back Securities and Credit Default Swaps.
Borrowing against future earnings now drove the growth in the economy. The consumer took the advantage of easy credit; the homeowners took the advantage of rising equity to supplement income; the investors further pushed up real estate prices by speculating on housing. Industry began to build retail stores in the newly built communities, borrowing against future revenue to support new stores when traditionally business expansion was paid with profits from past sales. Housing prices grow, standards of living grew, business growth caused job growth and the country prospered. Never was heard the cries of bad lending practices or over extended activities now commonly heard around neighborhoods.
Regulations did exist to require a closer relationship between leaders and borrowers, but cries of government bureaucracy and nanny state regulations were principals counter to those the nation had embraced since Reagan. (Or so we were lead to believe) Despite how loud the cries were of the pending crises, not enough of the country realized how they were personally invested in the problem. When the problem finally arrived in the retirement statements and home values did we begin to take a closer look at what we had allowed to occur as we stood on the sidelines safe in our belief of the promised dream.
The inflated value in the Stock Market by the abundance of liquidity began to leak out as cash began to leak out of the U.S. financial market. The first significant sign of this was when the presidents of Major U.S. financial firms were fired or removed. The one exception was the banks that stayed out of the mortgage market or business bank regulated out of the mortgage market. Still, little public attention was given to this event.
The leaders of business were experienced, and even today the cries of inexperienced elected officials trying to direct the business environment are criticized as interventionist. Blameless are the business leaders operating in an environment that gives their allegiance to micro economic principals of owner interest above public good. The effect on the macro economy where we live our private lives was devastating.
End part two.
The fall of the financial markets was due in large part to the withdrawal of cash from speculative markets to safer investment instruments. The short-term commercial paper that brokers sold to finance long-term speculation dried up as interest rates reset on variable mortgage and foreclosures rates rose. The compounded leverage on loans created trillions in paper wealth based on future earnings that depended on others ability to make payments. This house of card became the trillion dollar pyramid scheme that slowly began to fall from its lake of a solid economic foundation.
Federal Reserve Chairman Bernanke began to increase interest rates to slow growth in the U.S. economy. Unaware of the actions put in motion by Greenspan, variable rate mortgages already scheduled to reset, increased larger then expected. Home owners did not receive the increase in wages necessary to continue to make mortgage payments when the interest rates reset higher then expected with the increase in Feds fund rate. The increase in commodities prices, gas, and food further reduce the consumer spending starting the Great Recession in December of 07.
The economy began to slow down as consumer demand dropped and Christmas sales fail to meet expectations. Earning reports showed reduced future earning and short sellers headed for the door. The Dow industrial average began to fall as so did oil prices. By summer both had become harbingers of what lay ahead that we continued to ignore.
Private equity funds started the flow of cash out of the economy. As oil prices fall, investors understood that industrial demand for oil meant lowered output and lowered economic demand. Our service economy had reduced the percentage of the economy that was oil based delaying the impact on reduced domestic economic activity. These ice flows in our path were the danger signs that people began to notice floating on the service of our economy.
When the iceberg hit and we all looked for a life boat to get into discovered there was not enough for everyone in the economy. Those with third class tickets would once again be sacrificed.
End part three.
Iraq Withdrawal
Foreign Affairs article on the U.S. pull out of Iraq finds positive advantages to the U.S. but disadvantages to the White House making a current proposal to leave Iraq hard politically.
The author relies on past U.S. involvement in Vietnam, Laos, Cambodia, Lebanon, and Mogadishu to support his argument. Regardless of the original intent of the U.S. involvement the eventually fatigue caused political damage to the current administration.
U.S. withdrawal was driven by popular demand to end involvement as the U.S. became the lightning rod that brought the opposition forces together to oppose the U.S. intervention and withdrawal eliminated the glue that kept these factions together.
Eventually, local factions filled the vacuum left by the U.S and began to pursue self interest. Cambodia’s occupation of islands claimed by Vietnam brought about Vietnams invasion of Cambodia and China invading Vietnam in support of Cambodia. Hostilities ended and each country began to pursue economic development. The dominos never fell and economic development became containment.
The Lebanese intervention was intended to counter Soviet influence in the region but eventually this U.N. sponsored intervention left the various nations to resolve the situation on their own. The U.S. supported nations in the region to act as a proxy for their interest allowing the U.S. to have influence in the region after intervening troops were removed.
Mogadishu was originally a U.N. action intended to provide humanitarian aide to civilians caught up in the fighting between local war lords. U.S. attempts to capture leading opposition warlord led to the Black Hawk Down incident and calls for U.S. withdrawal. This became another administration black eye but allowed the U.S. to turn over ownership of a failed state to the U.N. using local authorities.
The success of U.S. withdrawal ultimately falls on the desire of the combatant factions to improve their situation by finding solution based on a mutual desire to end hostilities and improve the conditions of the population. U.S. involvement transforms into providing resources to support foreign policies interests by proxies.
The condition that an administration owns a situation they are perceived as having broken is the political price paid for a failed intervention, the exit and resulting peaceful economic development is the benefit the nation receives by supporting economic growth and improved living conditions. Failed states that continue hostilities after a U.S. withdrawal is best handed off to the U.N. and providing financial or humanitarian support.
The success of the U.S. withdrawal from Iraq is completely in the hands of the Iraqis. The political solutions reached will come from mutual agreement or disagreement to resolve differences. Further U.S. intervention can only come from the sidelines or with further partnership with the U.N. or NATO. Regardless of the final outcome in Iraq the U.S. can do no more then leave and let domestic forces resole national issues.
Predictions:
Current U.S. actions by Secretary Clinton point towards U.S. support of a peaceful solution between the Palestinian groups and Israel via financial support for humanitarian aid. Syria, Lebanon, and Jordan will also be brought into the process to develop a mutually beneficial economic development zone supporting a need for peaceful coexistence.
This action will allow Syria to reduce its dependence on Iran and allow Iraq to continue its’ traditional place as a counter to Iran. Iraq will be portioned into a three ethnic regions of Kurds, Sunni and Shiite, either by confederation or internal immigration. This will satisfy Iran’s desire for a friendly Shiite Iraq on its’ western boarder if only by confederation. Sunni economic interest will be supported by the Sunni majority nations on the western boarder of Iraq.
The partitioning will not be as tragic as that which happened between India and Pakistan, but a regional segregation of the two Muslim sects will allow people of mutual belief to begin economic development based on national interest rather then religion.
U.S. interest of isolating Iran as a rising influence in the region will be met when Iran is provided the leadership position it has desired. Iran will continue its’ opposition to Al-Qaida and Sunni OBL threaten its’ new position as regional power.
Afghanistan is a region that must be addressed on a micro bases with preservation of tribal interest. Pakistan is the true real terrorist front that we are just now beginning to address…
U.S. Economy
Foreign Affairs article on the current U.S. economic situation says the situation is not the same that Japan experienced as outlined in the Economist Article.
The article argues that Japan’s lost decade was due to the failure of the political economy to adapt to a changed economy. The challenges to Japan’s economy were systemic; old business that were no longer profitable, limited social net, and a government unwilling to address this situation fast or aggressive enough to alleviate the situation.
The author actually wrote that the fundamental U.S. economy is sound with out sounding funny. Japan had old companies that were no longer profitable. The U.S. economy is suffering from a loss of liquidity causing a down turn in demand. Japan took years to lower interest rate from 8% to zero where the U.S. took only months. The lower interest rates allowed the old companies to continue operations and eventually pass the cost onto the government and tax payers. The U.S. acted quickly to keep the financial market liquid with cash to lend to slow deflation.
The cause of the U.S. problem is the lost of liquidity due to the collapse of the credit default swap (CDS) market. Unlike regular stocks and bonds that retain their value when a broker goes under, CDS were insured against failure. The example is AIG failing when Lehman Brothers failed. When CDS began to fail there was a virtual run on the investment banks as customers simply moved money out and brokers were unable to sale commercial paper. But the story goes further.
Failed regulation and failure to enforce regulation, which allowed for regulation of mortgages, by both Congress and the Federal Reserve (The Maestro) allowed the growth of nonmortgage financial institutions to enter the market and extend credit to anyone ignoring established lending practices. The rest of the store is well known.
Commercial real estate in Japan rose 500% and prices have fallen to eliminate over 80% of that run up in prices. The U.S. will likely experience a price drop in housing of about 35% to 40% of the peak prices of 2006. The cost to the country and GDP cannot be avoided: foreclosures, job loss, and recession.
Replacing the lost liquidity, especially to the mortgage industry, will eventually restore stability to the financial market, how long this will take is unknown but not likely to be a decade.
Upside, the U.S. is a bargain now and I expect an infusion of capital and tourism to increase and help improve the economy. I continue to predict that the Federal Government will partner with local municipalities to create mortgage housing authorities to funnel local savings into rehabilitating foreclosed homes and reestablish this tax base that will again commoditize mortgages and sale them in a regulated market.