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US Top Court to Intervene in Government’s Email Dispute With Microsoft

The U.S. Supreme Court agreed on Monday to hear an appeal from the Justice Department on whether U.S. investigators can obtain emails stored overseas if they have a search warrant.

Since 2013, Microsoft has defied U.S. authorities in turning over emails that were stored on a data center in Ireland. While the investigators had a search warrant to obtain private records – in this case, emails – regarding a drug-trafficking case, Microsoft argued the warrant was valid under U. S. law but did not apply to other countries.

Microsoft’s lawyers maintained that the Stored Communications Act of 1986, the federal law that regulates electronic records, does not extend beyond the United States. Under the same logic, the tech company argued foreign governments could cause Microsoft to turn over data stored on U.S. servers.

A three-judge panel of the 2nd Circuit Court in New York overruled the Justice Department in favor of Microsoft. The Microsoft-Ireland decision, as it has come to be known, set a precedent for tech companies on U.S. soil. Essentially, tech companies can withhold digital evidence of crimes in the United States if the data is on a foreign server.

“Hundreds, if not thousands, of investigations of crimes – ranging from terrorism to child pornography to fraud – are being or will be hampered by the government’s inability to obtain electronic evidence,” Jeffrey Wall, Deputy Attorney General, said in the appeal, which was made in June. “The decision protects only criminals whose communications are placed out of reach of law enforcement officials because of the business decisions of private providers.”

The Supreme Court will hear the case early next year. Unlike most cases regarding privacy, the case does not hinge on Fourth Amendment rights against unreasonable search and seizure, but the Stored Communications Act of 1986 on electronic records and privacy.

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Populism Again Casts Shadow Over Booming Eurozone Economy

For months, the outlook for the eurozone economy has brightened thanks to a series of electoral defeats for populist parties in key states like France. Now, following votes in Germany and Austria and the uncertainty over the Spanish region of Catalonia, concerns are growing again about the potential impact of euroskeptic politics.

The euro has edged lower in recent weeks despite data showing that the eurozone economy is enjoying one of its strongest periods of growth since the global financial crisis exploded a decade ago. On Monday, it was down 0.3 percent at $1.1785, having been above $1.20 at the end of August for the first time in two years.

 

One of the reasons relates to the electoral success of populist forces, first in Germany in late-September when the anti-immigration Alternative for Germany received almost 13 percent of the vote and won representation into the country’s parliament for the first time. Though the center-right Christian Democrats came out on top, the authority of Chancellor Angela Merkel was somewhat undermined by AfD’s relative success and she has still to forge a new coalition.

 

The populist tide was further evidenced in Sunday’s Austrian election, which saw the right-wing Freedom Party come second with around 27 percent of the vote — enough to possibly become part of a government led by the People’s Party and its 31-year-old leader, Sebastian Kurz.

 

The impact of a coalition involving a party that has sought to downplay the country’s Nazi past could hinder efforts to further integrate the economies of the 19 countries that use the euro, as advocated for by new French President Emmanuel Macron.

 

“Even though Austria is highly integrated and depends on the eurozone’s structure and openness, a new Austrian government will make the eurozone’s life harder, trying to push through self-interests,” ING economist Inga Fechner said.

 

Also of potential concern to the unity of the eurozone is the uncertainty surrounding Catalonia following its disputed independence referendum earlier this month. On Monday, there was still a lack of clarity as to whether the region’s leader, Carles Puigdemont, has declared independence following the vote that Madrid has deemed illegal.

 

The Spanish government of Prime Minister Mariano Rajoy has repeatedly said it’s not willing to negotiate with Puigdemont if independence is on the table, or accept any form of international mediation. The government has threatened to activate Article 155 of Spain’s Constitution, which could see Madrid take temporary control of some parts of Catalonia’s self-government.

 

All these signs of populism come at a time when the European economy is enjoying one of its most sustained upswings for a decade. A run of economic indicators have shown that the recovery, especially among those countries that use the euro currency, has been gaining momentum through 2017. The recovery, which has also seen unemployment come off highs, has prompted speculation that the European Central Bank will start to ease back on some of its emergency stimulus measures in the coming months.

 

Many economists ascribe the improving economic backdrop to the defeat of populist politicians earlier this year, notably in France where National Front leader Marine Le Pen lost overwhelmingly in the presidential runoff against Macron. Her defeat come a few weeks after Geert Wilders’ anti-Islam Freedom Party fared worse than anticipated in Dutch elections.

 

At the start of this year, the rise of populism was considered by many economists as the gravest cloud hanging over Europe’s economic future, especially as worries over Greece had abated. The Brexit vote in Britain in the summer of 2016 had shown how vulnerable the region could be to populist movements. The great fear for those overseeing the euro currency is that a party may come into government seeking to get out of the single currency and revert to the country’s original currency.

 

What’s occurred in the past few weeks is evidence that those populist forces are not done yet.

 

Simon Derrick, chief currency strategist at BNY Mellon, said “it would make sense for the euro to weaken if concerns about populism in the eurozone re-emerged.”

 

The next potential worry is Italy, where elections have to be held by May 2018. The country has for years grown more slowly than other developed economies and there are concerns that a party seeking to blame the country’s problems on the euro could make headway in the elections, potentially triggering more volatility for a currency that’s spent years dodging crises. In August, former premier Silvio Berlusconi floated the idea of a parallel currency being introduced in Italy.

 

 

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Chill in the Air as McConnell Readies to Sit Down With Trump

President Donald Trump blames the Senate’s Republican leader for the health overhaul failure, tantalizes deals with Democrats and watches his former strategist work to bulldoze the Republican establishment on Capitol Hill.

There’s no need for air conditioning at the White House with that chill in the air when Trump, a public official since January, and Senate Majority Leader Mitch McConnell, first elected to Congress in 1984, meet on Monday.

 

“Mitch McConnell’s not our problem. Our problem is that we promised to repeal and replace Obamacare, and we failed. We promised to cut taxes and we have yet to do it,” said Sen. Lindsey Graham, a South Carolina Republican and a member of Congress since 1995. “If we’re successful, Mitch McConnell’s fine. If we’re not, we’re all in trouble. We lose our majority and I think President Trump will not get re-elected.”

 

Steve Bannon, back at Breitbart News after helping Trump win the presidency and serving in the West Wing, is committed to dumping McConnell, a Republican from Kentucky. In a speech to religious conservatives Saturday, Bannon put on notice some of those incumbents who are at risk of a challenge from his flank of the party. He said the lawmakers possibly can avoid that wrath if they disavow McConnell and meet other conditions.

 

“This is our war,” Bannon said. “The establishment started it…. You all are gonna finish it.”

 

Sen. Susan Collins, a Maine moderate who just passed up a run for governor and was a pivotal “no” vote on health care, said Bannon’s rhetoric is exactly what the American people are tired of. “They don’t want this hyper-partisanship. They want us to work together. And they want us to get things done,” she said.

 

Collins, who’s served in the Senate since 1997, added that Bannon’s “over-the-top rhetoric is not helpful. Mitch McConnell is the Senate majority leader. The president needs him. I’m glad they’re working together on tax reform and a lot of other issues. And I’m glad they’re meeting this week.”

Frustration abounds

McConnell responded to Trump’s Twitter barrage after the failed health care effort by saying that the challenges of governing should come as no surprise.

 

“A lot of people look at all that and find it frustrating, messy. Well, welcome to the democratic process. That’s the way it is in our country,” McConnell said at a Republican Party event in Kentucky this summer.

 

Trump, a former Democrat himself, cut a deal with Democratic leaders on raising the U.S. borrowing limit and keeping the government running into the winter. The president has also talked about future arrangements, though his recent list of immigration demands soured Democrats who had seen an earlier opening for legislative progress.

 

Hard-right conservatives frustrated by the stalled agenda in Congress wrote in a letter last week during the Senate’s break that McConnell and his leadership team should step aside. The senators’ weeklong recess also drew criticism from the White House: “They’re on another vacation right now. I think that we would all be a lot better off if the Senate would stop taking vacations, and start staying here until we actually get some real things accomplished,” Trump spokeswoman Sarah Huckabee Sanders had said.

 

Meanwhile, a McConnell-backed political committee spent millions and Trump endorsed Alabama Sen. Luther Strange in a recent primary election, but Bannon-backed Roy Moore prevailed. Moore, a former judge, has defied federal court orders, described Islam as a false religion and called homosexuality evil.

 

Senate Republicans had been upbeat about adding to their 52-48 edge in the chamber, especially with Democrats defending more seats next year – 10 in states Trump won in last year’s presidential election. But the Bannon challenge could cost them, leaving incumbents on the losing end in primaries or Republican candidates roughed up for the general election.

 

“If we don’t cut taxes and we don’t eventually repeal and replace Obamacare, then we’re going to lose across the board in the House in 2018. And all of my colleagues running in primaries in 2018 will probably get beat. It will be the end of Mitch McConnell as we know it. So this is a symptom of a greater problem,” Graham said.

 

He added that Bannon “can’t beat us if we’re successful. And if we’re not successful, it doesn’t matter who tries to beat us, they’ll be successful.”

 

Collins spoke on ABC’s “This Week,” and Graham appeared on CBS’ “Face the Nation.”

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IMF: Global Economy Healthy, Still Needs Low Interest Rates

The world economy is the healthiest it’s been in years but could still use a little help from low-interest rates and higher government spending from countries that can afford it, the International Monetary Fund says. 

 

“There was a strong consensus that the global outlook is strengthening,” said Agustin Carstens, governor of the Bank of Mexico and outgoing chair of the IMF’s policy committee. “This does not mean we are declaring victory just yet.” 

 

The 189-member IMF and its sister agency, the World Bank, wrapped up three days of meetings Saturday. 

Broad recovery, risks

The IMF expects the global economy to grow 3.6 percent this year, up from 3.2 percent in 2016. And three-quarters of the global economy is growing, making this the broadest recovery in a decade. 

 

But IMF and World Bank officials pointed to risks that could derail global growth. Geopolitical risks are rising, including a confrontation between the United States and North Korea over Pyongyang’s nuclear weapons program. The income gap between rich and poor is growing, fueling political discontent with the free trade and global cooperation that the IMF and World Bank promote. 

 

So in a communique Saturday, the IMF’s policy committee called on world central banks to protect the fragile global recovery by keeping interest rates down in countries where inflation is too low and economies are performing below potential. 

 

IMF officials have also urged some countries with healthy finances, such as Germany and South Korea, to make investments that will spur growth. 

 

IMF Managing Director Christine Lagarde appealed to countries to enact reforms that will make their economies more efficient and spread prosperity to those who have been left behind. Specifically, Lagarde argued that countries could improve their economies and reduce inequality by putting more women to work, improving their access to credit and narrowing their pay gap with men. 

On Saturday, Ivanka Trump, the president’s daughter and a White House adviser, appeared with World Bank President Jim Yong Kim to launch a World Bank initiative to support women entrepreneurs. The World Bank fund has raised $350 million, which is designed to allow the World Bank to deploy at least $1 billion in capital to finance women-owned businesses. 

 

Ivanka Trump told the audience that she wanted to “spend a lot of time offering any value that I can as a mentor.” 

 

Adjusting to Trump

The World Bank and IMF delegates are still adjusting to the Trump administration, which is skeptical of international organizations and contemptuous of free trade agreements. This week, the United States pulled out of UNESCO, the United Nations’ cultural agency. It is has balked at providing additional capital to the World Bank unless the anti-poverty agency rethinks the way it distributes loans. It has scrapped an Asia-Pacific trade deal and is threatening to pull out of the North American Free Trade Agreement with Canada and Mexico. 

 

Treasury Secretary Steven Mnuchin said he carried in his pocket a list of all the G-20 nations and the size of the trade balances the United States has with each of those nations. With most of the G-20 countries, the United States is running a trade deficit.

 

In a speech Saturday to the IMF policy group, Mnuchin said he wanted to see the IMF be a more “forceful advocate” for strong global growth by taking a harder look at countries that abuse world trade rules. 

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Tesla Fires Hundreds of Workers After Annual Reviews

Tesla Motors fired hundreds of workers after completing its annual performance reviews, even though the electric automaker is trying to ramp up production to meet the demand for its new Model 3 sedan.

The Palo Alto, California-based company confirmed the cuts in a Saturday statement, but didn’t disclose how many of its 33,000 workers were jettisoned. The San Jose Mercury News interviewed multiple former and current Tesla employees who estimated 400 to 700 workers lost their jobs.

The housecleaning swept out workers in administrative and sales jobs, in addition to Tesla’s manufacturing operations.

An unspecified number of workers received bonuses and promotions following their reviews, according to the company.

Tesla is under pressure to deliver its Model 3 sedan to a waiting list of more than 450,000 customers. The company so far has been lagging its own production targets after making just 260 of the vehicles in its last quarter.

Including other models, Tesla expects to make about 100,000 cars this year. CEO Elon Musk is aiming to increase production by five-fold next year, a goal that probably will have to be met to support Tesla’s market value of $59 billion, more than Ford Motor Co.

Unlike Ford, Tesla hasn’t posted an annual profit yet.

Despite the mass firings, Tesla is still looking to hire hundreds more workers.

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Minority Residents, Massachusetts City Head to Federal Court

In May, 13 Asian and Hispanic residents of Lowell, Massachusetts, filed a voting rights lawsuit against the city government, alleging the at-large electoral system, in which the winner takes all, dilutes the minority vote and discriminates against the candidates from community of color running for office.

The plaintiffs asked the federal court to rule that the city’s electoral system “violates Section 2 the Voting Rights Act” and for “the adoption of at least one district-based seat.”

The first hearing on the lawsuit is scheduled for Tuesday before the U.S. District Court in Boston. Lowell’s City Council filed a motion to dismiss in its first response to the residents’ lawsuit on Sept. 15.

At the Tuesday hearing, the judge will decide whether to allow the suit to move forward. If it does, Lowell will be going to trial against some of its residents.

“We’re not surprised” by the city’s response, said Oren Sellstrom, litigation director of the Lawyers’ Committee for Civil Rights and Economic Justice.

Lowell prides itself as being a diverse city, but “it remains to be seen” whether the city wants to “reflect diversity in the hall of power,” Sellstrom said.

City officials said they could not discuss the lawsuit because the issue is still in executive session.

Voting Rights Act

The Voting Rights Act signed into law by President Lyndon Johnson in August 1965 is considered one of the most significant pieces of civil rights legislation ever enacted in the United States.

The Lowell citizens’ lawsuit is based on the section of that law that specifically prohibits state and local governments from using voting systems that result in discrimination against racial or ethnic minorities.

This is important in Lowell because altogether the minority populations of the former mill town come close — 49.2 percent — to being the majority. Of the minority population, Asian-Americans form the largest minority group, about 21 percent, a cohort that includes more than 30,000 Cambodians.

Since 1999, only four Asian and Hispanic candidates have been elected to the Lowell City Council, which is currently all white. No non-white candidates have ever been elected to the school committee, Lowell’s version of a school board.

Changes possible

No matter how the judge decides, the City Council will be looking at the possibility of changing the city’s form of government, which includes the voting system. There have been two public discussion sessions on the issue since August.

“It is better for us and the citizen to have a district representation with a combination of at-large councilor, and it is better for the public to elect the mayor,” said James Leary, a city councilor and one of the three councilors leading the ad hoc subcommittee on the charter review that was formed in June.

In the next few months, after organizing several public sessions across the city, the committee is expected to make recommendations to the City Council on changing or keeping the current form of government.

After reviewing the committee’s recommendation, the City Council will make a decision on which direction to take. Before anything changes in Lowell, though, residents will be faced with a ballot measure in November 2018 using the current system.

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Trump Won States Most Affected by End to Health Care Subsidies

President Donald Trump’s decision to end a provision of the Affordable Care Act that was benefiting roughly 6 million Americans helps fulfill a campaign promise, but it also risks harming some of the very people who helped him win the presidency.

Nearly 70 percent of those benefiting from the so-called cost-sharing subsidies live in states Trump won last November, according to an analysis by The Associated Press. The number underscores the political risk for Trump and his party, which could end up owning the blame for increased costs and chaos in the insurance marketplace.

The subsidies are paid to insurers by the federal government to help lower consumers’ deductibles and co-pays. People who benefit will continue receiving the discounts because insurers are obligated by law to provide them. But to make up for the lost federal funding, health insurers will have to raise premiums substantially, potentially putting coverage out of reach for many consumers.

Some insurers may decide to bail out of markets altogether.

“I woke up, really, in horror,” said Alice Thompson, 62, an environmental consultant from the Milwaukee area who purchases insurance on Wisconsin’s federally run health insurance exchange.

Thompson, who spoke with reporters on a call organized by a health care advocacy group, said she expects to pay 30 percent to 50 percent more per year for her monthly premium, potentially more than her mortgage payment. Officials in Wisconsin, a state that went for a Republican presidential candidate for the first time in decades last fall, assumed the federal subsidy would end when they approved premium rate increases averaging 36 percent for the coming year.

An estimated 4 million people were benefiting from the cost-sharing payments in the 30 states Trump carried, according to an analysis of 2017 enrollment data from the U.S. Centers for Medicare and Medicaid Services. Of the 10 states with the highest percentage of consumers benefiting from cost-sharing, all but one — Massachusetts — went for Trump.

Kentucky, for example

Kentucky embraced former President Barack Obama’s Affordable Care Act under its last governor, a Democrat, and posted some of the largest gains in getting its residents insured. Its new governor, a Republican, favors the GOP stance to replace it with something else.

Roughly half of the estimated 71,000 Kentuckians buying health insurance on the federal exchange were benefiting from the cost-sharing subsidies Trump just ended. Despite the gains from Obama’s law, the state went for Trump last fall even as he vowed to repeal it.

Consumers such as Marsha Clark fear what will happen in the years ahead, as insurers raise premiums on everyone to make up for the end of the federal money that helped lower deductibles and co-pays.

“I’m stressed out about the insurance, stressed out about the overall economy, and I’m very stressed out about our president,” said Clark, a 61-year-old real estate broker who lives in a small town about an hour’s drive south of Louisville. She pays $1,108 a month for health insurance purchased on the exchange.

While she earns too much to benefit from the cost-sharing subsidy, she is worried that monthly premiums will rise so high in the future that it will make insurance unaffordable.

Most beneficiaries in Florida

Sherry Riggs has a similar fear. The Fort Pierce, Florida, barber benefits from the deductible and co-pay discounts, as do more than 1 million other Floridians, the highest number of cost-sharing beneficiaries of any state.

She had bypass surgery following a heart attack last year and pays $10 a visit to see her cardiologist and only a few dollars for the medications she takes twice a day.

Her monthly premium is heavily subsidized by the federal government, but she worries about the cost soaring in the future. Florida, another state that swung for Trump, has approved rate increases averaging 45 percent.

“Probably for some people it would be a death sentence,” she said. “I think it’s kind of a tragic decision on the president’s part. It scares me because I don’t think I’ll be able to afford it next year.”

Double-digit premium increases

Rates were rising in the immediate aftermath of Trump’s decision. Insurance regulators in Arkansas, another state that went for Trump, approved premium increases Friday ranging from 14 percent to nearly 25 percent for plans offered through the insurance marketplace. Had federal cost-sharing been retained, the premiums would have risen by no more than 10 percent.

In Mississippi, another state Trump won, an estimated 80 percent of consumers who buy coverage on the insurance exchange benefit from the deductible and co-pay discounts, the highest percentage of any state. Premiums there will increase by 47 percent next year, after regulators assumed Trump would end the cost-sharing payments.

The National Association of Insurance Commissioners has estimated the loss of the subsidies would result in a 12 percent to 15 percent increase in premiums, while the nonpartisan Congressional Budget Office has put the figure at 20 percent. Experts say the political instability over Trump’s effort to undermine Obama’s health care law could prompt more insurers to leave markets, reducing competition and driving up prices.

Trump’s move concerned some Republicans, worried the party will be blamed for the effects on consumers and insurance markets.

“I think the president is ill-advised to take this course of action, because we, at the end of the day, will own this,” Republican Rep. Charlie Dent of Pennsylvania said Friday on CNN. “We, the Republican Party, will own this.”

Dent is not running for re-election.

GOP support

In announcing his decision, Trump argued the subsidies were payouts to insurance companies, and the government could not legally continue to make them. The subsidies have been the subject of an ongoing legal battle because the health care law failed to include a congressional appropriation, which is required before federal money can be spent.

The subsidies will cost about $7 billion this year.

Many Republicans praised Trump’s action, saying Obama’s law has led to a spike in insurance costs for those who have to buy policies on the individual market.

Among them is Republican Rep. Andy Biggs of Arizona, a state Trump won. An estimated 78,000 Arizonans were benefiting from the federal subsidies for deductibles and co-pays.

“While his actions do not take the place of real legislative repeal and revitalization of free-market health care, he is doing everything possible to save Americans from crippling health care costs and decreasing quality of care,” Biggs said.

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Federal Attorneys: Trump May Block Critics on Twitter

President Donald Trump can block his critics from following him on Twitter without violating the First Amendment despite a lawsuit’s claims that it violates the Constitution to do so, government lawyers say.

Trial attorneys with the U.S. Department of Justice in Washington submitted papers late Friday to a New York federal judge, saying a lawsuit challenging Trump over the issue should be thrown out.

“The president uses the account for his speech, not as a forum for the private speech of others,” the lawyers wrote. “And his decision to block certain users allows him to choose the information he consumes and the individuals with whom he interacts — expressive choices that public officials retain the right to make, even when those choices are made on the basis of viewpoint.”

Not a state action

They say the president’s decision to stop some individuals from following him on his 8-year-old @realdonaldtrump account, which has more than 40 million followers, is not state action. Public officials, they add, sometimes announce a new policy initiative or make statements about public policy on the campaign trail or in meetings with leaders of a political party.

“The fact that an official chooses to make such an announcement in an unofficial setting does not retroactively convert into state action the decision about which members of the public to allow into the event,” the lawyers said.

The lawyers said his Twitter account “is not a right conferred by the presidency,” but rather is a private platform run by a private company.

In a warning that ruling against Trump might threaten the constitutional separation of powers, the lawyers wrote that “courts are prohibited from enjoining the discretionary conduct of the president.”

Institute responds

The lawsuit was filed in July by the Knight First Amendment Institute at Columbia University and seven people rejected by Trump after criticizing the president.

Jameel Jaffer, the institute’s director, said Trump’s lawyers were wrong in their legal analysis and to accept their statement that the courts had no say over the issue could have “far-reaching and intolerable” implications.

“The president isn’t above the law,” Jaffer said in a statement.

Katie Fallow, a senior staff attorney with the institute, said the argument by government lawyers that Trump’s Twitter feed is a personal account “is not defensible given that the president routinely uses it for official purposes and both the president and his aides have publicly described the account as official.”

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