Week in Review

IN THE NEWS

• In response to significant depreciation of the Chinese yuan, the U.S. Department of the Treasury designated China as a currency manipulator. Treasury Department Secretary Steven Mnuchin will now work with the International Monetary Fund to correct any trade advantage gained through currency manipulation. Senate Minority Leader Chuck Schumer (D-N.Y.) reportedly supported the designation, stating that “China has been manipulating their currency long-before and since President Trump took office.”­
• U.S. Senators Lindsey Graham (R-S.C.) and Richard Blumenthal (D-Conn.) proposed passing a law that would encourage states to pass “red flag” processes for confiscating firearms from people believed to be a danger to themselves or others. By one count, only 17 states have a similar regulation in place. Senator Chuck Schumer (D-N.Y.) stated that Democrats “will seek to require that any ‘Red Flag’ bill is accompanied by a vote on the House-passed background checks legislation.”
• President Donald J. Trump signed an executive order placing an economic embargo on Venezuela. The order prohibits trade transactions with the Venezuelan government, including the Venezuelan Central Bank and other state-owned entities. President Trump justified the embargo on the Administration’s belief that newly reelected President Nicolás Maduro is not the legitimate authority in Venezuela, also citing ongoing “human rights abuses, arbitrary arrest and detention of Venezuelan citizens” and “curtailment of free press.” Economist Francisco Rodríguez reportedly stated that the embargo may also harm Venezuela’s private sector, as firms “could be perceived as proxies for the Venezuelan government.”
• Environmental and labor groups filed a petition with the U.S. Court of Appeals for the Ninth Circuit asking the court to review the U.S. Environmental Protection Agency’s (EPA) decision not to ban chlorpyrifos, a pesticide linked to neurological damage in children and farmworkers. In light of EPA’s decision, several states including California and New York are working to implement state bans. Senator Tom Udall (D-N.M.) called the evidence linking chlorpyrifos to impaired brain development “clear and unambiguous,” saying there was “no excuse” for failing to ban the pesticide.
• Senator Amy Klobuchar (D-Minn.) introduced legislation that would allow the U.S. Department of Justice and Federal Trade Commission to seek civil penalties for antitrust violations from major companies. “The threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place,” Klobuchar stated. “Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” she continued. The civil penalties that would be allowed by the bill could be as high as 15 percent of a company’s total U.S. revenue.
• Judge Kristine Baker of the U.S. District Court for the Eastern District of Arkansas temporarily blocked the enforcement of Arkansas’ recently enacted abortion law, including its prohibition on abortions after 18 weeks of gestation and a ban on abortions of fetuses with Down Syndrome. She explained that the law would cause “ongoing and irreparable harm to the plaintiffs and their parents.” She further stated that the abortion ban is “facially unconstitutional” and that plaintiffs were likely to prevail on their claim that the laws are unconstitutional.
• Regulators from ten states and Puerto Rico launched an investigation of the payroll cash advance industry. New York’s Department of Financial Services (DFS) is leading the investigation into whether early wage access providers seek to circumvent state consumer protection laws—which prohibit payday lending—by referring to payment from customers as “tips” rather than interest payments. DFS Superintendent Linda Lacewell promised to work “with peer regulators to safeguard consumers from predatory lending and scams that ensnare families in endless cycles of debt.”
• Attorneys general from 43 states and territories sent letters to video streaming services, including Amazon, Apple, and Netflix, asking them to adopt policies protecting minor viewers from tobacco imagery. The attorneys general cited a 2012 study by the U.S. Office of the Surgeon General which indicated that exposure to tobacco imagery is partially to blame for rising rates of tobacco use among young people. A 2019 study by Truth Initiative, a nonprofit promoting cessation of tobacco use, found that Netflix programs depict twice as many tobacco images as broadcast television programs.
• The United Kingdom’s Information Commissioner’s Office added its signature to a statement by global data protection authorities expressing concern about Facebook’s cryptocurrency project Libra. Regulators from the United States, the European Union, Canada, and Australia had already signed the statement. Information Commissioner Elizabeth Denham stated that “there is the potential to combine Facebook’s vast reserves of personal information with financial information and cryptocurrency, amplifying privacy concerns about the network’s design and data sharing arrangements.”

WHAT WE’RE READING THIS WEEK

• In a research paper for the University of Pennsylvania Institute for Law and Economics, Natasha Sarin of University of Pennsylvania Law School disputes the idea that it was the unexpectedness of the Great Recession that prevented regulators from adequately intervening and that regulators had lacked sufficient legal authority to fortify large financial institutions. Financial indicators, she argues, were present for over a year before the collapse of Lehman Brothers, and regulators had used sufficient legal authority to respond to small banks but failed to apply these tools to large banks. The real issue, according to Sarin, was that regulators favored inaction until it was too late.
• Taylor J. LeMay, a law clerk at the U.S. District Court for the Eastern District of Texas, compared U.S. and United Kingdom offshore wind policies in an article in the LSU Journal of Energy Law and Resources. LeMay argued that the United States has cumbersome federal and state regulatory frameworks that deter offshore wind development by delaying returns on investment. LeMay concluded that the United States should model its offshore wind policies on those of the United Kingdom, whose success in wind energy protection LeMay attributed to its success to “a reliable incentive and policy framework, a strong supply chain, and a streamlined permitting process.”
• Water scarcity yields new opportunities for cooperation across states and nations and is not solely a source of conflict, according to Lauren Risi of the Wilson Center. In a Wilson Quarterly article, Risi explored “hydro-political risk”—the threat of political tensions motivated by conflicts over water scarcity or access—in the Colorado River Basin. Risi argued that, although the Colorado River Basin is one of the most significant current global sites of hydro-political risk, the Colorado River Drought Contingency Plan, to which seven basin states, the U.S. Bureau of Reclamation, and Mexico are all signatories, is evidence of the power of water scarcity to promote international alliances.