09 October 21
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Central Banks Digital Currencies will ransom our future
1.
That reading, which I accomplished while preparing lunch with the help of my favorite infrastructure, namely electricity, was of a transcript of a speech given by one Christopher J. Waller, a freshly-minted governor of the United States’ 51st and most powerful state, the Federal Reserve.
The subject of this speech? CBDCs—which aren’t, unfortunately, some new form of cannabinoid that you might’ve missed, but instead the acronym for Central Bank Digital Currencies—the newest danger cresting the public horizon.
Now, before we go any further, let me say that it’s been difficult for me to decide what exactly this speech is—whether it’s a minority report or just an attempt to pander to his hosts, the American Enterprise Institute.
But given that Waller, an economist and a last-minute Trump appointee to the Fed, will serve his term until January 2030, we lunchtime readers might discern an effort to influence future policy, and specifically to influence the Fed’s much-heralded and still-forthcoming “discussion paper”—a group-authored text—on the topic of the costs and benefits of creating a CBDC.
That is, on the costs and benefits of creating an American CBDC, because China has already announced one, as have about a dozen other countries including most recently Nigeria, which in early October will roll out the eNaira.
By this point, a reader who isn’t yet a subscriber to this particular Substack might be asking themselves, what the hell is a Central Bank Digital Currency?
Reader, I will tell you.
Rather, I will tell you what a CBDC is NOT—it is NOT, as Wikipedia might tell you, a digital dollar. After all, most dollars are already digital, existing not as something folded in your wallet, but as an entry in a bank’s database, faithfully requested and rendered beneath the glass of your phone.
Neither is a Central Bank Digital Currency a State-level embrace of cryptocurrency—at least not of cryptocurrency as pretty much everyone in the world who uses it currently understands it.
Instead, a CBDC is something closer to being a perversion of cryptocurrency, or at least of the founding principles and protocols of cryptocurrency—a cryptofascist currency, an evil twin entered into the ledgers on Opposite Day, expressly designed to deny its users the basic ownership of their money and to install the State at the mediating center of every transaction.
2.
For thousands of years priors to the advent of CBDCs, money—the conceptual unit of account that we represent with the generally physical, tangible objects we call currency—has been chiefly embodied in the form of coins struck from precious metals. The adjective “precious”—referring to the fundamental limit on availability established by what a massive pain in the ass it was to find and dig up the intrinsically scarce commodity out of the ground—was important, because, well, everyone cheats: the buyer in the marketplace shaves down his metal coin and saves up the scraps, the seller in the marketplace weighs the metal coin on dishonest scales, and the minter of the coin, who is usually the regent, or the State, dilutes the preciosity of the coin’s metal with lesser materials, to say nothing of other methods.
The history of banking is in many ways the history of this dilution—as governments soon discovered that through mere legislation they could declare that everyone within their borders had to accept that this year’s coins were equal to last year’s coins, even if the new coins had less silver and more lead. In many countries, the penalties for casting doubt on this system, even for pointing out the adulteration, was asset-seizure at best, and at worst: hanging, beheading, death-by-fire.
In Imperial Rome, this currency-degradation, which today might be described as a “financial innovation,” would go on to finance previously-unaffordable policies and forever wars, leading eventually to the Crisis of the Third Century and Diocletian’s Edict on Maximum Prices, which outlived the collapse of the Roman economy and the empire itself in an appropriately memorable way:
Tired of carrying around weighty bags of dinar and denarii, post-third-century merchants, particularly post-third-century traveling merchants, created more symbolic forms of currency, and so created commercial banking—the populist version of royal treasuries—whose most important early instruments were institutional promissory notes, which didn’t have their own intrinsic value but were backed by a commodity: They were pieces of parchment and paper that represented the right to be exchanged for some amount of a more-or-less intrinsically valuable coinage.
The regimes that emerged from the fires of Rome extended this concept to establish their own convertible currencies, and little tiny shreds of rag circulated within the economy alongside their identical-in-symbolic-value, but distinct-in-intrinsic-value, coin equivalents. Beginning with an increase in printing paper notes, continuing with the cancellation of the right to exchange them for coinage, and culminating in the zinc-and-copper debasement of the coinage itself, city-states and later enterprising nation-states finally achieved what our old friend Waller and his cronies at the Fed would generously describe as “sovereign currency:” a handsome napkin.
Once currency is understood in this way, it’s a short hop from napkin to network. The principle is the same: the new digital token circulates alongside the increasingly-absent old physical token. At first.
Just as America’s old paper Silver Certificate could once be exchanged for a shiny, one-ounce Silver Dollar, the balance of digital dollars displayed on your phone banking app can today still be redeemed at a commercial bank for one printed green napkin, so long as that bank remains solvent or retains its depository insurance.
Should that promise-of-redemption seem a cold comfort, you’d do well to remember that the napkin in your wallet is still better than what you traded it for: a mere claim on a napkin for your wallet. Also, once that napkin is securely stowed away in your purse—or murse—the bank no longer gets to decide, or even know, how and where you use it. Also, the napkin will still work when the power-grid fails.
The perfect companion for any reader’s lunch.
3.
Advocates of CBDCs contend that these strictly-centralized currencies are the realization of a bold new standard—not a Gold Standard, or a Silver Standard, or even a Blockchain Standard, but something like a Spreadsheet Standard, where every central-bank-issued-dollar is held by a central-bank-managed account, recorded in a vast ledger-of-State that can be continuously scrutizined and eternally revised.
CBDC proponents claim that this will make everyday transactions both safer (by removing counterparty risk), and easier to tax (by rendering it well nigh impossible to hide money from the government).
CBDC opponents, however, cite that very same purported “safety” and “ease” to argue that an e-dollar, say, is merely an extension to, or financial manifestation of, the ever-encroaching surveillance state. To these critics, the method by which this proposal eradicates bankruptcy fallout and tax dodgers draws a bright red line under its deadly flaw: these only come at the cost of placing the State, newly privy to the use and custodianship of every dollar, at the center of monetary interaction. Look at China, the napkin-clingers cry, where the new ban on Bitcoin, along with the release of the digital-yuan, is clearly intended to increase the ability of the State to “intermediate”—to impose itself in the middle of—every last transaction.
“Intermediation,” and its opposite “disintermediation,” constitute the heart of the matter, and it’s notable how reliant Waller’s speech is on these terms, whose origins can be found not in capitalist policy but, ironically, in Marxist critique. What they mean is: who or what stands between your money and your intentions for it.
What some economists have lately taken to calling, with a suspiciously pejorative emphasis, “decentralized cryptocurrencies”—meaning Bitcoin, Ethereum, and others—are regarded by both central and commercial banks as dangerous disintermediators; precisely because they’ve been designed to ensure equal protection for all users, with no special privileges extended to the State.
This “crypto”—whose very technology was primarily created in order to correct the centralization that now threatens it—was, generally is, and should be constitutionally unconcerned with who possesses it and uses it for what. To traditional banks, however, not to mention to states with sovereign currencies, this is unacceptable: These upstart crypto-competitors represent an epochal disruption, promising the possibility of storing and moving verifiable value independent of State approval, and so placing their users beyond the reach of Rome. Opposition to such free trade is all-too-often concealed beneath a veneer of paternalistic concern, with the State claiming that in the absence of its own loving intermediation, the market will inevitably devolve into unlawful gambling dens and fleshpots rife with tax fraud, drug deals, and gun-running.
It’s difficult to countenance this claim, however, when according to none other than the Office of Terrorist Financing and Financial Crimes at the US Department of the Treasury, “Although virtual currencies are used for illicit transactions, the volume is small compared to the volume of illicit activity through traditional financial services.”
Traditional financial services, of course, being the very face and definition of “intermediation”—services that seek to extract for themselves a piece of our every exchange.
4.
Which brings us back to Waller—who might be called an anti-disintermediator, a defender of the commercial banking system and its services that store and invest (and often lose) the money that the American central banking system, the Fed, decides to print (often in the middle of the night).
And yet I admit that I still find his remarks compelling—chiefly because I reject his rationale, but concur with his conclusions.
It’s Waller’s opinion, as well as my own, that the United States does not need to develop its own CBDC. Yet while Waller believes that the US doesn’t need a CBDC because of its already robust commercial banking sector, I believe that the US doesn’t need a CBDC despite the banks, whose activities are, to my mind, almost all better and more equitably accomplished these days by the robust, diverse, and sustainable ecosystem of non-State cryptocurrencies (translation: regular crypto).
I risk few readers by asserting that the commercial banking sector is not, as Waller avers, the solution, but is in fact the problem—a parasitic and utterly inefficient industry that has preyed upon its customers with an impunity backstopped by regular bail-outs from the Fed, thanks to the dubious fiction that it is “too big too fail.”
But even as banking-industrial complex has become larger, its utility has withered—especially in comparison to crypto. Commercial banking once uniquely secured otherwise risky transactions, ensuring escrow and reversibility. Similarly, credit and investment were unavailable, and perhaps even unimaginable, without it. Today you can enjoy any of these in three clicks.
Still, banks have an older role. Since the inception of commercial banking, or at least since its capitalization by central banking, the industry’s most important function has been the moving of it, fulfilling the promise of those promissory notes of old by allowing their redemption in different cities, or in different countries, and by allowing bearers and redeemers of those notes to make payments on their and others’ behalf across similar distances.
For most of history, moving money in such a manner required the storing of it, and in great quantities—necessitating the palpable security of vaults and guards. But as intrinsically valuable money gave way to our little napkins, and napkins give way to their intangible digital equivalents, that has changed.
Today, however, there isn’t much in the vaults. If you walk into a bank, even without a mask over your face, and attempt a sizable withdrawal, you’re almost always going to be told to come back next Wednesday, as the physical currency you’re requesting has to be ordered from the rare branch or reserve that actually has it. Meanwhile, the guard, no less mythologized in the mind than the granite and marble he paces, is just an old man with tired feet, paid too little to use the gun that he carries.
These are what commercial banks have been reduced to: “intermediating” money-ordering-services that profit off penalties and fees—protected by your grandfather.
In sum, in an increasingly digital society, there is almost nothing a bank can do to provide access to and protect your assets that an algorithm can’t replicate and improve upon.
On the other hand, when Christmas comes around, cryptocurrencies don’t give out those little tiny desk calendars.
But let’s return to close with that bank security guard, who after helping to close up the bank for the day probably goes off to work a second job, to make ends meet—at a gas station, say.
Will a CBDC be helpful to him? Will an e-dollar improve his life, more than a cash dollar would, or a dollar-equivalent in Bitcoin, or in some stablecoin, or even in an FDIC-insured stablecoin?
Let’s say that his doctor has told him that the sedentary or just-standing-around nature of his work at the bank has impacted his health, and contributed to dangerous weight gain. Our guard must cut down on sugar, and his private insurance company—which he’s been publicly mandated to deal with—now starts tracking his pre-diabetic condition and passes data on that condition on to the systems that control his CBDC wallet, so that the next time he goes to the deli and tries to buy some candy, he’s rejected—he can’t—his wallet just refuses to pay, even if it was his intention to buy that candy for his granddaughter.
Or, let’s say that one of his e-dollars, which he received as a tip at his gas station job, happens to be later registered by a central authority as having been used, by its previous possessor, to execute a suspicious transaction, whether it was a drug deal or a donation to a totally innocent and in fact totally life-affirming charity operating in a foreign country deemed hostile to US foreign policy, and so it becomes frozen and even has to be “civilly” forfeited. How will our beleagured guard get it back? Will he ever be able to prove that said e-dollar is legitimately his and retake possession of it, and how much would that proof ultimately cost him?
Our guard earns his living with his labor—he earns it with his body, and yet by the time that body inevitably breaks down, will he have amassed enough of a grubstake to comfortably retire? And if not, can he ever hope to rely on the State’s benevolent, or even adequate, provision—for his welfare, his care, his healing?
This is the question that I’d like Waller, that I’d like all of the Fed, and the Treasury, and the rest of the US government, to answer:
Of all the things that might be centralized and nationalized in this poor man’s life, should it really be his money?
Rep. Alexandria Ocasio-Cortez. (photo: Getty Images)
Amid ongoing inter-party fighting over the massive reconciliation bill, Axios reported Thursday that Manchin is demanding progressive Democrats pick one of President Joe Biden's three policies and abandon the other two.
The current iteration of the Build Back Better bill includes an expanded child tax credit, paid family medical leave, and subsidies for child care. But Manchin and other moderates' insistence on trimming the number of programs in the final package throws a wrench into a possible deal.
"Ah yes, the Conservative Dem position: 'You can either feed your kid, recover from your c-section, or have childcare so you can go to work - but not all three. All 3 makes you entitled and lazy,'" Ocasio-Cortez tweeted.
"But fossil fuel $, keeping Rx prices high,& not taxing Wall St are 'non-negotiable,'" the New York lawmaker added.
A spokesperson for Manchin did not immediately respond to Insider's request for comment.
Biden has already proposed cuts to his economic plan down from $3.5 trillion to $2.2 trillion, but Manchin reiterated on Wednesday that he won't support a package higher than $1.5 trillion.
Progressives like Ocasio-Cortez are fighting to keep all the proposed assistance programs in the final package by funding them for shorter amounts of time in order to lower the final price on the package, while centrists in the party are opting for the opposite approach: cutting the number of programs but funding them for longer.
The three working family programs that Manchin has targeted would likely cost around $1.4 trillion alone, according to Axios, with the expanded $3,600-per-child tax credit coming in at $450 billion, the estimated cost of paid family medical leave clocking in around $500 billion, and daycare subsidies and universal preschool costing $450 billion.
Dan Scavino, the deputy chief of staff for communications and director of social media in the Trump White House. (photo: Chip Somodevilla/Getty Images)
A process server brought the subpoena to former President Donald Trump's Mar-a-Lago resort in Florida on Friday, the source said. While Scavino was home in New York at the time, he asked a staff member to accept the subpoena on his behalf.
In its letter to Scavino, the committee outlined that, because of his close proximity and long history of working with the former President, he can provide useful information regarding conversations Trump had on January 5 about trying to convince members of Congress to not certify the election, the former President's movements on January 6, and the broader communication strategy the White House had in the lead up to the January 6 rally.
The source said that Scavino would review the subpoena with his attorneys early next week to determine next steps.
Scavino was among the former Trump aides that had been sent a letter from Trump's attorney this week advising that he intended to defend what he viewed as an infringement of executive privilege.
In the letter viewed by CNN, an attorney for Trump advised them to "where appropriate, invoke any immunities and privileges" and not provide documents or testimony.
Thursday had marked a deadline for four former Trump officials under subpoena to produce materials to the committee.
Committee Chairman Bennie Thompson, a Mississippi Democrat, and Vice Chair Liz Cheney, a Wyoming Republican, said in a statement that former Trump officials Mark Meadows and Kash Patel are "so far engaging" with the panel.
The statement did not mention Scavino.
An attorney for Steve Bannon said in an email obtained by CNN that he will not cooperate, citing Trump's claim of executive privilege. Bannon's lawyer told the committee that "the executive privileges belong to President Trump" and "we must accept his direction and honor his invocation of executive privilege."
The claim that Bannon could be covered by the former President's privilege is unusual because Bannon was not working for the federal government during the period surrounding the January 6 insurrection.
In their statement, Thompson and Cheney make clear that the committee will act "swiftly" against those who refuse to comply with a lawful subpoena, including by seeking to hold them in criminal contempt, as they try to squash concerns that the committee will not act forcefully enough.
The White House on Friday informed the National Archives that it would not assert executive privilege on an initial batch of documents related to the January 6 violence at the US Capitol, paving the way for the Archives to share documents with the House committee.
"The President has determined that an assertion of executive privilege is not warranted for the first set of documents from the Trump White House that have been provided to us by the National Archives," press secretary Jen Psaki said of President Joe Biden's decision.
Facebook CEO Mark Zuckerberg. (photo: Getty Images)
Facebook has been the target of an unprecedented flood of criticism in recent months — and rightly so. But too many critics seem to forget that the company is driven to do bad things by its thirst for profit, not by a handful of mistaken ideas.
The company is back in the news again, now at the end of a week from hell thanks to explosive revelations from a former employee who became disillusioned and leaked a trove of its internal documents to the public. Through an ongoing Wall Street Journal series based on the leak, a 60 Minutes interview, and an appearance in front of Congress, the crux of whistleblower Frances Haugen’s case is this: Facebook is well aware of the various harms and dangers of its platforms, but has consistently failed to rectify them because it would conflict with the company’s continued growth and profits.
One report revealed that company researchers had themselves determined that Instagram, which is owned by Facebook, has a psychologically damaging effect on teen girls, even as it denied this publicly and plowed ahead with a version of Instagram for under-thirteens. Another found that the company’s 2018 rejigging of its algorithm to promote “meaningful social interactions,” or MSI, had instead incentivized posts and content based in outrage, social division, violence, and bullshit. Others show that Facebook was intentionally targeting kids and finding ways to hook them on the product early, and that it dragged its feet on taking down posts it knew were made by drug cartels and human traffickers.
Many solutions have been put forward to deal with the problem of Facebook, like using antitrust laws to break it up, altering Section 230 to allow tech companies to be sued for things posted on their platforms, or, as Haugen suggested to Congress, demanding more transparency from the company and creating a regulatory oversight board. But much of what’s been revealed in these documents adds more weight to arguments that the company, and other de facto monopolies like it, should be treated as a utility or even taken under public ownership.
What the documents make clear is that, as Haugen told Congress, when Facebook comes across a conflict between its profits and people’s safety, it “consistently resolved these conflicts in favor of their own profits.” Facebook knows its platforms are bad for kids, but to keep growing, it needs to hook those kids so they’re part of its user base as adults, and for those kids to bring their parents into the fold. “They are a valuable but untapped audience,” one internal document from 2020 states about tweens, with the company studying preteens, plotting out new products to capture them, and discussing the idea of “playdates as a growth lever.”
Facebook understands that boosting MSI might feed division, vitriol, and all manner of unhealthy behaviors among its users, but not doing so means less engagement and, so, potentially less profit. When one employee suggested dealing with misinformation and anger by removing the priority the algorithm gives to content reshared by large user chains, Mark Zuckerberg, she wrote, wouldn’t do it “if there was a material tradeoff with MSI impact.” When researchers suggested the company tweak its algorithm so it didn’t send users into deeper, more extreme rabbit holes, like interest in health recipes that soon led to anorexia content, top brass ignored it for fear of limiting user engagement.
“A lot of the changes I’m talking about are not going to make Facebook an unprofitable company,” Haugen told Congress this week. “It just won’t be a ludicrously profitable company like it is today.”
Just like companies driving sales by making devices meant to break down and stop working after a few years, it’s Facebook’s hunger for growth and bigger profits that drives its reluctance to act responsibly. It would seem a no-brainer to take these incentives out of the equation, especially with these platforms taking on the status of “natural monopolies” like railroads and telecommunications.
If a firm is publicly owned or simply a tightly regulated utility, it doesn’t need to work under the capitalist logic of growth and excessive profit seeking that’s fueled these issues, nor does it have to survive if its user base no longer needs or cares for it. The fact that the company is going out of fashion with the youth and is predominantly used by people over thirty might be a problem for Mark Zuckerberg, private owner of Facebook, but it’s not much of an issue for a utility that a government reluctantly nationalized because of how much its users came to depend on it. In fact, it sounds like a readymade solution for a platform that most of us agree is, at best, addicting and unhealthy.
If younger generations don’t care if Facebook survives, why should we force them to think otherwise? If people are happier when they’re persuaded to unfollow everything and empty out their news feeds, why should we retaliate, as Facebook recently did to the creator of the tool that let them do this?
Of course, there are many practical matters that would have to be ironed out. For one, Facebook might be a US company, but its utility-like services are delivered to the entire globe, so there are real questions about what a publicly owned or regulated Facebook would actually look like — questions like “Which public?” or “Regulated by whom?”
Similarly, there would have to be stringent oversight and democratic control designed around any such scheme, lest the exploitation and manipulation carried out by the platform simply get transferred from the private sector to government. (Bear in mind, though, that through its surveillance programs and cyber operations, Washington and other governments are already using platforms like Facebook to collect and store data about the world’s users and manipulate information on them.) Perhaps in the end, the right way forward will be some combination of all of these solutions, including both breaking these monopolies up and taking parts of them under public ownership.
But if the exact solution isn’t clear yet, what is clear is that the current state of things is untenable. Beyond the issues highlighted by Haugen’s leak, we’ve long known that social media platforms and other tech innovations are mentally unhealthy for us, having been deliberately designed to be addictive to the point that the very software engineers and tech moguls responsible for them avoid using their own creations. Perhaps there’s a way to keep social media and its most useful features in our lives while getting rid of its most malignant characteristics; or perhaps the whole thing will turn out to be a mistake fundamentally incompatible with the way the human brain works. But to find out, we have to at least try something different.
Sadly, that’s not the solution that much of the Wall Street Journal series, most of Congress, and other news outlets seem to pointing to in reaction to this leak. Predictably, this news has produced calls for more intensified “content moderation,” meaning censorship, by these tech companies, as a way to prevent the spread of all kinds of misinformation or stop platforms from “enabling dangerous social movements,” as Haugen accused them of.
Ironically, this is despite the fact that the documents themselves show the folly of censorship as a solution to these issues. The very first story in the Journal’s series is about how Facebook created a “whitelist” of many tens of thousands of high-profile accounts, making them immune from censorship for posting the kinds of things that would get other users censored, suspended, or permanently banned. All the while, the company’s censors went after lower-level users, taking down completely innocuous posts or those whose message they misinterpreted, including Arabic-language news outlets and activists during Israel’s crackdown on Palestinians earlier this year. These platforms have shown repeatedly that they can’t be trusted to accurately and responsibly moderate content, as documented just this week in a Human Rights Watch report on its suppression of Palestinian content.
This response is part of a long-standing trend of what Olivier Jutel has termed tech reductionism: the belief that tech companies and their products aren’t just harmful and unhealthy for us, but responsible for every bad thing you can think of that’s happened in the last few years. In deciding how to deal with this issue (and choosing censorship as the way forward), we’re in danger of missing the wider political, economic, and social factors that are driving the tumult of our current world, and ascribing it instead to the near-mystical power of social media. Was Facebook really singularly responsible for the January 6 Capitol riot? Or was it just one of a number of useful tools that allowed attendees to organize themselves for the event, attendees who were driven by a combination of economic dislocation and largely elite- and mainstream media–peddled lies about the election?
Haugen told the Journal that her motivation for coming forward was watching a liberal friend of hers be swept up by sinister delusions described as “a mix of the occult and white nationalism” after spending “increasing amounts of time reading online forums” (not Facebook, oddly), culminating in the end of the friendship. Yet people regularly encounter or consume propaganda, let alone simply use social media and the internet, without going down a similar road. Unfortunately, we never find out what the underlying factors were for Haugen’s friend to be sucked into this miasma of lies, nor do we find out what led him to later renounce these beliefs. Misinformation has always been rife in the world; finding the answers to those questions will help us understand why it seems particularly potent in this era.
Avoiding mass censorship efforts doesn’t mean we’re powerless to do anything. There are clear changes that can be made to Facebook’s algorithms, design, central mission, and resourcing that would bring it closer to the true public service it claims to be than the nihilistic, profit-making juggernaut it operates like, and none of them would threaten our right to speak freely or mess with our ability to stay in touch with loved ones, organize events, or such platforms’ other useful features. Who knows — we might even feel like logging off every now and then.
Revelers celebrate news of Joe Biden’s election as U.S. president in Washington on Nov. 7, 2020. (photo: Tom Williams/Getty Images)
ALSO SEE: Refugee Admissions Hit Record Low,
Despite Biden’s Reversal
They described what they say are shrinking immigration opportunities under Biden as the White House lets visas expire — and as the U.S. hit the lowest number of resettled refugees in the history of the program.
“We’ve lost hundreds of thousands of visas that were meant for people to come here through the employment-based system or to join family members that, because of federal bureaucracy, were not processed in time, which is absolutely unjustifiable,” said Jorge Loweree, policy director for the American Immigration Council.
“One of the things that we consistently ignore in the immigration debate in this country is the reality that a big part of why we have 11-to-12 million undocumented people in the U.S. is because we don't have a meaningful and function system of legal immigration,” he added.
Democrats have spent much of the first months of Biden’s presidency attempting to move immigration reform through Congress, but their efforts have been twice batted down by the Senate parliamentarian.
A big part of those efforts is designed at providing protection to millions already in the U.S., shielding them from deportation by ensuring residency and an eventual path to naturalization.
But the close of the fiscal year means more than 200,000 visas will expire without action from Congress.
The government failed to issue some 150,000 family-based visas and as many as 80,000 employment-based visas, according to estimates provided by the State Department in mid-September.
“It doesn't sound like big deal but what 80,000 visas means is these are people stuck in employment-based or family-based green card backlogs for decades, and they are waiting for their chance to be able to apply,” said Shev Dalal-Dheini with the American Immigration Lawyers Association, noting that the government is just getting to visa applications first initiated in the late 1990s and early 2000s.
Also lost at the end of the fiscal year were 40,000 diversity visas, given out via lottery to as many as 55,000 people each year to help diversify the pool of immigrants coming to the U.S. The low processing rate has spurred lawsuits, with a court ordering the State Department to still issue nearly 7,000 from last fiscal year.
And the Biden administration resettled just 11,411 refugees this year, the lowest figure on record. Though the administration had doubts it would reach the 62,500 cap it set after the program atrophied during the Trump administration, the low totals nonetheless mean some 50,000 slots went unused.
“The loss of over 150,000 visas in the family-based category and potentially 80,000 visas in the employment-based category coupled with the record low resettlement of refugees this year equates to one of the sharpest decreases in legal immigration in modern history,” Loweree said.
It’s something he warned could have “cascading consequences for many people in the pipeline.”
The lost visa numbers were especially high this year as the coronavirus pandemic slowed processing both at the State Department, where some consulates remain closed, and the Department of Homeland Security.
The U.S. caps the number of both family- and employment-based visas every year. However, any family-based visas that aren’t used are then added to the employment-based cap for the following year — a feature that can surge employment-based opportunities.
The expiration of the visas furthers a trend sought by former President Trump, who wanted to limit family-based migration in favor of that tied to employment.
“The government can issue these visas whenever it wants to. It just doesn't want to do anything that would enable it to get them out the door. It’s just that simple,” said David Bier, an immigration research fellow with the Libertarian Cato Institute.
“The Biden administration came in with a set of promises, and they’re not fulfilling those promises so far. They haven't restored the immigration system to what it was before Trump and they're aren't really even trying. It’s a lot of very tiny, marginal improvements,” Bier told The Hill.
Some have been pushing the administration to include visa recapture in Democrats' budget reconciliation bill as a way to ensure the visas are not permanently lost and can instead be used in the fiscal year ahead. It’s a process lawmakers haven’t done since 2005 when Congress recaptured 50,000 visas through the REAL ID Act.
“It’s really irresponsible for Congress to let these numbers go to waste because these are numbers that they already authorized, and they're going to waste because of the pandemic and because agencies can’t get their act together fast enough to adjudicate cases,” Dalal-Dheini said.
“I think this is something long overdue, and it's trying to fix a problem that's unintentional,” she added, saying that lawmakers expected the visas they authorized to be used.
But that could hit a roadblock in Congress.
After the parliamentarian for the second time shot down passing a Democratic immigration proposal through reconciliation, some leaders indicated little appetite for forwarding a proposal that didn’t deal with the undocumented.
“Other immigration things, especially for businesses, that’s not going to happen if we’re not going to have any pathway to some form of status adjustment for the undocumented,” Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) told reporters.
He later clarified to Bloomberg, “If we’re talking about recapturing visas for family backlogs … I certainly would consider that. If we’re talking about getting visas so we can take care of businesses’ problems, I’m not supportive — in the absence of getting anything else done."
Menendez's comments nodded to a legislative effort from Sen. Thom Tillis (R-N.C.) and others that would preserve employment-based visas, which already receive the rolled over family-based visas, rather than those meant to help people obtain green cards to join family in the U.S.
Bier said the hesitation to advance efforts for visa recapture without other legalization pathways in part reflects broader lobbying efforts for the undocumented.
“The pro-immigrant side is so heavily dominated by organizations focused on helping immigrants already in the U.S. — it’s people helping out with the asylum seekers and people helping people without legal status here. So much of the advocacy organization and legal aid is all devoted to just preventing removals of people who are already here as opposed to helping people outside the country get here legally,” he said.
But Dalal-Dheini said any efforts to cure the ills of the immigration system will be a benefit to all who interact with it, including Dreamers and those with Temporary Protected Status looking to change their status. She warned that many in the U.S. with legal status are at risk of losing it while encountering the same overwhelmed system as those outside the U.S.
“With a big system like that if you improve some aspects of it other pieces can get ready for change,” she said. “You’re going to an agency that's pretty drained, and so to help people in the backlog and fund it better while anticipating a legalization package — it’s like clearing off the deck so that the big things can be taken care of by a ship that's in better shape.”
A patient with suspected COVID-19 infection is taken into an ambulance by members of the Emergency Mobile Care Service team, amid the coronavirus disease outbreak, in Duque de Caxias near Rio de Janeiro. (photo: Pilar Olivares/Reuters)
President Bolsonaro continues to face widespread criticism and anger over his government’s handling of the pandemic.
Bolsonaro, a coronavirus sceptic, has drawn the ire of health experts and many Brazilians for downplaying the severity of the virus, rejecting lockdowns and other public health measures, and failing to rapidly secure COVID-19 vaccines.
He has faced mass protests during the past several months, with demonstrators slamming his government’s COVID-19 policies and calling for his impeachment, and a Brazilian Senate committee in April launched an investigation into his pandemic policies.
But despite Friday’s sombre milestone, there were signs that infections in Brazil were finally ebbing, as the country ramped up vaccinations after a slow start.
More than 70 percent of Brazilians have received a first dose, compared with 65 percent in the United States, which passed the 600,000-deaths mark in June.
“The rejection rate of vaccines is really low, it makes other countries jealous,” said Alexandre Naime Barbosa, head of epidemiology at Sao Paulo State University. “That’s really important for Brazil to contain the pandemic.”
Brazil also appeared to have been spared the worst of the Delta variant so far, with registered deaths and cases falling despite the arrival of the more contagious strain.
Deaths were down 80 percent from their peak of more than 3,000 per day in April, and Brazil no longer has one of the world’s highest daily death tolls.
Still, Al Jazeera’s Monica Yanakiew said many Brazilians are angry about how the government has handled the pandemic.
“This delay in the vaccines has affected also the economy. Brazil is now having a very high inflation rate … and so the economic recovery will not be what was expected, and people are feeling hopeless,” Yanakiew reported.
On Friday, Brazilian non-profit Rio de Paz hung 600 white scarves on Rio de Janeiro’s famous Copacabana beach in honour of all those who died.
“The president discouraged sanitary standards, challenged mask use, condemned social distancing, was against mass vaccination – because of that we have these bitter numbers,” said the group’s president, Antonio Costa.
“These are thousands of grieving families,” he said, referring to the scarves dotting the beach. “One day, we’ll know how many of those have died, lost their lives, because they heard the denying speech of some of our main public authorities.”
At a support group in Rio for family members of the virus’ victims, Bruna Chaves mourned the loss of her mother and stepfather.
“It’s not just 600,000 people who are gone; it’s a lot of people who die with them, emotionally,” Chaves told The Associated Press. “It’s absurd that people treat it like it’s a small number. It’s a big number.”
Some analysts also remain worried about Delta’s potential to spread in Brazil.
Miguel Lago, executive director of the country’s Institute for Health Policy Studies, which advises public health officials, said he believed authorities are taking considerable risk by reopening too much and announcing celebrations.
“The pandemic has waned, but 500 deaths per day is far from good. And we don’t even have half the population fully vaccinated,” Lago said. “We just don’t know enough and we have this horrific milestone to contemplate now.”
A worker cleans oil-contaminated sand in Newport Beach, California, this week. (photo: Ringo H.W. Chiu/AP)
A large vessel of some kind may have struck the massive pipeline, shattering the concrete casing but not necessarily causing the slender crack from which oil spewed last weekend, said Capt. Jason Neubauer, chief of the Coast Guard's office of investigation and analysis.
The longer timeline was partly based on marine growth that was spotted on the pipe in an underwater survey.
The pipe, which was found to be intact last October, may also have been struck several other times by other ships' anchors over the course of the period, he added.
No ships have been identified, however.
"We're going to be looking at every vessel movement over that pipeline, and every close encroachment from the anchor just for the entire course of the year," the captain said.
The pipeline was dragged along the sea floor as much as 105 feet, Neubauer said.
That indicates a large vessel was involved, he said. Cargo ships with multiton anchors routinely move through the area from the ports of Los Angeles and Long Beach.
The leak fouled beaches and killed seabirds.
At least 17 accidents on pipelines carrying crude oil or other hazardous liquids have been linked to anchor strikes or suspected anchor strikes since 1986, according to an Associated Press review of more than 10,000 reports submitted to federal regulators.
According to federal records, in some cases an anchor strike is never conclusively proven, such as 2012 leak from an ExxonMobil pipeline in Louisiana's shallow Barataria Bay, where a direct strike by a barge or other boat also were considered possibilities.
In others the evidence of an anchor strike was obvious. During 1992's Hurricane Andrew, a 30,000-pound anchor was dragged by a drifting drilling rig over a Texaco pipeline in the Gulf of Mexico, causing a dent that broke open when the line was later re-started.
In 2003, a 7,000 pound anchor was found about 10 feet from a small spill on a Shell Oil pipeline in the Gulf.
A Coast Guard video released Thursday appears to show a trench in the sandy seafloor leading to a bend in the submerged line, but experts offered varied opinions of the significance of the brief, grainy shots. An earlier video showcased a thin, 13-inch long rupture in the line.
Robert Bea, an engineering professor at the University of California, Berkeley and former Shell Oil engineer, said the second video appears to show a furrow in the seabed created by a dragging anchor leading to the damaged pipeline.
Investigators, however, are expected to consider other forces that could have moved and damaged the pipe, including water currents of movement in the seabed.
It will take time.
"The results from the analyses need to be validated — corroborated. This process can bring even more questions," Bea said. "The shape of the crack indicates that it was caused by internal pressures in the pipeline. But, if that is true, why didn't the pipeline leak" earlier?
Frank G. Adams, president of Houston-based Interface Consulting International, said in an email that the slight bow in the line displayed in one video "doesn't necessarily look like anchor damage."
When a pipeline is hit by an anchor or other heavy object "that typically results in physical damage that may lead to a fracture," he said.
Reports of a possible spill off Huntington Beach were first coming out Friday evening but the leak wasn't discovered until Saturday morning. While the size of the spill isn't known, the Coast Guard on Thursday slightly revised the parameters of the estimates to at least about 25,000 gallons and no more than 132,000 gallons.
The Coast Guard said about 5,500 gallons of crude have been recovered from the ocean. The oil has spread southeast along the coast with reports of small amounts coming ashore in San Diego County, some 50 miles from the original site.
Local health officials said Friday that air samples from areas where oil potentially spread are within background levels — in other words, similar to air quality on a typical day — and below California health standards for the pollutants that were measured.
So far the impact on wildfire has been minimal — 10 dead birds and another 25 recovered alive and treated — but environmentalists caution the long-term impacts could be much greater. As cleanup continued on the shore, some beaches in Laguna Beach reopened Friday, though the public still can't go in the water.
Investigators are trying to determine what happened in the crucial early hours after reports of a possible oil spill first came in.
The narrow gash seen in one video could explain why signs of an oil slick were seen Friday night, but the spill eluded detection by the pipeline operator for more than 12 hours.
"My experience suggests this would be a darned hard leak to remotely determine quickly," said Richard Kuprewicz, a private pipeline accident investigator and consultant. "An opening of this type, on a 17-mile-long underwater pipe is very hard to spot by remote indications. These crack-type releases are lower rate and can go for quite a while."
When pipes experience a catastrophic failure, the breach typically is much bigger, what's referred to in the industry as a "fish mouth" rupture because it gapes wide like the mouth of a fish, he said.
Amplify Energy, a Houston-based company that owns and operates three offshore oil platforms and the pipeline south of Los Angeles, said it didn't know there had been a spill until its workers detected an oil sheen on the water Saturday at 8:09 a.m.
The leak occurred about 5 miles offshore at a depth of about 98 feet, investigators said. A 4,000-foot section of the pipeline was dislodged 105 feet , bent back like the string on a bow, Amplify's CEO Martyn Willsher has said.
Jonathan Stewart, a professor of civil and environmental engineering at the University of California, Los Angeles, said moving a large section of pipe that far would have caused "bending deformations" – tension on the side that was stretched into a semicircle, with compression on the other, as it was bent inward, Stewart said.
It's possible such pressure alone could result in a break, though Stewart said there is too little information to make a conclusion about the cause. It's possible a sharp section of anchor could pierce the pipeline but "you could still have damage just from the bending."
"Because it's pulling on the pipe, you create these bending stresses in the pipe, which could eventually become large enough that they rupture it," he said.
Questions also remain about when the oil company knew it had a problem and a potential delay in reporting the spill.
A foreign ship anchored in the waters off Huntington Beach reported to the Coast Guard that it saw a sheen longer than 2 miles just after 6 p.m. on Oct. 1, and that evening a satellite image from the European Space Agency also indicated a likely oil slick, which was reported to the Coast Guard at 2:06 a.m. Saturday, after being reviewed by a National Oceanic and Atmospheric Administration analyst.
Federal pipeline safety regulators have put the time of the incident at 2:30 a.m. Saturday but say the company didn't shut down the pipeline until 6:01 a.m. — more than three hours after a low-pressure alarm had gone off indicating a possible problem — and didn't report the leak to the Coast Guard until 9:07 a.m. Federal and state rules require immediate notification of spills.
Amplify said the line already had been shut down by 6 a.m., then restarted for five minutes for a "meter reading" and again shut down. A meter reading shows how much oil is flowing into and out of the line. The company could have been using that information to confirm if the pressure-change alarm was set off because the line was leaking, said Kuprewicz and Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston.
The company said a boat discovered oil on the water at 8:09 a.m.
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