Transcripts For CSPAN3 Key Capitol Hill Hearings 20150504

Of the fence. The burglary, arson, extortion and use of explosives are determined by reference to the elements of the offense, a categorical analysis. I know we asked you to organize this vagueness issue. But when you were here before you didnt think that the statute was vague as applied to your client. As i remember your argument was its clear that your client did not fall within the residual clause largely because the offense that is at issue a possession offense and you argue that none of the specific offenses listed is a position offense. Youre correct your honor. When we were here last time it is plainly not included for the reasons you mention and others. Why do we have to get to this issue at all . Why do we have to reach out to decide a constitutional question . Certainly, your honor, the fact that it is excluded it is at odds of the other courts. Something that is not in the plain definition but held to fall in the plain definition reveals the vagueness of the residual clause. Almost every case involves a dispute about what something means, about what the constitutional rule is, or what the statutory interpretation should be. So the mere fact that there is disagreement about this, it shows its unconstitutionally vague . I can think of no other instance in which the court has endeavored so many times to answer the precisely the same question not merely the same 14 words but asking whether a single offense satisfies those 14 words. In james in 2007 we held that the residual clause we decided that the residual clause is not unconstitutionally vague in sykes in 2011 we reconfirmed that. Can you give me other examples of which the court has overruled a constitutional holding that has been twice reaffirmed within a period of eight years. Has that happened frequently . I dont have a case at the ready for that question. But what doesnt happen freakily is that this court has to grab well such frequency and is unable to create an interpretive framework. The heart of stair desai sis is the precedent that provides guidance to the lower court. And with due respect to this courts understandable hesitation to declare this statute unconstitutionally vague that precedent is not workable. Do you think whether the statute is unconstitutionally vague or this courts can it be vague because this court messes it up . That is not case in this case. I dont know whether its possible but in this case the vagueness is in the text and operation itself. This courts repeated efforts to discern a useful framework havent caused the vagueness but proved the vagueness. Suppose you have a state court needing a justice for sentencing and they agreed that within their discretion to impose a maximum that they would impose a greater sentence if the defendant had a rap sheet which created a potential risk of physical injury to another would you say thats poor judging that its vague and they would be better off not saying it at all . I think the judges are tasks with. My hypothetical is that you committed an offense you think that is bad judging . Im not its a hypothetical. You can say its bad. I think that is beyond the task of judging into the task of legislating. You dont think judges should give reasons for what they do . Absolutely. You think they should give reasons . Yes, your honor. And you say this is bad reasoning and bad judging . The part of your hypothetical that troubled me, your honor was that the idea that the judges would make policy decisions unfettered to judge is made all the time on sentencing policy. And they announce the policy and in this course we want all members of the bar to know that if theres a rap sheet of prior convictions that have effects which category we will up the sentence. Your honor you think that is bad judging . I think that is verging into legislating. Can they do that as a matter of law . Not just as a matter of recommending to their fellow judges . Can they reverse one of their fellow judges if the fellow judge does not adhere the hypothetical is i agree it sounds like legislative do you think its bad judging for a judge to say what his policy is going to be for future cases . Yes. I think a judge should. There are states that have guidelines and they are legislated and committees that are decide it and judges on the committees. I dont know thats going to help us too much. I have counted up the number of splits and so forth in your briefs and so forth and adding in the cases i think generously on the basis of what you provided to us there are 14 splits over the course of 15 years and there are literally hundreds of different crimes, thousands, perhaps by the time you get so i cant i dont know how to decide whether 14 is a lot or a little. Im really im at sea on. This maybe 14 is just a few. After all, every statute has uncertainty at the edges or maybe its a lot. Help me. Yes, your honor, two things your honor i think first of all more than the number of splits is that each of this courts efforts answers the question before the court but has a difficult time answering any of those 14 questions. Are there any examples that you can think of where that was a basis for holding a statute unconstitutional . Your honor, in the vagueness cases that we have cited one of the things often discussed by the court is its isnt amenable to a useful interpretive framework. But the im never heard of that as a criterion. I mean, the common law had a method. I dont know and it had crimes there were common law crimes. We have statutes. The government cites many which use such words as risk of harm or reckless or they use words like we have here serious risk or risk of physical harm they cited a lot. There are other statutes that involve words like that. Are we holding all those unconstitutional . Absolutely not, your honor. I know you think that. All i need is help. Ill answer your first question. The first question is the one. In addition to the number of splits and whether 14 is a lot or a little . It is an enormous amount of times for this court to weigh in to decide an unsettable question. Precisely the same question. But i think we should take instruction from the lower courts and what they are saying about their struggle. We have cited half a dozen circuits and these are seasoned juryists who describe this as a black hole to impossible to meaningful and consistently apply. We are not counting just the number of disagreements we are talking about an unworkable framework. I suppose this is connected to Justice Breyers question do you think there is a core that everybody does agree on. There are some offenses which people just say, well, of course that fits within the residual clause. Its not the kind of thing that creates splits. Its not the kind of thing that creates controversy. If there is a core of agreement and all of the trouble is occurring on the margins . The margins are so much bigger than the core even if we are able to agree on a small number of things that fall within the center the fact is that the what do you think is in the core . Your honor, i think kidnapping might be in the core that does not fall in the force clause which many would do would be in the core but its what is more instructive is that so many things that the government suggested are easy case, the examples on pages eight and nine of their preef, on closer examination they are not that easy. Child abuse. One circuit or multiple circuits held that child abuse counts. But one found it didnt count. To declare a statute facially vague all of its applications have to be facially vague. And i guess you are contesting that standard because you are admitting that at least one thing you can think of, kidnapping, that that application would be appropriate. Is that right . Your honor, i think its important to look at where the government standard has to be vague in every imagined application comes from. It comes from flipside versus Hoffman Estates which dealt with licensing and financial fines where everyone agreed that the conduct in question was clearly in the core. This is different in all three respects. This deals with an onerous sentencing penalty but a mandatory one where congress acted to youre not answering the question. The question is whether you agree with the government so long as there is something clearly within the core its not vague. Do you agree with that. The i do not. I suppose you could have a statute that criminalized annoying conduct and according to the government that would not be unconstitutional because there is some stuff that would be clearly annoying. Yes, sir. What do you do when all of the statute that are cited in the appendix that says uses such language as serious risk of physical injury to another, the same words that are used here except this says potential. What do you does that suggest that all of those statutes would be vulnerable under your reading . Thank you your honor, the term serious risk is not on trial here. None of those with perhaps the possible exception of the two described on the first page come close in operation or function to what the residual clause does. In almost every one of the cases its part of a limited definition, subject to an additional limiting df in addition or one of the elements that narrow the conduct. Or is it also that in most of the statutes that were cited it depends on the facts of the particular case . Its the opposite of the categorical approach. Its up to the juries. The juries are routinely tasked with whether some individual conduct not an abstract imagination of conduct but what the defendant did constitutes a serious risk. That combined with the fact it is usually part of a narrower statute prevents those from being vague. With reason to your question, not one of the statutes not one, has given rise to the expressions of frustration from the lower courts. But look, we got that but its its not that cant be theres something odd about this statute that is causing the problem and i cant put my finger on it. And what youve done is simply point out that courts have had difficult difficulty with it. That isnt enough. I dont think. Why . The words seem clear enough. What is it about this that has led to this difficulty . Its not a problem to identify many cases where there is a serious rick of physical harm but its there is something that has given rise to this and i havent yet been able to articulate it to yourself. I have thought about it a lot. There are several things that give rise to the confusion. One is it asks judges to answer an almost impossible to answer question. They have to imagine whether an offense in the abstract and in its ordinary case presents a substantial risk how to select the ordinary case is something the statute give not guidance about and what degree of risk is required where to get the information regarding the risk. Its imaginary and subjective. Suppose the question of whether its a serious potential risk of physical injury to another were a factual question submitted to a jury to be determined on the basis of what your client did. Would that be unconstitutionally vague . I think that would go some direction to solving the problem. It would require factspecific analysis by the jury. The that a yes or a no . I think that if it still had the i think that would avoid the vagueness problem. It would create other problems. We would be trying to do this based on 20yearold convictions and often on questions that nobody had an incentive to argue or to litigate. Wouldnt that be thats the reason we went down this road, isnt it . Your honor points out why i hesitate to say it is a solution. If the parties were entitled to argue it to a jury and and litigate the specific facts. But i dont think i wasnt asking about a resid vis statute im looking at a statute that imposed a penalty for position of a sawedoff shotgun and it says or it someone is convicted under a statute that has this language and the possession of the sawedoff shotgun had just occurred you think that is not constitutionally vague. If the jury was asked in this offense whether that possession provided a substantial risk beyond a reasonable doubt that would not cause a problem. And other parts is when it requires the question to be an element with the offense as with the force clause or with burglary you just look at the elements of the predicate offense to determine whether it qualifies. Congress was trying to do something here. Some may think it is a good thing to do and some may think its not. And that is to impose an enhanced penalty for people who felons who possess firearms and have a record of prior conviction first a certain category of offenses. If the residual clause is held to be unconstitutionally vague is there any other way that congress could accomplish that end . Yes, your honor, i think there is. I think one solution would be to tie the risk to the elements so for instance keep the same 14 words but add in as an element, the creation of serious potential risk and anything that didnt fall within that congress could add as enumb rated offense. Why does that solve the problem . Because then litigants, defendants, and judges would only have to look at the criminal code of the state that has the predicate offense and see if it has as an element the an offense that prohibits the has as an element the possession of a sawoff shotgun. You should my solution the possession would not count under minnesota law because it doesnt require the possession in connection with behavior that creates a risk. The jury would have found the fact of the risk right . Precisely your honor. In the cases in my imagined solution what you are saying is that all the statutes in the back of the governments brief would count . Yes, your honor. But nothing else would you have to have it listed specifically and this conduct created a serious risk of injury. If congress chose that as a solution, yes, your honor. I think this demonstrates extortion doesnt have that . That would pose the additional solution is there any crime like that . What is the crime like that . Use, attempted use, threatened use of physical force and you are adding to those three categories or serious risk of what . Has as an element the creation of a risk or serious potential risk of injury to another. Its up to congress how to define it. But if you i apologize. Go ahead. If they want to hue closely to the status quo then requiring that risk to be an element, the government has collected for us 200 examples of statutes that have risk as an element. They would presumably count. And if there were some left out of this solution that congress wanted to include like for instance if extortion were not one of the enumb rated offenses rein they wanted to include it they can hear data, they can assess risk. They can hear testimony. They can decide what should and shouldnt count but its we shouldnt be imagining it ever time. Are you saying that this is something in response to Justice Salito equestions, are you saying that this is a savings construction that we should feel free to adopt . I. Your honor i dont presume to tell the court what it can and cannot do and it is strived for to create an interpretive framework to solve the problem. Far be it from me to can you get to your suggestion from the text of this statute . I do not believe so your honor. If it were in the text we wouldnt be in this place. Its important to me to evaluate your statement that most of the problems are at the margins, not the core. How do i do that . My assumption was the opposite. I thought the margins were few and the core covered a vast amount of criminal conduct. Where do i look to determine who is right on that . I think we grappled with that. The gray margins shouldnt lead to a conclusion of vagueness but its in this case over and over and over again there is disagreement about things that should seem obvious that core is smaller and smaller compared to the imaginens. Look at the easy cases at pages eight and nine. On closer examination those give rise to disagreement. They are not uniformly settled in favor of inclusion or exclusion. Anything that seems easy at first blush isnt. There are several splits pending right now and i dont mean to disagreements about how to apply this courts tests that are not be answered by this courts decision in johnson. The question of whether on sensual sex offenses based on age should qualify. The question of offense with recklessness should be assessed. Conspiracy to commit crimes of violence. One of the easy questions is the solicitation to commit murder. So the veneer of ease and simplicity that the government attempts to create in their writing is belied by the reality on the ground. A different question. As you understand the governments position or is there Common Ground between the parties that because this is a mandatory increase the standard for vagueness is precisely the same as the standard that we apply to determine whether or not a crime in its definition is itself vague . Is there a different vagueness standard for sentencing than for the statement of whether crime is at the outset . I dont think it deserves a lesser scrutiny because it is mandatory and onerous. Its as if there were a new crime. And im not talking about other aspects of the jurisprudence. But flipman versus hoffmen estates suggests that the licensing and fine statement that gave rise to the statement of vague in every application deserve greater scrutiny. You dont think you say a congressional cure as i understand your argument could only be to add to the list of crimes, to add to arson, extortion, or to have whereas an element of the crime is a serious risk. Thats the only things that congress could do . Nothing else . Oh, no. I dont mean to suggest that at all. Congress can fix this however they see fit. Thats why but what moves could the Congress Take . One is to list every crime they think should get the enhanced penalty. Another is to say the statute has to have has an element that it has a risk of serious risk to others. I dont think listing them is that difficult. Others list a large number of things. Im saying isly the anything else . Listing is okay saying the crime has a to have as an element, the risk of danger to another. Your honor, im not trying to avoid the question. I think it depends what they want to accomplish. If they want it to apply to any felony they can say so. If they want it to apply to things that are violent, they can say so. They didnt say much of anything when they wrote this statute. I dont want to take up your rebuttal time but this quick question. If congress assigned a committee or a person to go through the criminal code of every single jurisdiction and identify those offenses that didnt fall within any other provision of acca but met in those individuals the residual clause standard how many do you think they would come up with . I dozens . Hundreds . Thousands . I think it depends on whether Congress Wants this to be a narrowly applied enhancement or a broadly applied threestrikes rule. If they gave the court that guidance that show the hard areas of questions the commission could decide. I dont think that its necessary to look at every states code. If they specified the definition like for burglary and robbery in the 1984 enactment that would save an enormous amount of question. And with the courts permission i will save my last moments. Thank you, counsel. Mr. Dreeben . Mr. Chief justice and may it please the court. The armed career criminal act enormous principle with the methodology that does not produce ooug. We didnt say anything like that in begay. I dont think the court involved an opinion in begay. It commented on that in james. Sykes came later after begay. And the court continued to adhere to the idea that this statute can be applied as it has been applied four times by the court and in numerous instances by lower courts without substantial difficulty. I didnt mean to suggest in begay we addressed vagueness. But my point was that sykes provides a particular test but as your friend has pointed out, begay points an entirely different direction. What begay did was conclude that the similarity of the offenses in the residual clause to the enumb rated offenses had to have a certain similarity in kind. In sykes the court noted that the phrase that the court developed in begay purposeful violent and aggressive with a mens rea of ordinarily provide the manageable test that courts can apply. But begay points to the problem in my mind. There is no doubt that drunk driving does cause a risk of physical injury. But could be the that Congress Really wanted to impose a 15year mandatory minimum penalty to a person who has two drunk driving offenses prior . It seemed outside the ballpark of what they are interested in. And thats why i have had such a hard time with this, in part because of the sentence. You know a 15year mandatory minimum. And in part because, there seems like they had something in mind but its very hard to figure out. So i think Justice Breyer that it may have been a little bit too ambitious for the court to try to develop a similarity in kind test as the court did in begay. That was the position of the government. Were not asking the court to revisit that today. But once the court did develop it it then considered in sykes whether it provided a uniform universally applicable test and concluded it was better to restrict it to crimes that involve negligence recklessness. So it doesnt subsume whats in the statute. I think having done, that the court has given guidance to the lower courts. There has been some confusion about the relationship between begay and the risk test. Is that all it takes . I mean, can we just patch up this statute in ways that have nothing to do with its text as begay didnt . I thought we did not have any common law power to create crimes . And if thats the case. It seems to me it has to be congress thats done that. I agree if congress hasnt done it and hasnt done it clearly, it seems to me our job is over. I agree with you that the court does not have the power to create common law crimes. I dont think its done. That its engaged in statutory construction about which members of the court may disagree. If the court believes that a similar in kind limitation is appropriate for acca there is a text yule vehicle for getting there, its the same vehicle that your honor used in the other johnsons case whether batteries involve strong force or offensive touching. And your honor looked to violent felony and concluded that the word violent in that definition defined what kind of force would count. That was the impulse to distinguish injuries that are caused by regulatorytype violations like pollution and injuries that are caused in the way the statute specifies. But that phrase it seems to me could just as clearly be viewed as adding conclusions. I dont think that certainly not many, im not sure any involve that aspect of it. Its not a question of serious potential risk but otherwise. What is its relationship to the enumerated offenses . I think that is not such a big problem if the Court Applies that the way it did in sykes and the way the lower courts predominantly do. Its not a precise empire call analysis. This court could not have envisioned that this court and the lower courts have statistics to engage risk levels. It intended an exercise based on experience. Just as in sykes. Eight members of the court agreed in sykes that flight in a vehicle from a Police Officer in its ordinary case was sufficiently risky to trigger the residual clause. There was disagreement because of the structure of the indiana statute which had an enhanced offense that involved a vehicular flight i dont know what you mean by based on experience. What experience do i have involving these state crimes. I have not heard any case involving any state crimes. What experience are you asking me to apply . I think the same kind of logical judgment that the lower courts have used. Fast not experience. Logic is not experience. You are asking me to apply logic or experience 1234. Both. Which is the experience part . I will start with the the logic point and get to the experience point. The logic point involves look at the elements of the offense and asking what does the conduct in this offense consist of . Let me take an example of solicitation of a child under age 14 to engage inned somy. A court can say what that is an adult attempting to entice a child into a private place to engage in a sex act. Is that a an act in ordinary experience, is it likely to produce a serious potential risk of physical injury to another . Courts do not have much difficulty answering that question. Similarly in cases of kidnapping kidnapping, what does it mean i think its not difficult because its a horrific crime not because they have a basis for saying what the degree of risk of a serious potential risk of injury is. I dont think they have to say with precision what the degree of risk is. Congress gave four kpemp lar cliems to say what it is mind. Two of them burglary and extortion vols property or potential threat to a person and the danger that can arise is confrontation. I see that now. Wait, before because i want you to get back to the experience. The thing that also sticks in my mind is that indiana case. Do you remember the one im talking about . Because in fact you look at the words, but theyre nested, theyre nested in a set of other crimes. Yes. And really you would like to know in empirical fact how is this bit of a larger nest actually used in indiana . It might be. But it is really used against people who are involved in violent kind of situation. Or it might not be. Because there are a whole lot of other ones around. And now you turn to experience. I use experience you know, i have no idea whatsoever. And pozner suggested, i think i picked that up, go and do empirical research. Why doesnt the government do it . Commissions tried to do it. It cant start. Doesnt know where to begin. There are so many statutes. I think, Justice Breyer, the very difficulty and unmanageability of the enterprise suggests it is not what congress had in mind. What congress had in mind was identifying classes of offenses that judges are confident involve serious potential risks of physical injury to another, possibly the similarity in kind inquiry when the mens rea isnt satisfied. What Congress Expected courts to do was to analyze what the conduct is that is involved in it, compare it to the listed offenses and see if the risks are similar. Does the department of justice does the department of justice do any of that . The sentence as i understand it is one that the prosecutor asks for. And is there any guidance coming from the department of justice, guidance to the u. S. Attorneys who are going to be asking for acca sentences when they should and when they shouldnt . Yes, and the guidance key is, Justice Ginsburg, this courts decisions, we use primarily an analysis that focuses on looking at the conduct that the elements of the crimes embrace and logically analyzing what does it entail . Does it entail a risk of confrontation . The other kind of risk that is it written guidance from the department of justice to the u. S. Attorney . Yes, there is. In the form of guidance memos we regard as work product, but they involve analytical efforts to separate different offenses into different categories, based on the conduct and to the extent that statistics come into play, i know Justice Breyer, your opinion cited statistics, you talked about the need for statistics, we think they play exactly the role the court used them for in sykes. First, the court talked in sykes about what happens when someone flees from a Police Officer. What are the risks of what about extortion . I mean, extortion, that doesnt the other three i can see, burglary, arson, explosives, sure. But what about extortion . I thought its the hobbs act. Would be amazed if many of those involve violence. You would know. Violence by the extortee. I mean it certainly is at the other end of a postal communication or something, i mean if you dont give me some money, im in new york, youre in hawaii, im going to reveal such and such. What are the facts on that . I think that what congress had in mind was the kind of extortion where somebody threatens to inflict injury on a personal property and if it is in order to achieve a demand. And congress was concerned that the person who makes that threat poses a risk of carrying it out, which creates a degree of danger. Is that the justice departments position, that other extortion is not covered by the provision . I dont think if it is just blackmail, you threaten to reveal something about the persons life, that isnt covered . We would argue the generic definition of extortion is seeking to get property from a person with his consent by the use of threats of force or fear. Threats of force. Yes. Or fear. Yes. Well, you i mean, fear includes being afraid that some offense of your prior life thats right. So you dont assert that extortion means only the extortion that the mafia might, you know, pay up or were going to hurt you . I think a normal method of construction doesnt quite get you to the narrower view of extortion you expressed in your separate opinion in james, i believe. But that is a legal question. The government may make that argument and this court might conclude that under the principle that similar words should be construed similarly, extortion has a narrower meaning. The problem is the problem is not what the government argues when it gets in the court. The problem is what the prosecutor threatens when hes in entered into plea bargain negotiations. This is the point that Justice Ginsburg touched on. You were putting the Defense Council in a position where they have to interpret the vagueness in making the decision whether they want to plead five years or risk mandatory minimum of 15. And your guidelines say a lot, but i thought one of the things your guidelines say is you should prosecute the maximum extent that you can, right . You should charge the maximum if you charge. And the prosecutors go in and say, look, i could charge you this much. And or i could or i could i could add this charge to what ive got and then you face 15 years. The Defense Council said, all right, let me see if were guilty of that. Hell read that and have no idea whether theyre covered by it or not. I think no idea is it is an exaggeration. It is an exaggeration. This may not not enough of an idea to risk an extra ten years for their client. These arent charges in the same way that a criminal charges in an indictment. Typically criminal history isnt assembled until a presentence hearing is prepared. At that point the parties are more aware of whether the defendant might be exposed to the armed career criminal act or not. Sometimes analysis is done and can be done fairly reliably. Again, this court sees cases that really pose hard questions that have generated circuit splits, that result in legal questions that divided the lower courts. There is a wealth of activity below the surface that doesnt get to this court in which there isnt nearly as much difficulty in figuring it out. Now, on pages 8 and 9 of our brief, which my friend referred to several times, we cited 17 examples of what we thought were easy cases. The petitioner came back and said, three of those arent easy because theyre circuit splits. In two of them, the splits are because the definitions of the offenses, the elements of the offenses were quite different. Child abuse meant something very different in one jurisdiction from another. You take the position, so long as there is some easy cases, the statute cant be vague. I dont think the court has to go nearly that far, Justice Scalia. In this case, you have four you dont take that position . This court i thought your brief took that position. This courts decision do suggest that. I dont think the court has to go all the way to that position in order to conclude what is the standard . This goes back to what Justice Scalia was saying before, i mean, there is conduct that everybody agrees is annoying. There are rates that everybody agrees are just unjust and unreasonable. How much do we have to say that the core has shrunk and the margins have taken over before were willing to do this . I think the starting point is to look at whether the statute states something of an objective standard or a subjective standard. In the instance of unreasonable rates, that is a standard that Administrative Agency could flush that out. But for a court to do it, it would involve an application i feel as though it is really the same inquiry. Even as you describe it, it is identify crimes where, you know, dangerous stuff. Crimes that pose a risk of danger. How much danger . Well, as much danger as these four enumerated offenses. How much danger do they pose . Nobody is really sure. One of them seems only to pose that a lot of danger and a few select cases. It is a really it just seems even as you describe it, as the kind of thing that congress ought to be doing. Let me add one thing, justice kagan, to your description of what courts should do when they apply this analysis. First, theyre going to look to see if they can identify the ordinary case. Then theyre going to try to determine whether the risk is essentially, i think, analogous to the burglary, extortion risk of confrontation or the arson explosives risk of unleashing a destructive force. And then finally there may be some cases where the begay analysis applies. This is the really important point i want your honor to think about in this context. If the court is not satisfied on any one of those issues, the government loses. Not because the statute is vague, but because if the court is not confident that in an offense fits within the normative criteria that congress established, the tie goes to the defendant. No such thing as a vague statute. Whenever a statute is vague, the government loses on the rule of lenity. Therefore, there is no such thing as a vague statute. I think the kind of things that are vague statutes are either those where there is a tinge of First Amendment or other protected activity like in the annoying example, or cases like elco where the standard is unreasonable rates and everybody would agree that some rates are unreasonable. It is a very subjective standard. The hardest part of this of this test is determining what is the typical case of of this particular violation. What is the typical case of extortion, to take one of the four enumerated . What is the typical case of extortion . You seem to think it is ill break your leg, unless you pay up. I would think the typical case is, you know, ill disclose something about your life unless you pay up. And i think that if the court is faced with that kind of conundrum, it looks to reported decisions of convicted cases as the court indicated in james and it attempts to determine whether it can identify the ordinary convicted case. And if it cannot conclude the ordinary case involves the greater degree of violence, then it will conclude that the government has not what about one you think is easy, kidnapping . What if the statistics would show that in 40 of the cases, theyre talking about the parent that does not have custodial rights, you know, taking the child from school. And not returning him or her, but whatever. I mean, that doesnt pose, i would say, not a serious risk of potential violence that the parent is not going to harm the child. And yet you say thats an easy case. It is easy if it is at the margin. If 1 of the cases are, i dont know whether kidnapping is prosecuted more often in a case like that, or in another, more, you know, violent case or where it is extortion for money as opposed to just wanting more custody of the child. We would have to undertake the effort to try to persuade a court of what we thought the ordinary case was. If we failed, if we did not muster whatever the court thought it needed to understand how do you do that . Do you look at every charged case of kidnapping in the state of arkansas if it involves a law from arkansas . We would look at the reported cases in arkansas. We would look to the report misses the problem is i want to just get to justice kagans earlier question, if thats all right is it . Okay. Because for the reasons that youve heard, i would just like you to spend an hour, sometime before you sit down, a minute on the suggestion of limiting it through the use of the your appendix, which you heard described a minute ago. Looking at the language, i think it is possible within the language to go to that interpretation. So i dont really think that interpretation is correct, because if you look at the exemplar crimes i dont know what youre talking about. What im talking about specifically is you read the words otherwise involves conduct that presents a serious potential risk of serious injury to another, you look at the four examples, you say in each of the four examples there was a jury determination that it fell within one of the four, and we should read those words too as requiring the jury to make a determination that there is a serious potential risk and the way you do that is that you insist that an element of the crime has the words or the equivalent of serious potential risk. Now, thats roughly what the suggestion was on the other side. I just didnt want you to sit down and at any point you would like without addressing that possibility. Can i address it quickly, Justice Breyer. I dont think it is construction of the statute that really works. The exemplar crimes she didnt pose is as a construction of the statute. She said clearly this court could not adopt that, but congress could. She was asked, you know, how congress could fix this. That was her proposal about how congress could fix it. Yes. Just wanted to i think we agree with the petitioner on this one, the exemplar crimes, burglary, arson and so forth dont involve as an element characteristically it arises because of the elements of the crime. And the residual crimes residual clause where acca came from as a freestanding clause. I see, go back to justice kagan. Yes. I dont think that is a viable solution to this. But i do think the viable solution in this area is that for many crimes, they dont pose the empirical conundrums that can be hypothesized. And when they do, and the government is not able to satisfy the court or the court isnt through its own research able to become satisfied, that it is a fix on the ordinary case, that account say with some degree of confidence that the risk is comparable to the kpemp lar crimes, the crime falls out. So you have in the acca world many crimes that no one ever contests are covered. Mail fraud, gambling, and then you have crimes that we have listed that are not seriously contested. We listed 17 of them. They contested three. I think two of the contests really have to be set aside i think even please. Justice kagan. I think even in the ones that you think are easy, that theyre only easy in the abstract. The vehicular flight one was a good example of that in the abstract. Everybody just has a sense that its really dangerous if people flee from a Police Officer in a car. But then it turns out there are all kinds of degrees and we have zero idea what the charging is. Was not a fluke of that case. Thats kind of every case is that we dont have a sense of how all the statutes connect to each other, and what statutes are used for the dangerous ones, and what statutes are used for more minor variants of the same offenses. And that thats kind of an endemic problem in this, is that not right . Justice kagan, i think what the court is asking itself when it attempts to apply acca is not a question of that fine grained level of empirical precision. Congress understood, for example, that in most burglaries, probably not used hurt. Many extortions nobody realizes the threat. And yet it regarded the kind of person who is willing to undertake a crime that could lead to that kind of confrontation as properly subject to an enhanced sentence when they have not just one, but two other convictions and then they go out and use a gun. But then youre talking about a very different inquiry, it seems to me. Then youre talking to about just a gut check. Do people that is this the kind of conduct that a bad person engages in . No, i dont think that it is quite that amorphous. There is a much more specific inquiry into the risk and the way the courts have conducted it i think is really, you know, in this courts decision in sykes was an exemplar, but there are many more cases where they look at the conduct, examine the conduct, is this a sex crime that involves a minor, what is likely to ensue. I think it is kind of critical to keep a perspective here that the idea of substantial risk is shot through criminal law. That brings me to the statutes in your appendix. It did it does seem to me those statutes do require a case by case determination by the foundry of fact that there was a danger in the particular case. And so that is different from the categorical approach. Yes. And Justice Kennedy and most of those statutes it seems to me would survive if this court ruled against you here. It depends on the rational, Justice Kennedy. If the rational were the concept of substantial risk is itself too amorphous to be grasped at all and applied in a consistent manner, i think that would raise we would never say that. We would never say that. I think as a logical matter, thats essentially what petitioner is saying, that it is not possible to really get a fix on what those words shes saying you cant tell what the typical crime is, and when you cant tell what the typical crime is, you cant tell what the risk is. And my answer to that is cant do it for extortion. If you cant tell what the typical crime is, the government loses. Once you can tell thats not an answer. That sounds wonderful. The government loses because the rule that tie goes to the defendant. That sounds wonderful. But the fact is one court will say, yes, the government loses. Another court, given the vagueness of it, will say the government wins. But i dont think are we going to have to review every one of these until the law is clear . No i think the court does what it typically does, review cases and establish general principles and the lower courts make an effort to harmonize their rulings in light of them. It is not unique that this statute has generated a lot of litigation. Section 924c, this court had three Different Cases interpreting the meaning of the word use and one interpreting the word carry. Thats a higher ratio of cases to words than this statute. I think what it says is that when there is a lot at stake, when many years of prison time are at stake, people litigate hard. Is the test the same here for vagueness as when we determine the validity of a statute that specifies a crime . So i dont think thats so clear, Justice Kennedy. This court in chapman indicated there is a lesser degree of clarity required for vagueness doctrine in the sentencing context. Why should that be when it is a mandatory this is mandatory as five years, no possibility, in this case is such a good illustration because the judge said if it were up to me, this person should get half or most what did he say, twothirds . That would more than suffice. Im locked into this by acca, shouldnt we demand from congress, if it wants to have that kind of enhancement, really clear statement . Let me say two things about that, Justice Ginsburg. This statute involves recidivism. There was never any question that petitioners should have had about what conduct was prohibited and not prohibited. He knew or should have known that he could not possess a gun. And the second thing is because this statute is applied as a matter of law by courts with denoble appellate review, it achieves a degree of clarity through the litigation process that i think is going to be sufficient to meet whatever heightened standard the court might impose on it. But you do but i do want to come back before you do, i disagree with the statement you made. Because there are so many years involved, people will litigate hard. I think because there are so many years involved, people wont litigate at all. If theyre facing if they go to trial, such a large enhancement, i think theyre going to be compelled it gives so much more power to the prosecutor in the plea negotiations which is, of course, where almost all of the cases not so much here for two reasons, mr. Chief justice. One is that section 922g prohibits possession of a weapon by a firearm. I wont say there are no contested cases, but it is not the hardest crime to prove. If youre found in a car with a gun and the suppression motion fails, trial is not going to get you a lot. The second thing is, it is not totally up to the prosecutor. The presentence report will indicate the defendants criminal history and the judge is obligated to apply acca whether or not the Government Asks for it to be applied if, in fact, it is legally applicable. I dont think this context presents quite the same plea bargaining pressure that you dont know about the prior crimes how is the judge supposed to know about the prior crimes unless the prosecutor tells the court . May i answer . The presentence report, which is required to be prepared by the probation officer does a criminal history check, gathers that information, synthesizes it, makes recommendations to the sentencing court. Thank you, counsel. Thank you. Miss menendez, you have three minutes remaining. Thank you, urn your honor. First, i think lenimty is a usury solution in this case. After they looked at that as an answer, we looked through every opinion we could find. We did not find a single case nationwide where a court has applied lenity to find a marginal case should not count under the residual clause. If it is going to pose a solution that the government suggests, it needs substantial invigoration by this court to be the answer in the gray areas. The Second Thought is this suggestion that the court can decide what the ordinary case is from reported decisions is actually also skewed in favor of the government. Consider a standard offense where somebody commits a much less egregious case. Resisting arrest where all they do is refuse to be handcuffed, versus resisting arrest where they kick and punch and fight the officer. This case is likely to get a higher sentence and more likely to lead to appeals and challenges and a reported decision. This case is perhaps more likely to be resolved with the suspended sentence and never to appear in the reported case law at all. So if all were doing is turning to the reported case law to try to determine what the ordinary case is, thats going to give an artificially skewed sense of aggressive nature of those cases. Finally, your honors, while it is true this court has grappled with things like 924c repeatedly, 924c provides an example of what is supposed to happen, when court points out a flaw in the statute, which youve done four different times, congress answered. Changed 924c to try to address the courts decision and address the courts concerns from bailey. And then that answer led to additional questions. That give and take, that discourse is missing in this case, where it has been clear for a long time that this statute needs help and there has been inaction on the part of congress. Your honors, i think the idea that the tie should go to the defendant is important but it is just not happening because of the suggestive gut check your honor has mentioned. Judges substitute a feeling, a sexual offense involving a minor sounds bad and it sounds violent, so therefore it must count. But i invite your honors to look at the footnote in our brief where we highlight there is actually several cases that final that where the offense is unlawful because of the age of the victim, it doesnt count as a violent offense. So that gut check has to mean has to be more quantified, has to be limited, has to have specific guidance. The last point id like to make is that whether this Court Decides in favor of mr. Johnson on the merits, or an application of the rule of lenity, whether this Court Decides this statute is unconstitutionally vague as applied to possessory offenses, or whether this court takes the step that i think it is time for and that clears this clause unconstitutionally vague in every instance i think the appropriate result is for mr. Johnson to win and be resentenced. Thank you, counsel. The case is submitted. Now an update on the transition in south africa from apartheid to a majorityruled government system. Then faa reauthorization plans past 2015 and women serving in military combat roles. Creeri anda Senate Judiciary chair Chuck Grassley outlines his committees agenda. With live coverage of the u. S. House on cspan and the senate on cspan 2, on cspan 3 we show you the most relevant congressional hearings and then on weekends cspan 3 is home to American History tv with programs that tell our nations story, including six unique series. The civil wars 150th anniversary. American artifacts to discover what artifacts reveal about americas past, history bookshelf, the bestknown history writers and the presidency looking at the policies and legacies of our commanders in chief and our new series, real america, featuring archival government and educational films from the 1930s through the 1970s. Funded by your local cable or satellite provider, watch us on hd, like us on facebook and follow us on twitter. Since 2010, at least ten states have seen their largest wildfires on record according to the National Forest service. Coming up on cspan 3 at 10 00 a. M. Eastern a hearing on wildfire management. A little later in the morning, former governor Mike Huckabee will join the 2016 president ial field making his announcement in his hometown of hope arkansas. Again, thats on cspan. Now an update on the situation in south africa since it transitioned from apartheid. Good afternoon. Welcome to the Cato Institute. Im marian tupy. Before we start, a quick housekeeping item. The person who was supposed to be a respond ent today was taken ill and as a consequence wont be participating in todays forum. Instead, frans will talk for a little longer than we originally assumed, for roughly 35 to 40 minutes after which we will have a q a and we expect to finish perhaps a little earlier maybe at 1 15 or so. With that, allow me to introduce the subject of todays forum. It has been 21 years since south africas transition to a multiracial democracy. For much of that time, the country enjoyed a largely positive Media Coverage and goodwill on the part of both domestic and International Community and ordinary people around the world. Yet, as the time passed, the bad news from south africa became increasingly more difficult to ignore. First, there was the presidency marked by antiwestern rhetoric denial of the link between hiv aids and support for this zimbabwe dick ate for prompting michael gesh win of the Washington Post to refer to south africa as a rogue democracy. Then with the seemingly endless corruption scandals widespread electricity outages and plunging Business Confidence attempts to muzzle the media and kwaush the independence of the judiciary, disorder that culminated in the massacre in 2012 during which the police gunned down 44 protesters. For years, the anc has tried to dismiss criticism of its misrule as an attack on south africa as a whole. That, i believe says more about the anc than about its critics. The ruling party has tried to bring all institutions of the state, not to mention vast parts of the Civil Society under its thumb. As far as the anc is concerned, anc is the state. Perhaps most shameless with those anc defenders who argued that criticism of the anc amounted to the criticism of the majority rule. Well times have changed. As it has always been, to get a flavor of the political scene in south africa today, please join me in watching a very short video from parliamentary proceedings in the South African Parliament earlier this year. We have indeed, allowed one powerful man get away with far too much for far too long. Members, this honorable man is in our presence here today. Honorable president in these very chambers, just five days ago, you broke parliament. Please understand honorable president , when i use the term honorable, i do it out of respect for the traditions and conventions of this house. But please dont take it literally. For you, honorable president , are not an honorable man. You are a broken man presiding of a broken society. [ applause ] so youre willing to break every Democratic Institution to try and fix the legal predicament that you find yourself in. Youre willing to break this parliament if it means escaping the accountability for the wrongs you have done. You see, on thursday afternoon, outside this very house, members of the parliament were arrested and assaulted by your riot police. A few hours later inside this house, our freedom to communicate was violated by an order to jam the telecommunications network. Not long after that, armed Police Officers in plain shirts physically attacked members of this house. This was more than assault on members of parliament. It was an assault on the very foundations of our democracy honorable members. [ applause ] parliaments constitutional obligation to fearlessly scrutinize and oversee the executive lost all meaning on thursday night. In fact, the brute force of the state won and the hearts of our nation was broken. [ speaking in Foreign Language ] when you at that very moment, that our democratic order was in grave danger but heres the question. What did you do, mr. President . You laughed. You laughed while the people of south africa cried for their beloved country. You laughed while trampling mandelas legacy in the very week that we celebrated 25 years of his release. Honorable president , we will never, ever forgive you for what you did on that day. In our presence here today honorable president weve seen that already. All right. Good. So thats done, then. Frans cronje is the ce oechlt of south African Institute of relations. The institute was established in 1929 and is a research and policy organization oldest in south africa. The institute is not only the oldest think tank in south africa, it is also the oldest liberal institution in south africa. It tries to be independent of government and of all political parties. It sees its role as serving its members and the country at large to reach political and economic success on the continent by promoting liberal Democratic Values or, as we would put it classical liberalism. Frans was at the university and holds a ph. D. From northwest university. He joined the institute of Race Relations in 2004 and established its center for risk analysis, which specializes in using scenarios to help business and government leaders make decisions about investment and policy in south africa. Hes also an associate of the center for innovative leadership, a leading consultant and author. His work has been widely cited in the media. He writes columns for the report newspaper and is it a regular contributor to classic business on classic fm. With that, help me welcome frans cronje. [ applause ] narian, thank you. Good afternoon, ladies and gentlemen. It is a great pleasure to come and talk to you this afternoon. The Economist Newspaper says that south africa is headed downhill. Are they right, is the question that i am going to try and answer for you in the next 40 minutes or so. And im going to do that via a scenario exercise called the time traveler scenario that my institute released in south africa about 18 months ago. And the time traveler scenarios try and describe the steps and the trends and the processes that will take south africa to its 2024 and if we pull this off at all here this afternoon, i leave you in 40 minutes with a reasonably clear description of south africa the way it looks when it wakes up, opens the curtains and looks out at the world the morning after that election now ten years down the line. The story, as we wrote starts where it only possibly could in the South African economy. 1994 was the year of our democratic transition. Nelson mandela comes to power as the first democratic leader and we have average levels of gdp growth of just over 3 . Considering where we came from theres a member of success in that number. But its been a bit of a roller coaster ride. What you are seeing over both my shoulders here is gdp growth performance in south africa from the year 2000 projected by the institute into the year 2019. The 3 growth that weve averaged over the whole period to today where we sit started relatively slowly coming out of the transition years as the African National congress grew out of debt and the high Interest Rates. By the early 2000s, things were looking fairly positive indeed, between the years 2004 and 2007, south africa will exceed growth rates an average of just over 5 of gdp and those years that growth rate is something that you must keep in mind because were going to revisit it again on a few occasions this afternoon. You can then see coming out of 2007, very obviously, the Global Financial crisis the South African economy contracts by 1. 5 in 2009 and bounces out of the crisis and appears to recover into 2010 and 2011 and then the recovery stalls. Gdp growth in south africa is now trapped in a band of somewhere between 1. 5 and 2 of gdp, about a third, i will show you later of the rate that south africa needs to get out of political trouble. There are many things happening in this graphic. You see the financial crisis. But what you dont see and nor explains the difficulty south africa has in recovering economically out of the crisis is that the same 2007 and 2008 and 2009 period coincides with a significant shift in the country. Nelson mandela has been to davos in 1991 and has come back saying that south africa should drop their socialism system during the liberation years. By 1996, the South African government in the terms of its growth and employment and redistribution policy has adopted a fairly conservative economic model. It argues the need to finance social spending, for example, not through borrowing which is controversial throughout parts of the west these days. That takes south africa up to the relatively high growth rates. In 2007, though theres a Conference Party left within the South African government remnants of the communist party that had been the engine of ideas in the liberation struggle seized power by voting out south africas then leader and head of state who is forced to resign two years later. Subsequently left us within the South African government have seized control of the policy formulation function. The Economist Newspaper again a year ago got it right when it quoted us on this talking about the ominous turn in 2007, a Common Thread is that the weakened Property Rights threatened business with draconian penalties and undermined confidence. That assessment is spoton. Getting out of this growth trap over my shoulder requires dealing with two problems. The first one is that the International Economic environment is coming together in a way that will make the growth recovery more difficult. The second thing that needs to be overcome is very bad domestic economic and other policy. Im going to deal with both of those. We start with our argument on the global economy. These numbers will be familiar to you globally Economic Growth expected to pick up 2012 to 2017 to about 3 made possible by recovery and highincome or advanced economies, europe and the United States but in terms of rates of growth its a story of developing economies that should be exceeding growth rates of 5 of gdp by 2017. Those developing economies and purchasing power terms are now 51 of global gdp that overtook advanced economies over the past two or three years. The advanced economy 49 to give you a sense of scale, asia is at 25 of the worlds gdp. The European Union and the United States both sit at levels of 16 and 17 and 18 . China and purchasing power terms overtook the u. S. Last year in absolute dollar terms. The United States is somewhat ahead. India, 6 of the worlds economy, the japanese also 6. Subsaharan africa 2 . A very great extent what happens in the South African economy will be determined by how we are swept along by the tides and currents that shape Global Economic performance. The story of growth as it is predicted to unfold is therefore a story largely of developing economies but it is not spread across regions and china and india predicted to exceed growth rates of 6 of gdp. Europe sitting at 3 and only as long as you leave south africa in. As soon as you strip it out of the subsaharan numbers it becomes the third region in the world together with southeastern asia to be exceeding growth rates of just over 6 of gdp. Of course, are we con if i debt that at what we see in the Growth Numbers are the projections are accurate and one of the concerns we ran across immediately is that brought up by the price of copper. The numbers the years and along the bottom axis run from 2001 to 2015. Youre looking at the copper price there he a it picks up from 2001 into the financial crisis and falls through the crisis and appears to pick up again and its been stepping down for five years sitting now at just over 6,300, a number that was accurate on the London Exchange yesterday. On top of the copper price, quick economic Global Growth. You can see why we like copper. Its one of the best leading indicators to indicate whether its headed much better than oil and gold and concerning risk ap pit appetite. The same time the orange line ticks upwards again. We thought that it relates not to the fact that Global Growth forecast is necessary but to what we see and know you all know is happening in china. In 2012, growing at 8 . 2013 the same stepping down into 2014 and the chinese will engineer a growth rate of about 7 . The real figure might be below that. And thats a trouble, thats a problem for south africa. Because that means that one of our great commodity export markets and theres only one manufactured products. The great market for those commodities is starting to slow. The commodity demand will start slowing even the chinese drive their economy through internally drive driven consumption. The euro is staging a recovery but this has caused question marks over that and thats another problem for south africa because of what youre seeing on the righthand side of the graphic. Major export markets china, 200 billion a year is our biggest export market. Thats definitely going to slow and commodity demand will slow even faster. Our second biggest export market is the European Union. And what happens, for example, in the event of a greek exit . The United States a relatively small export market. South africa now records and this is a remarkable thing trade deficits with every major economy and region in the world except for nonenergy africa and the United States of america. Africa is an export market considerable and will continue to remain in the rest of the world as well. The trouble for us is that as south africa needs to stage a growth recovery, two of our big export markets, serious question marks are hanging over them. Our outlook on the currency, therefore, is as follows. The yellow bar that you see is 19 1982 and ive chosen that because the rand traded at 1 to the u. S. Dollar. In 1994 at the time of the transition it was 3. 5. 10 years later in 2004 it is 6. It has moved a decade later to the last bar 2015. We think it will average 12. 5th 12. 5 this year and we think the rand is on its way to trade to 20. The story on the rand, the takeout story is that it has lost between a half and twothirds of its value every decade since the 1980s and nothing in the current climate that we think is going to change that. You see that same rand number again. I put it here on the left side so it will remind you of the rands weakening trajectory. Theres a very curious relationship between the structure of south africas gdp. The years youre looking at are from 1994 into 2015. Despite what rapd weakness would have given the agricultural contribution is down from 5 to 3 . It would have been 15 . In the 1950s. Despite global booms in the mid to late 2000s and the weakening rand over that period, minings contribution to gdp is largely flat. The one that concerns us the most is the gray line manufacturers contribution to gdp. Is averaged about 25 from 1950 right through to the democratic transition in 1994. Subsequent 20 years its fallen by half to about 12 . Those three lines you see the hostile impact that government policy in south africa has had on three critical areas of the South African economy. The extent of that hostility is such that despite the huge benefit to exports it would have gained in the weakening round the contribution to the countrys economy is slipping. The last little line ill show you here its not the entire economy to 100 but left out some sectors that arent critical to my argument highskilled sector banking finance, insurance technology. Now almost three times as important to the South African economy as mining anding a curl combined. We are evolving over time to become a hightech highskilled post industrial emerging market economy and when i show you the skills portion of the economy, youre going to see why that presents opportunity in south africa to africas hong kong is to china. That means that we are unlikely to make much headway there. In the absence of a growth recovery, dont think that the revenue base of the government can improve quickly. This is the story of the South African taxpayer. The population in south africa is now about 55 Million People. 53 million are adults over 20. About half of those about 15 million or so, have a job including in the Informal Sector receiving monthly cash grants from the state, more people now than people in employment. Registered taxpayers the number looks reasonably healthy but thats an illusion. You have to register your employees now for income tax. Only 5 Million People are allowable to submit tax returns and just 10 of that number, 500,000, are earning the equivalent of 100,000 a year. That is the brittle nature of the income tax base. Without a turnaround in that tax base south africas government runs into a number of fiscal constraints. 2005 to 2015, south africas projected budget deficit is to sit at around negative 4 to negative 5 . It cannot borrow its way out of trouble because of this line, the orange one. Thats the countrys debt to gdp ratio. On the last day that the apartheid governed south africa that number was 48 . The National Congress government brings the debt levels down into the 20 percentiles and pick up into the financial crisis year in 2009, as you can see subsequently they accelerate and then the levels end again at exactly the number they were on the eve of south africas democratic transition. The South African government cannot grow its way out of trouble. It cannot borrow its way out of trouble. I will show you in a moment that it cannot spend less either, meaning that the fiscal deficit is now the most powerful force acting on the government to determine where it goes next. In terms of staging a growth recovery, theres some pretty formidable infrastructure constraints standing in the way, the most prominent of which is electricity electricity constraints. The years are 1994 to 2024. Were measuring megawatts on the left hand axis and the gray pars bars are available capacity. If they turn on the switch, they draw electricity. Its a number that currently sits at about 30000 and picks up to 40,000 over the next decade. Is it going to be enough . The first problem we get to is the relationship between the available capacity and this blue line that were calling stored capacity. The difference between the two is electricity generated capacity that is out of action for maintenance reasons, planned maintenance but, more often than not, unplanned. Were assuming a differential of 20 to what is in store and available to users. The worst this year has been 38 mainly as unplanned maintenance, breakdowns energy fran struck stur causing significant blackouts throughout the country. If the demand for electricity grows at 1 per annum then we have a surplus capacity by 2024. But 1 demand growth for electricity corresponds with 2 Economic Growth. Not enough to solve south africas social and economic problems. The demand for electricity increases at 3 per annum, why 3, if you look at the graph of the lines, 2004 to 2007 when south africa hit 5 growth for the first time and that rate of electricity demand the shortfall will be close to 10,000 megawatts, the equivalent of two coalfired power stations. What were seeing here, therefore, is that you cannot now talk seriously about south africa exceeding on a sustainable basis growth rates 3 of gdp, the risk is on the downside. If we see more breakdowns of infrastructure, which are happening at a record rate, will you have to push that growth ceiling of 3 downward. That means that that level of growth, you cannot deal with the achilles heel, which is south africas labor market. The population the blue line bar is 2001 and the orange bar is of last year 2014. The population has increased from 45 to roughly 55 Million People. The population of working ages increased and the population of the job however has increased by very much less than the population of working age and the population of unemployed as increased by even less than the population that is employed. Where are people going . They are becoming discouraged work seekers young people not looking for work. 9 million is the population rise over this period. 8 million are of people joining the working age population. Only 3 million of that 8 could find a job, including in the Informal Sector. 1 million became 4 million employed and that means they are looking for work but half become young people not looking for jobs. It is a crisis of young people. Youre looking here at south africas official Unemployment Rates by age group. The first bracket among the bottom line is people had 15 to 24. The data is not skewed by School Children as were only looking at people actively looking for a job that cannot find one. That Unemployment Rate is 50 . For young black people, its 60 . For young black woman it is 70 number. Astonishing number. As people get older, they appear to find work but that is not the case. These are people that have always had jobs and they have simply hung on to them without a growth recovery in south africa that 50 unemployment figure become as bubble that will drift through other age groups as we move through its a globally unique circumstance. We are home today that red part is 0. 7 of the worlds young people but almost 2 of the worlds unemployed young people. When does it turn . The answers are here. A lot comes up at once so you will follow my voice through this. 1996 to 2014 along the bottom axis. The blue line im showing you runs off the righthand axis. That is Economic Growth in south africa. The little peak and the only time after 1994 that south africa recorded a sustained decline in Unemployment Rate has corresponded averaging 5 Economic Growth. It cannot solve its structural Unemployment Program but infrastructure rates alone 3 of gdp cannot be met. You can start to see the position that the South African government has painted itself into and the scenarios that will follow shortly answering the question of how did they respond to that position . Before that, a went doeindow into south africas living standards. Households for black african black South African families, there are about 12 million of those families, you can see on the orange bar. But only half a million of them, 479,000 have a home loan an excellent indicator of middle class status, they can begin to accumulate assets. Indian South Africans and White South Africans we leave those two groups alone. White South Africans, about 1. 3 million families and a third have an active home loan from a Financial Service institution. Look at monthly expenditure levels and there in blue are the 12 million black families. Of those, 8 million in orange, are spending less than 2,500 rand a month. Only 660,000 are spending more than 10,000 rand, approximately 1,000 a month. And a number that correlates very closely to the half a million home loans, especially when you consider that we have drown these numbers out of a sample size of 12 million mixed race, indian asian, and White South Africans about twothirds of them will spend in excess of 10,000 rand a month. This is a very brittle middle class. The takeout number, only 5. 5 of black South African families have an experience of spending more the equivalent of 1,000 a month. South africa remain as poorer country than it is often able to portray itself as to the rest of the world. If you want to turn that around you need to be able to turn this around. The problem of the skills and what is happening in south africas schools, the longview is very important. So i start you in 1955 and im going to take you through 60 years to 2015 and were going to measure through the apartheid era into the democracy how many black children successfully completed high school. The number and there is a number from 1955 and sitting at the front you might see that its 555 children that completed high school. By the 1960s, not much has changed. In the 1970s, theres something stirring. The 80s, theres a pickup. The real pickup is in the last decade of apartheid. In the first decade of democracy, the rates at which young black kids leave and graduating high school is slipping. We expect this year the number to be 350,000 out of a cohert of 850,000 children and thats why i make the point of the changing infrastructure. The skills story is not a good one. Even if you were to survive in that blue bar and get to 2015 and graduate high school youve nonetheless suffered from a crisis of quality in your education. Were showing you the results of a study done on rates by grades. Were going to jump to grade 9 and then grade 12, the year at which you graduate high school. The test finds between grades 1 and 2, 60 of children in south africa are required to the degree to graduate those classes and graduate nonetheless. 4 out of 10 children have already been left behind. The rates crash by 2000. Only 12 of the class is found to be numerate to be required to be at grade 9 and only 700 South Africans will pass with the final math exam with a grade of 50 or above and that in an emerging highskill economy. For thatten reason, people remain dependent on south africas welfare system that now has passed more people than in employment. My colleagues have developed an excellent indicator that appears here in a moment and measures what proportion of the budget in south africa has spent on free or subsidized housing, Health Care Education and electricity, welfare is an actual cash grants to homes and individuals and 60 of government expenditure in south africa, the massive redistribution of wealth that has happened through the tax system. State debt costs are 10 . There is little room to expand the welfare system especially when you look at the fiscal constraints on the government and this is the point on south africa not being able to spend less because spending cuts will eventually have to come out of this and thats something that the government will not be able to survive. The dependency that this has brought is shown on this graphic running from 2001 to 2015 and measures a number of people in employment. For every 100 people who receive a Welfare Grant from the state in 2001, 300 people had a job for every grant recipient. 2009, for the first time, more welfare recipients more than there are people in employment. Its a complex answer, though. In 1994 70 in every 100,000 South Africans was murdered. A decade later the murder rate has fallen to 40 and it will largely stabilize to where we are today. Its a positive story but australias figure in 2014 was 0. 8 and yours here in the United States was 5 so in many respects we remain a violent society. Are you safer . We brought home and ill show you on top of that this data. 2005 to 2014 armed house and business robberies in south africa rising from 12 to 40,000 incidents. The total number of criminal convictions in the country has been falling and the reason i show you this is to make the point that many state institutions, the criminal Justice System being one of them, is simply overwhelmed by the demands placed on it and in the environment that we confront, we dont see our way out of these problems without a growth recovery. If this is the context where we are at 20 years, 21 years into our democracy u. What, what do South Africans think about it . The answer is by the presidency in south africa and asks one question and asks many questions, one of which is, do you agree that the government is performing well . In the year 2000, 72 of South Africans agreed with that. The government popularity has fallen to just 54th year and we think the number will fall below 50 into 2015. This is a collapse in confidence in the South African state. The collapse in confidence can be seen and read in other indicators as well. Riot policemen employed in south africa. Between 1995 and 2001, south africa has a policing system and 11,000 riot policemen and then 10 of policemen that do policing work in the country, between 2002 and 2006 the riot numbers south africa was making it. We were going to become a successful democracy and you can see in the i think its a fantastic way of measuring that. Subsequently, the figure is at least 4,5000. A government is responding to the perceived threat. Elected in a week or so i have no doubt leader of the opposition in south africa the graphs that marian showed you to the great shock they invaded South Africans parliament physically assaulted members of parliament and called the president and the state of the nation speech to appoint that he had to interrupt the speech the the governments responding to a real threat as well as it sees fit. 971 violent protests largely directed at the government took place in 2001. That number has more than doubled into 2014. Youre seeing the beginning of what will become a protest movement in south africa. That collapse of political confidence in the government can be measured when you look at the formal political arena, how South Africans vote. What im showing you here is voting patents and numbers measured not as a proportion of people who went to vote but express the proportion of people entitled to vote. In other words, citizens over the age of 18 had to go out and vote. In 1994, the anc got 54 of the vote of all people entitled to vote if everyone had turned out to vote. They got 63 of people who went to vote and they have that number 20 years later. So it appears if you measure the voting the Election Results of anc support is constant but if you measure anc support as a proportion of eligible voters its showing support quickly. The opposition of the party has made its way from 1. 5 to 13 of the eligible vote. All other parties you see there in gray the collapse of the National Party government that dates back to the apartheid era and some others. But the most political player in south africa has not appeared on the graphic. Its represented by this yellow line. The nonvote. The South African over the age of 18 entitled to vote who is choosing not to, their numbers are not greater than the number of people voting for the ruling party and that is not for a moment a comment on voter apathy. These are highly activist young people, very politically engaged who look around the political spectrum and say i dont think this is for me. If half of the nonvoters were to vote again and not to vote for the ruling African Congress, the African National congress will lose south africas next election and thats a reality. That is accepted in private within the party. If this is the predicament that they are being faced, what is it going to do and the scenarios emerge obviously, led through a few months of work. We think the government and the ruling party as it is now positioned, has two sets of choices. On Economic Policy and seeing the likely consequences of the approaching fiscal cliff, is it driven to reform the single demand of pursuit of Economic Growth in the understanding that only that growth driven by domestic and Foreign Investment can create the wealth to create the jobs to meet the expectations and secure the political future of the government. As it turns to the right or does it persist in the face of the evidence in the view that the social iflt socialist status can meet far better expectations. South africa is back to the idea, do we remain a free and open society under the rule of law as we have largely been or do the types of incidents that marian referred to do those become the norm at South African institutions are eroded how the country addresses those two questions of the fundamental importance to our future gives you the scenarios. Where the state insists on being the socialist development state and later heads off inevitable political defeat borne of its inability to meet expectations by attacking institutions south africas rocky road scenario. Socialism among crumbling institutions negative growth rates and invest of flight horrific human rights abuses. The best case is the government under pressure to the surprise of many of it is critics turns to the right. Growth rates will have to start approaching 4 to 5 of gdp and it will win on the righthand ak axis as the effects of reform are felt across homes across the country and there are reforms within the government who we know would like to turn this way but they remain a minority. An intriguing case, one that the South African government finds particularly interesting is what we call the narrow road scenario. Again, the understanding follows from the context that marketdriven reforms are the only way to escape the political defeat of the African Congress but the same time the winning of popular mandate is unlikely with a climate of ideas in south africa remains hostile to the idea of Property Rights and private enterprise and force reform and south africas model gains 4, 5 growth rates degree of stability and youre talking about something approximating south africa of 1980s. The next one is the toll road future. The socialist developing state prevails and significantly under the countrys potential and expectations escalate as we have clung to our Democratic Institutions and we have no ut do the African National congress will lose the 2024 election, most likely no clear when it will emerge and south africa will enter a new era of Coalition Politics. The most likely is the radical marxist left together with the African National congress and by the time the African National Congress Loses we think the radical left will have approached 16 17 18 of the vote atddded to the 49 of the African Congress gives the new regime a constitution majority. The most probable outcome on Current Trends is some hybrid of the toll in the rocky roads i think ending in Coalition Politics even if you have to push that one year ahead one cycle ahead into 2029 for the team at the institute which is our little Consulting Group to come to another conclusion of as the scenario we want to see economic upsurge of major export partners and that will cause us to reconsider the likelihood, is the government buying itself time to escape the fiscal consequences of low growth . Increases in foreign Interest Rates coinciding with capital upflows out of south africa and the economy falls flat. Reckless shortterm borrowing on the part of the government to shore up Political Support regardless of the consequences. The inevitable ratings downgrades will follow South African and the likelihood move into Institutional Investors pull out rand past the u. S. Dollar. Its the rocky road future. Sharp rand weakening together with be a environment of rapidly Rising Oil Prices that put an end to any growth recovery. One that we are particularly interested in is fundamental reforms in labor market policy to emerge from the successful defeat of the apartheid system. If the current government moves on on labor market deregulation it will tell us that they are truly interested in real reform. Other areas of policy reform may also follow, opening the door to either the wide or the narrow road. If we continue to see loss of autonomy of Democratic Institutions, the down side beckons, so does that narrow road, that south korea type scenario where the government will appropriate to itself considerable powers and use those to force significant and conservative Economic Policy reform. South africa emerges as a prosperous country. There are such attempts that havent been successful it will deter investment but more serious governments that do this follow very quickly, once you take Property Rights, individual rights follow. Stability in the ruling party meaning it falls apart what i dont think we will see would turn our views, sustain sharp increases in violent antigovernment protest actions. We have little doubt that south africas future as you will hear or experience it if you live in the country will fall broadly within the confines of one of the scenarios we set out for you today. Marian and i gladly take your questions. Thank you. [ applause ] thank you, frans for that interesting presentation. I would like to point out that the Marxist Group in south africa are waiting, called Economic Freedom fighters. I want to be sure theres no connection between them and Freedom Fighters at the Cato Institute that stand for the exact opposite. Before turning to the audience for questions could you explain in one or two sentences your beef with the unemployment regulations, for those people watching on tv or who are in the audience, whats the problem with unemployment regulations and agricultural Property Rights. I think the institute has maintained right from the time of the transition in 1994 that unduly heavy regulation of the south africa labor marked in the absence of skills revolution will conclude in the problem of structural unemployment and weve been proven right of course by the numbers that we see behind us. The fact of the matter, whether activists on the left in south africa like it or not, without significant deregulation of south africas labor market, we will not be able to ensure competitiveness that is necessary to allow very large numbers of young South Africans a job. There are exceptions have become organizations that protect the employed from unemployed. The political consequences of the rising and unmet expectations are driving the rising left and marxist left in south africa. So it is not just a question of deregulating labor markets to achieve economic ends. If you cannot place more South Africans in position, to take charge of their own lives, i think we will see a continued input of radical leftist thinking that will take south africa deep into that rocky road future. On Property Rights we have grave conflicts, not just a question of agriculture. There are a series of proposed and active policies and regulations in the pipeline that undermine those rights. That stretches from policy thinking that would undermine intellectual Property Rights and therefore become a severe disadvantage to the country should it in time wish to position to you very well can come in, rearrange. Should it want to become the services hub. As it stands, theres very little chance that south africa will attract the domestic or foreign Capital Investment new greenfield expansion in Mining Operations or agriculture and the like as long as the rhetoric and now policy is starting to place the state in the position where it can seize Property Rights virtually at its will and delay the payment of compensation should any be paid in the longer term at all. All right, thank you very much. Over to the audience. Please wait for the microphone to get to you and if you would please, state your name who your pay master is and keep your question informal question. First question here. Hi doug brooks with International Stability operations association. Great presentation frans. Could you address Foreign Workers, how that impacted the economy and how chasing them out may impact the economy as well. Absolutely, doug. If you follow the news on south africa, you will have seen in recent weeks attacks on black Foreign Workers out of africa. And these are nothing new. We estimated that between 350 and 500 Foreign Workers have been killed in terrible circumstances, machete wielding mobs over the past decade. Its a function of rhetoric directed out of parts of the South African government at times, and people closely people in the pay as marian would say with South African government, in this case the sue lou household who portray foreigners as stealing our jobs, in some cases stealing our women, which raises all manner of questions. Its part of something broader though, doug. It is an attempt to divert attention away from the root causes of south africas problems, to offer the seductive idea that someone else is stood in the way of you and a better life, if you can take that someone else out of the picture, then your life will improve. You delay the inevitable turn of focus on to the South African government itself. It is not done as brutally as talking about the negative impact of western investors and companies in south africa. Theres been a movement in south africa of students to remove any vestiges from university campuses. It is the same thing the idea that someone else came here and through their actions you are poor, and if you do not remove that other you will never have the lifestyle you aspire to. It is a very dangerous thing and it is going to increasingly turn i have no doubt, into arising degree of antiwestern sentiment in south africa as well, and western firms and the like invested in the country are going to start seeing this thing and what this heralds in their own company and organizations will have a difficult time batting it away. The gentleman with his hand up. The one i am pointing at. My name is steven. One scenario you havent mentioned is a possible indonesian solution where the radical left overplays its hand and the government if driven by nothing other than self interest sees its future in violent repression of the left and Property Rights are protected, if for no other reason than greed of a major family or two. I think there are elements of that, the top left scenario. The state is eventually forced to the right, has to maintain vestige of Property Rights, otherwise we get nowhere and tolerates no dissent at all. Are we already on the way there . That attack on parliament was on the marxist radical left. The move within the ruling party i think to undermine effectiveness of trade unions by isolating the charismatic leader of congress of south africas trade unions may be a move that direction. We certainly see reformers within the government and the ruling party people that would surprise some of the critics who if push comes to shove will move that direction. The trouble is the climate of ideas is hostile to the type of private sector led growth, and the rights necessary to get there. Either the reformers are more likely to fall short. The scenario is that continuing economic decline and oefrt move to try to undermine Democratic Institutions in the country. A gentleman to your left. Yes, you sir. David terry with executive intelligence. Simple question. The first is is the mike on