Sunday, April 30, 2023

Trans Mockery

Freud tormented himself over the question: What do women want? Frankly, the best way to answer the question is simply to ask a woman. Most women know very well what they want. If you are on good terms with them, they might even tell you. 

But, now, thanks to civilizational advancements we are now tormenting ourselves with the question: What is a woman? We owe this to the trans movement, a bizarre effort to persuade the world that a male human who mutilates his body, takes cross sex hormones and prances around like a caricature of femininity-- is a real woman. After all, trans women can now sell sports bras.

Such is the result of the current national debate over one Dylan Mulvaney-- trans woman whose association with Bud Light beer caused the company’s sales to tank. 

As Carrie Lukas points out in an excellent article, trans women like Mulvaney are living, breathing, pathetic caricatures. They make a mockery of femininity by making it appear to be a cosmetic enhancement. Moreover, trans women like Mulvaney mock real women by prancing around like mindless and brainless ditzes.

Lukas explains what society is saying when it insists that trans women are real women:

Women are vain, catty, and brainless. Women’s beauty is built on stiletto heels, false eyelashes, giant fake breasts, debilitatingly long manicured nails, and makeup. We know nothing about current events and sports; our heads are filled with gossip, worries about our accessories, and generating clickbait for our online profiles.

These are the messages sent by the elevation of transgender “spokeswomen” such as Dylan Mulvaney. Drag queens’ cartoonish depictions of overly sexualized women are no longer simply tolerated. Rather, the media and society elevate them to womanhood at its best. The mantra is no longer “trans women are women”; now trans women are the best women.

And, of course, as Lukas wisely points out, the elevation of trans women to the status of full womanhood produces more stereotypes. Isn’t young Mulvaney a living, breathing stereotype, someone who adopts stereotypical aspects of womanhood, the better to make a mockery of women?

Naturally, many women, including many feminists, find this to be grotesque. They do not like being caricatured and demeaned. Lukas suggests that the trans movement and its purveyors are making womanhood into a “garish costume:”

Among the great ironies of the rise of the transgender movement is that, while it claims to seek to upend gender roles, in practice, it elevates sexual stereotypes. A generation ago, girls interested in sports and woodworking might have been called tomboys, but no serious person would have suggested they weren’t really girls. Now, society is encouraging girls who do not conform to female stereotypes to consider becoming boys. The message is that womanhood is a garish costume to be put on or discarded. Like changing clothes or hairstyle, it’s a choice you can simply make and easily reverse if you change your mind.

And, of course, women who fought for decades not to be reduced to their body parts have now been reduced to just that-- to their body parts.

Lukas writes:

Women once fought to not be objectified and looked at as a collection of body parts. Yet now, we commonly hear women referred to as bleeders, people with periods, chest feeders, and worse. Spokeswomen selling feminine-hygiene products now have never even had a period; they’ve never felt the cramps and fatigue. They’ve never experienced these things because they do not have ovaries and a uterus. For them, these are useful props, and it’s all just a schtick.

So, it’s a form of societal madness, signaling a culture that has lost its collective mind. This notion that we are all obliged to participate in this nationwide mockery of womanhood speaks very ill of us. 

And dare we say, there is something wrong with a culture that allows males to participate in women’s sports, even to the point of allowing them in locker rooms. Does this make trans women into real women, or does this represent a new form of flagrant misogyny. When a man exposes himself in a locker room, doesn't that constitute sexual abuse or harassment?

As Lukas points out, there is no national movement to allow females to participate in sports as males, if they should so choose. 

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Saturday, April 29, 2023


Let’s see-- it was Tucker Carlson week. The famed Fox News host was fired, unceremoniously, from his slot on the network. To that the Babylon Bee, being slightly less satirical than usual, offered this headline:

Fox News Fires The Only Reason People Watch Fox News

No one knows right now why Fox fired Carlson. Rumors have it that he used some bad words, especially one that applied to members of the distaff gender. 

And yet, the Red Guards of our cancel culture, led by that pathetic twit named AOC, had been gunning for his scalp. He was slimed and defamed for being a racist and a sexist and a thoroughly unnice person. That means-- he had people on his show who had been canceled from other networks.

Naturally, we abhor any tendency to shut down debate and discussion. Today’s disinformation often turns out to have more than a few kernels of truth. 

As it happened, Carlson was one of the smartest people in television journalism. Admittedly, it is not too high a bar, but the fact remains, most of those who were calling for Carlson to be silenced were certifiable imbeciles. 

In truth, they were so stupid that they could not deal with any opposing point of view. They want to replace the marketplace of ideas with an indoctrination machine. If you think differently, and if you are intelligent about it, you will become a target for the Red Guards.

Carlson was right to offer up a short Twitter video, to the effect that most of what passes for discussion on cable news is profoundly ignorant swill. This does not mean that he was always right, but it certainly does not mean that he was always wrong. And it definitely does not mean that he ought to be silenced because he used bad language.

As for his two minute Twitter selfie, the Babylon Bee wrote this: 

Unemployed Guy's Basement Selfie Video Crushes Fox News In Primetime Ratings

Anyway, Harald Uhlig, an economics professor from the University of Chicago, offered this coda on the affair:

Many celebrate Carlson’s departure, but they shouldn’t. His show was important because it aired a perspective hard to find elsewhere. The expression of diverse viewpoints is crucial to free debate. Journalists who are unafraid and, yes, who occasionally cross lines that shouldn’t be crossed are an important part of a functioning free press. Hate them or love them, they are foundational to the freedom we enjoy. Debate and disagreement are essential for resolving differences through democratic means. Tucker Carlson Tonight was an important part of that. Now it’s gone, and that’s a loss for the country.

Anyway, the second important story this week was the impending presidency of Kamala Harris. Most savvy observers understand that old Joe Biden is not going to make it through the fourth year of his second term. They know that he is just clearing the path for President Kamala Harris. He and we know that Kamala could never be elected on her merits or in a fair election. Ergo, Biden will win an election and then will become incapacitated or will resign.

Of course, this assumes that the Republican Party focuses on the task at hand and finds a candidate who can beat Biden. It is not self-evident.

For now, someone ought to put together a book of the wit and wisdom of Kamala Harris. Never in the course of American history have we had such an incompetent fool rise as high as she has in our government.

Here, for your edification, are a few of her mindless meanderings.

So I think it's very important, as you have heard from so many incredible leaders for us at every moment in time and certainly this one, to see the moment in time in which we exist and are present, and to be able to contextualize it, to understand where we exist in the history and in the moment as it relates not only to the past but the future.

And another:

I think it's very important...for us, at every moment in time and certainly this one, to see the moment in time in which we exist and are present.


During Women's History Month, we celebrate and we honor the women who made history throughout history — who saw what could be, unburdened by what had been...


The significance of the passage of time, right? The significance of the passage of time. So when you think about it, there is great significance to the passage of time...there is such great significance to the passage of time.

If you retain your natural optimism about America's future, repeat after me: President Kamala Harris.

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Friday, April 28, 2023

Equitable Grading

Teachers across America are in agony. They have discovered that, despite their best efforts, some students consistently outperform others. They have also discovered that some students consistently underperform others.

I will not tell you which is which-- you know that already-- but certain teachers have concluded that grading is inequitable. That means, if you apply uniform objective standards to schoolwork, especially in elementary and high schools, the results do not fit easily into the requirements imposed by the equity agenda. 

To many teachers, this feels like bigotry, so we have to dispense with it. We need to introduce a new set of standards, the better to make some children appear to do better and some children appear to do worse.

As for competition, children are allowed to take tests and quizzes when they feel ready. This does not improve performance, but it does improve grades. In short, the schools want to punish those children who are doing better while providing a special advantage to those children who are doing worse. 

Throughout the Wall Street Journal story about this latest effort to pretend that minority children are just as good as Asian children, we never read anything about the ethnicity of the children who are supposed to be advantaged by equitable grading, but, perhaps, by now, we do better not to discuss it.

As for homework, the new system assigns much less of it, because some children do not do it or are not capable of doing it. In other words, children with stable homes and involved parents tend to do better on their homework. Thus, the equitable grading contingent has decided that we must abolish most homework, because it offers an unfair advantage to some children. The same applies to deadlines. Since some children cannot hand in their work on time, the equitable grading system allows them to hand it in when they want to do so.

In the past, when affirmative action and diversity began to invade the minds of our pedagogical elites, teachers noticed that students who had been admitted to schools on the basis of their race tended to underperform. In many cases they could not perform at all. The eventual solution was to hand out good grades regardless of performance. 

Equitable grading introduces a similar principle, but disguises its purpose.

The Wall Street Journal reports:

Equitable grading can take different forms, but the systems aim to measure whether a student knows the classroom material by the end of a term without penalties for behavior, which, under the theory, can introduce bias. Homework is typically played down and students are given multiple opportunities to complete tests and assignments. 

Proponents of the approach, including paid consultants, say it benefits students with after-school responsibilities, such as a job or caring for siblings, as well as those with learning disabilities. Traditional grading methods, they say, favor those with a stable home life and more hands-on parents. 

Doesn't this feel strange-- we now refuse to favor children whose parents are more involved and who provide a more stable home life. Apparently, we need to punish those parents and children who do the right thing. 

When it comes to requirements, especially those that involve deadlines, the equitable grading system allows children to hand in work whenever they want. Of course, this gives them an unrealistic sense of reality. When was the last time you heard tell of a company where you could deliver the goods or hand in your report when you felt like it?

“If you go to a job in real life, you can’t pick and choose what tasks you want to do and only do the quote big ones,” said Alyson Henderson, a high-school English teacher there. Lessons drag on now, she said, because students can turn in work until right before grades are due.

“We’re really setting students up for a false sense of reality,” Ms. Henderson said.

The story does not explain how the best students will feel challenged by the new system of equitable grading. Perhaps that is because the system is not designed to challenge anyone.

As for the downside of equitable grading, a high school student explained it:

Samuel Hwang, a senior at Ed W. Clark High School in Las Vegas, has spoken out against the grading changes, saying they provide incentives for poor work habits. A straight-A student headed to the University of Chicago next year, Samuel said even classmates in honors and Advanced Placement classes are prone to skip class now unless there is an exam. 

Dare I say that this is all slightly confusing. And yet, one is not surprised to see that students have learned how to game the system, to show up only when they are being graded and not to show up when it does not matter.

One understands that Samuel Hwang is right to emphasize the simple fact that the new grading system produces poor work habits, a lack of discipline, and a sense that one should try to get away with what one can get away with.

He learned his lesson well.

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Thursday, April 27, 2023

Destroying Jobs to Save the Planet

You would think, in a putatively democratic country, that we would take a vote before repealing the Industrial Revolution-- in order to save the planet. And yet, the environmentalist transformation of the American economy proceeds apace, regardless of the damage it does to American jobs and industry.

Apparently, we are going to destroy the world's people in order to save the planet. Someone is clearly not thinking here.

In truth, no one really voted for this, but the Democratic administration and the media is all-in on shutting down fossil fuel production. For now, witness Annie Lowrey in the Atlantic, they are wringing their crying towels over the job loss. 

She considers the transformation to be absolutely necessary, and that means, beyond debate and discussion.

The United States is embarking on an epochal transition from fossil fuels to green energy. That shift is necessary to avert the worst outcomes of climate change. It also stands to put hundreds of thousands, perhaps millions, of people like Feldermann out of work. The result could be not only economic pain for individual families, but also the devastation of communities that rely on fossil-fuel extraction and a powerful political backlash against green-energy policies.

At the least, she understands that communities will be destroyed by this apocalyptic folly. But still, she never questions the wisdom of imposing it on the American people, without their consent.

Lowrey understands the impact of these new policies:

Virginia Parks, a professor at UC Irvine, and Ian Baran, a doctoral student, tracked the consequences of the Marathon shutdown in near-real time, getting more than 40 percent of the workers to return surveys and a smaller group to sit for interviews. They found that, more than a year after the shutdown, one in five Marathon workers was unemployed. Their earnings had declined sharply, with the median hourly wage of employed workers plunging from $50 to $38. Some workers were earning as little as $14 an hour. And those new gigs came with more dangerous working conditions.

The same is true in Appalachia, where coal jobs have been erased in order to clean up the air:

Appalachia lost its coal jobs and gained an opioid epidemic. Detroit deindustrialized and fell into poverty and disrepair. The decision to open up trade with China sent millions of American manufacturing jobs overseas, and policy makers did little to create any in their place. Now the planned obsolescence of the fossil-fuel industry threatens to create new Rust Belts in regions economically dependent on extraction, such as the Permian Basin, in Texas, or the Bakken Formation, in Montana and North Dakota.

Lowrey does not question the wisdom of the climate change agenda. She does understand that the agenda is going to cause a massive amount of human suffering.

Joel Kotkin, however, understands the folly in these policies; his analysis requires our interest and attention. And, dare we mention, as we often do when quoting Kotkin, he is not a right wing conservative. Anything but.

In recent years, the overused word ‘sustainability’ has fostered a narrative in which human needs and aspirations have taken a back seat to the green austerity of Net Zero and ‘degrowth’. The ruling classes of a fading West are determined to save the planet by immiserating their fellow citizens. Their agenda is expected to cost the world $6 trillion per year for the next 30 years

Meanwhile, they will get to harvest massive green subsidies and live like Renaissance potentates.

Working people are going to lose their jobs. No one, as even Lowrey admits, has a reasonable plan to produce enough replacement jobs. And yet, Kotkin identifies an important point, namely that some people are going to get very rich from this transformation:

Their programme calls not only for fewer people and fewer families, but also for lower consumption among the masses. They expect us to live in ever smaller dwelling units, to have less mobility, and to endure more costly home heating and air-conditioning. These priorities are reflected in a regulatory bureaucracy that, if it does not claim justification from God, acts as the right hand of Gaia and of sanctified science.

For example, Germany just shut down its last three nuclear power plants. The cost of electricity has spiked by something like 45%.

The new technologies are being imposed on the public, without the benefit of a vote:

 Although improvements are being made to low-emissions vehicles, consumers are essentially being frogmarched into adopting a technology that has clear technical problems, remains far more expensive than the internal-combustion engine and depends primarily on an electric grid already on the brink of blackouts. Green activists, it turns out, do not expect EVs to replace the cars of hoi polloi. No, ordinary people will be dragooned to use public transport, or to walk or bike to get around.

Among those who are going to be enriched by the new regime, is China. And, of course, China is not going to immiserate its people in order to save the planet:

Building cars from primarily Chinese components will have consequences for autoworkers across the West. Germany was once a car-manufacturing giant, but it is expected to lose an estimated 400,000 car-factory jobs by 2030. According to McKinsey, the US’s manufacturing workforce could be cut by up to 30 per cent. After all, when the key components are made elsewhere, far less labour is needed from US and European workers. It’s no surprise that some European politicians, worried about a popular backlash, have moved to slow down the EV juggernaut.

And also,

The West’s crusade against carbon emissions makes it likely that jobs, ‘green’ or otherwise, will move to China, which already emits more greenhouse gases than the rest of the high-income world. Meanwhile, the Chinese leadership is looking to adapt to changes in the climate, instead of undermining economic growth by chasing implausible Net Zero targets.

For Americans the sustainability agenda is going to produce misery:

Rather than the upward mobility most have come to expect, much of the West’s workforce now faces the prospect of either living on the dole or working at low wages. Today, nearly half of all American workers receive low wages and the future looks worse. Almost two-thirds of all new jobs in recent months were in low-paying service industries. 

Dare we mention that the general public is not on board with this radical transformation. We can only hope that in America democracy will out, as it has in some European countries:

This opposition to the Net Zero agenda was first expressed by the gilet jaunes movement in France in 2018, whose weekly protests were initially sparked by green taxes. This has been followed by protests by Dutch and other European farmers in recent years, who are angry at restrictions on fertilisers that will cut their yields. The pushback has sparked the rise of populism in a host of countries, notably Italy, Sweden and France. Even in ultra-with-it Berlin, a referendum on tighter-emissions targets recently failed to win over enough voters.

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Wednesday, April 26, 2023


As I am sure you know, the first great memoir in Western civilization was the Confessions of St. Augustine. The Bishop of Hippo was the most important and influential of the group of theologians now called fathers of the Church. His memoir was not only the first great memoir; it remains, as best as I can tell, the greatest.

Anyway, among Augustine’s most famous dicta is this, apparently from the Confessions:

O Lord make me chaste, but just not yet.

Nowadays we are so sophisticated that we find such a prayer to be absurd. We do not take it seriously. We believe that when we marry we ought to bring a wealth of sexual experience to our conjugal beds. Some people insist that they have try-out sex before getting married.

It has something to do with compatibility, or so they say.

As for Augustine, he did not marry, but he did convert to Christianity, and embraced a newfound sexual purity. I will leave the theology to you.

Anyway, a recent research report tells us that being chaste before marriage is a good indicator of marital felicity. Promiscuity, as it used to be called, does not prepare one for marriage. It prepares one for an unhappy marriage.

Here is a summary of the report:

A new study by researchers at Brigham Young University in Utah echoes a substantial body of research to conclude that a certain degree of premarital sex could impact your future relationship prospects.

Experts in family studies at BYU’s Wheatley Institute have shown that 10-20% of married adults who have only had sex with one person – their spouse – reported having a happier and higher quality union than those who had many sexual partners before getting hitched.

They found furthermore that those who had had only one sexual partner were almost three times as likely to declare that divorce is not on their mind and twice as likely to report that they were “very satisfied” with their marriage.

One assumes, because one has largely surpassed the age of reason, that this all refers to the females of the human species. In fairness, the researchers suggest that the same rule applies to males.

Here are the statistics:

Just one in 10 married people who label themselves as “highly sexually experienced” could say they’re “very satisfied” in their marriage, according to the 30-page report.

Only 25% of married people who had 5-9 sexual partners, and 14% of those who had been with 10 or more, reported a “very high level of relationship stability in their marriage.”

On the other hand, 45% of those deemed “sexually inexperienced” reported the highest degree of stability. Moreover, nearly 80% of those who have had sex only with their partner reported greater emotional closeness in their relationship, which is over 20% higher than people who had multiple sexual partners before they got married.

Allow me to read your mind. Doubtless the people who defer sexual experience until they are married have a different attitude toward marriage than do those who are, excuse the expression, promiscuous. 

Even given that case, the strange part about it all is that promiscuous sexual behavior is a bad indicator for a good marriage. 

Obviously, we live in a culture where college students and even high school students believe that they ought to be hooking up with their cohorts. And you know that those young people who do so tend to hook up with people they barely know and who they will not see again. Evidently, their casual attitude toward relationships and their generalized promiscuity either does not speak well of their willingness to commit to another person or else it produces the liberated habit of doing what they want, when they want, with whom they want. Obviously, this is not a formula for a happy marriage.

At a time when young women are suffering from all manner of emotional distress, and when many of our most serious psycho professionals are blaming it on social media, is it not strange to read that promiscuous sexual behavior might be contributing to the problem?

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Tuesday, April 25, 2023


Obviously, there has been much talk about replacing the dollar as the preferred medium of international exchange. Countries around the world, countries like Brazil and Saudi Arabia have started doing business in Chinese currency. 

On the other hand, many serious thinkers have dismissed the notion, in part because there is no viable alternative. Niall Ferguson, a man who is long the dollar and who reminds us, in his latest Bloomberg column, that world leaders, including Charles de Gaulle decades ago, have declared the end of dollar hegemony-- to little avail.

Ferguson quotes Larry Summers:

Former Treasury Secretary Larry Summers had a good line about all this back in 2019. “You cannot replace something with nothing,” he said. What other currency is preferable to the dollar as a reserve and trade currency “when Europe’s a museum, Japan’s a nursing home, China’s a jail, and Bitcoin’s an experiment”?

One remarks that Ferguson and Summers are not merely academic commentators. Their views move markets. One suspects that they are more cautious than most, given that their remarks might precipitate a run on the dollar, a movement out of dollars and into Euros or Renminbi.

As for why it all matters, Ferguson explains, quoting himself:

“For the United States,” I wrote portentously, “the question is: How long can [the] dollar standard last? As long as the dollar is ascendant, the United States can continue to run huge trade deficits and budget deficits, without having to worry about serious economic fallout. But if the dollar were to lose its status as the world’s reserve currency, and suffer a more precipitous slide, that could have grave consequences. Unfortunately for Americans, the sheer magnitude of the imbalances, along with the emergence of suitable alternative — the Euro — have made this a distinct possibility.”

Many important commentators believe that the dollar’s glory days are over-- one reason being that American administrations have been confiscating dollar denominated assets from certain foreign countries:

According to Peter C. Earle of the American Institute for Economic Research, “the dollar’s fate as the lingua franca of world commerce over the long haul may already be sealed.”

For Earle, it is American overuse of financial sanctions that is to blame. The more the US exploits its power to shut adversaries’ economies out of the dollar payments system, the more other countries want to reduce their exposure to that risk. Hence recent agreements between China and Brazil, China and France, and India and Malaysia, to settle trades in one another’s currencies.

Some believe that the dollar is losing its status:

Because of such trends, according to Stephen Jen of Eurizon SLJ Capital, the dollar has already “suffered a stunning collapse.” “The USD is losing its market share as a reserve currency at a much faster rate than is commonly believed,” Jen wrote in a recent research note quoted at length by Robin Wrigglesworth in the FT. “The main driver of the collapse in USD’s reserve status in 2022 may have reflected a panicked reaction to property rights being jeopardized” by the freezing of Russia’s foreign currency reserves following its invasion of Ukraine.  “What we witnessed in 2022 was sort of a ‘defund-the-global-police’ moment.”

And, of course, as long as the American government continues to run exorbitant deficits, the value of the dollar must diminish:

Meanwhile, the US government is running significantly higher deficits than the ones I wrote about in 2004. And, unlike two decades ago, the Federal Reserve has been monetizing a large part of the deficits. Back then, the Fed balance sheet was 6% of GDP. Now, after successive rounds of quantitative easing and other interventions, it is up to 35%. The 2021-23 surge of US inflation cannot be explained without reference to major errors of fiscal and monetary policy. If the US intends to preserve its global monetary dominance, it is concealing that intention very well.

As it happens, the alternative to a dollar based currency system is a gold standard. That is, fiat currency that is convertible into gold. Ferguson dismisses the notion, but one Ruchir Sharma, writing in the Financial Times, is more optimistic.

As for Ferguson, here is his viewpoint:

John Maynard Keynes famously called the gold standard a “barbarous relic,” but there is nothing barbarous about a non-interest-bearing asset that outperforms an interest-bearing one. Data from the World Gold Council are revealing on this score. According to the most recent figures, the euro area holds 30% of total world official gold holdings, the US 23%, whereas Russia and China together hold just 12%.

And, here is Sharma:

Today com­ment­at­ors over­whelm­ingly agree that a weak­en­ing US dol­lar can­not pos­sibly lose its status as the world’s dom­in­ant cur­rency because there is “no altern­at­ive” on the vis­ible hori­zon. Per­haps, but don’t tell that to the many coun­tries racing to find an altern­at­ive, and such com­pla­cency will only accel­er­ate their search.

The prime example right now is gold, up 20 per cent in six months. Sur­ging demand is not led by the usual sus­pects — investors large and small, seek­ing a hedge against infla­tion and low real interest rates. Instead, the heavy buy­ers are cent­ral banks, which are sharply redu­cing their dol­lar hold­ings and seek­ing a safe altern­at­ive. Cent­ral banks are buy­ing more tonnes of gold now than at any time since data begins in 1950 and cur­rently account for a record 33 per cent of monthly global demand for gold. This buy­ing boom has helped push the price of gold to near-record levels and more than 50 per cent higher than what mod­els based on real interest rates would sug­gest. Clearly, something new is driv­ing gold prices.

Actually, most commentators do not believe that the dollar is in danger, we ought to look at the contrary opinion.

Moreover, for our edification, Sharma explains why it matters:

Though some doubt a dom­in­ant dol­lar mat­ters for the US eco­nomy, high demand for the cur­rency in gen­eral tends to lower the cost of bor­row­ing abroad, a priv­ilege Amer­ica sorely needs today. Among the top 20 developed eco­nom­ies, it now has the secondhighest fiscal and cur­rent account defi­cits after the UK and the secondhighest for­eign liab­il­it­ies (as reflec­ted in its net inter­na­tional invest­ment pos­i­tion) after Por­tugal.

Again, American policy makers believe that the dollar is impregnable and that American can do what it wants, especially in the matters of borrowing and spending money.

They theorized, as Larry Summers said, that there was no alternative to the dollar.

The risk for Amer­ica is that its over­con­fid­ence grows, fed by the “no altern­at­ive” story. That nar­rat­ive rests on global trust in US insti­tu­tions and rule of law, but this is exactly what weapon­ising the dol­lar has done so much to under­mine. It rests also on trust in the coun­try’s abil­ity to pay its debts, but that is also slip­ping, as its reli­ance on for­eign fund­ing keeps grow­ing. The last line of defence for the dol­lar is the state of China, which is the only eco­nomy suf­fi­ciently large and cent­ral­ised to chal­lenge US cur­rency suprem­acy — but even more deeply indebted and institu- tion­ally dys­func­tional.

When a giant comes to rely on the weak­ness of rivals, it’s time to look hard in the mir­ror. When it faces chal­lenges from a “bar­baric relic” such as gold and new con­tenders like digital cur­rency, it should be look­ing for ways to strengthen trust in its fin­ances, not tak­ing its finan- cial super­power status for gran­ted.

For his part Sharma has been watching the rally in gold and believes that the gold market is telling us something about the dollar. If countries want to challenge dollar hegemony, backing their currency with gold would be a good place to start. But for that they need to accumulate large amounts of the barbarous relic. Is that what is happening today?

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Monday, April 24, 2023

Is Silicon Valley Over?

Is Silicon Valley over? Has the center for high tech entrepreneurial activity moved out of the Valley, to other more favorable climes? One does not know the answer, but Joel Kotkin is surely the most qualified to offer an analysis.

So, we turn to his recent article, wherein he does not exactly bury Silicon Valley, but he does suggest that it has seen better days. It is, by his analysis, on life support.

One reason is that the tech giants have become monopolies. Thereby they no longer compete in the free market, but rig the markets to their advantage:

America’s tech titans have attained oligopolistic sway over markets comparable to that of John D. Rockefeller, Andrew Carnegie and Cornelius Vanderbilt. They may wear baseball caps rather than top hats, but their economic and cultural power is as vast — and their rise has been the death knell of the Valley’s bracing entrepreneurial culture.

Silicon Valley may not be completely over, but signs point toward an unhappy ending:

The collapse of Silicon Valley Bank is the latest indicator that the Valley — site of nothing less than an economic miracle in recent decades — is now in big trouble. Other signs include mass layoffs in the tech sector and a post-pandemic real estate downturn. The Valley, it seems, is entering a period of decadence that raises the prospect of long-term decline.

Now, Kotkin proposes that Silicon Valley declined because it no longer makes things. It has gotten into the business of manipulating minds. And, it has fallen into the hands of the best and the brightest, of Ivy League intellectuals. One adds that the tech talent in many of these companies has been imported from China. American universities are not producing it.

The start of this decline has coincided with a shift from the physical to the virtual. The Valley’s roots were in the old engineer-driven economy, one connected to the rest of the country, and to working-class America — somebody, it’s easy to forget, has to make the hardware. Today tech is dominated by a cognitive elite of Ivy Leaguers, management consultants and MBAs. “We used to build the future,” Leslie Parks, who formerly directed redevelopment efforts in San Jose, once told me. “Then we designed it, now we just think about it.”

But the Valley has slowly left the industrial battlefield — it has lost over 160,000 manufacturing positions over the past two decades. It bought into the idea that the unique genius of its financial and corporate culture would be enough for it to thrive and profit as production headed first to Japan, then China and, more recently, to other parts of North America.

To be fair and balanced, Kotkin still finds some glimmers of hope.

To be clear, the Valley is not done as a major tech center. It still boasts a venture capital community, a remarkable concentration of engineering and other management talent, powerful universities and the headquarters of some of the biggest companies in the world. And it remains home to many of the tech giants that now exploit their monopolistic advantages. But that is not the same thing as being the place where the world looks for a vision of the future, as it once was. Even if the Valley still matters, it may no longer dominate the future as its denizens once assumed it would. Instead, it will face fierce competition for tech supremacy — from other countries, and other parts of this one.

Kotkin is suggesting that the Valley is running on fumes. It is losing market share to foreign companies, especially those in China and India.

Over the last decade or two, the Valley has outsourced much of its industry. Apple produces two-fifths of its products in China, more than four times what is made in the United States. Other tech giants don’t make anything. Rather than trying to build a better mousetrap, big tech now makes much of its billions off surveillance — the source of the wealth generated by Google and Meta — and by disintermediating retail businesses. It is a far cry from the optimistic promise of a better tomorrow on which the Valley was built.

Surveillance, spying on people, collecting data preferences and using them to sell advertising-- these are not signs of a healthy industry. In effect, competition has suffered. And, without healthy competition, companies will either rest on their laurels or buy up their competitors:

The stranglehold of mega-firms and the associated Wall Street and venture capital money machine has undermined competition in fields from video games to artificial intelligence to cloud services to the metaverse and AI. To be sure, there’s some competition among the giants, much as there was between aristocratic clans in Europe or Japan’s feudal daimyo, but there are vanishingly diminished opportunities for the sort of startup that made up much of Silicon Valley Bank’s deposit base. Tech today is largely a game played between giants who, if they see promising technology, simply acquire it. Tech entrepreneur turned author Antonio García Martínez has called the contemporary Valley “feudalism with better marketing,” a “highly stratified” quasi-medieval society “with little social mobility.” With control of key markets, firms that columnist Michael Lind refers to as “toll-booth companies” can exact money from consumers who have little choice of going elsewhere — a bit like feudal lords. And if these barons compete, it is against one another. Largely ignored has been the impact of these changes on the people who live in the Valley. In the Eighties and Nineties it was heralded as “an exemplar of middle-class aspiration.” No longer. And that, too, is thanks in part to deindustrialization.

As the Valley has lost influence, it has become more political and has turned politically to the left. It has sought to have the government protect it. And it especially values progressive politicians.

Oddly, as the Valley has become more feudal — its reliance on “indentured” H-1B visa holders repeats a very old arrangement — its political culture has become more uniformly progressive. Back in its heyday, the Valley’s disproportionate number of eccentric and oddball engineers and tech visionaries belied a pragmatic political culture. It was a place where middle-of-the-road pragmatists in either party would be heard. In the Eighties and Nineties, Silicon Valley, like many industries, placed its bets on both political parties. Moderate Republicans, such as Pete McCloskey, Ed Zschau and Tom Campbell, and pro-business Democrats, such as Bill Clinton, all did well there.

Silicon Valley Bank, the one that just failed, had a board of directors that was chock full of Democrats. And, of course, Governor Gavin Newsome and San Francisco Fed chair Mary Daly had no real interest in banking:

 SVB’s board was packed with Hillary Clinton, Biden and Obama backers. The bank invested in nonprofits linked to Governor Gavin Newsom, and serviced left-wing media such as Vox and the troubled progressive site BuzzFeed. Some on the right have been happy to tie the bank’s decline to its inordinate attention to such non-banking concerns as climate change, racial justice and other progressive causes. This point may be exaggerated, but certainly the board did not seem to focus on the basics. The bank may also have expected gentle handling from the San Francisco Federal Reserve, which has also been focused on the adoption of progressive policies, and which seems to have dozed as the company moved towards bankruptcy.

So, Kotkin does not believe that the end is in sight. Not quite yet, at least. But, he does regret the Valley’s loss of an innovative edge. The giants of high tech are dying on the vine, and there seems to be little we can do about it:

Does all this suggest the Valley is finished? Not quite. Inertia is a mighty force. But something essential to the area’s success has been lost and with it the Valley’s hegemony over technology. The kingdom’s spell has been broken, no doubt accelerated by the SVB collapse. The Valley may be a critical tech center for the foreseeable future, but it will no longer be the undisputed tech center.