Tuesday, March 21, 2023

Autophagy among the Rich

The meaning is not obvious, and perhaps we do not need, as of now, to know what it means. And yet, Joel Kotkin is right to bring it to our attention. That is,  he points out that today’s young billionaires, especially the Silicon Valley cohort, tend largely to support radical leftist causes. 

They are all-in in the war against the weather, in the pursuit of racial equity and the embrace of gender ideology. 

The annual clown show at Davos epitomises how today, the global elites have embraced an unholy trinity of ‘progressive’ doctrines: climate-change apocalypticism, a belief in systemic racism and racial ‘equity’, and radical gender ideology. The super-rich hope that by genuflecting to these causes, they can buy themselves political protection and fend off the activists lurking in the ranks of their own companies. Yet, in the long run, this could end up fuelling their demise.

Kotkin suggests that they are simply buying political protection. They feel threatened by the radical left, the revolutionary bands who are inclined to confiscate their wealth. So, they finance the pet causes of the left, hoping that these rebels will leave them alone.

Another possible explanation is this: these billionaires do not consider themselves to be predatory capitalists, exploiters of the poor working class. They aspire to become part of an intellectual elite, a guardian class of philosopher kings, running, not just their businesses, but the world entire.

Be that as it may, Kotkin points out that these tech companies are basically monopolies. They do not have real competition:

Once the vaunted centre of grassroots entrepreneurialism, a lack of antitrust measures from both Republicans and Democrats has allowed technology companies to morph into quasi-monopolies. Google controls over 90 per cent of the search-engine market; Microsoft owns over 74 per cent of computer-operating-system software; Amazon has nearly half of the US online retail market share and a significant proportion of cloud computing; Google and Apple together account for 90 per cent of smartphone operating systems.

And, they have taken over the media and non-profits:

Companies like Google, Meta, Amazon, Microsoft and Apple largely not only control the biggest platforms, but have also taken direct ownership of movie studios, newspapers and magazines. All these outlets, along with the AI models these firms produce, tend to reflect the worldview of the tech oligopoly.

In the US, non-profits’ assets have grown by a factor of 12 since 1980. In 2016, non-profits brought in $2.62 trillion in revenues, constituting over 5.7 per cent of the US economy.

Such immense market power encourages executives not to take risks and innovate, but rather to consolidate their dominance by acquiring smaller competitors. Amazon, Meta and Google now account for two-thirds of all online-advertising revenues, which now represent the majority of all ad sales. These oligopolies also seem poised to dominate emerging technologies, from cloud services and underwater fibre-optic cables to AI.

But with the managerial revolution of the 1950s, the nature of executive elites changed. As sociologist Daniel Bell first identified half a century ago, business leaders were no longer upstarts and thus the natural opponents of state power. Instead, they reflected a new type of individualism, unmoored from religion and family, a worldview which transformed the foundations of middle-class culture. The goal of this new executive class, as Bell saw it, was not so much building great companies, but gaining accolades from their peers, the press and the public – a trend also set out in Alvin Toffler’s 1980 book, The Third Wave.

Gaining accolades-- this suggests that these predators really want to be worshiped and adored. They do not want to innovate and to build. And they do not want to be respected for what they have accomplished. 

They want to maintain their position and their power by having monopoly control over information:

Of course, there’s nothing new about business magnates seeking control of information, but rarely in history have they shown such fealty to a common perspective. Today, outside of Rupert Murdoch’s news empire, upon which the sun will inevitably set, virtually all the leading oligarchs lean toward the Democratic Party (ironic, given that it was once the less receptive party to corporate power). Tech companies played a major role in the election of Joe Biden in 2020 and also helped finance the Democrats’ remarkably good showing in November’s Midterm elections. Though many of these donations are claimed to be earmarked for ‘non-partisan’ organisations – such as the $300million spent in 2020 by Mark Zuckerberg and his wife – post-election analysis has found that they were ‘distributed on a partisan basis that favoured Democrats’. In 2020, five of the top eight donors to Joe Biden came from tech firms.

The new oligarchs also exercise their power and influence by funding non-profits:

The primary means for oligarchic control is not campaign contributions, however. Instead, many gain influence from funding non-profits, which espouse selfless rhetoric even as they push their funders’ own personal agendas and interests. In the US, non-profits’ assets have grown by a factor of 12 since 1980. In 2016, non-profits brought in $2.62 trillion in revenues, constituting over 5.7 per cent of the US economy.

Whether it’s the wives of the oligarchs or their heirs and heiresses, the people who are inheriting these fortunes do not know what it was like to produce them. They were not business people and did not work their way to the top. So, they do not know what it is like to work for a living. They are imbued with values that are more congenial to religions, that is, values like charity, and are happy to gain influence by giving money away. And yet, they must, above all else, want to hide the fact that they are useless parasites. They will go to great lengths to ensure that people do not discover their truth:

Born into the oligarchy rather than working their way to the top, these young trust-funders are not worried if their activities bother customers or even undermine the businesses that created their fortunes.

Many hope to fund a work-free world powered by technology and financed by the oligarchs’ lucre. This leftist dystopia will certainly not herald a bright future for the masses, but for the witless billionaires encouraging it, it does have a ring of historic justice.

Monday, March 20, 2023

The Benefits of Marriage

Among those aspects of human existence that improve your mental and emotional health, we find marriage. Get married and stay married-- count, along with aerobic conditioning and socializing-- as treatment for mental health problems.

The research, performed by Brendan Case and Ying Chen at Harvard University suggests that marriage is not just a relic of a patriarchal past. It is a basic human institution, a foundational aspect of all human societies, one that ought not to be scoffed at.

The authors open their Wall Street Journal op-ed:

As anthropologist Joseph Henrich observes, despite important variation in its form across cultures, “marriage represents the keystone institution for most (not all) societies, and may be the most primeval of human institutions.”

The authors researched the benefits of marriage. Is it really better to get and stay married? 

Still, there are good reasons to doubt the benefits of a post-nuptial society, as comparisons of married people either with the never-married or the divorced have generally found that the former are healthier and happier than the latter, even today.

Now, the authors consider the impact of marriage on women. They tell us that marriage works better for males, but they have not studied that cohort directly:

The women who got married in the initial time frame, including those who subsequently divorced, had a 35% lower risk of death for any reason over the follow-up period than those who did not marry in that period. Compared to those who didn’t marry, the married women also had lower risk of cardiovascular disease, less depression and loneliness, were happier and more optimistic, and had a greater sense of purpose and hope.

Of course, divorce is bad for your health:

Among those who were already married at the start of the study, divorce was associated with consistently worse subsequent health and well-being, including greater loneliness and depression, and lower levels of social integration. There was also somewhat less robust evidence that women who divorced had a 19% higher risk of death for any reason over the 25 years of follow-up than those who stayed married. Given how many factors influence health and well-being (genes, diet, exercise, environment, social network, etc.), the fact that marriage could reduce 25-year mortality by more than a third—and that divorce could possibly increase it by nearly a fifth—indicates how important it remains even for modern life.

Of course, these results tend to discredit the feminist critique of marriage as an instrument of patriarchal oppression:

Nonetheless, our study’s focus on women offers important insights in view of the continuing hold of feminist critiques of marriage as an instrument of patriarchal domination. Other things being equal (and of course in particular cases they often aren’t), marriage—with the support, companionship and affection it offers—is still a crucial constituent of a flourishing life for many women.

Of course, the issue of why this should be so remains open. Perhaps people do better when their lives are more stable and better organized. Perhaps they do better when they accept greater responsibility for others. 

At the least, cohabitation does not produce as many positive results as marriage:

… recent research has typically found that unmarried cohabiting couples report less happiness and relationship stability than do married couples.

But then, marriage has gone out of fashion. Fewer and fewer people have been getting married. Perhaps this is good for the manufacturers of psychoactive medication, but it is largely bad for human beings:

In 2021, for instance, the annual marriage rate reached an all-time low of 28 marriages per 1000 unmarried people, down from 76.5 in 1965, a trend driven both by rapid increases in cohabitation and by even steeper rises in individuals living alone. So too, the U.S. leads the world in the percentage of its children growing up in single-parent homes (23% in 2019, compared to, for example, 12% in Germany). All of these trends are concentrated among poor Americans and people of color, who arguably have the most to gain from the safety net offered by marriage.

It is clear, however, that many of us now view marriage not as an essential setting for socializing sex and raising children but rather as a dispensable luxury good.

So, marriage is not dispensable. It is basic to good mental health, not to mention, raising children and socializing sex. At a time when hook-up culture aims at de-socializing sex, we ought to give some thought to the fact that for most of human history sexuality has been socialized through formal institutional commitments. 

Sunday, March 19, 2023

Is Therapy Failing Men?

This should not come as news. I have, for many years now, decried the simple fact that today’s therapy is geared toward women. It either treats men like women or it does not treat them at all.

Heather Mac Donald described a new Yale University therapy center:

Last year, Yale University created a safe space that will set the industry standard for years to come. Call it the college woke spa, though its official title is the Good Life Center. Featuring a sandbox, essential oils, massage, and mental-health workshops, the center unites the most powerful forces in higher education today: the feminization of the university, therapeutic culture, identity politics, and the vast student-services bureaucracy. 

Of course, it is not just universities that have been feminized. The therapy world has suffered the same fate. The New York Post reports:

Sadly, there just aren’t enough male therapists to choose from.

Almost two-thirds of psychologists in the United States are female.

Eighty percent of clinical psychologists are female.

Some 75% of psychology graduate students are female.

This is one reason why therapy is failing men.

As it happens, female therapists in particular do not know how to treat men. They try to use the same model on men and women, and this leads to a higher rate of male depression and suicide.

Consider the differences:

Which brings us back to the idea of “male-based depression.” Adam Lane Smith, a licensed psychotherapist who specializes in treating both men and women, says that male depression tends to revolve around feelings of helplessness and powerlessness.

“Men need the ability to change their environment, create an impact that lasts (a legacy), and to either stop their pain or make it have purpose,” he explained.

They are less interested in having their feelings validated, and more interested in finding a solution.

They want answers, and they want them now.

Female depression, on the other hand, “tends to center around feeling unloved or feeling useless to the people they love,” Smith noted. “Women need to feel cared for, appreciated, and helpful.”

So, men want to function in the world. They are more likely to want to be coached than therapied. Apparently, women want to feel their feelings and to take warm baths of empathy.

Men want to have a sense that they can do something to improve their circumstances. Women, not so much.

This difference contains a crushing irony. We understand well that men validate themselves by how well or poorly they function in the world. And yet, haven’t we learned that today’s modern women also want to function in the world. What message are we sending women when we refuse to help them to manage their lives but pretend that they need merely to have their feelings validated?

Perhaps therapists are stereotyping women, making them creatures of feeling and emotion, suggesting that they cannot do anything to improve their conditions. If this is so, one might understand that women feel disempowered, to the point where they are being told that if they want anything to happen in the world they must rely on men.

Curiouser and curiouser….

Saturday, March 18, 2023

The Blame Game

Let the debate begin. You know which debate, the debate over whether wokeness caused the failure of the Silicon Valley Bank. Many commentators, including your humble blogger, have pointed out that the SVB was more woke than thou, and thus, that its environmentally friendly policies, mixed with its mania about diversity and inclusion filled the board of directors with people who did not understand banking.

And one feels compelled to notice, as reported in the Financial Times yesterday, that the bank’s leading executives were working remotely. Besides, the bank was not just making environmentally friendly loans, but, would you believe, it was long on empathy and short on banking acumen.

And then there is Mary Daly, the Fed official responsible for overseeing SVB. It was not merely that SVB did not have a risk management executive, but it had the seriously incompetent Daly overseeing the bank.

The New York Post reports on Daly’s inadequacies and disqualifications:

Daly has no background in banking or managing risk. After dropping out of high school, she worked in a donut shop before eventually getting her GED and entering college, where she became enamored with a socialist professor.

She said she was inspired by Marxian economist Gene Wagner, who “has mentored me my whole life.”

Several years later, after earning a PhD from Syracuse University, Daly landed a job as a labor inequality researcher at the San Francisco Fed, where she ingratiated herself with then-SF Fed President Janet Yellen, who helped her fail upward.

So, if you ask who was running the asylum, you will discover that the executive class was often chosen for reasons of diversity and inclusion.

Writing in the Wall Street Journal Kimberly Strassel points out that Mary Daly was more concerned with fighting against climate change than she was in the risks of bank failures.

Strassel explains the aberrant banking practices that brought SVB to its knees. 

Rather, as the Journal reported, SVB was beloved for its willingness to offer “banking services to startups that often weren’t profitable, in some cases didn’t have a product, and would otherwise have a hard time getting a line of credit or a loan from a larger bank.” One tech entrepreneur provided law.com a more scathing description of SVB’s products: “They’re basically subprime business loans. You’re talking about companies that have no credit profile, they’re burning cash and are unlikely to raise the same type of capital because of interest rates. . . . It was basically social credit.”

And this preceded the bank’s unfortunate investment in government bonds.

What inspires a bank to disregard risk and shower money on products or services that nobody is clamoring to buy? One answer is easy money and misguided regulation, which washed dollars into the economy even as it pushed banks like SVB to load up on sovereign debt, lulled by a Federal Reserve-fed belief that interest rates would stay near zero forever. The other? Washington handouts, via President Biden’s effort to engineer a climate industry that otherwise wouldn’t exist.

And then there was the Biden infrastructure bill. Note the impact of this bad legislation:

Congress’s $1.2 trillion 2021 “infrastructure” bill was a starting gun for a clean-tech frenzy. The bill made available hundreds of billions for new “technologies” for electrical grid modification, solar, carbon capture, battery storage, electric-vehicle charging infrastructure, geothermal, “smart community” widgets, microgrids, CO2 transport, hydro, wind, fuel cells, waste management and efficiency gains. Last year’s so-called Inflation Reduction Act threw yet more dollars at would-be green innovators, while also extending billions in household tax credits in an attempt to lure Americans to buy these government-fueled concoctions.

The Biden bills were a supercharged version of Barack Obama’s 2009 stimulus, which produced Solyndra’s federal loan guarantees and other green embarrassments. Yet Washington is adept at repeating mistakes. The feds did this time largely off-load responsibility to the state and local authorities or industrial players that apply for grants and pass the money on from there. But the message was still the same: A honey pot of hundreds of billions sits waiting to be taken. Cue the clean-tech scramble.

In short, SVB had been loaning money to subprime environmentally friendly firms. It was counting on the government to backstop its loans.

Strassel even suggests that the Biden administration was happy to bail out SVB because it was making environmentally sensitive investments. This means that the government has chosen to insure deposits well over the $250,000 limit because it wants to save the planet. She adds that if the bank had been financing oil drilling, the outcome would have been quite different.

More than a few economists and bankers are horrified at the prospect that the government has nationalized risk in the banking system. We will see how this develops. I cannot link to the Financial Times, but it did report yesterday that European banking regulators are enraged and incensed over the way the crisis at SVB has been handled. Covering all deposits, even those that had not been insured by the government strikes them as a very, very bad idea.

Friday, March 17, 2023

The Case against Biden

Consider the source of this Wall Street Journal op-ed. Its author, one Julian Epstein, is a Democratic Party political operative. (via Maggie's Farm) Thus, we assume that he speaks for other members of his party. His takedown of Joe Biden, his dismissal of the Biden presidency as a miserable failure suggests that serious Democratic politicians are terrified that another Biden candidacy will doom their party. Wishful thinking, perhaps?

Worse yet, according to this Democrat the Biden presidency has been a failure. While the media and Democrats extol the virtues of the Biden presidency, the truth lies elsewhere.

Epstein identifies a core cowardice among Democrats. They are simply too afraid to cross good old Joe. And this is so even though the polls say that Democrats do not want him to run again.

So, Epstein opens thusly:

But my fellow Democrats have shown their own kind of cowardice by refusing to say that President Biden shouldn’t run for re-election. Polls show most Democratic voters don’t want Mr. Biden to run again, but Democratic elites apparently believe that any dissent from party leadership or independent thinking—even in the name of an obvious truth—is dangerous to their job security.

As for the man himself, Epstein offers this unflattering description:

He is a preternatural panderer with nearly every audience, which keeps many activist groups at bay. And increasingly he comes across—even to his supporters—as a foggy retiree. Attacking him can seem ageist, even sadistic.

As many Republicans have noticed, Biden presented himself as a centrist moderate, but has governed from the far left.

But unlike his Democratic presidential predecessors, Mr. Biden’s job approval has been consistently in the dumps, and his legislative record is debatable at best. He and his staff promised centrism but instead governed from the far left. Voters of all races—especially working-class voters, for whom Democrats claim to fight—continue to desert the party.

As for Epstein’s bill of indictment, he begins by pointing out that Biden is incapable of uttering a coherent sentence in the English language. And that his statements count as bad policy. It’s a quality he shares with his vice president:

…  he consistently makes embarrassing and confused misstatements on nearly every policy front: Afghanistan (glaringly inept claims about Al Qaeda’s reconstitution and his generals’ support for total withdrawal, among many others), Ukraine (the suggestion that “minor incursions” by Russia may be tolerated and followed by an implication that forces from the North Atlantic Treaty Organization could join the conflict), student-loan forgiveness (false claims that Congress authorized it), nearly every other major policy area and even his own life story.

And then there is the cognitive impairment, often noticed by Republicans, but rarely acknowledged by Democrats:

The president seems frequently confused on stage, unable to identify public officials and even calling on a deceased official. None of us can imagine him surviving a press grilling without countless mistakes. An increasingly partisan mainstream news media gives Mr. Biden a pass. A few years ago, the media would have savaged any president for the mind-numbing regularity of the gaffes.

For all of the legislation that the Biden administration has apparently passed into law, the truth remains that the Biden economy is a trainwreck. Moreso lately, what with the banking system in serious trouble, but clearly Biden must take responsibility for the intractable inflation:

… the Biden economy has been the worst-performing of any Democratic president since Jimmy Carter by most measures. Voters have expressed strong bipartisan dissatisfaction with the worst inflation and interest-rates hikes in nearly half a century after White House economic bureaucrats pushed for an additional and unneeded $2 trillion Covid stimulus—far in excess of the $400 billion shortfall in gross domestic product at the end of 2020. Many of the supposedly new jobs created under Mr. Biden are rebound jobs from the pandemic, and labor-force participation is abysmally low. Retirement funds have been decimated with one of the worst-performing stock markets in memory. Mr. Biden’s war against oil and gas was bungled for lack of a meaningful long-term transition plan for decarbonization, and the result only aggravated inflation.

And also, it matters, as Epstein says, that the news media, having reached terminal corruption, has refused to call out Biden on any of his failures and failings:

Third, while partisans in the news media would have you believe the president has significant legislative accomplishments, it’s a hard case to make. The infrastructure bill was a consensus bipartisan bill years in the making. The Chips Act, while important, had no meaningful dissent. The Inflation Reduction Act hasn’t much reduced inflation, and the bill’s renewable energy subsidies, while helpful, will have a marginal impact on climate change without a more meaningful international framework on carbon reduction.

And then there is the national crime wave, about which Democrats have had little to say:

Fourth, Mr. Biden promised to govern as a centrist but stayed silent until this month when local progressives pushed to defund the police and reduce prosecutions, holding fewer criminal suspects amid dramatic crime spikes in the nation’s cities. The White House denied that local school administrators were pushing extremist ideas on race and gender despite mounting evidence that many are. There were nearly three million illegal border crossings in 2022, a record, as the White House shrugged it shoulders.

But then, Democrats did not do badly in the last Congressional elections. Doesn’t this tell us that Biden is more popular than we all think? Not so fast, Epstein says:

The Biden administration apparently believes it got a pass on these issues because Republicans underperformed on Election Day 2022. The real reason Republicans underperformed is that Mr. Trump’s election grandstanding penalized the candidates he endorsed by 5 to 7 points, and the abortion issue may have given Democrats a temporary bump. There was still a 7-point swing in the popular vote in favor of Republicans, and the election would have been a wipeout absent that Trump penalty.

In the governor’s race in Florida, and elsewhere across the country, Democrats saw hemorrhaging of their traditional constituencies, mostly because of concerns over the far-leftward drift of the party. Democrats would be smart to find someone with the wherewithal to recognize this and right the ship.

It’s as good an indictment of the Biden presidency as I have read. True enough, more than a few Republicans have been making the same points, but still, we are happy to hear it from a good Democrat.

Thursday, March 16, 2023

Carl Icahn Speaks

We have already assessed the views of Nouriel Roubini, Jeremy Grantham and Leon Cooperman, extremely wealthy market players. And we have discovered that they are all very pessimistic.

Today, we take a look at another billionaire, Carl Icahn, on the grounds that cranky old rich people are often the best guides through market turmoil. They are often the best guides through market advances, too.

As it happens, Icahn is seriously pessimistic, not just about the markets, but about the American economy. He remarks that corporate and political leadership is “worse than mediocre.” We would have great difficulty disputing the point. I mentioned the point yesterday, so I find it congenial.

This report, from the Epoch Times:

Billionaire investor Carl Icahn said that the U.S. economy is at a breaking point, blaming “worse than mediocre” leadership and warning that soaring inflation threatens to topple America’s position on the world stage.

“Inflation is the worst thing an economy can have, and I think people underrate that,” he said, adding that, historically, “every hegemony has been destroyed by inflation.”

Now, one remarks that the Federal Reserve bank has made something of a hash of its inflating fighting policies. More than a few serious thinkers, people like Lawrence Summers, have declared that the Fed was late to the party. Since Summers also remarked that the Biden administration, what with its out-of-control spending, provoked the current inflation, we are inclined to take him seriously.

Anyway, Icahn suggests that we are lacking good leadership. But, we have more diverse leaders-- apparently, diversity and incompetence go hand-in-hand:

Besides inflation, Icahn said he sees other “major problems in this economy right now,” including leadership at corporations and on Capitol Hill.

“I’m not going to get into politics, but you do feel that in Washington nobody knows what’s really going on,” he said, before turning to the issue of boardroom weakness.

“Leadership is worse than mediocre” in many U.S. corporations, he said, acknowledging that there are exceptions.

“You go into a company today … it’s really horrible what you find,” Icahn added.

Most sensible observers believe that the current corporate and government mania about diversity and inclusivity led to the hiring of more than a few people who were not up to their jobs. Evidently, it is difficult to identify the connection between certain executives and corporate performance, though we have tried to do so in recent days in relation to the Silicon Valley Bank and the Signature Bank.

Again, Icahn fears inflation and he understands that administration money printing has caused it:

“I think the banking crisis is something that you might expect in Silicon Valley Bank. There’s so much money floating around in the system,” he said.

“There’s just too much cash. By definition, if you keep printing out money … If we have too much money floating around in the system, you’re going to have inflation by definition,” he said, adding that he believes the Federal Reserve is right to hike rates to cool price pressures.

Of course, given the meltdown in Silicon Valley, among others, the chances are growing that the Fed will not be continuing its attack on inflation. One dares mention that Jerome Powell, whatever his virtues, is, by training, a lawyer. Would we all feel better if a banker was running the Fed?


As a friendly reminder, I should like to point out that, given the current state of our financial markets, I have been warning people about this for quite some time now. Most recently, in this post. Link here

So, those who follow this blog, have been forewarned of the pending calamities. Consider it a public service, especially useful for those who find my own opinions about current affairs somewhat off the mark. When it comes to predicting the markets, the issue is not whether or not I myself have any special skill as a market forecaster, but whether I can select those who do.