2025-02-28 23:46:57
The most important decision we make is who we partner with, who we marry. However, for many, marriage isn’t an essential life choice … it’s a luxury item. I asked my friend, the social scientist Richard Reeves, to pen a post on the subject.
A dramatic reversal has taken place on college campuses. Once male-dominated, they are now populated largely by women. In the early 1970s, about 3 in 5 students were men; now it is the other way around. There are 2.5 million fewer male than female undergraduates. There’s an even bigger gender gap in master’s degrees.
Does this matter? After all, the massive educational advance of women and girls is rightly seen as a cause for celebration rather than lamentation. Given that men still out-earn women, there’s an argument to be made that women need to out-learn men just to keep up in the labor market.
I think it does matter. For one thing, it highlights how the K-12 educational system fails boys. Kudos to those governors, like Wes Moore in Maryland, Spencer Cox in Utah, and Gretchen Whitmer in Michigan who have noticed. Even when men do enroll in college, they’re much less likely to get a degree. Too much male talent is being left on the table. This is why 30 or so institutions have already joined a new initiative I’m helping lead, the Higher Education Male Achievement Collaborative.
But there is one thing we can stop worrying about: that the college gender gap is reducing marriage rates. This is a common concern, and for good reason. There is pretty strong evidence for what anthropologists call female hypergamy, which is a fancy way of saying that women typically want to marry men of at least equal, or preferably higher, status. The fear is that, with so many more college-educated women than men, marriage rates will plummet.
I’ve always been skeptical of this argument. For one thing, women overtook men in higher education back in the 1980s. So if marriage rates among women with a college degree were going to fall, they’d have done so by now, and they haven’t. There is also some evidence from European countries that hypergamy declines as gender equality increases.
Because this is an empirical question, I commissioned an empirical study. The resulting paper, by Clara Chambers, Benjamin Goldman, and Joseph Winkelmann, uses data from Opportunity Insights, a team of researchers and policy analysts at Harvard led by economist Raj Chetty.
Marriage rates among college-educated women have been rock-steady at around 70% for decades, at least since World War II. The decline in marriage rates has been among women without a B.A. As a result, a huge class gap in marriage has opened up. As the authors of the study write for AIBM:
“The stable marriage outcomes for college-educated women sharply contrast with the significant decline in marriage rates among women without a B.A. over the past half-century. Among women born in 1930, there was no education gap in marriage rates. Since then, a nearly 20 percentage point gap has emerged, with college-educated women now significantly more likely to marry.”
The simple math here means that some women with college degrees must be marrying men without college degrees. That is exactly what the paper finds. One in five college-educated women marry a man without a four-year degree. What’s more surprising is that this was always the case, long before the great educational overtaking. College-educated women born in 1950 were as likely as those born in 1980 to marry a man without a degree.
Women with college degrees continue to marry at high rates, in part because of the continued willingness, among one-fifth of them, to “marry down” in terms of education. This suggests that a combination of female hypergamy and a growing gender gap in education is not having a negative impact on marriage rates. Of course, there are still many unanswered questions. Maybe some of the 30% of those women with a B.A. but no wedding ring would be more inclined to marry if there were more college-educated men around. The stability of the marriage trend suggests not, however. It looks like they just don’t want to marry, period.
In the most interesting couples from a cultural perspective, the wife has more education than the husband. At first glance, that bucks the whole idea of hypergamy. But of course, education is only one marker of marriageability and status. It turns out that money matters a lot, too. Men who have a college-educated wife, even though they don’t have a B.A. themselves — in other words, men who’ve “married up” in educational terms — make a lot more money than other guys with similar levels of education.
Among those born in 1980, guys who married up make $68,000 a year, compared to the $46,000 a year earned by men who either married a woman without a degree or didn’t marry at all.
The earnings premium among men who marry up educationally has gotten bigger over time. This shows that women with a degree are willing to marry men without one — so long as they’re making decent money. Women might “marry down” in terms of education, but not in terms of earnings.
The good news here is that economically viable men have decent marriage prospects and that women with degrees can find a good man. The bad news is that men doing badly in the labor market are likely to struggle in the marriage market, too.
The paper finds that, in areas where working-class men are doing better, marriage rates go up, cutting the marital class gap in half. Making men more “economically viable,” to use one of Scott’s favorite terms, turns out to be key to improving marital prospects.
There’s a corrosive downward spiral at work right now. As the economic prospects of men without a college degree decline, marriage rates fall. That leaves millions more men and women without a partner to share the responsibilities and benefits of family life. In other work by AIBM, we show that half of men without a college degree aged 30 to 50 now live in a household without children.
Without the positive pressures that come from being a father and husband, men are even less likely to really go for it on the work front. They are more likely to be unemployed. They become more vulnerable to addiction, more socially isolated. All of which makes them less attractive as potential spouses. Boys raised in single-mother households then struggle in school and in life, and they have difficulty finding a mate and forming a family, too. And so the cycle turns. The economic struggles of boys and men become entrenched across generations.
It’s not often enough stressed that the class gap in marriage is not only a consequence of economic inequality, but also a cause of it. Pooling incomes into a single household is obviously optimal, from an economic perspective, especially for those with the lowest incomes — who are now the least likely to marry. Some scholars suggest that the class gap in marriage can explain much of the decline in social mobility in recent decades.
Concerns about marriage should then be focused on men and women with less educational attainment and/or worsening economic outcomes. The problem is not that your daughter graduating from Amherst or Berkeley won’t find a man good enough for her. The problem is that a woman in Appalachia or the Bronx won’t find a man she sees as worth marrying.
The best pro-marriage, anti-poverty strategy is simple: improve the economic prospects of working-class and lower-income men.
Simple does not mean easy, of course. Massive investments in education and training are required, as well as more spending on infrastructure, place-based policies to help the poorest counties, and much more besides.
But it’s clear where to start: with the boys and men.
—Richard
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The post Marrying Up and Marrying Down appeared first on No Mercy / No Malice.
2025-02-22 01:25:57
I’ve struggled my entire career to discern the difference between being right and being effective. A recent poll shows many moderates favor effective (move fast, break things) over right (checks and balances). Autocracies are seductive — in the short-term, they seem effective. A third of Americans, on both sides of the political spectrum, favor an autocrat as long as he (let’s be honest, it’s always a he) is aligned with their views.
Many/most Americans, thus far, don’t feel life is any different under the new administration, and they like the idea of taking swift action against problems they believe have spiraled out of control: border crossings, government largesse, woke ideology. The blitzkrieg of threatening to invade allies, renaming bodies of water, and surrendering to Putin has left many Americans, especially Democrats, flat-footed, waiting for the outrage. If you believe that democracy should not surrender — as Trump is urging Ukraine to do — then the seminal question is … what to do? Honest answer? I don’t know. However, I do have some ideas.
Nobody had Elon Musk as Master of Coin on their 2024 election bingo card. Seizing the levers of the federal payments system was strategic and elegant, as it gave the White House a single point of control, with influence over government priorities and policies via control of money flows. I do something similar when my sons are misbehaving. Rather than attempting to parent (hard) I just remotely shut off their phones’ internet access. Department of Dad Energy (DODE).
With this seizure of power, and money is power, Musk can reward friends, punish enemies, impose his political will, and effectively “delete” government agencies and departments by shutting off funding without worrying about pesky constitutional oversight. This is techno-authoritarianism: Musk’s dominion encompasses the public and private sectors, physical and digital realms, and even space.
In a 2007 essay, Musk ally and DOGE co-architect Peter Thiel argued for a new Alexander the Great, i.e., a king or dictator, to “cut the Gordian knot of our age.” The chief obstacle, according to Thiel: America’s constitutional machinery. “By setting ambition against ambition with an elaborate system of checks and balances, it prevents any single ambitious person from reconstructing the old Republic,” Thiel wrote. My Pivot co-host Kara Swisher described this mentality as, “Let’s wipe the slate clean, then we’ll build the civilization we want.” The problem: A plurality of American citizens did not vote for this vision, much less these individuals.
Trump won. In our system, the ideas he campaigned on can now become policy, assuming he has the votes in Congress. Musk is the most powerful vice president in history, and he wasn’t even elected. See: The Time cover of Musk behind the Resolute desk, followed by that surreal Oval Office press conference where Trump played the role of geriatric bystander to Musk’s policy blitzkrieg. I believe when their giddiness re owning the libtards subsides, Republicans in Congress will realize they have created a monster they can no longer control. Musk’s digital coup subjugates the right as much as the left; his attempt to hijack the government also hijacks the MAGA agenda.
BTW, at some point Americans will realize the conservative/progressive battle is a misdirect. The real fulcrum, where the battle is being waged, is up/down — rich vs. not-rich. The wealthy and corporations, whom Trump and Musk listen to, will put up (largely) symbolic resistance to an emerging autocracy. They aren’t going to suffer, as the world now offers civil rights for sale: The 1% can move anywhere, buy influence, and ensure everybody in their circle has access to mifepristone. The “savings” from DOGE are, again, a misdirect from an enormous tax increase on today’s youth via the deficits we’ll register if Trump’s tax cuts go through.
I know a lot of very wealthy tech executives and financiers. The key to their wealth? Yes, much of it is luck — not their fault. And much of it is talent. However, the real secret sauce is a focus. The acquisition of wealth is an obsession for the (wait for it) wealthy. Pro tip: Anybody speaking at a university who claims they “never thought much about money” is obsessed with it. The right’s defense of Musk, that DOGE is some patriotic gesture, is laughable. His focus, and his only focus, is becoming a trillionaire. His “volunteerism” is an attempt to clear the obstacles between him and greater wealth, specifically regulators and fair play. Musk cultists often offer the same “aw shucks, he can’t help himself … he’s so authentic” rap when he says/tweets weird, reckless, and just-plain-stupid things. However, his ID is always in check when it comes to saying anything about China — where officials likely feel they have leverage over Musk. So measured, so thoughtful, so disciplined. So …. obsessed with money. He recognizes he doesn’t enjoy the umbrella protection of the First Amendment in China, and accusing a member of the CCP of being a sex criminal (his go-to) would likely result in swift economic retribution. He may or may not suffer from Asperger’s, but he definitely suffers from being an asshole. And BTW, for those of you/bots waiting to fill the comments section with cries of TDS or an obsession w/Musk, you’re wrong. I have been clinically diagnosed with DAS (Democracy Addiction Syndrome). And, bitches, after four weeks of this nonsense/incompetence/surrender, my affliction is spreading.
If it’s possible to hold our government hostage by capturing the federal payments system, then we need to work upstream of Musk’s chokepoint. Already, the Treasury Department has exhausted roughly 60% of the extraordinary measures at its disposal to delay a default on our bonds. The rates on the 10-year Treasury bill, however, indicate that Congress will raise the debt ceiling, as both parties have done 78 times since 1960. But what if Democrats refuse?
A dozen GOP senators and 49 House Republicans — more than 20% of each conference — have never previously voted to raise the debt ceiling. Democrats have a strong hand here. If they credibly threaten default, rates on the 10-year T-bill will increase and equities will likely suffer. This will be painful, but the pain will primarily fall on the 1% and corporations, i.e., those who own 90% of assets and have influence over Trump. In effect, the markets could do what Congress won’t — rein in Trump, kick Musk to the curb, and demand the U.S. remain a nation of laws.
In March the government will run out of money, unless Congress acts. If the government shuts down, roughly 3 million federal workers will stop receiving paychecks. Stiffing the military, air traffic controllers, and people who keep our food and water safe is stupid — it hurts them and us. At the moment, however, a sleep-deprived alleged ketamine abuser who makes Nazi salutes is cutting off funding for programs he dislikes and promising “buyouts” to federal workers with money that isn’t there. Hakeem Jeffries is correct when he says there’s little Democrats can do legislatively to stop President Musk. But Democrats shouldn’t do anything legislatively to enable him, either. Here again, Democrats have a decent hand to extract concessions, as a shutdown is upstream of Musk’s power.
Musk’s wealth is the source of his power and his main point of vulnerability. One-third of his wealth is tied up in Tesla stock, which briefly rose after the election as the market priced in kleptocracy but has plunged 30% since December. I sold my Tesla a few years ago; I’m not down with accusing innocents of sex crimes (note: Musk won his defamation case, but there is no dispute over what he said) and making Nazi salutes. (Call me a reactionary.) Protests at Tesla locations across the U.S. indicate that others feel similarly. Tesla’s brand value dropped 26% YoY, due primarily to Musk entering the political arena. His behavior in Europe, where he endorsed Germany’s far-right neo-Nazi party, stoked a race riot in the UK, and stands accused of manipulating algorithms on X to influence public discourse in France, has hurt Tesla sales. In China, Tesla’s second-largest market, sales are down 11% YoY, while last month BYD sold 4x the number of EVs Tesla did. Musk’s politics are bad for America. We need to make them bad for his business.
Musk once tweeted, “Between Tesla, Starlink and Twitter, I may have more real-time global economic data in one head than anyone ever.” Q: Is it in America’s best interest for one man to have the combined power of Henry Ford, NASA, and William Randolph Hearst? Starlink is a great product, but the growing leverage it gives Musk over global communications is alarming.
Already, Musk controls half the satellites in orbit. He plans to launch up to 58,000 more in the next five years and proposes to eventually increase that number to 500,000. In politics, the pendulum always swings back. Democrats should be clear that when they retake Congress, they will assess Musk’s dominance in satellites and instruct regulators to act in the interest of national security. (Note: This is also good politics, as Musk’s popularity is dropping, even among Republicans.) Think of it as threatening to invade Greenland, if Greenland was space. In the meantime, Senate Democrats can block government contracts Musk companies rely on by filibustering funding legislation, as Republicans do not have a filibuster-proof majority.
When I interviewed historian Niall Ferguson on my podcast, he said British politics is a “game of cricket between people who went to Oxford,” whereas American politics is a “blood sport.” I’d argue Niall misses some nuance. Recently, Democratic politics have felt like a stern game of bridge at the rest home. For MAGA, the coarseness of our discourse is a feature, not a bug. Musk and Trump understand this. They spew violent rhetoric and leverage political violence like January 6, because fear is a useful tool for keeping followers and opponents in line. Yesterday, a DOJ official began falsely accusing people of “threats” to Musk and his team and sending letters to officials to “clarify” their comments (i.e., intimidate them). Yeah, free speech, unless it’s our guys. This is an attempt to cast a chill on opposing speech in what can be described as the fascist hymn.
(Speaking of fascist hymns, The WSJ reported on Feb. 19 that Linda Yaccarino is now a brick in the fascist wall, threatening to leverage her dear leader’s influence to block the IPG/Omnicom merger if they do not advertise on her platform.)
Despite credible threats, Trump has removed security details protecting his former Secretary of State Mike Pompeo, General Mark Milley, and Dr. Anthony Fauci, to name a few. In response, Democrats marched to a Federal building and did their best impression of a seniors facility when Jell-O night’s been canceled. Democrats should make clear that, when they return to power, Trump and anyone else engaging in the digital coup will also lose their security detail. It’s about incentives. We need to move beyond the strongly worded letter.
What I’ve outlined above is slow and incomplete, compared to the speed and destructive force of a 19-year-old computer engineer high on Mountain Dew. My concern is for America, but I’ll be fine. The people who will pay a far greater price are Trump voters, who believe this fight is for them. It’s not, it’s against them — red states receive more federal funding than they pay in taxes.
Republican leaders, who are under the delusion they control the power of the purse, and won, are instead quietly expressing concerns over what DOGE cuts mean for their constituents. Dismantling USAID hurts Kansans who sell their crops to a government program that fights hunger abroad. NIH cuts threaten jobs in Alabama, Florida, Nebraska, and other red states. One of Louisiana’s Republican senators believes plans to gut the FBI will hurt his state. Cuts to the VA fall on a key Trump constituency, as veterans skew Republican by 2 to 1. Delete the Department of Education? Trump carried four of the top five states that receive Title I funding for low-income students: Louisiana, Mississippi, Arizona, and Alabama.
Amid a chaotic transition, the White House mistakenly elevated the wrong person to acting FBI director. In any other administration, this kind of fuckup would’ve been endless fodder for comedians and congressional investigations. In this administration, it barely gets a footnote. Brian Driscoll, aka Drizz, will likely be fired soon, but the G-man’s response to an attack on his colleagues and the rule of law is a lesson in leadership and masculinity: defaulting to protection. By refusing to comply with an unlawful order to name the 6,000-plus FBI agents who worked on January 6 cases, Drizz may have only delayed the inevitable.
But he succeeded in sounding the alarm and stiffening the resolve of his peers. The lesson? Submitting to a (second) insurrection without a fight will only make the insurrectionist bolder, but fighting, even if we lose, weakens him, as it inspires others to do the same. Think about this: A man who makes Nazi gestures owns the majority of satellites and space-launch capacity and has usurped the power of the purse and Congress. The same man is openly threatening other companies with government retribution if they don’t spend money on his companies. Democrats and Republicans: This isn’t a time to come together, but to the rescue.
Life is so rich,
P.S. Go beyond using AI to gut-check your work, and use it as a decision-making partner. Join AI as Advanced Thought Partner with Greg Shove for free on March 6.
The post DOGE: What Can Be Done? appeared first on No Mercy / No Malice.
2025-02-14 22:19:13
This past weekend, Elon Musk called me cruel, mean and deceitful. Two and half years ago I called him a welfare queen. You decide.
This post was published August 19, 2022.
What’s the most successful venture capital firm in history? Kleiner Perkins and Sequoia Capital backed many internet-era success stories. Andreessen Horowitz? No, one organization towers above. This firm was there before the first transistor was printed, and it will be there after we receive brain implants. One investor funded the computer, the internet, speech recognition, last-mile distribution, mapping the human genome, the core technologies of fracking, and the first horizontal shale drill, and today it’s driving down the cost of solar and wind power below that of coal. Even better news: If you’re a U.S. taxpayer, you’re a limited partner.
Founded in 1776 by General Partners Washington, Jefferson, and Madison, and headquartered today in a Beaux Arts corporate campus in the District of Columbia, the U.S. government is the world’s premier funder of technological and commercial innovation. The Inflation Reduction Act (“IRA”) is being hailed/hated as a climate bill, but it’s really just the most recent investment by Eagle Capital. Opponents of the legislation claim it’s a poor investment. Eagle Cap’s track record suggests otherwise, and we can expect big returns.
The IRA (awful name) will direct $369 billion to a variety of clean-energy initiatives, largely through tax credits. The largest investments are for solar, wind, and nuclear power generation, where Eagle builds on a track record of success. The government has invested over $3 billion in wind power R&D since 1976, and it’s been offering tax credits for wind and solar since the 1990s. Just since 2010, the cost of solar has dropped 85%, and the price to harness wind energy has been halved. Public funding, through R&D and tax credits, has been instrumental to that progress. Ninety percent of U.S. coal-fired power is now more expensive to operate than replacement wind or solar sources. And that’s not for lack of investment in coal. Conservative accounting puts government subsidies for coal at $20 billion per year, and the IRA includes investments in carbon-capture technology intended to support coal energy for several years. 
Eagle Cap’s $528 million loss on solar cell manufacturer Solyndra, which declared bankruptcy in 2011, was a notable miss. But failure is inherent to venture investing. One analysis found the best-performing VC firms have more money-losing investments than the average funds. The key difference is the magnitude of their successes and aggregate portfolio returns. Solyndra was a miss, but the $30 billion Department of Energy loan program that funded it turned a profit. There are many notable wins. One business that took a $465 million loan from the same program in its early days: Tesla. You likely didn’t know that, as its CEO spends more time shitposting America than crediting it.
Early-stage, future-leaning research is riskier and requires large amounts of patient capital. Private industry struggles to justify long-term, mammoth investments in deep science. The most enduring societies have one thing in common: Their governments play the long game. In the 1960s in the U.S., this meant computer and networking technology. At its peak, federal R&D spending approached 2% of GDP. The most cutting-edge work was done by the Defense Advanced Research Projects Agency (DARPA), which developed or funded the development of almost every building block technology of our tech infrastructure, from the internet and the mouse to graphical user interfaces and GPS. More recently, DARPA has been a major funder of AI projects, notably speech recognition — both Dragon and Siri spun out of DARPA. Speech illuminates the difference between government and private R&D: In the 1950s, private Bell Labs (aka the phone company) did pioneering work on speech recognition — but only on phone digits zero through nine. 
The government also invests upstream by supporting public education and universities. Stanford established its leadership in engineering thanks to a unique three-way partnership between the university, industry, and government contracts, centered around the Stanford Research Institute, where many DARPA innovations have been created. Marc Andreessen coded Mosaic, the first consumer-friendly graphical web browser — it was the precursor to Netscape Navigator — while attending the (publicly funded) University of Illinois and working at the federally funded National Center for Supercomputing Applications. Again, did you know that? Why would you? According to an MIT study, technology developed at universities and then licensed to industry between 1996 and 2010 created $388 billion in GDP and 3 million jobs.
Double-click on any major tech product or company, and you’ll find government-funded tech. Apple, Intel, and Qualcomm were all beneficiaries of a loan program similar to the one that funded Solyndra and Tesla. Google’s core algorithm was developed with a National Science Foundation grant. Economist Mariana Mazzucato, in her book The Entrepreneurial State, calculates that U.S. government agencies have provided roughly a quarter of total funding for early-stage tech companies, and that in the pharmaceutical industry (a sector requiring immense experimentation and a willingness to fail), 75% of new molecular entities have been discovered by publicly funded labs or government agencies.
Fifty years from now, the field most likely to spawn more value than digital computing is genetics, and similar to digital computing, genetics is an Eagle Cap portfolio industry. The Human Genome Project cost U.S. taxpayers $3.8 billion, was completed under budget and two years ahead of schedule, and has generated $966 billion in economic activity and $59 billion in federal tax revenue. It’s estimated the federal government’s $3.3 billion in annual spending on genetics projects generates $265 billion in economic activity annually. This number doesn’t account for the improved health outcomes and quality of life flowing from genetic breakthroughs — which have an estimated value of $1 trillion per year and growing. One of Eagle Cap’s recent wins in this space: the Moderna Covid vaccine, the result of a $25m DARPA grant to the company for developing RNA vaccine technology.
The biggest critics of the government are, oddly, some of its biggest beneficiaries. Tech billionaires are often the first to shitpost America, even as they continue to harvest wealth from the investments taxpayers make via the U.S. government.
In fact, the biggest bitch(er) may be the biggest (financial) beneficiary. Elon Musk says we should “get rid of all” government subsidies, that “the government is the biggest corporation with a monopoly on violence,” and last week mocked Washington for hiring more employees at the IRS. Let’s be clear: Elon didn’t build an EV company in South Africa or start a rocket company in Canada. He built Tesla and SpaceX in the United States. And both continue to be heavily dependent on U.S. government support.
There would be no SpaceX without NASA, its largest customer. Tesla built its Fremont factory with a $465 million DoE loan in 2010, and its first 200,000 cars benefited from tax credit subsidies of up to $7,500. For years the company was able to report profits thanks to the “sale” of emissions credits to other carmakers. All told, the company has accepted an estimated $2.5 billion in government support.
Marc Andreessen says he’s “pro-gridlock,” because “when the government does things, it usually doesn’t end well.” Except for providing the state-sponsored platform for his career — the University of Illinois and NCSA. Now @pmarca is making news because he’s concerned about our nation’s “housing crisis.” We aren’t building enough houses, he wrote recently, and that’s “a driving force behind inequality and anxiety.” Except when the housing is near … his house.
Another outspoken billionaire, Peter Thiel, says the U.S. government is “socialist” and believes we have “much worse outcomes than the Soviet Union in the 1950s.” (His solution is to take up seasteading — i.e., building floating autonomous ocean communities that aren’t subject to regulations or taxes.) But Thiel’s current venture, Palantir, is a government contractor that provides data analytics to the CIA, DoD, and other government agencies — and these contracts make up almost 60% of its revenue. Note: Palantir has lost money every year of its existence. That feels like a Soviet outcome. 
In his 1980 presidential run, Ronald Reagan advocated tearing up our social safety net on the manufactured claim that it offered nothing more than handouts for lazy people. He popularized the notion of the “welfare queen,” someone living large on the government’s dime, having more children to generate more welfare income. It was a classist, racist stunt. And it worked. Twenty-two states passed laws banning increased welfare payments to mothers who had additional children, and we’ve been slashing and burning the government ever since. Reagan’s welfare queen was a caricature, a country club cocktail fantasy of the ungrateful beneficiary of hard-earned tax money. The new welfare queens are tech billionaires. The only difference is, they’re real.
VCs claim they partner with entrepreneurs (many do), bring unique insight (most don’t), and care about the founder (read: money). What’s clear is that the economic model of 20% carried interest — investors and VCs get 80% and 20% of the gains on capital, respectively — has been flipped on its head re: public investment, where investors (taxpayers) often get less than the VCs and entrepreneurs they back. Ironically, a Democrat held up the legislation until the most obscene tax break in our tax code was restored. I hope someday somebody loves me the way Senator Sinema loves VC and private equity.
We’re on vacation, and my kids made $27 from their lemonade stand yesterday. They then spent $29 on Nerds and Airheads candy, and were 100% confident they should have unfettered access to their returns (before/during/after dinner) … as they earned it. The gap in the math was that Dad spent $38 on supplies (table, sign, market, pitcher, cups, lemonade mix, etc.). Take this times a trillion, and you’re starting to get warm re: the relationship between taxpayers, Sand Hill Road, and the innovators they back.
A wonderful thing about our country is that the people who are most patriotic are the ones who’ve made the greatest investment: veterans. Less heartening are the individuals who’ve registered the greatest benefit, are the least grateful, and are often the most critical: VCs who relocate to Miami and, before buying sunblock, disparage (constantly) the state they built their wealth in. Also, mega-welfare queens who cash EV subsidy checks and sell carbon credits as they mock the elected leaders who passed those laws. BTW, nobody believes you moved to Florida or Texas for better governance — you wanted the chance to recognize a capital gain at a lower tax rate than the middle-class taxpayers who funded your infrastructure. Fuck off.
The first trillionaire will likely be an entrepreneur who builds a layer of innovation on top of the bold investment American citizens are making to address climate change. Let’s hope they display more grace and citizenship and our elected leaders demonstrate more backbone representing investors, the lower 99.99%.
Life is so rich,
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The post Elon Musk, Welfare Queen appeared first on No Mercy / No Malice.
2025-02-08 01:42:49
A hat tip here to Financial Times columnist Robert Armstrong, who said on the Prof G Markets Podcast on Jan. 30: “There is a new vision where [AI] is much more competitive, and profits are shared, and much of the value may be captured by consumers.” (Listen on Apple here or on Spotify here.)
A new technology emerges that ushers in remarkable productivity or, better yet, dopamine on demand. A group of talented people builds a thick layer of innovation on top of the tech (financed by government), and a small number of CEOs leverage storytelling to access cheap capital and overwhelm the competition with brute force. These companies engage in regulatory capture (i.e., they become johns for our elected whores), and create trillions in shareholder value. GPS, e-commerce, payments, search, social, streaming … all produced trillion-dollar-plus entities.
AI is likely as transformative a technology as the aforementioned, and it’s already setting records for consumer and enterprise adoption. So the question is: Which organization(s) will capture, and sustain, trillions in shareholder value? The answer may be … no.
Marc Andreessen says DeepSeek is AI’s “Sputnik moment.” That’s the wrong analogy. This isn’t a rival flexing technological superiority, but dispelling the myth that we (the U.S.) are the only game in town. The Soviet Union did that before Sputnik, in 1949, when it detonated its first nuclear weapon.
Bicycles, sanitation, airplanes, vaccines, and Crispr are just a few technologies that have changed the world, but their benefits were dispersed across society rather than being hoarded by a few shareholders. I increasingly believe AI will join this roster — it presents dynamics similar to most stakeholder vs. shareholder innovations:
In sum, the winners here will be stakeholders, not shareholders. Scan your emotions after reading the last sentence. Did you reflexively grab your shareholder pearls and feel this was, maybe, a bad thing? It isn’t.
America becomes more like itself every day, and our obsession with, and idolatry of, the dollar has put the public good in the back seat. Billions of stakeholders benefiting from AI, vs. one business becoming worth more than every stock market on Earth except Japan and the US, and one man being worth more than Boeing feels less sexy … less American. (Hint: NVDA & Jensen Huang.)
In December, Chinese hedge fund High-Flyer released an open-source AI chatbot called DeepSeek that looks to be almost as good as OpenAI’s ChatGPT. It was reportedly designed in a matter of months by modestly paid millennial engineers and doesn’t run on the expensive Nvidia chips the U.S. prohibits from being sold to China. DeepSeek reportedly cost $5 million to train; it cost $100 million to train OpenAI’s LLM. Nvidia fell 17% on Jan. 27, losing over a half a trillion dollars in market cap. In one day, the company shed the value of the entire global auto industry (not including Tesla).
We don’t know if Jan. 27 was a speed bump in AI or the beginning of a tech market correction many have been expecting for 15 years. Some air definitely came out of the balloon, but just some — NVDA fell to its October ’24 price level (NBD). The DeepSeek revelation was shocking, but not surprising: A Chinese company knocks off an expensive U.S. product at lower cost (see above: China).
In retrospect, it’s easy to identify the action that rang the bell at the apex of a market. I believe the gong may have been the news that SoftBank is close to leading a $40b investment in OpenAI at a valuation of about $300b. This is double the valuation the firm raised at four months ago and a similar valuation to TikTok parent Bytedance. IP theft and addiction are both great businesses. However, crime pays more as OpenAI is being valued at 92x revenues, vs. Bytedance at 2.3x. Jesus, after reading the last sentence I wonder when Sam Altman is going to begin using terms such as “Community Based EBITDA.”
Masayoshi Son’s limited partners (i.e., his investors) are looking for venture-type returns (3x to 5x in 7 to 10 years), meaning Masa’s LPs (i.e., masochists) believe OpenAI will be one of the 10 most valuable firms in the world … soon.
Yesterday, I skirted along the edge of the atmosphere at four-fifths the speed of sound, traveling from London to New York in seven hours. The least expensive tickets were $400. Jet transport technology has changed the world. Sixty years ago, my mother crossed the Atlantic in a steamship: It took seven days and cost 4x what flying does today. Commercial aviation has created enormous value. However, the vast majority of that value has been captured by consumers and society, vs. airlines. Since 1945 the industry has experienced years of low-margin profitability only to have its gains wiped out by periods of huge losses (e.g., $128b in 2020).
Starting in the 1980s personal computers put technology that had cost tens of millions 20 years earlier on nearly every person’s desk. The gains in productivity, globally, have been substantial. I was on the board of Gateway Computer in 2006 — weak flex. We were the second-largest manufacturer (by unit volume) of a technology that, at the time, had greater adoption and a bigger impact than AI has at this moment. I raised, and purchased, 18% of the firm for $90m. Eighteen months later, we sold it to Acer for $900m. Why? A: The CEO urged us to sell, as he felt there was a real risk we might run out of money. Think about this: NVDA shed 600 Gateways on the DeepSeek news.
AI could be enormously valuable, and at the same time a lousy business. As with email, the user may capture 99% of the value and the manufacturer 1%. What looked at first like a proprietary asset may turn out to be a public good. BTW, isn’t this how education and health care are supposed to work? But that’s another post.
Vaccines may be a useful analog here. I have a stock screen looking for potential fallen angels to buy. One of them is Moderna. At the height of the pandemic the company’s stock was nearly $500 a share. As I write this it’s $33. Vaccines may be the greatest innovation in modern history. However, their value to shareholders is fleeting.
Private assets can transform into public ones for a variety of reasons. Economists have different words for the process depending on the details: It might be called “decommodification,” “non-excludability through diffusion,” or “commonization.” They are all Latin for “there is no money here.”
The ironies of DeepSeek are pretty rich. The biggest is that, as Jon Stewart pointed out, AI stole AI’s job.
Another one is the way Sam Altman has been bitching that DeepSeek stole some of his IP, “distilling” big OpenAI models to produce its own smaller, more efficient version. This conjures Steve Jobs whining that Bill Gates stole the idea of a graphic user interface from Apple. Gates responded that Apple had stolen the idea, too, when Xerox PARC left its garage door open. OpenAI is built on data it took from other people under the banner of “fair use.” Hannibal Lecter is irate that his neighbors aren’t vegan.
Another irony is that the U.S.’s attempt to keep American-made chips out of China may turn out to be a powerful argument in favor of free trade. Nvidia is now in a reasonable position to tell the U.S. government, “You’ve only created an incentive for adversaries to develop workarounds, destabilizing the AI industry and U.S.-China relations.” Anyways, it’s an argument.
Finally, though, what looks like it may be very bad for some businesses has the potential to be wonderful for the rest of us, not just for the public but also for the tech industry. Since the rise of Amazon and then Netflix, valuations have been driven not by innovation, but capital.
We thought King Kong was singular, and under U.S. control. And then a prehistoric reptile appeared on our shores, empowered by many years of exposure to nuclear radiation. FYI, Godzilla (#awesome) was meant to be a metaphor for nuclear weapons. Feels weird, but recently I find myself rooting for Canada, Denmark, and the lizard.
Life is so rich,
P.S. Introducing the Prof G Markets Newsletter, your weekly guide to the stories shaping the business world, designed for anyone who wants to understand the capital markets and establish economic security.
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The post A New AI World appeared first on No Mercy / No Malice.
2025-02-01 00:36:45
It’s the final day of Dry January. I tried it, didn’t last. I’m now drinking (again) like a Pan Am pilot in the seventies. Anyway, the 22% of U.S. adults who abstained from alcohol this month will get a personality upgrade just in time for the Super Bowl. Ostensibly, the Super Bowl is a contest between the two best football teams, but really it’s a platform for the real economy: the addiction economy. As Matthew McConaughey says in the latest ad from Uber Eats, “the whole game is basically an elaborate scheme to make you buy more food.”
Super Bowl ads are a proxy for the addiction economy, as advertisers for the food industrial complex, beer and alcohol brands, online gambling, crypto, and social media platforms offer you dopa on demand. But there’s a downside to gorging, no? Not to worry, there will also be ads from the medical-pharma industrial complex for products that manage (some of) the damage. Pundits claim we live in an “attention economy.” We don’t. Attention is just a metric for addiction. The addiction economy is broader, encompassing media, technology, alcohol, tobacco, gaming, pharma, and health care.
The world’s most valuable resource isn’t data, compute, oil, or rare earth metals; it’s dopa, i.e., the fuel of the addiction economy, which runs the most valuable companies in history. Addiction has always been a component of capitalism — nothing rivals the power of craving to manufacture demand and support irrational margins. Sugar and rum were the dopa-delivery systems and currency of the Triangle Trade. Later, the British East India Company was the Sinaloa Cartel of the 19th century, producing and distributing a product China became addicted to: opium. At its peak in the last century, Big Tobacco acquired customers with TV ads and endorsements from doctors, but the addictive ingredient, nicotine, is how the industry extracts $86k to $195k per customer — and costs those customers $1 million to $2 million in expenditures, opportunity costs, and health-care expenses.
Historically, the most valuable companies turn dopa into consumption. Over the last 100 years, 15 of the top 30 companies by cumulative compound return have been pillars of the addiction economy. The compounders cluster in tobacco (Altria +265,528,900%), the food industrial complex (Coca-Cola +12,372,265%), pharma (Wyeth +5,702,341%), and retailers (Kroger +2,834,362%) that sell both substances and treatments. To predict which companies will be the top compounders over the next century, consider this: Eight of the world’s 10 most valuable businesses turn dopa into attention, or make picks and shovels for these dopa merchants.
Given a choice, most lab rats will pick sugar over cocaine. They’ll even self-administer electric shocks for a sweet boost. Sugar stimulates our reward system 20x faster than cigarettes. Food companies engineer processed foods, not to maximize nutrition, but to hit the so-called “bliss point” — the exact combination of saltiness, sweetness, and other tastes that makes their product delicious, but not so delicious that consumers feel sated after a small serving. In other words, their food is engineered for more, not nutrition.
The industry profits at the expense of its customers’ health. According to a 2022 meta-analysis, 20% of American adults are addicted to food. Consumption of processed foods raises your mortality rate by 25%. The U.S. has a diabetes epidemic and an adult obesity rate of 40%. Compounding this public health crisis, food companies have a history of purchasing their competitors: diet companies. In 1978, Heinz bought Weight Watchers for $72 million. Unilever paid $2.3 billion for SlimFast in 2000. Nestlé purchased Jenny Craig in 2006 for $600 million. In 2010 the private equity firm that owns Cinnabon and Carvel ice cream purchased Atkins Nutritionals. (Most of these diet brands were later sold.) These acquisitions are akin to Pablo Escobar buying the Betty Ford Center.
McDonald’s used to brag, “one billion served.” Considering the history of weight loss and diabetes drugs — desoxyephedrine, fen-phen, metformin, etc. — pharma might just as easily brag, “billions prescribed.” After the food industrial complex makes people sick, we hand them over to the health-care industrial complex to treat the chronic conditions of these lifelong customers.
GLP-1 drugs are the most effective weight loss drugs to date, as they make us feel fuller for longer and suppress hunger cravings by modulating dopa levels. About 12% of U.S. adults have now taken a GLP-1, and the average GLP-1 user spends 11% less on food and beverages. But it’s early days for GLP-1s. Cost remains a barrier, and only one-third of employer health-care plans cover GLP-1s for nondiabetic patients looking to lose weight. Anecdotally, a Bloomberg Businessweek profile of Bowling Green, Kentucky, where 4% of the residents take GLP-1s, tells us that restaurants, grocery stores, health-care providers, gyms, and clothing retailers are all feeling the GLP-1 impact. If 60 million of the roughly 100 million U.S. adults who are obese took the drugs, Goldman Sachs estimates GDP could grow by more than 1%. As their full impact and second-order effects play out, GLP-1s will likely transform the economy.
Some people (smokers) used to reach for a cigarette immediately after finishing a meal; in the movies they’d reach for a cigarette after sex. Today most restaurants are smoke-free, but phones are ubiquitous before, during, and after every meal. We used to pick up a landline (Google it) to “reach out and touch someone.” Now that everyone has a cellphone, we spend 70% less time with our friends than we did a decade ago. We’re addicted to our phones, and even when we’re not seeking our fix, our phones seek us out — notifying us on average 46 times per day for adults and 237 times per day for teens. In college, I spent too much time smoking pot and watching Planet of the Apes, but when I decided to venture on campus, my bong and Cornelius didn’t send me notifications.
The compounders here are in your pocket. Sales of iPhones have made up roughly half of Apple’s revenue since 2009. Of late, the company has rolled out screen time tracking and other anti-addiction tools. Apple’s brand positioning is a bartender opening an AA chapter. Alphabet is incentivized to maximize screen time, as 76% of its revenue comes from targeting eyeballs with advertising. Alphabet is a niche player in the device market, but its Android OS (73% market share) is the perfect gateway drug, as it’s open-source and free.
It took us 20 years to wake up to the danger of opiates, and about the same for the phone. But it is happening. Eighteen states have passed laws restricting the use of phones in school, and roughly three-quarters of schools have policies restricting their use in the classroom. Yondr, a firm that makes locking pouches for phones, has increased sales to schools by 10x since 2021, to $2.1 million.
When Mark Zuckerberg released a video announcing the end of Facebook’s fact-checking program, Jimmy Kimmel joked that Zuck was “dressed like a molly dealer from Chechnya.” The shoe fits. The difference: MDMA makes you euphoric, while social media makes you anxious and depressed. As my NYU colleague Jonathan Haidt put it, the unconstrained combination of phones and social media has been “the largest uncontrolled experiment humanity has ever performed on its own children.” So far, the results are a mental health crisis: Eight percent of teens are addicted to alcohol or drugs; 24% are addicted to social media.
Unlike other platforms, TikTok is built around affinities, not the social graph. If chasing likes from our friends is digital heroin, TikTok’s AI is fentanyl. The algorithm rapidly calibrates what triggers a user’s dopa response by feeding them hundreds of videos every hour, turning the user into a blissed-out zombie. According to a lawsuit filed by the Kentucky attorney general, users can become addicted to TikTok within 35 minutes. The same lawsuit cited TikTok’s own research, which stated that “compulsive usage interferes with essential personal responsibilities including sufficient sleep, work/school, and connecting with loved ones.”
We’re hard-wired for addiction. We’re also wired for conflict, as competing for scarce resources has shaped our neurological system to swiftly detect, assess, and respond to threats — often before we’re aware of them. As technology advances, our wiring makes us more powerful and more vulnerable. We produce dopa monsters at internet speed. We can wage war at a velocity and scale that risks extinction in the blink of an eye.
Human beings evolved in small, cooperative groups, where loyalty meant survival. This instinct makes us naturally favor in-groups (our people, our nation, our ethnicity) and distrust out-groups (foreigners, outsiders, “the other”). Genocide exploits this instinct by amplifying group identity and dehumanizing outsiders, making mass killing seem justified or even necessary. Violence, repeated, becomes routine. What was unthinkable on Monday becomes “standard procedure” by Friday. Removing the security details of our political adversaries, who are under real threat from foreign enemies, is simply repackaged violence. In sum, it’s Tuesday in America.
This week marked the 80th anniversary of the liberation of Auschwitz by the Soviet Army. Our proudest moment, in my view, was America’s role in arresting this genocide, which represents the very worst perversion of human instincts. Now the U.S. risks becoming the font of this abomination. The president has repeatedly said that “immigrants are poisoning the blood of our country.” The world’s richest man is making Nazi gestures and told a far-right group in Germany, “It’s good to be proud of German culture, German values, and not to lose that in some sort of multiculturalism that dilutes everything.” Our (worst) instincts remain static — it’s our technology that’s evolving.
Instinct morphing into fear and demonization, coupled with propaganda, rail transport, and Zyklon B gave rise to the largest murder site in history. What might happen if these same instincts take root in a nation with unprecedented industrial might, armed with social media and AI? We need to cauterize this hate. People/bots in the comments section will accuse me of TDS. Have. At. It. The road to fascism is littered with accusations of overreacting. So … color me overreacting. It’s both the correct response, and impossible to overreact.
Never forget,
P.S. This week on Prof G Markets, my co-host Ed Elson and I discussed the Stargate Project, the rise of Oracle, and my stake in La Equidad Football Club. Listen and follow here on Apple or here on Spotify.
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The post Addiction Economy appeared first on No Mercy / No Malice.
2025-01-25 02:06:51
SCENE: A top secret communications room in the White House.
TIME: Next week.
NATIONAL SECURITY COMMUNICATIONS OFFICER: Secure satellite phone connection via Starlink established and confirmed. Sir, the next voice you hear will be that of President Putin. Go ahead, please, Moscow.
VLADIMIR PUTIN: Donald?
DONALD TRUMP: Vlad! It’s great, really great to hear from you.
PUTIN: Same here, and may I congratulate you for your total and complete victory. Your digital coin, very interesting development.
TRUMP: Vladimir, nobody’s ever seen anything like it. The most successful coin in history, maybe ever. People are saying it’s tremendous.
PUTIN: We have interest in large purchase. Very large. But Donald, situation with NATO … it complicates things.
TRUMP: Horrible organization, NATO. Horrible. They’re not paying their fair share, never have. These European countries, they’re laughing at us.
PUTIN: If you publicly question Article 5, perhaps we discuss bigger coin purchase. Much bigger.
TRUMP: The biggest. And you know what? NATO’s obsolete. Always has been. We’re looking at all our options, and people are going to be very happy with what we do. Very happy.
PUTIN: Good, Donald. We start with 50 million in coins. Maybe more after NATO statement.
TRUMP: Beautiful. Just beautiful. You’re going to love these coins. Everyone loves these coins.
You have to give it to the president, this is 3D grandmaster chess corruption vs. the checkers corruption Democrats have been playing.
SCENE: Phone conversation at 1236 Longworth H.O.B., the office of Speaker of the House Emerita Nancy Pelosi
TIME: Last week.
NANCY PELOSI: Paul, that firm you mentioned last week — the health-care AI one — what was the name?
PAUL PELOSI: There’s a few. The one that’s received the most press is Tempus AI.
NANCY: I was in a Medicare briefing today, and they are planning on pouring substantial resources into AI-driven diagnostics and care management. I believe Tempus was on their list.
PAUL: Understood. I’m on it.
It was disclosed on Tuesday, January 21, that Representative Pelosi, and/or related parties, had purchased between $50k and $100k of call options on Tempus AI, Inc. (TEM). That day, the stock registered the biggest one-day gain in its history, surging 35%.
These are each their own flavor of corruption. I respect the Trump grift more than the plain vanilla trading on material nonpublic information. It’s more creative, and if you’re going to abuse the public trust, you should do it for billions vs. millions.
America has just put out a “for sale” sign, and every corrupt government and company around the world has taken notice.
Instead of Russia offering Trump cash for abandoning Ukraine, it might be one side in Sudan’s civil war, which, though you don’t hear about it much here in the U.S., is the bloodiest ongoing conflict in the world.
Or maybe one of the makers of Red Dye No. 3, recently banned for use in food by the FDA after it was found that high exposures caused cancer in rats, will offer to put some money into $TRUMP if the president finds his veto pen.
During his first term, Trump owned a hotel in D.C. that was patronized by rich people, governments, and businesses who wanted something from the federal government. $TRUMP coin is more elegant: a vehicle that gives parties a discreet, easy way to pay off the president of the U.S. Think of the coin as a price discovery tool for bribery, a mixture of eBay and PayPal for corruption.
$TRUMP and $MELANIA are such obvious grifts, they embarrass one of the most shameless communities in our economy: the crypto bros who backed his candidacy. CNBC host Ran Neuner accused the presidential family of “grifting at the expense of the entire crypto community.” It’s likely that, as the grift dust settles into a Category 5 hurricane of indefensible losses (e.g., $MELANIA shed two thirds of its value in five days), Congress will be less amenable to the legislation the community has been advocating for. Just as my generation has pulled future generations’ prosperity forward for our benefit, via deficit spending, Trump is borrowing massively against the increasing credibility of the asset class to enrich himself and light the sector on fire.
We shouldn’t be surprised. The U.S. has been on this road since the Supreme Court’s 2010 decision in Citizens United, which took limits off campaign spending by corporations and other groups. The court held that existing restrictions violated the First Amendment, equating the ability to spend money on campaigns with the right to free speech. The result has been a deluge of corporate cash into our elections. Any small inhibitions or shame politicians may have felt about selling themselves to the highest bidder disappeared. Trump is doing loudly what other politicians do quietly. Now that he’s been reelected he’s not even pretending. The Washington Post claims that “democracy dies in darkness.” Maybe. What’s more apparent is that capitalism (competition, rule of fair play, trust in markets) dies in the full light of day. As Dylan sang, “Money doesn’t talk, it swears.” Right now, it’s telling the American public to go fuck itself.
Last year, Trump decided to ignore the real national security concerns that had been voiced about the app. TikTok became politically useful to him, and Jeffrey Yass, one of the largest shareholders of its Chinese parent company ByteDance, gave $100m to GOP groups.
TikTok now has about 2 billion global users and about 170 million in the U.S. ByteDance is required by law to turn user data over to China’s Ministry of State Security on demand. According to Pew Research, about 40% of young Americans now get their news from TikTok. The app is a neural jack connecting Beijing with the wet matter of America’s youth. A 14-year-old American spends approximately 14 hours a week on the platform. Think about this: a full day every week on a platform influenced by the CCP. Would we have let the Kremlin own CBS/ABC/NBC in the sixties?
When Trump’s efforts to make ByteDance sell during his first term failed, he signed an executive order banning TikTok, which was later overturned in court — he needed a law. Last year, then, Congress debated and overwhelmingly approved, and President Biden signed, the “Protecting Americans from Foreign Adversary Controlled Applications Act,” which gave ByteDance until January 19 of this year to sell to a non-Chinese buyer. ByteDance fought the law in court and lost. On January 17, the Supreme Court ruled 9-0 that the law was constitutional.
Then January 19 came, and TikTok shut down in the U.S. — for a few hours. TikTok returned from the dead almost immediately, as ardent TikTokers, with the aid and encouragement of ByteDance, posted and protested that a ban would deprive them of their free speech rights and/or their livelihoods. This is ground zero for why we should ban it. A social media app used by half of Americans and controlled by an aggressive foreign rival just confirmed it can spin up millions of citizens, particularly young people, to influence important government policy. TikTok (i.e., the CCP) will do this again. If China invades Taiwan, TikTok is the propaganda tool Radio America never dreamed of. It’s much easier to fool Americans than to convince them they’ve been fooled.
On his first day back in office, Trump signed an executive order delaying the ban for 75 days, saying he wanted to engineer a deal that would give the U.S. half-ownership of the app. “If I don’t do the deal it’s worth nothing,” he said. “If I do the deal it’s worth a trillion dollars.”
This is not a new concept — there’s even a word for it: socialism. Socialism is when the state controls the means of production. America has proven, in spades, that the full body contact of competition creates more economic growth than the government cosplaying a business. Whether it’s the U.K. investing in DeLorean or Obama propping up Solyndra, it usually doesn’t end well.
One of my favorite moments in Succession was when Logan Roy told his children: “You are not serious people.” He knew his kids were expectant and lacked the real-world skills and backbone to make good on their threats. We risk our allies, adversaries, and trade partners sensing that we, too … are not a serious people.
I’m not entirely sure how we got here, but I think it has something to do with the way money and business success have become so venerated in our culture. More money used to mean a better meal on a plane; now it’s a (much) better life. Just as we always find uses for additional bandwidth and energy, our consumer economy never runs out of incentives to amass more money.
I’m taking my son on the Eurostar (which has three ticket classes) to see a Paris Saint-Germain F.C. game where there are the seats we bought (£220), plus 11 higher categories, including ones with access to an indoor restaurant, heated seats, and a player meet & greet before the game (that’s £3,500). My first (real) date, with Maureen Burke, was in the 11th grade. I took her to see Springsteen at the Great Western Forum. Nosebleed seats were $12, and seats in the front 5 rows on the floor were $48. We sat in the $12 seats. i) I had no money; and ii) I thought it was super cool — “look how high up we are!”
More recently, for Taylor Swift’s Eras Tour at SoFi Stadium in Los Angeles, the “It’s Been a Long Time Coming” VIP Package would set you back $899. However, it did include a VIP parking pass, merchandise, and a dedicated entrance. For perspective, on an inflation-adjusted basis, premium tickets to Swift cost 5x what Springsteen did 42 years ago. This is all to say that not only is our government increasingly corrupt, but also: Being a teen in 1982 was … better. But that’s another post.
The most disappointing thing about our elected officials is not that they’re whores, but what cheap whores they are. For his $250m investment in Trump, the wealthiest man in the world was able to increase his purse by $140b (56,000% ROI). The increase in wealth had nothing to do with the performance of his businesses, but the market’s belief that we are now in a kleptocracy and the distinction between winners and losers is no longer about innovation but proximity to power. The polar vortex of corruption is here, as greater incentives, fewer guardrails, and the sense that character is no longer valued in America have cast a chill across capitalism.
Money has not washed over just our government, but also what has traditionally been a powerful check on corruption, the media. ABC’s Bob Iger sold out and settled rather than fight a lawsuit Trump brought over George Stephanopoulos’s on-air remark that Trump had been “found liable for rape,” a suit that looked very winnable for ABC. Jesus, Bob, really? FYI, the judge in the case also used the R word.
Many are now afraid of confronting Trump and First Lady Elonia, not because they think they might wrong them, but because they are worried about the aggravation and expense of being sued. In the end, the media and the citizenry are making a money choice when what is called for is a moral choice. (See above: Bob Iger.) For people who are not economically secure, it’s upsetting but understandable. For Bob Iger, it’s shareholder value colliding with cowardice. Last year the Disney CEO made $41m. But I’d argue he is increasingly impoverished.
The latest race to the bottom is blanket pardons. After Biden preemptively pardoned his family, Trump granted “a full, complete, and unconditional pardon” to all January 6 defendants, including Enrique Tarrio, the former national leader of the Proud Boys, who was convicted and sentenced to 22 years in prison for seditious conspiracy, and Julian Khater, who pleaded guilty to pepper-spraying Capitol Police officer Brian Sicknick in the face. Sicknick suffered several strokes and died the day after the attack.
There’s a rumor on Reddit that I’m running for President in 2028. That fits — I do possess the key attributes (wealth, narcissism, outdoor plumbing). Should I be victorious, I pledge to the American People the following: a full and unconditional pardon of all UCLA alumni, Great Dane breeders, and owners of Damn the Torpedoes (vinyl). Together, we will make America Tom Petty again.
Life is so rich,
P.S. Hear more on my thoughts on $TRUMP and what’s next for TikTok on this week’s Prof G Markets. Listen and subscribe here on Apple podcasts or here on Spotify.
P.P.S. Join Section for a conversation with LinkedIn founder and OpenAI founding investor Reid Hoffman on making ourselves superhuman with AI. It’s next Wednesday. RSVP for free here.
The post America For Sale appeared first on No Mercy / No Malice.
