In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.
Anyone who believes anything coming out of government agencies is not just gullible, they’re a danger to themselves (and invariably all of us).
Have you wondered how everyone is broke, yet somehow the Biden economy is on fire, creating all these jobs? Turns out, that was all a massive lie, the Philadelphia Federal Reserve admits. (What totally convenient post-election timing!) https://t.co/r0pQaoiOLg
Labor data might have been overcounted by as much as 1.1 million jobs earlier this year, the Federal Reserve Bank of Philadelphia revealed in a new quarterly report.
According to the regional central bank’s second-quarter “Early Benchmark Revisions of State Payroll Employment” report (pdf), researchers’ estimated employment changes that occurred between March and June were different in 33 states and the District of Columbia compared to the data published by the Bureau of Labor Statistics (BLS).
During this period, Philadelphia Fed researchers found that there were higher adjustments in four states, lower changes in 29 states and the nation’s capital, and lesser revisions in the remaining 17 states. This included a 4.1 percent drop in payroll employment in Delaware and a 1.2 percent decrease in jobs in New Jersey.
As a result, employment gains might have been overcounted by more than 1.1 million.
“In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES [Current Employment Survey] estimated net growth of 1,047,000 jobs for the period,” the report stated.
This also means that payroll jobs were flat in the March-to-June span. In addition, current estimates indicate that employment growth was 2.8 percent in the four months since June.
E.J. Antoni, a research fellow for Regional Economics in the Center for Data Analysis at The Heritage Foundation, tells The Epoch Times that this “feels like another pyrrhic victory.”
“The Philly Fed data aligns well with the household survey that shows a flat job market since March, contra the robust growth from the establishment survey,” he said. “The seasonal adjustments to the monthly headline jobs numbers this year from BLS have been abnormally large to the upside. December’s number will have to revised down 30% more than normal to essentially balance out the earlier large upward revisions. Job growth was technically ‘front loaded’ in 2022.”
The Philadelphia Fed explained how its calculations differ from how the BLS crunches the figures.
“The Federal Reserve Bank of Philadelphia has developed early benchmark estimates of monthly state payroll employment on a quarterly basis to predict the subsequent annual benchmark revisions by the Bureau of Labor Statistics (BLS). Our process enhances the monthly Current Employment Survey (CES) payroll employment data with the more comprehensive Quarterly Census of Employment and Wages (QCEW) payroll employment data. The CES provides a timely estimate of monthly state employment data, but the QCEW follows about five months later with a more complete picture, covering more than 95 percent of all employers. Our methodology was adapted from an approach pioneered by the Federal Reserve Bank of Dallas and modified to accommodate all 50 states and the District of Columbia,” the regional central bank noted in its methodology explainer (pdf).
Will this force the BLS to revise its figures lower in the coming months?
BLS Caught Overcounting
Critics have charged that there is something wrong with the monthly jobs report.
The BLS report is comprised of two chief surveys: establishment (businesses) and household. The former has recorded stronger-than-expected growth for most of 2022, while the latter has been roughly flat. Since March, the divergence has skyrocketed to 2.7 million workers.
The main explanation for this gap is that the BLS allows double counting. This means it will count every extra job a person possesses as another payroll. The household component does not permit this feature.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00The Geller Reporthttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngThe Geller Report2022-12-19 06:46:102022-12-19 06:48:03Philadelphia Fed: Job Gains This Year OVERSTATED by 1.1 Million, It Was Only 10K
‘Maverick’ is an outstanding intellectual biography of this prolific African-American economist.
Fans of Thomas Sowell have been eagerly awaiting the new biography by Jason Riley, with the appetite being whetted by the release of Riley’s one hour documentary on Sowell’s life in January.
This is not a standard biography.
Apart from providing a basic overview of Sowell’s life (his difficult upbringing in the segregated South and in Harlem, his late entry into academic life and meteoric rise as a public commentator), the author’s primary goal is to provide an introduction to Sowell’s voluminous body of work on matters as diverse as economics, education, cultural disparities and political ideology.
Like Sowell, Riley is a conservative African-American writer. A member of The Wall Street Journal editorial board, he is critical of the statist measures (expanded government, racial quotas, etc.) which many leftists advocate, arguing that they hurt blacks instead of helping them.
Four decades Riley’s senior, Sowell has a long track record of making similar arguments. Interestingly though, he initially held very different views.
A Marxist radical from a young age, Sowell overcame the burdens of being a school dropout and worked his way to a Harvard economics degree.
Finding that “smug assumptions were too often treated as substitutes for evidence or logic” among the Harvard elite, Sowell’s years of working within the government bureaucracy gradually led him to believe that it was not helping minorities: as shown by his fellow bureaucrats’ disinterest in evidence demonstrating that the higher minimum wage laws they advocated were increasing unemployment among disadvantaged groups.
One of the highlights of “Maverick” is Riley’s description of Sowell’s difficulties as a teaching professor in the 1960s and 1970s, prior to his appointment as a Senior Fellow in the Hoover Institution in 1980s, after which Sowell was able to concentrate on research and writing.
As someone who had been raised in a poor and uneducated family, Sowell understood the importance of education and was particularly eager to help educate other African-Americans.
Despite receiving offers of teaching positions at more prestigious colleges, Sowell decided to return to his original alma mater, the predominantly black Howard University.
His refusal to accept laziness or declining academic standards among his students caused him problems here and in other colleges at a time when American colleges were at the epicentre of a cultural revolution.
“Curricula were being reworked to accommodate ideological fashions. Race and gender and class were becoming preoccupations in student scholarship and faculty tenure decisions. And the notion that education must be “relevant” to the students – especially to minority students from different backgrounds – was ascendant,” Riley writes, and Sowell found it hard to adapt.
In addition to being something of a cultural anomaly for trying to uphold traditional standards, Sowell also refused to go along with politically correct social policies which he saw were not working.
While teaching at the prestigious Cornell University, Sowell observed that the college’s policy of admitting black students who did not meet their usual academic standards in the name of diversity was resulting in gifted students (who may have thrived elsewhere) struggling in their classes.
Though he appears to have initially been reluctant to engage on questions pertaining to race such as this, Sowell’s insistence on examining the facts and his willingness to criticise progressive ideology earned him the animosity of many in the black establishment.
This was often expressed in vicious ways: when it was rumoured that President Reagan would appoint Sowell to his cabinet, a leading NAACP (National Association for the Advancement of Colored People) official publicly compared him to the “house n*****s” of the plantation era.
A key criticism which Sowell levelled against so-called “leaders” of black America was their overemphasis on achieving political power (often sought for their own benefit) while members of their community suffered due to the breakdown of the traditional family and the poor-quality public services which those same political leaders were responsible for.
In a number of books on related topics – his titles included Ethnic America, Race and Culture, Conquests and Cultures and Affirmative Action Around the World — Sowell shone a light on how educational and income disparities came to exist between different groups, and how politically successful minorities (like Irish-Americans, who dominated America’s big cities as well as the hierarchy of the Catholic Church) sometimes lagged behind others in material terms while politically marginalised groups like the (Chinese diaspora in southeast Asia or the Jews of America) thrived economically and educationally.
Unsurprisingly, this did not endear him to politicians and activists who owed their positions and incomes to maintaining the view that income disparities were always the result of discrimination, which they of course maintained could only be addressed by political action.
Though Sowell’s courage and insights when it comes to issues of race are more necessary now than ever, his career offered so much more, as Riley makes clear here.
As an economist, Sowell earned the admiration of laymen with valuable and accessible books such as Basic Economics, while winning praise from other leading economists for more advanced materials such as Knowledge and Decisions.
Elsewhere, his informal trilogy about the history of ideas — A Conflict of Visions, The Vision of the Anointed and The Quest for Cosmic Justice – has helped to explain the differences in political psychology between Right and Left.
Sowell’s life has imbued in him a toughness which made him well-suited to the role he has played, one which has come at a cost.
“Sometimes it seems as if I have spent the first half of my life refusing to let white people define me and the second half refusing to let black people define me,” Sowell has reflected. Now in his 90s, he will probably never receive the recognition, which he richly deserves, as one of the world’s great intellectuals.
Throughout this excellent biography, Jason Riley provides an outstanding introduction to a truly great man whose work should continue to inspire us.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00MercatorNet - Navigating Modern Complexitieshttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngMercatorNet - Navigating Modern Complexities2022-12-19 06:27:402022-12-19 06:30:02Is Thomas Sowell one of the most important thinkers of our time?
NEW YORK and CAMBRIDGE, Mass., Dec. 16, 2022 /PRNewswire/ — Stagwell (NASDAQ: STGW) today released the results of the December Harvard CAPS / Harris Poll, a monthly collaboration between the Center for American Political Studies at Harvard (CAPS) and the Harris Poll and HarrisX.
Joe Biden’s approval rating remains steady at 42% as two-thirds of Americans think inflation is still increasing. Ron DeSantis continues his ascent as the poll shows him defeating Biden in a 2024 matchup for the first time.
Strong majorities of voters think Twitter shadowbanned users and engaged in political censorship during the 2020 election. Seventy percent also want new national laws protecting users from corporate censorship. Download key results from the poll, which includes more on free speech, immigration, and inflation, here.
“Americans continue to show they are looking for new leaders. Ron DeSantis strengthens his grip as the Republican alternative to Donald Trump, and Elon Musk is in some ways the new Trump as the outsider taking on the establishment,” said Mark Penn, Co-Director of the Harvard-CAPS Harris Poll and Stagwell Chairman and CEO. “Americans also want more information: they are buying the Musk argument that there is an information chokehold in this country, whether by Big Tech, government, or mainstream media.”
AMERICANS THINK INFLATION IS INCREASING AND WILL LINGER
66% of voters think inflation is increasing, and 61% of voters think inflation will continue for at least another year.
But Americans see economic troubles easing slightly: the percentage of voters who think the economy is heading in the right track and who are optimistic about their lives next year both increased by 3 points.
Voters are split on whether Biden’s policies caused inflation.
IT’S NOW A TWO-WAY GOP RACE BETWEEN TRUMP AND DESANTIS
Trump is still the GOP frontrunner in an open field: 48% of GOP voters would choose him in a primary, compared to 25% for DeSantis.
But in a GOP head-to-head, DeSantis defeats Trump by 4 points if GOP-leaning Independent voters are included; Trump wins the head-to-head by 10 points among only GOP voters.
For the first time, the poll shows DeSantis defeating Biden in a 2024 matchup, by 4 points; Trump would also defeat Biden by 5 points.
VOTERS BELIEVE TWITTER ENGAGED IN POLITICAL CENSORSHIP AND ARE ROOTING FOR ELON MUSK
Americans believe in the Twitter Files revelations: 64% think Twitter was secretly shadow banning users, and 64% also think Twitter engaged in political censorship during the 2020 election.
Americans like Elon Musk: 61% think Musk is trying to clean up Twitter from abuses, and his personal favorability is 8 points above water.
The Hunter Biden laptop story continues to generate controversy: 61% of voters think Twitter’s decision to ban tweets about the laptop was based on political bias; but 42%, including a majority of Democrats, believe the laptop is Russian disinformation.
70% of voters, including strong majorities across the political spectrum, support new national laws protecting internet users from corporate censorship.
AMERICANS THINK ILLEGAL IMMIGRATION IS A SERIOUS ISSUE BUT DON’T KNOW THE NUMBERS
Voters are concerned about the effects of Biden’s immigration policies: 67% think they have encouraged illegal immigration, and 57% think they are increasing the flow of drugs and crime.
Americans are unfamiliar with the extent of illegal immigration: 64% correctly said the number of illegal border crossings has increased under Biden, but the median voter underestimated that number by a factor of 10 (250-500 thousand vs. 2-3 million).
Two-thirds of Americans want Biden to issue stricter policies to reduce the flow of illegal immigrants, when told the actual number of illegal crossings in the last year (over 2.75 million).
The December Harvard CAPS / Harris Poll survey was conducted online within the United States from December 14-15, 2022, among 1,851 registered voters by The Harris Poll and HarrisX. Follow the Harvard CAPS Harris Poll podcast at https://www.markpennpolls.com/ or on iHeart Radio, Apple Podcasts, Spotify, and other podcast platforms.
About The Harris Poll
The Harris Poll is a global consulting and market research firm that strives to reveal the authentic values of modern society to inspire leaders to create a better tomorrow. It works with clients in three primary areas: building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. One of the longest-running surveys in the U.S., The Harris Poll has tracked public opinion, motivations, and social sentiment since 1963, and is now part of Stagwell, the challenger holding company built to transform marketing.
About the Harvard Center for American Political Studies The Center for American Political Studies (CAPS) is committed to and fosters the interdisciplinary study of U.S. politics. Governed by a group of political scientists, sociologists, historians, and economists within the Faculty of Arts and Sciences at Harvard University, CAPS drives discussion, research, public outreach, and pedagogy about all aspects of U.S. politics. CAPS encourages cutting-edge research using a variety of methodologies, including historical analysis, social surveys, and formal mathematical modeling, and it often cooperates with other Harvard centers to support research training and encourage cross-national research about the United States in comparative and global contexts. More information at https://caps.gov.harvard.edu/.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Dr. Rich Swierhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngDr. Rich Swier2022-12-17 07:10:012022-12-17 07:10:28Most Americans Think Inflation Is Still Increasing and Believe Twitter Engaged in Political Censorship
The safest way to store cryptocurrency is in your own crypto wallet.
Anthony* (a friend) called a few weeks ago, deeply worried.
A deputy principal of a high school in Queensland, over the past year he spent hundreds of thousands of dollars buying cryptocurrencies, borrowing money using his home as equity.
But now all his assets, valued at A$600,000, were stuck in an account he couldn’t access.
He’d bought through FTX, the world’s third-biggest cryptocurrency exchange, endorsed by celebrities such as Seinfeld co-creator Larry David, basketball champions Steph Curry and Shaquille O’Neal, and tennis ace Naomi Osaka.
“I thought these exchanges were safe,” Anthony said.
He was wrong.
Not like stock exchanges
Cryptocurrency exchanges are sometimes described as being like stock exchanges. But they are very different to the likes of the London or New York stock exchanges, institutions that have weathered multiple financial crises.
Stock exchanges are both highly regulated and help regulate share trading. Cryptocurrency exchanges, on the other hand, are virtually unregulated and serve no regulatory function.
They’re just private businesses that make money by helping “mum and dad” investors to get into crypto trading, profiting from the commission charged on each transaction.
Indeed, the crypto exchanges that have grown to dominate the market — such as Binance, Coinbase and FTX — arguably undermine the whole vision that drove the creation of Bitcoin and blockchains — because they centralise control in a system meant to decentralise and liberate finance from the power of governments, banks and other intermediaries.
These centralised exchanges are not needed to trade cryptocurrency, and are pretty much the least safe way to buy and hold crypto assets.
Trading before exchanges
In the early days of Bitcoin (all the way back in 2008) the only way to acquire it was to “mine” it — earning new coins by performing the complex computations required to verify and record transactions on a digital ledger (called a blockchain).
The coins would be stored in a digital “wallet”, an application similar to a private bank account, accessible only by a password or “private key”.
A wallet can be virtual or physical, on a small portable device similar in appearance to a USB stick or small phone. Physical wallets are the safest because they can be unplugged from the internet when not being used, minimising the risk of being hacked.
Before exchanges emerged, trading involved owners selling directly to buyers via online forums, transferring coins from one wallet to another like any electronic funds transfer.
Decentralised vs centralised
All this, however, required some technical knowledge.
Cryptocurrency exchanges reduced the need for such knowledge. They made it easy for less tech-savvy investors to get into the market, in the same way web browsers have made it easy to navigate the Internet.
Two types of exchanges emerged: decentralised (DEX) and centralised (CEX).
Decentralised exchanges are essentially online platforms to connect the orders of buyers and sellers of cryptocurrencies. They are just there to facilitate trading. You still need to hold cryptocurrencies in your own wallet (known as “self-custody”).
Centralised exchanges go much further, eliminating wallets by offering a one-stop-shop service. They aren’t just an intermediary between buyers and sellers. Rather than self-custody, they act as custodian, holding cryptocurrency on customers’ behalf.
Exchange, broker, bank
Centralised exchanges have proven most popular. Seven of the world’s ten biggest crypto exchanges by trading volume are centralised.
But what customers gain in simplicity, they lose in control.
You don’t give your money to a stock exchange, for example. You trade through a broker, who uses your trading account when you buy and deposits money back into your account when you sell.
A CEX, on the other hand, acts as an exchange, a brokerage (taking customers’ fiat money and converting it into crypto or vice versa), and as a bank (holding customer’s crypto assets as custodian).
This is why FTX was holding cash and crypto assets worth US$10-50 billion. It also acted like a bank by borrowing and lending cryptocurrencies — though without customers’ knowledge or agreement, and without any of the regulatory accountability imposed on banks.
Holding both wallets and keys, founder-owner Sam Bankman-Fried “borrowed” his customers’ funds to prop up his other businesses. Customers realised too late they had little control. When it ran into trouble, FTX simply stopped letting customers withdraw their assets.
The power of marketing
Like stockbrokers, crypto exchanges make their money by charging a commission on every trade. They are therefore motivated to increase trading volumes.
FTX did this most through celebrity and sports marketing. Since it was founded in 2019 it has spent an estimated US$375 million on advertising and endorsements, including buying the naming rights to the stadium used by the Miami Heat basketball team.
Such marketing has helped to create the illusion that FTX and other exchanges were as safe as mainstream institutions. Without such marketing, it’s debatable the value of the cryptocurrency market would have risen from US$10 billion in 2014 to US$876 billion in 2022.
Not your key, not your coins
There’s an adage among crypto investors: “Not your key, not your coins, it’s that simple.”
What this means is that your crypto isn’t safe unless you have self-custody, storing your own coins in your own wallet to which you alone control the private key.
The bottom line: crypto exchanges are not like stock exchanges, and CEXs are not safe. If the worst eventuates, whether it be an exchange collapse or cyber attack, you risk losing everything.
All investments carry risks, and the unregulated crypto market carries more risk than most. So follow three golden rules.
First, do some homework. Understand the process of trading crypto. Learn how to use a self-custody wallet. Until governments regulate crypto markets, especially exchanges, you’re largely on your own.
Second, if you’re going to use an exchange, a DEX is more secure. There is no evidence to date that any DEX has been hacked.
Lastly, in this world of volatility, only risk what you can afford to lose.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00MercatorNet - Navigating Modern Complexitieshttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngMercatorNet - Navigating Modern Complexities2022-12-14 05:01:142022-12-14 07:03:53‘I thought crypto exchanges were safe’: The lesson in FTX’s collapse
Federal prosecutors in the U.S. attorney’s office for the Southern District of New York indicted disgraced former crypto billionaire Sam Bankman-Fried on eight counts of fraud Tuesday, according to a copy of the unsealed indictment.
The charges brought against Bankman-Fried include conspiracy to commit wire fraud on customers, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering, according to the indictment. Bankman-Fried was also charged with violating campaign finance laws by conspiring to make illegal contributions to political candidates and joint fundraising committees, among others, the indictment shows.
From at least 2019 through approximately Nov. 2022, Bankman-Fried “agreed with others to defraud customers of FTX.com by misappropriating those customers’deposits and using those deposits to pay expenses and debts of Alameda Research, Bankman-Fried’sproprietarycryptohedgefund,andtomakeinvestments,” according to the indictment.
The indictment echoes a Nov. 2 report by crypto site CoinDesk alleging FTX and Alameda Research misused customer funds, which began the collapse of FTX and Bankman-Fried’s crypto fortune. FTX was Bankman-Fried’s cryptocurrency exchange, and Alameda Research was his crypto trading firm.
Likewise, the Securities and Exchange Commission (SEC) accused Bankman-Fried of a scheme to defraud billions from FTX investors beginning in May 2019.
According to the SEC lawsuit, “Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”
The Commodity Futures Trading Commission (CFTC) brought similar charges against Bankman-Fried, alleging he violated the Commodity Exchange Act and misused customer funds, CNBC reported.
“Bankman-Fried and other FTX executives also took hundreds of millions of dollars in poorly-documented ‘loans’ from Alameda that they used to purchase luxury real estate and property, make political donations, and for other unauthorized uses,” the CFTC alleged in its filing.
FTX filed for bankruptcy Nov.11 after appointing bankruptcy executive John J. Ray III as CEO following Bankman-Fried’s resignation from the company. Ray is testifying in front of the House Financial Services Committee about the collapse of FTX.
Bankman-Fried was arrested Monday in the Bahamas after prosecutors filed criminal charges against him, according to The New York Times (NYT). It is unclear when he will be extradited to the U.S., a process that can take weeks or longer, the NYT reported.
Bankman-Fried’s lawyer Mark Cohen told The Wall Street Journal the former “is reviewing the charges with his legal team and considering all of his legal options.”
His net worth peaked at $26.5 billion and was estimated to be $17.2 billion in September. Bankman-Fried told Axios on Nov.29 he had $100,000 remaining in his bank account when he last looked.
This is a developing story and will be updated as further details emerge.
Imagine that you are a U.S. immigration officer, handing out green cards to the would-be Americans of the world. You have before you two applicants who look almost completely the same; for some arcane, unspecified bureaucratic reason, you can only approve one of them. They’re both well-educated by American standards, both bringing identical families, both passed their background checks.
The major difference is their nation of origin. One is from a nation with a strong tradition of rule of law, free markets, and democratic pluralism. The other is from a country where kleptocracy, autocracy, and socialism are standard. The difference, in other words, is the character of the society that your two would-be immigrants come from. The question is: Should this difference matter?
The basic argument of The Culture Transplant, the new book from George Mason University professor Garett Jones, is that at least in the aggregate, the answer to this question is “yes.” The marginal immigrant, to be sure, may not matter. But Jones shows, through an engaging and digestible tour of the academic literature, that people bring their national character with them when they migrate; that those values persist for up to several generations; and that some values really are better for societal flourishing than others, so the values immigrants bring matters a great deal.
To reach this conclusion, Jones relies on a fairly diverse set of evidence. Much of the basis for his argument, though, is drawn from the so-called deep-roots literature. That research, in essence, looks at what today’s countries were like 500 to 2,500 years ago, in terms of level of governance, agricultural development, and technological development. It observes that what a country was like hundreds of years ago is a strong predictor of how developed it is today. More to Jones’s point, it observes that what a country’s people were like hundreds of years ago predicts what they are like today.
The point here is that, for whatever reason, certain fundamental facts about a civilization—i.e., its level of development—are both highly relevant to its performance on the centuries timespan and transplantable from one place to another. One plausible explanation is that whatever determines this outcome inheres in the people from those civilizations, who carry it with them and “transplant” it wherever they migrate.
Indeed, Jones reviews extensive research that shows immigrants often look more like their ancestors than the countries they arrive to, even several generations after arrival. If your ancestors believed in things conducive to development—social trust, cooperation, fairness, etc.—then you probably do too. And those beliefs matter for how the country you now live in does.
What are the concrete implications of this view? Jones offers two. One is that the countries with the highest rates of innovation—China, France, Germany, Japan, South Korea, the United Kingdom, and the United States—should be extremely cautious about changing the population composition through migration. These countries produce the overwhelming majority of the world’s progress, and if progress is a function of your country’s composition, then we should care a lot about keeping their current mix, because otherwise all of humanity loses out….
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Jihad Watchhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngJihad Watch2022-12-13 06:28:362022-12-13 06:32:05How Migrants Make The Economies They Move To A Lot Like The Ones They Left
If it sounds crazy that established players get a say on who is allowed to compete with them, well, it should.
When Parker Noland launched his trash-hauling business at age 20 in the summer of 2021, he was excited about the opportunities that lay before him. After taking out a loan from a local bank, the Montana native bought a truck and some dumpsters and got to work promoting his services. The business plan was simple: he would deliver dumpsters to construction sites looking to get rid of debris and then transport the dumpsters to the county dump once they were full.
Things quickly got complicated for Noland, however. Though he had registered his business, gotten the proper insurance, and complied with all public health and safety standards, he was still missing one thing, a Certificate of Public Convenience and Necessity. As a result, right when he was about to get his business off the ground he was given a cease and desist order by the Montana Public Service Commission, the agency responsible for administering the Certificate law.
Noland applied for the Certificate shortly thereafter on September 8, 2021, but his troubles were just getting started. Two national garbage companies—his would-be competitors—protested his application, which they are allowed to do under the law. The companies issued various demands, such as data requests, and Noland’s legal expenses to fight the protests were soon thousands of dollars and counting.
On November 9, 2021, Noland made the difficult decision to withdraw his Certificate application, seeing as he could not afford the mounting legal expenses involved with fighting the protests. To this day, Noland remains ready and willing to run his trash-hauling business, but he is legally barred from doing so until he gets the Certificate.
On November 15, 2022, Noland teamed up with the Pacific Legal Foundation (PLF) to file an official complaint with Montana’s eleventh judicial district court, seeking a permanent injunction against further enforcement of the law on the ground that it violates his Constitutional rights.
A Competitor’s Veto
If it sounds crazy that established players in an industry are empowered by the government to bury would-be competitors in unnecessary legal fees, well, it should. As PLF argues, these laws practically amount to a “competitor’s veto.”
“Montana’s Certificate of Public Convenience and Necessity law allows established garbage companies to keep potential competitors like Noland out of the market,” PLF writes in their complaint. “Noland applied for a Certificate, but was forced to withdraw his application after some of the largest garbage companies in the nation protested his application, which imposed massive delays and created enormous financial costs. The Certificate provisions challenged in this case prevent Noland and other would-be entrepreneurs from working—not because they are unfit to operate—but to protect incumbent garbage companies from having to compete fairly.”
“Incumbents can protest for the bare reason that they do not want to face new competition,” PLF continues. “The Montana Public Service Commission is further empowered to reject an applicant because it believes there is no ‘need’ for a new company, and therefore that a new business would take away from the incumbent’s profits. Together these provisions create a Competitor’s Veto over those who wish to exercise their right to earn a living as a Class D hauler. This blatant economic protectionism is prohibited by the Montana and U.S. Constitutions.”
In sum, “the Competitor’s Veto allows existing garbage companies to force an applicant to undergo the time and expense of an administrative hearing that has nothing to do with the applicant’s public safety record, or any other matter related to public health or safety, but instead simply because existing garbage companies seek to restrict market competition.”
Noland is hardly the only entrepreneur running into this problem. As PLF notes, there were eight applications for a Class D (trash hauling) Certificate in Montana between January 1, 2018 and September 8, 2021. All eight faced protests. As a result of the protests, four of the applications were withdrawn, one was denied, and two were granted the Certificate only after agreeing to reduce the scope of their business.
The story of the one successful applicant who didn’t have to reduce their scope is revealing.
“The only applicant who succeeded in securing a Certificate over a protest, and without reducing the scope of its business, was L&L Site Services, Inc., on December 15, 2020,” PLF notes. “After a lengthy legal fight before the Commission, which involved extensive discovery, including 13 supplemental responses to Allied Waste Services’ data requests, a 5-day evidentiary hearing requiring legal representation, and contentious oral argument, L&L’s application was granted on April 29, 2022, over two dissenting votes from Defendants Brad Johnson and Randy Pinocci.”
The garbage company which protested their application has since filed a Motion for Reconsideration, which remains pending.
“Over the past 3 years,” PLF concludes, “the strongest predictor for getting permission to enter the trade of dumpster servicing was agreeing to reduce one’s operating authority to not compete with incumbents. And even though one applicant was able to afford the time and expense of the legal battle required by an incumbent’s protest, the challenged provisions still allowed the incumbent to inflict significant costs and delay on its potential competitor for purely anti-competitive reasons.”
The Case against Certificate Laws
Laws requiring a Certificate of Public Convenience and Necessity (CPCN) cover a variety of industries in different states—from trash collection to telecommunications to natural gas—but they all have similar impacts. They are closely related to Certificate of Need laws (CON laws) which create similar barriers in the healthcare industry (hospitals, nursing homes, ambulances, etc.) and in other industries such as transportation (specifically moving companies).
The justification for these kinds of laws is twofold. For one, proponents argue that allowing businesses to compete without demonstrating a “need” will lead to duplicative services, that is, an overabundance of supply in a given area. The problem, they contend, is that this will lead to higher prices because companies will charge more for the capacity they do use to compensate for the unused capacity. If a company builds a hospital, for example, but realizes it can’t fill half its beds because the market is already saturated with hospitals, it will ostensibly hike prices for the beds it does fill to compensate for its loss.
The other argument is that by restricting entry into “saturated” markets, politicians can use CPCN and CON laws to encourage entrepreneurs to set up shop in areas that tend to have less access to these services, such as rural areas.
These arguments may sound plausible at first glance, but upon closer inspection they are rather spurious. For one, how does a bureaucrat determine when a market is too saturated? There are no objective criteria here. What’s more, the very fact that an entrepreneur is planning to enter a market is evidence that, at least from their perspective, there are needs that are currently not being met by established players.
Another major problem with this analysis is the assumption that businesses can unilaterally raise prices in order to cover their costs. This is not how prices work. Prices are set by supply and demand. If anything, a greater supply in a region will lead to lower prices.
The idea that these laws are needed to push entrepreneurs to “lower access” regions is also dubious. An entrepreneur, almost by definition, is seeking to meet needs that haven’t already been satisfied. Thus, they naturally gravitate to precisely these “low access” regions. If they successfully set up shop in a supposedly “saturated” market, it is evidence that the market wasn’t, in fact, saturated. If their business in that region fails, on the other hand, the market will quickly usher them elsewhere all on its own.
Noland’s story is a case in point on this. As PLF notes, construction companies specifically sought out Noland because the large incumbent companies weren’t picking up bins in a timely manner. In other words, there was a market need that was clearly going unfulfilled. The market was not saturated, and that’s precisely why Noland was setting up shop in the first place. Further, Noland’s more compact truck “allowed him to offer services to areas where the incumbent companies did not,” something he was no doubt planning to take advantage of.
There’s a curious irony here. Though the Certificate law was intended to increase services in underserved areas, its practical impact is to restrict services in evidently underserved areas.
There’s an irony on the price front too. Though the law was intended to keep prices down, by restricting entry it is actually creating opportunities for incumbents to keep prices up!
Thus, on both issues, these laws are not only unnecessary, but counterproductive. They are hurting the very consumers they were supposed to protect, not to mention the would-be competitors like Noland who are effectively prohibited from entering the market.
The economist Murray Rothbard summarizes the effect of these policies well in his book Power & Market.
“Certificates of convenience and necessity are required of firms in industries—such as railroads, airlines, etc.—regulated by governmental commissions. These act as licenses but are generally far more difficult to obtain. This system excludes would-be entrants from a field, granting a monopolistic privilege to the firms remaining; furthermore, it subjects them to the detailed orders of the commission. Since these orders countermand those of the free market, they invariably result in imposed inefficiency and injury to the consumers.”
While the Certificate law in Noland’s story is certainly troubling, the deeper problem this story highlights is the belief that government restrictions of the market can help consumers. The reality is exactly the opposite. The best way for the government to help consumers is to get out of the way, and in particular, to stop enforcing regulations that protect established players from new entrants. Let entrepreneurs compete. Let consumers have choices.
America was built by the Parker Nolands of the world, young entrepreneurs full of dreams and ambitions.
It would be a shame if we strangled that spirit with red tape.
This article was adapted from an issue of the FEE Daily email newsletter. Click here to sign up and get free-market news and analysis like this in your inbox every weekday.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Foundation for Economic Education (FEE)http://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngFoundation for Economic Education (FEE)2022-12-10 05:47:012022-12-10 05:48:08Young Montana Entrepreneur Is Being Legally Barred from Hauling Trash Because Established Players Don’t Want the Competition
Governor Ron DeSantis has announced that the state will pay $25 million to help rebuild homes after the extensive damage caused by Hurricane Ian.
The Post Millenial, December 2022:
Following FEMA’s denial of Florida’s request for emergency funds to help rebuild homes destroyed by Hurricane Ian, Ron DeSantis announced that the state will provide up to $25 million for emergency relief, according to Florida’s Voice.
"We're not just gonna sit there and take no for an answer […] We're gonna figure out what we can do […] We wanna cut through bureaucracy." pic.twitter.com/NmgwV9RGnc
“Unfortunately, we got word last week that FEMA had denied our request for funding our state-led housing initiatives, citing their quote ‘limited authority,’” DeSantis said during an announcement in Southwest Florida, the region where Hurricane Ian made landfall.
“We’re not just gonna sit there and take no for an answer,” he said, “we’re gonna figure out what we can do.”
“We wanna cut through bureaucracy,” he continued, “we wanna bring relief to impacted Floridians, regardless of whether FEMA wants to be a part of that.”
FEMA responded to DeSantis’ request in a December 2 letter, saying “Due to the limited authorities FEMA has to approve and pay for this type of work, as well as our inability to confirm that authorizing this policy expansion would achieve the intended outcomes for disaster survivors, your request is denied.”
The Biden administration is giving a nonprofit partially funded by leftwing billionaire George Soros’s Open Society Foundations (OSF) $12 million to strengthen labor rights and empower workers in three Latin American countries. The U.S. taxpayer dollars will go to the Solidarity Center, a Washington D.C.-based group closely allied with OSF as well as the country’s largest union conglomerate, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The Solidarity Center’s mission is to help workers across the globe fight discrimination, exploitation and systems that entrench poverty. It claims to accomplish this by empowering workers to raise their voice for dignity on the job, justice in their communities and greater equality in the global economy.
The group will use the $12 million to “strengthen democratic, independent workers’ organizations in Brazil, Colombia and Peru,” according to the Department of Labor (DOL) announcement issued this week. The project will bolster unions and advocate for the full and free exercise of collective bargaining rights and freedom of association, the agency writes, adding that the focus will be on underserved communities and advancing gender and racial equity. Specifically, the American taxpayer dollars will support activities that improve respect for the rights of Brazil’s Afro-Brazilian, migrant, women and LGBTQI+ workers in the digital platform economy and the manufacturing sector. In Colombia, the focus will be on increasing the capacity of women, migrants, and indigenous people to organize and advocate for workers’ rights. In Peru, the goal is to improve access to mechanisms for labor rights compliance in the mining and agriculture sectors, particularly for indigenous and migrant workers.
The Solidarity Center, which claims to be the largest U.S.-based international worker rights organization, also operates in Africa, Asia, Europe, and the Middle East. Most of its funding comes from Uncle Sam, but private groups like OSF also contribute generously. In 2020, the Solidarity Center received nearly $39 million in federal awards, according to its latest annual report. In 2019, the center got over $36 million from the U.S. government. Additionally, the group gets millions annually in “other revenues” that are not broken down. However, records obtained by Judicial Watch show that the OSF has given a lot of money to the Solidarity Center in the last few years. In 2020, the latest available reporting period, OSF gave the Solidarity Center $980,000. In 2019 the center received $785,000 from OSF and in 2018 it got $400,000 from the Soros nonprofit that has dedicated billions of dollars to leftist causes around the world. Soros’s global foundation explains that the grants are for economic equity and justice, access to justice for migrant workers in the U.S., to improve labor rights in Mexico and Central America, and the empowerment of vulnerable workers in the domestic and agricultural sectors in the Middle East.
The U.S. government has long funded Soros groups as well as those with close ties to them like the Solidarity Center. Judicial Watch has reported on it for years and obtained records that show the disturbing reality of American taxpayers financing Soros’s leftwing plots abroad. This includes uncovering documents showing State Department funding of Soros nonprofits in Albania to attack traditional, pro-American groups and policies; U.S. government funding of Soros’s radical globalist agenda in Guatemala , Colombia, Romania and Macedonia. The cash usually flows through the State Department and U.S. Agency for International Development (USAID). Details of the financial and staffing nexus between OSF and the U.S. government are available in a Judicial Watch investigative report. Domestically Soros groups have pushed a radical agenda that includes promoting an open border with Mexico, fomenting racial disharmony by funding anti-capitalist black separationist organizations, financing the Black Lives Matter movement and other groups involved in the Ferguson Missouri riots, weakening the integrity of the nation’s electoral systems, opposing U.S. counterterrorism efforts and eroding 2nd Amendment protections.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Judicial Watchhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngJudicial Watch2022-12-09 05:13:242022-12-09 05:29:01Soros-Funded Nonprofit Gets $12 Mil from U.S. to Empower Workers in Latin America
Home Prices are Down in Every One of the Top 58 Metros According to the Latest AEI Data. But Cities in this Region Have Taken the Biggest Hit so Far.
In the Fortune article below Shawn Tully discusses recent declines in the housing market and their variability between regions with Ed Pinto, the Director of AEI’s Housing Center.
It’s official: The sudden reversal in home prices that began this spring has hit every one of America’s major metros with declines from their recent all-time peaks. What’s remarkable is the gigantic range of the pullbacks from region to region, and how the biggest losers are due to keep falling fast, while the metros that so far have taken the most modest hits should face only relatively small retreats from their pinnacles by the close of 2023.
That’s the evidence from a report just issued by the American Enterprise Institute’s Housing Center. Each month, the AEI measures the total change in home prices in 58 markets from their previous summits. The new chart shows that 45 of those cities crested to cap a synchronized spiral between April and June, though a handful peaked later, including Miami and North Port in July, and Greenville, Charleston and Cincinnati in September. For the first time in October, every one of the 58 markets registered a fall from their high points, ranging from -12.9% in San Jose to -0.5% in Memphis.
The West takes the biggest pounding
The October numbers highlight a continuation of the most striking trend: the sharp pullbacks in the western cities. Indeed, of the fifteen metros showing the largest shrinkage, the metro farthest east is Austin. Posting the second steepest slide behind San Jose is San Francisco (-12.3%), followed by Seattle (-10.9%), Las Vegas (-9.4), Phoenix (-9.3%), San Diego (-9.2%), Sacramento (-8.7%), Austin (-8.5%), and Denver (-8.1%). Portland, Salt Lake City, Los Angeles, Boise and Colorado Springs have all retreated between 7.0% and 7.3% from their peaks notched just a few months ago.
These western markets—especially those in California—typically suffer from super-strict zoning laws that artificially restrict new building and hence severely limit the supply of housing. Those bottlenecks lifted prices gigantically over the past decade. From the start of 2012, Salt Lake City gained 159%, San Jose, San Francisco and San Diego between 163% and 168%, Austin 170%, Seattle 180%, and Riverside 194%. The champ was once sleepy Boise at 230%.
Boise boomed because it offered much more affordable housing than on the Golden State coasts, and hence attracted a wave of Californians who would work from anywhere in the post-COVID economy. But that mass migration has rendered its once-bargain housing far less attractive. The outflow from the likes of San Francisco and Seattle also greatly swelled prices in such formerly low-cost markets as Phoenix, Las Vegas, and Tucson. But now, a big swath of America’s western tier is pricing tens of millions of potential buyers out of the market, especially now that 30-year mortgage rates are hovering at nearly 7%, their highest level in decades. The upshot: A collapse in demand that’s sent values tumbling 7% to 13% in just a couple of months. “The places with the fastest growing prices in recent years are the ones correcting the most, and they’re all in the west,” says Ed Pinto, the director of the AEI Housing Institute.
Florida and Midwest are showing relatively small decreases
“What impresses me most is that while all markets have declined, the range of the declines is huge,” Pinto told me in a phone interview. He notes that the cities faring best are a mix that fall into two categories. The first are industrial metros in the Midwest and east that missed the boom. For example, Pittsburgh and Milwaukee gained 75% and 94% respectively since the start of 2012, less than half the increases in the hottest west coast locales. So their residents typically don’t flee in search of cheaper housing. Pittsburgh’s dropped just 3.5% from its peak, and Milwaukee’s down 1.7%. Memphis, St. Louis, Omaha, Philadelphia, Chicago and New York have all slid less than 2% of their respective high water marks. “The cities in the Midwest and Northeast are correcting the least,” says Pinto. “Their values didn’t rise nearly as much as in the western metros, so they don’t have nearly as far to fall.”
The second group encompasses sunbelt metros where prices have jumped just as sharply as on the west coast, but that are proving far more resilient than a San Jose or Seattle. The phenomenon is especially strong in the Sunshine State. Over the past ten years, the average house in the North Port market that includes Sarasota has waxed by 199%, while the Cape Coral homeowners gained 203%, nearly as much as Boise. Such Florida hotspots as Deltona and Orlando have registered comparable increases. Yet those metros have suffered only a fraction of the damage in the western markets. Of the group, Cape Coral had the largest fall at -3.5%, while Deltona, North Port and Orlando are down between 1.6% and 0.6%. Pinto points out that the Florida markets are still benefiting from super tailwinds, notably the exodus of buyers from the midwest and East Coast who can enjoy the sunshine while working from home, and prices that despite the big run-up, remain highly affordable versus the Western and Northeast metros. For example, the median sales prices in Q2 stood at $385,000 in Cape Coral and $400,000 in Orlando, highly attractive to families searching the ads in New York or Denver.
Where will housing prices go from here?
Pinto predicts that we’ll see a continuation of the present trajectory through the end of 2023—the West Coast markets will keep dropping rapidly, and the still relatively affordable sunbelt metros will suffer relatively small declines from their record highs. “In markets such as San Jose, San Francisco and Seattle, you could see a total decline from the spring peaks of 30%,” says Pinto. “That means another 15% or more from the decreases they’ve experienced through October.” On the other hand, he believes that the combination of continued strong population growth and affordable prices, sustained by strong levels of new construction versus the West Coast markets, will keep future total declines in the mid-single digits. “I see decreases of maybe 5% to 7% in markets such as North Port, Orlando, and many affordable Sunbelt markets,” he says.
As for the metros of the industrial Midwest and Northeast that are so far displaying only small declines, and never boomed in the first place, Pinto says that their housing values are highly dependent on the course of the overall economy. “If a recession kicks in unemployment will go up in a Memphis, Chicago or St. Louis,” he says. “Then their price declines will accelerate. But those places are still relatively affordable. If unemployment stays low, we’ll see relatively small total decreases from their peaks, along the lines of what we’ll see in the sunbelt markets benefiting from all the in-migration.”
Put simply, we’re witnessing a tale of three markets, the overpriced, extremely vulnerable West Coast from where people are fleeing, the Sunbelt that’s boomed but whose affordability provides good protection, and the Midwest and Northeast that didn’t join the joy ride, but whose fortunes will closely track the trend in employment. “I expect that the immense variability we’ve seen from region to region to continue,” Pinto concludes. The lesson from Pinto’s analysis is that we don’t have to see a steep fall everywhere where prices soared, because in many of those places, notably much of Florida and the Carolinas, homes remain a good deal for the natives and folks from the pricier regions. Keep in mind that the flexibility to live where housing’s most affordable and still keep your California or New York job has transformed the market. But in the West where the boom pushed homes beyond the reach of the broad swath of potential buyers, we’ll see jaw-dropping drops. And the already steep declines in October are just the beginning.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Edward Pintohttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngEdward Pinto2022-12-07 15:07:322022-12-07 15:21:51Housing’s Stunning Downfall in One Chart: Prices Have Plunged in 51 of These 60 Cities
New York City Mayor Eric Adams announced he is instituting involuntary hospitalization for homeless people deemed to be mentally ill and in crisis. It’s déjà vu all over again. Emptying the mental hospitals is arguably what created the homeless problem in the first place. The thinking at the time was that civil liberties are paramount – homeless people aren’t criminals and you can’t keep them locked up in psych wards. The counter-argument is that people who are not in their right mind can’t fend for themselves and create social problems when left to their own devices on the streets. Involuntary hospitalization is more humane than what is occurring now. The mentally ill now make up about a third of the homeless population in the United States.
I’ve seen all kinds of solutions to homelessness tried over the last 40 years, but nobody has solved the riddle. The ideas have ranged from the intriguing to the truly insane. Washington, D.C. opened city homeless shelters with a capped number of beds back in the 1980s. I asked a D.C. government official at the time if this was rationing and he dissembled. Fast forward to today and you find big homeless encampments in D.C. downtown parks and across from Union Station, so the homeless shelter approach clearly didn’t solve the problem. As for encampments elsewhere, some areas allow camping anywhere as a point of pride, while others confine encampments to designated areas. The worst idea of this lot is to allow the homeless to camp in your front yard with impunity, as in Illinois after the first of the year, but homeowners fled Portland after it was allowed there.
Democrat-controlled San Francisco passed a new tax in 2018 to end homelessness for all time. Spending on the homeless is up 400 percent but there are more homeless than ever in San Francisco and the conditions in which they live are deteriorating. Rat-infested hotels – that’s the solution the Democrats came up with. The police no longer respond to calls about stolen packages, break-ins, and other problems caused by the homeless.
Another idea is to provide free permanent housing for the homeless, but the result in Los Angeles was one-bedroom apartments costing $700,000 apiece and corruption. Meanwhile, the number of homeless people on the street is up 41 percent. The idea also doesn’t seem to be working in Washington, D.C. where the city is placing homeless people in upscale apartment buildings. It only takes one homeless person to create chaos and ruin an entire building, I heard one landlord say.
Another idea is to connect the homeless to lots of social services, like drug treatment and job training. But the most intriguing idea I’ve heard comes from philanthropists who created an entire village, I forget where, in which the homeless can find their dignity by having a role to play in a real community.
But none of these ideas address mental illness, which is one-third of the problem. Critics are already pounding away at New York City’s new involuntary hospitalization policy, but the city defends it, saying it will connect mentally ill homeless people with the psychiatric treatment they need. Some critics say the city doesn’t have enough crisis centers or other capacity to deliver the mental health services required. But involuntary hospitalization is only one new policy taking effect. The city is also going the permanent housing route by cracking down on landlords who refuse to take homeless people with government housing vouchers.
So there doesn’t seem to be a silver bullet that will solve the problem in all cases. I haven’t heard the idea expressed yet that all the approaches have some merit, that triage should occur and a custom solution built for each homeless individual. I also haven’t heard anything about family and friends being brought into the process. Government isn’t the answer to everything.
Florida’s Chief Financial Officer Jimmy Patronis announced Thursday that the state will begin pulling over $2 billion in assets from large investment manager BlackRock because of the firm’s environmentally and socially motivated investing standards.
Patronis said that BlackRock is choosing to use its money to pursue its ideology rather than secure profits for its clients, according to a press release. Florida’s State Treasury will begin to remove roughly $1.43 billion worth of long-term securities from BlackRock’s control as well as approximately $600 million worth of short-term investments managed by the firm.
“Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” Patronis said, according to the press release. “It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do.”
The asset manager aims to push the world towards producing “net zero” emissions by 2050 and sees climate change as a severe financial risk, according to BlackRock CEO Larry Fink’s 2022 letter to executives. In August, 19 Republican attorneys general accused BlackRock of violating its duty to make money for its clients by allegedly boycotting fossil fuel companies.
Patronis claimed that BlackRock, which manages $8 trillion in assets, has used environmental, social and corporate governance (ESG) investing practices to decide which companies receive investment as well as influence societal outcomes in an “undemocratic” manner. The Florida CFO stated that he cannot trust BlackRock with the state’s money as he doubts the firm’s dedication to seeking a return on investment.
“We are surprised by the Florida CFO’s decision given the strong returns BlackRock has delivered to Florida taxpayers over the last five years,” BlackRock said in a statement provided to the Daily Caller News Foundation. “Neither the CFO nor his staff have raised any performance concerns.”
Florida will have divested all its assets from BlackRock by the beginning of 2023 and transfer those assets to other asset managers. Missouri Treasurer Scott Fitzpatrick withdrew $500 million worth of pension funds from BlackRock’s management on Oct. 18, arguing that the firm uses its control of pension funds to push a “left-wing” agenda.
“We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens,” BlackRock stated. “Fiduciaries should always value performance over politics.”
The Florida CFO’s office did not immediately respond to the DCNF’s request for comment.
Americans are spending their Christmas money trying to buy food and fuel. And it’s going to get worse. Until we reform our corrupt and broken election system, we will remain under the boot of party of destruction and treason.
At Times Square in New York City, which was cloudy with occasional light rain, employees were seen waiting inside stores for crowds that so far had not arrived.
Outside the American Dream mall in East Rutherford, New Jersey, there were no lines outside stores. A ToysRUS employee was seen walking around the mall handing out flyers with a list of the Black Friday door busters.
Around 10:30am at Crossgates Mall in Albany, New York, the ultra low-cost brands and the higher-end buzzy retailers had the most foot traffic, while the middle-market stores were desolate.
Gap Inc.-owned Old Navy, which was offering 60% off most items, had a line so long that some shoppers turned around as soon as they entered the store. Athleisure favorite Lululemon Inc., which had only a few racks of discounted merchandise, and American Eagle Outfitters Inc.-owned Aerie, a popular intimates brand among Gen Z shoppers, also drew big crowds.
Meanwhile, stores like Banana Republic, Macy’s and Urban Outfitters had no lines at all, and only a handful of shoppers.
Overall, the National Retail Federation has forecast that retail sales will be up six to eight percent this year compared with last year. That is a big slowdown from last year’s 13.5 percent increase and the 9.3 percent rise in 2020. After adjusting for inflation, sales may actually be down. The Consumer Price Index is up 7.7 percent compared with a year ago.
November saw a significant decline in consumer sentiment, according to the University of Michigan’s survey. The index of consumer sentiment fell five percent below the October reading, reversing about one-third of the gain since the historic low in June. The gauge of current conditions dropped by 10.4 percent.
A reader of ours (H/T LC) sent us a video done by ColdFusion. LC wrote,
If you have not watched this video, do take the time to watch it, I don’t guarantee the accuracy, but I will guarantee you will not turn it off. What a boring life we lead, but, I can sleep at night and they probably can too, because they all are sociopaths.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Dr. Rich Swierhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngDr. Rich Swier2022-11-27 08:41:172022-12-13 05:27:19VIDEO: The FTX Disaster is Deeper Than you Think by ColdFusion
Sam Bankman-Fried, unlike James Taggart, is not an idiot. He knew his altruism was phony.
The financial collapse of the crypto exchange FTX was brutal and swift. Almost overnight, its CEO Sam Bankman-Fried saw his $16 billion fortune wiped out.
SBF, as he’s popularly known, managed to fool almost the entire world—though not quite everyone.
In hindsight, it’s not hard to see the red flags at FTX. There was no board of directors. Bankman-Fried couldn’t answer simple questions about his funding. The executive leadership was shady and there was the whole “cabal of roommates” in the Bahamas.
One thing that hasn’t gotten enough attention, however, is SBF’s philosophy of “effective altruism,” a social movement that rejects self-interest and instead focuses on “how to benefit others as much as possible.”
Many people will no doubt applaud SBF for his philosophy. Putting others before oneself is considered by many to be not just a virtue but the virtue, and it could help explain Bankman-Fried’s meteoric rise and celebrity. Legacy media swooned over SBF’s apparent selflessness. Story after story after story gushed over the crypto altruist who wanted to give his wealth away—even as he lived in a $40 million penthouse.
Bankman-Fried clearly liked to talk about his altruism, which many see as a clear and obvious virtue. Or is it?
‘Do Not Confuse Altruism With Kindness’
Ayn Rand famously didn’t see altruism as a virtue; she saw it as a sinister force.
“Do not confuse altruism with kindness, good will or respect for the rights of others,” Rand wrote. “These are not primaries, but consequences, which, in fact, altruism makes impossible.”
Now, I’m not an Objectivist. I actually celebrate giving and see charity as part of my Christian calling. But I think Rand is on to something. While I don’t believe “selfishness is a virtue” or “that greed is good,” I do believe in rational self-interest, the idea that it’s both normal and prudent for humans to advance their own interests in their economic decisions.
The idea of rational self-interest is central to capitalism and was famously articulated by Adam Smith in The Wealth of Nations.
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest,” Smith wrote. “We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities but of their advantages.”
Smith, like myself, didn’t see charity as a sin or mere foolishness. But he clearly understood that humans are naturally self-interested creatures and that this instinct is not actually detrimental to human flourishing, but a key to it. This is the miracle of a market economy, which leverages self-interest through trade and voluntary action to improve everyone’s standard of living.
Now, contrast this sentiment with Sam Bankman-Fried, who said he was bailing out digital assets not because he saw an opportunity but because he felt it was the right thing to do.
“It’s not fair to customers,” SBF said on CNBC’s Squawk Box.
Or consider what Bankman-Fried told an Institute of International Finance audience in August.
“It’s okay to do a deal that is moderately bad, in bailing out a place,” SBF said.
Purchasing failing companies to protect their customers seems like a dubious business strategy to me, and it was one of the things that caught the attention of seasoned traders, who began to raise questions about FTX. Those traders turned out to be right. FTX, which recently had a valuation of $32 billion, was massively overleveraged, and when rival crypto exchange Binance announced it was offloading hundreds of millions of dollars of FTT (FTX’s token), a run on funds ensued.
But it’s worth focusing on Bankman-Fried’s rhetoric a little more, because it occurred to me it sounds a little like a character in Atlas Shrugged.
‘Material Greed Isn’t Everything’
James Taggart, president of Taggart Transcontinental, is the most prominent villain in Ayn Rand’s magnum opus. He talks endlessly about serving mankind and sneers at those who are concerned with crass profits.
“Material greed isn’t everything. There are non-material ideals to consider,” Taggart lectures his sister Dagny, the hero of the story.
Taggart’s smug thinking is what prompts him to take on his own bad deal, a massive expansion of Taggart Transcontinental into Mexico. He confesses to “a feeling of shame” that he owns a railroad, but “the Mexican people have nothing but one or two inadequate lines.”
“The Mexicans, it seems to me, are a very diligent people, crushed by their primitive economy. How can they become industrialized if nobody lends them a hand? When considering an investment, we should, in my opinion, take a chance on human beings, rather than on purely material factors.”
Taggart gets his way and—like FTX—his San Sebastian Line is a disaster. The lesson in both cases is clear: beware business deals based on altruism.
SBF, like James Taggart, spoke often about serving humanity. His concern with climate change, global pandemics, and progressive causes earned him laurels and fawning press. Even after the collapse of FTX, newspapers are discussing his noble efforts “to prevent another pandemic.” But there is also a notable difference between Rand’s petulant railroad baron and Bankman-Fried.
While James Taggart is a mean, surly, unscrupulous man, his altruism seems somewhat genuine; either he’s too stupid to see his good intentions will bear bad fruit or he lacks the self awareness to realize his “altruistic” ideas are not as pure as he believes. (It’s important to understand that even though Taggart spurns selfishness and greed, he is clearly a selfish and greedy person.)
With Sam Bankman-Fried, this appears less true.
In an exchange with Vox reporter Kelsey Piper, SBF’s altruistic philosophy came up. Piper noted he was “really good at talking about ethics” publicly. His response is telling.
“I had to be…it’s what reputations are made of, to some extent,” SBF answered. “I feel bad for those who get [expletive] by it…by this dumb game we woke westerners play where we say the right shiboleths [sic] and everyone likes us.”
From this response, it’s clear Bankman-Fried knew he was a poser. His advocacy was just part of the new game of stakeholder capitalism. (Interestingly, SBF actually refers to ESG as a perversion.)
Sam Bankman-Fried, unlike James Taggart, is not an idiot. He knew what he was doing. I don’t know if this makes SBF more of a villain than Taggart or not.
But it certainly makes Bankman-Fried’s downfall all the more tragic.
Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.
http://drrich.wpengine.com/wp-content/uploads/logo_264x69.png00Foundation for Economic Education (FEE)http://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngFoundation for Economic Education (FEE)2022-11-23 13:44:572022-11-23 13:45:41Why Sam Bankman-Fried Sounded so Much Like a Rand Villain