Yves here. This is so sad and appears to have gone under the radar due to the impeachment hearings and Democratic party dominating the news yesterday. So many newspapers disappearing or becoming pale shadows of their former selves.

By Andrea Germanos, staff writer. Originally published at Common Dreams

 (Photo: Rachel Kramer/flickr/cc)

Journalists sounded the alarm Wednesday after Tribune Publishing’s largest shareholder sold his stake in the company to a hedge fund that’s been described as “a destroyer of newspapers.”

In a joint statement, the newspaper unions of Tribune Publishing—representing workers at papers including the Chicago Tribune and Baltimore Sun—said that the news of Alden Global Capital purchasing Michael Ferro’s 25.2% stake in the company should not be seen as “simply another change in stock ownership” because “Alden is not a company that invests in newspapers so they succeed.”

“They buy into newspaper businesses with the express purpose of harvesting out huge profits—well above industry standards—and slashing staff and burning resources,” the statement read.

“We know we are faced with the very real threat that Alden is looking to bleed its next chain of newspapers dry,” it continued.

Our joint statement. #savelocalnews @TidewaterGuild @CTGuild @hartfordcourant @ChesapeakeGuild @baltsunguild @news_guild @gaufre @dfmworkers @darrendcarroll @HellerJake pic.twitter.com/XrBuQu1fLa

— Jennifer W. Sheehan 😷 (@jenwsheehan) November 20, 2019

In a 2018 column, Bloomberg‘s Joe Nocera wrote that Alden was a “notorious as a destroyer of newspapers,” and that, under the direction of President Heath Freeman, the company carries out “layoffs [that] aren’t just painful. They are savage.”

Chicago Tribune Guild member Gregory Pratt commented on Alden’s history of slashing newsrooms, writing in a tweet that “Even in an industry flooded with bad owners, this is awful news. Alden gutted the Denver Post, among many other papers.”

Former Tribune reporter Mark Caro wrote in a tweet that “The Tribune parent company keeps going from one piece-of-garbage owner to another.”

News industry analyst Ken Doctor wrote Wednesday of Ferro:

To his would-be peers in the industry, frequent targets of his disdain, he’s departing appropriately enough, with a signature fuck-you. Who better to sell his Tribune stake—the one his group of Chicago investors had bought at bargain-basement prices, and which, ridiculously, gave him effective control of Tribune—to than the only man in the industry more reviled: Freeman, whose Alden has become the face of bloodless strip-mining of American newspapers and their communities.”

“If you subscribe to Capital Gazette or any of the other Tribune papers, let me introduce you to the vultures your money will now benefit,” tweeted reporter Danielle Ohl, who shared a link to a 2018 NiemanLab article  in which Doctor mused that “Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon.”

If you subscribe to @capgaznews or any of the other Tribune papers, let me introduce you to the vultures your money will now benefit. https://t.co/i5k5m4LDeD

— Danielle Ohl (@DTOhl) November 20, 2019

The fact that the purchase occurred the same day as Gatehouse completed its takeover of publisher Gannett to become the country’s largest newspaper company added to the chorus of concern.

The New York Times reported Tuesday:

In August, Gannett, the parent company of USA Today and more than 100 other dailies, and New Media Investment Group, the owner of the newspaper chain GateHouse Media, announced their intention to join forces. Over the next two months, the plan breezed through the regulatory process, winning approvals from the Justice Department and the European Union. Last week, shareholders at the two companies voted yea. And now one in five daily papers in the United States has the same owner, under the Gannett name, according to figures provided by researchers at the University of North Carolina.

The combined company will have its headquarters in Gannett’s home base, McLean, Va., and will be led by Michael E. Reed, the New Media chief executive since 2006. The job puts him in charge of more than 260 dailies—from small papers like The Tuscaloosa News in Alabama to big ones like The Detroit Free Press.

“Don’t overlook that today was exceptionally terrible for local newspapers,” CBS Newsproducer Jason Silverstein tweeted late Tuesday. “Gannett and Gatehouse merge. Majority stake in Tribune Publishing is sold to a hedge fund notorious for slashing newsrooms. This is a one-day crisis point.”

This July MIB celebrated its 5-year anniversary; the 300^th episode should role out sometimes next month.

One of the questions I seem to be getting all the time is this: What are your favorite episodes? What is your top 10 list?

That is a really tough question, choosing just 10 is a nearly impossible task. I could probably create 4 or 5 lists of 10 and each one is as fantastic as any of the others.

Instead, I will pull 10 of the better conversations we have had that are unique, and representative of what I hope to accomplish with the show. I left some of the early ones out – Jeff Gundlach, Arthur Levitt, Shelia Bair – because I was raw (read terrible) in the beginning. Do something for 2000 hours and 300X and eventually you suck much less.

Here is my short list, top 10 MIBs:

Masters in Business Top 10 List
10. Richard Barton, Microsoft/Expedia/Zillow/Glassdoor
9. Bill Gross, PIMCO
8. John Pizzarelli, Jazz Guitarist
7. Howard Marks, Oaktree
6. Cliff Asness, AQR
5. Robert Cialdini, Influence
4. Kenneth Feinberg, Mediator
3. Scott Galloway, the Four
2. Marc Andreessen, A16Z
1. Ray Dalio, Bridgewater

A short background story on each of these 10 shows is below.

10. Richard Barton, Microsoft/Expedia/Zillow/Glassdoor: He founded Expedia when he was a Microsoft engineer, launched Zillow and Glassdoor and Artsy from start-ups; he has been a CEO at many firms; is a partner at VC Benchmark Capital, and is on the Netflix board of directors. Few people understand both the technology and business side as well as Barton. Just a tour de force delightful discussion about tech.

9. Bill Gross, PIMCO (Part I and Part II): Could be the interview that put MIB on the map. Following my column imagining Gross’ farewell letter, an unnamed PIMCO insider sent me the full roster of PIMCO bonuses, which resulted in this column. Gross called me to complain, and one thing led to another, and the result was a 2 hour plus discussion. I had promised his people I would get him to Barron’s Roundtable on time, and we literally could not get him out of the office.

8. John Pizzarelli, Jazz Guitarist: We had just seen Pizzarelli do a 2-hour show at the Tilles Center, and afterwards, people were lining up to have him sign CDs. When I snorted at such silly fandom, Mrs. Big Picture said, “Yeah, its not like these people have a podcast/radio show.” Suitably chastened, I got online to pitch him MiB. He got it right away, showed up with his guitar, and was the first of several guitarists to appear on the show (Lawrence Juber, Steve Miller, Don Henley)

7. Howard Marks, Oaktree: One of the most spectacular track records in distressed fixed income, and a deep thinker on all things investing. I somehow became a Howard Marks whisperer, doing live Q&A in several CFA events (Seattle, Toronto, elsewhere). I understand his philosophy and track record and have a good feel for his thinking, and I can nudge him in the right direction. He did a second MIB and then was one of our earliest guests for MIB Live.

6. Cliff Asness, AQR: I had been chasing Cliff to come on the show for months to no avail. After the Bill Gross interview, Cliff reached out, saying, “I guess I have to do this now.” Our wives were in the control room watching our interview, and we ended after 90 minutes when the two of them got bored (but for that, we would have gone much longer). My Asness bonus is he has spent the subsequent 4 years busting my chops (occasionally with good cause) on Twitter.

5. Robert Cialdini, Influence: I could have used any of the behaviorists here – Kahneman, Thaler, Shiller, Gilovich, etc. but Cialdini was the book on my shelf I needed to read for the longest time. He was a giant upside surprise and the conversation was amazing.

4. Kenneth Feinberg, Special Master: Before we recorded this episode, we had a pretty intense debate as to whether it was appropriate or not. As it turned out, it was one of the most intensely moving conversations, filled with horrible and wonderful details about the survivors of 9/11 and the families of those who perished. Just amazing.

3. Scott Galloway, the Four The first (of four) interviews (two, three, four) with NYU Stern School of Business prof and entrepreneur is always fire. There is no one in academia like him. Bonus: His own podcast Pivot with Kara Swisher is great fun.

2. Marc Andreessen, A16Z As a native New Yorker, I work hard to speak slowly. Andreessen tosses that idea out and speaks so rapidly, throwing out so many ideas at once that it overwhelms the listener with the sheer force of intellect. Those of you who listen at 2X or 1.5X good luck with this one! Just a firehose of great insight and information.

1. Ray Dalio, Bridgewater

Previously:
MIB: The Venture Capitalists

MIB: Psychologists & Behavioral Economists

By Lambert Strether of Corrente.

Trade

“The U.S. portion of the Huawei Technologies Co. supply chain may be reopening. The Trump administration will allow some U.S. suppliers to resume shipping to the Chinese telecom giant easing export restrictions while U.S. negotiators struggle to wrap up the first stage of a trade deal” [Wall Street Journal]. “Last year U.S. semiconductor makers sent $44 billion in goods to overseas buyers, making it the fourth largest U.S. export. The next few months will determine how much damage Huawei’s blacklisting did to the industry’s supply chain. Huawei has said it found other suppliers to make up for the loss of U.S. chips and other components.”

“Trump considering whether Apple should be exempt from China tariffs” [Reuters]. “Apple announced in September it would make its new Mac Pro computers in Austin. The announcement came days after U.S. trade regulators approved 10 out of 15 requests for tariff exemptions filed by Apple amid a broader reprieve on levies on computer parts. Earlier this month, Apple also asked the Trump administration to waive tariffs on Chinese-made Apple Watches, iPhone components and other consumer products. Trump has made boosting the U.S. manufacturing sector one of the goals of his presidency, taking to Twitter to pressure U.S. companies into keeping jobs at home.”

Politics

“But what is government itself, but the greatest of all reflections on human nature?” –James Madison, Federalist 51

“They had one weapon left and both knew it: treachery.” –Frank Herbert, Dune

Here is a second counter for the Iowa Caucus, which is obviously just around the corner:

* * *

2020

Alert reader dk (not to be confused with DK) is in the process of developing the following interactive chart.

Here is (are) the latest Dem Primary Polling as of 11/21/2019, 10:00 AM EST. Biden leads, Sanders strong second, Warren third, Buttigieg third tier.

Here, the latest national results:

In Georgia, Survey USA has Biden leading, Sanders a strong second, Warren third 11/21/2019, 10:00 AM EST:

Here are the Georgia results:

I think dk has started a really neat project, and in the near future we’ll seek your feedback (within reason) for the tool “live.”

* * *

Buttigieg (D)(1): “Why Buttigieg’s Shadowy Consultant Past at McKinsey Matters” [Vice]. “[W]hen pressed about the McKinsey ‘experience’ that has evidently helped formed Mayor Pete’s thinking, his campaign defers to the non-disclosure agreements by which it says he is still covered.” • So Buttigieg should ask to be released from the NDA. Good PR for McKinsey, right? What Buttigieg said in 2010: “I did math for a living around economics—the economics of energy and the economics of stabilizing very tough places around the world in order to make sure there’s less violence there.” If you leave out the self-serving stuff, it sounds a lot like Confessions of an Economic Hit Man.

UPDATE Buttigieg (D)(2): “Is Pete Buttigieg’s climate adviser a fossil fuel shill?” [Heated World]. “The drama between Victor and climate activists is symbolic of a larger conflict emerging in the climate world, between those pushing for radical societal change via a Green New Deal and those who worry that such a push will ultimately be unsuccessful because of the powerful forces that would rather see the planet burn than accept such a shift.” • Well, both sides have a point. (Make up your own minds on the headline.)

UPDATE Buttigieg (D)(3): “As President, Pete Buttigieg Wants To Give 25 Percent Of Federal Contracts To Minorities. As Mayor, He Gave 3 Percent.” [The Intercept]. “ONE OF THE main tenets of Pete Buttigieg’s plan to address racial inequality if he becomes president is a proposal to increase the number of federal contracting dollars going to women- and minority-owned businesses to 25 percent. But in South Bend, Indiana, where he has been mayor since 2012, less than 3 percent of city business has gone to minority- and women-owned businesses in recent years, according to annual audits conducted by the city.” • I’m sure everything will be easier at the Federal level.

Trump (R)(1): “Tim Cook Appears Alongside Trump in Re-Election Campaign Ad Shot in Mac Pro Plant in Austin” [Daring Fireball]. “This is how Apple chose to unveil the packaging for the Mac Pro — in a poorly-shot overexposed propaganda video by the White House, scored with bombastic music that sounds like it came from an SNL parody of a Michael Bay film…. A low moment in Apple’s proud history, and a sadly iconic moment for Tim Cook. I hope avoiding those tariffs is worth it.” • Lower than getting rid of the MagSafe connector? I don’t think so.

* * *

The Debates

“Watch the full fifth Democratic presidential debate” (video) [WaPo]. • If you must….

“Read: Democratic debate transcript, November 20, 2019” [NBC] • Ditto.

* * *

It’s hard to have a hot take on something so lukewarm. Nevertheless:

“The unbearable persistence of Joe Biden” [The Week]. “The most noteworthy event at Wednesday night’s Democratic debate in Atlanta was something that didn’t happen: Nobody did anything to change the fact that former Vice President Joe Biden is the seemingly unshakable front-runner for the nomination of his party. It’s easy to lose sight of how consistent the race has been since Biden announced his candidacy last spring…. The former vice president was at 32 percent on June 26, and today he sits at … 30.7 percent. … The need to become The One Who Can Step Into Biden’s Shoes, combined with Buttigieg catapulting himself into the lead in the first two states to vote, set up what many commentators expected to be a tense evening, with several candidates gunning for Mayor Pete. It never happened. Aside from one testy exchange with Rep. Tulsi Gabbard toward the end of the debate, Buttigieg kept his powder dry, and none of the others did much to touch him. It was a civil and somewhat bland night overall, with each candidate working to stand out individually while avoiding nasty confrontations.”

“Last Night’s Democratic Debate Was Really Bad” [Jacobin]. “While a few candidates undoubtedly faced critical moments, MSNBC’s moderators (true to form) seemed to reserve the most negatively framed questions for Sanders — the Vermont senator having to field a range of queries that included: “Is President Obama wrong?”, “They’ve chanted ‘Lock Him [Trump] Up’ at a recent World Series game in Washington [and] at least two of your campaign events recently. Senator, should Democrats discourage this? Or are you okay with it?”, and “Would you cut a deal with the Taliban to end the war even if it means the collapse of the Afghan government that America has long supported?” For good measure, the network’s coverage was bracketed at each end by substance-free anti-Sanders barrages from some of its talking heads.” • I’m shocked.

UPDATE “The fifth Democratic primary debate showed that a cull is overdue” [The Economist]. “In reality, just four candidates dominate the Democratic race. Judged by polling data, fundraising, betting odds, attention in the press and so on, that pack has looked unchanging for months. Joe Biden, despite not raising much money of late, and Elizabeth Warren remain the front-runners…. Bernie Sanders, despite his heart attack, preserves a solid core of support. He said nothing new that would expand his appeal beyond the party’s far left. Pete Buttigieg, by far the youngest of the Gang of Four, is also holding his own.” • No need for a cull if you want a brokered convention, though.

UPDATE “They Don’t Believe Buttigieg Will Be the Nominee” [Politico]. “[T]he expected did not happen: Mayor Pete wasn’t the center of attention despite his upward trend in some polls… Maybe his opponents were afraid their attacks would raise his profile further. Just as likely, they are taking the long view, and they don’t believe Buttigieg will be the nominee. It’s hard to see how he can solve his biggest problem—a near-total lack of appeal among African Americans and Hispanics. Minorities are a big chunk of the electorate in South Carolina, Nevada, many of the Super Tuesday states and so on.”

Speaking time:

The fifth Democratic debate has wrapped up!

Warren spoke the most, followed by Buttigieg. Yang got the least speaking time. https://t.co/hThjmRLpvy pic.twitter.com/fbld4slcjZ

— The Washington Post (@washingtonpost) November 21, 2019

Shouldn’t the speaking times be equal?

And “Top 2020 Democrats played it safe at the Atlanta debate” [NBC] and “Beating Trump, rather than beating up on each other, was focus of fifth Democratic debate” [WaPo] and “Here’s the real Democratic debate: Which one can defeat Donald Trump?” [USA Today]. • It’s like they all decided to write the same story…

Our Famously Free Press

What again?

Hey @TulsiGabbard look at @MSNBC lie about this. They took your literal words and said @PeteButtigieg said them. Sure they can correct it but the damage is done. Don’t tell me it’s not on purpose. #manufacturingconsent pic.twitter.com/7krLIlbevk

— Fiorella Isabel🌹 (@Fiorella_im) November 21, 2019

Last debate, WaPo gave some of Sanders’ best lines to Warren. Why are the “mistakes” always one way?

Impeachment

“Do Americans Support Impeaching Trump?” (charts) [FiveThirtyEight]. 80.3% Democrats, 41.0% Independents, 12.2% Republicans.

“You Can’t Ignore Politics in Impeachment” [National Review]. “The simple reality of American politics and the Framers’ constitutional design is that presidents do not get removed from office unless and until there is a strong bipartisan majority of voters that wants them to be. The politics always matters.”

UPDATE “Impeachment inquiry: Trump seemed vulnerable. It didn’t last” [CBC]. “For the rest of the day, Republican members of the House intelligence committee pounded back at the witness and exposed vulnerabilities in his testimony. Sondland granted them an opening. He insisted he’d only drawn his conclusions about a quid pro quo based on his own logical reading of the situation, and not on anything he was actually told by Trump.” • This is a cool-minded, non-hysterical summary — thank you, Canada! — and well worth a read. The weird thing was that the yammering died down on the Twitter by late afternoon, and didn’t pick up again. I’m all for reasoning, but I don’t see a prima facie case that The Blob is any better at it than the Republicans, who set a very low bar.

Beat sweetener:

How tough is Fiona Hill? When she was 11, a boy in her class set her pigtail on fire while she was taking a test. She put out the fire with her hands and finished the test. My profile of today’s star impeachment witness: https://t.co/hFDSQmBm6R

— Sheryl Gay Stolberg (@SherylNYT) November 21, 2019

No mention, oddly, or not, of LaRouche.

Health Care

“Fact checking claims from the Democratic debate” [Boston Globe]. “Former vice president Joe Biden: “The fact is the vast majority of Democrats do not support Medicare for All.” THE FACTS: That statement is at odds with a Kaiser Family Foundation poll out this week. It found that 77 percent of Democrats support Medicare for All. Even more — 88 percent — support a ‘public option’ proposal such as the one Biden advocates.”

“Democratic naysayers are wrong on Medicare for All” [CNN]. “(CNN)The American political debate over health care is absurd. Americans pay twice as much as any other nation for health care, and then are told daily that they “can’t afford” to switch to a lower-cost system very similar to those of Canada and Europe. If President Donald Trump and the plutocratic Republican party were the only ones carrying this ridiculous message, it would be understandable. Yet this message is also coming from media pundits aligned with the Democratic Party and the most conservative wing of the party. Let’s be clear on the central point. Medicare for All, as first proposed by Bernie Sanders and endorsed by Elizabeth Warren, is affordable precisely because it is cheaper, much cheaper, than the current system…. In other countries, the government sets delivery prices and typically pays the health bills through the budget. In the US, the monopolists set the prices.” • For some definition of “endorse,” but yes.

“Reeling progressives meet behind closed doors after ‘Medicare for All’ barrage” [Politico]. “Now, leaders of the left — suddenly reeling after seeing the Democratic health care debate shift dramatically in their direction the past few years — are strategizing on how to retake the offensive. At a closed-door meeting Tuesday, Congressional Progressive Caucus leader Rep. Pramila Jayapal (D-Wash.) had a message for her fellow supporters of Medicare for All: Unite against the moderates and don’t fight about whether Warren’s plan is too mild compared to Sanders’.” • The issue, ffs, is not whether Warren’s “plan” is “mild.” Note this falsehood: the “plan” is a “two-stage transition plan in a nod to those concerned about upheaval in the health care system.” Warren’s “plan” is not two “stages.” It’s two bills. We’ve seen this movie before. The subtext here is that the activists are pissed, and the Beltway NGOs are telling them “we got this.”

Stats Watch

Jobless Claims, week of November 11, 2019: “The risks of marginally slower payroll growth in November as well as an incremental rise in the unemployment rate are the indications from initial unemployment claims which, in data that track the sample week of the monthly employment report, came in… higher-than-expected” [Econoday]. • Hmm.

Leading Indicators, October 2019: “The index of leading economic indicators continues to signal slowing growth going to into year end and next year” [Econoday]. “Weakness in manufacturing components has been the persistent theme in the slump with easing in labor strength also a negative factor for the index.”

Philadelphia Fed Business Outlook Survey, November 2019: “The Philadelphia Fed’s index has bolted back to the top of the regional manufacturing reports in recent months” [Econoday]. “New orders have been on a tear in this sample… Amid the recent surge in this report, some volatility in the readings may be appearing and fairly raise the question whether monthly sample sizes have been low and uneven. But at face value, this report is pointing to significant year-end acceleration for a manufacturing sector that hasn’t had a good year at all.”

Existing Home Sales, October 2019: “Favorable mortgage rates together with high levels of employment are giving housing, a sector that had been flat, a strong lift going into year end” [Econoday].

Banking: “Ghost funding and sandbagging: Wells Fargo’s sales tactics on trial” [American Banker]. “The broad outlines of the nationwide sales scandal at Wells Fargo are well known. Low-level employees, under heavy pressure to meet sales quotas, misbehaved on a massive scale. But less well understood is exactly how this pressure was transmitted through many layers of management at the bank, and how it felt to employees on the front lines. [Kathleen Fitzgerald’s] lawsuit offers a rare look into the granular details of what happened at the branch level…. ‘I did not agree with any of it, I really didn’t, but she was my boss,’ Fitzgerald testified. ‘She taught me, I learned it from her, and she learned it from her bosses, and it all trickles down.’” • And lots more.

Shipping: “Ohio logistics firm on the hook for $300,000 in lobster heist” [Freight Waves]. “Failing to thoroughly vet a subcontractor — a driver who allegedly disappeared with a pricey load of lobster — will cost an Ohio logistics company nearly $300,000. U.S. District Judge Indira Talwani ruled on Nov. 19 that Seneca Logistics Group LLC, based in Tiffin, Ohio, is on the hook for the never-recovered load after agreeing to haul it but then outsourced the job to Rapid Logistics Services Inc. A truck driver for Rapid, Ernesto Perez, allegedly stole the load of crustacean.” • Outsourcing for the win!

The Bezzle: “Hedge Funds and Private Equity Need Full Disclosure” [Barry Ritholtz, Bloomberg]. “The U.S. Securities and Exchange Commission is considering letting nonaccredited investors put money into closely held investment pools such as hedge funds, private equity and venture capital. This alone is reason to reconsider the issues of transparency and disclosure by these investment alternatives… [T]he SEC should mandate full disclosure for investment funds that accept money from public pensions, college endowments or not-for profit foundations. It also should require disclosure for funds in which the partners get a tax benefit from the carried-interest loophole, which lets them pay taxes on their earning at rates about half those on regular income.” • Ritholtz is always interesting and early; this connects to the resurgence of financial reform proposals we are seeing Democrats, well, butcher. As usual.

The Bezzle: “Local officials around the U.S. are paying more attention to how the companies in the fast-growing [food-delivery] sector charge for their services…potentially opening a rift between jurisdictions and the companies and even between the operators themselves” [Wall Street Journal]. “The dispute opens a new area of debate over how e-commerce fits into the larger tax system. Tax charges on orders can vary by company even within the same jurisdiction, and uniformity could raise costs for customers and make the companies liable for incorrect collections in the past. With fees projected to reach $10.4 billion by 2023, there are big stakes for all sides.”

Tech: “Video-editing upstart bares users’ raunchy flicks to world+dog via leaky AWS bucket” [The Register]. “Research by Noam Rotem and Ran Locar, for security biz vpnMentor, revealed that VEED.io left an AWS bucket completely unsecured and hosting what they summarised as ‘10,000s of videos’ that were accessible to anyone visiting the bucket’s URL. VEED bills itself as an online video-editing service that lets users add subtitles, text, effects and more to uploaded videos. A free tier allows this to be done for videos in 240px quality; anything better than that needs a subscription. Rotem and Locar found that one could visit the landing page hosting the videos with a web browser and theoretically look through them at one’s leisure without needing to provide login details.” • “And then dance and drink and screw because there’s nothing else to do…”

Mr. Market: “Inside the Strange, Unlikely Battle for Clever Ticker Symbols” [Marker]. “Playful tickers date back decades, most notably when Southwest Airlines first christened the space with its symbol, LUV. (The reference was to the company’s genesis at Love Field ahead of its IPO in 1977, but over time became synonymous with the brand’s folksy ethos.) But now it seems a new class of inventive ticker symbols is emerging. They run the gamut from WORK (Slack) and BYND (Beyond Meat) to GRR (investment firm Asia Tigers Fund), BDAY (children’s party supplier Celebrate Express), and WOOF (veterinarian services company VCA Antech). ‘Some people don’t care about tickers,’ says Patrick Healy, a corporate adviser who frequently deals with ticker symbols. ‘But other people lock in on it, and it’s almost like a vanity quest.’” • Indeed.

* * *

Today’s Fear & Greed Index: 70 Extreme Greed (previous close: 74, Extreme Greed) [CNN]. One week ago: 83 (Extreme Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Nov 19 at 12:52pm. Still drifting toward neutral. Now the needle is swinging toward neutral. I wonder if it’s impeachment?

The Biosphere

“LBA-ECO LC-14 Modeled Deforestation Scenarios, Amazon Basin: 2002-2050” [ORNL DAC (IE)]. Handy map (interactive at the original, so you can play with the sliders and see the projections). As of today:

“The Companies Behind the Burning of the Amazon” [Mighty Earth]. “But the incentive for the destruction comes from large-scale international meat and soy animal feed companies like JBS and Cargill, and the global brands like Stop & Shop, Costco, McDonald’s, Walmart/Asda, and Sysco that buy from them and sell to the public. It is these companies that are creating the international demand that finances the fires and deforestation.” • Bolsonaro is a particularly ugly front man.

* * *

“We Need to Talk About Peat” [Nautilus]. “Peatlands have been a repository for eons and a source of hearth fuel for thousands of years. They’ve been known as a carbon sink for about a century, certainly since the 1890s when carbon dioxide was understood to be a greenhouse gas. Peatlands cover just 3 percent of the earth’s land surface yet hold five times more carbon dioxide than forests, which cover 31 percent of the land surface. In Europe, peatlands contain five times more CO2 than forests…. Peatlands are waterlogged landscapes—from bogs to wetlands to swamps—composed of various plants. Peat is the coarse soil, which we know from our potting mixes, that makes up the surface. Because the underlying plants haven’t decayed in the watery areas, they contain huge amounts of carbon, fixed in them by photosynthesis. As a result, peatlands play an important role as carbon sinks, keeping excessive greenhouse gases out of the atmosphere.” • Well worth a read.

“Population densities predict forebrain size variation in the cleaner fish Labroides dimidiatus” [Proceedings of the Royal Society B: Biological Sciences]. “The ‘social brain hypothesis’ proposes a causal link between social complexity and either brain size or the size of key brain parts known to be involved in cognitive processing and decision-making. While previous work has focused on comparisons between species, how social complexity affects plasticity in brain morphology at the intraspecific level remains mostly unexplored. A suitable study model is the mutualist ‘cleaner’ fish Labroides dimidiatus, a species that removes ectoparasites from a variety of ‘client’ fishes in iterative social interactions. Here, we report a positive relationship between the local density of cleaners, as a proxy of both intra- and interspecific sociality, and the size of the cleaner’s brain parts suggested to be associated with cognitive functions.” • Co-operation = bigger brains?

Health Care

“The Effect of Large-scale Health Coverage Expansions in Wealthy Nations on Society-Wide Healthcare Utilization” [Adam Gaffney, Steffie Woolhandler, David Himmelstein, Journal of General Internal Medicine]. From the abstract: “We reviewed the effects of 13 universal coverage expansions in capitalist nations on physician and hospital utilization, beginning with New Zealand’s 1938 Social Security Act up through the 2010 Affordable Care Act in the USA. Almost all coverage expansions had either a small (i.e., Groves of Academe

“New Data Shows Slowdown in Growth of International Students in the U.S.” [Foreign Policy]. “The lowest growth rate in a decade could impact the bottom line for some universities.” • I’m so old I remember when universities didn’t have bottom lines. I guess it’s time to fire a few more adjuncts. Pour encourager les autres…

Guillotine Watch

“World’s Rich Are Rattled and Seeking Old-Fashioned Security” [Bloomberg]. “‘We’ve seen extraordinary demand for safe-deposit boxes ever since we started offering them in 2015, and that demand has really gone up since the late summer,’ said Ludwig Karl, a spokesman for Swiss Gold Safe Ltd., which operates high-security alpine vaults. ‘Most people say they are planning for difficult economic circumstances.’” • The rich are different…

Class Warfare

“The Characterless Opportunism of the Managerial Class” [Amber A’Lee Frost, American Affairs]. The bottom line: “The PMC can—and should—be brought to commit to its own abolition, but attempting to evangelize a class that has so much dif­ficulty even acknowledging its own existence is a futile endeavor. At this rare and fragile moment of opportunity for socialism in America, the best bet for Berniecrats is to build a strong base of workers com­mitted to social democratic reforms. The PMC will follow, as they always do; they’re the cart, not the horse.” • Perhaps longer than it needs to be.

“The Trump NLRB’s Stealth Blow Against Campus Solidarity” [OnLabor]. “The Trump NLRB is receiving comments on its proposed rule to exclude university teaching and research assistants who are also graduate students from the coverage of the National Labor Relations Act. That proposal has generated a fair amount of media coverage and teaching and research assistants across the country have been organizing to submit comments explaining to the Board how absurd it would be to declare them non-employees. But last week, without any fanfare, the Board issued a decision in Amnesty Intl. of the USA, Inc. that would mean that other campus employees (at least those without their own union contract) could be fired for coming to the aid of teaching and research assistants if the Board follows through on its threat to deny them employee status.”

There’s already so much stupid money floating about that investors don’t know where to put it. So what would an investor strike look like?

“what I see as a risk is a broad based investor strike in response to uncertainty, which is politically made” In this interview Axel Weber of UBS repeatedly used the phrase investor strike. Fascinating.https://t.co/d1pJEPihAx pic.twitter.com/Lxhds2iWdI

— Adam Tooze (@adam_tooze) November 6, 2019

News of the Wired

But why?

I added Mark Zuckerberg’s Profile Picture album to my Facebook Portal’s Superframe when users are supposed to only able to add the albums that they own

I reported this to Facebook and they don’t think this is a security vulnerability pic.twitter.com/6IsUpj8Nra

— Jane Manchun Wong (@wongmjane) October 30, 2019

* * *

Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi and coral are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (TH):

TH writes: “My favorite nursery: Roger’s Gardens in Newport Beach, CA.” By a happy coincidence, alert reader CM of Tuesday’s plant worked in a garden center!

* * *

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In September, ProPublica selectively vetted and publicized the findings of an international study by the German company Greenbone Networks which found widespread and serious deficiencies in the protection of patient medical images, like MRIs, CAT scans, and mammograms and related patient data (identifiers like name, data of birth, Social Security number) all over the world. Very few countries got a clean bill of health, and the US found to be particularly lax.

Greenbone made a second review. As a result of the report, 11 countries, including Germany, the UK, Thailand, and Venezuela, took all Picture Archiving and Communication Systems (PACS) servers offline. However, in the US, which Greenbone had classified as “ugly” in its “good, bad, and ugly” typology, got even worse. In the US, Greenbone identified 786 million exposed medical images, which is a 60% increase from when their original survey was completed, to September. Not only does the data have patient identifiers, but it can also include the reason for the test, ID cards and for members of the armed forces, military personnel IDs. This growth occurred despite some of the companies called out in the ProPublica report taking corrective action. From the latest report, which we have embedded at the end of the post:

For the most part, this data isn’t merely hackable, it’s unprotected.

This situation is bad for patients. First is the exposure to identity theft, both for financial fraud (getting credit in your name) and medical fraud (getting medical services in your name and leaving you and your insurer with the bill). Second is the possibility of vindictive use of sensitive health information. From the ProPublica story:

“Medical records are one of the most important areas for privacy because they’re so sensitive. Medical knowledge can be used against you in malicious ways: to shame people, to blackmail people,” said Cooper Quintin, a security researcher and senior staff technologist with the Electronic Frontier Foundation, a digital-rights group.

“This is so utterly irresponsible,” he said.

And at least one US official is up in arms. From an early November press release by Senator Mark Warner:

U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Intelligence Committee and co-founder of the Senate Cybersecurity Caucus, today raised concern with the U.S. Department of Health and Human Services (HHS)’s failure to act, following a mass exposure of sensitive medical images and information by health organizations. In a letter to the HHS Director of the Office for Civil Rights, Sen. Warner identified this exposure as damaging to individual and national security, as this kind of information can be used to target individuals and to spread malware across organizations.

“I am alarmed that this is happening and that your organization, with its responsibility to protect the sensitive personal medical information of the American people, has done nothing about it,” wrote Sen. Warner. “As your agency aggressively pushes to permit a wider range of parties (including those not covered by HIPAA) to have access to the sensitive health information of American patients without traditional privacy protections attaching to that information, HHS’s inattention to this particular incident becomes even more troubling.”

“These reports indicate egregious privacy violations and represent a serious national security issue — the files may be altered, extracted, or used to spread malware across an organization,” he continued. “In their current unencrypted state, CT, MRI and other diagnostic scans on the internet could be downloaded, injected with malicious code, and re-uploaded into the medical organization’s system and, if capable of propagating, potentially spread laterally across the organization. Earlier this year, researchers demonstrated that a design flaw in the DICOM protocol could easily allow an adversary to insert malicious code into an image file like a CT scan, without being detected.”

Warner also complained that HHS was giving its Good Housekeeping Seal of Approval to health care providers despite glaring security holes:

In his letter to Director Roger Severino, Sen. Warner also raised alarm with the fact that TridentUSA Health Services successfully completed an HHS Health Insurance Portability and Accountability Act (HIPAA) Security Rule compliance audit in March 2019, while patient images were actively accessible online.

I have always assumed that medical providers are on par with candy stores at data security and this report confirms my prejudices. The ProPublica story described why medical images are so commonly out in the open:

Oleg Pianykh, the director of medical analytics at Massachusetts General Hospital’s radiology department, said medical imaging software has traditionally been written with the assumption that patients’ data would be secured by the customer’s computer security systems.

But as those networks at hospitals and medical centers became more complex and connected to the internet, the responsibility for security shifted to network administrators who assumed safeguards were in place. “Suddenly, medical security has become a do-it-yourself project,” Pianykh wrote in a 2016 research paper he published in a medical journal…

The passage of HIPAA required patient information to be protected from unauthorized access. Three years later, the medical imaging industry published its first security standards.

Our reporting indicated that large hospital chains and academic medical centers did put security protections in place. Most of the cases of unprotected data we found involved independent radiologists, medical imaging centers or archiving services..

Meeting minutes from 2017 show that a working group on security learned of Pianykh’s findings and suggested meeting with him to discuss them further. That “action item” was listed for several months, but Pianykh said he never was contacted. The medical imaging alliance told ProPublica last week that the group did not meet with Pianykh because the concerns that they had were sufficiently addressed in his article. They said the committee concluded its security standards were not flawed.

Pianykh said that misses the point. It’s not a lack of standards; it’s that medical device makers don’t follow them. “Medical-data security has never been soundly built into the clinical data or devices, and is still largely theoretical and does not exist in practice,” Pianykh wrote in 2016.

From a HelpNet Security summary of the second report by Greenbone:

Dirk Schrader, cyber resilience architect at Greenbone Networks said: “Whilst some countries have taken swift action to address the situation and have removed all accessible data from the internet, the problem of unprotected PACS systems across the globe only seems to be getting worse. In the US especially, sensitive patient information appears to be free-flowing and is a data privacy disaster waiting to happen.

“When we carried out this second review, we didn’t expect to see more data than before and certainly not to have continued access to the ones we had already identified. There certainly is some hope in the fact that a number of countries have managed to get their systems off the internet so quickly, but there is much more work to be done.”

My tiny sample may not be representative, but my experience was also that the software imaging centers collect unnecessary but sensitive personal data.

Many years ago, my orthopedist wanted me to get an MRI. He was fussy and had a particular imaging center he liked (he did not have a financial interest in them). When I went to schedule an appointment, the staffer asked for my Social Security number. I refused to give it; I won’t give my SSN to any medical provider because there’s no good reason for them to have it and I assume their security is dreadful. The staffer said she couldn’t book me unless I gave it. I said I was a cash customer, I’d give them a credit card number and they could pre-authorize payment, and in any event, my insurer didn’t use SSNs as an identifier. No dice and so I did not get the MRI, since my MD was also stubborn and would not refer me to another radiologist practice.

That brick wall suggested to me that the SSN was set up as a “must fill” field in their software. I’ve never had that issue with any doctor or other medical test service (note I have not tried to get an MRI since then).

Both the ProPublica story and the Greenbone report strongly urged patients to press their medical providers about their data security:

If you have had a medical imaging scan (e.g., X-ray, CT scan, MRI, ultrasound, etc.) ask the health care provider that did the scan — or your doctor — if access to your images requires a login and password. Ask your doctor if their office or the medical imaging provider to which they refer patients conducts a regular security assessment as required by HIPAA.

And from Greenbone:

For patients it is usually difficult to verify the measures taken by the chain of medical service providers they face. What they can do is to be clear about their expectations about data protection and privacy.

• Ask your doctor about their data protection regime, what they do precisely.
• In case you get the generic answer (We do what is required by law), demand further details like
how often do they verify their IT security and data privacy posture.
• You might not get good or immediate responses, but the same question asked by many again and again will lead to an improvement.

I would also ask about their data retention policies. If you are a one-off patient and the image is not likely to have lasting value (like the chest X-ray I got as part of the Australian visa process, or to rule out a stress or hairline fracture as a cause of pain), I would press to have it deleted in a month or six months, and find out what it would take to have that happen. Even if you don’t get anywhere, it sends a message that patients are concerned about data security.

00 Greenbone medical images update

OK, here’s an idea: Start with the current rear drive, 2-door, 6 or 8 cylinder internal combustion engine (ICE) Ford Mustang. Working off of that base platform, do several things things:

1. Convert the ICE drivetrain into an all-electric SUV crossover;
2. Expand the body from a 2-door coupe to a 4-door crossover, keeping the Mustang Fastback shape;
3. The interior, inspired by Tesla, embraces the tech and design philosophy of E-cars;
4. Create multiple price points: $45,000 entry level; long-range, and performance versions at ~$65,000. (Before the $7500 Fed Tax rebate)
5. Base Mach-E  332 horsepower / 417 lb-ft of torque. A GT model makes 459 hp and 612 lb-ft of torque. Long range is 300 miles per charge
6. Comes in rear and all-wheel drive versions

All told a very nice design, well priced to sell through, from a firm that knows how to mass produce vehicles (Ford literally invented the process.

Base Mach-E is available for purchase late 2020 . . .

Source: Car and Driver

Source: The Verge

Source: Detroit Free Press

I Bought an Elephant to Find Out How to Save Them Outside

Handel and the Bank of England Bank Underground

How to Buy Drugs London Review of Books

Melting with tenderness TLS. Bernard Pivot interviews Nabokov on Apostrophes, 1975.

Why you shouldn’t use your phone to shop online TreeHugger

Nearly 100,000 Pounds of Packaged Salads Recalled Due to E. Coli Concerns Consumer Reports

Against Economics New York Review of Books

Imperial Collapse Watch

Blame Over Justice: The Human Toll of the Navy’s Relentless Push to Punish One of Its Own ProPublica. UserFriendly: “sad, but predictable.”

Scientists Issue Warning To Humanity: Climate Change Depends On Microbes Discover (david l). From June, still germane.

Oxford Dictionaries declares ‘climate emergency’ the word of 2019 Guardian

Why the electric-car revolution may take a lot longer than expected MIT Technology Review

The Wall That Would Save Venice From Drowning Is Underwater WSJ

Health Care

No Safety Switch: How Lax Oversight Of Electronic Health Records Puts Patients At Risk Kaiser Health News

Big Brother IS Watching You Watch

Facebook and Google’s pervasive surveillance poses an unprecedented danger to human rights Amnesty International

Brexit

Do Not Despair of This Election Craig Murray

L’affaire Epstein

Queen sacks Prince Andrew: Monarch summons distraught Duke of York to Buckingham Palace, orders him to step down from public duties and strips him of £249,000 ‘salary’ amid fall-out from his friendship with paedophile Jeffrey Epstein Daily Mail

The toxic prince: Andrew handed royal P45 after tipping point reached Guardian

Julian Assange

Advancing Propaganda For Evil Agendas Is The Same As Perpetrating Them Yourself Caitlin Johnstone

Class Warfare

THE PRICE AIN’T RIGHT: AN ECONOMIC INEQUALITY QUIZ Capital & Main

Report: Sacklers using fake doctors, false marketing to sell OxyContin in China Ars Technica

Minor crimes, major time San Francisco Chronicle

As Rents Outrun Pay, California Families Live on a Knife’s Edge NYT

Obama warns technology has created a more splintered world LA Times. Continuing to state the obvious. And note the final paragraph. Ka-ching!

2020

OK Obama, It’s Time to Cancel Centrism TruthDig

Noam Chomsky: Democratic Party Centrism Risks Handing Election to Trump TruthOut

Sanders’ Plan to Fight Global Climate Disaster Too Ambitious, Says NYT FAIR

California high court strikes down state law targeting Trump tax returns The Hill

Billionaire Michael Bloomberg files paperwork to run for U.S. president Reuters

Warren Raises ‘Corruption’ Alarm After Trump, Zuckerberg, and Thiel Hold Secret White House Meeting Common Dreams

Democratic establishment reaches boiling point with Tulsi Gabbard Politico (furzy)

While to be sure the source isn’t exactly impeccable, both Glenn Greenwald and Jimmy Dore have retweeted this.

If the @NYTimes is only “as meaningful as the content that fills” it, then based on its attack on @TulsiGabbard‘s white pantsuit, @Brad_Polumbo imagines that the paper’s so-called “style” section is complete trash.https://t.co/MVlCD6D9RD

— Washington Examiner (@dcexaminer) 21 November 2019

So much for the promise of equal time for all candidates, @AndrewYang got half the time as the usual media favorites. Typical. -V #LetYangSpeak #LetTulsiSpeak pic.twitter.com/gxemIlfdQG

— Tulsi Gabbard (@TulsiGabbard) 21 November 2019

It actually happened. https://t.co/78C3KmbAT0

— Stephanie Kelton (@StephanieKelton) 21 November 2019

Our Famously Free Press

How the Collapse of Local News Is Causing a ‘National Crisis’ NYT (SF)

Newsonomics: By selling to America’s worst newspaper owners, Michael Ferro ushers the vultures into Tribune Nieman Lab (SF)

737 MAX

A union of 60,000 aviation workers warned of more disasters like the 737 Max crashes if Congress doesn’t pass new rules on plane maintenance Business Insider

Syraqistan

Reports of War Crimes in Iraq and Afghanistan Highlight the Failures of Both Wars Counterpunch. Patrick Cockburn.

Iran loosens internet restrictions after protest shutdown Al Jazeera

After years of investigations, Netanyahu charged with bribery, fraud, breach of trust MondoWeiss

The road toward Greater Eurasia Asia Times. Pepe Escobar.

Trump Transition

Mike Pompeo scorns the law because powerful men like him never have to follow it Independent. Robert Fisk

Attempt to ‘Criminalize Basic Human Kindness’ Fails as Activist Scott Warren Found Not Guilty on All Charges Common Dreams

‘Insurgents’ lobbied Trump for war crimes pardons with little Pentagon involvement, officials say WaPo

US to Europe: Fix Open Skies Treaty or we quit Defense News

China?

Make BNO Hongkongers full British citizens, Boris Johnson urged by top political figures as UK election approaches SCMP

India

‘Cotton has now become a headache’ People’s Archive of Rural India. From October, still germane.

Without Internet, Kashmir’s Doctoral Scholars Are Stumped for a Way Forward The Wire

Antidote du Jour (LR):

See yesterday’s Links and Antidote du Jour here.

When it comes to crime, economists focus on deterrence. Deterrence works but it’s not the only thing that works. Simple things like better street lighting can reduce crime as can high-quality early education or psychological interventions such as cognitive behavioral therapy. The sociological literature has emphasized that crime is about preferences as well as constraints and life-events or turning points such as marriage and childbirth can greatly change crime preferences. The sociological literature is mostly from case studies but in a new paper, Family Formation and Crime, Maxim Massenkoff and Evan Rose (both on the job market from Berkeley) demonstrate these insights in a huge dataset.

A big part of what makes their paper very compelling is that almost all of the results are blindingly clear in the raw data or using very simple analysis. Here, for example, is the crime rate for women (drug, DUI, economic, or property destruction crimes) in the years before pregnancy, during pregnancy (between the red dotted lines) and after birth. Crime rates fall dramatically with pregnancy and in the three years after birth they are 50% lower on average than in the years before pregnancy.

Pregnancy imposes some physical limits on women but the effects are also very large for men whose crime rates fall by 25-30% during pregnancy of their partner and continue at that lower rate for years afterwards. Keep in mind that in our paper on three strikes, Helland and I found that the prospect of an additional twenty years to life (!) reduce criminal recidivism by just ~17%, so the effect of pregnancy is astoundingly large.

It’s not obvious what the policy implications are. Have children at a younger age doesn’t sound quite right, although in an analysis on teen births Massenkoff and Rose do indeed show that whatever the costs of teen pregnancy there are some offsetting benefits in reduced crime. More generally, however, there are policy implication if we think beyond the immediate results. First, these results show that crime isn’t simply a product of family background, poverty and neglect. Crime is a choice.

In Doing the Best I Can: Fatherhood in the Inner City, Edin and Nelson relay the following anecdote (quoted in Massenkoff and Rose):

Upon hearing the news that the woman they are “with” is expecting, men such as Byron are suddenly transformed. This part-time cab driver and sometime weed dealer almost immediately secured a city job in the sanitation department (p. 36).

Byron chose to change and he did so based on the rational expectation of a future event. Massnekoff’s and Rose show that these choices are common.

Instead of thinking of these results as being about pregnancy and marriage we should ask what is it about pregnancy and marriage that makes people reduce crime? Love, responsibility and long-run thinking are all at play. In economic terms, pregnancy reduces discount rates and gives men and women a reason to invest in human capital and work for the future. Children and marriage play a large role in socializing and “civilizing” both men and women but they surely can’t be the only such factors. Indeed, although men and women on average reduce their crime rates dramatically on pregnancy this is mostly coming from men and women who had high rates to begin with–there are plenty of men and women who don’t much reduce their crime rates on pregnancy because they were already low–in a way, these men and women were pre-socialized so how do we extend the benefits of pregnancy to the expectation of pregnancy or how can we widen the effect to other factors that can also civilize?

Hedge Funds and Private Equity Need Full Disclosure
Many function just like mutual funds or ETFs, yet operate behind a veil of secrecy.
Bloomberg, November 19, 2019

The U.S. Securities and Exchange Commission is considering letting nonaccredited investors  put money into closely held investment pools such as hedge funds, private equity and venture capital.¹  This alone is reason to reconsider the issues of transparency and disclosure by these investment alternatives.

Unlike mutual funds or exchange-traded funds, these pools of investment capital don’t have to provide much in the way of transparency. True, they must register with the SEC if they are large enough, but beyond that they don’t have to disclose much of anything. They don’t have to disclose the amount of assets under management, list their biggest holdings or reveal investment returns. They don’t even have to disclose the identity of their senior managers.

The SEC should mandate public disclosure of the details mentioned above.

Now having said that, I don’t believe every investment fund should be required to disclose this information. Funds that just accept the money of a limited number of wealthy individuals can keep doing whatever it is they’re doing behind the veil. But the SEC should mandate full disclosure for investment funds that accept money from public pensions, college endowments or not-for profit foundations. It also should require disclosure for funds in which the partners get a tax benefit from the carried-interest loophole, which lets them pay taxes on their earning at rates about half those on regular income.

This broader disclosure would accomplish at least three things:

First, it would help prevent the sort of fraud that seems to occur so regularly in this space. Everyone knows about the high-profile cases like Bernie Madoff‘s Ponzi scheme; there are plenty of other examples of fraud in hedge funds, and occasionally private equity and venture capital, too. The requirement of audited financial statements from a well-qualified accounting firm might have blown the whistle on some or even most of the scams.

Second, there is a huge funding gap between future obligations and assets among state pension funds: The shortfall is estimated at $1.28 trillion and is forecast to get bigger.²  These pensions have had widespread exposure to so-called alternative investments, mostly to their detriment. More comprehensive disclosures would allow better and more informed decision-making.

Third, a broader data set would help quantitative managers, allocators and academics to create a robust set of analytical tools to assess closely held investment funds. It is an area that is crying out for a review to determine how and where value is created and how investors should risk their capital. Just imagine what the academic world could do with that rich vein of information.

Those with libertarian leanings will argue that these are private pools of capital whose limited partners are sophisticated and the funds themselves are designed for accredited investors with the means, professional staff and self-interest to investigate the data themselves. Thus, there is no need for costly regulatory paternalism; the private market will work itself out.

That might sound good in theory, but decades of data demonstrate it does not work in practice. Institutional investing is staffed with humans who make all of the same errors as individuals, just within a more sophisticated and typically more costly framework. Pension funds and endowments all show a discomforting tendency to chase expensive investments after a period of good performance — and all too often after the hot streak is over. We have a looming retirement crisis in this country, and greater transparency and disclosure will only help led to better and more informed investing decisions.

________

1. State pension funds and college endowments are making investments on behalf of non-accredited (read small) investors in hedge funds, venture capital and private equity. If you are a teacher, police officer, college professor, fireman or any other public employee, the odds are that your pension fund already has exposure — and in many instances, substantial exposure — to these funds; you probably just don’t know it. This is reason enough to mandate transparency and disclosure rules.

2. Today’s labor force will not have sufficient resources to retire at traditional ages or with their expected standard of living as detailed by Charles Ellis in “Falling Short: The Coming Retirement Crisis (and What to Do About It).”

~~~

I originally published this at Bloomberg, November 19, 2019. All of my Bloomberg columns can be found here and here. 

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

Captain Elle Ekman, a logistics officer for the United States Marine Corps, wrote an op-ed in the New York Times on Wednesday that shocked me – and I don’t shock easily, Here’s One Reason the U.S. Military Can’t Fix Its Own Equipment.

Apparently, even the US military doesn’t enjoy a  right to repair for materiel it purchases, and instead must ship some equipment back to the states, for maintenance and repair by the original manufacturer, rather than fixing it locally.

No joking.

Why?

Over to Captain Ekman’s op-ed:

A few years ago, I was standing in a South Korean field, knee deep in mud, incredulously asking one of my maintenance Marines to tell me again why he couldn’t fix a broken generator. We needed the generator to support training with the United States Army and South Korean military, and I was generally unaccustomed to hearing anyone in the Marine Corps give excuses for not effectively getting a job done. I was stunned when his frustrated reply was, “Because of the warranty, ma’am.”

At the time, I hadn’t heard of “right-to-repair” and didn’t know that a civilian concept could affect my job in the military. The idea behind right-to-repair is that you (or a third-party you choose) should be able to repair something you own, instead of being forced to rely on the company that originally sold it. This could involve not repairing something (like an iPhone) because doing so would void a warranty; repairs which require specialized tools, diagnostic equipment, data or schematics not reasonably available to consumers; or products that are deliberately designed to prevent an end user from fixing them.

I first heard about the term from a fellow Marine interested in problems with monopoly power and technology. A few past experiences then snapped into focus. Besides the broken generator in South Korea, I remembered working at a maintenance unit in Okinawa, Japan, watching as engines were packed up and shipped back to contractors in the United States for repairs because “that’s what the contract says.” The process took months.

…

I also recalled how Marines have the ability to manufacture parts using water-jets, lathes and milling machines (as well as newer 3-D printers), but that these tools often sit idle in maintenance bays alongside broken-down military equipment. Although parts from the manufacturer aren’t available to repair the equipment, we aren’t allowed to make the parts ourselves “due to specifications.”

The right to repair has become more prominent on the political agenda, with both Senators Sanders and Warren endorsing versions of the concept, as has the editorial board of the New York Times (see Right to Repair Initiatives Gain Support in US).  The Federal Trade Commission debated the idea during a workshop this summer, and Ekman and captain Lucas Kunce submitted a comment letter, Comment Submitted by Major Lucas Kunce and Captain Elle Ekman, which provides details that support her NYT op-ed.

How the Military Lost Control of its Right to Repair

Efforts to streamline defense production ended up with these bizarre repair implications (some may say this was a feature, not a bug, and I won’t bother to quibble). From the FTC letter:

In 1970, the DOD funded one third of all research and development (R&D) in the Western world. Key aspects of technology and product development could be organized by the Pentagon due to the sheer size of its budget. As the civilian sector grew both in the U.S. and abroad, the clout once possessed by the national security community in the marketplace diminished. By 1992, the amount of aggregated R&D spending directed by DOD had dropped from one third to one seventh. By 1999, it fell to 16% of just domestic R&D.3 As the technology revolution of the 1990s accelerated, and as the post-Cold War environment induced further relative reductions in military budgeting, an increasing amount of critical cutting-edge technology development occurred in the commercial sector.

Policymakers responded to this change by shaping DOD’s procurement choices around norms in the civilian economy, with the hope that DOD could leverage “dual use” technology developed in the commercial sector. One goal of these efforts was to loosen rules on vendors trying to sell commercial products. Since the 1990’s, the Pentagon, along with the rest of the Federal government, endeavored to become a “better customer” to industry and vendors, by reducing oversight, simplifying rules, and becoming more trusting of industry. This over-arching policy goal was implemented through changes to US Code, the Federal Acquisition Regulation (FAR), and the Defense Federal Acquisition Regulation Supplement (DFARS), among other policies, rules and regulations.

Another policy choice was to encourage concentration across the defense industrial base in order to reduce overhead in industry. At a famous dinner with contractor CEOs nicknamed the “last supper” in Pentagon lore, Secretary William Perry directed defense contractors to consolidate to address a changing budgeting environment.Secretary Perry’s dinner worked. In 2005 the Center for Strategic and International Studies (CSIS) found 107 contractors that had consolidated to five. This consolidation was also an example of DOD following civilian sector financial and industrial norms, as in the 1980s and 1990s there was consolidation across most industries in the civilian economy.

The consolidation of industry, acquisition reform, and relatively less money spent on R&D, contributed to DOD’s current weakened negotiating strength and increased its drive to be a better customer in order to acquire items and services to accomplish missions. The situation is well captured in a DOD negotiating guide from 2001:

“Challenges to the Government today are to find ways to entice commercial industry into collaborating with the Department in vital research efforts, and to acquire commercial products using commercially friendly terms. While the acquisition streamlining legislation of the 1990s went a long way to create more commercial-like contracting processes for the government, some practices from past decades are holdovers to today.”

Another effect of the consolidation of the defense industry is the soaring use of sole source contracts. Sole source contracts are used when DOD is unable to find competition for an item or service and therefore is limited to negotiating with a single vendor. To illustrate how prevalent this has become, in the first three quarters of 2016, more than 50% of DOD contracting dollars were awarded without competition. The DOD has in many cases become a “price taker”, accepting terms and conditions commonly used in the commercial marketplace for weapons systems and vital products. Because of this shifting power dynamic, the decisions made for the commercial marketplace, like the FTC’s decisions on the right to repair, impact and influence federal contracting and DOD. (Jerri-Lynn here: citations omitted).

Translation: no right to repair. As the letter continues:

The net result:  serving military are reprimanded for trying to repair balky equipment on site. I’ve not been able to find data on how widespread it is for the military, the eye popping size of military contracts means that beaucoup bucks are involved (and I’m not the only one to find it difficult to assess how widespread the problem is; see this Extreme Tech account, The US Military Needs Right-to-Repair Legislation to Fix Its Own Broken Equipment).

Yet Kunce and Ekman’s FTC letter provides examples that show the problem is not just an abstraction:

Although the problem will become far more significant in the future, the issue today is not just theoretical. The following examples demonstrate how right to repair influences military operations. Note how both commercial and non-commercial items are affected with these contractual terms.

– While in Korea for an exercise, a mechanic was prohibited from conducting maintenance on a generator because the warranty would be voided, leaving the unit with the choice of voiding a warranty or losing the equipment that supported their training.
– Deployed Marines who did conduct maintenance on warrantied equipment were reprimanded because they voided the contract when they fixed the equipment.
– The process for managing secondary reparables (SECREPs), costly parts that
are economical to repair (e.g., various types of engines and transmissions), includes shipping these items back to the contractor in the continental United States from Okinawa, Japan, because repair efforts by Marines would violate repair support contracts. This creates significant transportation costs and time costs, and reduces forward-deployed unit readiness.
– New equipment increasingly incorporates electronics, and diagnostic software and data needed to trouble shoot is either not available for procurement or not procured because of the up-front procurement cost. The costs saved up-front are then absorbed during the equipment’s life-cycle and are manifested in increased Marine man-hours spent trouble-shooting and repairing equipment because Marines do not possess all of the tools and diagnostic equipment that would help them do maintenance more efficiently.
– Marines possess capabilities to fabricate, machine, and manufacture repair parts using a variety of tools (e.g., water-jets, CNC mills).While creating parts can save money and time, these parts either need to be reverse engineered or made according to manufacturer specifications. Often, those specifications are cost- prohibitive or Marines are not allowed to create the part due to manufacturer restrictions. As the Marine Corps continues to expand its capabilities in additive manufacturing (i.e., 3D printing capabilities), part manufacturing will continue to face vendor-induced obstacles. These obstacles will prevent Marines from repairing equipment if a part is unavailable due to supply chain issues in austere environments
– Overall, Marines are less capable of repairing equipment in extreme circumstances because they are not allowed to repair the equipment during regular operations and do not have the tooling, diagnostic equipment or diagrams, or hands-on experience (Jerri-Lynn here: citations omitted.)

Kunce and Ekman discuss two case studies, involving the Medium Tactical Vehicle Replacement (MTVR) and the Joint Light Tactical Vehicle. The base contract for the former was for $2,424.5 billion, with an additional contract for modifications, repairs and maintenance, and the vehicle has been used for ferrying troops and equipment since 1998. According to the FTC letter:

This warranty and repair contract was similar in many ways to those in the civilian or commercial world. The vendor became the repairman, and the warranty limited the right to repair for a third party, in this case, maintenance Marines. In a short-sighted way, that is good, because it frees Marines to perform other duties. However, the restrictions mean limiting the capability, flexibility, and experience of Marines who will be needed to conduct these repairs if they are ever in a hostile, kinetic arms, or D-Day-like situation.

This arrangement also increased cost to DOD. The requirement to return the parts stateside for repair incurred high shipping costs, and time spent in transit from overseas locations and the fixed price repair cost meant that significant funds were expended on repairs that could have been repaired faster and cheaper by Marines present at the location in which the repair was required.

What Is to be Done?

As I mentioned above, both Sanders and Warren propose a right to repair for farm equipment, and legislation is pending in approximately twenty states, some of which covers consumer electronics.

As Gizmodo reports, Lack of Right-to-Repair Protections Is Even Screwing With the U.S. Military:

Gay Gordon-Byrne, executive director of the Repair Association, told Gizmodo by email that the problem Ekman raises in her piece “illustrates the pervasiveness of repair monopolies and their very real-world consequences.”

“The military cannot possibly function without being able to fix their own stuff—but here we are. Farmers cannot put food on the table if they cannot fix their own stuff—but here we are,” Gordon-Byrne said. “Consumers are waking up to the fact they cannot fix their stuff either—and the legislative solution is in front of us. We don’t need to wait for the federal government to unlock monopolies—we can do it right now by passing right-to-repair legislation in any of multiple states.”

Gordon-Byrne noted the many bills that have been proposed in more than 20 states that hoped to secure right-to-repair protections for consumers. Gordon-Byrne said detractors of these proposals have described the bills as “too broad,” but she added that she doesn’t think “that argument is going to hold water going forward.”

“If we cannot fix our phones and bulldozers while waging war,” she said, “we’ve really screwed ourselves.”

Obviously, general right to repair legislation is not the only way to address the military issue. Speculating on how procurement specifications could be amended to fix this, however, is above my pay grade.

More Apple Shenanigans

Meanwhile, Apple continues its shenanigans over the right to repair, responding earlier this week to questions at a hearing before the subcommittee on antitrust, commercial and administrative law of the committee on the judiciary.

As Motherboard tells the story, Apple Tells Congress You’ll Hurt Yourself if You Try to Fix Your iPhone:

Apple’s primary arguments were that iPhones are too technical for the average person to repair without special training, that doing such repairs could be dangerous, and that it costs Apple more money to do repairs than they charge. It’s the first time Apple has ever gone on the record about its repair policies at length.

“Repairs that do not properly replace screws or cowlings might leave behind loose parts that could damage a component such as the battery, causing overheating or resulting in injury,” Apple said when asked why it stops third party repair stores from receiving official parts and information. “For these reasons, we believe it is important for repair shops to receive proper training when obtaining access to spare parts and repair manuals.”

But, right to repair proponents weren’t fooled. According to Phone Arena,
Apple: we fix iPhones at a loss, Right to Repair proponents cry ‘absurd!’, quoting Nathan Proctor, Director of the Campaign for the Right to Repair at US PIRG:

“Apple’s argument is absurd. In defending their decision not to make spare parts or service information available, the company claims that certain parts and information are necessary for a reliable repair. It’s a totally circular argument. Apple wants their customers, and the federal government, to accept the notion that while a repair monopoly exists, it’s a beneficial monopoly, made for our good.”

Apple also tries to claim it actually loses money on its repair monopoly. No, really. Motherboard again:

Apple also seemed incapable of answering basic questions about the repair market it insists it must tightly control. When the Congressional committee asked Apple how many technicians it had, it claimed there were tens of thousands. When the Committee asked how much revenue Apple generated from repairs, Apple claimed that “For each year since 2009, the costs of providing repair services has exceeded the revenue generated by repairs.”

Apple seems to be performing a sleight of hand here, and including in its “repair”  figures the costs of fixing its crapified  products, such as the debacle with its butterfly keyboard (see  Design Genius Jony Ive Leaves Apple, Leaving Behind Crapified Products That Cannot Be Repaired). Motherboard concurs:

The idea that Apple is losing money on repair is wild, and a curse of its own making. The answer by Apple seems vague on purpose. Throughout the years, Apple has had to offer many “service programs” for defective products. Most notably, Apple has had to replace a large number of MacBook and MacBook Pro devices for free because it designed an unrepairable keyboard that breaks easily and with normal use. Rather than replacing a few keys on those devices, Apple has to replace half of the computer. If Apple is including warranty repairs and service program repairs in addition to standard retail repairs, well, then, it is quite simply misleading the public and Congress.

And,  if it’s in fact actually the case, and Apple is losing money on repair – as legitimately defined, and not including its design-driven own goals –  it should be happy to facilitate efforts by third party repair services to enter or expand their presence in this market. If they can undertake the repairs at lower cost, and turn a profit, this saves Apple from losing money from maintaining its repair monopoly.

How about it, Apple?

Robert Reich in video advocating for Medicare for All.

Republicans and even some Democrats are out to scare you about Medicare for All. They say it’s going to dismantle health care as we know it and it will cost way too much.

Rubbish.

The typical American family now spends $6,000 on health insurance premiums each year. Add in the co-payments and deductibles that doctors, hospitals, and drug companies also charge you — plus typical out-of-pocket expenses for pharmaceuticals – and that typical family’s health bill is $6,800.

But that’s not all, because some of the taxes you now pay are for health insurance, too — for Medicare and Medicaid and for the Affordable Care Act. So let’s add them in, again for the typical American household. That comes to a whopping $8,975 a year. Oh, and this number is expected to rise in the coming years.

Not a pretty picture. If you’re a typical American, you’re already paying far more for health insurance than people in any other advanced country.

And you’re not getting your money’s worth. The United States ranks near the bottom for life span and infant mortality. Or maybe you’re one of the 30 million Americans who don’t have any health insurance coverage at all.

You see, a big reason we pay so much for health insurance is the administrative costs involved in private for-profit insurance. About a third of what you pay goes to the people who oversee billing and collections. And then of course there are the marketing and advertising expenses, and the profits that go to shareholders or private-equity managers.

What happens if we have Medicare for All?

Let’s first consider a limited version that keeps private insurance — as proposed by candidates including Joe Biden, Pete Buttigieg, and Kamala Harris. The insurance costs remain the same because it’s the same private insurers and the same co-payments and deductibles. The only difference is more of this would be paid through your taxes, rather than by you directly, because the government would reimburse the insurance companies.

This could help bring down costs by giving the government more bargaining leverage to get better prices. But we don’t know yet how much.

Now, let’s talk about a different version of Medicare for All that replaces private for-profit health insurance, as proposed by Bernie Sanders and Elizabeth Warren. In this version, total costs — including a possible combination of premiums, co-payments, deductibles, or taxes — are even lower. This option is far cheaper because it doesn’t have all those administrative expenses. It’s public insurance that reimburses hospitals, doctors, and pharmaceutical companies directly and eliminates the bloat of private insurance companies.

Economists at the University of Massachusetts-Amherst say Medicare for All that replaces private for-profit insurance would reduce costs by about 10 percent, mostly from lower administrative and drug costs. The Urban Institute estimates that households and businesses would save about $21.9 trillion over ten years, and state and local governments would save $4.1 trillion.

You’d pay for it through a combination of premiums, fees, and taxes, but your overall costs would go way down. So you’d come out ahead.  And everyone would be covered.

You’d keep your same doctor or other health-care provider. And you could still buy private insurance to supplement Medicare for All, just like some people currently buy private insurance to supplement Medicare and Social Security. The only thing that’s changed is you no longer pay the private for-profit corporate insurers.

Any Medicare for All is better than our present system, but this second version is far better because — like Medicare and Social Security — it’s based on the simple and proven idea that we shouldn’t be paying private for-profit corporate insurers boatloads of money to get the insurance we need.

It’s time for true Medicare for All.

Cross-posted from Robert Reich’s blog

By Lambert Strether of Corrente.

Patient readers, stay tuned for Elizabeth Warren. –lambert

Politics

“But what is government itself, but the greatest of all reflections on human nature?” –James Madison, Federalist 51

“They had one weapon left and both knew it: treachery.” –Frank Herbert, Dune

Here is a second counter for the Iowa Caucus, which is obviously just around the corner:

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2020

Alert reader dk (not to be confused with DK) is in the process of developing the following interactive chart.

Here is (are) the latest Dem Primary Polling as of 11/22/2019, 12:00 PM EST. Biden leads, Sanders strong second, Warren third, Buttigieg third tier.

Here, the latest national results:

I think dk has started a really neat project, and in the near future we’ll seek your feedback (within reason) for the tool “live.”

* * *

Bloomberg (D)(1): “Bloomberg spending $15M-$20M to register half million voters” [Associated Press]. “New York billionaire Michael Bloomberg is rolling out plans to spend an estimated $15 million to $20 million on a voter registration drive designed to weaken President Donald Trump’s reelection chances in five battleground states.” • So if you live in other states, you don’t deserve a franchise. Voter registration should be a normal party or even governmental function. It’s insane to do it on a project, campaign-driven basis.

Gabbard (D)(1): “Democratic establishment reaches boiling point with Tulsi Gabbard” [Politico]. “The Hawaii congresswoman’s presence on the debate stage is becoming a headache for the party as she uses the platform to appeal to isolationists, dissatisfied liberals and even conservatives. She has managed to secure a spot on the debate stage as more mainstream candidates like Sen. Michael Bennet (D-Colo.) and Gov. Steve Bullock (D-Mont.) failed to meet polling and donor thresholds to participate.” • So how are candidates that can’t get donors or make an impact in the polls “mainstream”? Maybe the mainstream isn’t where the political class thinks it is?

Patrick (D)(1): The rule is that you should always hire a hall that’s too small. Unfortunately for Patrick, in his case the hall would need to be smaller than 0’x0′. That’s a heavy lift:

Governor @DevalPatrick was supposed to have an event at Morehouse College tonight. An organizer with the college who planned the event told CNN that Patrick cancelled the event when he arrived and learned that he would not have an audience. (Note, two people came, not pictured) pic.twitter.com/CzNjWYcWKJ

— Annie Grayer (@AnnieGrayerCNN) November 21, 2019

Patrick’s debacle at Morehouse is in great contrast to Sanders–

Sanders (D)(1): Impressive photo at Morehouse, another key HBCU:

“I was arrested and went to jail fighting housing segregation in Chicago.

I know that that’s usually not the kind of thing pres. candidates advertise, but it’s a better way to go to jail than the corruption that currently goes in the White House” @BernieSanders at @MoreHouse pic.twitter.com/HEGK7nWFJD

— People for Bernie (@People4Bernie) November 21, 2019

Sanders (D)(2): “El-Sayed endorses ‘consistent’ Sanders for president” [Detroit News]. “In 2018, [El-Sayed] ran for governor as a progressive outsider. … Ultimately, El-Sayed finished second with 30% of the vote in the Democratic primary, behind Whitmer’s 52%.” • So we’ll see.

Sanders (D)(3):

Bernie Sanders’ aides point out that he has retaken the second-place position in the RealClearPolitics national polling average. At 19.3%, he’s at his highest point since early May. pic.twitter.com/lnXtQpbCvn

— Holly Otterbein (@hollyotterbein) November 21, 2019

We have post-modern polling, a narrative created by an unreliable narrator.

* * *

Impeachment

“John Bolton’s absence grows conspicuous as Fiona Hill and David Holmes testify at impeachment hearing” [MarketWatch]. “Bolton hasn’t been subpoenaed to appear, and House Intelligence Committee Chairman Adam Schiff has so far suggested he won’t be, even though his testimony could be of high interest to impeachment investigators. Schiff has indicated he doesn’t want a prolonged court battle over Bolton’s testimony, and Democrats have said they already have a mountain of evidence in their impeachment probe.”

“Opinion: Two things are now clear: Trump’s call wasn’t ‘perfect,’ and he won’t be removed” [Scott Jennings, Los Angeles Times]. Scott Jennings is former advisor to President George W. Bush and Senate Majority Leader Mitch McConnell and a CNN contributor. So I’d say Jennings is sending a message, both from the Republican establishment and Mitch McConnell. “[L]est you think use of the word ‘coup’ is something hysterical Republicans have deployed to whip conservatives into a frenzy, they borrowed it from a card-carrying member of the liberal resistance: attorney Mark Zaid, better known as the whistleblower’s lawyer. In January 2017, Zaid tweeted: “#coup has started. First of many steps. #rebellion. #impeachment will follow ultimately. #lawyers.” So the attorney for the whistleblower who started this impeachment frenzy (yet will not appear before the Intelligence Committee) predicted a ‘coup’ and ‘impeachment’ almost simultaneously with Trump taking office. You’d have to forgive your average Republican in flyover country for taking Trump’s opposition at its word.” • 

“Understanding Adam Schiff’s ‘Bribery’ Theory” [Andrew McCarthy, National Review]. “Schiff knows that not all bribery is created equal. He knows the first official act is not good enough for impeachment, even if it’s good enough for the federal bribery statute. That is: No one in America except the most ardent anti-Trumpers is going to support the impeachment of the president of the United States over the mere denial of a White House visit to a foreign politician.” • I’ll say it again: If a Republican Senator in the trial phase of the impeach can make their case in a sober manner — unlike the yapping puppies of the Freedom Caucus — they’ll have the chance to be Trump 2.0. For example: Do we want foreign policy made by an elected President, or by The Blob? Because that’s what this power struggle is about.

The Debates

Like a Roman circus:

I was in the crowd of the Democratic Debate last night. It felt like being on a Jerry Springer set.

The crowd–DNC members, party insiders, campaign guests–were not there to hear substantive argument, but felt bloodthirsty to be entertained by blows, takedowns, and clapbacks.

— Nicole Alexander Fisher (@_nalexander) November 22, 2019

And:

Kenya, Lee, Brett and I had that exact discussion as we were leaving the seats. It was bloodlust at its worst.

— Livin_Aloha_Joe 🌺🏄‍♀️☂️ Unusual American (@aloha_livin) November 22, 2019

Ladies and gentleman, I give you The Political Class.

L’Affaire Joffrey Epstein

“EXCLUSIVE: Inside Jeffrey Epstein’s New Mexico ranch: Jaw-dropping pictures show pedophile’s eight person party shower, life-sized installation of a crucified Jesus and ‘underground strip club where teens would entertain VIP guests’” [Daily Mail]. Do these VIP guests have names? Well, one of them does. An anonymous contractor: “‘I had seen things in the house, on the computers, which made me evaluate whether I should be working for him or not. There was numerous photographs in frames, in his library, his office, on the walls, of young underage girls topless and him and various other powerful people. Celebrities, entertainment people, political people, Bill Clinton, he wasn’t shy about having those in the house… I have seen a picture of him and Bill Clinton smoking cigars on pool lounge chairs with underage topless girls.” • Granted, this is a single source, but let’s not let this get lost in the oddly simultaneous hoopla about Randy Andy, mkay? And: “On security, [the contractor] discloses: ‘There were a lot of photographs being taken, they were all over [the ranch]. I noticed in the closets there were video distribution systems, which I initially assumed to be for entertainment, but now I’m not so sure. [They] may have hidden cameras in some of the rooms, that type of thing.’” • Damn, what’s that Russian word everybody was using, back when RussiaGate was a thing? Starts with a “k.”

Stats Watch

Kansas City Fed Manufacturing Index, November 2019: “Tenth district manufacturing activity continued to contract in November, with the composite index remaining unchanged at minus 3, matching the second lowest reading in three years” [Econoday]. “There were also some signs of recovery in the survey, however, particularly in shipments, which rose. Improvement was also seen in orders, though these were still negative… ” • Mixed news at best.

Purchasing Managers’ Index Composite Flash, November 2019: “Very close together along a shallow upward slope is the modest but still constructive indication from November’s set of flash PMIs, led by a 6 tenth gain for manufacturing” [Econoday]. “New orders for the manufacturing sample were also the best since April.” • Good news, even if only a survey!

Consumer Sentiment, November 2019: “Consumer sentiment continues to recover from its tariff-related scare in August” [Econoday]. • More good news.

Tech: “Global 5G wireless deal threatens weather forecasts” [Nature]. “Wireless companies are beginning to roll out their next-generation networks, known as 5G, around the world. The new agreement is meant to designate the radio frequencies over which 5G equipment can transmit. But some of those frequencies come perilously close to those used by satellites to gather crucial weather and climate data. … Weather forecasters will have to figure out how to mitigate the impacts on satellite observations — perhaps by working with the wireless industry to research ways to shut off or redirect 5G transmissions when a satellite is making its measurements. Botha said that the new agreement requires a “continued monitoring” of how 5G networks affect weather observations, but provided no details on what that monitoring would involve or what the consequences would be if the weather data are degraded.” • That’s insane. Why isn’t the precautionary principle controlling? The wireless monopollists should have to prove that they won’t screw up weather reporting, not the other way round. And all for moar and faster pr0n and the Internet of SH*t? It’s exactly Musk screwing up astronomy with his stupid satellites. And for what?

* * *

Today’s Fear & Greed Index: 68 Greed (previous close: 70, Greed) [CNN]. One week ago: 87 (Extreme Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Nov 22 at 12:31pm. We have now transitioned to Greed from Extreme Greed.

The Biosphere

“Coal Knew, Too” [HuffPo]. • Excellent, a must read. The first three paragraphs:

In August, Chris Cherry, a professor in the Department of Civil and Environmental Engineering at the University of Tennessee, Knoxville, salvaged a large volume from a stack of vintage journals that a fellow faculty member was about to toss out. He was drawn to a 1966 copy of the industry publication Mining Congress Journal; his father-in-law had been in the industry and he thought it might be an interesting memento.

Cherry flipped it open to a passage from James R. Garvey, who was the president of Bituminous Coal Research Inc., a now-defunct coal mining and processing research organization.

“There is evidence that the amount of carbon dioxide in the earth’s atmosphere is increasing rapidly as a result of the combustion of fossil fuels,” wrote Garvey. “If the future rate of increase continues as it is at the present, it has been predicted that, because the CO2 envelope reduces radiation, the temperature of the earth’s atmosphere will increase and that vast changes in the climates of the earth will result.”

“Massive Australian blazes will ‘reframe our understanding of bushfire’” (interview) [Science].

Q: What is the role of climate change?

A: You have to ask: Has there ever been a fire event of 1.65 million hectares that’s burnt a large area of what is generally considered fire-proof vegetation, and also occurred simultaneously with fires in other regions of Australia and California? What is happening is extraordinary. It would be difficult to say there wasn’t a climate change dimension. We couldn’t have imagined the scale of the current event before it happened. We would have been told it was hyperbole.

This is teaching us what can be true under a climate changed world. The numbers, scale, and diversity of the fires is going to reframe our understanding of bushfire in Australia. This is a major event which will have huge intellectual and policy legacies.

Well worth a read. Also, new word: “Pyrogeography is thinking about landscape, people, and fire.”

“Trump EPA to roll back Obama-era chemical rules” [Axios]. “The Environmental Protection Agency is set to roll back a set of Obama-era standards outlining how companies must store dangerous chemicals… The rules were enacted following a 2013 explosion in Texas that killed 15 people. Officials blame arson for the deadly blast, but the fertilizer plant fire was fueled by 80,000–100,000 pounds of unsafely stored ammonium nitrate. Under the EPA’s newly weakened rules, companies will no longer have to provide public information on what chemicals they store onsite.” • What could go wrong?

“How two intruders from interstellar space are upending astronomy” [Nature]. “Among other things, 1I/‘Oumuamua and 2I/Borisov have provided the first direct glimpse of the physics and chemistry of the squashed debris clouds that surround young stars and serve as the birthing grounds for planets. These samples from other planetary systems are allowing scientists to explore whether the Solar System is unique or whether it shares building blocks with other planetary systems in the Milky Way.” • Ha ha, they only look like debris clouds. I mean, the aliens managing our interstellar quarantine aren’t stupid. I just hope they like what they see on their latest swing through.

Gunz

“Nearly All Mass Shooters Since 1966 Have Had 4 Things in Commonm” [Vice]. “The stereotype of a mass shooter is a white male with a history of mental illness or domestic violence. While that may be anecdotally true, the largest single study of mass shooters ever funded by the U.S. government has found that nearly all mass shooters have four specific things in common. A new Department of Justice-funded study of all mass shootings — killings of four or more people in a public place — since 1966 found that the shooters typically have an experience with childhood trauma, a personal crisis or specific grievance, and a “script” or examples that validate their feelings or provide a roadmap. And then there’s the fourth thing: access to a firearm.”

Groves of Academe

“Southeastern Middlestill University Hiring Visiting Assistant Adjunct Just Because They Heard You’re on the Market” [McSweeney’s]. “The School of Communications, Businesses, and Queer Studies in the Fränk Malamarde College of Impossibilities at Southeastern Middlestill University invites applications for a visiting adjunct professor in nonprofit management to begin in August 2018.” • And it gets better.

Guillotine Watch

“How the 1% like to heal the world” [MarketWatch]. “There were a few recurrent themes among the [Forbes 50] top 20 donors’ priorities: universities, K-12 education, health-related causes, research to end various diseases, and criminal justice and prison reform.” • Gives me a warm feeling that top donor Warren Buffet is donating to social justice causes.

Class Warfare

“Bankruptcy, Divorce, and Long Commutes. More Evidence That Income Inequality is Toxic” [Evonomics]. “A team of economists led by Robert H. Frank measured changes in income inequality in each of the states and in the 100 most densely populated counties in America during the period 1990-2000. Income inequality was measured in two ways—the familiar GINI index and the ratio of the 90th percentile household income to the 50th percentile household income (P9050ratio). Well-being measures included non-business bankruptcy rates, the proportion of the adult population that is divorced, and the proportion of workers whose daily commute is an hour or more. The first two measures are obviously indicative of financial and other forms of stress. The rationale for the third measure is that most people do not want to commute more than an hour to work if they can afford to live closer. As with all good research of this sort, a host of other variables were controlled for. The results spoke loud and clear: The states and counties that experienced the largest increases in income inequality between 1990-2000 also experienced the largest increases in bankruptcies, divorces, and long commutes.” • A long commute is a really good stress indicator, as I know from personal experience.

“Analyses claiming that taxes on millionaires and billionaires will slow economic growth are fundamentally flawed” [Economic Policy Institute]. “Genuine information about economic policies is good and useful. But the highly stylized output of models that assume supply-constraints on growth are the norm, and which are presented as effects on ‘growth’ and ‘jobs’ with no further context are notably unuseful, and often actively misleading in today’s policy debates.”

News of the Wired

Not to start a text editor flame war or anything:

Harry Potter and the Prisoner of Vim https://t.co/OejiUVXQ0C

— vkmc (@vkmc) November 22, 2019

* * *

Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi and coral are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (PS):

PS: “These are deep-sea corals that live below the depth that light can penetrate. Consequently, unlike their shallow-water cousins, they have no photosynthetic algae symbionts and so have to rely exclusively on what they catch to feed themselves.” Moar coral (an honorary plant)!

* * *

Readers: Water Cooler is a standalone entity not covered by the annual NC fundraiser. So if you see a link you especially like, or an item you wouldn’t see anywhere else, please do not hesitate to express your appreciation in tangible form. Remember, a tip jar is for tipping! Regular positive feedback both makes me feel good and lets me know I’m on the right track with coverage. When I get no donations for five or ten days I get worried. More tangibly, a constant trickle of donations helps me with expenses, and I factor in that trickle when setting fundraising goals:

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If you hate PayPal, you can email me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, and I will give you directions on how to send a check. Thank you!

If you haven’t visited our newest sister site, AdamSmithWorks, we think you’re in for a treat. There’s new content going up there every week, as well as on their YouTube channel.

Today we added a video series, An Animal That Trades, to our own Econlib Videos collection.

As with all our videos, you’ll find complementary questions for further thought and discussion. One of the things I really like about An Animal That Trades is that it’s available in five, thematic, classroom-friendly “chunks,” each about 6-7 minutes. If you use any of these pieces in your own teaching, we’d sure love to hear about it.

Here’s a sampling of some of the questions prompted by the videos:

The narrator claims that economists today are more often seen as “fortune tellers” or “stockbrokers.” How did Adam Smith see himself by contrast? Do you think this characterization of economists today is correct? Why or why not?

The narrator describes the “spontaneous pattern” of the invisible hand as amoral. To what extent do you really believe such an outcome is amoral, even if spontaneous?

What were the main tenets of the physiocrats, who the Smith spent time with during his tenure in France? What did laissez-faire mean to them? What does it mean today?

The film takes us to life in a garment factory in modern-day Ethiopia, and the narrator points out that the workers’ “lives have changed drastically over the past decade.” To what extent are these changes net positive? Explain.

What does Smith mean when he says, “The market alone may not ensure positive outcomes for all?” What else should the government do to ensure that the its citizens’ quality of life rises?

What is the “cobra effect?” Economists often refer to this effect simply as unintended consequences. What other examples can you think of that illustrate this effect? How might these effects be mitigated?

Succinct Summations for the week ending November 22nd, 2019

Positives:

1. Q3 Earnings continue to come in stronger than expected;
2. Existing home sales rose 1.9% m/o/m, from 5.360M to 5.460M.
3. Home mortgage apps rose 7.0% w/o/w, above the previous increase of 5.0%.
4. Index of Leading Indicators fell 0.1% m/o/m, above the expected decrease of 0.2%.
5. PMI Composite rose 0.6 m/o/m from 51.6 to 52.2.
6. Consumer sentiment came in at 96.8 in November, above the expected 95.7

Negatives:

1. Markets sell off for the week as trade deal seems to be DOA. falling apart. Hard to believe Charlie Brown traders still fall for Lucy’s same football trade deal tricks;
2. Jobless claims remained the same for the week at 227k, above the expected 217k.
3. Same store sales rose 4.1% m/o/m, decelerating from the previous increase of 5.0%.
4. Housing starts came in at 1.314M in October, below the expected 1.320M.
5. Home mortgage refinance apps fell 8.0% w/o/w, below the previous increase of 13.0%.
6. Housing market index fell 1 point in November to 70, below the expected 71.

Thanks, Matt!

In the US, both taxes and social security benefits depend on one’s marital status and tend to discourage the labour supply of the secondary earner. Using information on US cohorts born in 1945 and 1955, this column shows that eliminating marriage-related provisions drastically increases the participation of married women over their entire life cycle and reduces the participation of married men after age 60. If the resulting government surplus were used to lower income taxation, there would be large welfare gains for the vast majority of the population.

After increasing robustly from 1962 to the early 1990s, the labour force participation of women in the US has been stagnating (Figure 1). Black et al. (2017) write: “The US economy will not operate at its full potential unless government and employers remove impediments to full participation by women in the labor market. The failure to address structural problems in labor markets – including tax and employment policy – does more than hold back women’s careers and aspirations for a better life. In fact, barriers to participation by women also act as brakes on the national economy, stifling the economy’s ability to fully apply the talents of 51 percent of the population.”

Figure 1 Labour force participation rate of women aged 16 and older in the US

Source: Bureau of Labour Statistics from the Current Population Survey

In the US, taxes and old-age Social Security benefits depend on one’s marital status and tend to discourage the labour supply of the secondary earner. Lower wages indicate that these secondary earners have historically been women. 

The disincentives from joint taxation arise because couples file taxes jointly and taxation is progressive. As a result, secondary earners face a higher marginal tax rate, which discourages their labour supply. This is because the marginal tax rate (i.e. the tax rate applied to an additional dollar of income, computed at different income levels) is a very important determinant in the decision to return to working. 

The disincentives to work related to Social Security benefits stem from the fact that married and widowed people can claim Social Security spousal and survivorship benefits using their spouses’ past contributions rather than their own. That is, Social Security benefits for a married person are the higher between one’s own benefit entitlement and half of the spouse’s entitlement while the other spouse is alive (spousal benefit) and the higher between one’s own benefit entitlement and the deceased spouse’s after the spouse’s death (survival benefit). This implies that the lower labour supply of the secondary earner does not necessarily imply lower Social Security benefits.

In a recent paper (Borella et al. 2019), we measure these disincentives and estimate a life-cycle model to study the extent to which marriage-based taxes and Social Security benefit rules affect labour supply and savings. 

To get a better sense of the magnitude of these disincentives, Figure 2 plots four marginal tax rates as a function of women’s earnings. They refer to people born in 1945 in calendar year 1988, and to the marginal tax rates of single women and married women with husbands at three different earnings percentiles. For instance, a single woman earning $500 a year faces a marginal tax rate of -10% (also owing to the Earned Income Tax Credit), whereas a married woman earning the same amount faces a marginal tax rate of 14%, 18%, and 21% if she is married to a man in the 25th, 50th, and 75th income percentiles, respectively. This suggests that making married people file as single rather than jointly would imply much lower marginal tax rates for women and could thus have large incentives with respect to their labour market participation.

Figure 2 Marginal tax rate when single (starred red line), married to a man at the 25th (dashed orange line), 50th (dotted orange line), and 75th (circled orange line) income percentiles, plotted as a function of women’s earnings in 2016 dollars

The left panel of Figure 3 plots Social Security benefits at the household level while the husband is alive. It takes data from married women at retirement age and, based on the deciles of their own Social Security entitlement, plots their average household yearly Social Security benefits with (circled line) and without (crossed line) marital benefits. For instance, the number 1 on the horizontal axis represents married women aged 66 in our 1945 cohort that are in the lowest decile of their own Social Security contributions. At that decile, household Social Security benefits for those women and their husbands are $32,000 under marital benefits and $22,000 without marital benefits. A comparison of the two lines in this picture reveals that about 50% of married households benefit from Social Security marital benefits while their husband is alive and that these benefits can be very large.

The right panel of Figure 3 takes data from the same married women and plots what their own yearly Social Security benefits would be after their husband’s death with and without survivor’s benefits. For instance, a 66 year-old married woman at the lowest 10% of Social Security contributions, once a widow, would receive less than $500 a month based on her own contributions, whereas she receives $22,000 thanks to her husband’s contributions and survivorship benefits. The picture shows that, because the potential wages of most women are lower than men’s, and because women participate less in the labour force and work fewer hours, survivorship benefits are large for over 80% of married women in this cohort. This last set of graphs highlights that Social Security marital benefits are large and can also reduce married women’s incentives to work.

Figure 3 Average household Social Security benefits at age 66 by wife’s own Social Security benefit decile, with (dotted blue line) or without (starred red line) marital benefit, in 2016 dollars.

Notes: Left panel: Social Security benefits at the household level while the husband is alive. Right panel: Average survivor benefit by wife’s own Social Security benefit decile, with (dotted blue line) or without (starred red line) marital benefits, 2016 dollars.

To evaluate the effect of marriage-related taxes and Social Security benefits on female labour supply, we estimate a rich quantitative lifecycle model of labour supply and savings with single and married people who face a possible change in marital status. The model incorporates skill building on the job and includes medical spending and longevity risk. Importantly, our model not only fits the observed data on labour supply and savings for single and married men and women over the life cycle, but also implies realistic responses of participation and hours worked in the labour market when net wages change (labour supply elasticities). 

Using our model, we find that marriage-based taxes and Social Security benefits strongly reduce female labour supply. The elimination of these marriage-based rules would have raised participation at age 25 by over 20 percentage points for married women and by 5 percentage points for single women.  At age 45, participation for these groups would have been, respectively, 15 and 3 percentage points higher without these marriage-related provisions. In contrast, the elimination of these marriage-based rules would reduce the participation of married men starting at age 60, resulting in a participation rate that is 8 percentage points lower by age 65.

We also show that, if the government surplus resulting from the elimination of marriage-related provisions were used to lower income taxation, the vast majority of the population would reap large welfare gains, and the few households that would lose would experience small welfare losses.

These results refer to the cohort born around 1945. Given that the labour supply of married women has been increasing rapidly over time for cohorts born before the 1970s, a natural question that arises is whether the effects of these marital provisions are also large for younger cohorts in which married women are more likely to work. To shed light on this question, we also study a cohort that is ten years younger and for which we still have a labour market history. Importantly, their labour supply behaviour is quite similar to that of younger cohorts. We find that even for the 1955 birth cohort, the effects of eliminating marriage-based taxation and Social Security benefits are large. A revenue-neutral reform (that is, one that reduces the proportional component of the income tax to balance the government budget, arising from the cost savings from the elimination of marital Social Security benefits) would be welfare improving for the vast majority of people in this cohort.

References

Black, S E, D Whitmore Schanzenbach and A Breitwieser (2017), “The recent decline in women’s labor force participation”, in Whitmore Schanzenbach, D and R Nunn (eds), in The 51%: Driving growth through women’s economic participation, Brookings, The Hamilton Project. 

Borella, M, M De Nardi and F Yang (2019), “Are marriage-related taxes and social security Benefits holding back female labor supply?” NBER working paper 26097.

The Intergovernmental Panel on Climate Change (IPCC) has recently warned that climate change could cause an increase in the frequency and intensity of natural disasters, even in the optimistic scenario of a temperature increase by 1.5°C above pre-industrial levels. This development will potentially have devastating effects on vulnerable communities which are unable to cope with the humanitarian and economic risks arising from floods, storms and other adverse events (IPCC 2018). Therefore, international humanitarian aid aiming to alleviate human suffering and economic losses is expected to increase in importance. 

In order to facilitate rapid and efficient assistance that is independent of international and domestic politics, such aid is supposed to follow the principle of impartiality. The principle is firmly established in international law and dictates that humanitarian action should be implemented “solely on the basis of need, without discrimination on the grounds of other factors such as sex, ethnic affiliation, religion or political views” (Persson 2004). Whether humanitarian aid meets these standards is, however, questionable. A prominent example relates to cyclone Nargis in 2008. The natural disaster killed approximately 140,000 people and affected millions in Myanmar. While the need for international relief efforts was unquestionable, the government of Myanmar was accused of systematically blocking and delaying the entry of humanitarian aid for political reasons, as well as of preferentially channelling some of it to its own ethnic group (EAT and CPHHR 2008). More systematic evidence for political interference in humanitarian aid is also available. According to Drury et al. (2005), the decision to grant US humanitarian aid is highly political and strongly influenced by diplomatic alliances, regime types and US media coverage. Similarly, Eisensee and Strömberg (2007) demonstrate that natural disasters that receive larger coverage in US evening news have a higher probability to receive US assistance. They attribute this to the interests of the US government, either because citizens lobby for aid or because politicians aim to benefit from positive reporting about an issue that voters care about. 

While these studies reveal important insights on how US politics affect the allocation of humanitarian assistance, in our own recent work, we focus on the role of political factors within recipient countries (Bommer et al. 2019). Anecdotal evidence from policy reports by the Red Cross and Red Crescent Societies (Klynman et al. 2007) and the International Dalit Solidarity Network (2013) suggest that power relations at the community level within recipient countries can distort the allocation of humanitarian aid. We broaden this perspective by focusing on national political leaders in disaster-affected countries. Specifically, we investigate whether natural disasters hitting the birth region of political leaders receive more humanitarian support from the United States. 

Previous research suggests that birth regions of political leaders receive favourable treatment in a number of dimensions, as evidenced in economic activity as measured by nightlight intensity in more than 120 countries (Hodler and Raschky 2014), governmental resources in Norway (Fiva and Halse 2016) and Italy (Carozzi and Repetto 2016), infrastructure in Vietnam (Do et al. 2017) and Chinese aid in Africa (Dreher et al. 2019). Perhaps one of the most intriguing manifestations of this phenomenon occurred in Ivory Coast in 1983, when the Ivorian president decided to relocate the nation’s capital from heavily populated Abidjan to his birthplace Yamoussoukro, a village of 15,000 inhabitants at the time (Rice 2008). Such favourable treatment has been suggested to be the result of leaders preferring their hometowns for intrinsic reasons or of attempts to ensure electoral or political support from their stronghold. 

In Bommer et al. (2019), we examine the existence of a ‘home bias’ in the allocation of humanitarian aid from the US for 6,228 rapid-onset natural disasters, such as floods, storms and earthquakes, striking 50 countries over the 1964-2017 period (see Figure 1). 

Figure 1 Number of natural disasters in our sample of the 50 aid-receiving countries most frequently affected by rapid-onset disasters over the 1964-2017 period

We take these data from the Office of US Foreign Disaster Assistance (OFDA), which responds to an average of 65 disasters in more than 50 countries per year (USAID 2018). The response usually follows a two-step procedure. It begins with a local US diplomat responding to an assistance request from the recipient country’s government, for which a limited amount of up to $50,000 is available. In a second step, the OFDA officials coordinate with the government of the affected countries to determine whether and how much additional aid the OFDA should give. Importantly, while the level of coordination can vary, the governments of the affected countries are typically involved in the needs assessments by the OFDA. These serve as a basis for determining additional aid amounts (OFDA 2010). Hence, political motives from both donors and recipients can find their way into the processes to make allocation decisions.    

We test the existence of a home bias in the allocation of disaster aid by comparing aid that is allocated as a consequence of disasters hitting the birth region of political leaders with that of disasters hitting non-birth regions. In doing so, we face the problem that any difference in allocation could be a reflection of differences in need rather than home bias, for example because (birth) regions with political ties to the government are richer and better protected against the risks arising from natural disasters compared to other areas. To ease such concerns and establish a causal effect of leaders’ birth regions, we follow three strategies. First, we compare regions that are similar on a range of observable characteristics of the affected subnational area such as nightlight intensity, population density and ruggedness. Second, we only compare disasters that hit the same areas repeatedly, testing whether or not they receive more aid at times the current leader of the country was born there. In a third approach, we compare disasters hitting the birth region of the current leader with disasters affecting areas that are not birth regions at the time of the disaster, but during the previous or subsequent period. This allows us to exploit a discontinuity introduced by leader changes. As unobserved confounding variables are unlikely to exhibit discontinuities that are simultaneous to leader changes, this approach comes closest to measuring a causal effect.    

Our findings suggest that favouritism towards the birth region exerts a strong and robust influence on the amount of humanitarian aid. Depending on the specification, the increase in funding when disasters hit a birth region is 45%-85%, on average, compared to when another region is hit. However, we do not find evidence for a systematic birth region effect on the probability of receiving US-provided disaster relief.

To shed light on these results, we investigate whether US political and economic interests facilitate the home bias. We find that neither geopolitical alignment nor commercial relations with the US influences its size. On the contrary, recipient-country characteristics in which leaders should find it easier to misappropriate funds – such as clientelism prevailing in public spending or low bureaucratic quality – explain a substantial share of it. The involvement of the government in damage assessments, as well as the difficulties in verifying information the government provides, seem to enable country leaders to favour their birth regions. Finally, providing a novel dataset on ethnic power relations, we show that the observed favouritism is not explained by the geographic overlap of birth regions with ethnic homelands of country leaders, but constitutes instead a self-sustained, independent dimension of favouritism.

Taking a unique perspective that puts the political power of the disaster-affected population at its centre, our study uncovers an alarming distortion to the impartiality principle for US humanitarian aid.¹ Our results indicate that the US did not prevent the recipients of its humanitarian aid from allocating it towards their leaders’ birth regions. Politically marginalised groups might suffer as a consequence. In order to address this violation of the impartiality principle, the US government – as well as other aid donors with similar bureaucratic structures – should acknowledge the importance of internal political dynamics and revise its processes for disaster damage assessment and aid allocation accordingly. 

References

Bommer, C, A Dreher and M Perez-Alvarez (2019), “Home bias in humanitarian aid“, CEPR Discussion Paper DP13957.

Carozzi, F and L Repetto (2016), “Sending the pork home: Birth town bias in transfers to Italian municipalities”, Journal of Public Economics 134: 42–52. 

Dreher, A, A Fuchs, R Hodler, B Parks, P Raschky, and M Tierney (2019), “African leaders and the geography of China’s foreign assistance”, Journal of Development Economics 140: 44–71. See also on VoxDev.

Drury, A C,  R S Olson, and D A Van Belle (2005), “The politics of humanitarian aid: US foreign disaster assistance, 1964-1995”, Journal of Politics 67(2): 454–473.

Do, Q-A, K-T Nguyen, and A N Tran (2017), “One mandarin benefits the whole clan: Hometown favoritism in an authoritarian regime”. American Economic Journal: Applied Economics 9(4): 1–29. 

EAT and CPHHR (2008), After the storm: Voices from the delta, 2nd edition.

Eisensee, T and D Strömberg (2007), “News droughts, news floods, and US disaster relief”, Quarterly Journal of Economics 122(2): 693–728.

Fiva, J H and A H Halse (2016), “Local favoritism in at-large proportional representation systems”, Journal of Public Economics 143: 15–26.

Hodler, R and P A Raschky (2014), “Regional favoritism”, Quarterly Journal of Economics 129(2): 995–1033.

International Dalit Solidarity Network (2013), Equality in aid: Addressing caste discrimination in humanitarian response, Copenhagen, Denmark.

IPCC (2018), Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)]. 

Klynman, Y, N Kouppari and M Mukhier (2007), World disasters report: Focus on discrimination. Geneve, Switzerland: International Federation of Red Cross & Red Crescent Societies. 

Konyndyk, J and R Worden (2019), “People-driven response: Power and participation in humanitarian action”, CGD Policy Paper 155. 

OFDA (2010), Annual Reports.

Persson, G (2004), “The government’s humanitarian aid policy“, Government Communication 2004/05: 52

Rice, X (2008), “The president, his church and the crocodiles“, New Statesman, 23 October. 

USAID (2018), “Office of U.S. disaster foreign disaster assistance“. 

Endnotes

[1] Interestingly, our novel focus on the disaster-affected population has recently been matched in the policy arena by former USAID Director Jeremy Konyndyk and Rose Worden (2019), who suggest involving currently peripheral voices of directly affected populations in decision-making processes.

Yves here. We’ve been republishing posts from Health Care Renewal for a very long time, but the recap below of the many causes of health care industry dysfunction is staggering. There is a lot of work that needs to be done.

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Originally published at Health Care Renewal

In last night’s debate which included leading candidates from the Democratic Party for its presidential nomination, as reported by Mother Jones, Senator Bernie Sander (D-VT) said (per Mother Jones).

the current health care system is not only cruel, it is dysfunctional

The video is here.

So the concept of health care dysfunction has officially made it to the big time.

You Heard It Here First

What took so long?

We have been talking about health care dysfunction for a very long time, starting with a publication in 2003.

To better understand health care dysfunction, I interviewed doctors and health professionals, and published the results in Poses RM.   A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14(2): 123-130. (link here).  In that article, I postulated that US physicians were demoralized because their core values were under threat, and identified five concerns:

1. domination of large organizations which do not honor these core values
2. conflicts between competing interests and demands
3.  perverse incentives
4. ill-informed, incompetent, self-interested, conflicted or even corrupt leadership
5.  attacks on the scientific basis of medicine, including manipulation and suppression of clinical research stuides

After that my colleagues and I have tried to raise awareness of these and related issues, now mainly through the Health Care Renewal blog.  We also set up FIRM – the Foundation for Integrity and Responsibility in Medicine,  a US non-profit organization, to try to provide some financial support for the blog.

Health Care Dysfunction is Multi-Dimensional

Unfortunately, one sentence in a presidential debate hardly does justice to a huge and multi-faceted set of concerns.

Since 2003 we have broadened our thinking about what constitutes and causes US (and more global) health care dysfunction. Early on we noticed a number of factors that seemed to enable increasing dysfunction, but were not much discussed.  These factors notably distorted how medical and health care decisions were made, leading to overuse of excessively expensive tests and treatments that provided minimal or no benefits to outweigh their harms.  The more we looked, the more complex this web of bad influences seemed.  Furthermore, some aspects of it seemed to grow in scope during the Trump administration.

A brisk summary of these often complex issues follows.

Threats to the Integrity of the Clinical Evidence Base

The clinical evidence has been increasingly affected by manipulation of research studies.  Such manipulation may benefit research sponsors, now often corporations who seek to sell products like drugs and devices and health care services.  Manipulation may be more likely when research is done by for-profit contract research organizations (CROs). When research manipulation failed to produce results to sponsors’ liking, research studies could simply be suppressed or hidden.  The distorted research that was thus selectively produced was further enhanced by biased research dissemination, including ghost-written articles ghost-managed by for-profit medical education and communications companies (MECCs). Furthermore, manipulation and suppression of clinical research may be facilitated by health care professionals and academics conflicted by financial ties to research sponsors.

Deceptive Marketing

The distorted evidence base was an ingredient that proved useful in deceptive marketing of health care products and services. Stealth marketing campaigns became ultimate examples of decpetive marketing.  Deceptive marketing was further enabled by the use of health care professionals paid as marketers by health care corporations, but disguised as unbiased key opinion leaders,another example of the perils of deliberate generation of  conflicts of interest affecting health care professionals and academics.

Distortion of Health Care Regulation and Policy Making

Similarly, promotion of health policies that allowed overheated selling of overpriced and over-hyped health care products and services included various deceptive public relations practices, including orchestrated stealth health policy advocacy campaigns.  Third party strategies used patient advocacy organizations and medical societies that had institutional conflicts of interest due to their funding from companies selling health care products and services, or to the influence of conflicted leaders and board members.  Some deceptive public relations campaigns were extreme enough to be characterized as propaganda or disinformation.

More recently,  as we noted here, we became aware of efforts by foreign powers to spread such disinformation for political, not just financial gain, e.g., in April, 2019, we discussed evidence that Russia had orchestrated a systemic disinformation campaign meant to discredit childhood vaccinations, particularly for the measles, which was likely partly responsible for the 2019 measles outbreak

Furthermore, companies selling health care products and services further enhanced their positions through regulatory capture, that is, through their excessive influence on government regulators and law enforcement.  Their efforts to skew policy were additionally enabled by the revolving door, a species of conflict of interest in which people freely transitioned between health care corporate and government leadership positions.

In the Trump era, we saw a remarkable increase in the incoming revolving door, people with significant leadership positions in health care corporations or related groups attaining leadership positions in government agencies whose regulations or policies could affect their former employers (look here).   We found multiple managers from and lobbyists for big health care corporations being put in charge of regulation of and policy affecting – wait for it – big health care corporations, a staggering intensification of the problem of the revolving door.

Bad Leadership and Governance

Health care leadership was often ill-informed.  More and more people leading non-profit, for-profit and government have had no training or experience in actually caring for patients, or in biomedical, clinical or public health research.  Lately, during the Trump administration, we began to find striking examples of top government officials expressing ill-informed, if not outright ignorant opinions about medical, health care and public health topics look here).  We had not previously expected leaders of government to be personally knowledgeable about health related topics, but traditionally they consulted with experts before making pronouncements.

Health care leaders often were unfamiliar with, unsympathetic to, or frankly hostile to their organizations’ health care mission, and/or health care professionals’ values. Often business trained leaders put short-term revenue ahead of patients’ or the public’s health.  In addition, we began to see evidence that leaders of health care corporations were using their power for partisan purposes, perhaps favoring their personal political beliefs over their stated corporate missions, patients’ and the public’s health, and even  corporate revenues. Then, we started seeing appointed government health care leaders who lacked medical, health care or public health background or expertise but also whose agenda also seemed to be overtly religious or ideological, without even a nod to patients’ or the public’ health (look here).

Leaders of health care organizations increasingly have conflicts of interest.   Moreover, we have found numerous examples of frank corruption of health care leadership.  Some have resulted in legal cases involving charges of bribery, kickbacks, or fraud.  Some have resulted in criminal convictions, albeit usually of corporate entities, not individuals.

In the Trump administration, corrupt leadership extends from the corporate world to the highest levels of the US government.  We discussed the voluminous reports of conflicts of interest and corruption affecting top leaders in the executive branch, up to and including the president and his family (look here).  One cannot expect effective enforcement of ethics rules and anti-corruption laws in such an environment

Abandonment of Health Care as a Calling

A US Supreme Court decision was interpreted to mean that medical societies could no longer regulate the ethics of their members, leading to the abandonment of traditional prohibitions on the commercial practice of medicine.  Until 1980, the US American Medical Association had  ruled that the practice of medicine should not be “commercialized, nor treated as a commodity in trade.”  After then, it ceased trying to maintain this prohibition. Doctors were pushed to be businesspeople, and to give making money the same priority as upholding their oaths. Meanwhile, hospitals and other organizations that provide medical care are increasingly run as for-profit organizations. The physicians and other health care professionals they hire are thus providing care as corporate employees, resulting in the rise of the corporate physician.  These health care professionals may befurther torn between their oaths, and the dictates of their corporate managers.

Perverse Incentives Put Money Ahead of Patients, Education and Research

We have extensively discussed the perverse incentives that seem to rule the leaders of health care. Financial incentives may be large enough to make leaders of health care organizations rich.  Incentives often prioritize financial results over patient care.  Some seem to originate from the shareholder value dogma promoted in business school, which de facto translates into putting current revenue ahead of all other considerations, including patient care, education and research (look here).

Cult of Leadership

Health care CEOs tend now to be regarded as  exalted beings, blessed with brilliance, if not true “visionaries,” deserving of ever increasing pay whatever their organizations’ performance.  This pheonomenon has been termed “CEO disease” (see this post).  Afflicted leaders tend to be protected from reality by their sycophantic subordinates, and thus to believe their own propaganda.

Managerialism

Leadership of health care organizations by managers with no background in actual health care, public health, or biomedical science has been promoted by the doctrine of managerialism which holds that general management training is sufficient for leaders of  all organizations, regardless of their knowledge of the organizations’ fundamental mission.

Impunity Enabling Corrupt Leadership

Most cases involving corruption in large health care organizations are resolved by legal settlements.  Such settlements may include fines paid by the corporations, but not by any individuals.  Such fines are usually small compared to the revenue generated by the corrupt behavior, and may be regarded as costs of doing business.  Sometimes the organizations have to sign deferred prosecution or corporate integrity agreements.  The former were originally meant to give young, non-violent first offenders a second chance (look here).  However, in most instances in which corruption became public, are no negative consequences ensue for the leaders of the organizations on whose watch corrupt behavior occurred, or who may have enabled, authorized, or directed the behaviors.

Taboos

Some of the above topics rarely appeaedr in the media or scholarly literature, and certainly seem to appear much less frequently than their importance would warrant. We have termed the failure of such issues to create any echoes of public discussion the anechoic effect.

Public discussion of the issues above might discomfit those who personally profit from the status quo in health care.  Those involved in the leadership and governance of health care organizations and their cronies, also have considerable power to damp down any public discussion that might cause them displeasure. In particular, we have seen how those who attempt to blow the whistle on what really causes health care dysfunction may be persecuted.

However,in the Trump administration,  we began to also note examples of government officials attempting to squelch discussion of scientific topics that did not fit in with its ideology, despite constitutional guarantees of speech and press free from government control (look here).

What a witches’ brew, surely leading to a cruel and dysfunctional system.

Discussion

In 2017, we said that it was time to consider some of the real causes of health care dysfunction that true health care reform needs to address, no matter how much that distresses those who currently most personally profit from the status quo.

Furthermore, in 2019 we asserted that all the trends we have seen since 2017 are towards tremendous government dysfunction, some of it overtly malignant, and much of it likely enabling even worse health care dysfunction.

Now that health care dysfunction is in the headlines, we hope health care and public health professionals, patients, and all citizens will have a much more vigorous response to it.  US health care dysfunction was always part of the broader political economy, which is now troubled in new and dangerous ways.  We do not have much time to act.

If not now, when?

If not us, who?

Yves here. The reporting on politics in Bolivia and the developments that led to the ouster of Evo Morales has generally been poor. This post argues that Boliva’s dependence on energy exports to support its redistribution policies put Morales in a tenuous position.

By Alke Jenss, a senior research fellow at Arnold-Bergstraesser Institute in Freiburg, Germany, and researches the intersection of critical political economy, state theory and urban (in-)security in Latin America. Originally published at openDemocracy

Symbols are essential to understanding the current turmoil in Bolivia. Since November 10th 2019, the Wiphala flag has been purged from official buildings. Police ripped it from their uniforms, where it had been emblazoned for the last 10 years. Self-declared interim president Jeanine Añez held a large bible when sworn in. Church representatives reportedly said “the Pachamama will never return to the (Government) Palace. Bolivia belongs to Christ.”

Timelines and institutional analysis show clearly that Evo Morales was ousted in a coup. The Organization of American States (OAS) suggested new elections due to “irregularities” in the elections of October 20th. By now, statistical analysis shows that even such irregularities may not have existed at all. Yet Morales announced new elections, following OAS recommendations. Despite this, the chief military general “asked” him to resign.

To explain the dispute of images, class, race, and gender relations are fundamental. When the Morales government took office in 2005, it represented a great desire for change. Poverty levels had reached 80 % in rural areas; conflicts raged about privatization of public goods (water) and extraction of natural resources (gas). That discontent led diverse indigenous and social movements to rally behind Morales’ candidacy, claiming neither the state’s institutional set-up nor its actual policies represented them.

The expressed aim of the Morales government’s “transformation process”, condensed in the path-breaking constitution of 2009, was to fundamentally transform the state. Symbolically, this became the Plurinational State of Bolivia. This is what the wiphala flag stands for: a recognition of the majority of people in Bolivia who self-identify as indigenous.

Changes after 2005 were dramatic. Redistribution policies massively reduced poverty from 63.9% (2004) to 32.7% (2013). Income inequality fell remarkably until 2011. Pensions were introduced even for informal sector workers; public spending on education and health soared; the constitution limited private property; agrarian reform commenced. Highly controversial investor-state dispute settlements were abandoned. A country which hadn’t allowed indigenous women to enter parliament now had its first female indigenous justice minister, Casimira Rodríguez.

Yet, this “transformation process” was not only truncated by the recent coup. Conflicts laid bare its structural contradictions, subject to long-existing asymmetrical integration into world economy. Social policies were made possible precisely by deepening extraction. It was the commodities super-cycle with high demand and oil and gas prices that enabled distribution, rather than redistribution. The nationalization of oil and gas extraction, while an economic success and supported by 92 % of society, remained partial; transnational corporations accepted higher taxes and joint ventures with state-owned firms.

Not only did this further the state’s dependence on exports, it prevented the diversification of the economy, the build-up of more value-added production industries and protection against volatile world market prices. Predictably, the fiscal deficit rose with falling oil prices. 76 % of Bolivia’s exports are minerals and rare metals, 15.9% agro-industrial products. Since 2015, the trade balance is negative – which it hadn’t been since 2005.

In 2010, Bolivia organized the World Peoples’ Conference on Climate Change, which elaborated far-reaching and agenda-setting declarations on climate change. Actual policies, however, contradicted the declared socio-ecological transformation.

The National Development Plan 2025 (NDP 25), published in 2015, declared Bolivia a regional ‘energy power’, based primarily on fossil fuels and large hydropower dams. Vicepresident García Linera declared:

“The twenty-first century for Bolivia is to produce oil, industrialise petrochemicals, industrialise minerals… We’re seeking out the areas where there’s more gas, where there’s water, sites for dams. Where there is water, it’s like pure gold falling from the sky.”

The plan further contradicted the buen-vivir agenda, potentials for an energy transition, and largely ignored the ecologically negative effects of large-scale hydropower projects. Renewables only make up 2 % of Bolivia’s energy production.

NDP 25 revived the conflict over state-planned roads through the TIPNIS national park. In 2011, indigenous groups, heavily disappointed by infrastructure plans they feared may destroy their territories, marched against the government. Morales put the road project on hold, but both CIDOB (Federation of Indigenous People of Bolivia) and CONAMAQ (National Council of Ayllus and Markas del Qullasuyu) withdrew their support. In 2015, NDP 2025 decrees revived the TIPNIS road, and oil and gas explorations in protected areas, conditioned on ecological mitigation. Many gas and oil concessions overlap with both national parks and indigenous communal land titles, like TIPNIS, exacerbating contradictions.

The consolidation of Morales’ political party, MAS, as a political project itself, within these contradictions, changed who could influence state policies. Ecological fractions within and initiatives outside MAS lost access to decision-making. MAS seemed to co-opt, channel and restrict political participation. Feminist groups long criticized MAS and Morales for downplaying the effects of their own patriarchal attitudes on Bolivian gender relations. Rates of gender-based violence are high in Bolivia; investment in gender policies is no priority.

Morales’ broad base slowly shrank. This reached a tipping point when on February 21, 2016, the government held a referendum to determine if Morales could run for a fourth term. A small majority of the electorate said no. The government resorted to legal mechanisms through parliament, and the constitutional court in 2018 declared that denying Morales’ candidacy would infringe his political rights. In response, criticism of deteriorating practices within MAS from diverse places within Bolivian society grew. The “transformation process” ceased to be their project.

However, the economic and cultural background of those sectors dominating the post-coup scenario is entirely different from those indigenous and environmental movements that criticize Morales for not being radically transformative.

Upper-class white supremacists from eastern provinces, deeply racist and sexist, seem to have formed an alliance with indigenous organizations based primarily in Potosí’s mining sector, which have long-standing conflicts with the MAS. Presidential candidate Carlos Mesa was side-lined; instead, a radicalized group formed around Luis Fernando Camacho. He leads the Santa Cruz Civic Committee and apparently gained police support by promising higher pensions.

Far-right senator Jeanine Añez from Beni declared herself president without necessary quorum. Audio files published by Costa Rican newspaper El Periódico suggest right-wing Brazilian executives may have been involved, who Camacho repeatedly met. The alliance with Marcos Pumari, leader of mining region Potosí’s Civic Committee, whose confrontations with MAS over royalties date back to the mining law (2013), enabled this white, homogenous group to claim diversity.

The Civic Committees are similar to chambers of commerce. Santa Cruz, Bolivia’s wealthiest region, produces around 70% of Bolivia’s food, hosts important gas extraction and hydropower projects and expanded agro-industries. Camacho’s family co-owns the business group Inversiones Nacional Vida with investments in gas, services and insurance companies.

Regional business elites from the very same wealthy eastern provinces, the so-called media luna, heavily opposed Morales’ policies since 2005. Fear of losing privileged access to resources, incipient land redistribution and indigenous communities’ growing strength were major factors for escalating these tensions into threats of secession in 2008. Camacho was vice president of the Organización Juvenil Cruceñista (UJC), an organization accused of acting as a violent militia during that conflict.

Negotiations between economic elites and the Morales government pacified the conflict for several years, but implied great concessions to these forces. The MAS opened up to agribusiness proposals. Policies allowing more land to be cleared for agro-industries, however, sharply slowed land reform and contributed to intensified deforestation and recent fires, which in turn horrified indigenous communities.

Now the rift is deeper than ever. The organization of lithium extraction, fundamental for a transition to electric cars, fuelled existing tensions. Protests led by Pumari and post-election pressure led Morales to cancel a deal between recently founded, state-owned Lithium corporation YLB (Yacimientos de Litio Bolivianos) and mid-sized German energy systems company ACI Systems that included processing lithium within Bolivia. Morales had presented the first fully Bolivia-produced electric car in September. Yet the Potosí Civic Committee demanded bigger shares of royalties for its region.

The protests after October 20th were first dominated by middle class urban youth, but amplified to broader sectors who protested against Morales for a variety of the reasons outlined above. The conflation of indigenous protestors with MAS and of earlier protests against Morales with coup supporters is highly problematic.

The multiplicity of voices instead reveals a highly heterogeneous, politicized society. The Union Federation of Mine Workers of Bolivia (FSTMB) pointed out Morales’ achievements yet asked him to resign to evade bloodshed. The indigenous peasant union (CSUTCB) demanded to not accept Morales’ resignation and that police operate within the law. Other indigenous groups heavily condemn Morales for never transforming the ‘development model’. They demand energy transition instead of large infrastructure projects, but also hold the Civic Committees around Camacho responsible for rampant fires in Santa Cruz. Feminist groups have condemned the coup, despite earlier criticism of Morales, and the extreme racist and violent attacks by coup supporters and military alike.

In El Alto, both MAS and other movements have mobilized against such attacks to an extent that police withdrew from this urban indigenous centre.

The violent crackdown on MAS supporters and any other mobilizations that condemn the coup is a sign that this heterogeneity is both strength and weakness: Those who marched against Morales in October may now well be subject to severe repression by an extremist right-wing government. Indigenous critique of Morales was never intended to result in a coup, but in democratic transition.

On the Farm London Review of Books. On animal sentience.

Left in Car on Its Own, Florida Dog Shifts Into Reverse and Drives in Circles for an Hour DailyBeast (David L)

Give Bees A Chance: Ailing Honeybee Populations May Soon Get A Booster Of Healing Fungi Forbes (David L). I hate the word “healing” but that doesn’t mean this approach does not have merit.

Physicists Have Finally Seen Traces of the Long-Sought ‘Axion’ Particle LiveScience. See geeky version in Nature: Axionic charge-density wave in the Weyl semimetal (TaSe4)2I

Bah humbug! North Pole lacks enough ice for sculptures Associated Press (resilc)

The Collapse of Civilization May Have Already Begun Vice (David L) versus The apocalypse: It’s not the end of the world Bulletin of the Atomic Scientists

Deep Adaptation: A Map for Navigating Climate Tragedy IFLAS (David L)

IT runs on Java 8 Vicki Boykis (vlade). From earlier this year, still germane.

China?

Asia’s powerhouse fuels global surge in coal use The Australian (Troy P). So much for the idea that China has embraced green energy.

Ex-CIA officer sentenced to 19 years in prison for conspiring to spy for China Reuters (JTM)

Brexit. Forgive me for putting UK election stuff in this bucket…

General election 2019: Jeremy Corbyn to remain neutral in any new Brexit vote BBC

Labour sets out advanced world’s harshest corporate tax regime Financial Times

Voters dislike Jo Swinson the more they see her, poll finds Times. So I’m not nuts.

Colombia

Curfew ordered in Bogota amid violent protests DW

Colombia protesters defy curfew as anti-gov’t rallies continue Al Jazeera

The CIA’s Jack Ryan Series Is ‘Regime-Change’ Propaganda Aimed At Venezuela Mint Press (Chuck L)

New Cold War

Charges of Ukrainian Meddling? A Russian Operation, U.S. Intelligence Says New York Times (Troy P)

Ukraine and Meddling in 2016 Yasha Levine. Important.

Putin could have been ‘FIRED’ in 1998 – from top spy job that propelled him to presidency RT (Chuck L)

Syraqistan

After Al-Baghdadi’s Death, Media Failed to Ask Where ‘War on Terror’ Is Going FAIR

Al-Baghdadi Killing: Knocking off the Odd Man Out American Herald Tribune (hat tip Off Guardian). JTM: “We mopes never can know what actually happened, amiright?”

Big Brother is Watching You Watch

Personal and Social information of 1.2 billion people Discovered in Massive Data Leak Data Viper. A less geeky version at Wired: 1.2 Billion Records Found Exposed Online in a Single Server

DOD Joins Fight Against 5G Spectrum Proposal, Citing Risks To GPS ars technica. Haha, this is getting fun!

NYC Creates a High-Level Position To Oversee Ethics In AI engadget. Why do I think this position was created for Cathy O’Neil (author of Weapons of Math Destruction)? Although they might want someone with more bureaucratic experience.

Trump Transition

America Will Never Live Down Trump’s War Crime Pardons TruthDig (Chuck L)

IRS Says Millionaires Can Keep Estate Tax Benefits After 2025 Bloomberg

Worker who raised alarm before deadly New Orleans hotel collapse to be deported The Hill

Russia Inquiry Review Is Said to Criticize F.B.I. but Rebuff Claims of Biased Acts New York Times (furzy)

Sacha Baron Cohen’s Keynote Address at ADL’s 2019 Never Is Now Summit on Anti-Semitism and Hate Anti-Defamation League (furzy). Note this speech has been widely picked up, from BBC to Slashdot, for instance: Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook Daily Beast.

Impeachment

Fiona Hill Is the Antidote to Trump Andrew Sullivan, New York Magazine. Resilc: “MSNBC’s new love child.”

Trump impeachment inquiry: Released records reveal Pompeo-Giuliani contacts BBC

Impeachment Non-Bombshells Endanger Democrats in 2020 Aaron Mate, Nation (UserFriendly)

If John Bolton Keeps Refusing to Testify, Congress Should Arrest Him Time (furzy)

Exclusive: Giuliani associate willing to tell Congress Nunes met with ex-Ukrainian official to get dirt on Biden CNN (allan)

“It Is Hard to Read This as Anything but a Warning”: New Polling Suggests Democrats’ Impeachment Push Could Alienate Key Voters Vanity Fair. Resilc flags this part:

Stop talking about issues that matter to you, not to me. Impeachment proceedings are viewed as bread and circuses for the anti-Trump crowd in Washington and the media—or, as Stanford political science professor Morris Fiorina described it to me, “entertainment and confirmation.” That’s a dangerous perception as Democrats approach one of the most consequential and fraught elections of our times.

Why skeptics on the left should care about impeachment The Week (UserFriendly)

US, EU gave over $20 billion in military and economic aid to Ukraine since 2014 WSWS

2020

Why Elizabeth Warren’s Foreign Policy Worries America’s Allies Defense One. Resilc: “Endless waste and a hollowed-out USA USA should worry them more.”

Wisconsin Governor Evers Signs ALEC-Inspired Bill to Criminalize Protest PR Watch (UserFriendly)

Our Famously Free Press

False Equivalence in the Age of Trump FAIR (UserFriendly)

A+ correction pic.twitter.com/LveoknpEkG

— Jake Maccoby (@jdmaccoby) November 22, 2019

Explainer: California faces decade of ‘unique’ wildfire blackouts Reuters. EM: “As some guerilla signage posted during the late-October 3-day outage in my neck of Marin aptly put it, welcome to Venezuela!”

A climate-change fix is the ‘biggest investment opportunity in history’: Al Gore to millennials MarketWatch (David L)

High-Beta Stock Trade Seizes Up Right After Everyone Piled In Bloomberg

WeWork to ditch leasing model in many cities Financial Times

Personal loans are ‘growing like a weed,’ a potential warning sign for the U.S. economy – San Antonio Express-News (resilc)

World’s largest hedge fund Bridgewater reportedly has big bet on market crash CBS (furzy)

Dear @elonmusk, Silence. pic.twitter.com/7mzud757ZM

— David Einhorn (@davidein) November 22, 2019

Elon Musk’s net worth plunges $768m in a day after cybertruck fiasco Guardian (UserFriendly)

OK Boomer, Who’s Going to Buy Your 21 Million Homes? Wall Street Journal

Class Warfare

I paid $300 an hour for the VIP experience at Disneyland, and it made me realize how wealth has transformed the American Dream Business Insider

Baldwin, Florida, opens town-run grocery store after becoming a food desert Washington Post

Dylan Ratigan: The Super Rich Have No Country. YouTube. UserFriendly: “This is a 2 hour tour de force nailing down the failures of the media and Democrats on the GFC. Great explanation of the whole GFC too.”

Opinion: Here’s the formula for paying no federal income taxes on $100,000 a year MarketWatch (JohnnyGL)

Foster America Al Franken (furzy)

Antidote du jour (furzy). Humpback whales feeding in Alaska:

And a bonus (DK):

This is HILARIOUS. 🦆😂

These rescued ducks rush outside on the first day of snow only to turn back around just as quickly!

Video from the wonderful Sanctuary at SHO in Vermont. ❄️ #loveALLanimals pic.twitter.com/2VuybK51jk

— ༻⋆≺ Martin 🏳️‍🌈 ≻⋆༺ (@KlatuBaradaNiko) November 22, 2019

See yesterday’s Links and Antidote du Jour here.

FuturePundit on twitter has an interesting theory of Elon Musk’s technology portfolio, namely a lot of it will be very valuable for living in a failed state.

Solar panels, for example, are a necessity when the state can’t deliver power reliably, as is now the case in California.

Solar panels plus the Tesla give you mobility, even if Saudi Arabia goes up in smoke and world shipping lines are shut down.

Starlink, Musk’s plan for 12,000 or more cheap, high-speed internet satellites, will free the internet from reliance on any terrestrial government.

Musk’s latest venture, the truck, certainly fits the theme and even if the demonstration didn’t go as well as planned isn’t it interesting that the truck is advertised as bulletproof. Mad Max would be pleased.

And what will you be carrying in your Tesla truck? One of these for sure.

Finally, the Mars mission is the ultimate insurance policy against failed states.

This week, we speak Ilana Weinstein, founder and CEO of The IDW Group, a leading consulting & hiring boutique for hedge funds, private equity and family offices in search of top investment talent. Her career took her from University of Pennsylvania to Goldman Sachs to Harvard Business School to the Boston Consulting Group.

She works with firms such as Citadel, Millenium, Point 72, and other highly-rated, sophisticated shops.

We discuss how difficult the present environment is for the hedge fund world. When she launched IDW in 2003, there were 3,000 hedge funds managing $500 billion; today, there are 11,000 hedge funds managing $3.5 trillion.  She explains why “Scale” is so important in the hedge fund world — data science and quant are a path to alpha, and very few firms can afford that sort of access to talent.

We discuss why it is a myth that the quickest way to achieve wealth is to launch a hedge fund. Most of the 11,000 hedge funds are single manager funds — neither Multi-Strat nor Multi manager — she notes two thirds of funds have an average AUM of $250 million. She suggests that the shakeout in hedge funds is continuing: “Its like a cottage industry of two bit players;” most of these guys will either muddle along or not exist in a few years.

She notes that there is a “war for talent” and that those people who can consistently generate alpha are sought after.

Her favorite books can be seen here; A transcript of our conversation will be available here.

You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.

Next week, we speak with Matt Benkendorf, of Vontobel‘s Quality Growth Boutique, a publicly traded $110 billion Swiss investment bank. Benkendorf is the CIO of the wealth asset management division. His division was just awarded the Active International Equity Strategy of the year and Active Global Equity Strategy of the year.

Ilana Weinstein’s favorite books

1. I Am Charlotte Simmons

2. The Big Short: Inside the Doomsday Machine

3. Hacking Darwin: Genetic Engineering and the Future of Humanity

Books Barry mentioned

1. The Spider Network: How a Math Genius and a Gang of Scheming Bankers Pulled Off One of the Greatest Scams in History

2. The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution

3. The Bonfire of the Vanities