Author: wrongologist

Saturday Soother – May 7, 2022

The Daily Escape:

Griffith Observatory, LA, CA – April 2022 photo by Mike Holzel

You undoubtedly missed it, but on Wednesday, Biden gave a short speech on the budget deficit and the national debt. You can watch a video of his talk here. You didn’t see it because it received virtually no coverage in the media. From Robert Hubbell:

“….let’s engage in a thought experiment: Ask yourself, ‘By what amount has the deficit increased during Biden’s tenure—rounded to the nearest $1 trillion?’”

It’s a trick question. During Biden’s first year in office, the deficit decreased by $350 billion and is on track to decrease by an additional $1.5 trillion by the end of this fiscal year (9/30/22). It will be the largest single yearly decline in American history. Biden also said that this quarter, for the first time since 2016, the Treasury Department is planning to pay down a small portion of the national debt.

Biden pointed out that the deficit increased for each year of the Trump administration, both before and after the pandemic. Let’s remember that the main driver for deficits during Trump’s administration was the Republican 2017 tax cut for corporations and millionaires. The Trump tax cuts didn’t add any additional revenue, and without any offsetting savings, deficit spending went way up.

After Biden finished speaking, he took a few questions from the press. He was immediately asked about Russian sanctions and the leaked draft of the Supreme Court’s abortion opinion. Biden responded by saying:

“No one asked about deficits, huh?….You want to make sure this doesn’t get covered.”

Why isn’t good economic news covered by the media? Most members of the media seem to be uncomfortable with it. Biden shares responsibility for getting the good news out as well. He should speak to the American people directly, not just indirectly through the press in the middle of the day.

Maybe Ukraine’s Zelensky could be a role model. He speaks directly to his people every day. Had Biden announced paying down the debt and cutting the deficit while seated at the Resolute Desk in the Oval Office, people would know that it was a big deal.

He should also speak about the location and targeting information we gathered about Russia’s cruiser and then shared with Ukraine:

“Intelligence shared by the US helped Ukraine sink the Russian cruiser Moskva, US officials told NBC News, confirming an American role in perhaps the most embarrassing blow to Vladimir Putin’s troubled invasion of Ukraine….The US…was not involved in the decision to strike.”

Despite America’s chicken hawk pundits’ finger-wagging, releasing this information hurts Russia’s already badly-run war effort. It shows Putin’s bad decision-making, poor command structure, and with it a likely collapse of morale. Going public also helps other NATO members see the differences with Trump’s four years of doing everything he could to sow distrust in the alliance.

There is a big country outside of DC desperate for good news. And therein lies the central problem for Democrats. Biden delivered this speech just before a meeting with Olympic athletes. Wrongo bets that this is the last we will hear from Biden on this accomplishment.

Just like FDR used his “fireside chats” to brief Americans on what his administration was doing, Biden should speak directly to the American people when necessary on matters of significant importance to the nation. He needs to discuss his accomplishments at every opportunity—and not just from the East Room of the White House.

Better messaging has to come from the top. If it does, voter support will follow. Oh, and by the way, we had another very good jobs report on Friday. The unemployment rate is 3.6%, and 428,000 new jobs were created last month according to the BLS. But the media only report about inflation.

It’s a continuation of Biden’s record job creation. In his first year in office, there were 6.6 million jobs added to the economy, 60% more than the next highest total, which was 3.9 million under Jimmy Carter. Wait, you thought Trump was the biggest job creator in history just because he said so? Wrong!

You might say that Putin is losing his domestic disinformation war while Biden is losing his domestic information war.

Time to turn off the news for a few minutes, and center ourselves for another rock ‘em, sock ‘em week ahead. It’s time for our Saturday Soother!

Here on the fields of Wrong, our crab apple trees’ blossoms will open over the weekend. It appears that we may not have bluebirds in our nest boxes for the first time in 10 years. A juvenile Cooper’s Hawk is using a box as his perch to survey our mix of woods and open grassland. That has driven many birds away.

So, grab a seat by a south-facing window and listen to Beethoven’s “Triple Concerto in C Major, Op. 56 No. 2” Largo, and Attacca, performed in 2019 by Anne-Sophie Mutter, Daniel Barenboim, and Yo-Yo Ma, accompanied by the West-Eastern Divan Orchestra at Philharmonie Berlin:

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Thoughts on Alito’s Draft Opinion

Daily Escape:

Chama River, near Abiquiu, NM – 2022 photo by James C. Wilson

Wrongo’s last column spoke about how the Republican Party had become the Party of White Christian Nationalists. And that was before the draft opinion overturning Roe v. Wade was leaked to the world. It seems that this likely decision is a key example of how radical Christians are assuming a political role in America that isn’t dissimilar to the Taliban’s in Afghanistan.

Justice Alito’s draft opinion reinforces the view that there’s a very dangerous Christian movement afoot in our nation. It’s not enough for them to live in a country where they are completely free to practice their own religious beliefs. They require the rest of us to live by their religious code, too.

Two thoughts: First about the Court’s legitimacy in the eyes of the public when they overturn a 50-year-old precedent. The Editorial Board of the WaPo summarized the damage to the legitimacy of the Court that Justice Alito is likely to inflict:

“The Court’s legitimacy rests on the notion that it follows the law, not the personal or ideological preferences of the justices who happen to serve on it at any given time….What brought the Court to its current precipice was not a fundamental shift in American values regarding abortion. It was the [result of] shameless legislative maneuvering of Senate GOP leader Mitch McConnell, who jammed two Trump-nominated justices onto the Court.”

For some time, you’ve been able to predict the votes of Supreme Court Justices by knowing the Party of the president that appointed them. That is particularly true if the issue is either overtly political or a Culture War proxy for Republican Party doctrine.

The American people want to believe the law is fair and impartial, because everyone wants to live in a just and predictable society. But this isn’t what Conservatives want. Their so-called love of religion and love of authority move them to reduce or eliminate voting rights, and now, to eliminate women’s rights.

Second, Wrongo thinks that the Conservative Court has gone a political bridge too far. Most polls show that the rights granted in the Roe v. Wade decision are broadly popular, even among Republicans. And Americans have lived with those rights for almost 50 years, assuming it was an inviolable Constitutional right, you know, like owning a gun.

Heather Cox Richardson says that the Supreme Court has never before taken away a Constitutional right. That means there will certainly be a political backlash against those who have supported this attack against women specifically, and against privacy rights in general.

Pew reports that women are more likely than men to express support for legal abortion (62% vs. 56%). And among adults under age 30, 67% say abortion should be legal in all or most cases, as do 61% of adults in their 30s and 40s.

This describes the foundation of a political movement: Young women as the vanguard of an anti-Republican crusade (pardon the Christian pun). We also know that young people historically have had the lowest voter turnout, dating back to the 1960s. Here’s a graph showing what percentage of women have voted by age group:

Source: Stastia

It was only in 2020 that very young women reached the 50% turnout level for the first time in 50 years. They still lag all other age groups in voting. This means that a wealth of untapped political power lies waiting to be flexed this fall, and overturning Roe is the spark that can light the fire.

Add to that Black and Hispanic women who according to a Guttmacher Institute report are, respectively, three and two times more likely to have an unintended pregnancy than white women. Nationally, Black women had 37% of abortions, white women had 34%, and Hispanic women had 22%. Black women are also more than three times more likely to suffer a pregnancy-related death compared to white women.

Pew also reported that two-thirds of Asian (68%), and Black adults (67%) say abortion should be legal in all or most cases, as do 58% of Hispanic adults.

All of this creates the basis for a national political movement to defeat anti-abortion candidates at local, state, and national levels. Think about how a young woman like Mallory McMorrow who spoke so effectively against the Republican Culture War, could be a leader in the fight.

Larry Sabato’s Crystal Ball lists seven states that offer the biggest potential for a Democratic backlash driven by abortion rights: Arizona, Georgia, Michigan, New Hampshire, North Carolina, Pennsylvania, and Wisconsin. Each of these states has a highly competitive gubernatorial or Senate race on tap for this fall, and several of them have two.

Before you say it’s impossible, remember that in Ireland in 2012, the death of a young woman who had been denied a medically necessary abortion became a rallying cry for the abortion rights movement. In 2018, this Catholic country held a referendum to change their Constitution to legalize abortion, which passed with over 66% support.

The non-Christian-radical path forward is via the ballot box, where women should be poised to lead us to a rebuilt society. Even as the Roberts Court and Republicans turn their backs on the Constitution, we must still embrace it.

The Roberts Court’s radical Christian majority is, intentionally or not, administering a fatal blow to the Court’s legitimacy.

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Tuesday Wake Up Call – May 3, 2022

The Daily Escape:

Sunrise, Ocean City, NJ – April 2022 photo by Sri Reddy

Jennifer Rubin’s article in the WaPo says that the GOP is not a political party anymore. It’s become a movement dedicated to imposing White Christian nationalism:

“The media blandly describes the GOP’s obsessions as “culture wars,” but that suggests there is another side seeking to impose its views on others. In reality, only one side is repudiating pluralistic democracy — White, Christian…who are becoming a minority group and want to maintain their political power.”

These are the people driving the Republican bus. Any progress is soon followed by their claims of victimhood. From Rubin:

“No one should be surprised that the “big lie” has become gospel in White evangelical churches. The New York Times reports: “In the 17 months since the presidential election, pastors at these churches have preached about fraudulent votes and vague claims of election meddling.…For these church leaders, Mr. Trump’s narrative of the 2020 election has become a prominent strain in an apocalyptic vision of the left running amok.”

America was founded as a Christian nation, by (White) Christians; and its laws and institutions are based on “Biblical” (that is, Protestant) Christianity. As Georgetown’s Phillip Gorski says about Jan. 6:

“Christians waved Trump flags. The “Proud Boys” kneeled and prayed. One man, decked out as a cosplay crusader, clutched a large leather Bible to his chest with skeleton gloves. What looked like apples and oranges turned out to be a fruit cocktail: White Christian nationalism.”

Widening out to society at large, the Republican Christian Right is successfully walking a line between two seemingly contradictory notions: That our nation is the greatest nation on earth precisely because it is a Christian nation; and at the same time, that our nation is overrun with evil forces.

The precepts of Christianity were meant to make us more accepting and humane towards others. Today,  these people are about doing the opposite of that.

The BJC’s (Baptist Joint Committee for Religious Liberty) report on the Jan. 6 coup includes survey data from February 2021, showing that Christian nationalist ideology (specifically, belief that the founding documents of the US are divinely inspired, or that the federal government should declare the US a Christian nation) were strongly associated with the belief that Black Lives Matter and Antifa started the violence on Jan. 6:

Source: Public Discourse and Ethics Survey, Wave 7 (February 2021) Fielded by YouGov. Survey design by Joshua B. Grubbs and Samuel L. Perr

The graph shows that the more White Americans agree with Christian nationalism, the more likely they were to believe conspiracy theories about the involvement of Black Lives Matter or Antifa.

Since the founding of the country, we’ve gradually gained a panoply of rights; rights which could not be infringed by federal, state, and municipal governments. Now, the six Christian conservatives on the Supreme Court plan to gut many of those decisions.

The effort to blur the lines between church and state in America may be reaching its zenith. On April 25, the Supreme Court heard Kennedy v Bremerton School District, the first case involving prayer and public schools to reach the high court since 2000.

America’s Constitution promises the “free exercise” of religion; but it also prohibits the “establishment” of religion. Recently the Supreme Court has been strengthening the first guarantee: the right to live your faith free from government meddling, while chipping away at the wall separating church from state.

The issue in the Kennedy case was whether a public school district had the authority to prevent a high school football coach from continuing his practice of leading student-athletes in midfield prayer immediately after games.

Four justices had previously supported Kennedy when the case first came to the Supreme Court in 2019. At oral arguments this time, both Justice Coney Barrett and Chief Justice Roberts also sounded inclined to join the four in favoring free exercise over religion-state separation.

The decision in this case may change our long-held First Amendment rights into something less than they were designed to be.

Time to wake up America! The Culture Wars are the tip of the Constitutional threat iceberg. We’ve all shrugged and walked away from people who think the worst about non-White, non-straight Americans. We can’t do that anymore.

To help you wake up, listen to The Judds’ “Love Can Build a Bridge”. Naomi Judd died over the weekend. Here it’s sung by Naomi and Wynonna on April 11, 2022. This was Naomi’s last public performance:

Sample Lyric:

When we stand together, it’s our finest hour
We can do anything (anything)
Anything (anything)
Keep believin’ in the power

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Saturday Soother – April 30, 2022

The Daily Escape:

Cactus bloom, Tanque Verde, AZ – April 2022 photo by Bel Meader

Since last fall we’ve seen headlines about the need for parental control of public school curricula. It’s been a huge political weapon for Republican governors like DeSantis in Florida and Youngkin in Virginia. The argument is that the way race, gender and history are taught in public school classrooms is outside of the cultural mainstream in America.

A new national poll by NPR and Ipsos shows that those concerns are held only by a minority of America’s parents, while the majority express satisfaction with their children’s schools and what is being taught in them. The poll’s findings show that fewer than 20% of parents seem to be concerned about the culture wars, but they seem to be driving 100% of the conversation about K-12 education in America.

The poll surveyed 1,007 parents of school-aged children. Parents answered questions about the impact of the pandemic on their children, academically and socially, and about their schools’ performance:

“This year’s responses showed positive trends as the nation continues to recover from the worst of the pandemic. Compared to 2021, a growing margin of parents say their child is “ahead” when it comes to math, reading, social skills, and mental health and well-being. Fewer parents say their child is “behind” in those areas. In fact, in 2022, almost half of parents, 47%, agree with the statement: “the pandemic has not disrupted my child’s education.” That’s up from 38% in 2021…”

However, that view is at odds with that of most education researchers, who see big disruptions in indicators like test scores, college attendance, and preschool enrollment. The Ipsos poll shows that parental satisfaction also included culture war topics. In the poll:

  • 76% of respondents agree that “my child’s school does a good job keeping me informed about the curriculum, including potentially controversial topics.”
  • 88% of respondents agree with the statement “my child’s teacher(s) have done the best they could, given the circumstances around the pandemic.”
  • 82% agree “my child’s school has handled the pandemic well.”

Mallory Newall of Ipsos points out that:

“It really is a pretty vocal minority that is hyper-focused on parental rights and decisions around curriculum…. Just 18% of parents say their child’s school taught about gender and sexuality in a way that clashed with their family’s values; just 19% say the same about race and racism; and just 14% feel that way about US history.”

Newall also said that there was a lack of partisanship in the responses:

“The most partisan issue in our poll was gender and sexuality, but still only a minority expressed any concerns. Republicans are closely divided: 26% say schools are not teaching about gender and sexuality in a way that matches their family’s values, while 22% say schools are (the remainder don’t know or say schools aren’t addressing those topics).

The problem of course is that the vocal, 20+% of American parents are seeking total victory in the culture war. Republican-aligned groups like No Left Turn In Education and Parents Defending Education have continuously pushed these issues into the spotlight. And it’s working.

Ralph Wilson, a researcher who studies how partisan donors back the culture war, says these groups imply that they represent a silent majority of conservative-leaning parents. But that’s not necessarily the case:

“It’s definitely an incredibly small minority that’s being amplified with this large, well-funded infrastructure to appear larger and to appear to have more well-founded concerns than they do.”

The Ipsos poll found that about a third of parents say they “don’t know” how their child’s school addresses sexuality, gender identity, racism, or patriotism. Only 24% of parents believe they have too little say over what is taught or what books are in the library at their kid’s school.

That’s enough! Let’s leave the culture wars behind for the weekend. It’s time for our Saturday Soother, where we gather ourselves for the week ahead. In northwest Connecticut, we can’t escape cold weather, so our remaining yard work must wait for warmer nights before planting can start.

Instead, pour a mug of your favorite spice tea, grab a seat by a big window, and listen to “The Banks of Green Willow” by the little-known George Butterworth, who was part of the English pastoral idiom. Butterworth and Ralph Vaughan Williams were close friends, and you may hear similarities in their music. Butterworth was killed in 1916 in WWI during the Battle of the Somme; he was just 31.

Here it is played by the  Royal Liverpool Philharmonic Orchestra under Grant Llewellyn:

And the pastoral images are nice!

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China’s Torpedoing the Supply Chain

The Daily Escape:

Spring snow, Mt. Princeton, CO – April 2022 photo by Haji Mahmood

For the past two years, Covid has thrown the global supply chain into a tailspin. Even though the cargo industry’s ships, trains, trucks, and planes worked full-time, we still have shortages. Now, China’s zero Covid policy is increasing both the uncertainty and costs of efficiently operating the still-choked global supply chain.

From Bloomberg:

“We expect a bigger mess than last year,” said Jacques Vandermeiren, the chief executive officer of the Port of Antwerp, Europe’s second-busiest for container volume, in an interview. “It will have a negative impact, and a big negative impact, for the whole of 2022.”

Bloomberg says that China accounts for about 12% of global trade. It’s recent Covid lockdowns have idled factories and warehouses, slowed truck deliveries and exacerbated container logjams. And since US and European ports are already swamped, this new outage will leave them vulnerable to additional shocks.

China is home to six of the world’s 10 largest container ports. It’s the global economy’s most important manufacturing hub. While most countries have decided to learn to live with the Covid, Beijing has maintained its Zero Covid policy, where even small outbreaks can shut down large population centers and slow economic activity.

It’s taking an average of 111 days for goods to reach a warehouse in the US from the moment they’re ready to leave an Asian factory. That’s similar to the record of 113 set in January 2022 and more than double the time that the same trip took in 2019, according to Flexport Inc., a freight forwarder.

Julie Gerdeman, CEO of supply-chain risk analytics firm Everstream Analytics says:

“Once product export activities resume and a large volume of vessels make their way to the US West Coast ports, we expect waiting times to increase significantly…”

You’d think that after more than two years into this pandemic, America would have realized that single-sourcing much of our industrial production to a dictatorship is a bad idea. One with enormous consequences when something goes wrong.

But we haven’t. US Treasury Secretary Janet Yellen has advocated for what she calls “friend-shoring” meaning reducing our dependence on China and Russia. Brian Ehrig, a partner at the consulting firm Kearney is co-author of a report that found 78% of CEOs are either considering reshoring or have done it already. He says that relocating supply chains:

“…might cost more, but if you can make smaller quantities that you can then sell at closer to full price, you can actually completely change the game…”

Le Monde reminds us that capitalism has created hidden dependencies in Ukraine. It is the main producer of the wiring harnesses that hold together the many electrical cables in a car. They quote Christine Lagarde, president of the European Central Bank (ECB) in a speech in Washington, DC: (brackets by Wrongo)

“Ukraine produces one fifth of Europe’s [harness] output,”

These parts are low value added, but essential in the construction of cars, a perfect outsourcing target for capitalism. Globalization isn’t going to die; but maybe it can evolve. Much of that possible shift hinges on convincing consumers to accept higher prices for the certainty of supply.

For example, once the CDC finally gave us unambiguous advice about wearing masks, there was a huge rush to open mask production facilities in the US. But now they’ve all closed, because it’s cheaper to make masks in China.

Dictatorships can ensure that labor remains cheap. That’s great for capitalists, not so good for people who needed masks in 2020 when China decided to keep most of them for their population. Or, now, when China is still willing to shut down its economy to stop a Covid outbreak.

And, despite all the good will in the world, nobody will make masks in the US if it means their five-dollar boxes of masks go unsold because everyone is buying the one-dollar boxes. Instead, they will complain about how the company asking five dollars is a bloodsucker.

We’re told that capitalism works. That it just does. That just-in-time supply cuts costs for consumers. But does it?

Art installation by Steve Lambert – 2013, Times Square, NYC

It’s proven not to work during an emergency. But what are the chances of re-shoring ever happening? Business school really only teaches one thing: Short-term profits rule and everything else is irrelevant.

After all, America is a business, not a country.

What should be readily apparent is that despite the CEO poll above, our corporate masters are certainly not thinking about systemic change to supply chains. Nor will they, as long as the focus is reducing costs as low as possible for maximum shareholder gain.

The point is that unless business is incentivized otherwise, don’t expect the supply chain to get any better. That incentive must come from the government in the form of tax policy or subsidy.

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Ukraine War Escalates

The Daily Escape:

Lupine, Rocky Mountain Front, MT – April 2022 photo by Jack Bell Photography

After just a few months, the Ukraine war is escalating dangerously. Russia decided to shut off gas exports to two EU nations, Poland and Bulgaria because they won’t pay Russia in Rubles. This escalation came one day after the US and other Western allies met to coordinate speeding up deliveries of more and better weapons to Ukraine.

Cutting off gas was called blackmail by the EU. But it isn’t blackmail, it’s war by other means. And it was totally foreseeable years ago when Europe happily set up its bulk gas buying relationships with Russia’s Gazprom.

There also were explosions in both Russia and in Transnistria (a separatist part of Moldova) that knocked out two powerful radio antennas and hit the state security ministry. Transnistria houses Europe’s largest ammo dump, filled with old Soviet armaments. It’s just 1km from the Ukraine border. Russia has blamed Ukraine. Ukraine blamed Russia.

Inside Russia’s Belgorod province, near the border with Ukraine, Newsweek reported that an ammunition depot was on fire. It’s unclear whether this was caused by poor local management, Ukraine, or sabotage.

And Germany decided to send anti-aircraft self-propelled guns to Ukraine. The Gepard, a tank with two 35-millimeter anti-air cannons, was phased out from the German army more than 10 years ago. But Germany still has many available. One problem is Switzerland, a key supplier of ammunition for the Gepard, has banned the export of that ammo to Ukraine.

It’s clear that the US and NATO are dipping their toes deeper into this conflict, and that Russia is expanding its efforts as well. The question is: whose toes get nipped first?

The Express is reporting that on Wednesday, Putin told Russian lawmakers in St. Petersburg:

“If anyone decides to meddle in ongoing events and create unacceptable strategic threats for Russia, they must know our response will be lightning-quick….We have all the instruments for this, ones nobody else can boast of. And we will use them, if we have to….We have already taken all the decisions on this.”

The big question today is whether the EU and NATO will say cutting off gas to one of us is cutting off gas to all of us. That would be a substantial escalation from where both stood on Russian gas in February.

By cutting off gas supplies, Russia may be making the same strategic mistake that the Confederacy made with its Cotton Embargo at the beginning of the US Civil War. That initially caused considerable economic pain, but both the French and British started importing Egyptian and Indian cotton. The South lost a long term market by its action. By the time the Confederacy realized it, they’d lost their key cotton export ports because of the US Naval blockade.

This is really Russia’s attempt to bully its biggest Western customer, Germany. As the Confederacy discovered, cutting off your big customers creates an aspect of Mutually Assured Destruction (MAD). It will be interesting to see how the rest of the EU deals with Russia’s demand for Ruble payments.

A few weeks ago it seemed Germany would blink first, but after its announcement to send armored vehicles, that seems less certain. The Russians are simply driving Europe to reduce their reliance on Russian gas and oil, with imports from other sources and renewables.

This is certainly an existential war for Ukraine and, given the current round of escalations and the bellicose talk out of Moscow, it’s becoming an existential war for all of Europe as well.

There’s an emerging feeling in the EU that Ukraine must win for Europe to feel secure. Winning is everything for both Ukraine and Russia. While Russia seems to be winning on the ground in Ukraine, they’ve been mostly stagnant for nearly a month while steadily getting chewed up by Ukraine’s defensive tactics. Ukraine on the other hand, is being bombed and shelled back to the 19th Century.

In the short term, things look bleak for Ukraine. In the longer term, if the West’s weapons resupply works, things look bleaker for Russia. And in the sanctions war, it also looks bleak for Russia in the longer term.

Europe probably can replace most of its Russian oil and gas imports within 12-18 months. OTOH, the Russian war machine is dependent on the West’s chips, optics, and other high tech, all of which are embargoed. It will take Russia years to replace them.

A final thought. Corruption in Russia’s military has been a serious problem since at least the 1970s. That time frame is important, because it means that no current Russian military officer has ever lived in an un-corrupt military culture. That doesn’t mean their military isn’t dangerous, but maybe we’ve exaggerated their prowess.

Wrongo asked Ms. Right if she could name a city in Moldova. She came up with bupkis. Wrongo understands that Bupkis has lovely churches and museums.

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Musk Buys Twitter

The Daily Escape:

High tide, Bandon, OR – April 2022 photo by Bobbie Shots Photography

The Boston Globe is reporting that Musk is purchasing Twitter.

Musk is one of the great entrepreneurs of the 21st Century. He’s redefining space travel with SpaceX. He’s revolutionized internet communication with his Starlink low-earth orbit satellites, having more than 2,000 satellites in orbit. And he’s made Tesla the global leader in Electric Vehicles. And that has made him very rich.

Now he’s using some of his Tesla money along with a lot of Other People’s Money (Morgan Stanley, Barclays, and Bank of America) to buy Twitter and take it private. Bloomberg says Musk’s pledging $21 billion of his own money. The Banks are going to lend him $12.5 billion, secured by an additional $62.5 billion of his Tesla shares.

The rest of the purchase price will be funded by $13 billion in debt that Twitter will take on. After the deal closes, Twitter will have about $1 billion in interest payments due on the new debt annually. Twitter’s cash flow is projected to be about $1.43 billion this year and $1.85 billion in 2023. So debt payments will now be a huge chunk of Twitter’s future cash.

Since this is America, it’s unlikely that any government agency will stand in the way of the sale, but there are two things wrong with it.

First is how Musk became so fabulously wealthy. As Ranjan Roy points out at Margins, his rapid ascent to wealth is due to his unusual compensation package at Tesla. The package set what appeared to be unrealistic goals for sales and profits.

In early 2018, when the comp package was agreed, there was plenty of doubt whether Tesla could scale its manufacturing capacity. Musk had repeatedly said Tesla was on the verge of bankruptcy, yet over the next few years, Tesla both stabilized and grew. It went from producing around 90k cars/quarter in 2018, to nearly 300k in the last quarter of 2021. Revenue grew from $12 billion to $54 billion. Tesla produced nearly 1 million cars in 2021.

At the same time, Tesla’s stock price went to the moon, making Musk the world’s richest human. Not incidentally, much of that was helped by Musk’s tweeting. Ranjan Roy says:

“…since the Spring of 2013, it was clear Tesla’s business results and Musk’s tweeting could have a self-reinforcing impact, and that…cycle…became more clear in recent years. Shortly after Musk signed his giant package, the really high-volume tweeting began, and the rest is wealth accumulation history.”

Musk realizes that he’s dependent on his Twitter marketing strategy. He has 80+ million Twitter followers, and unfettered access to his account is vital to his current and future business interests. Why? His current Tesla 10-year pay package has nearly hit its maximum targets in just four years.

Musk needs to think about where he gets his next giant gain in wealth.

This is the challenge of today’s capitalism: Boards with little real vision give stupendous compensation packages that turn out to be easily achievable. And the SEC allows entrepreneurs with media savvy to pump up their own stock at little personal risk.

Yes, Musk and Tesla have both paid fines to the SEC for stock manipulation. In a September 2018 settlement, Musk and the SEC agreed that he would step down as Tesla Chair and pay a $20 million penalty. Tesla also had to pay a $20 million fine.

But these were just minor costs of doing business compared to the personal wealth he’s created.

The second problem is that Musk, (and maybe a few on Twitter’s board) think that individual users should decide who and what gets seen and heard online. Musk says he wants Twitter to be an open playing field for competitive speech.

That may be peachy in the abstract. But we all know that every unmoderated platform goes to shit because it only takes a few bad-faith users to make it miserable for everyone.

For now, Twitter has decided that Trump can’t post on its platform. It decides whether to delete a post about vaccines if it deems the post to be misinformation. Most people don’t have the time to learn what’s real and reliable, and history shows how susceptible most are to harmful misinformation campaigns. Expect this to change after Musk buys Twitter.

Scott Galloway says:

“In an unmoderated online forum, all speakers do not play by the same rules or have the same tools. University of Maryland professor David Kirsch has found that automated pro-Tesla Twitter accounts are responsible for 20% of the tweets about Tesla, and that the launching of these bots correlates with increases in the company’s stock price.”

Rupert Murdoch transformed media in order to exercise greater influence over society. Does America need Musk to become another Murdoch? There’s a good chance one of his first acts as the Tweeter-in-Chief will be to re-instate Trump’s account, something that will have very serious political consequences.

Wrongo is a capitalist, but we’ve always needed rules to reign in the worst of the market’s players. And rules require umpires. Without umpires, anticompetitive and illegal acts go unpunished. Worse, today people insist, in the name of freedom, on their right to shout down all dissenting voices.

In America, underregulated economic winners have funded think tanks. Some have bought politicians. Some, newspapers and cable news stations. Musk is buying Twitter. They’re trying to convince us that the umpire is the enemy.

Musk wants you to live in a Wild West of speech and power. Are you ready for that?

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Monday Wake Up Call – April 25, 2022

The Daily Escape:

Dory, Jodrey State Fish Pier, Gloucester Harbor, Gloucester, MA – April 2022 photo by Juergen Roth Photography

Utah is in the news, first for the death of Orrin Hatch. He was the longest-serving Republican and the sixth longest-serving Senator in the history of the Senate. Hatch decided not to run for reelection in 2018, clearing the way for Mitt Romney to be elected in 2018.

Hatch blocked labor law reforms and fair housing bills. He voted against the Equal Rights Amendment, he proposed a Constitutional amendment to make abortion illegal. He helped draft the USA Patriot Act and supported the wars in Afghanistan and Iraq. Hatch also opposed the Affordable Care Act and backed Trump’s anti-immigrant initiatives and Trump’s withdrawal from the Paris Accords on climate change.

For his superb work in making the nation worse, Trump presented Hatch with the Presidential Medal of Freedom in 2018.

In other Utah news, Democrats want to defeat Sen. Mike Lee (R-UT) badly enough in November to nominate non-Democrat Evan McMullin instead of one of their own. From KSL.com:

“The Utah Democratic Party made an extraordinary decision on Saturday. A majority of delegates decided to not put forth a Democratic candidate to face off with Republican Sen. Mike Lee and instead back independent candidate Evan McMullin.”

At Utah’s state Democratic Convention, McMullin received 57% of the votes to 43% for his Democratic Party opponent Kael Weston.

McMullin ran an unsuccessful independent presidential campaign against Trump in 2016. He was a CIA operations officer from 2001 to 2010. He holds an MBA from Wharton and worked as an investment banker. He’s a (former?) Republican who was a senior adviser on national security issues for the House Committee on Foreign Affairs. He also served as a chief policy director for the House Republican Conference in the US House of Representatives from January 2015 through July 2016.

Backing McMullin has big implications for Utah’s Democrats. Having finally accepted that Utah Dems have been at least comatose if not dead for years, they’re not bothering to field their own Senate candidate. More from KSL.com:

“It’s an unprecedented measure for Utah’s Democrats, who grappled between party loyalty or backing an outsider to increase the likelihood of defeating a Republican in November. The Democrats were motivated by the prospect of unseating Sen. Mike Lee, who is running for his third term this year…”

After the vote, the losing Democrat Weston said:

“Of course, you want to be the candidate that walks out with a unanimous degree of support, but I knew this was always going to be an important conversation to have and I think with a great team, and a lot of supporters who drove from all across the state, it was a real conversation….Today was a crossroads and a certain path was taken. It’s a path that has not been taken before.”

Weston also said he’s more concerned about ensuring Utah has a:

“healthy political marketplace, and that’s not going to be possible if we don’t have Democrats on the ballot…”

Seems like the wound-licking will last for a while. McMullin said after the vote:

“Democrats are putting country over party….This is our democracy and, yes, it can be messy at times as we saw today, but it’s sure a heck of a lot better than the alternative.”

That sounds pretty mealy-mouth to Wrongo.

In 2022 we are facing some hard truths. Democrats at least in this Red state have decided that it’s time to do whatever it takes to stop sitting Republican seditionists like Mike Lee. It’s also a tacit admission that the Democratic Party brand is toxic in many Red states. So some Democrats are acting on the idea that coalition-building may not be such a bad strategy. They’re thinking that combining Democrats with Independents and a few never-Trumpers adds up to a huge chunk of real estate.

Maybe enough to win.

Time to wake up Democrats! Your Party is fractured and isn’t going to be healed by November. Since the states are often called the “laboratories of democracy”, maybe a few experiments in coalition-building with the center-right will tell us something more than simply being waxed in another Republican wave election like in 2010.

To help Democrats wake up, listen to Carlos Santana & Eric Clapton play “Jin Go Lo Ba” at the 2004 Crossroad Guitar Festival held at Cotton Bowl in Dallas, TX:

Trust Wrongo, you won’t spend a better eight minutes today.

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Sunday Cartoon Blogging – April 24, 2022

A follow-up to the DeSantis vs. Disney column. Nick Papantonis of Orlando’s WFTV describes the economic consequences of Florida’s decision to take away Disney’s protected tax status.  In a Twitter thread, he says that DeSantis’ actions have given Disney a $163 million/year tax break while passing on to the two counties that hold Disney’s Reedy Creek tax jurisdiction more than $1 billion of municipal debt.

Also, once Reedy Creek goes away as a jurisdiction, Orange and Osceola counties will be responsible for providing all of the services (fire, police, roadwork) that Disney currently provides. And those counties won’t be able to pay for the additional services by raising sales taxes or impact fees.

So, they will have to raise property taxes. By law, they must tax all properties equally (not just Disney) and it’s expected that the county mil rate for property tax computation in Orange County will rise as much as 25% next June.

Florida has just 12 counties where Biden won in 2020. DeSantis has cleverly managed to screw the residents in two of them. Orange was 61-38 for Biden, Osceola was 56-43. The residents, by the way, had no say in DeSantis’ Murder Mickey vote. They will likely have no say in their property taxes going through the roof. But they are likely to see their communities come close to financial ruin.

In a way, the outcome is a perfect encapsulation of the 2022 Republican Party: Take more from Joe Sixpack while the corporations that are ostensibly the target of their moral outrage, walk away with the money. Oh, and screw a few Blue counties. On to cartoons.

Who won? You be the judge:

GOP’s rules seem wrong:

Happy passengers are missing the big picture:

MAGAs should choose their poison carefully:

Our learning disability:

 

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Saturday Soother – April 23, 2022

The Daily Escape:

North Landing River, near Virginia Beach, VA – April 2022 photo by Erik Moore

Our media ecosystem is overwhelming us. Some of the information is accurate, some is bogus, and much is intentionally misleading. And that’s a deliberate strategy. While it didn’t originate with Steve Bannon, he perfected it with his thought that:

“…the Democrats don’t matter….The real opposition is the media. And the way to deal with them is to flood the zone with shit.”

This is why the ongoing cultural war works so well for Republicans. There’s always some petty war going on between the Parties that’s stoked by the media. And it’s almost always about cultural issues since Republicans really don’t have a policy platform, and don’t want to go against large corporate America. When you go against corporations, you lose the money needed to get elected.

But we should see the big corporations as our common enemy. Time Magazine has an article about how overtime pay has disappeared:

“If it feels like you’re working longer hours for less money than your parents or grandparents did, it’s because you probably are. Adjusted for inflation, average hourly wages have actually fallen since the early 1970s, while average hours worked have steadily climbed. American workers are increasingly underpaid, overworked, and overwhelmed.”

One reason is the loss of overtime pay:

“If you’re under the age of 45, you may have no idea that overtime pay is even a thing. But…middle-class workers used to get a lot of it….That means that [for] every hour you work over 40 hours a week you work for free, contributing…a giant pool of free labor that modern employers have come to expect and exploit. Profits are up, real wages are down, and income inequality has soared to its highest level since the Gilded Age.”

Overtime pay was one of the great New Deal reforms. It was a core provision of the Fair Labor Standards Act (FLSA). The FLSA set the minimum wage at one-half the median wage and the overtime threshold at three times the minimum—an amount equal to 1.5 times the median wage.

But both the minimum wage and the overtime rules began to change in 1975, and rising income inequality since 1975 is responsible for a $50 trillion upward redistribution of wealth and income from the bottom 90% households to those in the top 1%. Here’s a chart showing the impact of losing overtime. Productivity goes up, but is completely decoupled from income:

Source: chartr

The Economic Policy Institute has a tool called “Company Wage Tracker” that allows you to select any big corporation and see what percentage of their employees make below a certain wage. For example, it shows that 51% of Walmart employees earn below $15/hr.

The NYT wrote about Mary Gundel, a manager at a Dollar General store in Tampa, FL who was fired for speaking out about the chain’s policies regarding overtime and short-staffing:

“The store used to have about 198 hours a week to allocate to a staff of about seven people….But by the end of last month, she had only about 130 hours to allocate….With not as many hours to give to her staff, Ms. Gundel often had to operate the store on her own for long stretches, typically working six days and up to 60 hours a week with no overtime pay.”

Ms. Gundel was working 60 hours a week and making $51,000 a year. That means she’s making only a little more than the minimum wage. Dollar General is one of the most profitable retail chains in the country.

Prices are going up everywhere across America, and corporations are making proportionately more income. This is what the Democrats should be focusing on, standing up for workers, doing what is right as opposed to groping for answers to the Republican’s culture war issues.

There’s plenty that’s wrong in America. But what’s wrong doesn’t see the light of day alongside all of the pissing contests about Critical Race Theory, or predator grooming or LGBTQ issues. These are ginned-up to make sure you won’t pay attention to what’s really going on.

Something seems to be brewing. We’re seeing halting attempts at unionization at Starbucks and Amazon. Those employees want a better life; they want to have a seat at the table about the future of the company.

We need to remember that without the “essential workers” the country grinds to a halt. We need to support those who try to organize. We need to wrest some economic power away from politicians and big businesses. And finally, some faceless people who are sick of being wronged are trying to do just that.

Enough for another week. It’s time to let go of the news. It’s time for our Saturday Soother. On the Fields of Wrong we’re preparing our vegetable garden, although it will be a few weeks before it’s warm enough for the plants to survive. We had an overnight temperature of 32° earlier this week.

Now, grab a seat by a large window and listen to violin soloist Soojin Han play Chopin’s “Nocturne No.20 in C# minor” in August 2019. She’s playing on a 1666 Stradivarius:

It sounds beautiful.

Chopin composed the piece in 1830, but it was published in 1875, 26 years after his death. It was featured in the movie “The Pianist” in 2002.

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