Stocks for the long run and money illusion

by philg

“Bank of America Shares Finally Recover From 2008 Financial Crisis” (Wall Street Journal, December 12, 2025):

Bank of America notched a symbolic win Friday when its stock traded higher than $55.08, a level not seen for America’s second biggest bank since before the 2008 financial crisis.

Like other banks that were damaged during the crisis, Bank of America has struggled to get its stock price back to the highs seen when George W. Bush was still president. Citigroup shares also haven’t recovered to their past high of around $530 in 2007.

Bank of America’s previous closing high was $54.90 on Nov. 20, 2006.

Perhaps a cautionary tale for those who are buying into the AI bubble!

Nowhere in the article: any inflation adjustment. It thus becomes a good example of money illusion. The WSJ is supposed to be by and for people who are sophisticated about money. That a stock today trades higher in nominal dollars than it did in 2006 is meaningless given the reduction in value of the dollar. $54.90 in November 2006, adjusted for official CPI, is equivalent to $88.49 today. An investor who bought BofA stock in 2006, in other words, has lost nearly 40 percent of his/her/zir/their money.

(Adding insult to injury, if the stock keeps going up and the investor sells at only a 20 percent loss then the IRS will be there to collect 23.8 percent of an illusory “gain” (an increase in the nominal price) and a state such as California will collect an additional 13.3 percent (9 percent in Maskachusetts).)

Reporter biography: “Alexander Saeedy … is a graduate of Yale University, where he received a bachelor’s and master’s degree in History.”

Also in journalism, the New York Times displays a sampling of what it says are photos from Emmanuel Goldstein’s laptop (“Democrats Release Photos Showing Epstein Ties to Powerful Men”: “The 92 photos, selected by Democrats on the Oversight Committee from a trove of 95,000 images in Mr. Epstein’s email account and on one of his laptops”):

Three-fourths of the sample images include Donald Trump so a reasonable reader would infer that 75 percent of the images released (or maybe 75 percent of the 95,000 total?) included Donald Trump. Buried lower in the article: “The series of photos does include three images of Mr. Trump”. In other words, the representative 4-image sample of the 92 images chosen by the NYT contains 3 out of 3 Trump-related images.

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Grade inflation in the public schools

by philg

A friend’s daughter is a passionate progressive and, after completing an expensive degree at an elite university, signed up as a public middle school engineering teacher. Things haven’t been going well. “What percentage of her students are easy-to-teach white or Asian native speakers of English?” “Zero,” answered her dad. “They’re all either Black or immigrants. Half of the students speak only Spanish.”

All of the work for the course is done in the classroom/lab and, therefore, no homework is required. At least half of the students did nothing, goofing off in class and turning nothing in. “I can’t grade their work because they didn’t submit any,” says the daughter, ” so at least half of the class should get Fs.” She talked to some of the veteran teachers, however, and they advised her to give everyone in the class at least a C. The paperwork associated with a D or F grade would be onerous.

The father is an Obama-style Democrat (bigger government, Rainbow Flagism, but not necessarily Biden/Harris-style open borders). He volunteered that the core problem with our public schools nationwide is chronic underfunding. He believed that in the good old days of American K-12 the schools had vastly more money per student. He and his daughter both thought that most of the problems would disappear if the class sizes were reduced to half of the current levels (i.e., double the number of teachers).

Urban Institute offers some trends. State and local governments now spend more on “public welfare” than on schools:

Public welfare is also the champion for inflation-adjusted spending growth (“health and hospitals” have also grown and would also have been considered “welfare” in the bad old days):

Inflation-adjusted spending on K-12 has grown by 136 percent compared to the purportedly good old days of school funding in 1977. (Perhaps it doesn’t matter for a growth comparison, but most numbers for “per-pupil spending” understate what society spends on K-12 because they don’t include the capital costs of building or renovating schools.)

Circling back to the grade inflation issue, I wonder if it is time to trot out my oft-expressed opinion that teachers shouldn’t grade their own students. There should be a neutral third party (maybe simply a teacher at another school) who does the grading while the teacher is purely a coach to assist students with doing well when they submit material to the neutral evaluator. (See “Universities and Economic Growth” from 2009, for example.)

Loosely related, a “Failure is not an Option” frame around an EDUKTOR license plate (Illinois), captured in the Juno Beach Pier parking lot:

See “Back to school in Chicago: fewer than 1-in-3 students read at grade level” for how, apparently, giving students the Ds and Fs when they’re at the D and F level of achievement is not an option.

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Happy Kwanzaa

by philg

Happy Kwanzaa to everyone. Our Kwanzaa Bush decorated with an ornament we received as a gift from a neighbor:

The Democrat who runs New Jersey reminds us that this is the time for white men to cosplay as Maulana Karenga (“convicted of felony assault, torture, and false imprisonment of women”).

For Christmas Eve, on which a lot of Legacy Americans celebrate the birth of a baby, the same governor celebrates funding abortion care for babies:

A photo from a year ago at a Palm Beach County library:

The library also reminds us that Kwanzaa coincides with HIV/AIDS Awareness Month:

Let’s remember that how important this was to Kamala Harris’s family growing up.

Also from a year ago, the library’s new nonfiction books:

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Why aren’t we seeing a resurgence of voluntary communism within the U.S.?

by philg

Merry Christmas to those who celebrate!

The Roman World into which Jesus was born was a pure market economy. Property was private, taxes were ridiculously low by modern standards (perhaps 1-5% of income), and government-provided welfare was negligible. The New Testament describes a Christian community that voluntarily opted out of the Roman economic and political system:

Now the whole group of those who believed were of one heart and soul, and no one claimed private ownership of any possessions, but everything they owned was held in common.

There was not a needy person among them, for as many as owned lands or houses sold them and brought the proceeds of what was sold.

Acts 4:32, 34

We’re told that socialism and communism are enjoying renewed popularity in the U.S. Young progressives love Bernie Sanders and the Ayatollah Mamdani.

It’s perfectly possible to set up a voluntary communist or at least communalist society in the U.S. See, for example, Amana, Iowa: 75 years of communal living, in which people lived without private property embedded within a capitalist society.

Why aren’t at least some young progressives living their dream via voluntary contract?

Loosely related… Jupiter Mayor Jim Kuretski’s house, Christmas 2021:

Related:

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Christmas spirit in Palm Beach County

by philg

The prospects for a white Christmas and our neighbor’s front yard this morning receiving emergency professional lighting enhancement:

Screenshot

Our mayor’s house:

A few houses in our neighborhood:

Earlier this month, picking up a tree from Home Depot (Alton/Palm Beach Gardens) in the Rolls-Royce:

Sadly, the pre-Christmas shopping rush in Palm Beach Gardens has been marred by a recent arrival from Georgia, Antonio Moore. He murdered Rita Loncharich, aged 65, at the Barnes & Noble. He later admitted that he stabbed the victim in the back without any motive and despite not knowing her. Fox:

Despite the tragedy, let me wish a Merry Christmas to all readers, even those who don’t celebrate.

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U.S. economy defies Science

by philg

We’ve been informed that low-skill migrants, as a matter of Scientific fact, are positively correlated with U.S. economic growth (at least aggregate growth if not per-capita!). Low-skill migrants have been departing the U.S. at an unprecedented rate since the Trump Dictatorship v2.0 began (CIS; NYT (covers a different time period than the CIS analysis)).

Toda we learn from the Wall Street Journal that the aggregate GDP is expanding even as the migrant population shrinks.

Maybe the GDP numbers are wrong? We can see for ourselves that valuable Somalis and Latinx are being kidnapped by ICE (should we try to fight ICElamophobia?). We know that these folks are worth $billions even though there is not another country on Planet Earth that is willing to take the migrants whom we deport (i.e., no other country wants to be enriched as we have been). If the GDP data are correct, could the apparent contradiction be explained by The Science being merely a projection of researchers’ love for migrants? “Why immigration research is probably biased” (Guenther, December 20, 2025):

All of these choices resulted in 1,261 submitted models; no two were identical. Notably, this heterogeneity arose even though the hypothesis and data were the same! Think how much freedom researchers have when they are allowed to choose the hypothesis and the data.

It is not necessarily problematic if researchers are more liberal than the general public, but it is problematic if these attitudes make them analyse data in a biased way, to arrive at conclusions that reinforce their prior attitudes. In that case, immigration research ceases to be research and transitions into propaganda, where only hypotheses are tested that one can anticipate to portray immigration positively, and the research design is chosen to obtain the desired conclusion.

Related:

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Philip’s Book Club: False Dawn

by philg

Maybe some of you will join me in reading False Dawn: The Mirage of Recovery, an economist’s book about the Great Depression, which is when Americans came to accept the idea that every problem should be met by a larger federal government. FDR is almost a god for today’s Democrats (in a debate Ayatollah Mamdani identified FDR as the best modern-day U.S. President and then Florida Realtor of the Year 2020/2021 Andrew Cuomo said FDR would be his pick as well if FDR could be considered “modern”). If nothing else, False Dawn would make an awesome last-minute Christmas gift for anyone with insomnia (384-page work by an economist).

The Wall Street Journal selected this book as one of 2025’s ten best. Some excerpts from their review:

In 1932 Franklin Delano Roosevelt won the presidency with the promise to restore prosperity. But he and his advisers had no clear explanation for the collapse and his subsequent New Deal would amount to a series of experiments. FDR admitted to the nation that some of his proposals took the nation down “a new and untrod path.” If they failed to “produce the hoped-for results, I shall be the first to acknowledge it.”

George Selgin’s “False Dawn” asks if the New Deal’s varied experiments produced the promised recovery. In dispassionate, careful and finally devastating detail, “False Dawn” shows that, with a few exceptions, FDR’s experiments did not work. And he did not acknowledge it.

Based simply on raw numbers, the case for the New Deal is not strong. Although the economy did recover from its nadir when FDR took office in 1933, by 1939 the unemployment rate was still 17%. After six years of supposed recovery, the economy was in worse shape than in any other recession of that century or the following one.

Some might suppose that FDR used deficits rather than the Fed to juice the economy. But deficits as a percent of the economy were hardly different during Roosevelt’s time in office than they had been at the end of Herbert Hoover’s. While the New Deal spent more, it also imposed new taxes on food and payrolls. The result was a bigger federal government, but not one that relied on deficits as stimulus.

If not by increasing the amount of money or deficit spending, how did Roosevelt and his advisors hope to create recovery? The earliest solution they hit on—odd considering the rampant shortages—was to restrict production and thus raise prices. The National Industrial Recovery Act that passed in mid-1933 turned much of the American economy over to giant cartels. Industries colluded to raise prices and unions colluded to raise wages. The result was fewer goods on the market and an immediate economic collapse that would still be remembered today if it hadn’t been surrounded by so many others.

This could be an interesting update to The Forgotten Man, by Amity Shlaes, a Wall Street Journal reporter. I wrote a lot about that book shortly after its 2007 publication (what awesome timing by Schlaes and her publisher, given that the U.S. economy collapsed just a year later):

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Art Miami Miami 2025

by philg

You’ve read in this space about Art Basel Miami (officially “Art Basel Miami Beach”), which isn’t in Miami. There’s also Art Miami, which is in Miami and, having started in 1991, predates Art Basel Miami (2002). Art Miami happens in a huge waterfront tent and is connected to CONTEXT Miami, which features less-established artists. Art Basel and Art Miami are connected by the Venetian Causeway and also by an every-10-minutes water taxi service organized by the cities (if a city doesn’t spend all of its tax dollars on migrants, those who choose to refrain from work, and migrants who refrain from work, there is plenty left over for public services!).

My companion and I had a late lunch at Motek Miami Beach and then took the water taxi over:

We quickly learned that it is okay to cover your Ferrari in fur, but don’t leave it unattended!

Art Miami seems to have art by bigger names than Art Basel, with less emphasis on what’s newest. Here’s a Yayoi Kusama to go in your $200 million house:

Any house with kids should have this work by Mr. Brainwash (confusing because almost the same work is attributed to Banksy):

If you’re Christmas shopping for an elderly photographer/engineer, how about this Rolleiflex 35mm camera embedded in Lucite from François Bel?

On the CONTEXT side, a vaguely similar idea (no acrylic, though) from John Peralta ($28,500; unlike at Art Basel most of the pieces at Art Miami and CONTEXT had price tags):

A view from the smoking terrace:

An Israeli gallery showed up with some huge glass works and a few original Yaacov Agams (remarkably, still alive at 97):

Speaking of Israel, here’s a photorealistic work by Yigal Ozeri that would be perfect for the redecoration of Gracie Mansion for incoming Mayor Mamdani. The intifada could easily be globalized if Israeli women loved Ayatollah Mamdani as much as progressive white American women!

Here’s some more work from Israel for Mayor Mamdani, all from Natan Elkanovich (he says that he uses “kitchen and sewing utensils to drizzle and sculpt plastic materials on canvas”):

If you are a peasant with a house worth less than $200 million, Art Miami is probably a better place to shop than Art Basel. If you want to find out what’s exciting to art nerds, Art Basel is perhaps better. But if you’re doing Miami Art Week, both are well worth visiting.

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If a declining population is a disaster, shouldn’t the world’s best places to live be those with a young and growing population?

by philg

Today is the first day of the bleak northern winter. Let’s celebrate by considering a bleak forecast. Our smartest minds say that China is heading for disaster because the Chinese aren’t having enough children and, also, the Chinese refuse to convert to the Church of Open Borders (they wouldn’t have welcomed Rahmanullah Lakanwal as we did, for example). Here’s one from RAND:

Population well-being (structural security) implications include broad strain on government finances; increasing costs of social insurance programs, including pensions and health care; varied but generally negative economic effects; high youth unemployment and disengagement from competitive labor markets in a slowing economy; and mixed effects on innovation capacity.

(There will be “high youth unemployment” with a reduction in the supply of youths?)

The “decline in fertility” that is described will result in China’s median age going up from its current 40 maybe to Switzerland’s 44 or Taiwan’s 45 (they’re so old that all they can do is make 2nm semiconductors for NVIDIA and Intel) or, in a true nightmare scenario, to Japan’s 50. China could become a hellscape like Japan, in other words.

If low fertility and a high median age is something that a society should try to avoid that must mean that the world’s nicest countries are ones with high fertility and a low median age, right? The CIA list highlights some paradises:

  • Afghanistan: median age 20
  • Sudan: median age 19
  • Mozambique: median age 17
  • Niger: median age 15 (population growth rate of 3.66%, higher even than what the Palestinians have achieved while fueled by unlimited housing, food, health care, and education funded by US and EU taxpayers through UNRWA)

How can our smartest people predict that China will become bad through low fertility if the nations with the highest fertility aren’t great places to live? A simpler formulation of the above: Africa has a larger population than China and Africa’s population is growing robustly (more than 2 percent per year); if the fertility doomers are right why isn’t Africa a better place to live than China?

Folks also fret about potential gradual population decline in the U.S. In other words, we’ll be farther up the list of countries ranked by median age and, thus, farther away from the fertility champs cited above. Why would it be bad to have 300 million Americans instead of 343 (or maybe 370?) if the 300 million never get stuck in traffic, enjoy decluttered National Parks, and are surrounded by AI and robotics any time that something productive needs to be done?

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Art Basel Miami Beach 2025

by philg

Here’s my report from this year’s Art Basel. All photos from the iPhone 17 Pro Max.

Because paying $1,000 per night for a basic hotel room is just a rounding error for me… I stayed across the bay at the Marriott Biscayne Bay. This turned out to be a blessing in disguise because it was right next to Art Miami, which I hadn’t heard about and which I’ll cover in a later post, and also because it’s right next to a former Episcopal Church that has converted to Rainbow Flagism, consistent with Santiago de Compostela and End Stage Christianity.

If you don’t want to get stuck in traffic, the Miami Citibike system isn’t a bad way to get around. The bikes don’t seem to be in great shape and they don’t fit a 6′ rider that well, but the terrain isn’t hilly.

In Art Basel Miami Beach (2018) and Art Basel Miami 2021, UBS featured female victimhood and celebrated the handful of women who’d manage to overcome the “imbalance” and “make a difference”. The commitment to social justice seems to have evaporated and now UBS promotes getting richer:

Speaking of rich, the most talked-about installation echoed the UBS theme of rich-meets-art. Busts of Jeff Bezos, Elon Musk, and Mark Zuckerberg on robot legs interacted with Andy Warhol, Picasso, and the creator of this work (Mike Winkelmann; a.k.a., “Beeple”). (Given Picasso’s fondness for teenage females, could he have survived today’s moral rectitude?)

Here’s Andy Warhol (the most famous gay person not famous for being gay?):

The Wall Street Journal says that $200 million is the new minimum for a decent house and there were quite a few pieces for sale that would have required a spare thousand square feet or two. Here’s an example from Anne Samat titled “The Unbreakable Love… Family Portrait.” It includes plastic swords, keys, wine corks, etc.

A work by Yinka Shonibare that inspired me to stop complaining for a few minutes:

I looked him up on Wikipedia: “At the age of 18, he contracted transverse myelitis, an inflammation of the spinal cord, which resulted in a long-term physical disability where one side of his body is paralysed.” If someone who is half-paralyzed can make it to Art Basel, what’s wrong with the rest of us?

Feel better about your middle-school dioramas (by Mondongo, a husband-and-wife team in Argentina):

Here’s a technique that I enjoyed, hand cut paper by Ariamna Contino (or maybe by her assistants?):

At the opposite end of the effort spectrum, Erika Rothenberg’s 2018 work America, A Shining Beacon to the World:

Only the Weinstein Gallery (they haven’t changed their name?) was crass enough to put prices on labels. Here’s a modest-sized $3.5 million Leonor Fini work from 1936 (imagine what it would cost to get an original oil painting by an artist that people have actually heard of!):

Some practical advice… pay a little extra for the 11 am entry tickets and go in right at 11 rather than at noon. The venue gets crowded by 1 or 2 pm. A 2:15 pm Friday image:

From 1:22 pm:

You don’t have to spend a lot to bring a souvenir home from the event. For only $5,500, for example, you can get a nice Taschen book of David Hockney pictures (printed in Italy):

Don’t worry about charging for your electric Rolls-Royce:

There are quite a few additional art events in Miami Beach and, covered in a later blog post, across the bay in Miami proper.

Here’s a Mayan pyramid made from Coleman coolers at SCOPE (Victor “Marka27” Quinonez of Mexico):

Finally, you can just walk around South Beach:

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