Ron DeSantis’s book

by philg

I have begun to read The Courage to Be Free: Florida’s Blueprint for America’s Revival, despite my general aversion to this genre of literature. I consider reading Ron DeSantis’s book to be a duty both as a blog publisher and as a new Floridian. Progressive academic friends in Cambridge feel that they already know Mr. DeSantis. One noted, during my most recent visit, that DeSantis is responsible for importing slaves into the United States to pick sugar cane. “They come on boats in chains,” he said, “and aren’t paid.” Why don’t journalists from New York-based media enterprises ask Mr. DeSantis about his slave importation operation at press conferences? “They know that he won’t answer.” Why didn’t the progressive himself go down to Florida and picket outside the Governor’s Mansion for the slaves to be released? He’s a member of the laptop class and can work from anywhere. He couldn’t explain why he wasn’t willing to invest the price of a plane ticket to protest the actual slavery that he has identified on U.S. soil.

For folks who don’t feel that they already know everything worth knowing about Ron D, read on…

The book starts out rough, in my opinion:

Most Americans instinctively know that something has gone wrong with our country over the past generation.

How is Ron going to win with this message? Successful politicians generally tell Americans that they are the world’s greatest people living in the world’s greatest (and richest) country. A vote for the politician is a path to slightly increased greatness, not a recovery from a nosedive. The language gets a little softer later in the introduction:

Our nation needs immigration policies that recognize and enforce the country’s sovereignty, not just by having a wall at the southern border but also by quickly repatriating those in the country illegally. An erroneous claim of asylum should not give a foreign national a ticket to settle in the interior of our country. Nor should the legal immigration system have policies such as the diversity lottery and chain migration; instead, the immigration system should be merit-based; favor assimilation, not mass migration; and be geared toward benefiting the wages of working-class Americans.

Ron D will not deport migrants, but repatriate them.

Looking for useful life advice?

People often talk about the need for a student-athlete to “balance” the demands of the classroom with the requirements of sports. For me, I rejected the idea that I would strike a balance between academic achievement and athletic success, because I was not willing to give less than 100 percent to either baseball or my academics. So instead of balancing, I just did everything to the hilt and let the chips fall where they may.

He gave 110 percent while at Yale, in other words? Or 200 percent? I am not sure how to put this into practice since my capacity is about 50 percent on my best day.

We learn about Ron and Casey’s working class and military roots. Ron worked during high school and college, e.g., for an electrical contractor, while Casey’s sister was a USAF C-17 pilot. (Even today, the DeSantis family has minimal wealth.) Ron’s own military service made him skeptical of America’s recent war aims:

It was just as obvious that we would not succeed in establishing a pro-American, Western-style democracy in Iraq. This was simply outside the capability of any military force to achieve. The cultural differences were too vast for Iraq to embrace Madisonian constitutionalism. In fact, the Iraqis considered “freedom” to be submission to sharia law, not the enactment of a liberal democracy.

(The U.S. would be a lot friendlier to the immigrants that we claim to welcome if Michigan and Minnesota adopted sharia law. Why should Muslim immigrants, many of whom are asylees or refugees who are fleeing violence, have to accept a debauched society? They didn’t come to the U.S. because they love the way that the U.S. is, but because they would have been killed if they had stayed in their home countries.)

Ron was inspired by Barack Obama:

Once I left active duty, I began to think more and more about how our country was moving in the wrong direction, especially under the leftist agenda of the Obama administration.

What did he learn as a Congressman?

Ingrained in Beltway thinking is a contempt for average voters, particularly voters who reject leftist ideology.

That’s certainly consistent with my experience of D.C.! Also, Ron turns out to be one of the few Representatives who actually reads the bills.

The book does get more substantive. Leafing through, I found the following, for example:

Our reforms included protections for political candidates against being deplatformed, which is a way for Big Tech to interfere in elections. What is stopping Big Tech companies from shutting off Republican candidates from social media platforms during the stretch run of an election? If someone hosts a get-together for a candidate and provides refreshments, that must be accounted for as a campaign contribution, yet a tech company can upend an entire candidate’s campaign, and that is somehow not considered interference with an election. The reforms also included transparency requirements for the social media companies’ content moderation policies, and required that users be given notice of changes to those policies. The opaqueness of how Big Tech arrives at its censorship decisions means that it is easy for them to move the goalposts to stifle views the industry does not like.

I’m actually surprised that Twitter, Facebook, and Google allow Republican candidates to use their platforms at all. Any of these firms could cite the following analysis of the January 6 insurrection and say that it wasn’t safe to allow Republicans to speak.

I hope that some readers will read along with me!

So far I’m dismayed that Ron hasn’t adapted his message to be more like conventional politicians’. Crushing it in Florida against an all-abortion-care-all-the-time fossil does not mean that he can crush it with voters nationwide in 2024. Americans in general are the most timid and compliant humans ever to occupy this planet. The Floridians who wanted the freedom to leave their houses, breathe without masks, send children to school, not inject their children with experimental drugs, etc., are outliers on the spectrum of American cowerhood. Young/cognitively sharp/competent/energetic/effective sounds good, but Americans in 2020 chose a new president who does not have any of these qualities.

Full post, including comments

Silicon Valley Bank and Moral Hazard

by philg

Dedicated to diversity and regulated/supervised by a San Francisco Fed that was dedicated to diversity (see also “San Francisco Fed elevates a gay woman — its vice president — to the top job” (LA Times, 2018)), Silicon Valley Bank is being described as a casualty of its own wokeness. A friend who used to run a multi-$billion investment fund sent me this article by an economist, which attributes the need for an FDIC bailout… to the existence of the FDIC. Some excerpts:

The wrong way to think about moral hazard

Deposit insurance gives bank executive an incentive to take socially excessive risks. In some cases the risks won’t pay off. But that doesn’t mean executives don’t have an incentive to take excessive risks.

Things didn’t pan out for SVB. But that doesn’t mean their executives made an unwise gamble. It’s very possible that SVB’s strategy had a very high expected payoff, and they were simply hit by bad luck (rising interest rates.) Of course from a social perspective their decisions may have been bad, but not necessarily from a private perspective. “Heads I win, tails part of my losses are borne by taxpayers”. Of course I’d take more risk with those odds.

… back in the 1920s people cared a great deal about bank safety. Banks knew this, and managed their balance sheets far more conservatively than do modern banks. That’s why big city banks used to look like massive Greek temples; they had to convince depositors that they had the capital to survive hard times. The vast majority of big banks survived the Great Depression. US GDP in 1929 was about $100 billion and deposit losses during the Great Depression were $1.3 billion. Today, a 50% fall in NGDP (as in 1929-33) would wipe out almost our entire banking system. Modern bankers are far more reckless “despite” regulation. The negative effects of deposit insurance are far more important than the positive effects of regulation.

How do we get to Yglesias’s utopia [of more big banks]? Abolish deposit insurance (he wouldn’t agree). You’ll see a massive shift of deposits toward the larger, more diversified banks, making our system resemble the Canadian system.

FDR opposed deposit insurance, as he (correctly) feared it would create moral hazard. Unfortunately, Congress refused to listen to his good advice.

“FDIC fees are not a tax on the public.” Yes, they are.

“We aren’t bailing out bank executives”. No, we are not bailing out SVB executives, but we are (implicitly) bailing out their competitors.

I disagree with that last statement. The executives at SVB got to keep all of their big earnings from the big years that they had due to their aggressive risk-taking. Mary C. Daly gets to keep her $500,000+/year (including benefits) SF Fed compensation from incompetently supervising SVB. When things fell apart, none of these people had to pay anything back to the FDIC. It is the chumps with low-interest accounts at conservative banks who are left to pay.

Separately, I’m shocked that McKinsey wasn’t involved somehow in SVB! How can there be a group of elites robbing the peasants without McKinsey’s assistance? At least one of the usual suspects was there… “How Goldman’s Plan to Shore Up Silicon Valley Bank Crumbled” (WSJ):

Silicon Valley Bank executives went to Goldman Sachs Group Inc. in late February looking for advice: They needed to raise money but weren’t exactly sure how to do it.

Soaring interest rates had taken a heavy toll on the bank. Deposits and the value of the bank’s bond portfolio had fallen sharply. Moody’s Investors Service was preparing for a downgrade. The bank had to reset its finances to avoid a funding squeeze that would badly dent profits.

While few could have predicted the market’s violent reaction to the SVB disclosures, Goldman’s plan for the bank had a fatal flaw. It underestimated the danger that a deluge of bad news could spark a crisis of confidence, a development that can quickly fell a bank.

Goldman is the go-to adviser to the rich and the powerful. It arranges mergers, helps companies raise money and devises creative solutions to sticky situations of the financial variety—a talent that has made the firm billions.

Yet, for SVB, Goldman’s gold-plated advice came at the steepest possible cost. SVB collapsed at warp speed in the second-largest bank failure in U.S. history, setting off a trans-Atlantic banking crisis that regulators are working furiously to contain.

How big was the failure compared to the investments that are needed to build things with silicon? SVB’s pre-coronapanic/free-money-shower value was about $13 billion. A single Samsung fab is on track to cost 25 billion Bidies: “Samsung’s new Texas chip plant cost rises above $25 billion” (Reuters). The bump due to inflation in this one factory, according to the Reuters article, is in the same neighborhood as the SVB market cap, at least in nominal dollars.

We’re not hearing much about Signature Bank’s failure. For 8 years up to and including its seizure by the FDIC, Barney Frank was on the board: “Barney Frank defends role at Signature Bank: ‘I need to make money’” (FT):

FT says that Barney Frank made about $2 million by serving on the board of failed bank. None of that will be clawed back by the FDIC…

Full post, including comments

64-knot wind gusts at San Francisco’s main airport

by philg

Here’s some unusual weather at SFO:

KSFO 142256Z 23024G38KT 3SM -RA BR FEW008 BKN029 OVC047 13/12 A2970 RMK AO2 PK WND 20044/2201 SLP058 P0000 T01330117
KSFO 142209Z 22030G44KT 2SM -RA BR FEW008 BKN012 OVC017 14/12 A2968 RMK AO2 PK WND 20044/2201 PRESRR P0000 T01440122
KSFO 142156Z 21031G45KT 3SM -RA FEW008 BKN010 BKN017 15/12 A2966 RMK AO2 PK WND 21051/2129 RAE30B47 SLP043 P0000 T01500122
KSFO 142056Z 20039G54KT 3SM -RA FEW005 BKN012 16/13 A2959 RMK AO2 PK WND 21067/2011 SLP021 P0000 60000 T01610133 51022
KSFO 142054Z 20038G53KT 3SM -RA FEW005 BKN012 16/13 A2959 RMK AO2 PK WND 21067/2011 P0000
KSFO 141956Z 20042G57KT 3SM -RA FEW005 BKN017 OVC026 17/13 A2955 RMK AO2 PK WND 19062/1945 RAB12 SLP008 P0000 T01670128
KSFO 141856Z 19043G64KT 10SM FEW005 BKN025 OVC033 18/13 A2953 RMK AO2 PK WND 19064/1849 RAE07 SLP000 P0000 T01780128
KSFO 141815Z 18032G51KT 10SM FEW006 BKN029 OVC041 18/13 A2955 RMK AO2 PK WND 17051/1801 RAE07 P0000 T01780133
KSFO 141756Z 17033G49KT 10SM -RA FEW006 BKN033 OVC046 17/13 A2957 RMK AO2 PK WND 18049/1756 RAE22B48 SLP013 P0000 60062 T01720128 10172 20133 56020
KSFO 141656Z 17022G36KT 4SM -RA FEW006 SCT023 OVC032 16/13 A2957 RMK AO2 PK WND 16038/1645 SLP014 P0001 T01610128

On March 14 at 1856 GMT (around noon local time), the wind was from the south (190) at 43 knots gusting 64 knots. What if you decide to take off into that wind on 19L or 19R? Just a few clouds at 500′, a broken layer at 2500′, and overcast at 3300′ (all elevations above the airport, but the airport is only 13′ above sea level).

I find it almost comical that the METAR for a normal day at SFO is visually almost the same as the METAR on a day when a two-seater wouldn’t even need to start the engine in order to become airborne:

KSFO 151956Z 04006KT 10SM FEW020 13/07 A3002 RMK AO2 SLP164 T01280067

Maybe the next generation of METARs should allow emojis and there should be some of people being blown off the ramp. The current wind emoji is quite weak on Windows: 🌬️

Readers: Anyone been in the Bay Area through these recent storms? What’s the on-the-ground experience?

Related:

Full post, including comments

ChatGPT applies to college

by philg

It’s college acceptance letter time. If your child doesn’t get in, consider whether he/she/ze/they should have used ChatGPT to do the authoring. Here’s an essay penned by the Nvidia chips:

As a 17-year-old Black girl, I have had to navigate a world that is not always kind to those who look like me. Even with the privilege of growing up in a family with a wealthy investment banker as my father, my family has not been immune to the ravages of racism.

One concrete example of this was when my family was denied parking for our Gulfstream G650 while a white family was allowed to park a ragged-out Cessna Citation V. This was not just an inconvenience; it was a blatant act of discrimination that left us feeling vulnerable and disrespected.

These experiences have only deepened my passion for justice and equity, and have led me to pursue a major in Africana Studies at Oberlin College. I believe that by studying the history and culture of the African diaspora, I can help others who have faced similar challenges to mine.

I have seen firsthand how systemic racism impacts the Black community, from the disparities in access to quality education and healthcare to the over-policing and criminalization of Black bodies. I know that by studying Africana Studies, I will be able to better understand the complexities of these issues and the ways in which they intersect with other forms of oppression, such as sexism and homophobia.

I am eager to use the knowledge and skills that I gain through my degree to help others who have been affected by racism and other forms of injustice. I want to be a voice for the voiceless and to advocate for change in my community and beyond.

I believe that my proposed major in Africana Studies will equip me with the tools that I need to become an effective advocate for justice and equity. It will help me to understand the historical and cultural contexts of systemic oppression, and to work towards dismantling these systems of inequality.

In conclusion, I am excited to pursue my degree in Africana Studies at Oberlin College. I know that it will challenge me to think critically and deeply about issues of social justice, and that it will prepare me to be a leader and a change-maker in my community and beyond. I am committed to using my education to help others who have been affected by racism and other forms of oppression, and to create a world that is more just and equitable for all.

Here’s my prompt:

(Note that I would personally love to suffer the inconvenience and disrespect of being refused parking for my Gulfstream G650!)

From the Harvard Coop, March 11, 2023:

Full post, including comments

Maskachusetts trip report

by philg

Here are some photos from my recent trip to Cambridge, Newton, and Wayland. The high school where the Tsarnaev brothers took Tolerance and Diversity classes features a “Black Lives Matter” banner in 4X the font size of the sign that describes the building’s secondary purpose (“school”):

(Where is their rainbow flag? And why not a banner to celebrate immigrants, who are roughly 27 percent of the city’s population?)

Traffic delays slowed all of my excursions around the Boston suburbs. The eight-lane I-95 ring highway was jammed at midday on Saturday. The main road that goes to Wayland would be four or six lanes in Florida, plus dedicated left and right turn lanes at intersections, but in Maskachusetts it is only two lanes and a single car wanting to turn left can create a mile-long backup. Fortunately, there are plenty of opportunities to learn and improve when stopped at a light:

(The locals nearly all profess faith in population growth via mass low-skill immigration. Yet the transportation infrastructure of Boston plainly cannot support even the current population. The road network is jammed and the locals who eagerly cowered in place are unwilling to ride public transit due to COVID risk.)

The weather featured highs in the 30s, cloudy skies, and light rain or snow flurries, so it was perfect for ducking into the Harvard Bookstore to see what the nation’s smartest people are reading. Just a few steps from the front door, I learned a new vocabulary word: Filipinx. (Unclear why this title makes sense for a cookbook. It is not humans in a rainbow of gender IDs who are being cooked, I hope!)

Bernie and Cancel Culture got pride of place:

We know all about Bernie, I hope, but who is Ernest Owens, the promoter of cancel culture? The author’s bio at Amazon:

Ernest Owens (he/him) is an award-winning journalist and CEO of Ernest Media Empire, LLC. He is the Editor at Large for Philadelphia Magazine and President of the Philadelphia Association of Black Journalists. He hosts the hit podcast “Ernestly Speaking!” As an openly Black gay journalist, he has made headlines for speaking frankly about intersectional issues in society regarding race, LGBTQ, and pop culture.

What if you were one of the engineers who toiled mightily on Xerox’s amazing print-shop-in-a-box machine? You’ve been canceled, as of spring 2022:

The bookstore keeps the Spirit of Fauci alive with this “please wear a cloth mask against an aerosol virus” sign:

Only about 20 percent of the people inside the store were complying with this request from Science. Although 0 percent of the customers appeared to identify as Black, the store has an ample supply of books on Blackness and at least one title on how to be white:

If you love empathy and Scientific management of the U.S. economy, this book about Janet Yellen is for you:

Ms. Yellen is certainly delivering on the promise to “spread prosperity to all” in that most Americans are on track to become millionaires. (Bad news: $1 million will also be the price of a used Honda Accord.) Who will keep ChatGPT from taking over before inflation has had enough time to deliver universal millionaire-hood? Harvard, of course! The AI Safety Team lives on Church St.:

How about the new higher minimum wage? Shake Shack in Harvard Square has responded by eliminating the order-taker jobs. You order and pay at a touchscreen. How’s the labor quality now that higher wages are being paid? Some of my fries were still frozen.

We went back the next night to the Harvard Coop. They’re heavily invested in the idea that some books are “banned” in states other than Maskachusetts.

Returning to Harvard Bookstore, we found that these are referred to as “challenged” rather than “banned” books:

In conversations with white native-born progressives, none seem to have adapted to the fact that 85 million Americans are either immigrants or children of immigrants. The dominant conflict between groups in the U.S. is white vs. Black and if this conflict can be solved, e.g., via reparations or Black Lives Matter banners, Americans will all live together in harmony. They can’t understand why recent immigrants from India, China, or Honduras don’t share their enthusiasm for Black Lives Matter, allocating places in colleges or in jobs to those who identify as Black, etc. At a dinner event where most of the guests were either from India or were children of Indian immigrants, the current American race-based system was decried. “We’re ‘brown’ if we try to get into country clubs,” one professor said, “but we’re considered ‘off-white’ when we apply for jobs or to college.”

Full post, including comments

How did Jamaica get to be so dangerous?

by philg

I’ve been listening to Goldeneye: Where Bond Was Born: Ian Fleming’s Jamaica, in which the 1950s version of the island is described as a paradise to which film stars and billionaires (adjusted to post-Biden $$) seek to escape. A fabulous oceanfront estate could be purchased and/or built for thousands of British pounds. Fleming went there for two months every year, first to relax and then to write. Wikipedia:

When Jamaica gained independence in 1962, the murder rate was 3.9 per 100,000 inhabitants, one of the lowest in the world. In 2005, Jamaica had 1,674 murders, for a murder rate of 58 per 100,000 people, the highest murder rate in the world.

Today’s question is how this happened. Could it be overpopulation versus a fixed set of resources? The following chart (source) shows what should have been manageable growth, from 1.6 million to 2.75 million, 1960 to the present:

What about poverty? That’s often blamed for crime. The World Bank says the country has gotten richer, per-capita (this is adjusted for inflation (“current US$”)):

Maybe it is guns? We don’t have people killing people here in the U.S. We have “gun violence”. But the book describes guns as having been readily available in Jamaica in the 1950s (Fleming owned an assortment, for example).

Readers: Have you been to Jamaica? What’s it like for tourists? Are they mostly in resorts that are walled-off from the locals?

Full post, including comments

Can the working class afford to bail out Silicon Valley Bank customers?

by philg

Update: Ordinary schmoes are going to bail out the billionaire customers of Silicon Valley Bank, but the bailout is being disguised as a “special assessment” on the peasants’ banks. (NYT) Technically this is “not from taxpayers”… it is a bailout only from those taxpayers who have bank accounts.

I’m inaugurating a new category for blog posts today: transferism. The working class has already paid for a portion of all of the luxurious electric cars being driven around Silicon Valley. Joe Biden’s loan forgiveness scheme forces the working class to pay for elite families’ kids’ college education. What if there is a bailout of Silicon Valley Bank today with some money from the Federal Reserve or the U.S. Treasury? A friend in the money business says that Silicon Valley Bank wouldn’t take personal accounts unless an individual had at least $7 million in liquid assets (i.e., excluding real estate and private company shares). So a federal bailout would be a transfer from the working class to some of the richest people in the world.

(This also happened during coronapanic. A friend owns an aircraft charter company and the government gave him a huge amount of money in 2020 to pay pilot salaries. “I turned around and gave almost all of the money to the [Gulfstream] owners,” he said, “because they’re the ones actually responsible for the cost of pilot salaries. They never would have fired the pilots because they were still using their planes personally and it would have been too hard to re-hire and re-train. We ended up having our most profitable charter year ever, though that was exceeded in 2021.” In other words, money that will one day be extracted from the working class via taxation was used to pay billionaire Gulfstream jet owners.)

What are readers predicting for the fate of Silicon Valley Bank? “Regulators Hold Auction for Silicon Valley Bank” (WSJ):

Regulators are auctioning Silicon Valley Bank as part of a broader effort to contain the fallout from its failure on Friday.

Treasury officials confirmed the auction to lawmakers and staff on a call Sunday afternoon, according to people familiar with the matter, saying bids were expected by 2 p.m. Eastern Time.

That was hours ago! If there had been a successful bid, wouldn’t we have heard? Pre-coronapanic, which we can use as a period of time when valuations were at least vaguely tethered to reality, Silicon Valley Bank was worth about $10 billion. If it takes $20 billion to make depositors whole, the current enterprise should be worth at most -$10 billion. But given that the enterprise is now associated with incompetence and a huge amount of money has been wired out, maybe -$17 billion is a more accurate number?

So, despite not knowing anything about banking or being confident in the $20 billion shortfall plug figure, my prediction is that SVB is sold to a large bank for -$17 billion (i.e., taxpayers give the acquirer $17 billion). The justification will be that if taxpayers didn’t “invest” this $17 billion, the panic would spread and your Main Street bank would be next.

From the library at the Charles Hotel in Harvard Square:

Related:

Full post, including comments

Can we all agree on a $15 minimum wage now that it is worth $11?

by philg

Various state governors are arguing for a $15 per hour minimum wage. Examples:

and

Wikipedia says that the 15 number was put forth in 2012. How much are 15 of today’s Bidies worth in 2012 dollars? $11!

Let’s assume that these $15 minimum wage laws finally get implemented all around the U.S. What will happen to labor force participation? Some of the advocates for this higher minimum wage say that it will go up, which seems like a safe bet if we just expect regression toward the mean (see chart below).

Speaking of minimum wage, a reader sent me “Spanish husband is ordered to pay his ex-wife £180,000 for 25 years of unpaid housework based on minimum wage throughout their marriage” (Daily Mail). Divorce lawsuits aren’t lucrative in Europe compared to in the UK/US (see Real World Divorce) and the statutes reflect the assumptions that (1) that people of all gender IDs are capable of working for wages, and (2) a person who gets hold of children should not expect to support him/her/zir/theirself off those children. Because of these assumptions, alimony may not exist and child support profits are limited. Constrained by these new laws, a judge in Spain figured out that she could order a divorce lawsuit defendant to pay his plaintiff under a back wages theory.

Judge Laura Ruiz Alaminos, sitting at a court in Velez-Malaga in southern Spain, calculated the figure based on the annual minimum wage throughout the couple’s marriage…

The separated couple share two daughters and the ruling states that Ivana had spent almost all of her time looking after their family and working as a housewife during their marriage.

The mother-of-two, who wed her ex in 1995 before asking for a divorce in 2020, has said she is happy with the payout after years of hard work.

The couple’s marriage was governed by a separation of property regime, which Ms Moral’s husband had asked her to sign at the start of their marriage.

It specified that whatever each party earned was theirs alone, with them only sharing possessions.

She told [the reporter] that she has now spoken out about her case as she wants women to know what they are entitled to.

Minimum wage seems insulting for the work of being married!

(Note the misleading language in the above. Spain is a “no-fault” or “unilateral” divorce jurisdiction. Once the wife had decided to divorce her husband, she was guaranteed to get her wish and the husband’s wishes were irrelevant. But the legal proceeding is characterized as a request in which the defendant had some agency and control. The most common example of this is in the American media in which a court order following a trial is characterized as a “divorce settlement”, as though the parties had negotiated and come to a mutually satisfactory agreement.)

Full post, including comments

Book review: the American love affair with opioids, accelerated by McKinsey

by philg

Loyal readers may remember a review here of a book by a Los Angeles Times reporter on America’s taxpayer-fueled heroin habit (see Who funded America’s opiate epidemic? You did.). Empire of Pain: The Secret History of the Sackler Dynasty covers the same story from the angle of the family behind OxyContin. The Sacklers, whose names adorn university and art museum buildings throughout the U.S. and Europe, have been convenient scapegoats, but it turns out that they didn’t do it alone. Some things that I learned from the book…

Arthur M. Sackler, the patriarch, died before OxyContin was invented (the slow-release coating was actually the invention of a British company that had been acquired by the Sacklers’ sleepy Purdue Pharma and was used originally for morphine pills called “MS Contin”). He was the significant art collector and benefactor of AOC’s party venue at the Metropolitan Museum (how did it cost $587 for a car ride from the Bronx to the Upper East Side?). With the help of some friendly bureaucrats at the FDA, who would go on to be of much greater assistance to his brothers’ company Purdue, he pushed the limits of what was legal/ethical in medical advertising, especially for Valium and Librium, but museums are still happy to display the name of Hoffmann-La Roche, which actually made the drugs.

The book describes McKinsey, “The firm that built the house of Enron”, working to help Purdue Pharma increase sales of OxyContin even after the company and three executives had pleaded guilty to federal crimes regarding claims made regarding the drug. McKinsey’s biggest idea, according to the author, was that Purdue Pharma’s salespeople should make more frequent calls on the doctors who were the biggest prescribers, i.e., the “pill mills” such as Eleanor Santiago‘s (1 million pills, which resulted in a 20-month prison sentence for the physician). McKinsey also consulted for Johnson & Johnson, the author says, to help them push more opioids out to consumers. (See “Behind the Scenes, McKinsey Guided Companies at the Center of the Opioid Crisis” (NYT 2022))

Speaking of Johnson & Johnson, they owned a division in Tasmania where all of the poppies were grown to enable the production of OxyContin and competitive opioid pills from Janssen (J&J’s pharma subsidiary, now famous for its never-FDA-approved one-shot COVID vaccine) and other companies (in-depth background). The Federal DEA was also complicit in allowing a massive increase in the import quota for this critical raw material.

The author describes Mary Jo White, later appointed by Barack Obama to chair the Securities and Exchange Commission, as instrumental in weakening the government’s efforts to punish Purdue, which was owned entirely by the Sacklers (not, however, by any of Arthur M’s descendants or cash-hungry former wives, “the Valium Sacklers” as opposed to the “OxyContin Sacklers”).

Consistent with Dreamland, the book previously reviewed here, Empire of Pain says that it was common for people to transition from Oxy to heroin sold by migrants from Nayarit, Mexico and that, in fact, 80 percent of heroin overdoses were among people who’d previously been prescribed OxyContin. (See also “From Nayarit to Your Neighborhood: Heroin’s Path to a Ready Local Market”.)

The book supports the heritability of success theory advanced in The Son Also Rises: economics history with everyday applications. Even after a couple of generations that could have succumbed to idleness, the Sackler descendants are reasonably hard-working and successful. Madeleine Sackler, for example, has been successful as a filmmaker (ironically, a couple of them are about life in prison, which is not unrelated to the drug that has funded her lifestyle).

Empire of Pain: The Secret History of the Sackler Dynasty is timely given that a lot of our American brothers, sisters, and binary-resisters were just paid $600/week to stay home for two years and consume drugs and alcohol (this Senate document says there was a 30 percent increase in overdose deaths, but blames the “pandemic” rather than the “lockdown”). The antiracism experts at Mass General say that heavy drinking increased by 21 percent during lockdown.

If nothing else, reading the book will make you cautious about taking that first bottle of painkillers that a doctor prescribes!

The author is a New Yorker writer and he asserts as fact that HIV/AIDS would have been a solved problem if Republicans had not blocked federal funding for research into a cure for this disease (yet SARS-CoV-2 continues to kill steadily despite literally $trillions in tax money that has been thrown at it; see Did vaccines or any other intervention slow down COVID?). He also asserts as fact that if Purdue Pharma was liable for opioid-related deaths then gun manufacturers are obviously liable for shooting deaths (never mentioning that the gun manufacturers have always been quite candid about the lethality of guns/bullets and that the theory of liability for the opioid industry is that the companies lied to Americans about heroin-style drugs not being addictive/harmful).

Loosely related… the Temple of Dendur at the Met, in what used to be called “The Sackler Wing” (funded by Arthur M, blameless in the OxyContin debacle), “temporarily closed” in June 2021 for coronapanic:

Full post, including comments

Silicon Valley experts on gender equity and money have a $175 billion bank failure

by philg

Folks at Facebook like to lecture others, sometimes via software, regarding gender equity. What happens inside their own company? “Meta has a pay gap problem, with women abroad getting lower pay and smaller bonuses than men” (Business Insider):

The company, formerly known as Facebook, continues to pay women less than men, whether they’re hourly workers or on salary, according to Meta’s most recently available reports on pay inequity in the UK and Ireland. The company also hands women smaller bonuses, the reports said.

The report on Meta’s pay gap in Ireland is the most recent, having been released quietly in December as part of a new law in the country that went into effect last year. In 2022, women working for Meta in Ireland were paid 15.7% less on average than men at the company. The difference in bonus pay in the country is even larger, with the average bonus for women being 43.3% lower than those that go to men.

For women working at Meta in the UK, where the company operates out of London, the pay gap is smaller but still prevalent, according to a report from last year detailing pay data from 2021. The average woman there was paid 2.1% less than the average man. And again, the difference in bonuses is much starker, with the average bonus going to women being 34.8% less than bonuses paid to men.

The lords of Silicon Valley are also fond of reminding the peasants how much smarter they are about money, even as many venture capital firms there underperform the S&P 500 (HBR 2014; a 2019 article). What about something simple like running a bank? With about $200 billion in deposits to protect, Silicon Valley Bank made a big bet that the Vanquisher of Corn Pop wouldn’t set off hyperinflation. The bank bought long-term Treasury bonds. When Bidenflation took off, the value of these bonds collapsed. From “What’s Going on With Silicon Valley Bank?” (WSJ):

SVB Financial bought tens of billions of dollars of seemingly safe assets, primarily longer-term U.S. Treasurys and government-backed mortgage securities. SVB’s securities portfolio rose from about $27 billion in the first quarter of 2020 to around $128 billion by the end of 2021.

These securities are at virtually no risk of defaulting. But they pay fixed interest rates for many years. That isn’t necessarily a problem, unless the bank suddenly needs to sell the securities. Because market interest rates have moved so much higher, those securities are suddenly worth less on the open market than they are valued at on the bank’s books. As a result, they could only be sold at a loss.

Many of the bank’s deposits are sizable enough that they don’t carry Federal Deposit Insurance Corp. protection. SVB said it estimates that at the end of 2022 the amount of deposits in its U.S. offices that exceed the FDIC insurance limit was $151.5 billion.

Before it disappears, let’s have a look at their home page:

Certainly nobody can accuse them of failure to represent a diversity of hairstyles.

What can you do to protect yourself in case some other banks were overconfident regarding our current rulers and their Borrow-and-Spend-Like-Drug-Dealers economic policy? Move money that is in cash into mutual funds or common stocks. The bank is just a custodian for these assets and if the bank fails you’re still a shareholder at the same level. If you must have cash of more than $250,000, spread it among multiple banks.

Let’s dig a little deeper into this failed bank. It seems that they too might have built a culture of equity by underpaying a group of employees unified by a gender ID:

They were experts on “sustainable finance” whose own enterprise just happened not to be sustainable.

Related:

Full post, including comments