Category: US business

The purpose of business

George Will:

Semantic infiltration is the tactic by which political objectives are smuggled into discourse that is ostensibly, but not actually, politically neutral. People who adopt a political faction’s vocabulary also adopt — perhaps inadvertently, but inevitably — the faction’s agenda. So, everyone who values economic dynamism, and the freedom that enables this, should recoil from the toxic noun “stakeholder.”

The Oxford Reference definition is “all those with interests in an organization,” including “shareholders, employees, suppliers, customers, or members of the wider community (who could be affected by environmental consequences of an organization’s activities).” Which means: everyone. “All” in the “wider community” who claim an “interest.” Anyone can make such claims; no one can refute them.

A former governor of the Bank of England (Mark Carney), the head of the world’s largest investment firm (Larry Fink of BlackRock) and the CEO of the largest U.S. bank (Jamie Dimon of JPMorgan Chase) have joined forces to make capitalism “sustainable” through “ESG” (environmental, social and governance) investing. Although fashionable, this is of dubious legality. (See below: fiduciary duty.) The Economist’s “Schumpeter” columnist notes that sanctimony accompanies such “financial do-goodery.” Of course: ESG appeals to people for whom mere business — the creation of wealth and opportunity — lacks the cachet of politics.

Although progressivism presents itself as modernity on the march, its stakeholder doctrine echoes feudalism. Phil Gramm, a former U.S. senator, and Mike Solon, president at US Policy Strategies, writing in the Wall Street Journal, note that in feudalism’s “communal world,” workers had obligations to the church, the local aristocracy, the guild and the village: These “stakeholders” leeched away portions of what workers produced.

Today, Gramm and Solon say, about 70 percent of corporate revenue goes to labor, and 72 percent of the value of publicly traded U.S. companies is “owned by pensions, 401(k)s, individual retirement accounts, charitable organizations, and insurance companies funding life insurance policies and annuities.” So, the wealth of workers, and of current and future retirees, is diminished when “stakeholders” get corporations to sacrifice the goal of maximizing economic value to noneconomic, generally political goals.

Stakeholder capitalism violates fiduciary laws that require those entrusted with investors’ money to employ it “solely in the interest of” and “for the exclusive purpose of providing benefits to” the investors. (Emphasis added.) Sen. Marco Rubio’s proposed Mind Your Own Business Act would enhance shareholders’ power to sue corporate management for breach of fiduciary duty when corporations take actions “on a primarily non-pecuniary” (usually political) basis, or use primarily non-pecuniary public reasoning to justify corporate actions

Although progressives are especially disposed to break all private entities to the saddle of politics, factions of all persuasions can infuse politics into this and that: A Texas law, itself a political gesture, requires banks that underwrite the state’s municipal bond market to certify that their political gestures do not include forbidding transactions with the firearms or ammunition manufacturers and retailers. One affected bank: Dimon’s JPMorgan Chase.

The New York Times recently interviewed two advocates of ESG investing. One said, in effect, that only such investing fulfills fiduciary obligations because the welfare of those whose money is being used depends on “a planet that is livable.” Meaning: Politically enlightened ESG advocates know what unenlightened investors would want if they were as intelligent and virtuous as the advocates.

The other ESG enthusiast the Times interviewed said “social justice investing” is “the deep integration of four areas: racial, gender, economic and climate justice.” And the “single-issue CEO” — the kind focused on maximizing shareholders’ value — is “not the way of the future.” This is often the progressives’ argument-ending declaration: Non-progressives are on the wrong side of history, so they can be disregarded until history discards them.

The Times’s interviewer observed that “defining justice seems messy these days.” These days? Actually, justice has been a contested concept since Plato wrote. For today’s ESG advocates, however, the millennia-long debate is suddenly over: Justice is 2022 American progressivism, period.

In a dynamic society, resources are efficiently disposed by corporate managements whose primary duty, which other corporate activities do not compromise, is to maximize shareholder value by profitably supplying the demand for goods and services. Furthermore, in a congenial society, boundaries are respected: Most people say about most things, “This is none of my business.”

Self-proclaimed stakeholders, parasitic off others’ labor and accumulation, assert that everything is their business. Actually, although everyone has a right to advocate progressivism, no one has a right to insist on a stake in deploying others’ property for the stakeholders’ political ends.

The concept of an investor society — expanding investment opportunities to the roughly 30 percent of Americans not investing now — is something that Republicans should be focusing on instead of things that will never happen (i.e. undoing the 2020 presidential election).

Republicans should also be pointing out that the problems of today’s economy — rampant and worsening inflation led by spiraling energy prices — were the result not of the flaws of capitalism (which is flawed only because every single human institution is flawed since humans are involved), but by the flaws of government — specifically, Biden’s crappy energy policies, as noted by U.S. Rep. Dan Crenshaw (R–Texas):
There are (at minimum) 5 things that Biden can do right now to increase production. First, he can lift the development restrictions on federal lands and waters, and reinstate any canceled sales and leases that took place on them. Second, the admin can fix the NEPA permitting process by establishing agency uniformity in reviews, limiting reviews to two years, and reducing ridiculous burdens placed on projects. Third, accelerate LNG exports and approve pending LNG applications. Fourth, end permitting obstruction on natural gas projects by stopping any efforts to overstep its permitting authority by the Federal Energy Regulatory Commission. And finally, Biden needs to roll back the 30+ regulations that this administration alone has put on the entirety of the oil and gas industry since taking office.

The 70% society

Former U.S. Sen. Phil Gramm (R–Texas) and Mike Solon:

No one appreciated the power of capitalism more than its greatest antagonist, Karl Marx. Born of the Enlightenment, embodied in the Industrial Revolution, capitalism, according to Marx, “accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals . . . achieving more massive and colossal productive forces than have all preceding generations together” in “scarce one hundred years.”

Based on the erroneous notion that all value comes from labor, Marx assumed that the financier, entrepreneur and manager were noncontributing claimants on the fruits of the worker’s labor and that government could displace them and then “wither away” as growth occurred spontaneously. Most subsequent collectivists have assumed the same thing. In this utopia, workers would then receive all value created in society.

Government was never able to replicate the efficiency and innovation of private finance, entrepreneurs and managers, and it was freedom and prosperity, not government, that always withered away. But because of the misery Marxism has imposed, the world has a living memory and therefore some natural immunity to a system in which government takes the commanding heights of the economy.

No such immunity exists to the older and therefore more dangerous socialism of the pre-Enlightenment world. In the communal world of the Dark Ages, the worker owed fealty to crown, church, guild and village. Those “stakeholders” extracted a share of the product of the sweat of the worker’s brow and the fruits of his thrift. Growth stagnated as the rewards for effort and thrift were leached away.

The 18th-century Enlightenment liberated mind, soul and property, empowering people to think their own thoughts and ultimately have a voice in their government, worship as they chose, and own the fruits of their own labor and thrift. As Enlightenment economist Adam Smith put it, “the property which every man has in his own labor, as it is the original foundation of all property, so it is the most sacred and inviolable.”

The British Parliament repealed royal charters, permitted businesses to incorporate simply by meeting preset capital requirements, and established the rules of law governing private competition. Most important, laws were made through a process of open deliberation with public votes. This democratic process replaced the intimidation of medieval stakeholders, who under the communal concept of labor and capital took a share of what others produced.

These Enlightenment ideas spawned the Industrial Revolution and gave birth to the modern world, as described by Marx. As people sought their own advancement under a system of private property and the rule of law, as if guided by Adam Smith’s “invisible hand,” they promoted the public interest without intention or knowledge of doing so. Freedom and self-interest unleashed the world’s greatest productive effort and continue to drive progress to this day.

The pre-Enlightenment world was dominated by the powerful, who defined the public interest to benefit themselves and imposed their will on productive members of society. When labor and capital are forced to share what they produce with stakeholders, the reward for working and savings is plundered.

In the post-Enlightenment world, people were empowered to pursue their own private interests. Private interests and free markets accomplished what no benevolent king’s redistribution, no loving bishop’s charity, no mercantilistic protectionism, and no powerful guild ever did—deliver broad, unending prosperity.

Remarkably, amid the recorded successes of capitalism and failures of socialism rooted in Marxism, pre-enlightenment socialism is re-emerging in the name of stakeholder capitalism. These stakeholders claim that “you did not build your business” and that your labor and thrift should serve their definition of the public interest.

The initial target of this extortion is corporate America. Stakeholders argue that rich capitalists who own big businesses already get more than they deserve. But since roughly 70% of corporate revenues go to labor, the biggest losers in stakeholder capitalism are workers, whose wages will be cannibalized. And of course, the idea that rich capitalists own corporate America is largely a progressive myth. Some 72% of the value of publicly traded companies in America is owned by pensions, 401(k)s, individual retirement accounts, charitable organizations, and insurance companies funding life insurance policies and annuities. The overwhelming majority of involuntary sharers in stakeholder capitalism will be workers and retirees.

The mantra that private wealth must serve the public interest has been boosted by one of capitalism’s great innovations, the index fund. What investors gained in the efficiency of the index fund’s low fees, they are now losing as index funds use the extraordinary voting power they possess in voting other people’s shares. Whether their motives are promoting the marketing of their index funds, doing “good” with other people’s money, or, as Warren Buffett’s longtime partner Charlie Munger claimed, playing “emperor,” they have empowered the environmental, social and governance (ESG) agenda. Other stakeholders are sure to pile on, as evidenced by Sens. Bernie Sanders and Elizabeth Warren’s effort to get BlackRock to use its share-voting power to pressure a private company to yield to union demands.

Stakeholder capitalism imperils more than prosperity, it imperils democracy itself. Self-proclaimed stakeholders demand that workers and investors serve their interests even though no law has been enacted imposing the ESG agenda.

The fiduciary laws require those entrusted with the investors’ money to use it “solely in the interest of . . . for the exclusive purpose of providing benefits to” the investor. The index funds that enable stakeholders to intimidate public boards are violating federal fiduciary requirements and those government agencies that enforce stakeholder capitalism are engaged in an unconstitutional takings under the Fifth Amendment of the Constitution.

In our post-Enlightenment world, public interests beyond the confluence of private interests are defined by the public actions of a constitutionally constrained government. By overturning the Enlightenment, stakeholder capitalism not only endangers capitalism and prosperity, it endangers democracy and freedom as well.

Let’s repeat a paragraph for emphasis:

But since roughly 70% of corporate revenues go to labor, the biggest losers in stakeholder capitalism are workers, whose wages will be cannibalized. And of course, the idea that rich capitalists own corporate America is largely a progressive myth. Some 72% of the value of publicly traded companies in America is owned by pensions, 401(k)s, individual retirement accounts, charitable organizations, and insurance companies funding life insurance policies and annuities. The overwhelming majority of involuntary sharers in stakeholder capitalism will be workers and retirees.

That means Democrats lose in stakeholder capitalism too.


The downward spiral of Sports Illustrated

This all started with Jordan Peterson, as Jason Whitlock reports:

Dr. Jordan Peterson misspoke when he proclaimed via Twitter that Sports Illustrated swimsuit model Yumi Nu is “not beautiful.”

We all know beauty is in the eye of the beholder.

Peterson should have said the extra-plus-sized model is “not healthy. And no amount of authoritarian tolerance is going to change that.” He undermined a fact with a personal opinion, and by doing so, he allowed the woke to once again dodge responsibility for their real evil agenda.

On Monday, North America’s most honest public intellectual reacted to Sports Illustrated’s decision to place an obese woman with a strikingly pretty face on the cover of its formerly iconic Swimsuit Issue. He retweeted a New York Post story picturing the blubbery Asian beauty beneath his proclamation: “Sorry. Not beautiful. And no amount of authoritarian tolerance is going to change that.”

Twitter, of course, erupted in faux outrage. A white man impolitely aired his truth about a flabby Asian fashion model. Twitter’s social justice army accused Peterson of unloading a toxic vat of white privilege and white supremacy.

Unafraid of a brawl, Peterson engaged his critics. He doubled down on his contention that the left wants to redefine beauty standards.

“It’s a conscious progressive attempt to manipulate & retool the notion of beauty, reliant on the idiot philosophy that such preferences are learned & properly changed by those who know better.”

I say this respectfully. Peterson missed the mark again. He botched this issue. Beauty is an opinion. And we all know opinions are like booty holes. Everyone has one and they all stink. The left doesn’t want to retool the notion of beauty. They want to retool the notion of health. They want to reclassify obesity as healthy.

Virtually everything the progressive left promotes is related to normalizing a culture of death, destruction, and despair. Abortion is about the right to kill babies in the womb. Liberalizing drug laws is about freeing people to self-medicate themselves into zombies. Defunding the police is about normalizing violent chaos within communities. Hostility toward religion is about removing hope, the lifeblood of civilization. Transgenderism is about the mutilation of God’s creation.

Jordan Peterson is known for speaking uncomfortable truths. He passed on an opportunity in this instance. The platform of the modern left is built on early 20th-century satanist Aleister Crowley’s “do what thou wilt” philosophy. Crowley argued the purpose of life is for humans to align themselves with their true will.

It sounds great. Why wouldn’t you want to align yourself to your true will?

Well, for those of us who believe in a higher power, who believe our inalienable rights come from God, who believe that Jesus died on a cross for our sins, we’re taught the purpose of our lives is to align ourselves with God’s will for us. His vision for us is spelled out in the Bible.

We’re taught that our nature is sinful and we should avoid a “do what thou wilt” mindset and set of behaviors.

Specifically, among other things, we’re taught that gluttony is a sin that will harm our lives and lead to death.

Phillipians 3:19: “Their destiny is destruction, their god is their stomach, and their glory is in their shame. Their mind is set on earthly things.”

Proverbs 23:2: “And put a knife to your throat if you are given to gluttony.”

Proverbs 23:20-21: “Do not join those who drink too much wine or gorge themselves on meat, for drunkards and gluttons become poor, and drowsiness clothes them in rags.”

For those of you who are nonbelievers, you don’t need the Bible for evidence of the dangerous impact of gluttony and obesity. Check with any doctor. Punch it into Google. You can call me. Gluttony and obesity have been my weaknesses.

The effort to normalize obesity is evil and satanic. Sports Illustrated is promoting death with its glorification of rotund runway models. Yumi Nu foolishly believes her ascension to SI cover girl is a symbol of necessary progress.

“I feel like we’re in a place right now where people are making space for more diversity on magazine covers,” she said. “It’s a big time for Asian-American people in media. I know I play a big role in representation in body diversity and race diversity, and I love to be a role model and representative of the plus-size Asian community.”

Nu is a disciple of the D.I.E. religion of diversity, inclusion, and equity. The D.I.E. religion is just Aleister Crowley’s satanism rebranded in a way that makes it palatable for the masses. It’s do what thou wilt. It’s the seeking of your true will.

Yumi Nu is a 250-pound glamour girl. She has aligned herself with her corpulent true will. She’s no different from Lia Thomas, the young man who decided his true will was to be a swimmer on the University of Pennsylvania’s women’s team. Nu is no different from Pete Buttigieg, the U.S. secretary of transportation who hopped in a hospital bed to pretend he delivered a baby.

Yumi Nu feels like she’s the Asian Christie Brinkley, Heidi Klum, or Tyra Banks. The reality is Nu is more Lizzo or Jason Whitlock, a pretty face seated atop a grossly unhealthy body. The people lying to and about Yumi Nu want her and others to die an early death smothered in gravy, fried chicken, and Kool-Aid.

What made America great was when we collectively sought to align ourselves with God’s will for us. That’s what compelled us to end slavery and Jim Crow. Men and women who wanted to be on the right side of God fought for freedom and equality of opportunity.

Men and women who want to be on the right side of a history leftists plan to write will end up standing alongside Aleister Crowley and blubbery beauties.

Michael Smith:

There’s been a lot of discussion about the Sports Illustrated swimsuit issue and how it is incorporating obese models as some attempt to redefine beauty.

It is true that “beauty” is a historically and culturally flexible concept – but one aspect of it has not changed – beauty is celebrated because it is unique in some way.

Before SI flipped the script and focused on what society defined as beautiful and then began to try to redefine it, I enjoyed the Swimsuit Issue for that reason. I found it pleasurable to view females of unique beauty

I used to subscribe to the magazine – but I no longer do and the change in perspective as evidenced in the Swimsuit Edition is largely why. I can get sports news faster today than ever before. The Internet changed that – but when SI began its campaign against beauty in favor of celebrating average, that was the end for me

Look – in a totally non gay bro-like perspective, I appreciate unique handsomeness in men as well.

My wife one asked me who I would be if I could be anybody and I chose Brad Pitt’s character of Tristan from the movie “Legends of the Fall”. To me, Tristian is the idealized model of a real man – the way a man is supposed to look, act, and leave a legacy behind

Stuffing an obese woman into a swimsuit doesn’t make her beautiful any more than stuffing a dude with a beer gut into a Speedo makes him handsome

Shoehorning “plus-sized” Yumi Nu onto the cover of SI does not make her attractive.

I’m with Jordan Peterson on that.

It doesn’t make her ugly, either.

It is just that absent of her swimsuit, if I walked past her in a mall, I would notice nothing remarkable about her. She looks like pretty much every overweight woman in America. There are literally hundreds of men I see who generate the same “meh” reaction.

It’s not misogynist or misandrist, its just their appearance is average and therefore unremarkable.

I’m not interested in average – I can see average at any mall in America without paying for it. As a matter of fact, I see average every morning when I look in a mirror.

But as with everything these days, there is a deeper meaning to a seemingly superficial situation.

SI trying to normalize average as unique is the same process communists use to subdue the masses. Nobody can be special or unique, nobody can perform better than anyone else and most certainly, nobody can stand out – because standing out is standing over.

It’s madness and represents a complete denial of what we are as humans.

Peterson is right about another dimension of this discussion – it is a classic authoritarian move.

It’s actually the same blueprint as in Kurt Vonnegut’s “Harrison Bergeron”.

In the 2081 world of Harrison Bergeron, everyone is “equal” in every way—physically and mentally. The United States Handicapper General and her agents ensure compliance by forcing people to wear various devices and “handicaps” to assure no one performs better than anyone else. The strong or graceful are burdened with extra weight, the intelligent have their thoughts interrupted with jolting sounds, musicians wear an unstated handicap to limit their abilities and the beautiful wear hideous masks.

The original mission of the SI Swimsuit Edition was to celebrate the unique beauty of the female form.

Now it seeks to channel Vonnegut’s Handicapper General, a woman called Diana Moon Glampers, who eventually shoots the Harrison dead during a televised ballet performance with a double barreled 10-gauge shotgun

Glampers then orders the musicians and the ballerinas to get their handicaps back on and the people are ordered by the media to forget what they just saw.

And they did.

I have been an on-and-off subscriber to SI since 1982. The first issue of my first subscription was the 1982 Swimsuit Issue, back when the swimsuit issue was part of the issue before the Super Bowl. Later it became a separate issue.

SI, truth be told, has been floundering for several years as a print product, and in fact there is probably little reason to subscribe to the print edition anymore. The magazine went from weekly to biweekly, and is now a monthly. How a sports magazine can cover sporting events (which has always been central to SI) when coming out every month … well, that explains the “floundering” part.

It is reasonable to ask how swimsuits are part of “sports.” The swimsuit issue dates back to 1964, back when SI was 10 years old and its definition of “sports” was broader than now. Swimwear has usually been worn by models of the day (Cheryl Tiegs, Chrissie Brinkley, etc.) than athletes, and swimwear has waxed and waned in, well, skin coverage, including photos where models have held, though not worn, swimwear or anything else. For a few years those appearing in the swimsuit issue for the first time also were photographed in body paint and nothing else.

Why? The answer should be obvious: Money. To what should be no one’s surprise the swimsuit issue has been one of SI’s most lucrative, as you could tell given the previously gargantuan size of that issue. (With a lot of ads whose content rivaled the editorial photos.)

One of the more entertaining reads of SI has been the letters to the editor section following the swimsuit issue, which have, as all media should, included criticism of the swimsuit issue more from the left (objectifying, oppressing, exploiting, etc.) than the right (impure, sinful, etc.).

(I had a momentary involvement in this sort of thing, though not in SI. Back in 1988 a high school classmate of mine created what she called the Women of Wisconsin calendar, which was the focus of a story in the Wisconsin State Journal. Not long afterward a letter-writer condemned the calendar from the left — ironically, someone who had been a model for a fitness studio ad in the first newspaper I worked for in college. I then wrote a letter defending the calendar and asking how someone who agrees to do something and gets paid for it can be considered exploited. That was followed by another letter from where I was living that criticized the calendar from the sin perspective, written by the daughter of a local minister.)

SI started to lose the plot a few years ago when one of the models, who apparently is Muslim, wore neck-to-ankle swimwear. (That might be the ultimate mixed message — using a model from a religion whose excessively conservative adherents are famous for oppressing women for a project accused of exploiting women.) The plus-size models are not new, and their inclusion is less debatable than including a man wearing women’s swimwear. (No, not Caitlyn Jenner.)

Readers are, of course, free to read, or not, the SI swimsuit issue or anything else. (SI even went so far as to offer to not deliver the swimsuit issue to subscribers on request, such as libraries or schools.) Attempting to censor someone because you don’t like their views and don’t think anyone should be able to read those views (including photos of women wearing little or nothing) is a sign of low character.

SI is dealing with the same problem nearly every print publication faces — the Internet. Playboy Magazine’s response was to go bimonthly in 2016 and then quarterly in 2018, while briefly no longer showing the obvious reason to buy the magazine in the first place. Playboy stopped printing in 2020. SI has a vast website, but SI also has vast sports news competition online.

SI’s response has been an attempt at the woke business model, celebrating athletes’ progressive social awareness (see Kaepernick, Colin, and Thomas, William “Lia”) when the evidence that that’s what SI’s readers want is not being backed up by increasing print advertising. That’s not the reason for its slow-motion demise, but SI’s attempt to broaden its readership isn’t working. (The most recent issue, whose theme is women in athletics, is no bigger than SI issues were in its weekly days.)

SI seems destined to follow Sport, Inside Sports and ESPN The Magazine (whose attempt to emulate the Swimsuit Issue was the Body Issue, showing off the unclothed bodies of athletes, including those who don’t really have athletic bodies — this means you, Prince Fielder) into print memory. (I know something about that, as you know.)


Bidenomics vs. how the economy really works

National Review:

Lowering the price of consumer goods by raising the cost of producing them — President Biden can be, to put it charitably, counterintuitive.

The Biden administration is in an entertaining public spat with what we might as well call the “Bezos administration” (Amazon’s annual revenue exceeds the GDP of most European countries), and, while our faith in the man who publishes the Washington Post is something quite a bit less than total, in this case Jeff Bezos is unquestionably in the right — and not just because the Biden administration has an uncanny knack for being wrong on every economic question at every possible opportunity.

Biden has proposed to fight inflation by raising corporate taxes. As Bezos was quick to acknowledge, there is a case to be made for raising corporate taxes (we are not persuaded by that case, but there is a good-faith argument there), and certainly there is a crying need for an anti-inflation policy — but to pretend that these are the same thing is economic illiteracy.

The Biden administration has an inflation problem — because America has an inflation problem — but the administration is by and large unwilling to do the things that are in its power to actually address that problem, because such measures are likely to be politically difficult for a White House in which the reflexive response to any problem is to throw money at it. Inflation is a problem that is famous for getting worse when you throw money at it, and for getting better when you stop.

As Bezos points out, Biden and many of his congressional allies tried to throw even more money at our already-overheated economy and were saved from their own worst inclinations only by the relative sobriety of Senator Joe Manchin, the West Virginia Democrat whose willingness to buck his party has made him, for the moment, the most powerful man in Washington. “They failed,” Bezos wrote, “but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high.”

Indeed, in the near term, putting new cost burdens on the firms that produce consumer goods and services would be a pretty good way to ensure higher prices for those consumer goods and services — the economics of “tax incidence” (how the economic burden of a tax actually gets distributed in the real world) can be pretty complex, but powerful firms reliably are inclined to pass along their expenses to consumers as well as to their vendors and employees. Everybody who has ever paid $10.81 after sales tax for a $9.99 bottle of bleach knows how that works — it is the consumer, not the producer or the seller, who pays the tax.

The United States already has a relatively high corporate tax rate, one that is a bit higher than the rates in high-tax Nordic countries such as Sweden, Finland, and Iceland, and significantly higher than the rates in such competitive European countries as Ireland and Switzerland. We lay a second tax on dividends, which are paid out of corporate income that already has been taxed once at the corporate rate.

The administration’s suggestion that Bezos’s criticism is only a cover for his disinclination to pay taxes is cheap demagoguery and deserves to be regarded with contempt. It is only the latest in a long line of contemptible inflation dodges: First it was “transitory,” until it wasn’t, and then it was the “Putin price hike,” even though the inflation started long before the war in Ukraine, and now it is Republicans or Jeff Bezos or — give it a couple of days — systemic racism. Anything other than the obvious: flooding the economy with money during a worldwide supply-chain disruption and keeping Covid-era emergency economic policies in place long after the economic emergency has passed.

Biden and other critics sometimes complain about “loopholes” in the tax code, which is strictly boob bait — in reality, the Biden administration loves special handouts written into the tax code: These are called “tax incentives,” and the administration proposes to create many more of them to reward politically connected businessesThe Obama administration couldn’t get enough of them, either.

Biden and other Democrats, notably Elizabeth Warren, have charged that this is an issue of “price gouging.” But big retailers are hurt by inflation as much as anybody — because they are buyers as well as sellers of goods. Walmart, for example, just announced that it missed its first-quarter earnings estimates because of higher prices for fuel, inventory, and labor. It is not the only firm facing such difficulties. Raising Walmart’s taxes at such a time is not the most obvious way to achieve consumer price stability.

Indeed, the Biden administration has no idea how that would work. When asked about how raising corporate taxes would combat inflation, the new White House press secretary, Karine Jean-Pierre, did an excellent imitation of a high-school student who hasn’t done the reading and gets called on to expound on Chapter 32 in Moby-DickIt is hilariously painful to watch. The president himself often appears to be as lost as last year’s Easter eggs, but Jean-Pierre is if anything even more incoherent — the real world isn’t MSNBC, as it turns out.

But, back in the real world, the fact is that the prices of baby formula and gasoline are not going through the roof because billionaires are buying those commodities by the ton and need to be reined in. (We trust the yacht market will see to itself.) Taxing Elon Musk into penury is not going to affect the price of a pound of 93 percent lean hamburger at Trader Joe’s — and that price is the sort of thing that the Biden administration should be worrying about for both substantive and political reasons.

We do not have high hopes for the Biden administration and never have. But, ceteris paribus, we would prefer a Democratic administration that is wrong and serious to one that is wrong and preposterous. And the Biden administration’s approach to inflation has, so far, been nothing short of preposterous. The intellectual laziness and moral cowardice of this administration are extraordinary, and Americans are paying a very high price for them.

How to make Bidenflation worse

James Freeman:

There are too many dollars chasing too few goods and services in the United States. Until the Federal Reserve effectuates a meaningful reduction in the amount of dollars, countering inflation requires either increasing the supply of goods and services or reducing the demand. The latter option inflicts economic pain and tends to be nearly impossible for policy makers to engineer without also depressing supply, but unfortunately it seems to be President Joe Biden’s preferred course.

On Friday the president tweeted:

You want to bring down inflation?

Let’s make sure the wealthiest corporations pay their fair share.

Amazon founder Jeff Bezos, who always seems more sensible than the newspaper he owns, responds:

The newly created Disinformation Board should review this tweet, or maybe they need to form a new Non Sequitur Board instead. Raising corp taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection.

Mr. Bezos is right to suggest that inflation is not caused by competitive corporate tax rates. In fact pro-growth tax policy acts as a crucial incentive for businesses to supply more goods and services and to create disinflationary innovations.

But Mr. Bezos may be giving Mr. Biden too much credit in dismissing the President’s tweet as mere irrelevant disinformation. It’s possible that the president is not confusedly combining two economic concepts. The chilling possibility here is that Mr. Biden understands exactly what he’s saying and that he intends to use confiscatory taxation to depress economic activity in a misguided belief that he can reduce demand and end inflation by crushing business. The president ought to remember the 1970s but apparently doesn’t.

Annie Palmer at CNBC notes:

White House spokesperson Andrew Bates responded in a statement that “it doesn’t require a huge leap to figure out why” Bezos, the world’s second-wealthiest man, would oppose Biden’s proposal to hike taxes on the ultra-wealthy and corporations.

“It’s also unsurprising that this tweet comes after the President met with labor organizers, including Amazon employees,” Bates said in a statement.

Bezos’ venture capital firm, Bezos Expeditions, didn’t immediately respond to a request for comment.

If the White House goal is to discourage supply by attacking business, it’s doing a marvelous job. Now unfortunately even one of the critics who tried to dissuade Mr. Biden from his inflationary spending agenda in early 2021 is endorsing the emerging Biden policy. Former Obama and Clinton economic adviser Larry Summers tweets:

I think @JeffBezos is mostly wrong in his recent attack on the @JoeBiden Admin. It is perfectly reasonable to believe, as I do and @POTUS asserts, that we should raise taxes to reduce demand to contain inflation and that the increases should be as progressive as possible.

Investors have lately been tortured by a fear that the Fed cannot slay inflation without triggering a recession. Now along comes the disturbing prospect that slowing the economy may be official White House policy.

Biden and baby formula

Scott Lincicome:

Throughout the pandemic, we’ve ingested a hefty diet of stories on various “crises” that, quite frankly, weren’t really crises at all. I mean, no offense to you gamers out there, but, while limited supplies of PlayStations may very well stink, it ain’t really a “crisis.” (I await your hate mail!) The current situation with infant formula, on the other hand, really does seem quite serious. In particular, a February/March 2022 FDA recall of Abbott Nutrition formula products made at a problematic Michigan facility has pushed an already-stressed U.S. market into full-on panic mode. Not only are supplies desperately short in numerous states, but prices have (as they do when supplies are low) spiked, leaving families—especially ones with low incomes or babies that need special products—in desperate shape.

Retailers are also rationing the stock they do have, in order to deter hoarding by panicked parents. And, while remaining domestic manufacturers are operating flat-out and promising to increase supply as much as possible, they say there’s just so much they can do to quickly solve the problem.

In some ways, the infant formula situation is just another example of the pandemic doing its thing. The Wall Street Journal, for example, reported in January—before the big Abbott recall—that domestic producers were struggling with the same things that almost all U.S. manufacturers are struggling with: labor and materials shortages, transportation and logistics hiccups, and erratic demand. The demand issue may be particularly severe for baby formula:

Laura Modi, co-founder of Bobbie, an online organic baby-formula startup, said even intermittent shortages can lead parents to stockpile. She said her company has seen an influx of demand from parents rattled by the lack of availability of big-name formula brands. “It can take one post in a Facebook moms group to send some into a panic,” she said.

Any parent who’s used formula (including this one) can surely relate. Unlike most other COVID-19 panics, there often aren’t good alternatives for the formula your baby can consume. So when you start seeing those shelves get bare … it’s crisis mode, for sure. And then came the FDA recall, which affected a substantial chunk of domestic supply, to throw even more fuel on the fire.

No wonder parents are stressed.

Unfortunately, the infant formula crisis isn’t simply another case of a one-off event causing pandemic-related supply chain pressures to boil over. Instead, U.S. policy has exacerbated the nation’s infant formula problem by depressing potential supply. First, as my Cato colleague Gabby Beaumont-Smith just documented, the United States maintains high tariff barriers to imports of formula from other nations—all part of our government’s longstanding subsidization and protection of the politically powerful U.S. dairy industry. Imports of formula from most places, such as the European Union, are subject to a complex system of “tariff rate quotas,” under which already-high tariffs (usually 17.5 percent, but it depends on the product) increase even further once a certain quantity threshold is hit.

We even restrict imports of formula from most “free trade” (scare quotes intended!) agreement partners, including major dairy producing nations like Canada. In fact, a key provision of the renegotiated NAFTA—the U.S.-Mexico-Canada Agreement (USMCA)—actually tightened restrictions on Canadian baby formula to ensure that new investments in Ontario production capacity by Chinese company Feihe would never threaten the U.S. market:

Canada agreed that, in the first year after the agreement takes hold, it can export a maximum 13,333 tonnes of formula without penalty. In USMCA’s second year, that threshold rises to 40,000 tonnes, and increases only 1.2 per cent annually after that. Each kilogram of product Canada exports beyond those limits gets hit with an export charge of $4.25, significantly increasing product costs….

Canada wanted to attract investment for a baby formula facility because it uses skim milk from cows as an ingredient. Healthy consumer appetites for butter leave provincial milk marketing boards with a surplus of skim. Baby formula looked like a smart use for it, and Canada didn’t have any significant infant formula production before Feihe arrived.

Expanding this plant, or building a second infant formula plant somewhere else in Canada, look like less attractive business propositions under this new trade deal.

The bolded part is especially important today: Because USMCA effectively capped possible exports of infant formula to the United States, it discouraged investment in new Canadian capacity—capacity that we sure could use right now. The same goes for other potential Canadian suppliers—indeed, that’s the whole point of the USMCA restrictions. As Big Dairy’s trade associations stated in supportive public comments after the agreement’s text was completed:

A particularly critical additional element of USMCA in this area is the export surcharge that is intended to discourage exports of Canadian SMP, MPC and infant formula beyond specified quantities. Properly administered, this provision will be an essential tool in constraining Canada’s ability to dump unlimited quantities of dairy products onto global markets…. Canada must ensure that these surcharges function as intended to discipline the export expansion of these product areas.

Export expansion! Heaven forbid!

If tariffs were the only problem here, then high prices in the United States right now might induce alternative supplies from overseas producers looking for new customers and profits. Unfortunately, however, the United States also imposes significant “non-tariff barriers” on all imports of infant formula. Most notable are strict FDA labeling and nutritional standards that any formula producer wishing to sell here must meet. Aspiring manufacturers also must register with the agency at least 90 days in advance and undergo an initial FDA inspection and then annual inspections thereafter. And the FDA maintains a long “Red List” of non-compliant products that are subject to immediate detention upon arriving on our shores. As a result, the FDA routinely issues notices that it has seized “illegal” (e.g., improperly labeled) infant formula from overseas. …

The FDA has also forced foreign distributors to recall products sold via third party websites:

Following this recall in particular, FDA seizures of this illegal product (sigh) reportedly increased.

Key here is the European Union, which is the world’s largest producer and exporter of infant formula, especially in the Netherlands, France, Ireland, and Germany. (China, it must be noted, produces a lot of formula but sells almost all of that to its domestic market.) European formula also has been found to meet FDA nutritional requirements, and is in high demand by some American consumers. Yet, when parents here have tried to import European formula, it’s been routinely subject to seizure by the FDA. In fact, formula made by two of the most popular European brands—HiPP and Holle—is on the FDA’s red list and thus only arrives here via unofficial, third party channels.

Unless the FDA gets to it first.

These regulatory barriers are probably well-intentioned, but that doesn’t make them any less misguided—especially for places like Europe, Canada, or New Zealand that have large dairy industries and strict food regulations. Indeed, as the New York Times noted about “illegal” European formula in 2019, “food safety standards for products sold in the European Union are stricter than those imposed by the F.D.A.” And, it must be noted, it was an unsanitary American factory that fueled our current crisis, and the FDA may have even ignored a whistleblower’s complaints about the situation “months before infant formula was removed from grocery store shelves.”

So spare me the “unsafe imports” stuff, okay?

Finally, Beaumont-Smith notes that another U.S. regulatory barrier—“marketing orders” for milk products—might also be discouraging imports or stifling American production:

These laws cover multiple classes of milk and establish a system for dairy farmers with price and income supports, and trade barriers. The milkiness (ha) of the system makes it difficult to clearly conclude that these orders impact infant formula but given dry milk is a vital component, it can be inferred that these orders … distort economic activity in the dairy sector that could stymie U.S. producers’ ability to produce more formula to help make up for lost supply. And of course, the import barriers contained within the orders dampen U.S. producers’ demand for foreign classes of milk, including dry milk, thereby reducing options, which are needed most during domestic emergencies.

The combination of trade and regulatory barriers to imported infant formula all but ensures that our almost $2 billion U.S. market is effectively captured by a few domestic producers—despite strong demand for foreign brands. What German company, for example, is willing to spend the time and money meeting all the FDA requirements—registration, clinical trials, labeling and nutritional standards, inspections, etc.—only to then face high import taxes that make its product uncompetitive except during emergencies? The answer: almost none.

Tellingly, the country facing the lowest U.S. trade barriers, Mexico, is also the largest foreign supplier of infant formula, while powerhouse European suppliers barely register. Meanwhile, Abbott is in full-on crisis mode and has turned to flying in formula produced at an FDA-registered Irish affiliate:

Abbott, based in the US, has turned to its staff at Cootehill, Co Cavan, and the 1,000 dairy farms supplying ingredients to the plant.

The company said the plant is registered by the United States Food and Drug Administration (FDA), and it has increased the volume of Similac Advance powder formula produced in Cootehill, for daily air-shipping into the US. “This year, we’ll more than triple the Similac Advance powder formula we import from our Cootehill, Ireland manufacturing site,” said a spokesperson.

Those (highly tariffed) Irish imports will surely disappear once the U.S. crisis subsides. Nevertheless, both they and Mexico’s volumes are a testament to the potential benefits of broader U.S. liberalization of trade in infant formula.

Maybe somebody could inform Congress.

Compounding issues in the U.S. market is the Special Supplemental Nutrition Program for Women, Infants and Children program (called “WIC”), which provides vouchers for low-income Americans (at or below 185 percent of the poverty line) to buy formula at approved retailers. According to the USDA, which administers WIC, the program served about 1.5 million infants in 2021 (for context, there were about 3.6 million total births that year). Various reports estimate that WIC sales constitute about half of all infant formula sales in the United States.

Giving taxpayer money to poor American babies isn’t objectionable (even to this libertarian!), but WIC’s design raises some serious concerns. Here’s how it works:

Since 1989, State WIC Agencies have been required to enter sole-source contracts for infant formula. Under these contracts, the over 1.2 million infants served by WIC are limited to specific brands of “contract formula” that are eligible for discounted rebates from infant formula manufacturers, reducing overall program costs. Abbott Nutrition contracts with the majority of State WIC Agencies.

As the Wall Street Journal explained a few years ago, the discounts provided are very significant:

Fierce bidding for those state contracts has led the three biggest formula makers to offer steadily deeper discounts—on average 92% below wholesale prices—eroding profits on WIC sales. But winning a state’s contract makes a formula maker the dominant player on a state’s grocery store shelves, where the companies try to make up for their money-losing WIC sales.

Given these steep discounts, WIC is undoubtedly a good deal for U.S. taxpayers and WIC customers—in normal times, at least. Now, however, the program may be contributing to the current crisis in at least three ways. First, as the dominant buyer of infant formula in the United States and by demanding below-market contract prices, WIC may discourage additional investments in U.S. capacity or new market entrants. Put simply, nobody had an incentive to break into the U.S. infant formula market—or to boost existing U.S. production—when half of the market is effectively controlled by a single buyer demanding unprofitable prices and compliance with piles of state and federal regulations. As one expert put it years ago about WIC, the government “is using its monopsony power to extract an involuntary program subsidy from an industry.” That’s not exactly a great way to encourage more domestic investment or supplier diversity, especially when—as National Review’s Dominic Pino documented yesterday—the major producers have alternatives:

The major baby-formula makers do business in many other markets as well, so it’s hard for them to justify continuing to lose money on steeply discounted government-contracted baby formula when they could focus their efforts elsewhere. Reckitt Benckiser, for example, also owns Lysol, Mucinex, and Durex, among many other brands, and it’s currently trying to sell its baby-formula division — or, what’s left of it, since it already sold the Chinese portion of that division last year.

Second, WIC distorts domestic price signals and thus discourages new production from coming online when supply gets tight. Pino again:

In a free market, widespread shortages shouldn’t occur. The price should rise as supply gets low, which encourages more production. The increased production should prevent a prolonged shortage before it has a chance to get started, then bring the price back down as well….

With government responsible for over half of the country’s baby-formula purchases, price signals don’t work like they should. As research firm Datasembly noted, the baby-formula market was beginning to go awry before the Abbott recall. The out-of-stock percentage moved from its normal range into double digits in July of last year. Yet “overall prices didn’t increase when out-of-stock percentages started to increase,” it found.

Such behavior would be very strange in a free market, but it makes perfect sense when you consider that predetermined contracts with state governments are responsible for such a large segment of total purchases. The USDA is fully aware of these problems, noting in a 2015 article that “WIC essentially replaces price-sensitive consumers of infant formula with price-insensitive consumers.” A 2015 USDA report finds that lack of price sensitivity also contributes to the long-term increase in baby-formula prices, as both manufacturers and retailers have steadily raised their prices above the overall rate of inflation for years. We don’t get short-term price increases when they would help prevent shortages, but we do get long-term price increases that slowly make formula less and less affordable — which further encourages WIC expansion.

WIC expansion, yes. But not, unfortunately, the expansion of domestic infant formula production.

Finally, the WIC program’s use of sole supplier contracts has created a problem specific to the current crisis because, as noted above, the big FDA recall just happened to hit the very producer—Abbott—holding most of the WIC contracts. So we have tons of WIC customers forced to find other options and therefore added stress on the U.S. market:

The USDA granted a temporary waiver for WIC clients to obtain alternative brand options of baby formula, further compounding the supply chain issues as a new pool of parents are now vying for what was already a limited supply of products.

Research also shows that the WIC-winning manufacturer ends up getting a major boost in the U.S. market generally:

[T]he manufacturer holding the WIC contract brand accounted for the vast majority–84 percent–of all formula sold by the top three manufacturers. The impact of a switch in the manufacturer that holds the WIC contract was considerable. The market share of the manufacturer of the new WIC contract brand increased by an average 74 percentage points after winning the contract. Most of this increase was a direct effect of WIC recipients switching to the new WIC contract brand. However, manufacturers also realized a spillover effect from winning the WIC contract whereby sales of formula purchased outside of the program also increased.

This means that WIC made the very U.S. manufacturer now in trouble with the FDA, Abbott, the dominant national supplier, with predictable effects for the domestic market when Abbott’s Michigan factory shut down. Abbott and the other U.S. producers will surely try to fill the breach until that facility comes back online, but—given Abbott’s problems and tightness in U.S. labor and materials markets generally, as well as the fact that the other formula companies weren’t expecting demand for their products (in part due to WIC!)—it’s unclear whether quick capacity expansion is possible.

For American families’ sake, let’s hope things clear up soon.

Bad U.S. policy surely didn’t cause the infant formula crisis, but it just as surely made the situation worse than it needed to be. Trade barriers and poorly designed welfare policies helped create a brittle system dominated by a few domestic players—a system that might muddle through in the good times but one that crumbles in the face of a serious shock and struggles to recover thereafter. Meanwhile, American consumers (here, babies and their already frazzled parents) are left in the lurch, and world-class foreign producers can’t help much because they lack the necessary paperwork and financial incentives or because past U.S. policies have discouraged them from setting up official distribution channels or new facilities to serve the American market.

Given market realities, it seems unlikely that U.S. policymakers can flip some policy switch and quickly fix the situation, but they can at least (hopefully) learn a few lessons.

  • First, the infant formula situation is an unfortunate reminder that the trendy economic nationalist policies proposed to make America more “resilient”—tariffs, localization mandates, government contracts, etc.—can actually make us weaker by discouraging global capacity, supplier diversity, and system-wide flexibility. As I’ve said a million times now, reshoring supply chains might insulate us from external supply and demand shocks, but it also can amplify domestic shocks (and reduce overall economic growth and output to boot). We’re seeing that reality play out once again in the highly protected and regulated U.S. dairy market, where domestic production accounts for the vast majority of American consumption.  Indeed, infant formula—with its protectionism, regulations, and heavy dose of government direction—is pretty much the poster child for what nationalist “industrial policy” advocates today propose for all sorts of “strategic” industries.  And, well… here we are.  Lessons abound.
  • Second, the formula crisis points to a better way forward for U.S. policy. Most obviously, the United States should follow the lead of major dairy producing nations Australia and New Zealand and eliminate barriers to imported infant formula and other dairy products—for practical/economic reasons and for moral ones. (Taxing baby formula to enrich Big Dairy?! COME ON.) The United States also should embrace—as we discussed previously for rapid tests—a regulatory system that allows Americans to buy any food approved by the FDA or any other competent regulator. If it’s good enough for consumers in Europe, Canada, New Zealand, Australia, Japan, etc., it’s good enough for us (and if some folks still want to buy American, nothing’s stopping them). Finally, the WIC program should probably be overhauled to ensure that the system doesn’t short-circuit price signals and supplies. Replacing the convoluted and distortionary sole-supplier bidding/contract approach with a simple cash voucher for qualified parents would be the obvious place to start, especially when paired with pro-consumer trade and regulatory reforms that would lower formula prices generally. (And when we’re done doing that, we should embrace a host of other market-oriented policies that will help American moms.)

These changes won’t put formula on American store shelves tomorrow—and they might not be good for the economic nationalists or Big Dairy—but they’d definitely be better for the rest of us in the longer term. It’s too bad parents had to learn this lesson the hard way.

Education and economic ignorance

Tim Nerenz:

LendEDU lists the 50 states ranked by the number of years is takes to pay off the average student loan in that state. …

Utah’s top rank is an average repayment period of 8.14 years of average monthly payments of $202 to pay off the average loan of $19,742

New Hampshire ranks last with an average repayment period of 14.4 years of $213 monthly payments and an average loan of $36,754.

The median of state averages is 11.68 years with monthly payments of $208.47. This is for a degree that the Department of Education says will increase lifetime earnings by more than $1 million.

WIsconsin ranks 33rd with an average of $30,600 per student borrower and 72 percent of 2019 college graduates graduating with education debt.

Any credit counselor or financial advisor will tell you that doubling up the monthly payment will reduce a 30- year mortgage to an 11-year repayment, and the same is true of car payments and student loans. Doubling the average $200 payment reduces the average payoff period to less than six years.

According to NerdWallet the average new car loan is paid over six years with $684 in monthly payments. The average used car payment is $488 for five years.

That difference alone could provide the money to double up the average student loan payments and cut the repayment time by half or more. It is one of the many ways that responsible degree holders have paid down their debt.

And here is another. The 2017 Tax Reforms reduced taxes on households making $15-50k by 16-20%; for those making $51-100k, taxes were lowered by 15-17%; for those making $100-500k, taxes were reduced by 11-13%; for those making $500k to $1 million, taxes dropped 9%; for those making over $1 million, taxes were reduced by 6%.

The standard deduction was increased by $6k for single filers and $12k for married couples and heads of households. How many student loan payers used that extra money to accelerate their loan payments and retire their debt sooner? Most of the accounting majors, I would guess.

Three rounds of covid stimmy checks provided $3000 per adult with adders for dependents in the household – that is 15 months of average student loan payments for the degree-holding laptop class that largely evaded the income loss imposed by covid lockdowns. Did they use the windfall to bring their accounts current?

This is an election year and Democrats should make student loan forgiveness THE issue of the campaign. All 435 Members of Congress should hold a special town hall in their districts on this one question.

They can explain to their constituents who chose affordable colleges and worth-it degrees or trades, earned scholarships and Pell grants ($2 billion unused each year), worked their way through school, used employer benefits, chose military service, saved for their children’s tuition, and honored their loan contracts are now morally obligated to pay off the debts of those who did not. Use plain English and look your folks in the eye.

If you are curious, the percentage of adults with federal student loans in arrears is 4%. This latest marginalized community is one tenth of the adults with college degrees, which has grown to 37% of the adult population.

The proportion among naturalized citizens is higher (42%) and the percentage of loans in arrears is far lower than native-born Americans. If you come here from somewhere else, your appreciation for our marvelous country is much greater – same as it ever was.

Our tax dollars fund colleges and universities; our tax dollars fund Pell Grants, the GI bill, and education reimbursement benefits for government workers; our tax dollars front the money for students who could otherwise not afford it – those loan proceeds go directly to college administrators each term to spend as they wish.

The argument that we do not do enough to support higher education is absurd; the people who make it are not serious.

The costs of college have increased because government money going to higher education has increased. Financial aid that follows the student provides the obvious incentive for colleges and universities to let in more students. Most colleges and universities are tuition-dependent, meaning their endowments are nowhere near as large as the Harvards and Yales of the world, and that provides another incentive to let in students, and since the feds are paying most of the cost of the student, there is no incentive for a college or university, even one with tight finances, to limit what it charges students.

A comment on Nerenz’s Facebook post passes on this from MoneyWise:

Experts often say a college degree vastly increases lifetime earnings and job prospects. But not necessarily for all majors.

Using earnings and employment information from the U.S. Census Bureau’s American Community Survey, Bankrate recently ranked 162 majors for career success after graduation. These are the majors on the bottom — counting down to the most worthless.

The list:
10. Library Science.
9. Interdisciplinary studies (“smaller, specialty majors spanning everything from ancient language studies to archaeology to neuroscience”).
8. Drama and theater arts.
7. Educational psychology.
6. Human services and community organization. (As community organizer Baravk Obama could attest, the money is much better in politics.)
5. Visual arts.
4. Cosmetology services and culinary arts.
3. Psychology.
2. Composition and speech. (“This major lends itself to a wide variety of different career tracks. Grads may find work in fields such as journalism, writing, political campaigning, public relations or marketing. Nearly every industry needs writers; the trick to being employed is gaining experience in a specific field.” Average income $44,211; average unemployment 4.9 percent.)
1. Fine arts. (Average income $40,855; average unemployment 9.1 percent.)

The poster then asks:

Why should we have to foot the bill for all of Americas philosophers, journalists, creative artists, general studies, and other nearly useless college degrees as ranked by MoneyWise? Go to tech school, learn a trade, pick up a tool belt and make yourself useful – that is the advice most of these college bums needed to hear.

Twitter with Musk

Robby Soave:

Twitter has a new sheriff in town, and his name is Elon Musk. The world’s wealthiest man offered to buy the social media site for $44 billion, and the company’s board accepted the offer yesterday.

Musk has many reasons for buying the company, but his main drive appears to be to preserve—or even strengthen—the site’s commitment to the principles of free speech.

“Twitter is the digital town square, where matters vital to the future of humanity are debated,” tweeted Musk.

Admittedly, the town square analogy is imperfect, as my colleague Liz Wolfe highlighted in her excellent post on the subject. For one thing, Twitter is a private company, rather than a genuinely public space, which means that it is not bound by the First Amendment. Unlike the actual town square, Twitter retains the right to punish users for perfectly legal speech. It’s also the case that while Twitter is incredibly important for the political class, journalists, business leaders, and other social influencers, it’s not nearly as big or as frequently visited as Facebook, YouTube, or TikTok. As Techdirt’s Mike Masnick put it, the entire internet is really the town square; Twitter is one small space that’s part of it.

And Twitter is all a-twitter

Liz Wolfe:

Over the last week, SpaceX and Tesla founder Elon Musk arranged $46.5 billion in financing to follow through on his unsolicited offer to Twitter’s board to buy the social media site from them. This afternoon, the board accepted Musk’s offer to buy the company for $54.20 a share.

Long a Twitter power user/troll/loudmouth, Musk bought a 9.2 percent stake in the company last month, becoming the largest shareholder, before deciding he’d rather have the whole thing.

Cue hysteria! Musk haters have taken to the site to declare that Donald Trump will now probably win the 2024 election, that Musk’s bid is really about white power, that Section 230 must be reformed, and that, yes, Musk’s new policies will be lethal. (Perhaps the death toll will be even larger than net neutrality‘s!)

So, for users of the platform, what’s likely to change?

Musk has panned the site’s existing content moderation policies, saying they are too restrictive and encroach on people’s ability to speak freely without being censored. Some liberalization of these policies and the re-platforming of controversial figures like former President Donald Trump—who was banned in the wake of the January 6 riot for inciting violence among his fans—seems likely, though unpopular with droves of users.

Disney Woke

The Wall Street Journal:

The Walt Disney Co. needs Florida more than Florida needs Walt Disney. That’s the latest chapter in this tale of a CEO who followed his woke staff like a lemming off the cliff of cultural politics. Disney employees demanded that Mickey Mouse oppose Florida’s misdescribed “don’t say gay” bill. Now state lawmakers are reacting by putting down a few glue traps.


The Florida Legislature voted this week to abolish the Reedy Creek Improvement District, which in effect lets Disney World run its own private government. Created by the Legislature in 1967, the district covers about 40 square miles and features two water parks and four theme parks, including the Magic Kingdom. Disney essentially controls land use, environmental protection, fire service, utilities, more than 100 miles of roads, and more. …

The Journal cites a source who knows Disney’s finances and says the district saves the company tens of millions of dollars a year. Without it, services like fixing potholes could revert to county government.

Disney largely funds the Reedy Creek district, which had about $150 million in revenue last year. It also carries close to $1 billion in debt. The mayor of Orange County warned Thursday that if the district goes, then upkeep will “fall to the county’s budgets,” putting “an undue burden on the rest of the taxpayers.” The headaches look large enough that it’s difficult not to wonder about the bill’s effective date. It dissolves the Reedy Creek district on June 1, 2023—time for Disney and Mr. DeSantis to make up.

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