Friday, June 24, 2022

ESG: the Left's Latest Trojan Horse



I attended a summit of sorts yesterday. A clandestine one. 

Who was there? CEOs, state attorneys general and treasurers, think tankers, former federal government officials, law professors, authors...it was a high powered and diverse group.

What brought everyone together? A shared belief that "ESG" is a profound threat to our country. 

Why was the meeting clandestine? Because some of the participants were in the position where they could be professionally cancelled if their views were known. That's where we are as a country. It's a bit like a private school parent pushing back against CRT, or a university president criticizing DEI initiatives. (So many acronyms to fight...)

ESG stands for "Environmental, Social, and Governance." It is an effort to exert pressure on our corporate and financial institutions to adhere to a certain set of principles.

Sounds nice, no?

It always does. 

In reality, ESG is a heavy-handed tool used by the left to achieve various policy goals that it cannot achieve through the legislative process. It is the latest stratagem of the Long March, mandating that companies hold certain views, hire in certain ways, and stay out of certain industries.

And it's working; this is a fight we're losing, and part of the problem is that almost no one outside of corporate America knows what ESG is. There are millions of otherwise smart, informed people that have never heard of it. As I told the group yesterday, ESG is where CRT was two years ago: an unfamiliar threat that had seemingly emerged overnight, but one that had been percolating for decades.

CRT is no longer an unfamiliar concept, and those fighting it have done a fairly effective job of properly stigmatizing the movement. (Thus efforts to rebrand CRT as "Culturally Responsive Learning. The left is nothing if not facile with language.)

But CRT was affecting people's kids, so they woke up to the threat quickly. ESG, previously touted as "stakeholder capitalism," is even more insidious, because it operates on a level once removed from most people.

For instance, do you have money at BlackRock, State Street, or Vanguard? If you do, you are actively abetting the ESG movement. Undoubtedly, you know none of this.

You see, those companies and others take your money and invest it with with ever-shifting, elusive ESG principles. They use your proxy to jam through hundreds of woke voter resolutions every year. They have the power of trillions of dollars.

Your money, their values. (Someone else at the summit came up with that.)

Worse, by eschewing certain sectors, these managers are willingly accepting sub-par performance in the name of political ideology. Again, with your money. This is a direct violation of fiduciary duty, and I expect pension managers, in particular, may be on the receiving end of lawsuits soon.

It can't happen soon enough.

There's so much more to this. If you feel like you need a little more background, I refer you to Utah State Treasurer Marlo Oaks excellent guest column.

Get up the curve, because you're already paying a price for this.

Wednesday, June 8, 2022

What Is the Left's Endgame?


There's a thought experiment I like to play with liberal friends, which I call King for a Day. The idea is, you are the king, you control everything. Now go ahead: what does your America look like? 

What new laws will you make (or abolish)? 

What will tax rates look like? 

Will we bother with a Constitution or a Supreme Court?

Would you abolish "hate speech?" The Electoral College?

Please, be specific.

It's a pleasing yet confounding game for leftists. Pleasing because they get to play out their progressive fantasies; confounding, because they discover they don't know where to stop. You see, that's the thing: progressivism has no philosophical limits. It always wants more. More government, higher taxes, more regulations...more.

When an objective is achieved, the the goalposts are immediately moved, because they always need a cause, beliefs to cherish, a reason to march in the streets. 


This is Inconvenient

This is why the left bristles at the Bill of Rights and the Supreme Court because both are about limits, specifically limits on government, and government is always the vessel of the left's dreams of centralized control.

This is quite in contrast to conservatism, which by its very definition is about limits and de-centralization.

There's a concept called "subsidiarity" which started with the Calvinists and then became a pillar of Catholic social teachings. It says that problems are best solved at the most local level possible. Have a problem? Look to your family. That doesn't get it done? What about turning to your neighbors or town? And so on. Only the very biggest problems are assigned to the state.

The idea is that problems are most efficiently solved by people or entities that are the closest to them. 

This is how I think about conservatism. 

Contrast this to liberalism, ever voracious, yearning for centralized, top-down, one-size-fits-all solutions to complex problems. Think Obamacare.

Which brings me back to our little thought experiment, which fast-forwards the process, asking our leftist friends to consider their endgame.

But, what might that be? Is it Denmark? Cuba? Something else? At what point does the left say, "we won" and go home? This is one of the interesting questions of our time, and we will attempt to answer it. 

The short answer is: never.

Let's consider the evidence we have about the current state of affairs. The left...

  • Seems to want anarchy. They have funded radical DAs who won't prosecute crime. They want open borders. They all but celebrated the 2020 summer of looting and rioting.
  • Wants to indoctrinate your children. This now happens from kindergarten all the way through college. We now have gender and race struggle sessions for third graders that would make Mao smile. As part of this, they actively drive a wedge between children and their parents. Families are treated with deep suspicion at best, the enemy at worst.
  • Advocates economic policies that anyone with common sense could tell you are self-destructive. This includes gutting traditional energy and printing money with abandon.  
  • Has co-opted the leadership of most every large corporation, NGO, and university, bending them to their agenda. When Disney supports teaching trans ideology to second graders and Princeton declares itself systemically racist, you know the Long March is nearing completion.
  • Wants to regulate speech they don't like, recasting it as "violence." 
  • Views organized religion with hostility.
  • Wants to make gun ownership by private citizens illegal, leaving only the state with arms.


What would Mao do?

All these are precisely the avenues a Lenin or a Mao would pursue if presented with the following assignment: turn modern America into a Marxist state.

Okay, I know what you're thinking. You have liberal friends, and they're not Marxists, for God's sake. And c'mon, man, Joe Biden isn't Pol Pot, so just shut up with your juvenile, everyone's-a-commie hyperbole.

All these things are true, but here's where we consider an apparent contradiction. 

It is true that Joe Biden, for instance, is not a Marxist, not consciously. He doesn't want to turn America into Cuba. And yet, he is very much on the side of every policy and cultural experiment that would lead us there, because there is no way they lead anywhere else

The British philosopher Roger Scruton described totalitarianism as the "absence of any constraint on central authority." What's the best way get that power?

Chaos.

Scruton also observed that revolutions don't happen from below, by the people, but rather from above, in the name of the people, by an "aspiring elite."

Any of this sound familiar? It has always been this way, starting with the Russian Revolution, because those pesky workers never seemed to revolt when they're supposed to. And now, here in America, our most radical ideas are being actively promoted by universities, corporations, and even our own government.

Communists have always embraced societal chaos, including open criminality, as a means to an end, as a way to tear down traditional, competing, institutions. People will ultimately turn to the state to be their savior. Same thing with economic chaos: the people will demand help and the state will provide it in the form of a larger state. Families and churches will be undermined at every turn because they are alternate belief systems. The state can be your only family and your only church.


Useful Idiot

The answer to the contradiction is that Biden and most others on the left are what Stalin called "useful idiots" The agenda is being driven by a relatively small number of true believers, and the Bidens of the world don't even begin to understand how they're being played. They drift along with wherever the center of power is, and right now that's on the hard left.

Starting with the election of Obama, then the ascendence of Bernie Sanders, AOC, Elizabeth Warren and others, plus the chaos of George Floyd and the money of George Soros, the Democrat Party has been subsumed to the will of these true believers. Joe Biden is their ultimate dancing bear, the most useful idiot of all.


True Believers

And yes, these people, these relatively few, are Marxists. Denmark is not the goal here. 

Of course, few actually call themselves Marxists, they dress themselves in more digestible language like "democratic socialist." Don't want to scare off the useful idiots, after all. But it wouldn't take more than a couple of Stoli shots to get them to admit they'd like to send people like us to re-education camps.

These are the people calling the shots now. The Lovely People smile and go along, terrified of being cancelled or just too dumb to know how they're being used.

So the goal is, and always has been, centralized power. On the left, this always manifests as Marxism, and by Marxism's very nature, the struggle is never over. 

The end game is that there isn't one at all beyond a never-ending pursuit of power.


"Freedom is never more than one generation away from extinction. We don't pass it to our children in our bloodstream. It must be fought for, protected, and handed on to them to do the same."       -Ronald Reagan


Thursday, April 14, 2022

ESG: The Invisible Fist

Welcome Naked Dollar readers. This week we have a special guest blogger: Marlo Oaks, Treasurer of the State of Utah. Pay attention, because Marlo has something very important to say, and he is a brave man to say it. -SCJ



DEI, CRT, SEL… It can be hard to keep up with the acronyms, but there’s a relatively new one you need to know: ESG. 

 

It’s safe to say most Americans haven’t yet heard of ESG. It stands for Environmental, Social, and Governance. I’m here to tell you what it is, and why it’s a huge problem. 


Pushing back against ESG should be a bipartisan effort important to all Americans because it will fundamentally alter our American system. If you take away nothing else, know this: ESG uses economic force to drive a political agenda through corporate America. As Larry Fink, CEO of BlackRock, the largest investment manager in the world, so succinctly stated, “You have to force behaviors, and at BlackRock, we're forcing behaviors.” 

 

BlackRock manages $10 trillion of other people’s money. Other investment managers have trillions more. Unelected by anyone, they are using the might of other people’s capital to drive a far-left agenda. Arguably, no one outside the Federal Government has more power, and few people outside the industry know what’s going on.

 

As a state treasurer, I operate at the intersection of politics and capital markets, squarely where ESG resides. Many are afraid to speak out about it, but people need to understand the threat that it poses to our American system, one based on free-market capitalism and constitutional principles.


There’s a small tech company in my state of Utah that employs fewer than 75 people. A Silicon Valley tech titan was a client. Call it Twoogle. Last year, Twoogle explained to the company that if they wanted to continue to do business with Twoogle, they would need to implement a whole range of policies. 


For example, the Utah company would have to provide six months of full pay and benefits for maternity and paternity leave. The company responded that Utah’s fertility rates are higher than other states, and offering the benefit to all employees would imperil the company financially. Since fewer than five employees served the Twoogle account, they asked if they could implement the policy for just those employees. 

 

Twoogle said no, they must implement the benefit regardless of the financial impact. 

 

That every employee knew what benefits the company offered before they agreed to work there was beside the point. The tech company was forced to drop Twoogle as a client, a serious blow.


And what about Twoogle? Presumably, they engaged the company because they had the best product at the best price. They, too, will pay a price for their policies when they move to the next-best provider. How is this good for Twoogle's shareholders 

 

This is just one small example of how ESG plays out across our economy. Multiply it by a million.

 

ESG is a political scoring system for investors, with companies like S&P Global issuing ESG scores on corporations. It sounds great, right? In reality, ESG is dictatorship in capitalist clothing. Our banks, investment managers and corporations are all promoting ESG, cleverly lending ESG the veneer of free-market capitalism. But it is not capitalism.


Capitalism is freedom in an economic context. ESG is a system of force. ESG substitutes our pluralistic institutions for conformity to centralized power, one that makes up the rules as it goes. If you don’t believe me, think about the indeterminate nature of ESG. There are two layers of subjectivity: the determination of the ESG factors themselves and the answers to those factors. If you ask people what the factors should be, you will get different answers depending on their shade of leftist politics. 

 

Even if people agree on the factors, the answers as to what constitutes a “good” or a “bad” score for a particular factor also depends on whom you ask. Is British Petroleum “bad” because it sells oil or “good" because of its focus on developing alternatives?


This is an inherently political exercise, and ESG cedes power to the entities determining those two central questions. Government bureaucrats appear to be colluding with investment behemoths like BlackRock to make the agenda, and they use the threat of regulation and the power of our investment money to bully corporate America into carrying it out.

 

What would prevent new factors from being used as a weapon against the other side? For example, what if the government under different party control suddenly decided to use capital to favor donations to pro-life groups? I would oppose this on the same grounds. We need to keep our capital markets and businesses politically neutral. Corporations and investors are free to engage in the political process but should not be bypassing that process to drive their political agendas.

 

Pension allocators, most of whom are government employees, are also in on the game. As one insider put it, they are “effectively creating law and enforcing it without voter input, debate, or even knowledge. Given their size, their standards flow downstream, changing everything.”


Why, you may ask, is any of this a problem for the average person?


Well, why do you think gas prices are so high? 


In the past, capital would have flowed to traditional energy companies to fund profitable projects. With oil prices so high, there are plenty of projects to choose from. But these projects find themselves on the wrong side of this administration's regulators and the ESG mob, so they don’t get funded. The result is less supply and higher prices.


The misallocation of capital leads to vital industries dying on the vine. This is not merely inflationary, but also a national security threat. We see this playing out in Europe right now, their own early version of ESG having largely banished much-needed fossil fuels. When Russia invaded Ukraine, their moral assessment of fossil fuels and firearms flipped. There's no consistency with ESG. 


When power is centralized, society suffers. Pluralistic institutions like free capital markets protect us from the tyranny of elite power.


On the other side of the ledger, ESG leads to asset bubbles in favored industries. The resulting bursts harm us all, as we saw in 2008 when the federal government forced banks to provide mortgages to high-risk borrowers in the name of social justice. The resulting defaults nearly brought down our economy.


ESG also leads to just plain bad investing, where high ESG scores trump mundane concerns like balance sheets and income statements. Solyndra, anyone?


If you’re in a large pension plan, these mistakes are being made right now in your portfolio. You will see it in the form of lower returns, which we are witnessing in ESG funds this year. When entire industries—fossil fuels, tobacco, defense, etc.—are excluded from your portfolio, returns will naturally suffer.

 

Ultimately, ESG consolidates power into the hands of elites who like to decide what’s best for us. It bypasses our legislative process and undermines our constitutional republic. Proponents of ESG are socialists pretending to be capitalists. Many of them have enriched themselves through the very system they now seek to undermine. Larry Fink is a billionaire.


One more anecdote.


Just this week, I learned a large insurance company informed one of our local utility companies that they could no longer provide the company’s fleet with automobile insurance because some of the power they provide as a utility is coal-based. Is this insurance company going to stop insuring motorists if they drive gasoline-powered cars? What about the electricity used to recharge an EV vehicle? If it comes from a coal plant, will this company decline coverage for that vehicle? Where does this end? 


When corporate America starts down this path, it is hard to stop. Just ask Disney. It is not just childish; it is dangerous and destructive.


If I could wave a magic wand, I would get American business back to doing actual business and out of politics. Capitalism has served us well. It is the greatest generator of wealth and innovation the world has ever known. ESG is a stealth cancer threatening the economic fabric of our country, and those who know better must join me in speaking out. Do what our little company here in Utah did and say “no” to the intolerance, hate and tyranny. 


Say no to ESG.

Friday, March 25, 2022

Bureaucratic Bloat Pricing Middle Class Out of Schools Like Exeter


Phillips Exeter

I've written in the past about the bureaucratic bloat that is destroying American higher ed. A mere three years ago, Yale made news when its number of administrators first exceeded its number of professors. More recently, they made news again when the admin head count surpassed the number of students.

These spiraling numbers are the main reason tuition costs are rising so fast. Yale, with its $42 billion war chest, corrects for this by making tuition free for lower income students.

Reasonable, right? The rich pay full freight and those in need pay nothing.

Not so fast. What about the middle class? They are the big losers. But they are not who Yale's interested in anyway.

Another issue is that the admin bloat is part and parcel of the academy's descent into insane wokeness. The huge portion of these bureaucrats are part of either DEI or Title IX initiatives. (If you're unclear on the horrors of the latter, I suggest you read Campusland or Laura Kipnis's excellent book, Unwanted Advances.)

So the growth of the admin monster is bad for colleges on two levels: expense and ideology.

If only all the bad ideas that spring from universities stayed in universities. Once upon a time, they did, mostly. 

No longer.

Phillips Exeter, if you're not familiar, is a school that sits at or near the reputational pinnacle of American scholastic education. 

At least it did. It's hard to say now. Schools like Exeter are following universities' leads, buying into the progressive whims of the woke class, ideas very popular on Twitter, but not so much with the average American, and then adding bloated staffs to mete out the ideology. But Exeter, like Yale, isn't catering to the average American, is it?

This is what one Exeter grad wrote to me recently:


Here is what all this waste really means – Exeter has become unaffordable for most because the cost is increasing faster than inflation. 

Why? Because they keep adding unnecessary labor to the equation. 

Stephen G. Kurtz, headmaster at Exeter when I graduated in the 80s was famous for saying that the cost of an Exeter education has always been roughly the same as the cost of an average new American car. I checked, and he was right. However, today the average American car price is $47,070. Exeter’s tuition with room and board? $61,121.  

In 1981, Exeter had 200 teachers and roughly a thousand students, a 5:1 ratio which we would often brag about. Guess what the ratio is today? 5:1. Same number of students, same number of teachers. 

Then what gives?  

Staff. 

Staff to run things like these stupid programs. In 1981 the school had 100 staff. So, 300 total employees. Today, 400 staff. Now 600 employees. So, featherbedding. The result of all of this is reflected in the soaring costs to go to the school. 

But, you say, we are “need blind." Not true. What the school now has is a barbell situation where the poor and the rich can go, but those of more average means cannot. This is a very sad situation caused by profligate spending on the part of these schools. I bet if you look at Andover you will see the exact same situation.


Or anywhere, honestly, including public education. In addition to this being an ideologically driven phenomenon, don't think there isn't a lot of self-interest happening here.

Thursday, February 24, 2022

The Rise of the DEI/ESG Commissars


Who remembers the Hunt for Red October? Based on the Tom Clancy novel, Sean Connery plays a Soviet sub captain who plans to defect to the U.S. along with his senior crew.

But before that can happen...

there's this one crew member who could foil the whole thing, and he needs to be dispatched. His position? 

The political officer.

And who is that? He's the one whose entire job is to make sure nothing transpires on the ship that runs afoul of Marxist orthodoxy. 

Often called political commissars, political officers became a common practice in all communist countries. It turns out that nobody much likes living under communism, so rigid control, directed from the top, was critical. Enforcers were needed everywhere to sniff out any potential troublemakers. 

But more than just policing, the commissars are responsible for a unit's political education. Officers and enlisted men were forced to sit through endless dreary lessons on Marxist/Leninist ideology.

Ideological conformity was paramount.

Like a lot of bad ideas, political officers first appeared in France, in this case during the Revolution. They were called commissaires politique. The Soviets adopted the idea shortly after their own revolution, and the Chinese Liberation Army continues the practice to this day.

But...now we do too.

I was talking to a prominent Ivy League professor the other day, one who will go nameless (for obvious reasons—the Ivies don't tolerate thought criminals). He laments that his school is not the same that it once was, calls it ideologically oppressive, and that it's only gotten worse under the Ivies' iron grip of Covid. (Obey!)

But hey, tell us something we don't know. The once great Ivies have become rigid, depressing places (longtime Naked Dollar readers know I've chronicled this many times in the past, particularly where my own alma mater is concerned.)

What I didn't know, and what I learned, was just how pervasive and intrusive the DEI complex has become on campuses. And I'm someone who thought he knew how bad it was.

It's worse.

A quick story is relevant here. 

The villain in my novel Campusland is the dean of diversity and inclusion at a fictitious university (located in "Havenport, Connecticut"—draw your own conclusions). At some point, I had to decide how many employees to put in her department. After trying and failing to find out how many DEI employees several Ivies had (they pretty much bury the info), I settled on thirty. I figured, hey, this is satire, so I'm allowed to exaggerate.

Almost to the day that Campusland hit the bookstores, I found out Yale's actual number.

150. 

If you'd read that number in a satiric novel, would you have bought it? Me neither.

Anyway, back to my professor friend.

He said that his department's DEI "coordinator" had many objections to a book he was getting published, mostly around what was deemed "triggering" terminology and characterizations. Mind you, this was a science-based book. The professor had to fight his own school's DEI bureaucracy over words


An Ivy League School

Think about that. Every department at this Ivy has not only a dedicated DEI bureaucrat, but, according to the professor, subcommittees as well.

He added:

"They take up so much of everyone's time, make everyone nervous about saying/teaching/basically thinking the wrong thing. But they feel important, and the faculty encourage them because all are afraid to be the white men who set boundaries."

All of academia lives under the jackboot of DEI commissars. Their power is enormous.

But the professor's story doesn't end there. His outside publisher had something called a "sensitivity reader."

What's that, you ask? Pretty much the same thing as the DEI coordinator. They screen your work for wrongthink, to borrow from Orwell.

I called my publisher and asked about this. It turns out that at major publishers, every book, fiction and non-fiction, is put through this ideological gauntlet. Everything you read now has been scrubbed and sanitized by some nameless, faceless wokester who finds offense in everything. (Campusland, apparently, snuck in under the wire just before this took over the industry.)

The sensitivity reader in the professor's case had fifteen pages of comments. Fifteen! I read them myself, and they are as particulate and ridiculous as you might imagine.

The apparatchiks are everywhere now. (Conform!)

Which brings us to the financial industry and something called "ESG."

If you're not familiar with this, ESG stands for "Environmental, Social, and Governance." (It is part and parcel of something called "stakeholder capitalism.")

ESG investing means putting your money where your values are. There's nothing ostensibly wrong with that—it's your money, you can invest it as badly as you like. But the system has been hijacked by the money managers, most notably Blackrock and its CEO, the odious Larry Fink. Rarely has someone gotten so wildly rich off the very system he seeks to destroy.


Larry Fink

At $9 trillion of AUM, Blackrock is easily the largest money manager in the world. They take those trillions and invest practically everywhere.

Why does this matter?

Because Larry Fink is irredeemably woke, and he has made Blackrock into an activist investor. 

Want them to invest in your compoany? Better be ESG compliant. 

But what is ESG compliant?

Increasingly, investors rely on ESG "scores," actual grades for each of the three category. These can be very subjective. For instance, should Exxon get a high score or a low score? On one hand, they are an oil company, and we all know they're evil. On the other hand, they're really trying to do something about it. (Correct answer: low score. Because oil.)

A lot of power is in the hands of the people creating these scores, most notably Morgan Stanley. Think these committees are run by conservatives who value, say, cost-benefit analyses? If you do, I've got a solar array in Seattle I'd like to sell you.

(Also, what about the conflict? Will Exxon's ESG score magically change when Morgan Stanley's banking department is trying to raise capital for them?)

This is all a bit like social media companies hiring left-wing-grifters-dressed-up-as-do-gooders like the Southern Poverty Law Center to decide who should be de-platformed. Or worse, it's an eerie echo of China's social credit system (now seemingly being adopted by Canada).

ESG investing is all about subverting free market capitalism to the will of the woke progressive agenda. 

The real fun starts after ESG investors invest, when they start laying shareholders resolutions on your company, forcing adherence to ESG doctrine. That's when they really start throwing their muscle around and voting all those shares—money that isn't actually theirs! That money belongs mostly to small investors via pension funds, investors who likely know little of what's being done in their name.

ESG adherents claim they are "doing well by doing good." But there's no evidence they're doing either. In fact, by forcing companies out of profitable businesses, like say, fracking (the "E"), by compelling companies to pursue (always progressive) social causes that have no link to shareholder profits (the "S"), or by forcing appointments of possibly less-than-qualified board members in the name of diversity (the "G"), it does nothing but undermine profitability. 

But let's say you run an investment company, and you just want to keep running money like you used to and not have to filter everything through the lens of social justice.

No problem, right?

Wrong.

The Long March has captured regulators, the accrediting institutions, the consultants, and the pension allocators. The auditors will be next, according to one source. RFPs ("requests for proposal") are now littered with questions about your firm's commitment to the various tenets of wokism. According to one invesment company CEO I spoke to, "Best practices now encompass ideology. No debate, no appeal."

If you want your firm to succeed, you must bend the knee.

He added the following:

"Pension allocators are the sneakiest. They are effectively creating law, public policy, and enforcing it without voter input, debate, or even knowledge. Given their size, their standards run downstream, changing everything..."

And now, if your firm is of a certain size, you are all-but-required to have full-time ESG staff. They are your embedded commissars, and their power increases by the day. You may have graduated, but you are still on campus.

I've singled out education and finance in this piece, but DEI bullies, sensitivity readers, and ESG monitors are spreading everywhere, in every manner of organization. They are a cancer, a modern Red Guard, and will ruin your career and your company if you step out of line.

So, comrades, you know what to do.

Obey.








 

Monday, February 21, 2022

The Pulitzer Prize Is a Fraud

 


The Pulitzer

A couple of years ago, I wrote a piece called Conservatives Don't Win Stuff. It was based on my observation that, well, conservatives don't win stuff.

This is because the Long March through the Institutions (which I also wrote about here) is over. The left now controls them all, including once rock-ribbed GOP redoubts such as the Fortune 500.

Among these many institutions are, of course, the various bodies that have anointed themselves as the "giver of awards." The Motion Picture Academy, the MacArthur Fellows (they of the "Genius" Award), the Rhodes Trust, the Nobel Committee...let's just say you'll find a clean subway car in New York before you find a conservative on one of these boards.

So be it. 

But one pestiferous purveyor of these accolades deserves an extra-large, heaping pile of our scorn: the Pulitzer Prize Board.

For background, the Pulitzers have long leaned hard-left. For instance, way back in the 30s, they gave the New York Times Moscow Bureau Chief, Walter Duranty, the coveted award for his propagandistic coverage of Josef Stalin, which included some delightful reportage such as the following, about the kulaks (farmers):

Walter Duranty

"Must all of them and their families be physically abolished? Of course not–they must be 'liquidated' or melted in the hot fire of exile and labor into the proletarian mass."

Nice.

Duranty also pointedly ignored the biggest story in the Soviet Union during the 1930s, the policy-driven famine that killed tens of millions. His reporting provided intellectual cover for an entire generation of campus-based Marxist wannabes.

Duranty was so awful that the Times itself disavowed the coverage (albeit some five decades later). Can you imagine?

So, the Pulitzer people took back their little prize, right? 

Nope.

Despite being formally petitioned by various groups twice, they declined to do so.

What really separates Pulitzer from the pack, though, happened far more recently, when they gave the award to both the New York Times and the Washington Post for each's "deeply sourced' and "relentlessly reported" coverage of the fanciful "Russiagate" scandal.

Of course, we now know, with 100% clarity, that the entire thing was a fraud concocted by Donald Trump's political opponents. There was plenty of reason to think this then, too, but I don't need to rehash all the details of why in this post. If you want some great reporting on just how outrageous this Pulitzer was, I refer you to this excellent piece in the New York Post. 

Needless to say, the Times and the Washington Post have not returned their awards, and the Pulitzer Board had not asked for them back. All parties probably think the Russia narrative could have been true, even if it blatantly wasn't.

We're all good here.

But this got me wondering. Who's behind curtain? What kind of people would make such a horrendous mistake and not even attempt to walk it back.

One of the wonderful things about the internet is that it's easy to find out such things. 

Unlike the mostly center-left Lovely People who inhabit school boards, about whom I have written, these people are committed progressives. The Pulitzer Board consists of precisely what you'd imagine: a rogue's gallery of academic, journalistic, and NGO leftists. All but one live on the coasts (the sole exception living in coastal aspirant Austin, Texas).

I present to you, the Pulitzer Board:

(Perhaps genuflect as you read these names—these people are very elite and went to very good schools.)

Elizabeth Alexander - Head of hard-left Mellon Foundation, big Obama supporter. Read her tweets here.

Nancy Barnes - Editorial Director, NPR

Lee Bollinger - President, Columbia University

Katherine Boo - former staff writer for the New Yorker and current reporter for the Washington Post.

Neil Brown - former editor of left-leaning Tampa Bay Times. Now runs the Poynter Institute, a journalism school funded in part by George Soros's Open Society Foundation. One principal area of focus is "fact-checking technology." (Cue the irony.)

Nicole Carroll - Editor-in-chief of left-leaning USA Today

Steve Coll - Dean of Columbia Journalism School, the ever-flowing wellspring of liberal journalists.

Gail Collins - Editorial Board, New York Times (Does she get to vote on the Times' own Pulitzers?)

John Daniszewski - Editor at Large for "standards" at the Associated Press. Here's a quote from his bio: "John works with journalists and editors around the world to ensure the highest levels of media ethics and fairness." 

One wonders if these people have any self-awareness, any at all.

Steve Engelberg - Editor in chief of lefty online news organization ProPublica. Also won Pulitzers. Worked for NYT for 18 years.

Carolos Lozada - Washington Post book critic, author of "What Were We Thinking: A Brief Intellectual History of the Trump Era." Twitter feed: https://twitter.com/CarlosLozadaWP

Kelly Hernandez - Professor of African American Studies, UCLA. From her bio: "One of the nation’s leading experts on race, immigration, and mass incarceration." Believes we are "wasting money" on policing and incarceration. Watch her here: https://www.youtube.com/watch?v=a1kigeQAG6k.

Aminda Gonzalez: VP and Exec Editor, Simon & Schuster

Kevin Merida - Executive Editor, LA Times

Viet Thanh Nguyen -  Professor of English, American Studies and Ethnicity at USC.

Emily Ramshaw - CEO of The 19th, a feminist-oriented news service. Very concerned on Twitter about the shortage of female climate scientists.

David Remnick - Editor of the New Yorker, and author of, among other things, a hagiography of Barack Obama and a recent puff piece on AOC.

Tommie Shelby - Professor of African American Studies at Harvard. Recent speech title: "Afro-Analytical Marxism and the Problem of Race."

Pro tip moving forward: these awards are nothing more than trumped up self-congratulation inside an intellectually fatuous, vacuum-sealed bubble. To the average American, they mean nothing, and nor should they. Ignore them.

Now give me a damn beer.


Friday, November 26, 2021

The Digitization of Ownership and Why It's Really Cool

Trigger Warning: this post has nothing to do with schools, CRT, or even politics. But read on to discover the incredibly cool financial market developments happening right now, but not fully understood. Note that I previously wrote about crypto developments in "Why Conservatives Should Love Cryptocurrencies."




Imagine you could own a $1,000 portfolio that looked like this:

$200    New York Yankees

$375    Picasso's Guernica

$125    Ranch land in Wyoming

$250    David Bowie's song catalogue

$100    James Bond's Aston Martin

$75      Kyle Rittenhouse's prospective legal settlements

Each of these positions represents equity ownership. Crazy? Think again, because it's coming fast. These are all assets of varying sorts and there is no reason they each couldn't have fractional ownership in the form of crypto. 

You probably heard about the U.S. Constitution almost being purchased by 17,437 random people. While they didn't win the bidding, that's hardly the point. They raised $47 million in seventy-two hours. Average donation: $206. (My son was in for $180.) This was all done using crypto currency as the medium of exchange.

Nobody had to hire lawyers to set up an LLC. Nobody had to hire a management team. No intermediaries required.

They came together in the form of a DAO—a Decentralized Autonomous Organization. Basically, a bunch of people buy crypto coins, pool them, and then decide what to buy and what to do with the asset after its purchase. The more coins you own, the more votes you get.

Then there's this. 

A company called BlockBar is making it possible to buy crypto coins associated with uber-expensive bottles of rare liquor. If you own a coin, it's associated with a specific bottle. You can exchange the coin at any time for the bottle itself, which is stored safely.

Let me back up a moment. 

By now, you've probably heard of NFTs (Non-Fungible Tokens). They burst on the scene about a year ago. Until recently, they were just a way to claim ownership of a digital asset, say, an electronic image like this one, 3DPunks #087:

You can be the official owner of this image for the low, low price of $2100. Alternatively, you can copy and paste it, like I did.

It's easy to see why some, including me, were skeptical. 

More recently, though, NFTs have represented claims on a broader range of things such as experiences, access to parties parties, membership in communities, and such. 

More interesting.

But back to BlockBar.

What they are doing is creating NFT coins for tangible assets, and that's where things get very interesting. And not just tangible assets, but theoretically any kind of asset. Team ownership, legal settlements, intellectual property. Basically anything that has a value.

So, why not just own the bottle Macallan 40 itself? 

Because most people who buy these bottles are investors who never drink them, and the coin is more liquid, should they choose to sell. To quote BlackBar's CEO, "You can always exchange the digital asset for the physical, but it is easier to sell the digital asset—you don't have to physically move the bottle, ship it all over the world, and have it be authenticated over and over again by auction houses selling it."

If the Constitution DAO's investors had succeeded, any of them could have sold out at any point, perhaps making a profit.

If this all has a familiar ring, it should. Once upon a time people used precious metals as currency. But lugging gold and silver around was cumbersome and dangerous, so currencies that represented a claim on metals were created. The U.S. had the gold standard as well as silver certificates. How much easier—and safer—it became to engage in commerce. 

What we're witnessing now is an evolution in this concept—the digitization of ownership, all made possible by the underlying security of the blockchain. All sorts of previously illiquid assets, many of which have been unattainable but for the very rich, will soon be liquid and accessible to even the smallest investors.

Just imagine the new forms of investment and speculation this opens up. Think the Yankees just made a bad trade? Sell! Think Kyle Rittenhouse will end up owning CNN and MSNBC? Buy! Just want to brag about owning James Bond's car? Buy!

(The Kyle Rittenhouse angle is interesting, because if you think about it, anyone could sell "themselves," or more specifically, their future earnings stream. There could be an entire subsection of NFTs where you trade in the future prospects of famous people.)

Anyone with even a few dollars to invest can play in the most rarefied of markets.

Guernica

But this has benefits for the very rich as well. Let's say you currently own Guernica. 

(You don't, because it hangs in the Musea Reina Sophia in Madrid, but let's assume that away.)

I'm guessing Guernica is worth $150 million, but hey, it doesn't go with your new decor and you want to sell. You'll have to go through Sotheby's or Christies and pay them 10% of the auction hammer price, or $15 million. The process will take many weeks, and the painting will have to be shipped to the auction house for authentication and viewing. It's all very time consuming and expensive.

This is why trading in and out of things like paintings really doesn't happen much. The friction is too great.

But, if your ownership were digitized on the blockchain, you could sell it tomorrow. Or, if you prefer, sell 49% and still maintain controlling rights, which means Guernica still hangs over your fireplace.

Expenses go down, liquidity goes up. These are compelling things. And they both add significant value to any asset.

Digital stock markets are already being created, such as Open Sea. Most of the listings are, frankly, digital effluence like 3DPunks #087. But tangibles will be there soon enough. Coinbase is planning an NFT market, and they may quickly become the market leader. (Full disclosure: I own shares.)

Sure, all this will take some time. Owners of things will have to decide to go digital, or they'll have to sell to DAOs. But an increasingly varied number of assets will find their way into the crypto space.

Here's hoping our regulators don't feel the need to screw it up. They tend to get very uneasy when confronted with new things they don't fully understand. Digitization is highly democratic, and decentralization is something we all should embrace, particularly conservatives and libertarians.

Digital Picasso ownership? Already here. Not Guernica, but a painting called "Fillette au beret."

Buckle up, it's going to be fun.


UPDATE (2/24/21): Making the Naked Dollar look quite prescient, a DAO is currently raising money to but the Denver Broncos.