The Final Tax Haven

The private space race really accelerated recently as two of the world’s wealthiest men test drove their spaceships for the first time.  Jeff Bezos followed quickly behind Richard Branson by briefly leaving the planet, boldly affirming the quality of their respective pet projects.  The third of this group, Elon Musk, has disclosed he has secured a ticket to space but aboard of Branson’s rocket instead of his own.  Achieving manned space flight brings excitement and momentum to the burgeoning industry as well as incredible marketing for their respective brands.  SpaceX, Blue Origin and Virgin Galactic offer dreams of space tourism and the former two hope to develop multiplanetary communities.  Building an infrastructure and supply chain for industry, transportation and space living is ambitious but it may be worthwhile for the world’s richest men.  Space may be the final frontier for escaping the wealth tax proposed by US democrats.

The Ultra- Millionaire Tax Act is being offered here on Earth by Elizabeth Warren and several other Democrat lawmakers, including Bernie Sanders.  This bill is the latest attempt by progressives in Washington to expand the federal budget and provide “free” services to citizens (and likely non- citizens).  The proposal would pay for such necessities as beefing up the IRS to go after wealthy taxpayers, pumping more money into the public education system and providing childcare.  Warren can be counted on to point out that it is unfair that wealthy Americans became wealthier during a pandemic and that they should dutifully pitch in a bit extra.  Commonly, liberal officials in DC tell us that wealthy individuals and large corporations pay nothing in tax or that they just need to pay their fair share. 

The proposal would raise $3 Trillion dollars over a decade to fund various progressive government programs and wealth transfers.  The extraction of 2% of wealth above $50M and then an additional 1% on wealth above $1 Billion in personal wealth would be imposed annually.  “Pitching in a little extra” would be a minimum of $19,000,000 in tax of wealth on top of taxes on earned income for an American billionaire.  Fortunately, these people will also apparently be funding an expansion of the IRS to add large groups of agents to verify the value of their worth year in and year out.  Also, the affected are not entitled to a refund if your assets decrease in value.  This tax will be so fundamentally in opposition to the current notion that you must earn income for it to be taxable.  This doesn’t matter though because the wealthy don’t deserve the assets they accumulated (see Marx for further detail).  

So why accelerate their space projects?  Aside from Bezos and Musk owing $6B and $5.3B per year respectively, the bill comes with a nasty penalty for denouncing your US citizenship.  The Ultra- Millionaires Tax Act calls for a 40% forfeiture in order to declare yourself not a US citizen and excuse your assets from being ringed out for cash annually.  Therefore, if you cannot escape this incredible overreach of government on Earth, I propose that an ultra- wealthy American that is already building an aerospace company might go to space permanently.  This seems to be a loophole in the proposed bill as the IRS cannot possibly pursue a tax avoidance case on the moon. 

The scheme works in multiple ways and would be able to help many other very wealthy and successful US citizens.  First, this endeavor would take large capital infusions into private companies. The founders would bring down wealth as they sell stock of public companies and pay capital gains taxes.  The transfers to privately held companies (Virgin Galactic being an exception) would also provide a more difficult task for IRS agents charged with determining the value of non- publicly traded firms.  Shortening the ramp towards a viable multiplanetary society would likely also require more capital than the founders have available to reasonably deploy.  This would allow for other ultra- wealthy Americans to participate in the funding of Blue Origin and SpaceX.  These willing investors will likely begin to see the similar benefit as the Bezos and Musk. Not only would the other independent investors help secure their spot in the Exodus, but they would also bring considerable advantages to the development of space communities.

Once the wealthy escape to their Tax Haven among the stars, they will need to develop basic societal needs (procuring food, water, housing) but also complex systems of protecting their assets from the terrestrials.  Luckily, these people are the single greatest creators of value in human history as evidenced by their accumulated net worth.  Among the group of our financial elites are pioneers of fintech, ecommerce – supply chain and logistics, cloud computing, telecommunications and online communications.  Increasingly, the wealthiest individuals seem attracted to crypto currency assets.  They have done a good enough job of keeping the grubby hands of the US Senate off their money this long, surely these guys can come up with a lasting transferrable store of value for the Moon. 

The government will be upset to have lost their additional revenue stream, but they do win in one sense.  A stated goal for the wealth tax is that by applying the levy, income disparity in America will shrink.  Lawmakers are relying on the notion that this level of financial unfairness will persuade large swaths of the public that taxing asset values is worthwhile.  With some of the richest people leaving Earth, the wealth delta will be greatly dissolved.  In addition, many people who loathe the rich will be happy to see them detach from society.  Many who still claim to believe in American capitalism love to cheer on the billionaire entrepreneur story until they one day become the head of some illuminati- adjacent society.  For Bezos’ troubles, nearly 200,000 people signed a petition to not let him return from his first voyage.

As one who believes that wealthy individuals currently pay most of the federal income tax in United States and their corporations pay large sums of state, local, payroll, and sales/ excise taxes, I say Godspeed.  Income tax started in America with only a select few funding government revenues under the same argument as this Ultra- Millionaires Tax Act.  Crossing beyond the threshold of earned income for a tax basis could always be pushed downward into lower levels of wealth.  A robust IRS that chases around billionaires and their diverse portfolios may one day find the low hanging fruit of everyday Americans’ retirement savings.  Unfortunately, middle class Americans would never be able to attempt such a daring escape. 

Brazil’s Women’s Basketball Team Brings New Strategy to Tokyo

In 2016, Brazil’s women’s basketball squad disappointed in their home country going 0-5.  The team finished second to last, only semantically edging out Senegal.  After that showing, the country’s national basketball organization went back to the drawing board.  The Brazilians are bringing an entirely new approach to the upcoming summer games.  The roster is completely turned over and they are undoubtedly poised to revolutionize the sport. 

Brazil had a couple close matchups in 2016, losing to Belarus by 2 and Turkey by 3 in the group stage.  With their dismal record, they were relegated to the bleachers early on.  At least they didn’t have to travel in 2016.  On the positive side, they had front row seats to watch the US team seemingly out score each of their opponents 2 to 1.  Now, I don’t want to be too harsh.  Teams still have to be top twelve in the world to qualify for the Games.  Now the issue for Brazil is going from being an also- ran to a serious contender.

After everyone went back to their respective homelands, the Brazilians got to work on a new gameplan.  Back in 2018, they finally saw the vision.  Every single player on the roster was axed.  They were going in a completely new direction, and not only for their group but the world.  The team is bigger, stronger, and faster than ever and they are hungry to avenge the 2016 outing.

This summer Brazilian Women’s Basketball will unveil the first full roster of transgender women in Olympics history.  As the movement for transgender men entering women’s sports has grown, this will be the largest scale disruption in athletics in the modern era.  Brazil’s team will feature 12 former male semi- professional basketball players.  These men were recently hanging on to the last of their careers in the game but now have new life.  They are collectively elated to realize their dreams of competing in the Olympics.

The revolutionary move has remained a lesser- circulated triumph of equity and inclusion as the Games approach.  But as we inch closer (hopefully) to the rescheduled event in Tokyo, everyone in the media is doing their homework and preparing their profile stories.  There are always so many examples of competitors that overcome incredible feats and display unimaginable levels of fortitude to reach the pinnacle of athletic achievement.  The Olympics are the culmination of lifetimes built on making it to this moment.  This is no different for these trailblazers. 

Like any sweeping cultural change, there are those who push back because they are intolerant of change.  There have been cries from some that the Brazilian team has an unfair advantage but this is just transparently transphobic.  These detractors want to exclude athletes who just want to realize their dream of competing in the Games.  These transgender women have not always identified as women but they have always strived toward greatness in the game of basketball.  Now those who cry foul want to delegitimize these competitors based solely on their identity. 

Some biological females argue that the Tokyo tournament will be tainted, including members of the US team.  They seem to be laying the foundation of having an excuse for when they aren’t able to steamroll through the bracket.  Are they selfishly concerned for their personal legacy or are they simply unwilling to accept people across the human spectrum to their sport?  It seems from my view that the American basketball players have been quite outspoken on cultural and social issues.  Many of them have found their voice in a turbulent time in their nation.  So is it only when the changing of social norms encroaches their court that they draw the line?

Fortunately for the Brazilian team, the Olympic committee is a forward thinking union.  They see the Games as one of the only remaining events that unifies the world, if only briefly.  By backing the Brazilian team, the committee really expresses that inclusiveness, acceptance and opportunity are truly important to the athletic atmosphere.  I think we can all look to the Tokyo Games as a glimpse into a future of a radically reimagined competitive landscape.  As for the Brazilians, I hope that they are able to leave the bitter taste of 2016 in the past and cross into the arena of true Olympic contenders.

From the Newsdesk of The Daily Faberian- São Paulo Branch

An Argument that Georgia’s Voting Bill is not Suppressive

There are few things that are as sure as death and taxes, but Democrats calling voting bills suppressive is a close second. An age old tradition in politics is that any Republican voting measure is dismissed as suppressing the vote. The suppression seems to only ever occur in African- American communities, no less. Especially in the American South, you must always let everyone know that conservatives are trying to go backwards to the “good old days” when only white men selected representatives. The point is simple enough: Democrats must tell their supportive groups that they are being disenfranchised, playing on emotions of the past, so that they show up to the polls in higher numbers defiantly thus increasing their odds of success on Election Day.

The snowball effect of politicians and activists coming out and slamming a voting bill is a reflex.  Surely no one actually reads these things.  Who has the time for that anyway?  Even corporate leaders are joining in on the fun in this new world.  Do the CEOs of DOW 30 companies have legal teams anymore or does it not even matter?  Let me then take the other side of the argument after reading through the legislation.  

The first hit on the new legislation is the easiest claim to make- no food or water in the lines. On the surface, you hear President Biden tell the media that such a provision is indecent and the bill as a whole is tantamount to Jim Crow. If that’s the only thing you see on the matter, then you may be inclined to think that these people down in Georgia are just cruel and inhumane. You would be especially so if you also saw the stories in previous election cycles that only African- Americans wait in long lines to vote (I find this to be a subjective talking point). The feeling would compound again once you realize how hot it must be down there in the Deep South.

Now let’s broaden the scope on this a bit.  The rule that is amended is discussing the illegality of soliciting votes in exchange for something of value.  Section 33 of the bill states that persons should not display campaign material, give any gifts or money, or solicit signatures for petitions.  It is a fairly common and understood practice that there should not be influencing material or offers of value up and down a voting line.  Now the rule also does not preclude people from doing these activities entirely either (remember how you always see every possible campaign sign across the street from your polling place).  The rule states that you cannot provide food or water within 150 feet of a building where a polling place is located, within a building holding a polling place or 25 feet from a voter standing in line at a polling place.  In my opinion, this would mean if you would like to stand and hand out water bottles about a football field’s length away, the state says go for it.  By the way, if you think you’re going to be there a while, bring a water bottle and a granola bar, no one will mind. 

The second thing that any left winger will always call suppression is voter ID.  This has forever been an issue where somehow procuring a state ID to vote is an insurmountable burden.  Again, the argument tends to lean on previous laws setting a high bar on the African- American vote.  I’m not here to discuss those statutes but that’s where Democrats and activists will always draw the line.  On the other side, conservatives continue to pound the table on security.  The Republicans have gone around saying that providing ID to vote is a basic requirement and the only way to insure security for elections.  Basically, in this bill neither point is entirely true. 

Asking a voter in Georgia to provide a Driver’s License or state ID for voting absentee is the new addition this year.  Providing ID to vote in person is already required in the state of Georgia.  Now in reading the bill I noticed that the amendments did not stop with Driver’s License or State Issued ID. Section 28 discusses the envelope which is used to submit an absentee ballot.  The elector should write his/ her Georgia Driver’s license number or Identification Card number on the envelope.  The amendment continues on to say that if a voter does not have a Georgia Driver’s License or Identification Card, the voter should affirm this to be the case and write the last four digits of their Social Security Number.  Further, the amendment states that if the elector does not have a Driver’s License, Identification Card, or Social Security Number, they may provide a copy of a form of ID permitted under Section C of Code Section 21-2-417.  Those other forms of Identification include a Utility Bill, Bank Statement, Government check, Paycheck or other government document displaying your name and address.  Section 25 of the bill is amended to state processes for applying for an absentee ballot.  The amendment of Section 25 also discusses the request for ID when applying for an absentee ballot.  The same procedures apply as in Section 28.  A voter may provide a Georgia Driver’s license, Identification card, or in the absence of those forms, any of the previously mentioned Identifiers. 

There is not a terribly strict measure here stating that only those authorized to drive in Georgia may vote by absentee ballot.  There is no restriction that even requires a voter to procure an ID card.  You must provide some basic form of proving a name and address – this makes sense because the state must send the ballot somewhere.  The point here is that the left should calm down on the suppression pandering because I can’t see this being terribly burdensome.  For supporters on the right, maybe call this extensive list of acceptable ID to attention.  This point would likely be seen by Republican politicians as backing down and being “soft” on security.  In the end, they are to blame for that because that is the only talking point they’ve had.

As I was going through this bill, I noticed an amendment that no one has discussed.  This point is actually a nod to the left and their argument on long lines.  If the Democrats and activists did care about their alleged suppressed voters, they would champion this amendment.  If the Right wanted to appear to be compromising and, frankly, compassionate, they would bring this up in media spots.  Section 18 of the bill discusses changes to precinct size as well as equipment and polling staff.  The first section already existed in the law.  It states that any precinct greater than 2000 electors where those who want to vote and cannot within 1 hour of polls closing must make adjustments in the next election.  Those changes would either include a resizing of the precinct to be less than 2000 voters or an increase in machinery, poll staff or both.  The amendment added this year is where I think value is created.  The amendment states that any precinct greater than 2000 electors where those who desire to vote but must wait in line for over 1 hour before checking in must make changes.  The changes are the same remedies listed above for the first statement. There is a clause in the bill where the wait time should be checked at a minimum of 3 times in the day.  

In my opinion, this truly cuts to the disservice that media outlets, political leaders and think tank brains provide to the American people.  Everyone competes for eyeballs and attention spans are about the size on a grain of sand at this point.  Most people work for a living and don’t have hours to spend reading legislative documents.  Unfortunately, my opinion is swaying towards actually reading the text of bills, statistical outputs and coming to my own conclusions.  

As for this bill, I find it fairly outrageous to swipe at it with claims of suppression, racism and the rebirth of segregation. In reality, the bill doesn’t suit an expressed value on the left where anyone can vote at any time in any place without proving identity, citizenship or age for that matter. It will likely be used as a successful fundraising tool where PACs will fuel up for another election cycle. Advertisements will be made, memes posted online (and not flagged for misinformation), and rallies will be had all on the back of this legislation. Many will never take the time to understand the underlying activity and will know for a fact that the Georgia legislature is just a punitive, bigoted, right wing political steamroller.

A Public- Private Partnership for the Cure

We learned this week that we have three different vaccines for the COVID virus in the US.  We also learned that we are supposed to be able to get a vaccine by May.  We have the product and the manufacturing but we still don’t have the infrastructure and delivery process developed.  There seems to be a lot of confusion on where to get a shot, whether someone is eligible to receive a shot and how to make an appointment.  There are not a lot of aggregated solutions that pool resources for inoculation.  There are plenty of stories out there where people endlessly search different sites and refresh until an appointment comes up.  I think that there is a public- private partnership opportunity that resolves a lot of the inefficiencies.  

I propose that the state of Georgia partner with Chick Fil A franchise locations in order to vaccinate the state.  The partnership can leverage the drive thru service and the time spent in the queue as a way to vaccinate thousands.  It could also utilize the curbside pick up area where customers await their online orders.  Healthcare professionals would work in teams to get the customers a shot while they sit in their car.  This partnership would seek to eliminate complicated tiers of eligible citizens, lack of information on where to go and provide an incentive for people to go get their shot (and the second). 

Customers would receive a gift card for something nominal like a free sandwich, redeemable for the second visit.  The gift card would have a special marker that Chick Fil A and the State of Georgia builds a social media marketing campaign around.  Customers would then be encouraged to share over social media and engage with that online campaign.  The customers would post their gift card signifying completion of their first shot and share the knowledge of vaccine availability.  They would also be able to show pride in their participation in the program similar to a “I voted” sticker.  

Upon arriving for the second round of shots, customers can get their free sandwich along with the rest of their meal.  They also get their second shot, completing their medical process.  Customers would then receive a second, uniquely branded gift card that is redeemable at any point in time.  Again, customers post on social media with their second gift card further expanding the marketing. 

Execution of the process could be sped up by utilizing the Chick Fil A app.  Chick Fil A would update the app to be utilized for selecting vaccination options.  Customers would need to agree to some data sharing and add any additional basic information.  The Chick Fil A app already has a fair amount of identifying information for transaction completion and identifying your vehicle.  Customers seeking to use the vaccination opportunity could fill out any needed information before getting in their car.  Also, customers would select which round of the shot they’re taking through the app when placing their order.  The partnership could also control traffic flow by sending cascading notifications to customers with an account on the app.  The company likely could even direct customers to specific locations, given the GPS capabilities of the app.

This is a win for Chick Fil A, citizens and the State of Georgia.  Chick Fil A will gain new customers and new app users that will hopefully be profitable in the future.  Chick Fil A also gains by having packed stores across the state for the entirety of their open hours instead of only peak times.  Also, many customers will purchase a meal in addition to getting their shot.  Customers win through this proposal by cutting through regulations and red tape.  Citizens order their shot when they go to lunch instead of scrolling through internet searches for appointments.  The State wins because the partnership provides marketing for the vaccine program and an existing distribution infrastructure.  This program allows local communities to know where they can go for a shot and how to order it.  

According to the site, there are 247 Chick Fil A locations in the state of Georgia.  If a store was utilizing only the drive thru and able to move cars through the line in 10 minutes, they could vaccinate 540 cars in a week.  If a store could get a car through the drive thru in 5 minutes, they vaccinate 1080 cars in a week.  Utilizing this method across 247 stores would yield 133,380 – 266,760 cars per week.  The capacity expands when leveraging curbside pickup.  Only using 6 Curbside spots at a store where a car turns over every 10 minutes, would vaccinate 3240 cars in a week.  When all 247 stores are providing this curbside pickup service, 800,000 cars could be vaccinated in a week.  These would all be high targets to obtain and the timing needed may be higher than 10 minutes but this is a high volume of shots going into arms.  Other assumptions in the numbers include vaccination service 15 hours per day and of course 6 days in the week.  Also, I say you can vaccinate cars because there will be opportunities to vaccinate multiple people from a household on a trip.  

Chick Fil A and the State of Georgia would eliminate some of the biggest issues that exist in the vaccination program in this partnership. The existing infrastructure makes sure that we don’t have to spend a large amount of taxpayer funds on new sites. The partnership cuts through complicated rollout structures and hierarchies. This partnership once again champions Chick Fil A as a steward of their community and provides them with immeasurable goodwill. Citizens would know where to go to get a shot and that they will be rewarded for doing so. The partnership will get the word out by leveraging social media and proud, newly vaccinated customers. This is not perfect but it is a win, win, win.

Longtime High School Head Coach Accused of Inciting Violence, Fired

Jefferson High School took the field against crosstown rival Riverside last October without the guidance of head coach Dan Marshall.  This was the first time in a decade that the Minutemen were not led out of the tunnel by Marshall.  The longtime coach built the program into a powerhouse in the 5A division.  The coach’s position with the team had been hanging in the balance pending a review by the School Board.  This week Marshall met his fate when the Board decided he would be banned from the School District for life.  His fall from the pinnacle of 5A football began after accusations that his pregame speech incited violence on the field of play.  

Right before Jefferson faced off between the Central Bearcats on September 25th, Marshall gathered his men around him and went through the game plan.  They discussed the first set of plays that the offense would run and key players that they wanted to shut down.  Then suddenly Marshall began to get fired up.  Marshall started speaking to his players in impassioned tones to convey the seriousness of the game.  He needed the guys to get fired up and be ready for the physicality of the night.  Then Marshall went too far. 

“I need you guys to go out there and fight like you never have before.  You’re going to have to go out on that field and punch these guys in the mouth.  Those Central boys need to know that they’re in a brawl with the meanest dudes in this state.  I want you to hit them so hard, they refuse when their coach tries to sub them back in.  If we win this game, we lock in a spot in the playoffs.  Now go out there and give them hell.”

The game was physical.  The Minutemen have prided themselves on a hard- nosed brand of football conditioned into them each summer during camp.  Jefferson’s defense was the stingiest in the division last season.  They hardly allowed the Bearcats to cross the 50.  Over the course of the game, Central’s players were dealt punishing blows from the Minutemen.  Jefferson’s halfback, Evan Spencer, is a bruising runner headed to the SEC next year.  He cut through the Central front seven over and over, plowing several Bearcats like Hershel’s famed “hob- nailed boot” run.  Jefferson went on to easily win the contest and seemed to have another state title run brewing.

The next week everything changed for the Minutemen.  Marshall’s speech in the locker room was being shared virally around the area on social media.  As with everything else in this era, a student staffer filmed the pregame motivation on his phone.  The coaches at Central weren’t immune to seeing the clip, nor were the Bearcat players and parents.  Soon the posts were accompanied with outrage.  People wanted to know how a coach could do such a thing as to incite his players to violence.  Calls for Marshall’s job began to flood into the school and the district. 

Tuesday, before the Riverside matchup, Coach Marshall was placed on administrative leave as an investigation was called.  The district needed to look into whether the coach did indeed incite his players to violence.  Coaches in the area spoke out publicly for and against Marshall.  Some called the speech commonplace and pointed out that many coaches get players fired up before taking the field.  Others made statements aligned with holding Marshall accountable.  They said no one should be going around telling their players to “fight” or “punch another in the mouth.”  All of the sudden, a promising season, Marshall’s career and motivating speech were on the line.

Marshall made arguments stating that his speech was in the spirit of hyping up his players and getting the adrenaline going.  He stated repeatedly to the Board that he never has the intention for anyone to get hurt, nor encouraged his team to play dirty.  He also made the argument discussed by other coaches that pregame speeches get players to rise to the occasion of a physical sport such as football.  Marshall then reiterated the point that if he is found to be in the wrong, most coaches will need to drastically change the way they address their men.  

This week we learned that Coach Dan Marshall was found by the Board to be guilty of inciting violence in the game against Central.  The Board President told Marshall, “Our body has reviewed the evidence and finds your inflammatory speech to be dangerous to the young athletes in our district.  By speaking the way you did, your players went forward and engaged Central’s football team with violence and force.  Luckily, no one was seriously injured as a result of your language but who’s to say that won’t be the case in the future.  We must act swiftly to make sure that you do not ever have the opportunity to cause harm in this district ever again. The School Board hereby dismisses you from your position as head coach of Jefferson High School.  We further rule that you may never hold a coaching position within this district for your lifetime.”

There has been no word yet from Jefferson’s administration on the program’s next steps.  The team never really recovered from Marshall’s absence last season as it ended with a disappointing first round loss.  As for Coach, we can only hope that he is able to find refuge with another program.  This is a tough loss for the Minutemen and this season is a strange new environment for the other coaches in the District.  How long before the speech police come for them too?

-From the newsdesk of The Daily Faberian

Let Them Have Risk

It is atypical for market stories to seep out into the broader news cycle and popular culture.  Most who are not involved in financial markets probably only go as far as seeing what the DOW or S&P 500 indexes did on a particular day.  They might go check their 401k every now and again.  Many people in my generation shied away from active investment due to heavier debt loads and the bad taste in their mouth left by the Great Recession.  Like everything else in our society, 2020 turned that theme upside down. 

A new class of risk loving investors has leveraged stimulus checks and additional time at home to get involved in the markets.  The added benefit of deeply reduced transaction costs and mobile access give small investors the best opportunity they’ve had to participate at their scale.  Increased enthusiasm amongst this class coupled with expansions in information sharing online have created an even more unique environment.  Needless to say, some of the activity has been weird.  A younger, less wealthy class are willing to take outsized risk, invest their money where they feel emotionally attached and conduct analysis in an unorthodox manner. 

There are also social and cultural themes channeling themselves in this group.  It seems no coincidence that they are called the Robin Hood traders (after their platform of choice).  Many are less than enthusiastic to see that our wealthiest citizens have become much more affluent during a period where many are out of work.  There is a fair amount of disdain for the Hedge Fund, family office, Bezos class.  One strange exception is Elon Musk.  Despite rising to become the world’s richest man, he is still viewed as a man of the people and even an underdog story. 

I think that this bifurcation has taken these traders back to their childhood when big bank executives took on excessive risk only to go freely.  Meanwhile,  many of these people’s parents lost jobs, houses and college savings.  Many people saw that an economic elite lives under different rules in our country.  Instead of criminal investigations, Bank CEOs were taken in front of Congress for a strong talking to.  Now this is happening again.  Many have been sent home from their jobs or college (or high school).  They see that the Walton family will be wealthier and better positioned once the mom and pops are crushed by the boot of government. 

The culmination of these forces is exploding out of the financial markets in early 2021.  If you typically watch CNBC for business news, you have only heard discussion of the activist underdog trader.  A band of online traders are now taking aim at the group they disdain for their wealth and their separate rules (Elon cheers from Twitter).  Personally, I wish that I could see other news and stories but I have to admit it is fascinating.  The Robin Hood traders are not shown in the same sympathetic light as their namesake figure.  No, somehow the narrative is that these relatively small time traders are the villains. 

The professionals have their platform on TV to cry foul and call out for reform from the SEC (and live intervention from NASDAQ, NYSE).  Those who make their living seeking market abnormalities at high risk now clamor for rule changes under the guise of “safety.” The entirety of the air time has been dedicated to a bunch of sore losers and CNBC gives no balance to the story.  I may have missed something but I did not see anyone invited into the conversation to represent the online alliance.  If there wasn’t Chamath Palihapitiya getting in on air on behalf of these Merry Men (credit Jim Cramer), no one would have given their case for trading.  I find a stark comparison to the days of having Icahn and Ackman come to blows over their competing interests. 

I don’t think that you can have a completely unregulated market. There are good arguments to be had for protecting traders from risk but professionals should not be the only ones allowed to act. In my opinion, what we have here is a completely irrational market and you can’t force people to act rationally. Both sides of these trades are taking tremendous amounts of risk, the only difference is concentration and scale. The other difference is where each respective side’s power and influence resides- one on cable the other on the internet.

You can certainly argue the validity of valuation on these companies but that is not a reason to shut someone out.  I’m not sure we want to get into the business of having regulators say high or how fast a security can move.  We have guardrails in place in the form of circuit breakers but people are only going to pick up where they left off. The other argument of manipulation doesn’t smell good either.  There is no difference in the people who go on TV only to talk their book and make a free sales pitch on the air.  The new class of traders have online audiences where they share information and state their thesis.  Under both circumstances, no one is obligated to take action on information they hear on the business channel or on an Internet forum.

Again, the current state of the market is awash with irrationality.  Neither side of these trades deserves protection from regulators or the court system.  Pain is already occurring on the short end but eventually it will come for these irrational bulls.  If you take part in a short side trade that is already greater than its outstanding shares, you deserve pain if it blows up.  If you choose to be stubborn and not acknowledge that a group of people are trying to buy you out of a short position, you deserve pain if it blows up.  If you choose to make decisions by reading an anonymous chat board and don’t research, you also deserve pain if it blows up.  None of these behaviors are indicative of prudent capital management. 

Unfortunately, the pain will be felt disproportionately by those who have the most to lose- in terms of percent of assets.  The institutional investors have far greater capital resources and far more diversified portfolios.  For that reason, and several others I was hoping their whining would fall on deaf ears.  Their lesson may come from clients wishing to cash out after being wrecked by amateurs or losing credibility in the investment community.  It will be fun for the Robin Hood traders to see the billionaires squirm, if only for a minute.

I think that these people should keep looking for opportunities where big money is being pushed too far.  The whole point of actively investing is finding ways to outperform the broader market.  Traders and investors should continue to take risk but not get swept up in the pandemonium akin to financial revolution.  Many of these smaller traders must now learn the difference between gains and greed. 

We should not lock these traders out of the markets.  We should treat these people like adults who are capable of managing their capital.  Regulators should not give in to an institutional class that calls for change during the game because they’re getting hammered.  Who amongst the hedge fund managers would slam on the brakes when they’re stomping out weaker investors? When you go to a sports book- and these people are gambling- you don’t get to ask for a refund because you didn’t know the QB was injured. 

Big guys- you lost and got pain for being overextended. Little guys- you captured an incredible amount of attention by taking on risk and getting a victory. Let’s leave it at that and not manipulate the system. Let people be free to make decisions for themselves and don’t cast out small investors because you don’t agree with their choices. Don’t tell these people they’re too dumb to invest in a free market. Don’t bend to a class of investors that had it gone the other way, wouldn’t miss a second of sleep over these people.

Globalism Was Only Halted – Back to the Business of Joining the Borderless Blob

The past five years may have been the last hurdle on the path towards globalism.  Donald Trump won in 2016 by appealing to more nationalist policy and that was a problem for the larger Washington entrenchment that seeks the more universal view.  A vote by Britain to leave European Union slightly before the US election was a shocking display of nationalistic sentiment.  The results of Brexit will likely be largely symbolic in the end to the pleasure of the globalist movement.  Other smaller nationalist political movements took hold but are now fizzling.  Moving to a truly global political structure becomes more likely in the aftermath of Trump as our ruling political class realizes that they almost lost their grip.  The US is the biggest piece to the puzzle given our economic size and strength. 

The end of World War II brought on the foundation of the modern globalist movement.  Forming global organizations, largest among them the United Nations, was a mechanism against experiencing another conflict.  Bringing nations together through diplomacy and building relationships would create non- violent avenues of resolution.  The devastation of the Great War was massive in it’s own right and the global powers mostly only united around punishing the German state.  The League of Nations ultimately failed to bring the global community together.  The fire of the First World War was never put out and the next conflict burned hotter and spread much further.  Really the 1930’s and 1940’s were the last decades of empire building efforts, which were carried out significantly by the German and Japanese.  After seeing the Holocaust, fascist aggression and the bomb, the world needed to ensure that we could not ever see a similar tragedy.  

Stability on the world stage is certainly a strong argument for the globalist approach.  Proponents of globalism also argue that bringing countries together brings mutual benefits of economic gain, larger scale ability to solve problems facing all nations and that the entirety of mankind will be able to elevate their prospects in life.  Connecting people from all areas of the globe should allow ideas to flow openly and we will also create a kinder, more tolerant community.  At face value, all of these things are good reasons to participate in the globalist society.  The downside is that this does have a cost.  America and a handful of other nations will subsidize the cohesion that we seek to achieve.  Not all countries will comply or participate in the way that the globalists prefer.  Globalism requires a lessened sense of pride in your own nation’s achievements and also requires a sacrifice of quality of life for those citizens of the subsidizing countries (Americans).  Really this idea of a globalist utopian society leans more towards a political socialism and against the unique American way of life.  

Going back to the 1940’s, the United States really rose from a mid- sized power on the world stage to the preeminent super power status that we enjoy today.  Before the two world conflicts, America was not necessarily seeking a globalist society.  We were better known for keeping to ourselves and did not even want to participate in either war.  The resulting destruction of Western Europe was a leading factor in building our economic strength.  Through this new strength, we were able to lead in establishing the post- war era and then eventually lead the fight against communism.  The latter half of the 20th century was a time of great pride in our country and our freer way of life.  We helped win the war against the Nazis, became a beacon of freedom that  starkly contrasted autocratic tyranny and were leading western civilization forward.  

Nationalism is viewed in a distorted manner as a political styling of autocrats, either on the far left or far right of the spectrum.  It is a policy that is viewed in terms of isolation and an uncooperating nature.  Oftentimes the extreme association is with race – white nationalism – and the connotation is that we should reject that thinking.  Clearly in terms of race, we should reject that policy but political nationalism is different.  The nationalist view seeks to enhance the prospects of one’s own domestic community.  A nationalist viewpoint promotes having patriotic exuberance.  This does not mean that a state is closed off to the world community and a nationalist can still be a leader on the global stage.  The nationalist sentiment should seek to ensure that a nation’s own citizens have rights to a prosperous life and promote the same for other nations.  This means being a leader by example and setting a path by which other nations can enact similar policies to lift their own tide.  

There are many nations on Earth where they clamour for the globalists.  This system will greatly improve the lives of their people, bring them into the modern age and stabilize their society.  Raising literally billions of people into a middle class over the span of a few decades is incredibly attractive to political leaders who know that they would never be able to do so domestically.  The changes China has seen in the decades since Richard Nixon broke bread with Mao in the 1970s is a really good case for the powers of globalist policy (also a case against as they continue to claim developing nation status).  An incredibly poor population led by one of the strictest authoritarians of the 20th century emerged to its current place as the second largest economy on Earth.  

The other side of the benefits of globalism is that they must be subsidized by the prominent countries, of which there are few.  This shift occurs not only in direct monetary investment.  The countries playing benefactor do so also by shifting jobs to other countries, provide defense and security, redirect private financial investment towards foreign opportunities, dissolving the inherent ideals of your land and accepting that your domestic corporations will serve the global environment above your own.  The economies required to power the development of other nations must wage a successful campaign to convince their citizens that the global wellbeing supersedes their domestic values and rights.  Over the past few years we saw this campaign kick into another gear as the United States halted their march toward globalism. 

The globalism ideal of placing international development and equity above individual states’ requires a lessening of domestic importance and pride.  Globalism requires political leaders to serve a larger set of stakeholders, not just their electorate body.  The subsidizers must convince constituents that our global issues – climate, energy policy, international economic prosperity, human migration- are more important than their own domestic issues.  A ruling class of prominent societies must convince the domestic population that they should adopt ideals more suited to the global community and not those on which your country was founded.  

The campaign towards the globalism movement and its disruption were highly demonstrative during the past four years.  Donald Trump favored policies that protected the economic security of domestic citizens.  He favored domestic energy independence, fair trade with international partners and enabling industries that are seen as unimportant – see manufacturing.  There was a realization that our people deserve to have careers that pay well and that there was still a need for a healthy middle class.  In the UK, people were tired of being dictated to by the European Union.  The Britons wanted to be free of a bloc that holds these globalist views whereby a group of a couple dozen countries pushed policy that seemed to leave them behind.  These views will be steamrolled in both countries over the long term. 

In America, there is a campaign to devalue the belief system we hold and shift toward the globalist view.  Americans have unique individual freedoms – speech, press, firearms, religion- and states rights (federalism) that do not meet the modern global viewpoints.  There is a cultural movement where the American academy are cramming down reasons why we should not be proud of our heritage.  A narrative is emerging that goes like this: America was founded by slave owners and colonizers who established a racist institution that swept across the continent and resides among us today in exactly the same way.  The ideas are being pushed that we should not be proud of our founding, we should not have the rights we established and that nothing can be changed in our land other than tearing down our current system.  We are being told that our country is filled with hatred, intolerance, white supremacy, inequality and most importantly inequity.  Americans should not salute the flag and sing the national anthem- racist, we should not say the pledge of allegiance- also racist, we should also not protect our borders- incredibly racist.  

Americans are being told that our founding tenets are really just outdated and that we should modernize to conform more with the global community.  Political leaders would like to take away gun rights, curb the qualifications of accepted speech and let us know that we are racist in a way that we can never heal.  That definition of racism is not the kind that we once knew in the time of Martin Luther King and the civil rights movement.  The new racism is an ideal founded on Marxist theories of oppressor and oppressed – this time it’s white vs. black instead of factions of the economy.  Americans are never going to be able to fix their ills when half of the country is racist and white supremicist based on their preference of political affiliation.  American political figures push ideals of equity of outcome not equality of opportunity.  All of these arguments are the reflexive outrage of a ruling class and economic elite that find their globalist plans infringed upon.  

America is a place where the most successful businesses in the world are rooted.  The only other competitors in recent times are propped up communist party champions from China.  The United States offers the most efficient and influential financial market in the world.  Our country offers a legal system that protects property rights at an unrivaled level.  America also has a competitive corporate tax policy.  All of these factors make this country the most fertile ground for innovation and wealth on the planet.  Our workers are some of the most skilled and well educated.  Many of our country’s businesses go on to expand into international markets to find continued growth.  There is no problem with successful business ventures but these corporations take advantage of our domestic market then become beholden to globalist values.  Once multinational corporations serve the global market, they act on behalf of values that are prominent in the global community.  No doubt China, India and the European Union are valuable expansion points but the cost is abandoning the date that brought them.  The leaders of these corporations largely keep their headquarters domestic but move operations to the cheapest labor markets and now lecture Americans about their values.  These executives do the bidding of the globalist movement after amassing billions – if not trillions- in market capitalization on the backs of American capital and labor.  

With America marching toward the globalist society, the workers of our country will suffer.  Industries that employed millions will fall by the wayside.  People in other countries will be the beneficiaries of this shift as they learn new skills and earn higher wages.  People in international communities will succeed in ways that were previously unimaginable.  I don’t blame these international communities that seize the opportunity to advance economically and stabilize.  But I do question the leaders here in America willing to sacrifice their own middle class.  I also understand that corporations have a mandate to maximize shareholder value but at what long term cost?  We need to retain these industries because miners in West Virginia cannot simply “learn to code.”  We cannot abandon millions of skilled workers in our country to appease the globalist agenda.  

When we do not have a middle class able to work and earn an honest living due to globalism, technology will come to bury them once and for all.  America is also a leading incubator of technological advancements that have a serious impact on society.  We will be automating everything from manufacturing to back office functions.  The rest will be outsourced to the beneficiaries of globalism where the cost of human labor does not warrant automation.  The creative visionaries that develop these technologies will still be rewarded handsomely as they generate untold value for the economy. The outcome that results is a very poor class that provides tasks locally where they can and an incredibly wealthy class (much smaller in scale) that develop valuable technology.  Globalism and technological development hollow out a once vibrant core of the American economy to the benefit of the masses in developing nations.  

We had a political leader that the establishment never thought we would have and never wanted. The UK political establishment did not want Brexit. This brief period of time may be a tiny final nail in the coffin of nations. The prominent western world pushes toward globalism. We push toward diminishing the values and beliefs that hold nations together and the replacement is a global unitary order. The globalist future actually resembles a lot of what we have seen in socialist nations. Most of us will suffer from the equity of outcome that cultural figures seem to think is of utmost importance. There will be a very small elite political class and an equally small corporate elite conspiring to allocate resources globally. Economic resources will spread as equally as possible amongst the other seven billion global citizens. Rights will also be allocated along this global initiative as well. The voice of those equally less privileged will be equally silenced by their globalist leaders. Borders will be meaningless and there will be no real reason to migrate elsewhere. Welcome to the globalist utopia.

Americans Will Need to Unsubscribe to Pandemic Policy

We now live in a world where companies make you pay a subscription for everything.  It’s always an amount that’s small enough that you shrug and think it’s harmless.  A few bucks a month for Netflix, a couple dollars for Amazon prime and a little bit more to backup your cloud storage.  All the sudden you have no idea why your money’s gone and forget half of the things you subscribed to.  The other part of that is we never delete these items and stop paying because it is inconvenient or we may someday pick it back up.  I think that this is a good analogy for where we are with pandemic policy and government assistance.  Most Americans just received a second round of payments from Washington and Biden is proposing more immediately.

First of all, politicians have done a good job of elevating their usefulness during the pandemic.  They forced tens of millions into isolation and disallowed schools, restaurants, many small businesses, sporting events, concerts and other social gatherings.  Then, since many were unable to work, we expanded unemployment insurance, offered business grants and direct payments to taxpayers.  The argument is that ‘it’s not your fault that you can’t pay your bills and we’re here to help.’  Politicians are correct.  It is not the taxpayer’s fault, it’s the politicians in DC and state/ local areas that did not allow people to earn a living.  Politicians grabbed the fire extinguisher, started a fire and then said ‘hey, look there’s a fire. Also, I have the extinguisher and am the only person that can save you.’

The spending from the government has been in numbers that are really astronomical and difficult to even process.  We are becoming numb to proposed spending bills that are in the trillions of dollars.  The money going out to individuals so far is about $1800 per person over two payments, which really doesn’t replace lost wages.  It is a small amount on an individual basis that helps those struggling but only marginally.  So when these payments go out, our attitude is almost dismissive.  To the federal government, however, that is several hundred million dollars, if not over a trillion.  Us, the individual see the payment as something small and relatively harmless.  We seem to be putting our hand back out asking our leaders for more. 

Instead of doing the easy thing and staying on our couch, letting the federal stimulus roll in, we need to unsubscribe.  We need to signal to our elected officials that we prefer to run our businesses, go to school, go out to restaurants and make our own decisions on where we spend our money.  We need to put out the fire and call out our leaders for starting the fire.  If we become accustomed to being paid a few bucks in the name of safety, we will pay long term.  Economically, everyday Americans will be paying higher taxes, our government debt will become a riskier asset (more expensive to repay), the government will not be able to pay for other services – such as our defense – and unemployment will be higher for longer.  It will also further perpetuate the belief by the government that they can just offer constituents free things and we will nod and vote for them. 

I say that this is on the people to unsubscribe because politicians will never offer that as an option.  Those on the right pretend to be fiscally conservative but, that’s hard to believe at this point.  It’s also virtually impossible to run against someone who is offering more free stuff while you are out there pleading for responsibility and turning off the money printer.  It’s also a matter of whether you want to return to the normality and relative independence you once had.  You have to decide that you can make decisions on safety and how to make a living for yourselves and whether that currency outweighs the supplemental amount that the government is offering. 

We are a country that claims to be skeptical of large government, and wants to be left alone to make our own decisions and live our lives unimpeded.  The American people rolled over nearly a year ago and trusted our leaders when they asked us to stay in for a few weeks.  Maybe, based on known information and projections on the virus’ consequences, the decision made some sense.  The issue is that those in power typically have a hard time dialing it back on their own.  This is the traditional concern of the American people. 

Continuing to offer payments and services to enhance our lives and keep us safe are easy ways to slide the scale of power towards government. Hopefully it is not too late for this to change. Rules are being set and consequences implemented for those who do not follow the rules there for your “safety.” Now that the conversation has shifted from “flatten the curve” to “prove that you’re vaccinated,” it might be difficult to believe that government officials really want to loosen their grip on the country.

Can the Cancellation be Reversed?

In the final days of the Trump administration we are witnessing one of the most public and sweeping cancellations of an individual in our country. Donald Trump has seemingly been locked out of any internet or social account that he may have. Banks are distancing themselves from the president and even the PGA is cancelling business with the man. Twitter was one of the first dominoes in this spiral and likely one of the harshest. Several days after the take down of Trump, Twitter’s CEO is now opining on the severity of the action and whether this is the correct course. The actions are reversible and this does not have to be a stake- in- the- ground moment.

These actions are seen on the conservative side as a warning that a small group with homogeneous political views could wipe out alternative viewpoints overnight.  The argument goes – if they can silence and shun a sitting President, what will they do to you?  This surely was the largest single display of wiping someone from the conversation.  It clearly shows how reliant our society is on social media and internet platforms for information and communication.  This reliance is only growing in the 2020’s as we continue to operate our remote lives. 

Not only was Trump taken down, but even sites where his followers were perceived to be communicating. In one of the most shocking corporate offensives, three industry giants aimed against the upstart Parler. It only took a weekend to remove a site that was topping App Store charts. Apple, Google and Amazon collectively deleted a business due to not having the same rules as the other three. Parler’s sin is being perceived as a “right wing” social platform. Their own marketing places themselves as a free speech alternative to legacy social media. Allegedly, this company did not monitor speech in a way that was consistent with the other technology cool kids. This is a larger discussion but, this speaks to the power that a technology oligarchy can exercise on our society any time they please.

For the supporters of the cancellation, the justification is that Trump is someone who incites violence and has a large megaphone to do so. The reaction is in light of January 6, 2021 and the day will forever be the “I told you so moment” for many. The argument for keeping one of the most prominent social media users quiet is to keep our country from experiencing violent riots and disruptions to the inauguration. Further, many see this as an action to be applauded. The canceling feeds into the post- election elation of the left that the “the king is dead.” The Teflon Don was finally unable to escape a different mob.

For many on the left, he has likely said something every day of his presidency that was worthy of cancellation. There has been a swell in calling for people to be de- platformed, cancelled, and tarred and feathered for not holding the popular beliefs of the left. There is a movement occurring where you must comply with certain ideas, use the proper language and signal your correctness to the public. This is a goalpost that seems to be on skates or a runaway train maybe. Donald Trump was the most visible antithesis of this culture and his presence in the digital public square bothered many.

Days after the en masse cancellation, Twitter CEO Jack Dorsey began to express his opinions on the effort in an unexpected way. He took a stance that what occurred was a dangerous precedent and questioned the correctness of his company’s actions. To me, that is strange mostly because the messaging makes him sound like he is distant from decision making. I’m not sure what the procedures are for executing a Twitter ban but, it seems that if you’re going ban a sitting US President, the CEO would want to weigh in on that.

This could be more of the public relations effort of an industry now asking congress for assistance.  There has been a growing argument from social media CEOs to be regulated at the federal level.  Twitter, Facebook, Alphabet and others continue to be in a vice squeezed by both political parties.  These industry leaders now say, ‘please set rules for our communities so that we don’t have to.’  Publicly questioning whether your company did the right thing over Twitter could be another overture to lawmakers. 

It’s also plausible that Mr. Dorsey does actually think that the action was too far- reaching.  Part of his comments reflected on how typically those banned from his site have other options available to them.  The issue now is what happens when all of his peers act collectively in the same manner.  Should social media companies think independently and not make snap decisions to send the right signal? Should private firms be calling balls and strikes on the appropriateness of speech on their site?  Further, should private companies decide what the appropriate level of moderation is required from a peer/ competitor (Parler)?

To me, the upside is that these actions can be reversed.  These companies do not have to draw a red line and say ‘we can not go back from here.’  You can reinstate someone’s voice.  In my opinion, the fact that a highly visible CEO seems unsure of whether it is right or not makes a case for reversal.  Personally, I don’t think it should have happened in the first place but, we don’t have to say that we are done on the issue. 

This would, of course, require several highly influential executives and corporations to admit a mistake. Reversing the cancellation of the President would also then alienate those on the left who have had a great victory against their chief rival. You would then also have a backlash from the political left at the exact moment they take power of the White House and Congress. The firms would have to decide that giving someone their freedoms back outweighs a hashtag to cancel Twitter or Facebook (or YouTube, Snapchat, Twitch, Shopify, the PGA, Mayor de Blasio, Pinterest, Amazon, Stripe, etc.). They would also have to decide that restoring some goodwill with conservatives is worthwhile even though Democrats may likely decide their regulatory fate.

At the end of the day, a select few companies now wield an incredible level of influence over our daily lives and public discourse. The topics that they are being asked to tackle are complex. There really isn’t a way for these companies to decide on those issues without negative market share risk. They are also networks that operate in nearly every country on the planet. These companies must now also serve the greater international constituency, not just the US. I think that in this country we should have more conversation, not less. I think that people should not be exiled from the public square because of the actions of others. Expelling political or commercial competitors further alienates factions of our society and widens the gap of understanding one another.