Andy Kessler

WSJ: Once Trump Leaves, Who’s Left to Blame?

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https://www.wsj.com/articles/once-trump-leaves-whos-left-to-blame-11610314313

Here’s my prediction: On Jan. 20, the No. 1 video on YouTube will be “Ding Dong the Witch Is Dead” from “The Wizard of Oz.” Go ahead, play the song in your head. I’ll wait.

This hope for mass emotional relief was best summed up by House Speaker Nancy Pelosi who, according to Politico, told her leadership team, “I’m counting down the hours ’til he’s gone. . . . I plan to pull him out of there by his hair, his little hands and his feet.” I guess tearing up the State of the Union speech wasn’t therapeutic enough. Nor is there any peace for the mouth breathers who stormed the Capitol and sat feet-up on her desk. Or the quixotic and psychotic contesting and protesting of the 2020 election—or 2016, or 2000 for that matter.

What a mentally unnerving four years. We’ve all heard, “I cried with my daughter that morning.” Some folks actually sent me books on Hitler so I could brush up on what they were convinced would come—but never did. Universities offered therapy dogs and breathing spaces—some with coloring books. “Resist” jewelry jumped off shelves. NBC’s “Today” show seemed to open every day, as did many casual conversations, with “Did you see that tweet?” And we added to the vernacular “Orange Man bad,” “El Cheeto” and the Bidenism “C’mon man!”

So many seemingly functioning adults needed someone to blame. A literary agent told the New York Times : “Trump doesn’t want to let go of his job, and a shockingly high number of us don’t want to let go of him.” Author Douglas Coupland smartly noted that “blame is just a lazy person’s way of making sense of chaos.”

Years ago, I believe the comedian Dennis Miller nailed it by saying—and I’ll clean it up—that blaming cigarette companies for getting cancer is like blaming your Members Only jacket for not getting dates in the ’80s. Blame yourself! Mr. Trump or Mrs. Pelosi may not be to your liking, but they weren’t the cause of all your problems. Everyone ought to stop projecting and look inward. Especially the dude in the horns and animal skins.

According to Salon, “Trump is a psychopath.”

Read the rest here.

WSJ: How the Fed Stifles Lending

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https://www.wsj.com/articles/how-the-fed-stifles-lending-11609697886

Dear Jerome Powell: End quantitative easing now. The Japanese tried QE in 2001, buying government debt, mortgage securities and even stocks. It didn’t work. The Federal Reserve has tried it four times since Lehman Brothers went belly up in 2008. QE doesn’t work and instead of keeping markets stable it creates instability.

The Fed supervises and regulates U.S. banks. But traditional banking (think Mr. Potter from “It’s a Wonderful Life”) represents only about 15% of all lending, maybe less. The rest is the mysterious-sounding shadow banking system based on securities lending and other credit products, including repurchase agreements—the repo market.

In repo, broker-dealers, hedge funds and banks construct short-term transactions. You put up collateral—Treasury bills or sometimes less-pristine instruments—with an agreement to buy them back the next day or week for slightly more, and invest the proceeds in the interim. Jeffrey Snider, head of research at Alhambra Investments, calls it a “reserve-less currency system.” This is how global supply chains are funded, to bring us cheap goods from Walmart or Amazon.

Sometimes lenders repledge the collateral to other lenders and take out repo loans of their own. And the cycle goes on. It’s a little bit like hot potato, passing the collateral to the next guy. Known as rehypothecation, these transfers used to be done once or twice for each posted asset but are now sometimes done six to eight times, each time creating new money supply. Note: this is modern money creation—outside the purview of the Federal Reserve—and it’s huge.

When times are good, repos work fine: The agreements expire without problems and the collateral gets passed back down the chain smoothly. But eventually, iffy collateral sneaks into the system. That’s also fine, until markets hit an inevitable rough patch, like, say, March 2020. No one will take the junky stuff anymore, and everyone scrambles for good collateral. So there’s a mad dash, a brawl really, to buy Treasurys—like musical chairs with six to eight buyers eagerly eyeing one chair.

We saw this collateral problem in action.

Read the rest here.

WSJ: Beat the Blues With Music Flicks

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https://www.wsj.com/articles/beat-the-blues-with-music-flicks-11609103299

Locked down again? Finished the gambit of everything on Netflix, Prime, HBODisneyHuluMax+ and even all 201 episodes of “The Office”? Follow me on a magical musical tour down one last rabbit hole before the lockdown looney tunes end. Music will set you free.

You’ve probably seen zillions of concert movies, from “Woodstock” and “The Song Remains the Same” to “American Utopia.” But I think a choice list of movies can lead us all the way to the essence of the 1960s-to-’80s music scene. Forget reading a book; that’s like swimming a marathon—we’ve got to see and hear the story.

Maybe we warm up with the daddy-issues biopics “Bohemian Rhapsody” and “Rocketman.” Or the raunchy “The Dirt” about Mötley Crüe, who just have issues period. Or “Sid and Nancy.” But forget fiction. Let’s hear from real musicians. Don’t stop me now.

We’re ready for “Echo in the Canyon” about the music scene in Laurel Canyon, Los Angeles—lots on Roger McGuinn and David Crosby of the Byrds (the Beatles’ favorite American band, it turns out). Their unique sound came from Rickenbacker guitars made in nearby Santa Ana. John Lennon played a Rickenbacker, and when someone from the company invited the band to a New York hotel to see the second-ever-made electric 12-string guitar, George Harrison grabbed it and changed pop music forever. Americans supplied the weapons Eric Clapton and other Brits used in the Invasion. We’ll learn the beginnings of the Beach Boys, mixing in The Mamas and The Papas, plus Stephen Stills and Neil Young of Buffalo Springfield. Is this that essence we’re searching for? Maybe, but it certainly reveals the origin of decades of American music.

The narrator of “Echo” is Jakob Dylan, Bob’s son. So next watch Martin Scorsese’s “Rolling Thunder Revue: A Bob Dylan Story.” It’s about the 1975-76 ragtag bus tour of Dylan and a collection of musicians—there’s Joni Mitchell, and hangers-on like Allen Ginsberg. Be warned, there are a lot of fake Easter eggs in the documentary, including actress Sharon Stone in a Kiss T-shirt joining the tour.

To keep Scorsese rolling, next watch “Shine a Light.”

Read the rest here.

WSJ: How Tech Got Ready for 2020

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https://www.wsj.com/articles/how-tech-got-ready-for-2020-11608499711

Woody Allen was onto something when he said “80% of success is showing up.” Sure, that gives short shrift to all the work we put in— Thomas Edison’s “99% perspiration.” But never has showing up been more important than in 2020. You had to be ready when panic and turmoil and lockdowns hit.

Lots of things didn’t show up on day one: N95 masks, ventilators, toilet paper, kettle bells, flour and common sense. But so many things did show up during lockdowns. Teleconferencing has always been lurking in the background, but Zoom was ready. Where would we be without it? Same for the cloud computing it runs on, which was ready to scale. Add broadband to the list. Europe, with foolish network-neutrality laws, had to throttle speeds.

Telemedicine was ready. I wrote last year that I had fired my doctor and taken up telemedicine and I got tons of emails telling me I would die soon. I’m still here, and now you probably use it. Streaming via Netflix and a dozen other services was ready, and then some. Next year major studio films will appear simultaneously in theaters and on streaming services—previously unthinkable.

The “ready” list was amazing: Contactless payments (though Apple Pay didn’t work with masks), meal delivery, grocery delivery, retail logistics, e-billing, ticketless travel, airport-security line-cutting retinal scans, motion-sensing Purell dispensers. Amazon was ready with essentials, but six weeks to deliver a book? Yes, I’ve heard of Kindle. And weirdly, ballpark crowd noise sold to videogame companies was sold back to teams. Accidentally ready!

You can probably name dozens of others. But the bigger question is: Why was all this stuff ready to go?

The history of digital technology is littered with examples of lowering costs—ever since chips were invented in 1958, things have magically gotten smaller, cheaper, faster, better.

Read the rest here.

 

WSJ: Dear NASA: What’s in It for Me?

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https://www.wsj.com/articles/dear-nasa-whats-in-it-for-me-11607900349

Years ago I visited a friend at JPL, the Jet Propulsion Laboratory in Southern California, and he asked if I wanted to meet the captain of the Voyager 2, the space probe launched in 1977, then headed toward Neptune. “Absolutely!” In the middle of a messy room sat a young woman drinking coffee and smoking a cigarette—the captain!—next to a toaster-size gray box with a white dimmer-like knob on top of it. Radio signals take hours to reach the Voyager, and between long stretches of boredom, the captain could use the knob to adjust its antenna. My friend was captain the previous week, and now it was her turn.

As we recalled during the 50th anniversary of the lunar landing last year, space travel is a great challenge, a destiny just out of reach—until it isn’t. It’s aspirational and inspirational. Even so, wise guys (like me) note that after billions poured into the space program, all we got were Tang and Velcro. Earthwise, that’s not so far off. It’s called space because, let’s face it, there’s not much in it.

Yes, communication satellites are important, as is GPS, which helps Uber steer a car toward you. But note that GPS first got off the ground in 1973 because it was funded for Nudet, or nuclear detonation detection—military tech, not space exploration. To be fair, NASA was an early customer of Silicon Valley, but quickly abandoned state-of-the-art chips in favor of highly reliable older ones.

Still, progress marches along. We now have a Space Force, founded a year ago this week. Boldly go! Last month, a privately funded SpaceX rocket and capsule safely ferried four astronauts to the International Space Station, an amazing accomplishment for all anti-big-government types. Astronauts will conduct experiments of unknown value to earthly pursuits. There have been 3,000 such experiments in 20 years, though nothing earth-shattering. Can spiders build webs in space? Not quite the right stuff. Last week Chuck Yeager died. Oh, and an Israeli former space officer says the Earth has been contacted by a “Galactic Federation.” Uh huh.

Don’t get me wrong, I’m fascinated by fiery launches and rocket stages that land on floating platforms for reuse. But I’m more in the “What’s in it for me?” camp. Communications, imaging and even travel benefit all of us. Going to Mars? I’m not so sure.

How about we mine asteroids for metals and even water?

Read the rest here.

WSJ: A Stimulus Dollar Is Only a Dollar

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https://www.wsj.com/articles/a-stimulus-dollar-is-only-a-dollar-11607279296

Wait for it . . . any day now . . . get ready for the “multipliers.” You know, the idea that a government dollar spent magically turns into multiple dollars in the economy. We ought to start hearing that silly word again as the lame-duck coronavirus stimulus negotiations kick in. Expect more multiplier mumbo jumbo as the Biden administration begins its tax-and-spend fiesta.

Let’s face it, the Democrats haven’t had a believable economic messenger since Robert Rubin during the Clinton administration. Since then they’ve presented a cast of characters— Larry Summers, Mr. Biden’s adviser Jared Bernstein, and lately Elizabeth Warren —who bend themselves into pretzels to justify higher spending and then higher taxes.

The New York Times described this trend during the early days of the Obama administration. The financial crisis team of Jason Furman, Tim Geithner and Mr. Summers were “carrying around this list of multipliers” taken from a chart by Mark Zandi, chief economist for Moody’s Analytics. Every dollar spent extending unemployment insurance benefits would, the fairy tale went, boost the economy by $1.64. Sadly, a dollar in reduced corporate taxes would boost the economy by only 30 cents. But cheer up, every dollar spent on food stamps would spur a $1.73 increase in gross domestic product. Mr. Zandi called it “bang for the buck”—the proverbial free lunch. It’s more like “dud for the dollar” because it didn’t work. It never does. Multipliers are a canard, a Keynesian conceit.

The economy grew after the Great Recession, as it does after every recession. The stimulus didn’t stimulate. Shovel-ready projects weren’t ready. Many complained that the stimulus wasn’t big enough. More hooey. The Obama administration’s high taxes and heaps of regulation held the economy back. Is spending driving today’s recovery? Think back to the Heroes Act 2.0, Nancy Pelosi’s $2.2 trillion coronavirus relief bill. Economic growth in the third quarter of 2020 was 33% as lockdowns were lifted, despite—or because of—that gigantic stimulus package not becoming law.

The theory of multipliers is based on the Keynesian view that poorer consumers tend to spend a large amount of increased income, and the rich less so. But multipliers are half a story. Someone has to put up the original money that allegedly gets multiplied, taking it away from the private sector and negating whatever dwindling chain of transactions are hypothesized. It’s like two waves canceling each other out—you can’t just do the math on the additive public wave and ignore subtracting the private. This demand-side theory omits the principle of productivity, the real driver of economic growth and prosperity.

But no matter, expect multiplier talk to, er, multiply.

Read the rest here.

WSJ: Beware the Dow 30K Euphoria

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https://www.wsj.com/articles/beware-the-dow-30k-euphoria-11606672322

A great Wall Street lesson: Keep those decamillennial hats around. Last Tuesday saw the Dow Jones Industrial Average close above 30000 for the first time, but by Friday it was underwater again. Remember, more than 10 years passed between March 1999, when the market first crossed 10000 (with wild celebration), and November 2009, when it finally crossed that mark for good (hopefully). Even more time passed between when the market briefly crossed 1000 in 1966 and when it passed that mark permanently late in 1982.

It’s just a number, right? Yes, but blared across tickers, radio, TV, the web and now Twitter, market milestones symbolize progress. Or is it excess? Either way, they’re thought of as a scorecard of success. Oh what a feeling. In many ways, today’s market feels like 1999. Lower-than-expected inflation—check. Relative peace—check. Fed printing money—check. Plus new technological paradigms and IPO mania. Will it end the same way?

It’s easy to see why the market is booming. First, indexes overweigh successful companies (remember when General Electric got tossed from the Dow?). Thirty Dow companies and a cap-weighted S&P 500 mean trillion-dollar-valued companies drive the indexes. A quarter of the Dow’s past 10,000 points were provided by Apple alone.

Then add low interest rates—effectively zero, because there is a glut of capital and low demand for it. The Federal Reserve seems on course to keep rates low forever. The main reason is that we are in the midst of a serious digital dividend. Cloud computing, artificial intelligence and smartphone apps have driven huge productivity gains, in part by reducing each company’s need to build out its own infrastructure. Plus, work from home will mean fewer office buildings, less maintenance on roads and bridges, and less inventory in stores. Each Zoom call equals one less airline seat.

The market is paying for the digital dividend twice (or more). It pays for the profit upside of Apple, Amazon, Microsoft, Google and Facebook, but then again with high earnings multiples induced by low inflation. With interest rates near zero, the market pays up huge for future earnings. But not forever: For those keeping track, long-dated bond yields bottomed on Aug. 4.

But who cares? Wall Street loves a bull market. We’ve got IPO mania and SPAC attacks.

Read the rest here.

WSJ: Gambling Is the Only Game in Town

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https://www.wsj.com/articles/gambling-is-the-only-game-in-town-11606069340

As I headed home from college for Thanksgiving, a foreign student staying the weekend asked about the holiday’s meaning. I quickly answered, “Food, family and football.” He said he understood the first two but not football. Another friend piped in, “To enjoy it, you gotta have a little action going on the games.” So I took the Cowboys over the team formerly known as the Redskins (hopefully they’ll be renamed the Washington Swampers soon). We had to explain spreads and over/under—like teaching a baby to walk.

A little action helps. I was in a sports bar during college basketball’s March Madness when all the games were pretty much over, and then Northeast Louisiana hit a bucket at the buzzer to lose by only 8 with the spread at 9. I stood up and screamed and got a lot of funny looks. Yes, interest definitely turns into commitment. But I wonder if it’s gone too far.

No question that gambling is fun, but it’s not for everyone. You used to have to go to a casino, see a bent-nose bookie—I’ve got a horse right here, his name is Paul Revere—or physically write down your picks for a friend’s football pool. Technology makes it so easy to bet—too easy. At any age. I worry.

Professional leagues have a rude history with betting: Raiders quarterback Kenny Stabler’s relationship with a “well-known New Jersey gambling figure,” National Basketball Association referee Tim Donaghy’s prison time for betting and manipulating scores, and Pete Rose’s ban for life for betting on baseball. Temptation is too alluring. But who cares now? Heck, the Raiders play in Las Vegas! Wanna bet all professional leagues embrace gambling as another revenue stream?

Now everyone is gambling. Online poker is addictive, until you lose. After the lockdown drought, sports blissfully came back, as did betting. Even formerly family-friendly fantasy football leagues are now big business. Betting operator DraftKings saw users up 64% and revenues almost double from last year’s third quarter. If, like me, you wonder how this is possible, New Jersey won a 2018 Supreme Court ruling that allowed states to legalize sports betting. Bits easily cross borders to bet. The spigots have opened.

Lotteries are still a monster business, despite the truism that the lottery is a tax on people who don’t understand statistics. Same for casinos.

WSJ: China Is Losing Its Bet on Chips

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https://www.wsj.com/articles/china-is-losing-its-bet-on-chips-11605476356

Apple is making its first Mac computers since 2005 without an Intel microprocessor. Instead, the company announced last week, Macs will use Apple’s own M1 processor, fabricated by TSMC, the Taiwan Semiconductor Manufacturing Co. Hey, nothing personal, Intel—by now the whole industry knows you botched your transition to sub-10-nanometer chips and are still behind. But this has implications way beyond computing.

If Intel is a few years behind, China’s lag may be closer to a decade. In conjunction with formulating its 14th Five Year Plan, Beijing put out an official communiqué (I love that word!) previewing its “protracted battle” with the U.S. and stated, “Technology self-reliance is the strategic support for national development.” What’s scary is that China may have to draw this battle line right through Taiwan, where Apple gets its processors. We now see headlines like this in the Asia Times: “US tech giants exposed if China takes Taiwan.” Ya think? Let’s break this down.

To begin, note that last year China produced only 16% of the semiconductors it consumed domestically. In 2014, China announced a National Integrated Circuit Plan promising to spend $150 billion to expand local semiconductor manufacturing. It didn’t work because you can’t throw money at the problem. The world is littered with companies ( AT&T, General Motors ) and countries (France, Italy, Russia) that failed at semiconductor production. It takes state-of-the-art equipment and homegrown expertise.

Second, to produce wicked-fast chips for smartphones, 5G and certainly the latest precision weapons, you need fabrication facilities, or fabs, that can turn out 7- or even 5-nanometer chips, which isn’t easy to do. According to Mike Brown, director of the Pentagon’s Defense Innovation Unit, “50% of advance semiconductor production is in Taiwan.” The rest is in the U.S., South Korea and Israel.

Third, the Trump administration cut off China’s Huawei from buying advanced chips made by TSMC. Except for Intel and Samsung, most everyone uses TSMC, including U.S. companies Nvidia and Advanced Micro Devices.

Fourth, for about five years, Intel has been stuck at 14-nanometer chips. This gets confusing: I spent most of my early career tracking the chip business, and I still get headaches digging into their guts.

WSJ: Mideast Peace Means Open Markets

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https://www.wsj.com/articles/mideast-peace-means-open-markets-11604867508

“Once the Sand Curtain starts coming down, there’s no stopping it.” This from my friend Jon Medved, CEO of the Israeli venture-capital firm OurCrowd. He likens the Aug. 13 announcement of the Abraham Accords peace agreement between the United Arab Emirates and Israel to the Berlin Wall falling and the end of the Iron Curtain. Within a few weeks, Mr. Medved had hired (via Zoom) a senior Emirati deal maker as his man on the ground and announced a $100 million deal with the Al Naboodah merchant family.

For centuries, the route between the two regions was a land bridge for commerce—think of caravans trading goods between the East and West. But that route had been undertrafficked since the U.A.E. was founded in 1971. The hostility and lack of formal relations between the states made commerce near impossible. Plus, the lack of direct flights means it takes about 20 hours to get from Israel to Dubai—heading west to lay over in Zurich or Frankfurt and then coming all the way back east. Come January, there are plans for more than 100 nonstop flights a week, which will take only three hours.

The accords make sense. The U.A.E. and Israel have similar populations of about nine million to 10 million and a roughly equal gross domestic product. The knee-jerk reaction to this deal, and I’m certainly guilty of this, is to think it’s merely a trade of oil for ideas. But there’s much more to it. The U.A.E. is a country of entrepreneurs: They get 20 million tourists a year flocking to hotels and malls and even indoor skiing. Uber recently bought Careem, an internationally operating Emirati ride-sharing company.

I asked Mr. Medved what folks in the U.A.E. want. “Of course they’re interested in cybersecurity, logistics and fintech. But they’re also interested in smart cities and transportation. Remember, they invested in Elon Musk’s Hyperloop. Add alternate energy and even food security—we get asked a lot about agtech—as well as technology for education and health care.” This is a sign of a region modernizing. The U.A.E. even announced on Saturday that it would loosen its religious restrictions on personal freedom.

A U.A.E. webinar named Emirates Angels got government approval within 48 hours. That a webinar needed government approval means there is still some work to do. But Mr. Medved says U.A.E. merchants want to add value and “see eye to eye” with overseas investment partners, instead of merely being a source of money.

A few years ago, I spoke at OurCrowd’s Global Investor Summit, which gets 20,000 registrations and even a few dozen from the Arab world who attend under the radar.

WSJ: Digital Voting’s Time Has Come

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https://www.wsj.com/articles/digital-votings-time-has-come-11604251999

Cash a check or go through airport security, and you’re asked for a photo ID. Heck, visit most offices in major cities and you need an ID. But when you vote, which we’re constantly reminded is the most important thing you can do, you have only to provide your name and address and sign a dusty book and you’re waved in. At least a human will check you in—with mail-in ballots, signatures are easy to forge.

No one knows how much voter fraud takes place, but it’s not zero. There’s something behind the stories of dead Chicagoans voting and living ones offered cash and a drink at a pub for the right vote. There’s a better way.

Paper ballots should go the way of the abacus. Someday, last week’s Supreme Court orders about when various states can count mail-in ballots will seem quaint. Voting can be modernized easily with off-the-shelf technology.

Years ago, a hedge-fund friend proposed a simple solution: Everyone who shows up to vote has a photo taken and then gives a signature or fingerprint. That data is uploaded securely to the cloud and some rudimentary checks are done. But here’s the trick: After the first use, it would be really hard to show up and vote under an assumed name, because the photos wouldn’t match. No one could vote more than once, because the photo would show if you’ve already voted. You could cheat, but only with your first-ever vote. With even the most rudimentary facial recognition, dead people couldn’t vote.

It’s ingenious, but I said at the time it went too far. Taking photos of citizens would violate their privacy. Some may not want others to know their location. Illegal aliens might get nervous—oh wait, they’re not allowed to vote.

But I think the time has come.

WSJ: A Biden Economy Means ‘Litter Jobs’

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https://www.wsj.com/articles/a-biden-economy-means-litter-jobs-11603658932

I hate admitting youthful indiscretions. Way too long ago, I was with friends in a desolate Colorado parking lot drinking rare-outside-the-state Coors beers. One guy would occasionally open his window and toss empty cans out. I shyly mentioned that he probably shouldn’t litter. After all, I grew up watching “The Three Stooges” on channel 11 WPIX with constant public service announcements featuring an American Indian standing next to a highway crying as litter is thrown at his feet.

The can-tosser launched into a long diatribe ending with, “Listen, someone will have to be paid to clean up all these beer cans. Who am I to deny someone a well-paying job to feed his family and pay rent?” I stupidly laughed. I think that guy is now a politician, but obviously dead wrong.

During the first debate, I had a Coors flashback when moderator Chris Wallace asked Joe Biden about his $2 trillion climate change spend-fest: “I actually have studied your plan, and it includes upgrading four million buildings, weatherizing two million homes over four years.”

Mr. Biden responded: “The fact is, it’s going to create millions of good-paying jobs, and these tax incentives for people to weatherize” are “going to make the economy much safer.” Maybe he cribbed this from Al Gore in Wired magazine last year. “Now, think about the Green New Deal,” Mr. Gore wrote. “What it encompasses are two things we have to solve: the climate crisis and the opportunity to create tens of millions of new jobs.” That includes “retrofitting residential, commercial, and industrial buildings.”

This is what passes for progressive policy these days? It sounds impressive but it’s dead wrong. These are litter jobs—unproductive work that subtracts from societal wealth rather than adding to it. A waste of resources.

We saw similar thinking this summer.

WSJ: No Quick Fix for Social Media Bias

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https://www.wsj.com/articles/no-quick-fix-for-social-media-bias-11603048637

After Twitter’s ban of the New York Post’s scoop on Hunter Biden’s Ukrainian payoffs last Wednesday, CEO Jack Dorsey called his staff’s actions “unacceptable.” Ya think? The timing was especially dumb, as he’s set to appear next week, along with Facebook’s Mark Zuckerberg and Google’s Sundar Pichai, before the Senate Commerce Committee. The topic is Section 230 of the Communications Decency Act, which shields social-media platforms from liability as publishers. Mr. Dorsey just gave his adversaries the fuel to burn his tweet house down.

Except Twitter didn’t do anything illegal. Section 230 protects online forums against being sued for user-posted content on their platforms. But these platforms can also apply “community standards” to remove anything they deem objectionable. You and I have First Amendment rights to say whatever we please (without inciting violence), but these platforms are private companies. They can remove or allow what they want.

That doesn’t mean they should. All rise: The court of public opinion is in session. Sen. Ted Cruz pointed out the hypocrisy of banning the Biden revelations—however questionable or ill-gotten they may be—but allowing the New York Times’s story on Donald Trump’s leaked tax returns or Buzzfeed’s Steele dossier.

So now Twitter—along with Facebook, which didn’t ban the Biden story but said it was “reducing its distribution”—have drawn a murder hornet’s nest of rebuke, mostly calls for rewriting or repealing Section 230. In a dogpile sandwich, it now seems everybody hates the statute that built the latest version of the internet.

Republicans, led by Sen. Josh Hawley, rightly worry about bias against conservative posts. Mr. Hawley has introduced several bills to rewrite Section 230, and he’s probably not done. House Speaker Nancy Pelosi suggested in April that Section 230’s privileges “could be removed.” And forget Chuck Schumer—even comedian Amy Schumer wants to “Amend CDA 230.”

President Trump tweeted “REPEAL SECTION 230.” This may have been a trick to get Kamala Harris, who said of a vaccine, “if Donald Trump tells us to take it, I’m not taking it,” to be for Section 230.

WSJ: To Serve the Public, Seek Profits

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https://www.wsj.com/articles/to-serve-the-public-seek-profits-11602435735

“It’s way past time we put an end to the era of shareholder capitalism,” Joe Biden declared in Dunmore, Pa., in July. Companies “have responsibility to their workers, their community, to their country.” This echoes last year’s virtue semaphoring by 181 CEOs, when the Business Roundtable redefined corporate purpose away from shareholders and toward “stakeholder capitalism”: a collectivist creed of workers, customers, communities, climate and country. Why does it feel like we’re about to get our pockets picked? The message is clear: Profits are greedy, so spread the wealth around.

It’s been 50 years since the New York Times published Milton Friedman’s article “The Social Responsibility of Business Is to Increase Its Profits.” Most people only read the title, so they miss Friedman’s statement that businesses are obliged to avoid deception and fraud. A company must “engage in activities designed to increase its profits,” he writes, “so long as it stays within the rules of the game.”

Almost as penance for publishing the original, the Times recently printed an eight-page supplement nitpicking Friedman’s article. It’s as if in 1826 the Times of London had ripped to shreds Adam Smith’s “The Wealth of Nations” and said, “No one has actually seen the invisible hand. Hidden incentives? Balderdash! Let’s go back to stakeholder mercantilism.” The sun would have set on the Industrial Revolution.

Capitalism and competition create wealth; other systems slop existing wealth around. Stakeholder capitalism is a passing fad with a blatantly obvious end result. Ding ding!—there were four redundant phrases in that sentence. “Stakeholder capitalism” is redundant because companies already benefit stakeholders or die quickly. “Customers are always beautifully, wonderfully dissatisfied,” Amazon’s Jeff Bezos told Congress in July. “A constant desire to delight customers drives us to constantly invent on their behalf.” And any company that wants to be around beyond next quarter already takes care of its community within the Friedmanesque rules of the game. Underpaying employees means competitors eventually lure them away.

No, profits aren’t greedy. They are a critical price signal—a measure of how well a company is deploying capital and creating value for society. The stock market sums all expected future profits, funding companies with great profit prospects and starving unworthy ones. But besides owning shares in those companies, what’s in it for us?

A lot. In a 2005 paper, Yale economist William Nordhaus concludes, “Only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers.”

WSJ: TikTok Meets the Meddling Feds

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https://www.wsj.com/articles/tiktok-meets-the-meddling-feds-11601843585

TikTok shock: Last week a federal judge enjoined an executive order blocking new downloads of the Chinese video-sharing social network, which has 100 million users in the U.S. Wow—that’s a lot of people wasting time. Now a Nov. 12 deadline looms to shut off TikTok’s U.S. operation or outsource its management to U.S. partners. The Trump administration is concerned that the app’s user data could be funneled back to the Chinese government, which owner ByteDance denies.

In July, Treasury Secretary Steven Mnuchin announced TikTok was under review by the Committee on Foreign Investment in the U.S., or Cfius. There’s no question TikTok has quickly turned into a major social-media platform, but is it really a security threat?

No one can say why the Chinese government might want to spy on 16- to 24-year-olds who watch twerking routines. TikTok may censor information critical of Beijing, but it’s primarily an app for entertainment, not news. Maybe someday the platform could feature videos that influence elections. But that’s a big “maybe.” And please don’t make me think of Joe Biden twerking.

As for its potential as a spy tool, there are simpler remedies, like having Apple and Google set limits on the data TikTok can collect. Or restricting data transfers. I suggest making TikTok put up a bond, say $50 billion, that gets forfeited if it is caught providing data to Beijing.

The real problem is that the current remedy, a forced ownership transfer of TikTok’s U.S. operations to American investors, violates all forms of business decency. The Trump administration is basically stripping away equity from Chinese investors. Originally, Microsoft and Walmart were to invest and run the U.S. TikTok. When they dropped out, Oracle (with Walmart as a marketing partner) negotiated to be the “trusted technology provider” to TikTok. The data would stay in the U.S., and Oracle would buy an equity stake—basically buying a customer. And somehow, still unclear, Chinese investors would own less than 50%. This taking doesn’t smell right.

There’s a history of presidents manhandling corporate assets. Franklin Roosevelt threatened to nationalize the banks in 1933 forcing Congress to pass the Emergency Banking Act to strengthen balance sheets.

WSJ: ‘It Ain’t Braggin’ if You Can Back It Up’

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https://www.wsj.com/articles/it-aint-braggin-if-you-can-back-it-up-11601238077

Hubris is deeply embedded in our culture, especially in social media, which 12-time Daytime Emmy Award-attending actress Moira Rose has called an “amusement park for clinical narcissists” and a “cauldron of self-absorption.” We’re inundated with mean bosses: Gordon “Yes, Chef” Ramsey made a TV career out of it. Even lovable talk-show host Ellen DeGeneres—who actually uses “Be Kind” as a marketing brand—is accused of running a toxic work environment.

Big egos are contagious, especially in sports. Barry Bonds, the home-run-record-holding San Francisco Giant, once told sportscaster Chris Myers, “You pay money to go to baseball games. Well, your ticket doesn’t say autographs. Your ticket doesn’t say that we’re role models. Your ticket just says pay to see the show.” Teammate Jeff Kent, who considered himself closest with Mr. Bonds, has said Barry had a “cocky, arrogant attitude.” Mr. Bonds thought a lot of himself, declaring, “I’m not afraid to be lonely at the top.” All this even though he was getting more than a little help from “the cream” and “the clear”—anabolic steroids.

Was that pride? Ego? Hubris? All of the above.

You know the type. At cocktail parties, they talk your ear off about themselves and if you try to interject with something about yourself—“Just got back from Brazil . . .”—they immediately personalize it and tell you about meeting soccer star Neymar’s agent’s sister at a golf outing where they birdied the 14th hole. The only question they ask is, more or less, “Enough about what I think about me, what do you think about me?” This is when I excuse myself and head to the bar.

The world is overfilled with bloviating, egotistical, one-track, braggadocious, arrogant, chest-pumping, self-important, pretentious know-it-alls. Politicians count these traits as features, not bugs. Wall Street is a hotbed of hubris, à la Tom Wolfe’s “Masters of the Universe”: investment bankers, traders (though a lot fewer of them these days) and, when their returns are good, many venture capitalists, private-equity folks and hedge-funders. All invincible, until they aren’t. Ray Dalio’s Bridgewater Associates, which managed $148 billion in assets, saw its flagship fund lose 18.6% through August this year. Now that’s humbling.

But what if you really are the greatest? Cardinals pitching great “Dizzy” Dean once predicted that he and his brother, Paul (nicknamed “Daffy”), would win 45 games and then famously said, “It ain’t braggin’ if you can back it up.” Fair enough —and to his credit, he only said it once.

WSJ: Clean Power, No Thanks to Al Gore

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https://www.wsj.com/articles/clean-power-no-thanks-to-al-gore-11600633749

Here’s a fun game. Ask an environmentalist about his top plan of action to fight climate change. You’ll likely get a quick answer urging a carbon-neutral or net-zero-emission clean-energy economy, usually by 2050, echoing the Paris climate agreement. OK, now ask if he’s for nuclear power, which has zero carbon emissions, at which point he’ll usually stare at his shoes and mumble something about high costs.

“The biggest problem with nuclear power,” activist Bill McKibben of 350.org told Techonomy, is that “it’s really expensive.” Al Gore, who sounds more and more like a revivalist preacher, told Reuters last month, “They’ve priced themselves out of the market. Electricity from nuclear power plants is by far the most expensive in the world,” while the cost of renewables “is continuing to go down.”

That’s funny, because in 1994 the Clinton-Gore administration canceled research funding for the Integral Fast Reactor, which sure could have helped us down the learning curve to lower-cost carbon-free electricity today. The U.S. has constructed a tiny handful of new nuclear plants in the past four decades. Yes, the same folks who fought nuclear energy tooth and nail are now complaining that it’s too expensive—like saying they’re orphans after killing their parents.

I mention all this now because earlier this month, and almost miraculously, the Nuclear Regulatory Commission approved the design and issued a final safety evaluation report for a Small Modular Reactor, or SMR, by NuScale based in Portland, Ore. NuScale’s design, funded by engineering firm Fluor and the U.S. Energy Department, joins six older federally approved designs. But it’s the first that looks as if it can scale and reduce costs.

In most nuclear fission reactors, uranium pellets are sealed in metal tubes known as fuel rods. These rods are submerged in water along with control rods that usually contain cadmium or boron, which absorb neutrons. When the control rods are removed, released neutrons cause a fission chain reaction, splitting atoms and releasing heat. This heats the water, which circulates through a heat exchanger with a separate water stream, producing steam to turn an electricity-generating turbine.

The NuScale reactor is smaller—only 65 feet tall and 9 feet in diameter, with much installed below grade.

WSJ: Newton’s Law of Stock Momentum

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https://www.wsj.com/articles/newtons-law-of-stock-momentum-11600013869

Does this sound familiar: Smart guy owns a stock in March at $200, sells it in June at around $600, but then buys it back in July and August for between $900 and $1,000. By September it’s back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month. He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling the force acting on it, didn’t know that works for stocks too.

When bull markets get going, investors come out of the woodwork to pile in. These momentum investors—I call them momos—figure if a stock is going up, it will keep going up. But usually there is some source of hot air inflating stocks: either a structural anomaly that fools investors into thinking ever-rising stock prices are real, or a source of capital that buys, buys, buys—proverbial “dumb money.” Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen to keep flames growing.

Most simply blame the Federal Reserve—especially today, with its zero-interest-rate policy—for pumping the hot air that gets the momos going. Fair enough, but that’s only part of the story. Long market runs have always allured investors who figure they’re smart to jump in, even if it’s late. Everyone forgets the adage, “Don’t mistake brains for a bull market.”

In some ways, it used to be even easier to get carried away. In 1929 you could buy stocks with as little as 5% down payment, compared with today’s 50% margin limit. Even Groucho Marx, who wouldn’t join any club that would have him as a member, joined the momos and lost big in the crash.

The 1960s and ’70s had the Nifty Fifty bubble. In 1987 it was a rising dollar and the Japanese buying anything not tied down. I remember the story of an investor at a large Japanese insurance company asking a market strategist for a list of his favorite 20 stocks. Handed the list, the investor handed it back saying buy me 100,000 shares of each.

In 2000 it was comments like, “The internet is underhyped.”

WSJ: California Is Coming for You

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https://www.wsj.com/articles/california-is-coming-for-you-11598804191

I didn’t have to read the entire Democratic Party platform, let alone the spend-tasmagoric Biden-Sanders Unity Task Force recommendations. Sitting here in California, I’m already living it. If polls are to be believed, left-coast policies are coming to you soon—and you’re not going to like it. California is an early glimpse for the rest of the country of a blackout-rolling, water-deprived, tax-hiking, spending-spiking one-party state longing for its old incandescent glow.

The U.S. may flip to one party rule; California is already there. Democrats have controlled the state Assembly since 1997 and the governorship since 2011—or 1999 if you ignore Arnold the Governator, as most do. Single-party rule means single-party rules. We’re No. 1 in the top marginal income tax rate at 13.3%, including for capital gains. That beats New York City. We’re also No. 1 in state sales tax, but only ninth when you include local levies. Still impressive! Everything else follows.

This month Californians have been subjected to rolling blackouts because of the state’s renewable energy mandates—33% today, 60% by 2030 and 100% by 2045. When the sun goes down, which I understand happens every evening, solar cells are worthless. So California has to buy energy on the spot market—sometimes for 10 times normal prices when it’s hot. So we get rolling blackouts. This craziness could be yours too in the near future. Get used to higher bills and resetting your clocks.

California is No. 3 in the nation in water prices. Sad, since it grows 90% of America’s broccoli, 95% of its garlic, 71% of spinach, 69% of carrots and two-thirds of fruits and nuts. Your prices are going up. And kiss incandescent lightbulbs goodbye—most were outlawed in California as of Jan. 1. Someone please send a box of 60-watt flame-tip candelabra base bulbs my way. I’m getting desperate.

And of course, California spends money like a drunken sailor. The state is blessed with tax dollars spouting from employees of Apple, Google, Facebook, Microsoft via LinkedIn, Amazon (whose search operation is based in Palo Alto), Twitter, Uber, Lyft, Airbnb, Palantir and—oops, check that, Palantir is moving its headquarters to Colorado. Can’t say I blame them.

Where does the money go?

WSJ: Life Lessons to Copy and Paste

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https://www.wsj.com/articles/life-lessons-to-copy-and-paste-11598215275

We all owe a debt to Larry Tesler, who died in February at the age of 74. I meant to write about him in March but reality intervened. Tesler isn’t generally considered one of the founding fathers of personal computing but he’s certainly a contributing cousin, including features I guarantee you use every day. His story contains lessons galore—see if you can catch ’em all.

Tesler was born in New York, and took an interest in computers as a kid when he learned they were being used to forecast elections. This was in the 1950s—and it’s still an art, not a science. While at the Bronx High School of Science, he somehow talked folks at Columbia University into granting him 30 minutes per week on an IBM 650. Per week! At 16 he trucked out to Stanford to study mathematics and, like everyone else, got involved in ’60s counterculture, and he eventually became a freelance coder.

In 1970, after a failed marriage, Tesler, along with his young daughter and a bunch of his friends moved to something like a commune in rural Oregon. In a 2005 oral history, Tesler recalls, “That was pretty cool but there was no income up there.” Fortunately, Alan Kay, who invented the easy-to-use Smalltalk programming system, was setting up an effort at Xerox Palo Alto Research Center. Mr. Kay wanted to hire Tesler but couldn’t find him. Happily for all of us, that whole commune thing didn’t work out.

Tesler joined Xerox PARC in 1973 and worked on the Online Office System and a user-friendly computer named Alto running Smalltalk. Looking for features, Tesler found a newly hired secretary, Sylvia Adams, who had only used a typewriter. “I grabbed her. I didn’t want her to get contaminated by some word processor that we were using”—her lack of exposure would provide a fresh perspective. He sat her in front of a monitor and asked what she would want to do with the document on the screen.

She told the furiously note-taking Tesler, “Well, I have to insert something there, so I would point there, and then I would type what I wanted. And to delete this, I would draw through it.” She also told him she wanted to drag text around and even copy it elsewhere. Voilà—Tesler created cut, copy and paste in a system named Gypsy. (I pasted just now!) He even invented the expression “Wysiwyg,” as in “what you see is what you get.” Tesler also worked on an early portable computer named NoteTaker. Xerox didn’t commercialize it, nor much of anything he developed.

In 1979 Xerox had negotiated to buy options for shares of Apple Computer. In exchange, Apple staff could tour PARC.

WSJ: Stock Scenarios for a Madcap Year

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https://www.wsj.com/articles/stock-scenarios-for-a-madcap-year-11597607961

Every weekday before stock markets open, thousands of “morning meetings” at investment funds are jam-packed with analysts, portfolio managers and chief investment officers. Who’s doing what to whom? Is our macro view about to fall off the rails? Is Amazon going to beat our earnings estimates? The best firms discuss various scenarios and what-ifs so there are no surprises.

Right now, there’s not a lot of margin for error in investing. Most indexes, because they’re weighted by market capitalization, are basically surrogates for Apple, Microsoft, Amazon and Google. At over $300 billion, Tesla feels like it’s valued at almost the cumulative profits of every auto maker since the Benz Patent-Motorwagen hit the road in 1886. That’s probably not far off. Ten-year Treasurys are at 0.7%—hardly worth collecting interest.

It is said that stocks “climb a wall of worry,” meaning that when bad news and worry are reflected in stocks, it’s time to buy. Stocks peak when everyone stops worrying and it feels like nirvana. Kinda like now. Despite virus mania, it’s an Alfred E. Neuman stock market: “What, me worry?”

So what’s the bear case, the worry scenario, that investors discuss in hushed tones even as the market soars like a SpaceX rocket? I used to enjoy visiting one investment firm in Minneapolis. On the white board, someone wrote, “State your conclusions upfront.” So here are four potential scenarios, with some conclusions. As Wall Street strategists like to say, this is not investment advice, unless, of course, it works.

• Inflation returns with a vengeance. Pfizer CEO Albert Bourla says a Covid-19 vaccine could be coming soon. By October, he told the Washington Post, “there is high likelihood that we will know if it works.” From there it moves quickly to Food and Drug Administration approval, and Pfizer plans 100 million doses by year-end.

Then the economy would reopen quickly. Goldman Sachs thinks unemployment will decline to 6.2% by the end of 2021. With a vaccine, maybe it goes to sub-4%? (At this point a buzzer sounds and I’m thrown out of the morning meeting for waffling. Investors need to pick a side and state their conclusions, else they become one more equivocating opinion.)

WSJ: ‘Investment Master’ Goes Abroad

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https://www.wsj.com/articles/investment-master-goes-abroad-11597006944

China’s stock market has been hotter than a cup of Luckin Coffee. Watching its run, along with today’s TikTok turmoil, reminds me of my small brush with Chinese fame. In 2006 I started getting investing emails from China about once a week, with oddly capitalized words and lots of misspellings. It looked like spam, but the wording seemed weirdly personal, so I finally answered one.

I got back a note about a “Master Forum,” asking if I could come to Beijing and Shanghai to speak. Then came pictures of past conferences, one with Jim Rogers, of “Investment Biker” fame. Maybe it was real, so my wife and I booked a trip. If it was a scam, at least we would tour China. They asked for pictures of me so they could promote the conference.

At the Beijing airport we were met by eight people, holding flowers for my wife and a poster with my picture on it. OK, this could be interesting. We took a two-hour drive through smog and traffic and were checked into the penthouse suite at the Peninsula Palace hotel. So far so good. A driver and interpreter met me in the morning and took me to an office building. I could barely see through the smog, let alone the haze of jet lag. I met the staff of Weekly on Stocks, a sort of Chinese Forbes magazine (never heard of it before or since). The recent issue had my picture on the cover. Weird. Again, none of this was registering; it felt like a hallucination.

My wife and I toured the Great Wall and Ming Tombs and the Forbidden City. After another night of bad sleep, I was driven to the People’s Library—posters with my name lined the entrance—and pulled up to a huge auditorium. Inside, I noticed the Chinese version of several of my books. They cost 50 cents. Ah yes, I had sold the Chinese rights, and China’s enthusiasm for free markets created an appetite for investment books. People kept taking selfies with me and asking me to sign books—which happens to me, well, never. “Should we stop this intrusion?” my host asked. I coolly waved him off: “Oh, it’s OK.” I was Tom Wolfe for a day!

We walked into the auditorium and I stopped cold—there sprawled across the back of the stage on a giant red backdrop was a 20-foot picture of . . . my head. Surreal. Lots of Chinese characters, and the few English words were my name and “International Master Forum.” Crazy.

WSJ: The Physics of a Political Crack-Up

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https://www.wsj.com/articles/the-physics-of-a-political-crack-up-11596396637

Are politics swinging out of control? Have we reached the resonant frequency of destruction? Oh, how we’ve swung—from the lefty Third Way of Clinton-Gore, to the righty foreign adventures of Bush-Cheney, to the progressive “Life of Julia” nanny state of Obama-Biden, to today’s confused tariff and border-wall follies of Trump-Pence. No wonder we throw the bums out every four or eight years.

Physics students learn that everything has a resonant frequency, which can cause an object to vibrate with increased amplitude and eventually out of control. This is how opera singers can shatter glass.

One real-life example is “Galloping Gertie.” On Nov. 7, 1940, a day with 35-mile-an-hour wind, Washington state’s Tacoma Narrows Bridge, then the world’s third-longest suspension bridge (after the Golden Gate and George Washington) and just four months after completion, started to twist and swing out of control. Movie footage shows what seems like a wave of energy pulsing through the bridge until, after an hour, it collapsed. Apparently, it had hit its resonant frequency.

Has U.S. politics, always bouncing to the left and to the right, reached its own resonant frequency? Impeachment hearings, looting, fighting in the streets and burning cities sure feel out of control.

Our political system was brilliantly built to last. To the three branches of government, we added freedom of speech and the press as a fourth wall of checks and balances. The two-party system forces compromise and competition for the middle. The Senate and Electoral College counterbalance urban and rural needs. There’s no question the system is flexible enough that, outside a few extreme modes—civil war, civil rights—it hasn’t come close to its resonant frequency of collapse. Sure, we get a racist George Wallace on one extreme and socialist Bernie Sanders on the other, but voters are smart enough to understand their danger and not get fooled again. American democracy is fragile but sturdy.

Until this Memorial Day.

WSJ: Tech CEOs Deserve an Apology

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https://www.wsj.com/articles/tech-ceos-deserve-an-apology-11595796522

It’s summer—must be time to grill a few CEOs. Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai will appear Wednesday (virtually, how fitting!) before the House Judiciary Antitrust Subcommittee. It’s tech success vs. lawyers and career politicians who probably have an aide print out their emails. Broadway is closed, so this will be must-see theater.

The CEOs’ task is to disarm, dissuade and dissipate. No need to upstage congressmen, who are playing a weak hand. Antitrust is driven by consumer harm. Sure, there are screw-ups: Amazon favors its own products, Apple its own apps, Google its own YouTube videos; Facebook collects too much personal data. Yet none of these habits necessarily harm consumers and all could be easily fixed without decadeslong antitrust inquisitions. Lawyers are taught: “If you have facts on your side, hammer the facts. If you don’t, hammer the table.” Expect loud table banging.

Mr. Zuckerberg should play up consumer benefit: “Chairman [David] Cicilline, 85.7% of registered voters in your Rhode Island district use Facebook for over an hour every day.” Get him thinking: Would they vote for Facebook over me? Questions will fly about an advertiser boycott over “hate speech and divisive content”— Disney recently joined Starbucks, Ford, Unilever and Verizon. But branded advertising doesn’t really work on Facebook, hence brands are saving money by boycotting. Zuck must think: We don’t need these Mickey Mouse outfits.

Facebook is a small-business platform, and a critical one. Millions of companies rely on it to sell products locally and often nationally. Mr. Zuckerberg should ask: “Are you against small businesses? Is this an indictment of our entire American society? Well, you can do whatever you want to us, but I for one am not going to stand here and listen to you bad mouth the United States of America. Gentlemen!” That last part was Otter in “Animal House,” but you get the point.

On the other hand, Amazon should demand praise—like when you ask the annoying Parisian waiter, “Do you speak German?” and as he sputters “Non” you say, “You’re welcome.” Mr. Bezos’ job is simple: “Congressman, have you watched ‘House of Cards’?” (They all have.) “You’re welcome. Netflix uses Amazon servers. So does Zoom. Did you get your next-day delivery of that 6-quart Instant Pot? You’re welcome.” Lockdowns would have been undoable without Amazon Prime.

WSJ: Hail Mary Agenda

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https://www.wsj.com/articles/a-yuge-re-election-agenda-11595180915

Donald Trump’s presidency may have ended in front of St. John’s Episcopal Church on June 1. Of course, I also thought Barack Obama’s presidency was over when he accepted the Nobel Peace Prize—another futile gesture. President Trump is down big in the polls, but is it too late? Recall, behind 45-41 with time running out in November 1984, undersized Doug Flutie threw his famous Hail Mary pass to victory. Mr. Trump needs one. Populism and trade won’t work this time as Joe Biden has, Clinton-like, triangulated with his “Buy American” plan. My advice: Go big. Here’s a bold second term economy-rousing agenda:

• End the interest expense deduction. This would be a “Nixon goes to China” moment for President Trump, as only a real-estate guy who made his fortune writing off interest expenses could get away with it. The asymmetry—we pay taxes on interest earned but write off interest paid—has always hurt the economy, even caused many boom-busts. It helps mediocre businesses like real estate and levered-up companies bought by private equity, which often get whacked in recessions (Hertz hurts). The 2017 tax reform capped the interest expense deduction at 30% of taxable income for most filers, but there are loopholes a Mack truck could drive through. Get rid of it and watch capital flow toward productive uses.

• End subsidies. Start with corn and biofuels—Iowa has lost sway since it botched its caucuses. Actually, end all energy subsidies: oil, gas, solar and wind. Elon Musk became (briefly) the fifth-richest person in the world by selling unprofitable cars and profitable “regulatory” credits, $350 million worth last quarter. End them. While you’re at it, end inefficient labor subsidies by killing the Davis-Bacon Act of 1931 and sinking the Jones Act of 1920, shipbuilders’ gift. It’s time.
• Buy Cuba and make it a county of Florida. Having a failed communist state 90 miles from Florida should no longer stand. During the 1962 missile crisis, President Kennedy said he would “give assurances against an invasion of Cuba,” so we can’t send in the Marines. Mr. Trump got skunked on buying Greenland, so let’s get Cuba instead. Give $10,000 cash to each of its 11 million citizens: $110 billion well spent. Then give each Cuban a voucher or chit for a share of each of the country’s state-owned businesses, which is all of them except for a few restaurants and old ’57 Chevys. Like in Eastern Europe, these chits start to trade well before various companies or hotels are ready to be sold or go public. Cigars for all. And we don’t need a 51st star on Old Glory—just fold Cuba into Florida (no income tax!). And speaking of Florida . . .
  
  
• Time to fix Social Security. It’s the third rail of politics, but go for it. Set the retirement age to 70 for those born after 1980, 71 after 1990, 72 after 2000. And fix the cost of living adjustment, or COLA, which is 1.6% for 2020. The consumer-price index Social Security uses badly overstates inflation in the digital age. Set COLA at half of the consumer price index. Then, for the young folks:

WSJ: Your 2020 Econ Crash Course

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https://www.wsj.com/articles/your-2020-econ-crash-course-11594578813

Remember Econ 101? Bo-ring. Something about marginal utility, blah blah, and some Keynesian claptrap about wondrous government spending. “The Soviet economy is proof that,” you’ll learn from Paul Samuelson’s 1989 textbook, “a socialist command economy can function and even thrive.” It’s the “con” in economics. But we don’t need no stinkin’ textbooks—just look around. Amid this pandemic and protest perturbed period, Econ 2020 will teach you everything you need to know—no classroom required.

• Price signals. After nights of looting, Los Angeles announced curfews. I watched as protesters trying to make a point (not looters) quietly sat down in the street and were arrested one by one, zip-tied and taken away in modern-day paddy wagons. The next night, crowds dispersed right at curfew. Turns out the police issued $1,000 tickets for breaking curfew—a lot for protesters’ parents to pay. Now that’s a price signal. On the flip side, New York City’s recent restriction of cash bail meant many arrested looters were quickly released so they could loot again.
  
  Health care has the same problem, because so much is “free.” A study published last year in the Journal of the American Medical Association suggested 25% to 30% of health-care spending may be waste. This is especially true of notorious MRI and CT scans and heart angiograms. “Let’s just take a look to rule things out,” the thinking goes, “because insurance pays.” Then came the pandemic, which the American Hospital Association says caused hospitals to lose more than $200 billion. Why? Because frightened consumers skipped procedures, including unnecessary ones.

• Supply and demand. Bob Barker told us, “The price is right.” Well, except in the case of shortages of toilet paper, hand sanitizer, rice, sourdough ingredients and more. Stores wouldn’t raise prices lest they be accused of gouging. Customers tried Amazon, but it had its own antigouging rules and was selling out of many items, like kettlebell weights for home workouts. So savvy sellers began listing “classic,” “vintage” or even “collectible” kettlebells so they could set market-clearing prices. Voilà, no more shortages.

• Jobs. The most important role of an economy is job creation, for many reasons. Hong Kong’s pro-democracy protests last summer took place mostly on weekends, because so many people worked. In the U.S. this year, 40 million have lost work with many willing to be fired to collect the $600 a week unemployment add-on kicker. That meant lots of people sitting around being paid to do nothing—kindling for protest bonfires.

WSJ: Cancer Screening Leaps Forward

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https://www.wsj.com/articles/cancer-screening-leaps-forward-11593973586

So often the future shows up when you’re looking for something else. In 2013, DNA sequencing company Illumina bought Verinata Health and began offering noninvasive prenatal testing. Using a pregnant woman’s blood, a now-$500 DNA test can spot Down syndrome and other chromosomal conditions. Since then, the use of very invasive needle-to-the-womb amniocentesis testing has dropped.

But that’s not the story here. Of the first 100,000 women tested, 10 (or 0.01%) had unusual chromosome patterns. The fetus was fine, but in each case, the mother had cancer of differing types. That was worth investigating—600,000 die from cancer in the U.S. each year—but large expensive clinical trials would be required.

So Illumina spun out a new company named Grail in Menlo Park, Calif., to do what’s known as Circulating Cell-free Genome Atlas studies. Running DNA sequencing on regular blood samples, Grail generates hundreds of gigabytes of data per person—the well-known A-T-G-C nucleotides, but also the “methylation status,” or whether a particular DNA site’s function is turned on or off (technically, whether or not it represses gene transcription).

Most popular DNA screenings for cancer risk test only a single gene site, like BRCA1. But Grail’s chief medical officer Josh Ofman tells me, “cancer may show up as thousands of methylation changes, a much richer signal to teach machine learning algorithms to find cancer” vs. a single site. “There are 30 million methylation sites in the entire human genome on 100,000 DNA fragments. Grail looks at a million of them.” It takes industrial-grade artificial intelligence to find patterns in all this data, something a human eye would never see.

Mind you, this is not a consumer 23andMe test of your genome that says you might have, say, a 68% chance of getting cancer. Grail is detecting the signature of actual cancer cells in your blood. According to validation data published in the Annals of Oncology, the test can find 50 different types, more than half of all known cancers.

And it can find cancer well before symptoms show up, in Stage I or sooner, when therapies are cheap and effective.

WSJ: How to Slay a Tech Giant (Apple)

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https://www.wsj.com/articles/how-to-slay-a-tech-giant-apple-11593375647

When Apple announced last week that it will soon replace Intel processors with its own, I had a flashback to 1993. Morgan Stanley’s technology investment banker Frank Quattrone called me in New York: “John Sculley”—CEO of Apple—“wants to meet with you Friday,” he said. It was Thursday morning. “About what?” I asked. “I don’t know, do your virtual thing.” I booked the 9 p.m. to San Francisco and the redeye home.

Meanwhile, I was on the phone all day with the banking team to help create “the book.” No investment banker worth his salt shows up without a spiral-bound pitch book put together by lowly associates pulling all-nighters, with strategy ideas and suggested transactions (investment bankers’ payday!) to solve the company’s future problems.

Back then I was intrigued by companies organized in horizontal layers attacking vertical behemoths. IBM was a vertical giant and did everything from soup to nuts: chips, hardware, operating system, software, applications, services. They had 50% of the computer industry’s revenue but 90% of its profits. They used FUD—fear, uncertainty and doubt—to freeze out competitors.

But IBM was vulnerable. A loose horizontal confederation threatened its power: Intel processors, Microsoft’s operating system, Western Digital hard drives and Compaq hardware, along with Lotus, Adobe and Microsoft applications, added up to a “Virtual IBM” and eventually toppled the giant. The same thing happened in the late 1990s with AT&T. A horizontal internet of network equipment, browsers and websites created a Virtual AT&T and toppled the vertically integrated telecom.

The team met with Mr. Sculley, his chief financial officer and general counsel, and I got to make the pitch. I recently dug up my dusty copy of that pitch book to remember what I said. Apple had “superior software and ergonomic hardware design” but needed to “focus on mobility as a natural offspring of smaller form-factor computing.” Not bad, in hindsight, though a decade early.

But Apple’s stock, at 14 times earnings, was valued like commodity PC maker Compaq instead of software and platform company Microsoft with its 26-times multiple.

WSJ: A War of Meaningless Words

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https://www.wsj.com/articles/a-war-of-meaningless-words-11592757588

Truth or consequences? “When I use a word,” says Lewis Carroll’s Humpty Dumpty, “it means just what I choose it to mean—neither more nor less.” In other words, anything he wants it to mean. Prescient. Today words are abused and truth has become so debased that no one believes anything anymore.

It started off Art Linkletter-like: Politicians say the darnedest things. You know—the definition of “is,” uranium yellowcake, if you like your doctor, the size of inauguration crowds. Facebook and Twitter now have truth squads trying to discern truths from fakes. Good luck with that. The Post-Truth Era not only has arrived; in three short months, we’ve descended into the depths of dishonesty dysfunction.

Even numbers. Now 2.2 million = 150,000? Imperial College London epidemiologist Neil Ferguson helped force much of the world into lockdowns with his forecast of 2.2 million U.S. deaths. He assumed 268 million of Americans, or 81%, would be infected. So far it’s 2.3 million. As Bob Uecker would say, “Juuust a bit outside.” Mr. Ferguson then put the hip in hypocritical, having his married girlfriend break the stay-at-home order he inspired.

The White House was also math-challenged. Its “15 Days to Slow the Spread” quickly became 30. Which is it? We flattened the curve, and a quarter of the economy. No matter, we’re now on day 90, quarantine crazy and hankering for haircuts.

The World Health Organization declared in March that you don’t need to wear masks, probably because of the world-wide shortage. California now requires them, even outside. Again, which is it? Whacked in the head so many times with untruths, you stop believing anyone.

OK, those were emergency conditions, where anyone could make mistakes. Except, except—our leaders continue to be the worst offenders. “Follow the science!” Los Angeles Mayor Eric Garcetti declared residents could only use the “wet sand” part of the beach to go swim. New York Mayor Bill de Blasio said dry sandy beaches are fine but swimmers would be “taken right out the water.” Not very scientific.

WSJ: A Boy and His Flag (Day)

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https://www.wsj.com/articles/a-boy-and-his-flag-11592153447

June 14 is Flag Day. It happens to be my favorite holiday, perhaps tied with food-and-football-fest Thanksgiving. I’m not rah-rah patriotic—I have as much disdain for those who hide behind the flag as those who trash it—but Flag Day is personal for me. I grew up in central New Jersey, in the township of Bridgewater, some 10 miles up the Raritan River from New Brunswick. I’d leave for school each morning and before turning right to the bus stop, I’d look left, up the hill into a clearing with a flagpole, where a flag flew day and night.

In 1777, Gen. William Howe and 18,000 British troops were occupying New Brunswick. George Washington had 8,000 troops encamped in the Watchung Mountains, uphill from my house, with a commanding view to keep an eye on Howe and stop his march to Philadelphia, the nation’s de facto capital. On June 14, 1777, the Continental Congress adopted the 13-star flag. The Middlebrook encampment, toward which I looked reflexively every morning, was where the Betsy Ross flag flew for the first time.

A sign of the times, the Middlebrook encampment of my youth was in disrepair: a couple of old cannons, lots of wrappers and broken beer bottles, and the flagpole. Until recent decades, it was one of only a few places allowed to fly the flag 24 hours a day.

Today you can have the Stars and Stripes on your underwear and sneakers—though Betsy Ross got bounced off Nike’s Air Max 1 USAs. Canceled. Scrubbed. Too bad. I always think of the flag as a banner of opportunity, for everyone. “America is the land of opportunity,” said Elon Musk, the immigrant founder of Tesla and SpaceX, before last month’s successful space launch. “There is no other country where I could have done this.” Heck, freedom-loving John Hancock was an entrepreneur (OK, smuggler) who hated paying taxes. To me, the flag means only one thing: If you respect freedom enough, anything is possible.

We lived on the right side of the railroad tracks but on the down slope of our town’s economic divide. Generally, doctors, lawyers and businessmen lived uphill, while blue-collar and service workers lived below the foothills, like us. Inequality? Nobody cared. My dad was an engineer, which was less valued back then, and my mom worked with learning-disabled children. But they made enough to send their kids to college.

WSJ: Party Like It’s 1983 - The Reagan Playbook

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https://www.wsj.com/articles/party-like-its-1983-11591560625

“In the grip of the world-wide recession, we must all stick to anti-inflationary, high-productivity policies that adapt new technology, retrain workers, and increase efficiency.” Who said that? Donald Trump? Angela Merkel? Emmanuel Macron? Nope, that was Ronald Reagan in May 1983, speaking on the eve of the Williamsburg Economic Summit of Industrialized Nations.

Now, the off-again, on-again Group of Seven meeting scheduled for June is off until September at the earliest. Too bad. It’s needed more than ever. I spoke with Larry Kudlow, director of the White House National Economic Council and the so-called Sherpa of the meeting’s agenda, and asked what his pitch will be. “It’s the Reagan playbook,” he says. “In some sense, it’s very easy. The same principles apply. You want to reduce tax rates, generate incentives, reignite the animal spirits, and deregulate to remove business obstacles.”

Without Reagan’s principles, the capital investment and innovation since 1983 might still have happened, just more slowly. We’d be getting that original iPhone right about now, delaying improvements in everyone’s living standards. Wait, no Uber?

More than 42 million Americans have filed jobless claims since mid-March, and around 21 million are now unemployed. We need jobs, badly. After the first wave of rehiring, Mr. Kudlow insists, “you must reignite growth—you must. Your car battery is dead because you haven’t used it in three months, so you have to pull out the jumper cables and reignite the battery, which is what we are trying to do with the economy.”

In 1983, the U.S. economy had just gone through the ravages of Paul Volcker’s inflation-slaying recessions. Now it’s zero inflation and lockdowns. Do we need another giant stimulus package? Mr. Kudlow thinks not: “The first tranche was rescue, cash, liquidity, survival. Now we’re transitioning through the reopening, and the third leg has got to be growth incentives. That’s been my mantra internally, and we’re going to press that at the G-7.” He prefers a payroll-tax holiday and capital-gains exclusions for investments through the end of the year.

WSJ: Give Online Learning an Upgrade

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https://www.wsj.com/articles/give-online-learning-an-upgrade-11590954189

School’s out for summer. School’s out forever? A lot of parents are figuring out that remote learning, forced on us by school closings, is mostly the same old, same old—teachers droning on to students, except online. Not much has changed in education since the Little Rascals’ Miss Crabtree’s one-room class in 1930.

And it’s broken. Even before Covid, more than half of incoming students at community colleges required remedial math or English courses. As former Florida Gov. Jeb Bush told me, “Something’s wrong when you have rising high-school graduation rates and rising remediations.” Seriously wrong. Billions are wasted reteaching high school.

All our Zooming may be a spark. Mr. Bush insists, “We need to flip the system on its head so that time is the variable and learning is the constant—which requires a mastery-based system.” OK, a lot to unpack there. For about a decade, many schools have used “flipped” classrooms. A teacher records lectures that students watch at home, and the next day in class students discuss the lectures and do what would’ve been their “homework.” But that model only goes so far. Lectures are still dull. They don’t engage and motivate kids. Even with small class sizes, many students fall behind.

Forget flip; the flopped classroom is coming. Upend teachers, kind of, by creating a robust online learning system, filled with building blocks and snippets that students need to complete before moving on. Not lectures from your ninth-grade history teacher, Mr. Mailitin, but learning from the best teacher in your district or state or country. Many would nominate Sal Khan and his Khan Academy.

This isn’t science fiction, though that’s the inspiration. Neal Stephenson laid out the concept in his 1995 novel ,“The Diamond Age: Or, a Young Lady’s Illustrated Primer.” Before Netscape went public and well before iPads, Mr. Stephenson envisioned learning via adaptive, customized instruction on thin portable devices. Much of the technology now exists and works. Even a voice interface is plausible. Learning can be made fun—see videogame deep dives—even delivered over phones.

When flopped, teachers (probably fewer of them) become coaches, tutors, encouragers, motivators.

WSJ: Finally, the Low Prices We Deserve

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https://www.wsj.com/articles/finally-the-low-prices-we-deserve-11589740923

Stanford Health Care cut employees’ pay 20% in late April. JetBlue Airways halved top executive compensation. A huge glut of oil, wine, airline seats and even lobsters means prices are plummeting. And whoa, Apple’s new iPhone SE is $399, quite a change from its $999 models. It’s starting: April’s consumer-price index was down 0.8%, but get ready for steady price declines and a long trip down that escalator. Like a released balloon going pffflllttt in slo-mo. Let’s call it the Great Unflation.

Yes, a made-up word—technically it’s deflation. As Milton Friedman said, “inflation is always and everywhere a monetary phenomenon” that is “produced only by a more rapid increase in the quantity of money than in output.” The opposite trend, deflation, is typically caused by a more rapid decrease in money. Current price declines aren’t primarily a monetary phenomenon, as many price increases in the past 35 years weren’t counted in the inflation stats. They were hiding in plain sight.

Have they hit a breaking point? Here’s what I mean: The 2015 Golden State Warriors, mid-playoff run, raised beer prices to $13 from $11 and—I’m convinced—shrank the cup size. Ticket prices tripled over the next few years. That didn’t show up in the CPI, but it’s real nonetheless.

You’ve seen it: $3,000 for a one-bedroom apartment in San Francisco, $4,000 in New York—more than twice what you’d pay in Austin, Texas. It’s $300 for five minutes with a doctor and $75,000 to spend a year at Columbia or the University of Chicago. Average ticket prices for Lady Gaga’s concerts last year were $420. Average.

First-class stamps are 55 cents even though almost everything in your mailbox could be delivered online for free. A caramel macchiato costs $4.80. It’s $8.99 for Cold Pressed Watermelon Water at Whole Foods. We have $100 cable TV bills—same for a middling red Bordeaux or a ticket to Disneyland. Curry 7 sneakers are $140. And for a while I’ve been convinced that the word “organic” means the same thing for twice the price. Time for the pffflllttt.

We’ve been blessed for 35 years with an economy driven by relentless cost reductions in electronics.

WSJ: Graduation Is a Time for Unlearning

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https://www.wsj.com/articles/graduation-is-a-time-for-unlearning-11589139567

Dear Grads, Lockdown Class of 2020: Switch off “Animal Crossing,” wrap up that episode of “The Masked Singer,” pause practicing your TikTok “Renegade” dance, finish ironically chugging your Corona beer, and listen up—Karens, Beckys and Chads, too.

Yes, someone owes you an apology. You’re heading into the worst job market, competing with 33 million recently laid-off plus furloughed employees. I told you to take that antifungals course. To paraphrase the philosopher Bluto, 3¾ years of college down the drain. All this from a coronavirus 22-year-olds have a statistically insignificant chance of dying from. You will forever be Generation C. All of Gen X through Z’s FOMO—fear of missing out—has morphed into FOGO, fear of going out.

You got cheated out of a graduation ceremony, but don’t despair: Facebook to the rescue. This Friday it’s hosting #Graduation2020. Woo-hoo! And professors be damned—“words of wisdom” will come from Oprah, Awkwafina, Jennifer Garner, Lil Nas X and Simone Biles, with special musical guest Miley Cyrus. But, get this, only two of those six graduated from college and they are all incredibly successful. I think this is Harvard dropout Mark Zuckerberg rubbing it in.

They may not be sages, but neither are the people you trusted who got you to blow through your parents’ savings. Especially since you finished classes via videoconference—remember, you can’t Zoom a zoomer because a zoomer can’t be zoomed (ask your dad). The only good news is that you won’t have bad dreams like the rest of us about missing class or that last test. You likely passed automatically.

You were told to go to college, study hard and you’ll get a good job. But that model has been broken for a while. Instead you got cancel culture, pronoun police, plus diversity and inclusion—of everything but sound ideas, which need to be free to mingle and test-drive. You’ve been run down, you’ve been lied to. You ended up with someone else’s agenda.

“You’re going to find that many of the truths we cling to depend greatly on our own point of view. . . . The truth is often what we make of it; you heard what you wanted to hear, believed what you wanted to believe.” Sound familiar? For 20 points, who said it? Socrates? Kant? Hume? Rousseau?

WSJ: How Big Data Is Attacking the Coronavirus

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https://www.wsj.com/articles/how-big-data-is-attacking-the-coronavirus-11588541839

The value of a network rises in proportion to the square of the number of users, observed Ethernet inventor Robert Metcalfe. Metcalfe’s Law— precisely expressed by the formula n(n-1)/2—is what enabled Facebook, Twitter, WhatsApp and all social networks. The more the merrier. But it’s exactly the opposite for pandemics. You’re safest on your own or in small groups. The harm goes up in proportion to the square of the number of your contacts.

Or rather it does until it doesn’t, according to 19th-century British epidemiologist William Farr. He didn’t guess. In 1840 he studied data from the 1837-39 smallpox epidemic and noted that the number of deaths followed a normal bell-curve distribution. Known as Farr’s Law, it’s his curves that we’ve flattened. As the journalist Michael Fumento said of Covid-19, “Communicable diseases nab the ‘low-hanging fruit’ first (in this case the elderly with comorbid conditions), but then find subsequent fruit harder and harder to reach.” That echoes Farr’s observation that pandemics burn out as fast as they start. Yet that tendency, and the data that back it, has barely been mentioned during the Covid crisis.

Farr obviously didn’t plot his data on a MacBook. The first useful, programmable and electronic digital computer, Colossus, was created by Alan Turing and friends a century later in England to decrypt the Nazis’ Enigma and Lorenz code-machine communications. After the war the British were so nervous that Colossus would end up in the hands of Soviet spies that they destroyed all plans and copies. A colossal mistake.

In the U.S., by contrast, the Eniac computer, designed to help create artillery tables, wasn’t turned on until November 1945, completely missing the war. Rather than destroy it or keep it secret, on Feb. 14, 1946, the War Department miraculously put out a press release with details and invited interested parties to meetings to share ideas. Yes, share! That simple press release is why technology is dominated by U.S. firms and Silicon Valley emerged in displaced California orchards and not in, say, Shropshire, England. Call it the Eniac law: Open is better than closed. Dissemination is better than secrets. Turns out, to invoke Metcalfe’s law, ideas network too.

Fast-forward to the Covid era, with apocalyptic pandemic models driving policy. A few short weeks after the World Health Organization declared a global pandemic, Silicon Valley veteran Tom Siebel’s artificial intelligence company C3.ai went live with an open cloud-based repository. Known as a data lake, it contains location and confirmed case data from the World Health Organization and Johns Hopkins, genome sequences of Covid-19 samples from the National Center for Biotechnology Information Virus Database, global patient data such as symptoms and lab results, and the Milken Institute’s database of treatment and vaccine trackers. It’s available to everyone—nonexclusive, royalty-free. The Farr and Eniac laws in action.

WSJ: What Shape Will the Rebound Take?

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https://www.wsj.com/articles/what-shape-will-the-rebound-take-11587930592

For all us former at-home meteorologists turned self-appointed epidemiologists, predicting everything from barely a flu to an epidemic apocalypse of infection rates and ventilator shortages, I’ve got some good news. As the corona clampdown is (please) coming to an end, there’s a new parlor game sweeping the nation. Now, as newly minted armchair economists, we all get to predict the shape and span of the economic recovery. You’re in luck: I’ve got your buzzword-compliant cheat sheet and a few tips, sure to impress your isolation circle and both flatter and flatten their curves.

OK, we’ve clearly fallen off a cliff. There have been 26 million new unemployment claims in the past five weeks. The jobs chart looks like someone dropped a fishing line in the water with a dead whale attached. Same for oil prices. This means the drop in second-quarter gross domestic product will be . . . well, nobody knows exactly. Estimates are still in flux. Sixty economists surveyed by The Wall Street Journal predicted an annualized decline of 25% on average, which works out to about 7% for the quarter alone.

But a fishing line down should mean a Polaris missile right back up, right? President Trump has even said the post-virus economy will take off “like a rocket ship.” That’s the essence of a V-shaped recovery. If we’d had a two-week house arrest—three, at max—maybe a V it would be. The unemployed return to work, stores open, new cars crank out and voilà, just like old times. Unfortunately, that ship has sailed. Sad, because a short lockdown could have been enough to scare the corona out of us, instilling enough fear that we self-enforce social distancing, wear masks, distrust strangers. Mission accomplished weeks ago.

Now there’s no going back. With airplanes idle, hotels empty, theaters going bust, stores like Neiman Marcus threatening chapter 11 and oil going subzero last week, all signs suggest serious damage to the economy.

So many economists now think we’re in for a U-shaped recovery. It’s the next one down the list, though not a bad bet. But there are lots of different types of U shapes. The letter U. Then there’s the Miami Hurricanes’ “The U” hand signal with a little more time in the basement. And for true pessimists, there’s the bathtub with a long time underwater before emerging. Short sellers like to talk about L-shaped recoveries, meaning things will never come back—but ignore them. Still, any of these U’s are possible.

But economies often don’t recover symmetrically.

WSJ: Upgrade Our 8-Track Government

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https://www.wsj.com/articles/upgrade-our-8-track-government-11587317309

I’ll admit to using this line all the time: “The Howard Stern Show” asked Ringo Starr, “What did you do with the money?” “What money?” “The money your mother gave you for singing lessons.”

Earlier this month, Johns Hopkins surgeon Marty Makary told Tucker Carlson about a much-needed Covid-19 antibody test developed in January that was under review by the Food and Drug Administration. Dr. Makary noted, “And we lost precious time when one of the original scientists submitted an application and was told that he had to submit it also by paper mail with a CD-ROM with the files burned on it.” CD-ROM? They might as well have asked for applications on a deck of IBM punch cards with audio on 8-track tapes. The FDA budget is around $5.8 billion. What did you do with the money?

Last week, New Jersey put out a call for Cobol programmers to update its unemployment-benefits software, which runs on mainframes installed 40 years ago. Cobol was invented in 1959. New Jersey has a $39 billion budget. What did you do with the money?

I grew up in New Jersey (Exit 14), but this ineptitude is everywhere. A 2018 study revealed that only 42% of all state and local government computer systems were implemented after Oct. 25, 2001. The rest are “old or broken,” including two-thirds of those used for child support and half of those used for unemployment or vehicle registration.

The feds, who spend $88 billion a year on information technology, are worse and notorious for ancient systems. The Pentagon’s control of nuclear missiles and bombers until very recently ran on 8-inch floppy disks from the 1970s. Some of the weather-tracking systems of the National Oceanic and Atmospheric Administration and the National Weather Service were programmed in Fortran, as far back as the 1950s. Or the National Institutes of Health, which stopped buying fax machines . . . in 2019. And—yikes—remember the 2018 false alarm? “Ballistic Missile Threat Inbound to Hawaii. Seek Immediate Shelter. This Is Not a Drill.” And don’t forget how HealthCare.gov imploded in 2013.

According to the Government Accountability Office, as of May 2016 two different Internal Revenue Service computer systems used for tax data and refunds were written in “low level” assembly language 56 years prior.

WSJ: Coronavirus Shatters Complacency

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https://www.wsj.com/articles/coronavirus-shatters-complacency-11586717230

With 30 minutes’ notice, I got invited to a dinner with the writer Tom Wolfe in dot-com era Palo Alto, Calif. Oddly, I arrived first and was led to a corner table for four, where I grabbed the best seat, overlooking the restaurant. Wolfe arrived late, dressed in white, naturally, and sat opposite me—his back to the restaurant. He asked questions about Silicon Valley and then told stories of trying out for the New York Giants as a pitcher and getting cut because he only had a sinker and no fastball. Great metaphor, actually. Eventually other diners figured out who was in the house, and I watched with delight as the chirping in the room grew deafening.

I recalled this recently while rereading his December 1987 American Spectator article, “The Great Relearning.” In 1968, San Francisco’s Haight-Ashbury Free Clinic was observing all sorts of long-gone diseases. That’s because hippies had become prone to “sweep aside all codes and restraints from the past and start out from zero,” and thus were “relearning the laws of hygiene by getting the mange, the grunge, the itch, the twitch, the thrush, the scroff, the rot.” There was a long postwar economic expansion, and it was almost as if everything useful had already been invented. Heck we were exploring space and going to the moon. It meant an entire generation could spend their parents’ money, drop out and rewrite the rules.

Sound familiar? The long boom that ran from the 1980s until last month, with a few temporary interruptions, created chronic complacency. Everything was so easy. No one really knew where stuff came from anymore. The internet just worked, without even a dial tone. Click and a book showed up at your house. Click again and a car picked you up. Again and someone rented you a spare bedroom. Too easy. Medicine just showed up at pharmacies. Milk and cookies overflowed store shelves. Some dreamed of utopia.

Soon modernity was swept aside to “start out from zero,” as many Americans old and mostly young embraced socialism and demanded big government and the end of capitalism. People got their political views from comedians and Teen Vogue. Just one short month ago, 1,548,025 Californians actually voted for avowed socialist Bernie Sanders. Amazing. Like “Night of the Living Dead,” antimodernity took over parts of the body politic. How stupid—a mental grunge, mental scroff and mental rot.

We were a rich culture obsessed with a climate “crisis” based on centurylong models that are as pie-in-the-sky as current doomsday pandemic models. Activists insisted that housing, health care and college were human rights. A cancel culture viewed the world, as Jeffrey Tucker of the American Institute for Economic Research writes, as “marred by appropriation, microaggression, identitarian denialism, and structural racism/sexism/imperialism.” Take your pick. Yes, awareness is important for those slandered, held back, disadvantaged. But should “social justice” decompose America’s entire $22 trillion economy? No thanks.

When times were good, this swept-away thinking was given free rein, and then it ran wild.

WSJ: Ode to American Toilet Paper

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https://www.wsj.com/articles/ode-to-american-toilet-paper-11586112316

A few weeks into the lockdown, let’s assess where we are. First, we’re all germophobes now. Handshakes are so yesterday. We’re caught up on “Tiger King” episodes on Netflix. We appreciate Amazon same-day delivery now that most orders take a week. We miss sitting in restaurants and milking a table over meaningless conversations. Same for sports, which provided a great background noise to life. Grocery supply chains still seem to work. And given which shelves are bare at Costco and most supermarkets, we see clearly that Americans have a weird fascination with not running out of toilet paper.

This last one should come as no surprise. It’s part of what separates us from the, err, “unwashed” masses. Anyone who has traveled outside the U.S. knows exactly what I’m talking about. I was warned not to shake hands in India.

But why are Americans different? We obsess because, like French wine or Italian coffee, we have the best, so we flaunt it. Be thankful for the glories of two-ply—my kingdom for a 12-pack of 1,000-sheet rolls, still hard to come by. No surprise that in what was definitely not a slow news day on Wednesday, there was national coverage of an overturned 18-wheeler near Dallas because its load of thousands of rolls was burning.

Sure, toilet paper may be controlled by the patriarchy: the Scott brothers, Clarence and Edward, and ol’ Mr. Whipple, who insists that you “don’t squeeze the Charmin!” But once you go two-ply, you can never go back. No wonder Americans hoard.

The first commercial toilet paper was introduced in 1857 by a New Yorker named Joseph Gayetty. It was sold as Gayetty’s Medicated Paper—with aloe. It even had his named embossed on the flat sheets. Rolls were first patented in 1891. By 1935 Northern Tissue started advertising that its toilet paper was “splinter-free”—another reminder that you really didn’t want to be born before then. Two-ply was invented in England in 1942, around the same time as electronic computers.

But take a trip to parts of Europe or Asia or especially South America, and you’ll learn quickly that they’re stuck in the past.

WSJ: Innovate From Your Couch

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https://www.wsj.com/articles/innovate-from-your-couch-11585509674

By now you may have read about how Isaac Newton, while sheltering in place during the 1665 closure of the University of Cambridge for the bubonic plague, used his free time to discover gravity and invent calculus. And how during the closing of London theaters due to plague in 1606, William Shakespeare had nothing better to do and wrote “King Lear” and “Macbeth.” Those guys didn’t even have Wi-Fi. You do, plus extra time. Be productive.

Most of us work with our nose to the grindstone: developing drugs, selling homes, marketing gluten-free potato chips, restocking toilet-paper shelves, prescribing blood-pressure medicine, teaching calculus, manufacturing respirators—heck, even knocking out weekly columns. We rarely come up for air and ask if there is a better way of doing all this. Many jobs have long been ripe for disruption, and now they’re being upended in real time. Productivity—doing the right things the right way—is progress, is wealth creation, is what pays for government stimulus. Actually, economic growth is the sum of each of our productivity stories.

How to find it? Well, I’m a sucker for origin stories (except those involving apocryphal fruit, like Newton’s apple and Washington’s cherry tree). So much discovery and product creation happen away from work, when you have absolutely nothing better to do. The mind wanders, problems are puzzled over, and ideas start popping into your head, often in the strangest places and times.

Google famously instituted “20% time,” which let employees spend a fifth of their time on personal projects that benefited Google. But by 2015 only 10% of employees used their 20% time. Former Googler Marissa Mayer claimed it was more like 120% time. Too bad.

In 1993 I helped take public Avid Technology, which created early digital video-editing tools, initially on superfast but expensive workstations costing $25,000 to $50,000. After seeing demos, Apple had sent Avid a few prototypes of its new Macintosh model and helped the company port software to cheaper Macs. But it was too slow, which is why no one else was editing video on personal computers.

One of Avid’s co-founders, engineer Eric Peters, told me he was home sick for a few weeks around then.

WSJ: Cracker Jack Economics

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https://www.wsj.com/articles/cracker-jack-economics-11584906547

What is it with Cracker Jack politicians who want a prize in every package?

Last week when Joe Biden and Bernie Sanders clashed over stimulus in a primary debate, Mr. Biden celebrated the 2009 Recovery Act, saying it “had $900 billion in it and was the thing that kept us from going into a Great Depression.” If you believe that, I’ve got a bridge to nowhere to sell you. The Obama administration touted “shovel ready” projects—they were shoveling something, all right. Then again, remember President George W. Bush’s 2008 $152 billion stimulus in the form of tax-rebate checks? The “booster shot” for the economy was a huge dud. Sadly, here we go again—a stimulus for all of us.

What actually saved the economy in 2009 was one word: backstop. Finance froze because toxic mortgage-backed securities littered the system and, as with mad-cow disease, no one knew which ones were bad. The Federal Reserve provided a backstop to the commercial-paper market, then money-market funds and eventually banks, by buying up many mortgages to relieve default risk. Once bank stress tests took Armageddon off the table, lending restarted and the crisis ended. Spending on roads and bailing out General Motors were mere pork-barrel waste.

The economy is now grinding to a halt. Forty million Californians must “shelter in place” until further notice. New Yorkers too. Everywhere bars are (gasp!) closed. Planes are empty. Cruise ships are mothballed. Marriott and other hotel chains are furloughing employees.

Politicians need to do something, right? Yes, but it should be short-term and temporary. President Trump has a “big bold plan.” White House adviser Peter Navarro wants an $800 billion payroll-tax cut. Senate Republicans want to send $1,200 checks to a huge share of Americans. Treasury Secretary Steven Mnuchin is negotiating with congressional leaders a bailout of as much as $2 trillion. Rep. Ro Khanna, Mr. Sanders’s campaign co-chairman, ups the ante with checks of up to $6,000 for those making less than $65,000. Candy-coated popcorn, peanuts and a prize.

Mr. Mnuchin has smartly authorized the Fed, via Section 13(3) of the Federal Reserve Act, to lend directly to solvent companies, creating a trillion-dollar backstop for the commercial-paper market and money-market funds. A “lender of last resort” is needed. Airlines need capital, so lend to them at a Bagehotian penalty rate, against future ticket sales or even planes as collateral. The penalty rate is to make sure those that don’t need it don’t clog the system. The same program could shore up hotels and other still-solvent large businesses. And with support from the Fed, banks can do the same for small businesses. If the economy has a three-month hole because of quarantines and lockdowns, the Fed can provide a bridge loan across that void.

WSJ: Crisis Means a New Business Era

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https://www.wsj.com/articles/crisis-means-a-new-business-era-11584313927

The junk-bond-financed $6.75 billion buyout of United Airlines collapsed on Friday, Oct. 13, 1989. The stock market immediately dropped 191 points or almost 7%, equivalent to a 1,500-point drop today. Scary.

Rod Berens, head of research at Morgan Stanley at the time, called a departmentwide meeting after the market closed. I dreaded going. I had a list of tech stocks I was recommending that got killed that day. When I showed up, I noticed several cases of champagne—a weird way to celebrate the loss of wealth. But why not? I grabbed a glass; it was Friday.

And then my boss headed toward me. Uh oh, I thought, he’s going to fire me. Instead, he smiled, gave me a high-five and said, “Congratulations, now it’s your turn,” and clinked my glass. Talk about confused—one of the worst days in my professional life and I get congratulated?

I didn’t see it at the time, but he was dead right. Eras change, sometimes overnight. Over the next decade, the stock market shifted from junk-bond-fueled buyouts, a dominant Japan and the Cold War to highly valued emerging technology companies, ending with the dot-com blowout.

The current market turmoil tells me a new era is breaking, so question everything. Will cable, energy, mobile and social media ever come back? And if not, what’s next?

Well, the knee-jerk reactions will come first.

WSJ: How to Read the Myopic Market

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https://www.wsj.com/articles/how-to-read-the-myopic-market-11583685581

Happy 20th anniversary Tuesday to the Nasdaq index peak of 5049 back in 2000, zenith of the dot-com era. After observing our current beer-head frothy market for months, I was an idiot for thinking I could hold off until today to write a warning column. The market always trades to maximize pain. So, ouch.

Time waits for no one. One thing I’ve learned investing is that for every stock there’s this invisible arrow pointing to some moment, some time in the future, that markets focus on to evaluate it. That time horizon isn’t published anywhere; it’s something you feel, an equity duration. Typically, it’s 12 to 18 months.

Euphoria drives that arrow out years. Beyond Meat was selling at 20 times 2020 revenue, Apple stock boomed even with flat-ish iPhone sales, and Tesla stock did Icarus-like figure eights close to the sun. But Nasdaq and the entire market have done so many daily ascents and drops and barrel rolls since their peak Feb. 19—it’s now a coronavirus roller-coaster market. Why? Because uncertainty can collapse time horizons to months or even tomorrow.

Remember, a stock’s value is the sum of all future profits discounted back to today. It’s dependent on profits, growth and risk. Investors estimate future profits and growth rates, but risk? Again, you can’t look that up anywhere—it’s just a feeling based on interest rates, competition, world events and more. Beyond Meat seemed to be priced for five years out. Risk is in the eye of the beholder. So investors use a shorthand: A price-to-earnings multiple that provides some hint to how far out the market is looking. In May 1999, Yahoo’s P/E multiple hit 1,062!

Twenty years ago, we had this new internet thing, a loose Federal Reserve, AOL juicing startups in exchange for IPO shares, and momentum investors, or momos. Like ants to a lollipop, momos crawled into dot-com stocks, pouring in price-insensitive money that attracted even more momos. George Soros’s hedge fund might have been the last one in. After the Federal Reserve flooded the world with dollars to mitigate the nonexistent Y2K threat, it pulled back in early 2000 and markets reversed. Momos became nonos. After 9/11, when time horizons collapsed from years to months, Amazon’s stock had fallen 94%, to $6.

Today’s market madness features fewer IPOs, but the loose Fed and momos are present and accounted for.

WSJ: Give Philanthropy the Market Test

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https://www.wsj.com/articles/give-philanthropy-the-market-test-11583100757

I’m always mystified by philanthropic foundations and how fruitlessly they disperse their capitalism-provided funds. Bloomberg Philanthropies spends a chunk of its $8 billion on “Sustainable Cities.” The new $10 billion Bezos Earth Fund is backing climate activists. The $12 billion Ford Foundation insists, “To address the climate crisis, we must address inequality.”

Huh? Way more than philanthropy, free-market capitalism gets people out of poverty, raises living standards and cures the world’s ills. Of the four things you can do with your money—spend it, pay taxes, give it away or invest it—investing is the only one that increases productivity, the scaffolding of capitalism and societal wealth.

So my eyebrows rose when I was offered a chance to meet Raj Shah, president of the $4 billion Rockefeller Foundation. Maybe I’d be able to gather some squishy grant-making examples to make fun of. Boy was I wrong.

Perhaps the Rockefeller difference traces in part to the foundation’s founder. John D. Rockefeller was an interesting guy, much maligned despite bringing light and heat to the masses (and saving whales). On top of his heroic business efforts, he understood where philanthropy could be useful.

A favorite book of mine, Ron Chernow’s 1998 “Titan,” describes how Rockefeller made his money, then gave it away. He looked for big projects only he could fund, such as eradicating hookworm—a parasite that struck people who walked barefoot, predominantly Southern blacks. Rockefeller funded tests for thousands of rural citizens and provided shoes. It worked. One branch of the Bill and Melinda Gates Foundation uses a similar philosophy to fight malaria and HIV.

Mr. Shah told me about the Rockefeller Foundation’s recent deal to bring reliable power to millions of people in India.

WSJ: Don’t Buy Into Big-Tech Hysteria

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https://www.wsj.com/articles/dont-buy-into-big-tech-hysteria-11582484198

Is Big Tech “downgrading humanity”? So says former Googler and podcaster Tristan (rhymes with “twist-on”) Harris, director of the weirdly named Center for Humane Technology. Mr. Harris and many of his fellow tech skeptics describe humans as little different from pets, believing everyone who uses Facebook or an iPhone is a manipulatable idiot. He couldn’t be more wrong.

Mr. Harris preaches about an “attention crisis.” OK, you have my attention. Testifying before the Senate last year, he said tech companies are in a “race to the bottom of the brain stem.” He also claimed humans in the 21st century still have “Paleolithic emotions.” Basically, “we’re chimpanzees with nukes.” Wait, did he just call you a chimp?

Elsewhere he has claimed that social networks are delivering “outrage that works on the piano key of your nervous system.” The man can certainly turn a phrase. He explains that “technology is getting better and better at hacking human weaknesses.” And you’d better put down that glass, because “we’re drinking from the Flint water supply of information.”

Mr. Harris’s most fevered claim is that social media has taken over politics. “We’re not really in control of world history anymore,” he says. “The technology companies that are shaping our information sense-making environment are in control of every major electoral outcome, and whether people believe conspiracy theories.” And there it is. It isn’t Hillary Clinton’s fault she lost in 2016. It was maybe the Russians and certainly Big Bad Tech. Mr. Harris insists “one side is currently winning by there not being regulation.” You can probably guess which one he means.

Mr. Harris believes “we’ve been manipulated into this multiyear-long hypnotic trance,” and that “we need someone to snap their fingers and wake all of us up out of this.” A savior, a messiah. Might that someone be Mr. Harris?

Alarmism can be a lucrative business.

WSJ: President Donald J. MacGuffin

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https://www.wsj.com/articles/president-donald-j-macguffin-11581278117

Is he a disease or a cure? Like him or hate him, there’s tons of spilled ink trying to assess President Trump’s governing style. To me, the key to understanding Trumpism is remembering why he was elected.

What do I mean? Voters chose Donald Trump as an antidote to the growing inflammation caused by the (OK, deep breath . . .) prosperity-crushing, speech-inhibiting, nanny state-building, carbon-obsessing, patriarchy-bashing, implicit bias-accusing, tokey-wokey, globalist, swamp-creature governing class—all perfectly embodied by the Democrats’ 2016 nominee. On taking office, Mr. Trump proceeded to hire smart people and create a massive diversion (tweets, border walls, tariffs) as a smokescreen to let them implement an agenda of tax cuts, deregulation and originalist judges.

Those reforms have left the market free to do its magic and got the economy grooving like it’s 1999. The daily Trump hurricane—like the commotion over the Chiefs from Kansas—makes the media focus on the all-powerful wizard while ignoring the policy makers behind the curtain.

Alfred Hitchcock called this kind of distraction a “MacGuffin”—something that moves the plot along and provides motivation for the characters, but is itself unimportant, insignificant or irrelevant. It can be a kind of sleight of hand, a distraction, and Mr. Trump uses his own public persona as a MacGuffin in precisely that way. The mobs decked in “Resist” jewelry fall for it every time.

For example, Sen. Bernie Sanders used his remarks during the Senate impeachment trial to point out that the media had documented some 16,200 alleged lies by President Trump. The MacGuffin worked! Mr. Sanders and his peers are focused on the president’s words, while most voters see the real plot unfolding in America—millions of jobs and rising wages.

The president’s success comes from his ability to shrug off critics. My son went to college in the early days of the social justice power grab. He recalls heated discussions in which someone would interrupt him to say, “Sorry, but you don’t get a say—you have white privilege.” My son would shoot right back: “Yeah, I don’t believe in that,” and resume his argument.

WSJ: How I Almost Bought the Knicks

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https://www.wsj.com/articles/how-i-almost-bought-the-knicks-11580673783

Kobe Bryant dropped 61 points on the New York Knicks on Feb. 2, 2009, at Madison Square Garden. The Knicks have been painfully awful for years, appearing in the playoffs only five times since 2000. Here’s a secret: I almost bought the Knicks. Well, “almost” is a stretch.

Sitting bored at my desk at Morgan Stanley in 1994, I got a call from a college friend, John Demitroff, then a G.X. Clarke & Co. bond salesman. “You work for an investment-banking company,” he said. “Could you help Dave DeBusschere and me buy the Knicks?” I think I spit out my coffee.

It turned out that seven years earlier John had overheard that the EF Hutton brokerage firm was raising a $350 million fund to buy National Basketball Association franchises. The next day he read an article about DeBusschere and left a message to pitch him on a business opportunity buying NBA teams. Now this made some sense: No. 22 DeBusschere was an NBA champion, hall of famer, eight-time All Star and even the commissioner of the American Basketball Association when it merged with the NBA in 1976. An old boss had told my friend, “When you see an opportunity, just ask. You never know.”

Sage advice. Amazingly, DeBusschere called back the next day and they met at a downtown New York diner. John explained that he had a buyer (EF Hutton) and needed sellers. DeBusschere knew everyone in the NBA—would he be interested? DeBusschere agreed and they even signed a short partnership deal. And then . . . nothing happened. EF Hutton kited checks and was sold to Shearson Lehman. The partnership unraveled.

Now jump ahead to ’94. The Knicks (along with the Rangers, Madison Square Garden and the MSG Network) were put up for sale by Viacom, which had taken control of its owner, Paramount. That’s when my friend called for help. I was an analyst following tech companies, not even an investment banker; we were just a couple of know-nothing 30-somethings. No matter—I was in.

The first thing I told John was to get “the book.”

WSJ: Phones That Can Read Your Mind

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https://www.wsj.com/articles/phones-that-can-read-your-mind-11580071868

When I first met Larry Page and Sergey Brin around 1999, Google’s accidental billionaire founders (they couldn’t even sell their technology to Yahoo for $1 million) gave a talk about the future of search. Mr. Page rambled for a while, then stopped, grinned and said, “what we really want to do is know what you want before you even think it.” The audience laughed nervously, but that’s been a driving force of technology ever since.

Ad men since “Mad Men” have tried to bend our minds into buying products they’re pitching for their clients. But will we ever get real personalized advertising—ad systems that interact with us closely, in a real-time two-way dialogue about our wants and desires—that it will be a step ahead of our thinking?

I posed this question to advertising giant Martin Sorrell. He built the ad agency WPP in the 1980s based on the “big TV idea,” and today we’re inundated 24/7 with Bud Knight, the Geico gecko and Flo from Progressive. It’s now easy to tune out. Yet with the rise of the “fearsome fivesome” online behemoths—Google, Facebook, Amazon, Alibaba and Tencent—Mr. Sorrell suggests we’ve entered the era of “personalization at scale.”

He defines personalized advertising as “content, not perfect and not tent-pole, tailored to your needs and delivered to you at the time you want and the format you respond to.” He’s even created a purely digital advertising company, S4 Capital, to apply the strategy. Facebook, for instance, figured out the average person spends 1.7 seconds looking at Newsfeed posts on mobile devices, so S4 helped its client L’Oréal create 2-second makeup ads.

S4 also helped Netflix promote its drug kingpin show, “Narcos,” by cutting it into a million different short segments. Surfers at WSJ.com might see ads likening the show to business. Those on a sports or fitness site would see ads with lots of ripped muscles.

It’s the feedback loop that makes it personal.

WSJ: Your DNA Could Catch a Criminal

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https://www.wsj.com/articles/your-dna-could-catch-a-criminal-11578863580

In December, Michigan police arrested Robert Brian Thomas as a suspect in two cases of sexual battery—committed in Florida in 1998. These were the latest of hundreds of cold cases investigated since the Federal Bureau of Investigation’s April 2018 arrest of Joseph James DeAngelo, the alleged Golden State Killer. There are still hundreds of thousands of untested rape kits nationwide, but now technology may make it almost impossible to get away with this crime. Privacy concerns are an obstacle in solving cold cases—but not an insurmountable one.

Here’s a quick recap of how crime DNA is processed. The first step is for law enforcement to check samples against the Codis database, the FBI’s Combined DNA Index System. Codis is limited in its use of only 20 DNA markers, and it has records only for convicts and some prior detainees. Only 14% of sexual-assault DNA is matched to a suspect through Codis.

Fortunately, Ancestry.com has the DNA of more than 15 million users, and 23andMe has 10 million. Neither shares data with law enforcement. But many users upload their results to third-party sites, like GEDmatch and FamilyTreeDNA, to find long-lost relatives. DNASolves is another database recently set up specifically to help solve crimes.

After GEDmatch co-founder Curtis Rogers opened access to law enforcement, investigators uploaded DNA from one of the Golden State Killer’s 50 rape and 13 murder crime scenes from 1974-86. They didn’t find a direct match but discovered enough potential close relatives to search the family tree and narrow down the suspects. They followed Mr. DeAngelo to a store and swiped his DNA off the door handle of his car.

David Mittelman, who runs DNASolves, explains the numbers. Using DNA sequencing, he can analyze a sample for $5,000, which covers DNA extraction, genealogy and manpower. “Hopefully costs will halve in the next three to five years,” he says.

Hundreds more cold cases have been investigated since the Golden State Killer arrest.

WSJ: Tech Will Rule These ’20s, Too

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https://www.wsj.com/articles/tech-will-rule-these-20s-too-11578262248

Does history rhyme? A century ago, the ’20s boomed, driven by consumer spending on homes, cars, radios and newfangled appliances like refrigerators, sewing machines and vacuum cleaners. Most Americans couldn’t afford the upfront cost of a lot of these goods, so manufacturers and retailers invented installment plans. Debt ruled as 75% of cars, furniture and washing machines were bought on credit.

The supply-side policies of Treasury Secretary Andrew Mellon, who pushed for tax cuts in 1921, 1924 and 1926, increased the capital available for new consumer businesses. The consumption boom also sparked a giant service industry: My grandfather ran Kessler’s Refrigeration Service in Brooklyn, N.Y. Lifestyle advertising was perfected on billboards and in tabloids, which, like today, led to complaints about ads’ ubiquity and influence.

And stocks were hot, hot, hot. Radio Corp. of America shares were worth $11 in 1924, $20 in January 1928 and $114 in 1929, with a peak price/earnings ratio of 72. Turns out equities could be bought on installment too—sometimes a margin loan with a measly 10% down payment.

Like the movie “Titanic,” you know how this ends. Speculation. Tariffs. And finally, the crash of Oct. 28-29, where the market dropped 13% on Black Monday and 12% on Black Tuesday, triggering widespread margin calls for debt repayment. That risk is why the Federal Reserve now caps stock margins at 50%. According to legend, it’s also why windows in New York skyscrapers don’t open. By 1932, RCA stock was worth $3.

So what’s next? My fundamental rule for finding growth trends is that you need to see viable technologies today, and then predict which ones will get cheaper and better over time. Microprocessors, storage, bandwidth—all still going strong after half a century.

The fundamental building block of the 2020s will be artificial intelligence, particularly machine learning. Better to ask what it won’t change this decade.