Andy Kessler

WSJ: Why Does Hollywood Hate Silicon Valley?

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https://www.wsj.com/articles/hollywood-hates-silicon-valley-theranos-uber-wework-neumann-kalaniick-television-holmes-11650817560

Has streaming peaked? Netflix stock dropped 37% last week after the company’s loss of subscribers, and CNN+ was dead on arrival. Are viewers finally revolting? Maybe it’s the shows and content. It’s hard to find a movie, series or newscast that doesn’t push a social or political agenda, from “Bridgerton” to “Squid Game” and “The Handmaid’s Tale.” Even formerly family friendly Disney is getting too preachy. Elon Musk calls this the “woke mind virus.”

The agenda list is too long, so I’ll focus on the current rash of shows about entrepreneurs: Showtime’s “Super Pumped” on Travis Kalanick and Uber; Apple TV’s “WeCrashed” on Adam and Rebekah Neumann and WeWork ; and Hulu’s “The Dropout” on Elizabeth Holmes and Theranos. Their debuts curiously coincided with the Netflix’s “Inventing Anna” about the con artist Anna Sorokin. Hollywood seems to equate entrepreneurs with scammers, almost as if filmmakers have a vendetta against success.

As I watched these entertaining series, I mostly laughed instead of cried, knowing this is how many people will think about entrepreneurs going forward. It’s a shame the entertainment industry is bent on destroying the reputation of Silicon Valley, which is keeping Hollywood alive.

Watching these series was fascinating but also a bit spooky, because I’ve known or met many characters in these shows. So it was fun to compare their real-life looks and personalities with the portrayals. Most weren’t even close. The opening line of each episode of “Inventing Anna” could apply to all the series: “This whole story is completely true. Except for all the parts that are totally made up.”

Here is the common thread: Silicon Valley entrepreneurs are misogynistic, adolescent, narcissistic tech bros running cults—even Ms. Holmes with her black turtlenecks and deepened voice. They consume only tequila, mysterious green juice or kombucha. Every company party has a bounce house. Bankers are idiots, and venture capitalists can be manipulated easily. Board members are rubber-stamping cretins. Every startup founder travels on private planes. (Note to venture capitalists: If a startup uses a company jet, then you’ve invested too much money and have lost control.) Finally, everyone’s motivation is the same: “We’re saving the world” or “making the world a better place,” a generational delusion. While there’s always a smidgen of truth to tropes, these are all clichés.

Anna Sorokin was a con woman.

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WSJ: Oprah, Pavlov and Gavin Newsom

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https://www.wsj.com/articles/oprah-pavlov-and-gavin-newsom-gas-tax-rebate-debit-cards-california-oil-reserves-gasoline-prices-electricity-11650205836

California is a mess and Gov. Gavin Newsom is sending treats to its citizens. It has the nation’s highest gasoline prices—over $6 a gallon for premium. The Western States Petroleum Association explains, “The first $1.27 a gallon we pay at the pump now is for taxes and regulatory programs.” Pretty easy to fix, but not for Mr. Newsom, who proposed, Oprah-like, sending Californians $400 gas-tax-rebate debit cards: You get a card. You get a card. Everybody gets a card!

The Legislature may vote on it this week. Of course, $400 is barely a month of fill-ups for many commuters. California, which has the fifth-largest oil reserves of any U.S. state, should have some of the cheapest gas in the country. Plus, Mr. Newsom’s gift cards aren’t really a gas-tax rebate. Electric-vehicle owners, who don’t buy gas, get a card too, even though they already get up to a third off their electricity bill via California’s Home Charging EV2-A electricity rate.

So if it isn’t a rebate, what is it? Simple: a bribe for Californians to forget who got them into this mess. And it’s a brazen step toward a universal basic income program, following the federal government’s blatant attempt to get citizens hooked on receiving money: $1,200 stimulus checks, $600-a-month unemployment supplements, $300-a-month child tax credits. Like Pavlov’s dog, Americans are asking “Did the mail come yet?” as they wait for government checks. Yes, money that people need to survive due to massive policy screw-ups by the same government giving them the money. Here’s a treat. Good dog.

Same with electricity. California has steep progressive pricing—the more you consume, the more you pay per kilowatt-hour, from a baseline 24 cents to 60 cents in peak hours. Yet the state still gets rolling summer blackouts because of renewable-energy mandates and cap-and-trade carbon taxes. California forces power plants, natural-gas providers, and other large greenhouse-gas-emitting industries to buy carbon-pollution permits. But Californians get some of that money back as—you guessed it—a rebate, another treat.

Instead of developing low- or zero-carbon energy such as nuclear or geothermal, the state forces utilities to buy carbon credits, runs them through the Sacramento money-shaving machine, and then trickles a few bucks back to consumers to make it look as if it’s doing something. Many Californians this month will get climate credits for electricity and natural gas worth $87 and another in October worth $39. Everyone gets a rebate, and the credits are per household while rates are usage-based, another distortion.

Water is another puddle of muddle.

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WSJ: Major League Baseball’s Respect Problem

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https://www.wsj.com/articles/major-league-baseballs-mlb-respect-strike-lockout-salaries-sports-money-players-canceled-games-cancellation-contract-dispute-11649613926

The Major League Baseball lockout delayed Opening Day until April 7 this year. I passed on attending. Long ago in grad school, I postponed graduating until August so my neighbor and I could do a driving baseball trip. The schedule was almost perfect: a game in St. Louis, the next night Kansas City, then Seattle, the Bay Area, Southern California and Dallas. Right as we were about to leave, the players went on strike. Aargh! Ultimately 713 games were canceled in 1981. I’ve never forgiven the players or their union.

I’m still a fan. Back in my New York days, I tried and failed to get tickets to opening day at Shea Stadium between the St. Louis Cardinals and the New York Mets. Fortunately, I scrounged up tickets for the next day. Rodney Dangerfield threw out the first pitch—marketed as “No Respect Opening Day.” Just my speed.

That’s how I feel about baseball: I love the game but have no respect for the money side of the business. As NBC producer Don Ohlmeyer told reporter Tony Kornheiser when asked about the problems in sports, “The answer to all your questions is: Money.”

The constant bickering over revenue sharing and minimum salaries and luxury taxes is tiresome. It’s not as if players are exploited workers sweating on an assembly line—the lowest-paid player got $570,500 last year. It’s now $700,000. Yes, I’m aware there’s no crying in baseball, but every strike and work stoppage ups salaries, and then prices spiral higher—tickets, beer, dirty-water dogs, Cracker Jack, media rights—to pay outrageous contracts such as newly minted Met Max Scherzer’s $130 million three-year deal.

Meanwhile, baseball is struggling to get fans out to the old ballgame. Forget the Covid years: Total attendance at regular-season games peaked in 2007 at almost 80 million, and in 2019 only 68.5 million went to games. Maybe that’s because average ticket prices in 2007 were $22.77 and are now up 50% to $34.21. The Yankees raised nosebleed ticket prices 40% between 2018 and 2020.

Because of this and media rights sales, Major League Baseball revenue nearly doubled, from $5.4 billion in 2007 to $10.4 billion in 2019. Good luck maintaining that. Eventually price hikes stop working.

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WSJ: Here Come the Price Controls

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https://www.wsj.com/articles/here-come-the-price-controls-oil-reserves-rent-consumers-joe-biden-inflation-drugs-11648998374

On the 2020 campaign trail, Joe Biden declared, “ Milton Friedman isn’t running the show anymore.” Wrong! In March 2020 the money supply was $16 trillion, it’s now $21.8 trillion. Lo and behold, inflation is running at 7.9%, supply chains are tight, and many store shelves are empty. Friedman’s adage “Inflation is always and everywhere a monetary phenomenon” has stood the test of time.

But what scares me most is the likely policy responses by the Biden administration that would pour salt into this self-inflicted wound. It feels as if price controls are coming. Don’t trust my Spidey senses? Joe Biden’s own words from March 16: “Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.” And in last month’s State of the Union address he said, “As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.”

And the worst offense: “Cut the cost of prescription drugs. We pay more for the same drug produced by the same company in America than any other country in the world. . . . let’s let Medicare negotiate the price of prescription drugs. They already set the price for VA drugs.” That sounds good on the surface, but don’t fall for it. As Tomas Philipson noted on these pages, companies would “face a tax as high as 95% on sales if they don’t concede to the government price.” These aren’t negotiations. They are price controls.

Prices set by producers are signals, and consumers whisper feedback billions of times a day by buying or not buying products. Mess with prices and the economy has no guide. The Soviets instituted price controls on everything from subsidized “red bread” to meat, often resulting in empty shelves. President Franklin D. Roosevelt’s National Recovery Agency fixed prices, prolonging the Depression, all in the name of “fair competition.” Watch for the resurrection of that phrase to rationalize price controls.

In 1971 President Richard Nixon announced, “I am today ordering a freeze on all prices and wages throughout the United States.” We got new government entities: a Pay Board and a Price Commission. Americans paid for this mistake for another decade. Farmers drowned chickens rather than send them to market. Store shelves emptied. Price controls contributed to long lines at gasoline stations in 1973 during the Arab oil embargo. It’s pretty simple: When you freeze prices too low, producers stop producing.

Price controls don’t work. Never have, never will.

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