Andy Kessler

WSJ: The Deadly ‘De-Growth’ Craze

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https://www.wsj.com/articles/growth-world-economic-forum-sustainability-poverty-investment-esg-climate-protectionist-trade-energy-11667077994

The modern world is constantly subjected to crackpot movements that eventually fail, but not before causing serious damage. Karl Marx was a crackpot. So was the John Birch Society in its mission to fight communism “behind every tree.” The latest is Modern Monetary Theory and unlimited dollar creation for government spending, which caused today’s runaway inflation.

In the 1970s, the Club of Rome insisted that for the world to be ecologically sound, we needed a “no-growth economy.” This was as dumb as the debunked Malthus theory that population growth would outstrip food. The disgraced Club of Rome thankfully went dormant. But it’s baaaack.

The new craze is “de-growth.” Proponents demand we “put well-being ahead of profit.” Normally, I’d say “Pfffft, ignore them,” but none other than the Davos dudes of the World Economic Forum are featuring arguments for de-growth. Weird because mostly growing global companies pay the WEF’s bills—tributes to the woke dons. The WEF’s website is filled with scholar-infested nonsense including a video asking, “What would a post-economic-growth world look like?”

It wouldn’t be pretty. Like Manta rays that must keep swimming or die (sharks too), societies that don’t grow eventually devolve into oppression, chaos, anarchy and then ruin. The Roman Empire. The Soviet Union. Venezuela. De-growth is living with less. Capitalism’s productivity is doing more with less. Big difference.

What would this mean for the U.S.? No growth means no investment for innovation. This leads to stagnation—freezing everything in place. Then comes command and control. Experts to allocate slices of a finite pie. Unions (see how they treat independent gig workers as meat to organize). True collectivism. Eventually “Lord of the Flies” chaos. The Fyre festival. Everyone for himself.

Growth is oxygen.

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WSJ: Make the Metaverse a Sandbox

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https://www.wsj.com/articles/metaverse-sandbox-innovators-tech-companies-meta-google-microsoft-tim-cook-apple-future-supernatural-ftc-facebook-11666548553

Apple CEO Tim Cook was asked recently about the dreaded green bubble—the one that appears when you send a message to someone without, gasp, an iPhone running the proprietary iMessage app. But it’s worse than that. His questioner added, “I can’t send my mom certain videos and she can’t send me certain videos and so . . .” Mr. Cook interrupted with a chuckle and said, “Buy your mom an iPhone.” Corporate hubris usually proceeds a downfall.

Interoperability can make or break technology, and much is still broken. Many Google apps don’t work well on an iPhone. Why? Apple wants you to use its apps, interoperability be damned. The iPad only recently added support for a mouse, but it’s not good enough for iPads to replace Mac computers and laptops. Why? To protect Apple’s $35 billion Mac business. Users suffer. Technology has a long history of ignoring interoperability. America Online ran its business like a walled garden. More hubris that didn’t end well. It even had two messaging services, AOL Instant Messenger and ICQ (I seek you), that couldn’t send messages to each other until 2003.

In 1990 a judge ruled that competitors infringed Lotus Development’s copyright on its 1-2-3 spreadsheet’s command structure and keystrokes. But it turns out that file formats can’t be copyrighted or patented, allowing Microsoft Excel to read and write Lotus 1-2-3 spreadsheets. This interoperability was a boon to users, though in the end not so good for Lotus, as the company didn’t innovate enough beyond spreadsheets. To protect its Windows operating system, Microsoft was slow to embrace internet protocols like TCP/IP and mobile standards such as Bluetooth and lost its edge in both.

Standards matter. Think of road widths, gasoline mixtures and lights that don’t blind opposing drivers. The 120/220 volt electricity divide was fixed via sensors that allow travelers to use their computer and phone chargers universally, although with different plugs. AA batteries were introduced in 1907, standardized in 1947, AAA in 1911 and 1969. Cellphone standards were another benefit to users and keep evolving—6G isn’t coming until 2030 or so.

Which brings me to the Metaverse, an awful moniker for the nascent three-dimensional online world where we will eventually work, learn and play. I’d prefer names like the Hive or the Vortex (franchising opportunities available). Whatever we call it, there are no real standards for avatars, clothing, motion, weapons, speech or architecture.

To figure this out, Facebook aka Meta announced the purchase of Within, maker of virtual-reality fitness app Supernatural. Almost immediately, the Federal Trade Commission fought the purchase.

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WSJ: Stocks Can Always Get Cheaper

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https://www.wsj.com/articles/stocks-can-always-get-cheaper-wall-street-investment-earnings-bargain-market-trends-losses-charges-recession-peloton-11665945285

Are stocks cheap yet? When I was a young Wall Street analyst visiting institutional investors in Boston, I sat in a money manager’s office noting his framed prints of horseback riders in red jackets on a fox hunt. He asked me what I thought about a particular tech stock. I walked him through my forecast for the company and said the stock was a buy. “Why?” he asked. I said, “Because the stock is cheap.”

Big mistake. He launched into a 10-minute tirade, screaming, “Who are you to know if a stock is cheap? Have you ever lived through a downturn?” He even told me my tie was too expensive before he threw me out of his office. Ah, the service business. But I never again said a stock was cheap and instead focused on fundamentals, emerging trends, expectations and market sentiment.

Cheap stocks can always get cheaper. Companies such as Peloton, Carvana and Robinhood are down 80% to 95% from their peaks. Buy the dip, right? Be careful—the biggest mistake is looking backward, not forward.

Later I worked as an investment banker until I found out you had to be nice to people. I discovered a graphics-software company with a $5 stock and $5 a share in cash. Intriguing. If they could turn around their business, it could be a bargain. I won’t ever say cheap! I kept an eye on it and visited a year later. Because of losses and restructuring charges, the company only had $4 a share in cash and, sure enough, the stock traded at $4. After another year, it had $3 a share in cash and the stock was worth $3. I stopped visiting. It eventually went out of business. No future, no upside.

Market bottoms form when everyone is negative. The International Monetary Fund says the world economy is headed for “stormy waters.” Ray Dalio, who founded the hedge fund Bridgewater Associates, thinks we’ll see five years of “negative or poor real returns.” JP Morgan CEO Jamie Dimon says stocks could fall another 20%. Is that negative enough? It’s a start, given that few said these words a year ago.

My sense is there is more ugly stuff coming.

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WSJ: Blame Lockdowns on Silicon Valley

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https://www.wsj.com/articles/blame-lockdowns-on-silicon-valley-technology-artificial-intelligence-safety-privacy-innovation-liberty-new-york-crispr-11665321090

Lockdowns were a huge policy mistake. I blame Silicon Valley. I know, I know, the real blame resides with ill-informed technocrats who instituted the draconian and non-Jeffersonian lockdowns: the Trump and Biden administrations, blue-state governors, the Centers for Disease Control and Prevention and the rest of the alphabet soup of head-nodding agencies. Yet policy makers implemented lockdowns only because they could—because Silicon Valley provided the tools to lock people in their homes without completely imploding the economy.

Think about it. You couldn’t force lockdowns without laptops, Zoom, Amazon deliveries, cloud computing, Slack, QR codes or Netflix. Without them, lockdowns would have lasted two, maybe three weeks tops before the utter destruction of the economy forced everyone back to the workplace. Instead, we took the Faucian bargain of technology-enabled yearlong lockdowns because it was doable. Silicon Valley’s tools became shackles.

Lockdowns came with huge costs: job losses, increased crime, stunted learning, delayed medical treatments, violent protests, government spending blowouts, supply-chain disruptions, inflation, mental-health issues—all avoidable. Like bad air days, I fear bad carbon days will soon invoke climate-emergency lockdowns to keep people from driving.

Technology giveth and technology taketh away. The latest example is the plan to install cameras on every New York City subway car to limit crime. Gov. Kathy Hochul said, “You think Big Brother is watching you on the subways? You’re absolutely right. That is our intent.” Privacy advocates, such as the New York Civil Liberties Union, are naturally up in arms. Its statement reads, “Living in a sweeping surveillance state shouldn’t be the price we pay to be safe.”

Smart cities are now possible. Surveillance cameras, congestion pricing, timed traffic lights, buses that actually show up on time, balanced electricity usage, it could be urban utopia. But I wonder when smart cities crash, will we turn them off and then back on again? China has already created smart cities and uses data as scoring inputs for its Social Credit System, which stifles freedom for its citizens. Tech giveth and taketh.

The National Traffic Safety Board last week recommended blood-alcohol monitoring for all new vehicles. Another invasion of privacy, although no word yet from the New York Civil Liberties Union.

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WSJ: Marxism at the Museum

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https://www.wsj.com/articles/marxism-at-the-museum-new-york-washington-capitalism-socialism-marx-smith-wealth-productivity-schwarzman-donors-11664712471

Polls show more than half of 18- to 24-year-olds in the U.S. have a negative view of capitalism. More than half have a positive view of socialism. I wonder where they got that.

I recently strolled through the New York Public Library’s “Treasures” exhibit, which would delight readers and writers alike: Charles Dickens’s writing desk, a manuscript delivered in a box from former newspaper columnist Mark Twain, draft cover art for Jack Kerouac’s novel “On the Road,” and an illustrated page from Tom Wolfe’s “The Bonfire of the Vanities” manuscript. Pretty cool stuff.

Ah look, a first edition of Adam Smith’s “The Wealth of Nations” from 1776—the free-market bible. I was in awe until I read the description: “Adam Smith believed, as did Karl Marx the following century, that national prosperity was best measured by a country’s labor power rather than by how much gold lay in its treasury.” I guess the description is technically correct, but Karl Marx? In the same breath as Adam Smith, who called free markets “the obvious and simple system of natural liberty”? Unlike Smith, Marx naively saw a static world without productivity, only labor exploitation. He completely missed that labor is more brain than brawn. Add exhibit curators to the list of socialist tub thumpers.

I wonder what Stephen Schwarzman, CEO of the rather capitalistic private-equity firm Blackstone and giver of $100 million to the New York Public Library, whose name is etched in stone outside, thinks about the Marxist agenda of the library’s curators.

Wouldn’t you know it, next to “The Wealth of Nations” was none other than manuscript notes for “Das Kapital” by Karl Marx with this description: “The work has exerted an immense and lasting influence on world events: over the past century, its ideas have not only maintained a secure place in the realm of economic and political theory, but also inspired anticapitalist revolutions across the globe.” OK, but it was a lasting negative influence. And of course there was no mention of the hundreds of millions of people impoverished and slaughtered by Marxist regimes.

The description goes on: “Karl Marx’s foundational account of capitalist production and its manifold effects on human lives still inspires argument, insight, and resistance.” Inspires?

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