Epstein's corrupt bankers

Senator Ron Wyden "followed the money" on Jeffrey Epstein.

Epstein's bankers knew something was very wrong: money laundering and cash for very suspicious behavior with very young people. There were "red flags" everywhere. The banks broke the law by doing nothing.

This week Wyden issued a 67 page report.

Wyden's report showed that the largest, most "respectable" financial institutions in the world --  bent the rules, broke the law, and tolerated the intolerable to accommodate a very large and profitable client. Jeffrey Epstein was such a client. He kept hundreds of millions of dollars in the banks, and he was a connection to other big clients. 

Wyden's report names names: JPMorganChase, Deutsche Bank, and Bank of America. The banks didn't pretend not to see what they saw. They saw "red flag" behavior. The banks internal compliance officers, up to the highest levels, knew that Epstein was a legal and reputational risk. They discussed it, weighed it, and decided the money was worth the risk. Eventually they were caught and paid fines and settlements (p. 56).

Wyden's  report shows that bank officials were aware that the unusually large cash withdrawals were likely for the purpose of paying for "massages" with underage girls. Epstein had already been adjudicated as a sex offender and the presence of very young models -- "nymphettes" -- was openly acknowledged in JPMorgan's internal emails (pp. 27-28).

The large cash withdrawals week after week, presumed to be for paying for these massages, needed a pretext. Epstein and JPMorgan's bankers settled on withdrawals from an "Aviation Account," as if jet fuel for Epstein's plane would be paid for with U.S. currency (p.38). 

The White House, the Treasury Department, and the GOP-majority Senate did not assist this investigation. They obstructed it. Wyden persevered. (pp.54-57).

Wyden's report is important as a stand-alone document revealing a dimension of the Epstein matter: the fact that this was not just a failure involving the unique and private character of Jeffrey Epstein. The "Epstein crime" involved a large group of people and institutions who knew something transgressive was happening. These powerful people tolerated it, snickered over it, were put off by it, and some participated in it directly or indirectly. These people included Donald Trump. Wyden published what is purportedly Trump's birthday greeting to Epstein, which references their shared secrets. (Trump denies he created it.)

Trump is doing more than changing our constitutional practice with a dramatic reset of the balance between executive and congressional power. He has also reset our norms regarding financial and sexual corruption. Wyden is doing what James Madison thought senators would do. "Ambition must be made to counteract ambition."  Wyden is doing what Democratic voters are demonstrating in primary election that they want. They want a fighter, someone who names names, calls out lawlessness and corruption, and points an accusing finger at the financial and political elites who have been consolidating power in Trump's second term. 

I will repeat an assertion I made yesterday in my comment about Wyden and Democrats. Wyden's busy week advanced policies that have widespread popular support. It is not clear to me that the median Democratic voter has shifted "left." Maybe they have. I am confident, though, that Democrats want to see some results, some change of a tangible kind to deal with the top-heavy distribution of national incomes. I also think Democrats are still unhappy with the inarticulate and weak leadership they got from President Joe Biden and Senate Minority Leader Chuck Schumer. They want a narrative of a better Democratic future. Wyden comes across as willing to confront Trump in a smart, aggressive way. I think Wyden is in the sweet spot of what works for a Democrat.

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Senator Ron Wyden

 "Where have you gone, Joe DiMaggio?

A nation turns its lonely eyes to you"

     Paul Simon, "Mrs. Robinson," 1968

U.S. Senator Ron Wyden still has his fastball.

A player "still having his fastball" is an expression about aging and effectiveness. Senator Wyden is old enough to have slowed down. Instead, he is more active and effective than ever. In an era of frustrating political news, that makes me very happy.

Wyden has been in the news this week because he taped a long interview with Sharyn Alfonsi for the CBS News show 60 Minutes. In it, Wyden described the results of the investigation by the Senate Finance Committee of the banking records of Jeffrey Epstein. It revealed that Wall Street banks knowingly broke laws to continue banking services to Epstein notwithstanding "red flags" of both money laundering and sexual exploitation.

CBS, under the new ownership control of the Trump-allied family of mega-billionaire Larry Ellison, hired a Trump-friendly executive editor, Bari Weiss. She has been firing CBS News people to create a Trump-friendly news department. Weiss fired Alfonsi, and did not broadcast the planned news show on how Epstein's banks enabled him. Wyden protested, calling it self-censorship.

Senator Wyden posted a report on that investigation on August 4. I will comment on it in a future post.

For today, I have a different point. I have written often about the aging of politicians. I was early to warn that Biden needed the crutch of a teleprompter, even in 2019 campaign speeches. I have been critical of both parties for rewarding seniority so much that politicians hang on too long. Too many federal legislators spend their last months in office absent from the job, and sometimes in hospice or memory care. Yesterday I wrote that the rise of young, activist politicians was less a lurch to the left than one toward the energetic vibe of generational change. I suspect median Democratic voters want new and results more than they want left.

Locally in Medford, I am happy that Jeff Golden, a state senator, (and as chance would have it, like Senate Minority Leader Chuck Schumer, a college classmate) after a period of back-and-forth indecision, decided not to run for re-election. Good. I am a fan of Jeff, but I think he had gotten curmudgeonly in his frustration with Oregon politics. People who embraced change in policy and personnel in their 20s and 30s have been part of the process that shaped the intervening 50 years. There is an implied insult from priorities voiced by new people and in the emergence of new people they themselves did not select. Jeff did the right thing by letting go. I hope Chuck Schumer does the same. Schumer, from his very being and position, cannot help but represent rigidity and the status quo. People age 76 have a hard time coming across as agents of change and reform. 

Senator Wyden is an odd case, and he represents for me the flaw in overgeneralizing about age. He is the exception. He is a dynamo. He isn't the image of change, protest, reform, and activism, but he is an example of it. Here is the output from Wyden's Senate Finance Committee in the first four workdays of August:

Day after day, Wyden is setting up roadblocks to the worst parts of the Trump presidency. He is doing what Congress is supposed to do: be an equal branch of government. Wyden is raising issues that have widespread bipartisan popular support. 

August 3: Working Americans are losing health insurance, putting them at risk of medical bankruptcy and closing rural hospitals.

August 4: Wyden exposes the tie between big money elites and Epstein, another issue with bipartisan popular support

August 5: Wyden exposes a cosy deal: Immediately after a $5 million dollar campaign contribution to the MAGA campaign fund, Trump made three phone calls, and the FDA promptly switched positions to allow the sale of candy-flavored nicotine vapes. I would like to think that even Republican supporters of Trump are uncomfortable with that kind of quid pro quo money in politics, as well as the risk of candy vapes as a gateway to nicotine addiction.

August 6: Wyden presents a way to finance Social Security into the future -- a giant issue where Congress had dithered.

And so on, day after day:  Click here to read the details. It is exhausting to try to keep up.

Wyden isn't part of the schism between liberals and progressives, or "regulars" and Democratic Socialists. He is both a Democrat of long standing, and a change agent. I was ready to assume he had slowed down. He hasn't.  See his day-after-day output. Click the link. See for yourself. 

Ron Wyden has his fastball and is pitching every day. 

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Trump did something smart.

     “Chevron, too much money. ExxonMobil, too much money. They’re going to give some of that back to the public and they better cut the retail price, the consumer price.”
          President Trump, from the Oval Office

"Oil prices DOWN, NOW! Thank you for your attention to this matter. President DJT"

          Truth Social Post

I get negative feedback from readers when I say something positive about Trump. So let me be clear: Trump is corrupt, a sexual predator, and a constitutional scofflaw. Trump is a lying, narcissistic, sociopath.

I credit Trump only with being skillful, not with being good. We can learn from bad people.

Voters see Trump breaking his usual alliances to fight for them. People understand this one: The oil companies didn't do anything to deserve higher margins on oil, but they are getting a windfall and consumers are paying the price. That feels unfair and Trump is doing something about it. It is as simple as that.

Trump does not say what they should do. He demands they do it, even though he has no power to force them to do what he demands. People read that as being strong, decisive, and on their side. 

Democrats who wonder how it is that a corrupt sexual-predator sociopath like Trump can win elections, should take note.

Trump shows he can be flexible when it is in the interests of voters. Trump has established that he is pro-oil company. He empowers them; they donate to him. He sabotages clean, renewable, cost-effective energy technologies to direct federal resources toward fossil fuels. He scoffs at Democratic fussing over climate change and carbon footprints. Trump is the oil companies' guy -- any voter paying attention knows that. So he is doing a version of that "Sister Souljah" comment of Bill Clinton having the courage to call a foul within his own team.  We love you, oil companies, but don't get carried away!

Democrats could learn from that, too. Correcting excesses within one's team reads as courage and integrity.

Trump demonstrates that government can interfere with free enterprise. The general rule is let markets work in a capitalist society. Trump openly and proudly breaks that rule when it is in the public interest.  Activist government is supposedly the brand of Democrats in the FDR tradition. Trump is stealing the Democratic brand.

Democrats could take note and reclaim it. And maybe they are.

I do not see the rift in the Democratic Party between the "moderates," or "establishment" Democrats and the "Democratic Socialists" as a division between left and more-left on a continuum. There is something else at work, too: bold energy. The rise of Democratic Socialist candidates springs from Democratic voters desire for the party to look active, alive, alert to the problems in America, and to accomplish something tangible, to use government to make lives better. They aren't primarily more left. They are bolder, better looking, and more articulate.

Trump can get away with telling oil companies to lower prices and not be attacked for being a communist. If a Democrat says what Trump said, then The Wall Street Journal, Fox News, and Republican politicians would shout how this is proof that Democrats have become communist tyrants in the mold of Mao, Stalin, and Castro. Democrats should do it anyway. Being criticized for going to bat for consumers is a net positive for Democrats. Just make clear that they aren't doing it because they hate capitalism. It is because they care about consumers.

The public wants change. Populism in both parties shows this. Some things in our economy aren't working well. Here is a look at one reason why:

So far Trump has done a better job of voicing worker frustration than have Democrats, but that is changing. The energy of change among Democrats is generational. Their activist candidates are young. They are wrenching the torch from the hands of the old guard. Republicans are not so lucky. The change agent for Republicans is not just deeply flawed in matters of character and judgment; he is 80 years old.

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The "unthinkable" nuclear war: Part Two

I watched this when it was first broadcast on the Ed Sullivan show in 1958.

We had finally gotten a television. 

It was so thrilling!  He kept 13 plates spinning! Just barely.

He ran back and forth. Some tottered, but he got them going again. It is a fun 90 seconds on YouTube, and I recommend it. You might consider it a change of pace from politics. It isn't. 

It is a metaphor of nuclear proliferation.

Medford schools did not have "duck and cover" drills in my childhood and youth. Maybe they presumed we were out of the line of fire. In my first month as a county commissioner in 1981 I visited the county sheriff's office and spoke with Dwayne Franklin, the elected sheriff. I asked what plans for preparedness the county had in the event of a nuclear exchange. Were food, water, or geiger counters stored? Was there a backup communication system in the event the power was off in the radio towers?

He said there was nothing at all. No plans. The plan was to presume that it simply could not happen, so there was no use planning for the impossible. He said he didn't even want the commissioners to discuss creating a budget item for it. Planning for nuclear war would make him look like a kook. He told me to let it drop and not to talk about it.

Yesterday's guest post by Ira Helfand and today's post by Bruce Van Zee bring nuclear war back to mind, a place where prudent people need to keep it. Bruce is a retired physician in Medford and this guest post is a re-publication of his own Substack post from this anniversary week of the atomic bombs dropped on Hiroshima and Nagasaki. 

He makes an important point: President Trump has sent a message to non-nuclear countries that whatever protection they may have thought they had based on a world operating on "rules-based order" with the U.S. acting like a benign world policeman is over. Every country is on its own. Iran will survive because it has a nuclear-weapon equivalent, the ability to shut down the Strait of Hormuz. If a strategic waterway isn't available to a country, it better acquire a bomb.

That means more plates spinning. That is the metaphor. What could go wrong?  Bruce publishes an insightful blog about politics, health, life, and the human condition three times a week at https://bvzcvz.substack.com.

Guest Post by Bruce Van Zee

Avoiding a Nuclear Armageddon
Nuclear Proliferation is on the Rise

There is much to despair about the many ways Trump’s policies have made America worse than when he took office. From the cost of living (especially gas and groceries), to the loss of America’s respect in the world, to the fragmentation of Pax Americana, to the divisiveness with which he governs – we are a lesser country than we were.

Even more disturbing, we are not as safe. Our military has shown vulnerability in the Iran war of choice which depletes our treasury as we use million-dollar interceptors to shoot down thousand-dollar drones and missiles. A strategic objective to justify this war is lacking and Trump’s erratic prosecution of it makes it less likely, not more, that Iran will give up nuclear ambitions.

But most worrisome is the sense that Donald J. Trump has brought the world closer to the unthinkable possibility of a nuclear apocalypse.

Bear with me, and I dearly hope that I exaggerate, but here are the threads of my concern:

--  First, Trump abolished the JCPOA, Obama’s deal with Iran and with the agreement of even Russia and China, to limit Iranian nuclear enrichment safely below weapons grade uranium. International inspectors agreed Iran was abiding by the terms and was not violating the agreement. He also withdrew the U.S. from the INF treaty that provided safeguards and improved transparency about nuclear capability between rival powers.

--  Secondly, the Iran war only confirmed in Iran’s mind that to protect their country, they would need a nuclear deterrent. So, of course, there has been no substantial progress in negotiating a new agreement to constrain Iran’s nuclear ambitions. The MOU was a joke.

--  Thirdly, Trump then makes a very poorly timed deal with Saudi Arabia to offer American help to establish a nuclear energy program. And the agreement inconceivably does not have international inspections built in. Iran and Saudi Arabia are enemies, one Sunni, the other Shia. You can be certain that if Iran thinks Saudi Arabia has any chance of getting a nuke, they will redouble efforts to obtain nuclear weapons themselves. Adding to Iranian paranoia is Trump’s insistence that the deal include Saudi Arabia signing the Abraham accords which would make Israel an ally of the Saudis and would only further Iranian resistance and determination.

--  Fourthly, the leader of the most powerful nation on Earth has openly threatened Iran with annihilation. Trump has made statements such as, “blasting Iran into oblivion”, and “[bomb them] back to the Stone Age’, and “a whole civilization will die tonight.” Statements like these are not only irresponsible but hardly advance a positive dialogue towards peace and an agreement to constrain nuclear materials.

--  Finally, Trump vacillates and has no consistent strategy in his diplomatic and military approach to Iran. Unpredictability is destabilizing and could be a trigger for expansion of hostilities.

In sum, though Trump says his goal with the Iran war of choice is to prevent Iran from having nuclear weapons, it is hard to imagine that he could have done anything more to make sure they eventually do.

On top of these concerns is the disappearance of Pax Americana and the abandonment of our allies. I would not be surprised that many of the nations of Europe, Southeast Asia, Japan, and Oceania are having internal discussions about whether they will need a nuclear deterrent in the face of America’s unpredictability and seeming abandonment. Trust that America will always be there for them is rapidly shredding. And the more nations that have nukes, the more risk of an incident that could lead to a nuclear accident or intentional attack.

Trump makes it even worse with his rhetoric and erratic policies. If the policy is “America First” and the implication of “Might Makes Right” means international law takes a back seat, then other nations are likely to follow suit in self-defense. Then there is this juvenile macho, testosterone-fueled ethos out of the Pentagon from Pete Hegseth and his “Department of War” that only adds fuel to the fire. It makes it more likely that a rival nation, perhaps China, Russia, North Korea, would be sufficiently frightened of the aggressiveness and unpredictability of the Trump regime to initiate an attack. Or at least another arms race to prepare for one.

And here’s an awful thought: Trump has proven time and time again that his ego and self-interest are higher priorities than the interests of the nation. And he is easily offended and vengeful. I do not put it past him to use nukes if sufficiently provoked, not as every other president has viewed them – to remain on the shelf as a deterrent because of mutually assured destruction.

It is way past time for responsible Republicans who care more about their country and humanity to exercise some restraint on this President. Trump has shown enough erratic and unbalanced behavior that he should not be allowed anywhere near the nuclear codes. But this Congress has proven to be cowardly and incapable of challenging Trump. And at least some of them know better. For more on the dangers of Trump and Nuclear Proliferation (here).

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Will Medford, Oregon residents survive a nuclear war?

Nuclear war is not "unthinkable."

Today's guest post author. Ira Helfand, MD, thinks about it and is trying to do something to stop it.

A nuclear war will be very, very bad for the people who survive the first wave of explosions. 

In this anniversary week of the atomic blasts that destroyed Hiroshima and Nagasaki, I asked Microsoft's Co-Pilot artificial intelligence program if residents of Medford would survive a nuclear war. It assured me that Medford is unlikely to be a direct target but that residents should shelter in a basement or interior room for 48 hours, during which the radiation fallout would lose 99 percent of its danger. The implication is that we would emerge to resume normal life.

No.

What Co-Pilot did not say was that this begins a long, cold period of famine and social chaos. I mentioned Co-Pilot's response to a college classmate, Ira Helfand, MD, and he agreed to write a guest post to correct the record. 

Ira Helfand is past president of International Physicians for the Prevention of Nuclear War, the recipient of the 1985 Nobel Peace Prize, and a member of the board of International Campaign to Abolish Nuclear Weapons, the recipient of the 2017 Nobel Peace Prize."

Guest Post by Ira Helfand, MD

As we observe the Hiroshima/Nagasaki anniversary this week, Peter asked me to comment on Co-Pilot’s response to a question he posed asking how people in Medford, Oregon would do in the event of nuclear war. Co-Pilot had a pretty upbeat assessment. It told him that Medford would not be a target, and people would be OK if they just sheltered in their basements for a couple of days.

Unfortunately, the response appears to fall rather clearly into the category of AI hallucinations.

It is true that Medford would probably not be a target. But most of the major cities across the country would be. Estimates are that more than 100 million people would die that afternoon from the explosions, fires, and radiation.

Those who survived—including the good people of Medford-- would find themselves in a landscape we cannot imagine. Most of the critical infrastructure we all depend on would be destroyed or profoundly disrupted. There would be no electric grid, no cellphones, no internet, no food distribution system, no public health system, no system for producing or distributing gasoline or heating oil or natural gas. In the months following the initial attack the vast majority of the US population would die from starvation, from radiation, from epidemic disease and from exposure to the elements.

And the destruction would not be confined to the U.S. and the other countries that actually fought the war. A large-scale nuclear war between the U.S. and Russia would loft enormous amounts of soot into the upper atmosphere, as much as 150 million tons. The soot would block out the sun dropping temperatures across the planet an average of 18 degrees F. In the interior regions of Eurasia and North America, the temperature would fall 45 to 50 degrees F. and not recover for the better part of a decade. 

Earth has not seen temperatures that cold since the last ice age. Under these conditions, most of the ecosystems that evolved since the ice age would collapse, food production would collapse and the vast majority of the human race would starve to death. A study published in the journal Nature/Food in August 2022 showed that in the first two years after the war six billion people, three quarters of the human race, would starve to death.

That same study showed that the famine caused by even a limited nuclear war, as almost occurred between India and Pakistan last year, could kill up to two billion people worldwide, including 130 million here in the United States.

So do we really need to worry about this? Is nuclear war even possible?

Unfortunately, the answer is a very definite yes to both questions. In the last 15 months, five of the nine countries with nuclear weapons have been engaged in active warfare. Russia threatened to use nuclear weapons in Ukraine; the U.S. made slightly veiled threats to use them in Iran; and India and Pakistan fought a mini-war, during which airfields that housed nuclear weapons were bombed.

I was at the Global Nobel Assembly on AI and Nuclear War at the Vatican last month. One of the participants, a Nobel Laureate in physics, had an interesting way of assessing the risk. Suppose, he said, that there is a two percent chance per year of nuclear war, then statistically, there is a 50 percent chance –literally the toss of a coin--of nuclear war in 34 years. We can’t know the exact chance of nuclear war in a given year, but events of the last year suggest it is almost certainly much higher than two percent.

The bottom line? Right now we are marching blindly towards a nuclear catastrophe that will kill billions of people and destroy human civilization.

BUT—it doesn’t have to happen. Nuclear weapons are not a force of nature over which we have no control. They are little machines that we have built with our own hands. We have already dismantled some 60,000 since the 1980’s; we know exactly how to dismantle the 12,000 that remain and could do it in 3-4 years.

What is missing is the political will, a movement like the 1980’s Freeze Movement. Back from the Brink, (www.PreventNuclearWar.org) is a new campaign that intends to create such a movement. It has grown rapidly to a network of 25 chapters across the country, secured the endorsement of 70 cities and towns, and six state legislatures (including Oregon), and more than 500 NGO’s including most of the national faith communities and major environmental groups, labor unions, and a new student group Students for Nuclear Disarmament (www.students4disarmament.org). In Congress, H. Res 317 in the House has 60 co-sponsors, and S. Res. 323 in the Senate has ten, including both Senators Jeff Merkley and Ron Wyden of Oregon.

Looking for something to do? How about helping to save the world?

 

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Foreboding: Technology is at a hinge point.

I still have the willies.

Artificial intelligence companies are "too big to fail." I have heard that before. 

Guest post author John Coster asks if this moment reminds us of the year 2000, the year the internet bubble popped. It does for me.

The frenzied build-up of data centers reminds me of the frenzied build-out of fiber cables. The stories of fantastic potential uses of artificial intelligence remind me of the presumed remaking of the economy by the internet. (It happened, but not on schedule.) But mostly I am reminded that technology platforms and infrastructure need to be paid for with profits, which wasn't happening in 2000 and may not happen now, not on schedule at least. Artificial intelligence platforms need to create income to meet their goal of going public; AI customers are getting surprise charges for using AI and they are realizing that they need to start shopping for utility and price.  Users are learning that Chinese platforms can do the same work as the well-known frontier platforms for a fraction of the cost.

The crisis is one common in technology: It gets cheaper. WAY cheaper, and then it becomes free. 

John Coster looks back 30 years to the prior technology bubble. We learn from history, but but we make the same mistakes again anyway. 

Coster enjoyed a 45-year career planning, building and operating critical facilities for major technology firms, as well as the energy, education, healthcare, and heavy manufacturing sectors for Fortune 50 companies. He currently advises and consults with venture capital clients focused on emerging technologies. He holds multiple patents using AI for energy optimization in high-tech facilities.

Guest Post by John Coster

Does It Feel a Little Like 2000 All Over Again? 

Back in the late 1990s, when I was running Microsoft's small (by today's standards) portfolio of data centers, massive amounts of IPO money were being poured into what SoftBank's founder called the "Internet zaibatsu." It was a thrilling vision: a global, interconnected web of technologies that would transform the world.

During those heady days, nearly any startup with a "Dot-com" in its name could raise capital almost overnight in the race to go public, fueled by enthusiastic brokerages and institutional investors. The NASDAQ rose 86% in 1999 alone. But it wasn't just data centers attracting investment. Untold miles of fiber-optic networks were laid around the world, while networking and content delivery companies like Akamai soared nearly 400% on their first day of trading. The entire movement was driven by the promise of technological and economic transformation through the next generation of "killer apps"—remember that term?

At the time, Microsoft was considered a technology relic. Even mediocre talent was poached for exciting new ventures offering trendy offices, game rooms, on-site pubs, and lavish morale events. I was also heavily recruited with breathtaking equity packages designed to lure me onto the wave. I was slow to buy into the hype and probably missed the chance to hit the jackpot. But I was learning a tremendous amount in my role, and I was also traveling the world as part of Microsoft's Y2K task force (Yes, there were real threats, and we fixed them.)

What I saw behind the scenes during those global tours of data centers—and during job interviews—gave me pause. Huge IPO-funded data centers were filled with IPO-funded dot-com companies running services over IPO-funded fiber networks. I'm no economist, but it seemed that enormous amounts of money were changing hands to build all this infrastructure, while relatively few businesses appeared to have sustainable, profitable business models.

I decided to stay at Microsoft and sold all of my tech stocks—including what I could sell of my vested Microsoft options. That turned out to be a fortunate decision. Microsoft fell from roughly $120 to $30. Amazon lost about 90% of its market value, and companies like 360networks went from a $13 billion market capitalization to insolvency in just a few months. By October 2002, the NASDAQ had fallen roughly 77% from its peak. The party was over.

Of course, that wasn't the end of the story. While capital seemed to disappear, there are always people who can see "where the puck is going." The distressed physical assets of failed companies were auctioned off for pennies on the dollar. Companies like Digital Realty Trust acquired dozens of abandoned data centers, stripping and salvaging barely used generators, chillers, and transformers while holding onto the best facilities. They had the patience to wait for the market to mature.

Digital Realty eventually went public and today has a market capitalization approaching $70 billion, with more than 300 properties around the world. Today, it is riding the AI wave as well.

I eventually left Microsoft and joined a group that acquired 26 distressed data center sites. Together, we built another dozen facilities across Europe and Asia before the company was acquired by what is now Lumen. There are always people who know how to capitalize on failure.

Today, the scale and impact of AI investment dwarfs anything we saw during the dot-com boom. Yet the enthusiasm surrounding AI feels hauntingly familiar.

Try this experiment: Ask your AI engine of choice whether AI is profitable. The answers are revealing.

Yes, demand for energy, skilled construction and operations labor, semiconductors, and the raw materials needed to build AI infrastructure is outstripping supply. The build-out is contributing meaningfully to global GDP. But I still find myself wondering: when will AI itself become consistently and sustainably profitable? What is the "killer app" that ultimately justifies this unprecedented level of investment?

I realize profitability is only one dimension of our complex relationship with AI. But even if AI achieves the kind of singularity that Sam Altman envisions, economic reality still matters. Technologies don't always evolve around investment bubbles.  If the business fundamentals fail to materialize, we may be in for another rough ride.

 

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Easy Sunday: Jon Ossoff is the real deal

Democrats have a plausible candidate for president.

I saw him audition in Portland yesterday. He sounds like a president. 

My wife and I attended a fundraising event for him.

The event had the usual elements of a higher-dollar fundraising event, plus some extras. Huge home, splendid hors 'd'oeuvres, valet parking, good sound system, a professional photographer who will send photos to guests. It sends a message that Ossoff is a top tier candidate.

It was a warm day, mid-high 70s. Ossoff wore this open-collared shirt. 

The event followed the usual format.  First, a brief pre-gathering where Ossoff met with the "hosts," i.e. the people who invited their networks of friends and made leadership contributions. Then 45 minutes of visits, handshakes, and photos with guests. Then the hostess took the microphone to acknowledge other event organizers and introduced the headline introducer, Senator Jeff Merkley. 

Merkley spoke for five minutes praising Ossoff's hard work and effectiveness in the senate.

Ossoff spoke for about 20 minutes. I have heard well over a hundred presidential campaign speeches. Ossoff's was at the highest quality, comparable to Pete Buttigieg, Bill Clinton, and Barack Obama, speaking within the genre of serious people presenting a story of America's condition and what needs to be done to address it. He sounds like a smart, professional, urban, or suburban politician; not "folksy good-ol-boy." Trump and Bernie Sanders both lead with grievance. Ossoff is more optimistic. He presents as can-do and forward-looking. There is a JFK "new generation of leaders" vibe to Ossoff.

Ossoff offers something Democrats desperately needed but lacked in a Biden presidency. He is articulate and persuasive. He didn't meander. He didn't check off  a list of policy proposals and proposed laws in the way that both Hillary Clinton and Elizabeth Warren did, which had the effect of making them come across as policy staffers, not leaders. He did not sound canned and over-practiced. 

He did not hide from trouble spots for Democratic politicians. He said that for Democrats to establish a "durable majority" in the senate, Democrats must diversity on some issues. Democrats need to win in red and purple states to get to 50-plus senators. He warned that we might not want to hear this, but Democrats were crazy to have drummed Joe Manchin out of the party. "Who else is going to win in West Virginia?" 

Ossoff is Jewish. An inaudible question from the audience asked him about Israel. Ossoff is generally aligned with the J Street Group, a pro-Israel, pro-peace group advocating both security for Israel and a negotiated two-state solution that condemns Israel's settlements in the West Bank. Ossoff set out what I perceived as a middle course: sharp condemnation of  Prime Minister Netanyahu but within the context of support for Israel continuing to survive and be recognized by Muslim countries of the region. It is possible that his position will satisfy no one among Democrats, and the division will break up the party. Alternatively, it may be that a liberal Jewish critic of Israel is the only person who can thread the needle and hold the party together. Parties are stitched together by rhetoric and personality. 

Here is how he presents himself in his official senate photo. Serious. Black suit, black tie. He is compensating for his youthful appearance.

He is 39. He is married and has a three-year-old and one-year-old. He married in 2017 to a woman who kept her birth name. He graduated from Georgetown University's School of Foreign Service; he earned a Masters degree from the London School of Economics.

An astute female guest at the event told me she thought Ossoff was exactly the right amount of good-looking to win in politics. "Ossoff is a nine," she said. "The perfect spot. Ten is good in Hollywood, not politics. Newsom is a ten, and he has too much hair and looks too slick, and comes across as untrustworthy. Ossoff is just right." 

She added that anyone from California will have a hard time winning a presidential election. "Georgia is a good purple state. Of course I would vote for Newsom over any Republican. I just hope I don't have that as my choice," she said.

Scenes from the event: short visits, photos.

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