Death With Dignity

Robert Warren died yesterday afternoon. 

He was 95, turning 96 in April. He died with dignity.

He was my friend for 29 years. He was ready to die and he welcomed it. I helped him navigate the process to make it happen.

July, 2022

In 1997 Oregon passed the Death With Dignity Act. It allows Oregon physicians to prescribe life-ending medications to patients who meet the criteria of being at the end of life, who have the cognitive capacity to understand their decision, and have the physical ability to take the dose on their own. There are waiting periods and hoops for both patients and health professionals.

In 2022 278 people chose this path and died from physician-prescribed medications.  There were 431 prescriptions written in 2022; 84 of those people died from other causes without having taken the prescription. There is no timetable or requirement to take life-ending medication.

I call the life-ending white powder "medicine." That is the term used through the hospice and "Death With Dignity" process. This wasn't "poison." Poison is a misuse of something. Drain cleaners and agricultural herbicides are poisons when ingested. The white powder that came in a pill bottle from a pharmacy was a kind of pain reliever. It worked as intended. It had the normal prescription-type words on it, along with instructions on how to mix it and consume it. The pharmacist gave a consultation. The hard part isn't for the patient, he said. For them it is quick and easy. The patient is totally unconscious and at peace. He warned that there will be some waiting, possibly hours. Death itself takes time. You need to be ready for that, he said.

Bob Warren said that 2:00 p.m. yesterday would be a good time to go. We coordinated that time so that the various hospice people could arrange their schedules to be there. Throughout the morning employees from the assisted-living facility that he lived in came to tell Bob what a joy he was to help and that he would be missed. They knew what Bob had planned. Bob greeted them warmly and thanked them. They stopped coming at 1:00 p.m. The word must have gone out: No visitors after 1:00. The facility was careful to have nothing whatever to do with the Bob's death. At 1:20 I gave Bob two anti-nausea pills. These are to make sure the life-ending medicine stayed in his stomach. 

Just before 2:00 p.m. I mixed the powder with apple juice, as instructed. The nurse and health care people stepped out of the room. They, too, are instructed not to participate in the act of Bob drinking the mixture. Two people from Oregon's Death With Dignity nonprofit asked him if he understood that he would be taking a life-ending drug. He said he certainly did. He sat on the edge of his bed, took the glass, drank it down. We sat there together, my arm around his shoulder. In two minutes he said he was sleepy and was ready to lie back. He sighed and closed his eyes. The room filled back up with hospice nurses, who helped to scoot him back onto the bed with his head on a pillow. The nurses and I held his hand and talked to him as he lay there quietly, sighing from time to time, unconscious and otherwise motionless. During that hour and 40 minutes the nurses monitored his heartbeat and breathing until his heart stopped.

Bob Warren made a living as a musician in Los Angeles. He was alert and opinionated to the end. We played Wordle together every day. He got yesterday morning's word, BREAD, in three guesses. He knew exactly what he was doing yesterday. He had made a decision. He had had enough. He knew the lyrics to hundreds of songs that were popular in the 1930s, 1940's, and 1950's. He recited the lyrics to a song made popular by Rosemary Clooney, "I Stayed Too Long at the Fair."

The merry-go-round is beginning to slow now
Have I stayed too long at the fair?
The music has stopped and the children must go now
Have I stayed too long at the fair?

He was ready to leave the fair.

The Oregon Health Authority keeps track of this program, including questions about why people choose to end their lives.

As in previous years, the three most frequently reported end-of-life concerns were decreasing ability to participate in activities that made life enjoyable (89%), loss of autonomy (86%), and loss of dignity (62%).

That was Bob. He had become essentially immobile. He needed help to get to the bathroom. He couldn't see well enough to read. He couldn't get to his computer or navigate its keyboard. People brought him food and he said he could barely taste anything. He wasn't suffering in agony, but he was generally uncomfortable. He was getting weaker. He knew what he had to look forward to was more of the same, only worse. Time to go now, while I still can make my own decisions and die with my dignity intact, he said. 

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Each Party has a political vulnerability: Principle

Republicans have the abortion issue.

Democrats care about racial and gender prejudice. 

In both cases, it is a matter of principle.

Some issues in politics come down to deeply held moral values.  Other issues can reach an accommodation through compromise. Does anyone think that a marginal tax rate on earned income of 37% is moral and just, but one of 38% is the work of the devil? Lobbyists care, some big donors care, and in the inside-baseball of D.C. partisan war, elections may be won or lost on whether a PAC gives or withholds money to a politician who "holds the line" at 37%. But the public doesn't care. Those issues are resolved by politics.

Some are not. Primary election voters of each party have issues that cannot be compromised because they are matters of principle. Compromise would infuriate some of one's longtime supporters. It would bring a primary election opponent or a third party spoiler in a general election. The abortion issue is this kind of issue for Republicans. Since the Dobbs decision, GOP legislators aren't choosing to tiptoe toward some politically advantageous compromise where the issue meets an uneasy middle ground. They are racing to fulfill the wishes of abortion opponents, and in red states are successful in doing so. Democrats use the issue to characterize Republicans as extreme.

The Democratic Party is a coalition of interest groups that revolve around support for the underdog. They oppose prejudice against minority races, religions, genders, and gender preference. Climate activists defend the vulnerable climate, considering it to be bullied by the dominant culture of fossil fuels and industrial polluters. Support for these issues a kind of secular religion, based on their version of principle and science. Republicans have found words in the Bible to defend their positions. 

Democrats have a drag on their support that is as profound as  the abortion drag on Republicans. Joe Biden masked that problem for Democrats. He is as well positioned as any nationally-known Democrat to make a bridge to White working class Americans. Biden was "Scranton Joe," an Irish Catholic union-supporting old-school Democrat. But even Biden is not persuading White working class Americans. White men voted 56-39 for Trump, and non-college White men voted 66-32 for Trump. Rural White non-college voters voted 75-24 for Trump. Republicans succeeded in presenting themselves as the party of White Christian Americans. Accelerated by the election of Obama, they understand themselves to be under siege. They understand themselves to be outmatched by powerful, educated elite snobs from above and outnumbered by growing numbers of ambitious minorities striving for preferential status.  Politically engaged Democrats do, indeed, consider racial and religious prejudice "deplorable," to use Hillary's word. They consider misogyny deplorable. They consider prejudice against homosexuals deplorable. Democrats cannot compromise on racism and other prejudices. Republicans call Democratic policy extreme.  

A Republican may emerge who attempts a new policy on abortion, presenting a new orthodoxy.  I don't see one yet.  It may not be possible until Republicans lose landslide elections. A Democrat with standing and credibility to change Democratic orthodoxy will likely need to be a person in a persecuted group. At this point no one is challenging either Biden or Democratic orthodoxy. I don't expect Democrats to change anytime soon, either.

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Surprise!!

Banks are leveraged. Stuff happens.

  

The failure of Silicon Valley Bank took the world by surprise. It is why bank regulations are proper and necessary. 

There is constant lobbying pressure from banks. They want looser regulation. They fight reserve requirements. Then they fail and they get bailed out because it is in the public interest to bail them out. It happens again and again. Bank failures involve more than the bank's managers and stockholders. Banks have customers and those customers have customers. Banks are like airplanes with passengers inside. If the plane crashes the passengers crash.

 One view of the Silicon Valley Bank failure is that people "should have seen it coming." In that view, perhaps current laws and regulations are sufficient and we just need to do a better job of enforcing the regulations we already have. That is what the banks say in their lobbying, and that message finds fertile political ground among people who protest too much government regulation of business. 

 

That is a mistake. Bank failures happen by surprise. If they were easy to avoid, banks would avoid them. Let me cite two pieces of evidence. One involves put options. Those are bets that a stock will fall below a certain price by a certain date.

ONE: A news story from asiamarkets.com

Just hours before it was revealed Silicon Valley Bank – the 18th largest bank in the U.S. – is on the brink of bankruptcy, one options trader executed a trade that would turn $4000 into just over $1.2 million. 

On Tuesday March 7 the trader purchased $4,000 worth of Silicon Valley Bank (NASDAQ: SIVB) put options with a strike price of $200, expiring on 3/17/2023. They took out all volume available at the 13 cents per contract asking price.

Just over 24 hours later on Wednesday, the bank announced it needed to undertake a $2.25 billion share sale (over one third of its market cap) to stave off bankruptcy. For that sole March 7 buyer of the SVB puts it was payday. 

The $0.13 cent contract price of the puts exploded to $39.10.

There are lessons here. It could have been you that bought those options! Those 13-cent options were just laying there. If SVB's failure is obvious to you, why didn't you buy them? But you didn't know. That is the point. If "the public" had known, or if there were even a glimmer of a hint of suspicion, people would have scooped them up and driven the price way up.

Maybe that one person made a dumb-luck guess. That trade will be closely examined by the SEC. If the trade was done by an agent of a bank employee or regulator, the profit will be disgorged and the insider fired. But even then, the fact that the put options were essentially worthless, means that there was no sense of concern circulating about the bank. There could not have been even a glimmer of a hint of suspicion within the financially savvy and ultra-plugged-in tech community that banked there. Had there been, those puts would not have been priced at 13 cents.

TWO: The regulators didn't see it coming either. The Federal Reserve reported on the state of the economy and risks to the banking system when the loan portfolio of Silicon Valley Bank problem had already become a problem.

At the conclusion of its 60 pages of analysis it summarizes with "A Survey of Salient Risks to Financial Stability." It mentioned Ukraine, monetary tightening, economic problems in Europe, tensions with China. It concluded with a concern about market fragility. It is noteworthy for what it does not mention:  

There is nothing here about what destroyed Silicon Valley Bank, the fact that it and many other banks might already be insolvent because their legacy loan portfolios had dropped so much in value when interest rates went up.

I draw a political and policy conclusion from this. Again, my thought is informed by the personal history I described yesterday of the clueless hubris of the nation's top bankers. They created and held mortgage loans that were toxic on the day they were issued. Citigroup, along with other mega-banks, was going broke and didn't know it. Being large did not make them smart or safe. Leveraged institutions like banks need guardrails. Regulations. They need to be stopped from taking risks that will seem entrepreneurial in the moment and foolish in hindsight. 

Banks will complain. Of course. When times are good, bankers act like charged-up teenagers having fun, fun, fun with their daddy's T-Bird. The government cannot take the keys away. We need banks. But governments can require seat belts, airbags, and speed limits. And it can jail lawbreakers.

And don't trust that giant banks are too big and smart to get into the trouble smaller banks got into. We know better. We remember.

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Risks to watch out for

Today's post isn't a prediction of doom. It is a warning about risks.

A recession or banking crisis ends presidencies. 

The reality of politics is that sometimes there are great waves of sentiment. Economic problems in an election year mean that even popular politicians get washed out of office. 

Democrats have positives going into 2024. Republicans are catering to their extremes on abortion, which scares people. The route to the GOP presidential nomination appears to be by echoing and amplifying Trump, and Trump scares people. Unemployment is low. The Gross Domestic Product has returned to the pre-Covid trend line and is bigger than ever. Inflation is coming down. Gasoline prices are down. Democratic policies like expanded health care and rebuilding infrastructure are popular, and Republicans are positioned against them. But none of that will matter if there is a banking crisis or recession in the months leading up to the 2024 election. 

This chart is issued by St. Louis Fed. The yield on the 2-year Treasury rate is subtracted from the 10-year rate. The yield curve is negative when the rate dips below the horizontal line at zero. It is negative again.

See the relation to presidential losses? Carter in 1980. George H.W. Bush in 1992. Al Gore underperformed in 2000. Republican wipeout in 2008.

Will we get a recession this time? No one knows. But it's a risk.

The yield curve is negative because the Fed is trying to slow down the economy to end post-Covid inflation. It is intentional. Sometimes the economy is disrupted by accident. Covid was an accident. A banking crisis is an accident. 

No one quite understood how vulnerable the Silicon Valley Bank was to a run. The bank was forced to sell at a loss the low-interest-bearing bonds they had in their portfolio of assets. The depositors didn't know there was a problem. The regulators and credit rating agencies suspected a problem, but didn't think it critical. Even the bank managers didn't know until it was too late. 

Other American banks have the same problem. Loans made back when interest rates were much lower than they are today are worth less than face value. The Fed, the FDIC, and Treasury all say they they are on top of this problem. 

But I was a Financial Advisor back in 2007-2008, and those same people told the public they were on top of that problem, too. They sounded confident and reassuring. We know there are questionable mortgage loans, they said, but because we know the problem, we are solving the problem. Bank reserves are ample. 

My employer at the time, Citigroup, told Advisors like me that there would be a lot of bank failures, but we, Citigroup, were ahead of the curve. We are big and we have reserves, they said. We have it covered, they said. Bank leaders told Advisors that Citigroup would profit by picking up failed wreckage of other banks, and do it on the cheap.

Shortly, Citigroup was wreckage. Government didn't "have it covered," nor did Citigroup. In a contagion the backstop insurance one has in place is worthless. One's supposed assets aren't assets, because there is no one to sell them to. Your counter-parties are desperate to sell, not buy. Bank contagions are like wave elections. Even the strongest are washed away.

Will that happen this time? No one knows. But it is a risk.

Sometimes what seems like the end of a crisis is really just the beginning. Here is where we are today, overlaid by the timeline of the Lehman Brothers crisis. This wasn't the end. It was the second inning. 

I am not predicting doom. My intention is to warn readers of risks. Spokespeople for trustworthy institutions--the Fed, the FDIC, Treasury--have a powerful incentive to reassure the public. If people get spooked, they become a stampede. If everyone stays calm and markets function well, then banks can sell out of their underwater loans or they will mature at par. That works until it doesn't, and if it doesn't, all hell breaks loose. 

And in that case the public will vote for whoever the Republican candidates are.

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Sloths, Idleness, and time for repose and reflection

The world is too much with us; late and soon,

Getting and spending, we lay waste our powers;—

Little we see in Nature that is ours;

We have given our hearts away, a sordid boon!

                               William Wordsworth, 1802.

Yesterday I said today's post would be a warning about potential financial problems ahead, based on the experience of the Lehman Brothers collapse. 

Let's wait one day for that. 

Cross-country flights on airplanes used to be an enforced oasis of quiet time for passengers. Before the words "airplane mode" meant something specific on a phone, there was the airplane mode reality of sitting in a seat with no responsibilities. We were in enforced isolation. Everyone on the outside world understood that the passenger was out of touch for those hours. The passenger could read quietly or nap or do quiet work without interruption. It was an oasis from the world. 

Then progress happened. Now one can be as plugged into the bustling world on an airplane as anywhere else, with phones, high-speed internet, movies. The connected world crashed into that repose. William Wordsworth observed the industrial revolution crashing into pastoral England. John Coster observed the busy world invading airplane mode while he read yesterday's "Easy Sunday" post about the quiet lives of sloths. The world is too much with us, Coster wrote.

Coster has been doing cross-country travel for decades. He grew up in Massachusetts and lives in Seattle. His 44-year career has included developing dozens of global data centers for major technology companies. He currently manages an engineering and technology innovation team for T-Mobile. He was on a plane, fully plugged in, and he wrote me this while frustrated trying to get the buggy blogspot comment feature to record a comment.

Guest Post by John Coster

I’m sitting on a plane with my free T-Mobile wifi, but for some reason I can’t get my app to comment.

Your post about sloths got me thinking about how unconcerned sloths must be about what they can neither comprehend nor change. It also got me wondering about why we humans obsess about things we cannot fully comprehend or over which we have no real agency. I was reminded when Nassim Taleb in his book The Black Swan wrote that he reads or listens to news about once a week because more frequency does not help him be better informed about things that matter. In fact, he thought connecting with news at a higher frequency creates an outsized sense of importance and urgency in our minds. So more frequency is antithetical to understanding. And that was back in 2007.

In pre-digital times, it was considered a sign of curiosity and intelligence to be “well-read,” to be a person of “the world.” There was a cannon of publications and general news sources that were considered reliable. That’s ancient history of course.

We are all increasingly bombarded with unwelcome notifications and alerts on our digital devices. Yes, I know you can turn them off, but that’s my point. You need to opt out, to unsubscribe, to filter to junk, or otherwise disable the default of connection. But I can’t do that with its ubiquity everywhere else. I walk through my office at work (and every conference room) and public spaces have flat screens and digital billboards. They scream for our attention with all manner of “important” information and never-ending news reports, often replaying the same footage of the ‘catastrophe-o’ -the-day’. My favorites are the Money-shows, with well-dressed, serious-looking people, in high-tech studios explaining our complex financial world with great (but dubious) certainty, while streams of market prices and news bites race across the bottom. You can’t blink.

Taleb was right. I’ve never felt more distracted, inclined to worry, and truly uninformed in my life.

The sloth’s life looks pretty cool. We both meet the same end, but the sloth has a more chill ride. But of course I want to be informed, but especially with AI producing even more content, how do we choose what fills our gray matter?

 

 

Tomorrow, back to the connected world, with charts and intimations of problems ahead. It's the future. We won't know until it happens.

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Easy Sunday: Taking it slow

Usually my Easy Sunday posts show something pleasant and un-serious.  

It isn't all politics, money, and conflict. 

Below is a brief video of a young South American sloth being re-united with its mother.  Sloths look like primates--monkeys or apes--but they aren't cousins at all. They are closely related to armadillos and anteaters, which look nothing like sloths. The sloth branch of that family evolved to live in trees and therefore got the attributes of tree dwellers: Long arms and legs, eyes in front, grasping hands. There is a message in that parallel development. We look like we do because that appears to be the best way to survive living in and around trees. 

I saw this sloth up close in Brazil. The boy showed off his pet to me. It moved in slow motion, about 1/4 time. It slowly turned its head toward me to check me out. I imagined it to be utterly serene. And sleepy. They go in and out of naps, sleeping about 15 hours a day. It reminded me of a cuddly ET, from the 1982 movie.

   Here is the 37 second video. 

Click

Tomorrow it is back to the usual storm and strife. I will publish a graph comparing the collapse of the Silicon Valley Bank overlayed against a graph of what happened following the Lehman Brothers failure. It is history, not fate or a prediction. But still.

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Palookaville.

Michael Pence coulda had class. He coulda been a contender! He coulda been somebody, instead of a bum, which is what he is, let's face it.

My headline rephrases those lines from the anguished Terry in On the Waterfront. Mike Pence had a rendezvous with history and he didn't show up. Pence could have been a contender.

Michael Pence was an eyewitness. He could have leveraged his testimony into a new brand for himself. He would no longer be white-bread Second Banana. He could be Mr. Integrity, the voice of the New GOP.  Instead, he was silent when it mattered, and now he is playing peek-a-boo. He knows a secret, but won't tell. He tells reporters that he witnessed something shameful, but he won't testify about it.  

Pence wants the impossible. He wants the Republican nomination for president in 2024. He wants credit for being a good, loyal Republican and part of the Trump-Pence administration. Now he also says Trump was wrong. He wants it both ways. Perhaps Republicans will give him extra credit for loyalty because even though he could rat out Trump with testimony under oath, he refuses. 

Pence has an un-fixable problem. He wasn't a loyal Republican. A loyal Republican would have found a pretext to keep Trump in office. That is how Trump defines being a loyal Republican. Activists in the party fell into line and so did its leadership. 

Too little. Too late. 

There was a brief period in the aftermath of January 6 when GOP leaders might have changed the direction of the party. They could have openly said that Trump was wrong, that the insurrection was wrong, that Trump was the outlier, and they were rid of him. Many GOP leaders did say it, but then they backed off. A new GOP could have emerged: "Trump-ism without Trump, because the GOP won't stand for insurrection." 

In that world, Pence would have been a potential successor. He would have been Mr. Strong, the man in the arena who put the brakes on Trump. He could have been Mr. Integrity, the real Christian. Voters can swing that way after a president does something openly corrupt. Jimmy Carter got elected in the aftermath of Watergate. Carter was Mr. Clean, a born-again Christian who taught Sunday School and was faithful to his wife. Mike Pence had a shot.

In the aftermath of Watergate, White House aides Bob Haldeman, John Erlichman, Charles Colson, and many others went to prison. The GOP willingly cleaned itself up. In 2021 the GOP project could have been to show they supported the rule of law, norms, and patriotic tradition. They are, after all, the conservative party. They could have condemned the insurrection, Trump's failure to attend the Biden inauguration, and Trump's refusal to aid the presidential transition. They could have de-Trumped the party. That didn't happen.

Mike Pence could have spoken out forcefully in the days after January 6. Trump's crowd threatened the republic. The insurrection threatened him. It threatened his wife. It was on TV! Even Fox was appalled. He had media cover. He had done the right thing while rivals like Ted Cruz and Josh Hawley were cheering the mob. Pence had a path.

He didn't take it. He kept mum. He let the GOP re-embrace Trump. So now he wants to be half-loyal to the Constitution by saying he did his duty, and half-loyal to Trump by saying he did that duty reluctantly, because he had no other choice, and moreover he is protecting Trump by keeping his secrets. He is Mr. In-Between.

Halfway is nowhere. It's Palookaville.

Terry: "He gets a title shot outdoors in a ballpark, and what do I get? A one-way ticket to Palookaville."

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The Stormy Daniels Flub

You get one chance to make a first impression.

I hope the delay in the Manhattan hush-money case is so the Georgia case can be filed first.

The presumed "delay" in the hush-money case is because Trump announced that he would be arrested three days ago, on Tuesday, in that case.  He wasn't. 

There is a "tell" there. Trump announced his impending arrest. Trump took the lead. Trump wanted the hush-money case to be the frame for all future indictments. His presumed crime there was the mis-identification of business records, his having put "legal fees" on a check to Michael Cohen rather than "hush-money reimbursement." The impending arrest inspired outcries from Republican officeholders, and Photoshop fake images like this one.

Republicans imagined an ugly arrest like this as proof that Democrats are doing politics, not justice. Democrats--at least some of them--imagine this image as sweet justice. After all, Trump broke the law. It was hush money, and arguably a campaign donation, not legal fees, not exactly.

The Manhattan D.A. may well fall into the trap.

College classmate Jim Stodder wrote me with his vivid perspective on this. He teaches international economics and securities regulation at Boston University, with recent research on how carbon taxes and rebates can be both income equalizing and green. During and after college he knocked around as a roughneck in the oil fields. Then he returned to formal studies and received a Ph.D. from Yale in economics. His website: www.jimstodder.com

Guest Post by Jim Stodder 

Jim Stodder, selfie, taken this morning

In a famous scene in the HBO series, The Wire, the scary cool Omar says it after two hitmen fail in trying to kill him: "When you come at the King, you best not miss." That's the problem with the first case against Trump that's about to break.

Of the five cases now in the hopper, which one do you think Trump is the least worried about? The Georgia case for his pressure to miscount votes? The US Congress case for the January 6 attack on Capitol? The IRS case for years of tax fraud on his businesses? The FBI case for refusing to turn over secret government documents? Or the one about paying a pornstar so she wouldn't blab to the press?

Bingo, that last one. Not only is it by far the least serious, it's the one his supporters all know is true. They either don't care or actually think it's kinda cool. The cover up -- as was said about Nixon -- is worse than the crime. Except that the hush money payment to Stormy Daniels wasn't even a crime. And covering it up was probably only a misdemeanor. Not the thing to go after a king.

What about Al Capone? When the Feds got him for tax fraud, his underlying crimes of racketeering and murder were far worse than his accounting cover-ups. So Trump is no Big Al; he's not even a little Tricky Dick.  

Even if he's convicted for the Stormy financial cover-up, I doubt it will hurt his political fortunes. It might even help him, as it will be seen by many -- not just his MAGA hats -- as a small-time political prosecution.

And there's one more thing. Everyone knows that if you have to explain a joke, the joke is dead. Now try explaining why the accounting Fun-and-Games around the Stormy payout were a crime. That's what a NY Times op-ed does, https://nyti.ms/40n1p6p, and it's a mess. Even those who hate Trump won't be able to keep it straight.  

So this case is going nowhere fast. Nowhere except more mud on the faces of my poor deluded fellow-Dems, once again falling for their favorite fantasy, The Donald in a jumpsuit that matches his fake tan. Alvin Bragg, the Manhattan DA, should forget about Stormy. Let one of those four other legal cases get there first.

 

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Gavin Newsom: A Californian's impression.

Gavin Newsom is acting like a presidential candidate-in-waiting.

I have warned in this blog that the California governor is too good looking to be elected U.S. president. Moreover, he was too "blue state." He was too reliable and doctrinaire a liberal. He is too Californian. He has a brand, and it has too much San Francisco associated with it. I have posted here that if he strikes me that way, he would surely strike voters in the battleground Upper Midwest states that way.

I asked a bone fide brand expert about the Gavin Newsom image and underlying reality, as he observed it from close up. Tony Farrell lives in Oakland and has been following Newsom for years. Farrell has done Guest Posts here. He is the college classmate who managed marketing for the Gap, The Nature Company and The Sharper Image.

Guest Post by Tony Farrell

Farrell

"Before Ukraine,” just to make conversation, I would casually ask friends who they thought should or would be the Democratic nominee for President in 2024. (No one ever said Kamala Harris.) I always suggested Gavin Newsom, but no one else ever did. And almost universally, those I spoke to regarded Newsom’s national reputation as fatal. I wonder.

It’s now “after Ukraine” and all’s changed. Now I believe Biden should run and will run.

Nonetheless, Peter asked me to convey thoughts about Gavin Newsom from my personal perspective, having lived in the Bay Area since 1978 (45 years), so I will offer my impressions.

For a long time, I did not take Newsom seriously, as he was too young, with practically no experience except as an entrepreneur; and he was linked to the Getty family, which is just weird. 

He was 36 when elected mayor of San Francisco (succeeding Willie Brown, mentor to both Gavin and Kamala Harris), after representing lofty Pacific Heights on the City’s Board of Supervisors (a powerful group). In the beginning, there was gossipy focus on Gavin’s bodacious pompadour; lots of spurious questions about his sexuality (and other aspects of that). After one of the most bizarre homicide cases in City history (a horrendous dog-mauling in an apartment hallway), Gavin married the prosecutor, Kimberly Guilfoyl--which is also weird.

Most memorably, about 20 years ago, SF Mayor Newsom earned national renown (if not infamy) for issuing marriage licenses to same-sex couples, in clear violation of California law. All those marriages were annulled the following year in state court. At the time, I strongly believed it was very bad form for a mayor to be a flagrant scofflaw. But, ultimately, many here now see his action as a courageous move toward the right side of history. Perhaps he was a visionary, and his actions helped spur the changes the country now lives with comfortably. It's still very debatable, however.

I met Newsom only once, briefly, after his speech at a gala function in support of the environment. I hate to say it, but I could not stop looking at his pompadour. I think, like Trump, Gavin has an unreal personal aura. He stands six-feet-four, plus two inches for the hair. Moreover, when I closed my eyes during his speech, I swear I could not tell the difference between him and Bill Clinton! I later learned Gavin had been taking speaking lessons from Bill and somehow subconsciously adopted both an Arkansas accent and the rasp. Anyway, I was still not taking Gavin seriously.

That all said, in the 20-plus years that I’ve lived with Gavin on the scene here, I’ve come, day by day for thousands of days, to respect him immensely for his judgement; his political skills; his courage; his empathy; his down-to-earth common sense on almost everything I think about. That includes guns, climate, crime, fiscal prudence, health care, taxes, our propositions, you-name-it. His prompt, decisive actions at the beginning of Covid might have saved my ass. California had none of the medical horrors experienced in, say, New York City.

California has a cartoonish reputation in many parts of the country: The proverbial Left Coast filled with delusional Marxists spouting the worst kind of wokeness. And we have all that, but from the perspective of those of us who live here such craziness resides in minor players like school-board members who want to take the name “Lincoln” off of schools. It's renegade City Supervisors who block efforts to cut regulatory red tape or efforts to address homelessness. 

Tony Farrell and wife, Kathy

Among the “normies” I hang out with here in Northern California--educated and well-off, generally, who now see Trump as a treasonous criminal--our favored players are centrists. These would be people like Diane Feinstein (another former SF mayor); Willie Brown (ditto); Arnold Schwartzenegger (Republican former governor); Secretary of Defense Leon Panetta. I believe Gavin Newsom now fits into that pantheon of grounded, commonsensical, good-government types who help run and represent this most remarkable state. California is a state, I must point out, that boasts more Trump supporters than Texas and it sends Kevin McCarthy to Congress again and again. It might be hard to believe, but even Jerry Brown is seen here as a centrist. Brown was my mayor here in Oakland (and married the senior counsel for my old company, The Gap, where Newsom’s sister also worked) and our governor, too. As Oakland mayor, Jerry Brown was long past his “moonbeam” reputation from decades ago. Instead, he was just a super-smart and aware guy with excellent governing skills and a practical approach to leading Oakland and, later, the whole state. 

Gavin Newsom, like Jerry Brown, was educated by the Jesuits. Perhaps that says something about their rigor, truth and intellectual honesty.

Anyway, that’s my personal journey with Gavin Newsom. The question is, is there enough time for the country to make the same journey? Can the shallow, leftist image of Newsom be fleshed out? Can the cartoonish woke image be erased and replaced with one of an extraordinary leader who has demonstrated remarkable governing skills in perhaps the most complex governor job among all 50 states? 

Maybe. I hope so, because I don’t have any other ideas for a great Democratic president.

 

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Systemic double standard

How to end inflation:

     Make the poor, poorer.

     Meanwhile, protect the wealthy.

There is a double standard on "moral hazard."

Recessions end inflation. Business slows down. People get laid off, especially marginal workers at the bottom of the income pyramid. The Fed sees low unemployment figures and is continuing to raise interest rates. Unemployment is the lowest it has been in 55 years. Minimum wage jobs aren't getting filled until employers pay $15, $16, maybe $18 an hour. I see help-wanted signs everywhere.

It is never a good time to be a low-skill, low-experience employee, but this is as good a time as it's been since 1969. Back then, in my youth, the economy was supercharged by the government's Vietnam war spending. That combined with 500,000 young men being out of the job market because they were deployed in Vietnam. Millions more were out of the full-time workforce because they were sheltering in college to avoid the draft.

A recession this year will reduce the marginal demand for labor. The income those people don't make will reduce overall demand. That will send price signals through the economy. Banks will be more wary to lend, and that will further reduce the money supply. The poor get poorer so everyone else is better off.

There are other ways to pull demand from the economy. One is to raise taxes on the people who pay most of the taxes, i.e. the wealthy. This is in the control of Congress. The effect is direct, almost immediate, and targeted. Money that might be spent is used to reduce the deficit--a widely acknowledged public good. But that targets people with political power. That won't happen.

Americans are seeing a drama play out. The wealthy stay rich. The poor get poorer, and lectured.  It preserves the current balance of winners and losers.

The Fed and FDIC just bailed out the large, uninsured depositors of two failed banks. Avoiding a banking crisis is a public good. But the depositor bailout raises the issue of "moral hazard."  Some business depositors wisely (in hindsight) chose to bank with large, acknowledged too-big-to-fail banks like JP Morgan, which operate under tighter regulation, instead of smaller regional banks. They missed out on the corporate validation of banking with a specialized technology-startup bank. But now, all bank depositors, including JP Morgan customers, will be paying higher FDIC insurance costs. It is unfair. The improvident SVB depositors got something extra and undeserved. 

I liken this to the student loan-forgiveness issue. There would be a generalized benefit by reducing the debt burden on millions of young adults. For a generation high school students heard the message that the way to secure their future was to get a college degree. Colleges sold the idea. Politicians agreed. Lose your manufacturing job, but don't worry. Just retrain. Go to college. Easy credit allowed colleges to raise rates. Congress made college debt non-dischargeable in bankruptcy. The trap formed.

Fifty years ago a young man could work his way through the most expensive college in America with summer jobs and part-time employment during the school term. I grew melons and fought forest fires in the summer and worked in libraries during the school year. Wages were good in relation to college costs. Not now. The least expensive regional colleges are less affordable now than were the most expensive private schools in 1969.

Yes, young people were improvident: They foolishly believed adults--the politicians, colleges, and labor economists. Conservatives make their values clear: It would be moral hazard to bail them out. It would be unfair to the people who did not go into debt. Besides, it would be inflationary, since the money going into interest payments would be directed back into the economy to buy things. But bailing out venture capitalists and giving tax breaks to the wealthiest--well that just makes good sense to conservative pundits and politicians.

The double standard is real. It is the way of the world. That is why people call it systemic.

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Abortion prediction

Well, that didn't age well.

Today's Guest Post observes the predictions by Court Justices Samuel Alito and Brett Kavanaugh. They said the Dobbs decision on abortion would get the issue off the table of national politics.

Justice Kavanaugh projected an image of happy federalism.

[T]he Court's decision today does not outlaw abortion throughout the United States. On the contrary, the Court's decision properly leaves the question of abortion for the people and their elected representatives in the democratic process. Through that democratic process, the people and their representatives may decide to allow or limit abortion.

No more one-size-fits all. 

The GOP never had a chance to make this a winning issue or a local one. Too many Republicans take the moral position that human life begins at conception, so abortion is murder, plain and simple, wherever it happens. GOP officeholders are jostling to ban abortion in their own states. They are reaching out-of-state, to make a felony out of "aiding and abetting" an abortion for a woman from their state. The issue has gone national. The fever dream wishes of the most anti-abortion legislators in the reddest of red states will be the issues on the Supreme Court's docket.

John Shutkin brought this bit of backfire karma to my attention. He was a college classmate. He is a retired corporate attorney who finished his career as General Counsel for two international accounting firms. He is on multiple nonprofit boards and addressing equal rights,  equal justice, poverty, and access to education. He lives in Massachusetts.

Guest Post by John Shutkin

For the record, though a long-time lawyer and litigator, I am not in any way either a Constitutional scholar nor a (professional) SCOTUS analyst. Disclaimer out of the way, I nonetheless found this CNN news story today of great interest: CNN.   

And, even after reading this article, I saw a New York Times headline that Wyoming had become the first – but certainly not the last – state to outlaw abortion pills. Expect lawsuits over this legislation to be filed in. 

So Alito and Kavanaugh confidently claimed in Dobbs that, based on their ruling, judges would soon be “out of the abortion equation?"  Um, boys, is it possible to be more than 100% wrong? At best, they were stupid and naïve. Or they are damned liars, willing to say anything as a pretext for justifying the pre-ordained holding they want to come to. (We lawyers refer to that as “Writing the opinion from the bottom line up.”) And they are neither stupid nor naïve. So guess which one it is?

But this is the post-Dobbs world that they created and there is no putting things back in the toothpaste tube. I can imagine Chief Justice Roberts, so desperate to protect the legitimacy of SCOTUS – and, not coincidentally, his own legacy – metaphorically clutching his pearls as the abortion cases keep pouring in, many of which will likely end up on the SCOTUS docket. And, though it will be of small comfort to us on the other side of the abortion argument (especially to all the women and families whom Dobbs and its progeny will have destroyed) I do hope that Alito and Kavanaugh are called out in no uncertain terms on their blithe assurance by the liberal Justices. They damn well deserve it.

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