Bosses in charge

It is Elon Musk's Twitter, and he will fire people if he wants to.

Elon Musk is the boss. 

No apologies, no compromise.

Elon Musk is a general in the war to reclaim authority in corporate America. It had been slipping away from owners and toward managers and skilled employees. He is tilting the balance of corporate power back. Workers had gotten uppity.

Musk's swashbuckling decisiveness projects a can-do attitude. The leader leads. Musk isn't managing for "stakeholders" of multiple interests who want consensus in a shared power arrangement. He manages for himself.

The intractable inflation of the 1960s and 1970s came from guns-and-butter spending for the Vietnam War, then an oil price shock, and then an expectation settled into society that wages and prices were moving up on an unstoppable escalator. Cost of Living Adjustments--COLAs--were commonplace in rental agreements, labor arrangements, pensions, everything.  Leaders didn't set prices. The system set them. 

Ronald Reagan shocked that system in 1981, his first year as president. Air traffic controllers were widely acknowledged to have a stressful job. They were understaffed, they had enormous responsibilities, and they were paid middling salaries. Their union, PATCO, wanted higher wages and better working conditions. The federal government refused. Employees struck. Reagan fired them all.

The firing sent a signal that dominated labor relations for a generation. Then, a few years ago, the pendulum began moving back in widely-discussed contracts of movie stars and sports stars. The star had more power than the owner. In the technology industry the coder/entrepreneur who devised a better application created billions of dollars of wealth. A couple of people in a garage or dorm room could create billion-dollar businesses. They could disrupt and destroy hundred-year-old businesses.Talent, not capital, created wealth. Combine that with the retirement of the Boomer generation, with COVID, with a generation of gentle and protective parenting, and the stratification of work where "bad jobs' in agriculture and construction are done by foreign-born people of questionable legal status. The result is an American workforce that is beginning to notice its power. Unemployment is low. Job interviews are two-way explorations. Large and small businesses cannot get work done because they cannot find the employees to do the jobs.

Elon Musk is a disrupter. He announced mass firing at Twitter. He said if employees wanted to keep working they needed to commit to being hard core and to work 18 hours a day. If not, leave. Good riddance. 

Reagan's firing PATCO strikers involved only 11,000 people directly, but it sent a giant signal to employees everywhere. There wasn't an escalator. There was a boss who would fire people or move the jobs to China. The rich got richer. Owners of capital did very well in the past 40 years. Worker wages stagnated. 

The era of worker empowerment is in its infancy. Technology leads it, but in health care, building trades, hospitality, even government, work isn't getting done because employers cannot find workers. A recession and a bold visible leader can kill this infant in its cradle. Musk appears to be giving it a try. He is showing companies that they can fire employees and survive--or maybe not. We will find out. Maybe every corporation inconvenienced by an advisory board of workers, or a corporate board worried about an ESG score, can do the same. 

The world is at work trying to figure out Musk. He is talking about being "anti-woke" and that gets him support on the political right. I think it is much bigger than that. I think he resends the signal Ronald Reagan sent. He represents and leads a counter-trend away from employee empowerment and back toward the power of capital. He is so comfortable with being boss that he can make a performance out of letting there be a pretend vote about it--among users.  Not employees. Employees were starting to think they had power, and that has to stop.

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Easy Sunday. Stay alive.

We can stay on top of our booster shots.

https://www.nber.org/papers/w30512

From the abstract: 

Political affiliation has emerged as a potential risk factor for COVID-19. . . . The excess death rate gap between Republicans and Democrats widened from 1.6 pp (22% of the Democrat excess death rate) to 10.4 pp (153% of the Democrat excess death rate). The gap in excess death rates between Republicans and Democrats is concentrated in counties with low vaccination rates and only materializes after vaccines became widely available.

There was a huge opportunity for Trump and the GOP. They could have touted the fast-tracked vaccines as a triumph of American can-do entrepreneurial science combined with common-sense government de-regulation. It could have been the Trump Vaccine, Trump's proudest achievement. It would bring back memories of families lined up to get the polio vaccine, America great again. It would have positioned American vaccine science versus inferior Chinese science.

Leftist anti-vaccination, all-natural-home-remedy enclaves could have been the hotspots of excess deaths, populated by refuse-niks, who would rather die than trust the Trump vaccine.

The GOP went the other way. It was a missed opportunity.

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Celebrity

Headline: The Guardian:

"British Royal Family: Harry and Meghan invited to Charles' coronation, report suggests." 

Who cares?  

Apparently, we do.

There is something about humans that make us curious about celebrities. I saw the headline about the British royal family and it triggered an observation.

I was going to write, "curious about leaders" and if that were true it would make obvious evolutionary sense, both for in-group success and for competition between tribes and nations. Leadership is serious and important. But it goes beyond that, to sports figures, movie and music stars, the ultra-rich, to gangsters, and to whatever special attribute the Kardashian family has. If I understand it correctly, they are famous for being famous which makes them famous.

What we really like is gossip. There are characters that emerge into public view and to be culturally competent one needs to know what others are talking about.

I follow political and media celebrities, not royal ones or the Kardashians, but I am acting out the same human impulse. I don't pretend that my fascination with Trump, in all his cheesy malevolence, is entirely serious and important while the Kardashians are not. Trump is a character and subject of gossip, just like reality TV stars.

I had gotten along fine for years knowing and caring little about Elon Musk, but now he has burst into view, almost rivaling Donald Trump on center stage. One of the insights I have is that we most enjoy watching celebrities when they are messing up. Elon Musk is messing up, but he doesn't seem to care and he is doing it with broad bold strokes. He fires people then hires them back. He says he welcomes dissent on Twitter, then bans people who cross him, then lets the banned people back in. He is acting like an impulsive child knocking over Lego buildings. It is fascinating. 

I watched Breaking Bad, where the protagonist made meth. I watched The Americans, where the protagonists were murderous Russian spies. I watched The Godfather, where the protagonists were mafioso. I recognized that what the protagonists were doing was morally wrong. Yet in watching I found myself caring about them and hoping they survived the incidents and suspenseful close calls of the story line. I got into the characters.

It shouldn't surprise me that people have gotten into Trump and hope he gets away with everything he has done.

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This is real.

This is not parody.

Donald Trump is really doing this. It isn't something done in his name, or for him. Trump is all in, personally.

Official Donald Trump Digital Trading cards

Yesterday, when I began to prepare this blog post, images of superhero Trump were available to buy for $99 each. There were apparently a hundred different images, and there were an unreported number of each of those images.

Trump's creation of these cards is a new level of grandiloquent grift, but that is only half of the over-the-top Trump-ness of the story. The other half is that overnight they sold out.

The video at CollectTrumpCards.com begins with Donald Trump saying:

Hello, this is Donald Trump. Hopefully your favorite president of all time, Better than Lincoln, Better than Washington. I'm doing my first Official Donald J. Trump NFT collection right here and right now. . . . 

People snapped up images like these:

Two observations:  

One is that there is no level of over-the-top self-promotion for Trump. There is no limit to his willingness to monetize his supporters. There is no top so there is no over. Trump is beyond parody. Could he sell toenail clippings gathered from Mar-a-Lago staff, and call them his own, and sell them? I think he could.

The second is better understanding why Republican candidates choose to destroy their own campaigns by clinging to Trump. The close-at-home case on point for me is why a nonpartisan Medford, Oregon mayor, a career police officer, and a Republican candidate for Oregon state senate would choose to lose a winnable election. Randy Sparacino only needed to say that he wasn't totally Trump-blind and that he didn't agree with a wild proposition announced by local Republican party officers who called Biden an illegitimate president. He could have won with a mumble that gave local voters some glimmer that Sparacino was not drinking Trump Kool Aid. He didn't do it. 

The explanation is in the "sold out" notice. The votes he might have won by showing himself to be a reasonable, fact-based, supporter of orderly government might well be overwhelmed by the votes he would risk within the Trump-supporting GOP electorate. Sparacino isn't stupid. He wasn't trying to lose. He was trapped by his GOP voters and by the GOP state leadership that paid for his million-dollar campaign. Too many of them don't think Trump posing in a cowboy duster or superhero costume and calling himself greater than Lincoln and Washington is laughable and weird. 

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Dare Democrats Re-think Kyrsten Sinema?

Try out an idea: 

Democrat should thank Kyrsten Sinema.

I realize the idea appears preposterous on its face. After all, every Democrat has heard that the crazy, self-serving turncoat senator sabotaged some of Democrats' biggest, boldest ideas. A "real" Democrat is already preparing to run against her in the Democratic primary.

Washington Post photo

Consider her predecessor, John McCain. He branded himself a "maverick." He was positioned on the left, open-minded, non-Trump side of the GOP. McCain famously corrected a woman who called Obama a Muslim. That isn't Trump's style. In McCain's last important vote, he pointed thumb down, killing the GOP effort to repeal the ACA, Obamacare. Had the GOP killed it, the U.S. health care system would have quickly fallen into crisis. There would be millions of people without health care. The ACA had become popular. We needed it or something like it. GOP policy and messaging had so much inertia, and Trump was so invested in being anti-Obama, that the GOP was going to risk the GOP's growing hold on White-working-poor Americans. Those blue collar people, who now vote 65-35 for Republicans, are the primary beneficiary of the ACA. The GOP won by losing. McCain saved it. 

Sinema is the maverick McCain of the Democrats. Arizona is barely purple. Democrats win when the Republican candidate is an unelectable kook, and then only barely. Biden carried Arizona by a few thousand votes. Candidates Kari Lake and Blake Masters both lost narrowly, even after both sabotaged their campaigns by sticking with a strong, crazy version of Trump election denial. Had Republican Doug Ducey been eligible to run for re-election he would have won in a landslide. Arizona is not a blue state where a conventional Democrat/Republican matchup elects Democrats. Mark Kelley won because he is an astronaut, a hero, and the husband of a former congressperson brain-damaged by a gunshot while doing a Town Hall. His opponent was an election-denying kook. That is what it takes for a conventional Democrat to win in Arizona.

As an Independent Sinema will still caucus with Democrats--no real change. She frustrated Democrats on a close-vote issue of the carried interest taxation loophole for hedge fund managers and she voted against the minimum wage bill. She held up the infrastructure bill and got some concessions. She positions herself as wavering, so it added drama to Senate votes. Still, amid all that, Democrats passed historic laws on infrastructure, jobs, child poverty, sentencing for marijuana, gun control, same-sex marriage, prescription drug costs, and climate change. With all the Democratic complaining about how Democratic bills would have been stronger if Sinema voted like Elizabeth Warren, somehow Democrats and Biden have a record of surprising achievement, notwithstanding a 50-50 senate. A Republican senator would have killed all that. With Sinema in office, they passed. Accept the win.

The perfect is the enemy of the good. Elizabeth Warren could not win a senate seat in Arizona. A person positioned as a maverick can. Democrats complain about Sinema. That helps her. Their complaints prove she is a real maverick. 

The laws Democrats might have passed would have been more progressive without Sinema's concessions. But that isn't America and it isn't Arizona. Republican candidates for the U.S. House won 52-48 in the 2022 midterm elections. Democrats have not yet sold their message and policies to a clear majority of the American public. Since Democrats justifiably consider themselves the defenders of democracy and legitimate elections in this era of Trump, they need to face up to the verdict of democracy. Policies that are moral and just and righteous and critically important to the future of the planet only become law if they reflect the opinions of the American people. 

The problem for Democrats who prefer a real progressive to a Kyrsten Sinema isn't Sinema. The problem is that Democrats have not yet persuaded the tipping point voters of America to agree with them.

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Inflation snapshots.

Inflation dropped slightly, to 7.1%, according to the Fed's calculations.

Gasoline prices are down. Home prices are  down. 

I notice gasoline prices. It had been $5-something in Oregon. Now it is under $4. The WTI (West Texas Intermediate) price is now $75/barrel, a price at which it is still profitable for oil companies to drill and frack, but no longer a spectacular windfall. U.S. oil companies did not over-react to the brief period of oil at $120. The "capital discipline" they exercised a year ago--to the condemnation of people who urged they ramp up production in the face of Russia's invasion of Ukraine--turned out to have been prudent.

If oil prices settled at the $70s range, U.S. oil companies could profitably meet U.S. demand. Energy prices would have a modest effect on inflation, neither inflationary nor deflationary. It is not the nature of oil prices to settle at an equilibrium. That is why energy prices are excluded from inflation calculations. 

In COVID's early months, U.S. shutdowns caused American to buy more physical stuff from China. Our ports clogged up. Now China's severe COVID lockdown policy is slowing Chinese manufacturing. That is hurting U.S. supply chains, which is inflationary. Exports from China fell 8.7% from last year. Imports into China fell 10.3%. The slowdown shows up in the dramatic drop in trans-Pacific shipping costs. Ships were stuck at sea waiting to get dock space. We are back to normal, which is deflationary.

Home prices are dropping. The Fed calculates rent into inflation by imputing a rent that a homeowner would pay if they were renting that home. In fact, once a person buys a home, that price is locked in. Calculations don't match lived experience.  Housing rents, too, tend to be "sticky" with rents locked in from year to year. Still, housing is such a large part of a family budget, it needs to be figured in somehow.  At any one time, some people are buying or selling homes and some people are looking for a place to rent. Those people set the market price for everyone else in inflation calculations.

For the purposes of Fed calculations of inflation, the housing component is dropping, as the chart shows. Notice that the right axis is not zero, so the apparent drop is exaggerated in the chart, but home prices are down about 9% nationwide and far more than that in some markets.

I rent out an updated farm house built by my grandparents 99 years ago. It is a two bedroom, one bathroom place with about 1,100 square feet. I was inundated with rental applicants at $1,400 a month. The rental market in Medford is skewed by the fire two years ago that destroyed over 2,000 homes.

Some places in America have rents that seem impossibly high to me. They are bright blue cities where jobs are being created. Fox News and Republican officeholders describe these as hell-holes of violence, crime, and misery run by Democrats, yet apparently people want to live there. These are the most productive places in America, creating wealth and taxes that support the nation.

I lived in Boston almost 50 years ago 1973-1975.  My apartment was a 12-minute walk from a subway station where I took the train to downtown. It was in a working class neighborhood, called lower Dorchester.  The place today is still there and apartments like mine rent for $2,150/month. 

When I lived there the floors had gold carpets. The countertops were formica. There was a "great room" with kitchen appliances along one wall. There was one small bedroom and a bathroom. I would estimate 600 square feet total for the place. There were coin operated washing machines and driers in the basement.

Back in 1973, I earned $750 a month, $9,000 a year, working at City Hall for Mayor Kevin White. I earned a bit more than did secretaries who did typing for the City of Boston. My wife was in graduate school so I was the sole income-earner for the household. My rent was $165, or 20% of my income. Today a household would need to earn almost $11,000 a month or $130,000 annual income for rent to be 20% of income. This was not a fancy place. Working class people lived in it then and likely now. It might be manageable if there were two incomes, not one. Otherwise the household for a working family would be paying half their income in rent.

Inflation is getting better, but on the margin for young adults the overall affordability of life is harder than it was for me. This has been an era when Fed policy inflated assets. The great stock market of the past 40 years is irrelevant to young people. They weren't alive for it. The rise in housing prices didn't make them wealthy. It made houses unaffordable. 

Boomers like me might be surprised at the prices charged by tradespeople or others doing personal services for us. It seems so high. But people who have owned a home for decades have lost touch with inflation. People in their 20s entering the workforce are experiencing the other side of the tremendous increase in housing prices.

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Twitter Troll

I can't take my eyes off of you.

But if you feel like I feel
Please let me know that it's real.
You're just too good to be true
I can't take my eyes off you.

 Frankie Valli, 1967

Elon Musk is a star. He is acting out. He has center stage and he is hanging onto it by being outrageous. 

Musk is in a manic high. 

Ron DeSantis has not displaced Trump on center stage. Elon Musk has. Musk dominates big-gesture narcissism the same way Trump did it, by being in the news cycle multiple times a day saying provocative things, poking his opponents in the eye with a stick. Screw the woke left. Screw Biden. Screw Democrats. Screw moderation weenies, and don't just fire them; accuse them of supporting child abuse. Screw the media and accuse them of hiding the truth. Twitter is the real media. Screw the supposed protectors of public health: "My pronouns are Prosecute/Fauci."

Musk has adopted the Master of the Universe model of behavior that became famous--then infamous--on Wall Street with big dealmakers making big money treading like Godzilla, buying up and smashing companies. Bravado and hubris were strengths, not weaknesses. They exemplified testosterone Alpha Male can-do empowerment. The Master of the Universe is not constrained by laws or custom. The character is bigger than life. The character is an alternative to the little girl truth-teller in the "emperor has no clothes" fable. That girl is empowered by her innocence and naïveté. The Godzilla titan can flout the rules because he knows the rules won't constrain him.

Musk, like Trump, appeals to the populist political right's resentments of elite opinion and social norms. They feel White Christian heterosexuals are picked on by the nannie/tyrants of the establishment. The Master of the Universe is Atlas, working on behalf of the everyday oppressed silent majority. Atlas shrugs. He is too rich to be called "deplorable."  

There is an irony here. The richest man in the world is telling people to fear the power of elites. It works for Musk like it worked for Trump. People trust a traitor. It takes one to know one. 

Musk is communicating with big, bold strokes. He showed he could make an offer to buy Twitter on a whim and as a joke. Then he realized he vastly overpaid. He was flamboyant in his rule-breaking to get out of the purchase. He ended up buying Twitter at the price he offered because his bluff offer was so well crafted. It was ironclad. The only person who could constrain Musk was Musk.

Upon owning Twitter, Musk announced an ultimatum. He told employees, "This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.“ They needed him. He was the boss. Like Trump said of America, "Only I can fix it." He could tease employees on their way out. “I would like to apologize for firing these geniuses. Their immense talent will no doubt be of great use elsewhere.”

This weekend, on the stage with Dave Chappelle, amid boos from the crowd, Musk shouted, "I'm rich, Bitch!"

Manic. Hubris. 

Medford CBD convention, 2019. The sky is the limit!

My own impressions of this era are colored by my experience. Magic beans aren't real. The emperor has no clothes. Internet stocks get to crazy highs. Mortgages given to the unemployed are a house of cards. Bernie Madoff was a Ponzi scheme. Beanie Babies were worthless. Junk bonds fail. Enthusiasm for CBD was a flash in the pan.

On the way up, things are so good and so easy that the people involved in them go crazy. People on a manic high of success and power and entitlement are fascinating to watch. They are stars. As Trump observed, "when you’re a star, they let you do it. You can do anything. Grab ’em -- --- -----. You can do anything."

It works for them until it doesn't. Then the unraveling.

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