The Hands of Man

I am always in awe of those who can create something new and creative out of nothing.

It is relatively easy for someone to copy the work of others and add a couple of bells and whistles.

It is the original effort that is difficult. 

Creating something where there is no model or experience.

There is no statement that says it better than what Sir Isaac Newton was known to have said.

"If I have seen further, it is by standing on the shoulders of giants."

In these pages I have written before about some of those who stepped out and have truly done something original that also had transformative effects on society.

Newton would call all of them "giants".

The Wright Brothers.

Steve Jobs.

Elon Musk.

I am a not a big "Arts" guy but I have similar respect for anyone who can create original work in music, film or art. 

That is especially true of sculpture where you start with a block of stone or a mound of clay and turn it into a beautiful form.

I first gained a true appreciation for this when I was in Florence, Italy when I was 18 years old and had the opportunity to see Michelangelo's sculpture of David.

I remember being fixated on the right hand of the statue as I stood several feet away considering the detail and attempting to contemplate how this human shape could have been created from a single block of marble.

 

It was also easy to feel a little small at 18 years of age when I learned that Michelangelo was a mere eight years older than me when he began working on David in 1501 A.D. that then consumed nearly three years of his life. 

It was a giant statue created by a giant of a man.

I recently came across a thread on X.com by @Culture_Crit that highlighted some of the greatest works of lifelike sculptures ever produced.

Here is another marble sculpture by Michelangelo that depicts Moses that was completed in 1515.

Michelangelo did not miss many details in the human form.

Here is a sculpture by Chauncey Bradley Ives (1884) titled "Undine Rising From the Waters".

It does seem as if her garment is wet and clinging to her skin. However, it is all marble.

We also have this statue in marble by Antonio Corradini, "Modesty" (1753) that depicts a veil of sheer fabric over the face and body.

However, could there be a greater example of sculpting a veil out of marble than that created by Giovanni Strazza in the 1850's with "The Veiled Virgin"?

How about this piece by Francesco Queirolo which includes intricate netting?

Incredibly, this work was done with one block of marble and took seven years (1752-1759) to complete.

A closer look at "The Release From Deception" by Queirolo.

A detailed look at the netting.

Credit: https://mymodernmet.com/francesco-queirolo-the-release-from-deception/

I am not sure there is a more realistic marble sculpture than "The Abduction of Prosperina" by Gian Lorenzo Bernini (1622) .The hands gripping Prosperina's body are astounding.

What is most amazing about all of these sculptures is that they were done solely with the hands of man, a creative mind and some rudimentary tools such as a hammer and chisels.

There was no CAD-CAM, artificial intelligence, laser cutting tools or 3D printing.

The hands of man created these masterpieces.

Michelangelo reportedly stated in his later years that he viewed his work not so much sculpture but of liberating figures that were already existing in the stone. He contended he could see  them in his mind's eye and his work was to merely chip away the excess material around the figure.

Is there anyone alive today who could create such masterpieces using only their hands and the tools available in these prior periods of human history?

Seeing all of this reminds me of passage in Walter Isaacson's biography of Elon Musk that seems particularly relevant when considering all of this.

Elon found it surprising---and frightening --- that technological progress was not inevitable. It could stop and even backslide. America had gone to the moon. But then came the grounding of the Shuttle missions and an end to the progress.  

"Do we want to tell our children that going to the moon is the best we did, and then we gave up?, he asks.

Ancient Egyptians learned how to build the pyramids, but then that knowledge was lost. The same happened to Rome, which built aqueducts and other wonders that were lost in the Dark Ages. Was that happening to America?"

"People are mistaken when they think that technology just automatically improves", he would say in a TED talk a few years later.  "It only improves if a lot of people work very hard to make it better."

The truth of Elon's views hits home even more so right now considering the events of the last few days when an American built spacecraft returned to the moon for the first time in 51 years.

Source: https://phys.org/news/2024-02-years-moon.html#google_vignette

What is also true in looking at these great works of art, even when technology improves, it does not necessarily mean that the final product is better or more inspiring than that which was done with the hands of man.

The same can be said of that moon landing last week when you compare the tools at hand today compared to what existed 51 years ago.

Source: https://blog.adobe.com/en/publish/2022/11/08/fast-forward-comparing-1980s-supercomputer-to-modern-smartphone

Returning To BeeLine's Origins

My 12-year old grandson recently asked me how long I had been writing BeeLine.

It surprised me when I realized that I had been writing BeeLine since before he was born.

BeeLine was launched on January 1, 2011.

I pulled up the first BeeLine blog post so that I could read it with my grandson.

I was surprised at how closely BeeLine has adhered to the key principles and vision I had for it in that very first blog post.

My most important objective was to provide some coherence and context as to what was going on in the world. I also wanted to do it by getting above the clutter and chaos that fills our world with hard facts and data.

The blog posts that followed may not have been as concise as I originally envisioned but I soon discovered if I was going to provide the necessary factual content and context it would require more exposition and explanation.

I also found out that the time commitment to the blog was greater than I expected because of the additional research it took to verify and substantiate the facts or data I used in each post.

It is true that there is a lot of misinformation on the internet. I always endeavor to confirm or corroborate the key facts and data I use in BeeLine.

Unfortunately, since I started writing BeeLine, it seems more and more misinformation is found in the mainstream media where it is used as part of a narrative to advance the agenda or interests of progressives or the D.C. establishment (e.g. Russia collusion, Covid had natural origins, etc.)

Here is that first blog post.

Over 1,800 blog post later, have I remained faithful to the original vision of BeeLine?

Your comments are welcome and appreciated...

Welcome to BeeLine   (originally published January 1, 2011)

A new year.  A new beginning.  A new blog.  It certainly is debatable whether the world needs another blog.  By one count (Pingdom), there were 126 million blogs on the internet in 2009.  That compares to 234 million websites serving 1.73 billion internet users worldwide.

90 trillion emails were also sent in 2009 (the final 2010 totals should be available in the next 30 days). However, 81% of all emails are spam according to Pingdom!!

Keeping all this in mind, I want BeeLine to be useful and relevant.  A"beeline" is defined in most dictionaries as a straight or direct route. The shortest line from one place to the other is probably the way I like to think of it.  That is what I want this blog to be.  There is so much information out there, but how do you get yourself above the clutter, chaos and calumny that we live with everyday?  My hope is to provide some small modicum of coherence and context about the world and share it with you in a concise manner.  That is my goal for BeeLine.

I intend to write primarily about what interests me and what I also think you will find interesting. That will probably mean there will be a heavy dose of politics, public policy, economics, taxation, investing, employee benefits, neuroeconomics, sports and interesting trivia.  However, anything and everything is fair game if it meets the BeeLine test of giving you a direct path to what I find interesting and what I think is worth sharing.

How will I do this?  Will there be enough worth sharing?  I have no idea as I begin the New Year.  However, experience tells me I will come across something that will meet the test.  The only serious question is whether anyone will care.  I start off knowing that of those 1.73 billion internet users, 738 million are in Asia.  By contrast, only 250 million are in North America-only 15% of total worldwide internet users.

When you add in the internet users in Latin America (179 million), Africa (67 million), the Middle East (57 million) and Europe (418 million of which a large majority do not speak English) I have to come to terms that none of us is as relevant as we think we are (or used to be).  It is a new world. I will do my best to embrace it even if I am competing in a small market much like my local Cincinnati Reds baseball team.

Happy New Year!

This and That---February 21, 2024 Edition

A few random observations, charts and factoids to provide some context on what is going on in the world.

What Is Going On In Portland?

Portland, Oregon was at the center of the defund the police movement a  few years ago.

Source: https://thehill.com/changing-america/sustainability/infrastructure/503940-portland-is-latest-city-to-defund-police/

The argument was that resources would be better spent on psychologists, mental health professionals and paramedics than community policing.

This was how one of the young. liberal, female protestors confronted the police in Portland during the Black Lives Matter and Defund the Police movement in 2020.

It was one of my favorite images from that crazy year.

How have the progressive strategies worked out in Portland?

Another interesting factoid I saw about Portland recently.

It has the most strip clubs per capita of any city in the United States.

Source: https://priceonomics.com/why-does-portland-have-so-many-strip-clubs/

I have to say that surprised me considering the progressive, feminist mindset that permeates politics in that city.

In attempting to get an explanation as to how it is that Portland became the strip club capital of America I came across this explanation.

When Oregon adopted its constitution in 1859, it included a very vague, open-to-interpretation statute (Article 1, Section 8): “No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write or print freely on any subject whatever.” Since then, Oregon’s Supreme Court has vigorously defended this “free expression” in all forms, resulting in something of a garden of eden for strip clubs.

Apparently that "free expression of opinion" allows strip clubs to proliferate and young women to protest the police while nude in the middle of the street but did not extend to those who did not want to wear a mask or to get vaccinated during Covid.

Source: https://www.wmtw.com/article/portland-city-council-unanimously-passes-mask-mandate/38659539

Source: https://komonews.com/news/local/covid-19-vaccine-required-for-city-of-portland-employees#!

White Males Die By Suicide, Black Males Die By Homicide 

This is an interesting chart that shows violent death rates for males by race.

White males die by suicide. Black males by homicide.

Credit: https://twitter.com/Foz89107323/status/1759271422956863600

It appears that destructive tensions in Whites are borne internally whereas the opposite is true in Blacks.

This appears to have been exacerbated in recent years as "White Guilt" has become a thing.

I referred to the following data in an earlier blog post  ("Making Sense of Self-Esteem") that shows that in the U.S. Blacks have the highest level of self esteem and Whites have the lowest. This may partially explain the high suicide rates for White males compared to Blacks.

It has also generally been true that all races feel better and have warmer feelings about their own race than they do of others. This has probably been the case since the beginning of time since familiarity drives favorability in the human mind.

You see that fact in this chart which measures in-group bias by race/ethnicity.

However, there is one outlier---White liberals.

They claim to feel more warmth to other races than they do to their own race.

Credit: https://twitter.com/Foz89107323/status/1759271478120305101

White liberals are the only group who views themselves worse than they do others.

It is never a good thing to take anger out on someone else.

This data suggests that it is worse to take it out on yourself.

Who Is Driving In Luxury?

Recent data suggests that 39% of the vehicles that Gen Z are interested in buying are luxury models.

Only 12% of the vehicles that Boomers are likely to buy are luxury brands..

Gen Z is generally defined as someone who was born in the mid-1990s or later making the oldest of that generation in their late 20's.

What is interesting is that the Federal Reserve is not even separately breaking out the wealth of this generation yet. due to lack of data. Anyone born after 1981 is considered a Millennial.

However, even considering this, Millennials only hold 8.5% of total wealth in the U.S.

Boomers hold 50%.

The fact that Boomers are not interested in buying luxury cars might be one reason why they have that wealth.

The fact that Gen Z wants to buy a luxury car must be a reason why they want their student loan debt to be cancelled.

Source: https://www.visualcapitalist.com/us-wealth-by-generation/#google_vignette

Catch and Release

Joe Biden claims that he needs Congress to pass new legislation in order to make the border more secure.

However, look at the chart below of the number of illegals who were apprehended at the southern border and then released into the country on their own recognizance to appear at an immigration hearing sometime in the future. 

Many of those released will not get a court date for at least a decade. 

Source: Source: https://apnews.com/article/immigration-courts-wait-54bb5f7c18c4c37c6ca7f28231ff0edf

What are the chances that these illegals will even show up for that court date knowing they may be deported?

In 2020, under the Trump administration, just 365 border apprehensions were released into the United States with a notice to appear at a future court date.

In 2023, under the Biden administration, over 1 million illegals who were apprehended by the U.S. Border Patrol were released into the country. 

Credit: https://twitter.com/kerpen/status/1756811183410008148

You might believe the law changed in January, 2021.

It did not.

This was accomplished by the executive orders of Joe Biden.

No new law will fix this.

Laws do not mean anything if the person charged with enforcing the laws of the United States does not do so.

Population Pressure

What is the population of the United States?

How much has it grown since the official census in 2020 determined that there was a population of 331.5 million in the United States?

How many were added in 2023?

It seems that you can get very different answers based on who you want to believe.

This investment researcher believes we are seeing the lowest population increases in the United States in more than 100+ years.

It is worse than what we saw in the Great Depression.

It is "scary".

At the same time, Newsweek has a story reporting that the United States has just seen the largest one-year growth in population in the nation's history citing a report by John Burns Research and Consulting.

Source: https://www.newsweek.com/us-population-largest-one-year-increase-history-1870560

Credit: https://www.newsweek.com/us-population-largest-one-year-increase-history-1870560

Both of these reports cannot be true.

In addition, the official U.S. Census Bureau estimate is that the population of the United States increased by 1.6 million over the last year.

What are we to believe?

Let's analyze this issue the way we approach things at BeeLine.

That means we look at the underlying data and facts for the truth.

According to the U.S. Census Bureau there were 3.66 million births in 2023.

There were 3.15 million deaths.

Source: https://www.census.gov/library/stories/2023/12/state-population-estimates.html

The difference in births and deaths would give us a net population increase of .51 million.

1.2 million immigrants were given lawful permanent residency (green card status) in the United States in 2023.

We then have to consider the number of illegal immigrants who entered the country in 2023.

There were 3.2 million apprehensions and expulsions at the border in 2023. There were an unknown number beyond this that entered the country undetected.

We know that the vast majority of those who were encountered and apprehended at the border were released into the country at the direction of the Biden administration.

Let's be conservative and estimate that 2.5 million additional illegal immigrants are now in the country that were not here a year ago.

Credit: Bianco Research, L.L.C.

Let's do the math on the population increase in the United States in 2023 based on these facts.

Births minus deaths                +.51 million

Legal immigrations              +1.10 million

Illegal immigration               +2.50 million

Net Population Increase        +4.11 million

The BeeLine analysis suggests that the 3.8 million increase in the population cited in the Newsweek story is the most reliable number to believe.

The claim that U.S. population is seeing its lowest growth rate in over 100 years is clearly wrong in that this analysis is ignoring any immigration numbers.

The U.S. Census number is similarly inaccurate in that it appears to totally ignore illegal immigration in its numbers. Otherwise its 1.8 million growth numbers is very close to BeeLine's 1.71 million for births minus deaths plus legal immigration.

I would suggest that 3.8 million  to 4.1 million is a sound estimate for the increase in population in the United States in 2023.

That would make it the largest yearly increase in population numbers in the United States in history.

What is interesting to me in all of this is that the Democrats are "all in" on an open border at the same time that they are so vocal about sustainability issues.

There seems to be no recognition of the enormous sustainability issues regarding their position on illegal immigration. This is especially surprising considering the importance of this issue with liberal  and younger voters in particular.

Too many immigrants puts too much strain on our resources. It puts unnecessary strain on everything in our society---our water, our sewer systems, our roads, the electric grid, our infrastructure and our environment. It contributes to congestion and urban sprawl.

Add to this what it does to increase the financial strain on our schools and our health system and costs pressure on rents and housing costs, not to mention our law enforcement and justice system.

Adding too many immigrants, too quickly, also puts added pressure on the social order if those immigrant numbers outpace the ability to integrate and assimilate them into the general population.

How do you add 4 million people in one year without creating enormous sustainability and societal problems?

You can not do it.

However, this is where we are.

Thanks, Joe!

Is the SAT Pendulum Swinging Back?

Six years ago I wrote a blog post entitled The SAT Meets PC" about the emerging trend of eliminating standardized tests as an admission requirement at selective colleges and universities.

The move was apparently motivated by the fact that the test scores of those the universities wanted to give preference to were not scoring high enough on the standardized tests and those they wanted to reject were scoring too high.

The trend gained momentum over the succeeding years (particularly in 2020 as Covid disrupted the education sector) until almost all top colleges got rid of the SAT or ACT requirement in what they argued was in the interest of more diversity, equity and inclusion.

In my previous blog post I pointed out the absurdity of all of this in that the use of standardized aptitude and assessment tests like the SAT or ACT were introduced to begin with in order to identify talent and aptitude in the first place.

What is interesting is that the argument for doing so is to "enhance diversity".

That seems particularly ironic in that standardized tests were introduced in order to "enhance diversity" in the first place. They were introduced to identify talent and aptitude without regard to anything else--family background, wealth, race, religion or gender.

We now have to get rid of these tests to do the same thing they were introduced to do?

It appears that the pendulum is now swing back the other way.

In 2022, MIT reinstated the SAT/ACT requirement.

Last week Dartmouth said they were bringing it back as well.

Source: https://abcnews.go.com/US/dartmouth-reinstates-satact-scores-drawing-attention-role-standardized/story?id=106987409

This week Yale announced it is considering reversing its position on the SAT.

Source: https://www.bloomberg.com/news/articles/2024-02-14/yale-weighs-bringing-back-sats-after-dartmouth-mit-reversal?embedded-checkout=true

I know something about the subject of standardized tests. I have taken more of them than most people on this earth.

I have taken the PSAT, SAT, ACT, LSAT, the Multistate Bar Exam and the CPA exam.

Some argue that standardized tests are racist. However, they do not appear to be racist when it comes to Asian students, many of which have been brought up in families that have far different cultures than most Americans. Many parents of these students also only speak English as a second language. How is it Asians score even better than Whites on the SAT/ACT?

In fact, a recent study found that Asian students who had parents who did not graduate from high school scored higher on the SAT than Black students who had parents with doctorate degrees.

A final analysis compares the SAT scores by ethnic group across each of the nine levels of parental education: no high school, high school, vocational training, associate’s degree, some college, bachelor, master degree, PhD professional, PhD scholarship. Earlier, I have examined 8 data sets and found that the black-white IQ gap increases when education level increases, consistent with the hypothesis that more education does not reduce the IQ gap. This pattern was replicated in the SAT scores, for both years. The asian-white gap maybe increases with education level, but not the hispanic-white gap. It is striking that asians with parents who did not complete high school score 100 points above blacks with PhD parents.

Asian students with parents who did not finish high school also had SAT scores about the same as White students with parents who had college bachelor's degrees. 

Source: https://humanvarieties.org/2023/08/06/a-remarkable-correlation-between-iq-and-sat-scores-across-ethnic-groups/

Standardized tests are designed to assess whether you have the abilities to succeed in college, law school, medical school and the like or the knowledge for professional certification. They have been used over years because most of the studies I have seen  (and these studies were well known before 2018) suggest that there is a strong correlation between those that do well on those tests and those who successfully complete the coursework. The correlation is also better than high school grades in predicting future higher academic success.

Why is Dartmouth bringing the SAT back?

Dartmouth explains that their own research has shown that the SAT does exactly what it was designed to do when it was first designed---identify talent across a broader spectrum of society and also predict college success.

From Dartmouth's explanation about its research study on the reversal of the SAT policy.

...High school grades paired with standardized testing are the most reliable indicators for success in Dartmouth's course of study. They also found that test scores represent an especially valuable tool to identify high-achieving applicants from low and middle-income backgrounds; who are first-generation college-bound; as well as students from urban and rural backgrounds. It is also an important tool as we meet applicants from under-resourced or less familiar high schools across the increasingly wide geography of our applicant pool. That is, contrary to what some have perceived, standardized testing allows us to admit a broader and more diverse range of students.

In that the pendulum on the SAT looks to be in the early stages of swinging back you might want to read in full what I wrote about six years ago when political correctness started to overtake merit and common sense.

It also provides you with some helpful perspective and context on why the standardized tests were instituted in the first place in order to level the playing field in favor of talent and away from privilege.

Isn't this what equity is supposed to be about?

The SAT Meets PC (originally published August 9, 2018)

After World War II aptitude tests gained increased favor with both business and education due to their wide use in processing hundreds of thousands of military recruits into the right roles in the War effort. For example, my father was only a high school graduate at the beginning of World War II but he was assessed with high intelligence and trained as a cryptographer. He told me that he was one of the cryptographers who passed the top secret message to drop the atomic bomb.

Business used the tests after the War for hiring for management positions based on whether someone had the aptitude to succeed rather than simply focusing on a college degree. It was the same reason that the Armed Forces used aptitude tests. Quite simply, in those days only 1 in 10 went to college. If someone did not attend college it most likely had nothing to do with their ambition or intelligence. They simply did not have the financial resources to continue their education.

The use of standardized tests leveled the playing field. It did not matter if your father wasn't a bank president or you did not go to a boarding school. It only mattered if you had the smarts to succeed.

Interestingly, a Supreme Court case in 1971 (Griggs v. Duke Power Co.)  ruled that jobs-based aptitude tests were potentially discriminatory as they could cause "disparate impact" when used by employers to assess and predict the performance of workers for promotion and advancement. As a result, a college education became the "default" for determining who would get on the management track and college became the only ticket for future advancement. High school graduates were left out in the cold no matter what their abilities might be.

The use of the SAT and ACT tests began being used extensively in college admissions decisions for similar reasons after the War and their importance grew after the Griggs decision. Admissions into the Ivy's and other top schools that were historically based on family connections and the East Coast boarding school they attended. The use of standardized tests like the SAT allowed college admissions to be democratized and merit based.

Using a standardized test that measured one's aptitude for college work leveled the playing field. It allowed schools to find overlooked talent who may not have had all the advantages of the prepsters on the East Coast. It did not matter if you hailed from Michigan, Montana or Mississippi and did not have  the same access to a quality high school education that the affluent had. The SAT showed whether you had the ability to do the work. The SAT also allowed admissions officers to objectively compare a student from the Choate School with students from Chillicothe, Ohio and South Central LA.

You can therefore argue that standardized testing has been one of the biggest factors allowing deserving, overlooked people to be recognized and receive opportunities to get ahead in the military, business and education over the years. This led to millions being elevated in their class status in the United States.

In fact, it would be difficult to point to anything else that has had a bigger impact on improving class mobility and opportunity for deserving people over the last 75 years.

Therefore, I find it interesting that more and more colleges are dropping the SAT and/or ACT as part of their admissions process.

The University of Chicago announced last month that it was dropping the requirement. Chicago joins over 1,000 other colleges and universities that have eliminated the standardized test in their admission decisions.

What is interesting is that the argument for doing so is to "enhance diversity".

That seems particularly ironic in that standardized tests were introduced in order to "enhance diversity" in the first place. They were introduced to identify talent and aptitude without regard to anything else--family background, wealth, race, religion or gender.

We now have to get rid of these tests to do the same thing they were introduced to do?

Standardized tests are not just a big topic at the university level. They are also under attack in New York City where they are used for admission decisions for the city's top high schools.

The reason?

Too many Asians are scoring well and too many Blacks and Hispanics are scoring poorly.

52% of admission offers to New York City's elite high schools for 2018 went to Asians.

4% to Blacks.

6% to Latinos.

27% to Whites.

This is not fair according to New York City Mayor Bill DeBlasio because Blacks and Hispanics make up about 70% of the city's school population but they are only getting 10% of the spots in the elite high schools due to their standardized test scores.

On the other hand, Asians make up 13% of the school population but got 52% of the spots.

Accordingly, DeBlasio has won approval to get rid of the standardized test and allocate spots in the elite high schools so that Blacks and Hispanics get somewhere close to 50% of the admission offers.

All in the name of diversity.

Of course, if the NFL determined who made their rosters with similar thinking they would no longer consider 40-yard dash times or how much an athlete could bench press. They would also allocate a set number of roster positions to those that played in the Ivy, Patriot and Mountain West conferences and cut back those who played at Alabama, Ohio State or USC.

All in the name of diversity.

Of course, there remains the question as to whether putting individuals in positions where they are in over their heads is really in their best interest.

Well-regarded African American economist Dr. Thomas Sowell argues that affirmative action programs aimed at promoting diversity actually do more harm than good for minorities. After all, it easy to see that putting someone in an NFL game that is ill-equipped could hurt them. It is harder to see that in college or high school admission decisions.

Minority students admitted to institutions whose academic standards they do not meet are all too often needlessly turned into failures, even when they have the prerequisites for success in some other institution whose normal standards they do meet.

When black students who scored at the 90th percentile in math were admitted to M.I.T., where the other students scored at the 99th percentile, a significant number of black students failed to graduate there, even though they could have graduated with honors at most other academic institutions.

We do not have so many students with that kind of ability that we can afford to sacrifice them on the altar to political correctness.

Such negative consequences of mismatching minority students with institutions, for the sake of racial body count, have been documented in a number of studies, most notably "Mismatch," a book by Richard Sander and Stuart Taylor, Jr., whose sub-title is: "How Affirmative Action Hurts Students It's Intended to Help, and Why Universities Won't Admit It."

A law professor at the University of Pennsylvania named Amy Wax was recently placed on probation and prohibited from teaching required first year courses because she questioned the wisdom of the school's affirmative action program. In doing so she stated that she had never seen a black student rank in the top quarter of the class and only rarely in the top half. She claimed that almost all black law students gained admittance due to diversity mandates.

Penn's law school dean refuted Wax's claims. However, he produced no data to support his claim that "black students have graduated in the top of the class" at Penn Law.

Wouldn't that be relatively easy to do considering the amount of data that a law school typically compiles for accreditation purposes and for the annual law rankings that are done by US News and others?

The Dean's defenders state that he cannot release that data due to privacy concerns. That is nonsense. We are talking about aggregate data. I would like to see the class rank distribution and graduation rates for all admitted minority students at Penn for the last 10 years.

Is Professor Wax right or wrong in her assertion? If wrong, the discipline is warranted. However, if she is right doesn't Penn owe everybody an explanation and shouldn't more research and thought go into whether its affirmative action programs are helping (or hindering) minority students?

In the meantime, the SAT has met PC (political correctness) and ability seems to be losing in the name of diversity.

Wine and Vinegar

In July, 2021 I wrote a blog post titled "Trump 2024?"

It was barely six months after Trump had left office and I was evaluating the prospects of whether Trump would run again in 2024.

The general consensus at the time was that Trump would face an uphill battle if he were to run in 2024. He was coming off of two impeachments in just over the last year of his Presidency and the specter of January 6th was also fresh in everyone's mind. Many thought that he would find it impossible to run again..

However, even at that early date in 2021, Trump was doing rallies and drawing large crowds. That told me there was no doubt he was running in 2024 and he would be a force if he was healthy.

I know that there are many in the GOP establishment and in media that want to believe that Trump is done. Those types of turnout and viewer numbers suggest that Trump is still a force to reckon with.

However, I also predicted at that time that the Democrats were going to do everything they could to make Trump a convicted felon.

Democrats have long claimed that Trump is a crook or has been involved in nefarious activities. However, we have heard this for five years and they have not been able to turn up anything on the man.

There is little question that the Democrats are going to turn over every rock and throw everything they can at Trump and his family the next few years They clearly live in fear of the man. They may get something that sticks and get people to believe that it is more than political retribution. If they do, Trump will not be viable in 2024 as his political brand will be permanently damaged. Once you lose trust you don't get it back.

Three years later the Democrats have literally thrown everything at Trump  you can think of from a legal perspective.

However, Trump is still standing and all of it appears to have made him stronger.

Why?

It goes back to what I wrote three years ago.

All of it appears to be nothing more than political retribution.

For example, let's consider the differing treatment of Biden and Trump on the alleged retention of classified documents.

First, Trump was President and would additional latitude with regard to the possession of classified documents under the Presidential Records Act compared to Biden.

All of the records that Biden had (some dating back a decade or more) were from his time as Vice President of which there are no exceptions for the possession of classified material.

Some of Biden's records were stored in open boxes in his garage and in an office that he shared with the Chinese. Trump's were kept under lock and key at Mar-A-Lago.

However, Biden's conduct is excused because he was an old, confused man.

Trump needs to be convicted of a felony and sent to prison.

Who was the greater risk to national security?

It is this unequal application of justice that is working in Trump's favor right now.

Of course, the biggest thing going for Trump is Biden.

I predicted in 2021 that an implosion of the country under Biden/Harris could be a huge factor for Trump's resurgence in 2024.

When people are in trouble they are less concerned with personality and more concerned about performance.

An implosion of the country under the Democrats and Biden/Harris. Trump has many critics but hard times have a way of focusing people on what is most important. Trump's personality is the most cited reason why many did not like him. When people are in trouble they are less concerned with personality and more concerned about performance. A deteriorating situation in the country will make Trump a lot more attractive to more people than you can imagine. 

Let's look at some recent polling data to understand this better.

In a recent NBC poll, 40% stated that Trump performed better than expected as President compared to only 14% who believed that of Biden.

42% believed that Biden had performed worse than expected compared to 29% who said that of Trump.

Source: https://www.nbcnews.com/politics/2024-election/voters-are-rating-trumps-presidency-better-expected-hindsight-rcna137971

The views of Independents about Biden's performance should be particularly troubling to Democrats.

Only 6% of Independents believe Biden has done better than expected and 52% say it has been worse.

I don't think there is a more important indicator on how the 2024 election might go than looking at the question of voter remorse. In other words, how many of Biden's 2020 voters are going to vote for him again seeing how things have turned out compared to Trump 2020 voters.

This was a question asked in a recent Morning Consult poll. 

90% of 2020 Trump voters indicated they are willing to vote for him again.

Only 82% of Biden voters state they will do the same.

The election could turn on this question when we get to November.

Source: https://twitter.com/PpollingNumbers/status/1752083582372159829

You get a good sense of how perspectives have changed with the passage of time by looking at some  questions in the NBC News poll where they asked voters to compare Trump and Biden on some issues and personal characteristics.

It is particularly interesting to compare the results in the new poll to one taken right before the 2020 election.

For example, on the issue of who was most competent and effective, Biden was preferred by a net +9 on this question in 2020. Trump is now +16. That is a 25 point swing.

Trump was +2 on dealing with crime and violence in 2020. He is now +20.

Trump was +16 on the border and immigration. He is now +32.

Trump was +10 on the economy in 2020. He is now +22.

All of these are a reflection on how voters are viewing the deterioration of the country under Biden.

On the other hand, regrading the issue that the Democrats talk most about, "protecting democracy", Biden is only +2.

Source: https://pos.org/wp-content/uploads/2024/02/Bill-NBC-Executive-Summary-Presentation-d1a.pdf

Who has changed their minds the most about Biden and Trump since 2020?

A look at the cross tabs is revealing.

Biden is losing the most support among minority voters.

The biggest change is in Latino voters.

Biden was +33 points in 2020 exit polling. Trump is now +1 with Latinos.

Among Blacks, Biden's support has dropped from +75 to +59.

Biden has also lost significant support among younger voters.

He has gone from +24 to +8 with 18-29 year old voters, +6 to -5 with age 30-44 voters, and -1 to -12 with 45-64 year olds.

The Democrat party traditionally wins elections due to the votes of minorities and younger voters. These groups are deserting Biden in droves in recent polling.

It is due to these numbers I continue to believe that Democrats will have to find a way to get Biden off the ballot before November.

Source: https://pos.org/wp-content/uploads/2024/02/Bill-NBC-Executive-Summary-Presentation-d1a.pdf

Given Biden's declining mental capabilities and poll numbers over the last two years, it is beyond me why the Democrat establishment has not already moved Biden to the sidelines.

The only explantation is that they do not want the rank and file of the Democrat party to decide.

They must prefer to let a couple thousand (Democrat delegates at the DNC convention) or a couple hundred (the Democrat National Committee) decide rather than the voters.

It says a lot about what is supposed to be a "Democrat" party which is arguing that this election is about "protecting democracy".

Political analyst Nate Silver in a recent tweet summarizes it very well.

As wine ages some varieties get better and some turn to vinegar.

It is also true that even a wine with imperfections is preferable to vinegar.

All of this indicates that the same may be true with political candidates.

Melt-Ups and Melt-Downs

What Is a Melt-Up? (per Investopedia)

A melt-up is a sustained and often unexpected improvement in the investment performance of an asset or asset class, driven partly by a stampede of investors who don't want to miss out on its rise, rather than by fundamental improvements in the economy.

Let's consider a few data points and see whether we might be in a stock market melt-up.

The S&P 500 is up 22% in the last 3-1/2 months.

The S&P 500 has also closed higher in 14 of the last 15 weeks. That has not happened since 1972.

This has never occurred at any time when the stock market was also up +20% during the 15 weeks.

What is particularly interesting to me is that the stock market advances we have seen have been despite the increase in interest rates.

The usual pattern would be for stock prices to be under pressure as interest rates rise in that investors are drawn to higher yields and the relative safety of bonds, money market funds and interest-bearing bank deposits.

However, the S&P 500 is actually 15% higher than when the Fed started raising interest rates in March, 2022. Rates are now 525 basis points (5.25%) higher than they were two years ago.

Market analyst and investor John Hussman has calculated that the equity risk premium for stocks as compared to treasury yields right now is worse than it was in both 1929 and 1999.

We know what happened next in those two cases.

The DJIA from that high point in 1929.

Source: https://www.federalreservehistory.org/essays/stock-market-crash-of-1929

The tech-heavy NASDAQ from the dot.com high in 1999.

Source: https://vishalnoel7.medium.com/the-dot-com-bubble-of-2001-18bf817abcbd

It also should be noted that about 75% of the S&P 500 gains this year are due to the performance of just four stocks----Amazon, Meta, Microsoft and Nvidia.

You can see from this chart of the performance of these stocks compared to the overall S&P 500 how large the impact these names have had on the overall index.

 

Of course, no stock has had more influence on the S&P 500 than that of Nvidia.

It is up 231% over the last year, 77% over the last six months, 50% year-to-date and 32% in the last month.

Can you say melt-up?

Nvidia's stock price is being stoked based on its dominant position in the manufacture of chips that are being used in artificial intelligence applications.

I expressed reservations about Nvidia's stock price last May when its price/sales (not revenue, SALES) was 35. 

Since that time the stock price has doubled to almost $725 per share.

I guess that shows how much I know.

Nvidia has seen tremendous revenue growth over the last year but the stock price has increased even faster. The price sales/ ratio is now 40!

Source: Nvidia (NVDA) Price to Sales Ratio

Nvidia is now valued at over $1.7 trillion.

Let's put that in context.

That is now more than the entire Chinese stock market represented by shares on the Hong Kong stock exchange.

Source: https://www.marketwatch.com/story/nvidias-now-worth-as-much-as-the-entire-chinese-stock-market-8ca1208d

Nvidia's market cap is approaching the entire GDP of Canada of $1.9 trillion. Some market analysts believe Nvidia will surpass $2 trillion in value this year.

Nvidia has a higher market value than the entire S&P 500 Energy Sector although Nvidia right now is only producing $19 billion of total net income compared to the Energy Sector's $147 billion.

Nvidia's earnings from AI may ultimately justify that stratospheric stock price. However, that is extremely unlikely. Stocks like Amazon and Tesla once had similar price to sales ratios but there are many, many more companies that could not grow revenues and profits fast enough to meet the expectations of their stock price long term.

Nvidia's stock may go to even higher multiples of sales and earnings in the near term than where it is today. Crazy can get even crazier in the short term.

However, it is almost certain that a melt-down will follow the melt-up.

Whenever I see something like this unfold in the stock market I consider the words of former Sun Microsystems CEO Scott McNealy who provided this sage advice over 20 years ago when talking about the challenge of meeting the expectations of stock prices in the tech sector gone wild in the 2000 dot.com craze.

This interview came after many of those high flyers came back to earth, including his own company, which had a price/sales ratio of around 10 at the peak of the market.

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?’— Scott McNealy, Business Week, 2002

It also reminds me of the story of the stock price of RCA (Radio Corporation of America) in the 1920's and 1930's.

RCA was the high-flying stock of the Roaring 1920's.  It was the leading company in the emerging "wireless" communication for the masses era".  The stock appreciated almost 10-fold between 1924 and 1929.  However, an investor who purchased RCA at its 1929 high had to wait 57 years to recoup their investment.  That is a long time. 

Investors got a little ahead of reality.

A more familiar name of recent years is Cisco Systems. It has been a great company for a long time.

However, 24 years after its high in the dot.com madness it still has not exceeded its value from a quarter century ago.

This is despite Cisco increasing revenues by over 400% and net income rising from $2 billion in 1999 to $12.6 billion in 2023.

It had a market cap of almost $400 billion in early 2000. Today, 24 years later. Cisco is valued at barely half of that ($204 billion). 

Some analysts state that there is an eerie resemblance between Cisco's stock price chart leading up to 1999-2000 and the stock performance of Nvidia recently.

Ho

Why did RCA and Cisco stock fall in price so rapidly?

They were both great companies that performed well for years and years despite the falling stock price.

The problem was that in both cases investors  became overly optimistic about a new, transformative technology.

However, at some point investors realized that the companies were not going to grow revenues and profits at 50%, 70% or 100% every year.

The same will prove true with AI.

At some point, sales or earnings growth is going to disappoint investors for the simple fact that castles cannot be built into the air to infinity.

A melt-down of the stock will follow.

It is no different with the broader stock market.

The S&P 500 is up 80% the last five years. The NASDAQ is +112%.

We will reach a point (probably sooner rather than later) when a realization will come to investors that the fundamentals of the economy are not as good as is being portrayed and that stocks are overvalued compared to interest rates.

A melt-down will follow.

Japan had a melt-up in stock prices in the late 1980's that peaked in 1990. 

It is only now after 34 years that the Nikkei index is almost back to where it was in 1990.

Source: https://tradingeconomics.com/japan/stock-market

Melt-ups are great.

However, melt-downs invariably follow.

Plan and protect yourself accordingly.