Monday, April 15, 2024

Iran/Israel in Context

Things got a lot more dangerous and uncertain in the world over the weekend as Iran directly attacked Israel with a drone and missile attack launched from within its own borders.

Iran has effectively been at war with Israel for decades but heretofore has been content to conduct its hostilities through proxies. Hamas, Hezbollah, the Houthis and others in the Middle East receive funding, weapons, strategic and tactical support from the Iranians.

Most of the external war making conducted by Iran is done through its Islamic Revolutionary Guard Corps (IRGC) which is a multi-service branch of the country's primary army.

It is tasked with defending the Islamic Republic of Iran from both external and internal threats.

In any totalitarian regime you need muscle to insure you stay in power. The IRGC is that muscle internally. Their power even extends to wielding control over significant parts of Iran's economy.

The IRGC also has an outsized role in Iran's foreign policy and is involved in various efforts to destabilize much of the Middle East.

Much of the IRGC's international operations are under the control of the secret wing called the Quds Force. It reports directly to the Supreme Leader of Iran, Ayatollah Khamenei, rather than through the IRGC command structure.

You may recall that President Trump ordered a U.S. air strike that killed Qassem Soleimani, the then chief of the Quds Force on January 3, 2020 near the Barghad, Iraq airport as he was about to return to Iran after visiting IRGC  Quds personnel in Syria  and in transit to the same with those in Iraq.

Trump also had designated the entire IRGC a terrorist organization in 2019. The Biden administration continued that designation. Prior to Trump's actions, only the Quds Force was a designated terrorist organization.

The Iran attack on Israel was in response to Israel killing the Iranian general who was commanding the Quds Force in Syria and Lebanon along with six other Iranian military commanders.

Mohammad Reza Zahedi, the general who was killed in the air strike in Damascus, Syria, was acknowledged even by Iranian source to have been involved in the planning and execution of the October 7, 2023 attacks by Hamas on Israel.

Source: https://www.foxnews.com/world/assassinated-iranian-general-involved-planning-execution-october-7-hamas-massacre-report

An organization affiliated with the Supreme Leader of the Islamic Republic of Iran revealed that Iranian General Mohammad Reza Zahedi, who was reportedly killed by an Israeli airstrike on April 1, played a key role in the mass murder of 1,200 people, including over 30 Americans, on October 7.

The U.S.-based Middle East Media Research Institute (MEMRI) located the shocking admission and translated it into English. Iran’s Coalition Council of Islamic Revolution Forces published on April 3 a notice of mourning and recognition for the late Iranian Islamic Revolutionary Guard Corps (IRGC) commander, Zahedi.

Zahedi was the IRGC’s commander of its elite Quds Force in Syria and Lebanon and was killed along with six other men in Iran’s diplomatic compound in Damascus.

The media often refers to the attack on Zahedi to have been done at the Iranian Embassy in Damascus.

That is not accurate.

The strike actually occurred at a building next to the embassy that the Iranians referred to as a consulate.

However, the fact that the general and other IRGC commanders were in the building negated any diplomatic status the building might have otherwise had under the conventions of war.

This image shows that quite well as you can see the intact Iran embassy on the left and the consulate building to the right in ruins. Note that even the fence around the embassy is still intact.

A picture of Soleimani is on the fence in front to the Iran embassy.

Talk about a precision bombing!

Source: https://abcnews.go.com/Politics/pentagon-reveals-israel-conducted-strike-iran-syria/story?id=108764420


Iran stated that they fired on Israel as retaliation for this attack.

Of course, all of the hostilities began with the Hamas attack in Israel on October 7.

 Israel killed the IRGC general and his other commanders for their role in those attacks.

Who really started all of this?

It appears that Iran launched 331 drones and missiles at Israel carrying over 60 tons of explosives.

This included 185 kamikaze drones, 36 cruise missiles and 103 ballistic missiles.

All of the drones and cruise missiles were shot down before they entered Israel by a combination of the efforts of Israel, the United States, Great Britain and Jordan.

Seven ballistic missiles struck an air base in Israel with limited damage. 

That is a success rate of about 98% which is pretty impressive.

Of course, those impressive results cost money.

It is estimated that the defense effort cost for that one night cost was about $1.4 billion.




The question now...what comes next?

Does Israel stand down in light of the fact that there was little damage done?

Some have suggested that this was nothing more than a show by Iran to save face with its populace.

However, sending over 300 drones and missiles at Israel with the expectation that Israel was going to shoot most of them down sounds a little far fetched.

It makes more senses to consider that this volley was used by Iran to test the defense capabilities of Israel looking to plan another strike in the future.

This is why it may be dangerous for Israel to stand down.

What would Israel target in Iran if it retaliates?

The nuclear sites?

The missile launch sites or manufacturing sites?

Iran's oil infrastructure that pays the bills?

The electric grid that powers the economy and those nuclear sites?

Do the Israeli's forego direct military action and initiate covert activities by Mossad in Iran that might directly target the regime? Israel has previous shown their covert capabilities to operate in Iran successfully. They have apparently killed several nuclear scientists and inserted a virus into the nuclear weapons infrastructure program.

I have learned to never underestimate Israel.

In all of this it is important to remember how we got here.

Joe Biden removed the economic sanctions that were crippling Iran when Donald Trump was President.

Oil prices were low due to expanded U.S. drilling and Iran was running out of money during the Trump years.

Biden took office and immediately released billions of dollars to Iran that has undoubtedly funded a lot of the IRGC terror activities in the region.


Source: https://twitter.com/mazemoore/status/1779251369511191034
 

Let's also remember what Joe Biden was saying about Donald Trump in 2020.

He said Trump did not know what he was doing with Iran. He said he had no strategy.

However, do you recall that Trump was getting peace deals done with a number of Middle East countries as part of what he called the "Abraham Accords" during his term in office?

Those deals were intended to further isolate Iran.

There are no peace deals being brokered right now in the Middle East.

All we see are missiles flying everywhere. 



Biden also said that Trump was going to get us into a war with Iran.


Soure: https://twitter.com/TPostMillennial/status/1779241454034112570


How wrong he was.

What is worse is look at this clip and you can see the massive decline in Biden's cognitive and communication abilities over the last four years.

It is truly scary.

And scarier still to think where the world is right now.

Consider what happens to the price of oil if Israel strikes Iran's oil facilities or Iran retaliates to an Israel attack and shuts down the Straits of Hormuz.

What happens to the price of oil?

Could we even see large shortages of oil?

Of course, that is why we have a Strategic Petroleum Reserve.'

However, Biden drained half of the SPR off in the last two years for political purposes.


Source: https://ycharts.com/indicators/us_ending_stocks_of_crude_oil_in_the_strategic_petroleum_reserve


What was the emergency? Biden and the Democrats wanted to buy votes.

Biden said he would refill it at a "profit". 

So far only 4% has been replenished and oil prices are going the wrong way to think about any "profit".

Meanwhile, the price of oil has risen from around $70/barrel to $87/ barrel sine January.

It goes without saying that the real losers in all of this will be the people of Iran.

They live under the thumb of an authoritarian theocratic regime.

Iran was a thriving secular society and economy in the late 1970's before the Islamic revolution put the mullahs in charge.

To provide some context, it now takes 676,500 rials ( as of April 14) to buy one dollar in Iran.

This headline was actually on Friday before the attack.

Source: https://www.jihadwatch.org/2024/04/iranian-rial-loses-30-of-its-value-overnight

In the midst of all its other woes, the Islamic Republic of Iran has just suffered the worst economic collapse of its existence: the Iranian rial has lost 30% of its value overnight. The Iranians have for years seen their economy decline because Muslim fundamentalists, in way over their heads, rather than technocrats, have been in control of that economy. Their mismanagement, their expensive overseas commitments to proxies and allies, and the billions they have been spending on their nuclear weapons and ballistic missile programs, have all contributed to a colossal misallocation of resources. 

In 1978, before the Islamists took over, it took only 71 rials to buy one dollar!

Let’s remember that in 1978, just before the Shah’s regime fell, the dollar was worth 71 rials. As of April 8, one dollar is worth 660,000 rials. It’s weimaresque, cauchemaresque. There has not been a decline in value like that anywhere since the Second World War. Naturally, the government of the Supreme Leader, having no clue as to how to right the economy, is doing everything it can, at a time of growing protests all over the country directed at the regime’s economic performance, to divert attention to foreign affairs, and the need to respond to “aggression” 


Consider the GDP per capita in the United States, Israel and Iran according to The World Bank as of 2022.

The USA economy is 16x the size of Iran's on a per capital basis.

Israel's is almost 12x.

This is the case even though Iran has all that oil and also has the highest percentage of college graduates earning degrees  from the STEM fields (44%).

Is something holding the economy and people back?





Is it possible that the best thing that could happen for the people of Iran is for Israel to somehow be responsible for regime change?

God works in mysterious ways at times.

All I really know is that trust and faith in God is about all we have to rely on looking at the situation in the Middle East right now.

Friday, April 12, 2024

Chocaholic Alert

If you are a chocaholic you may want to stock up on your chocolate supplies.

The price of cocoa has skyrocketed lately.




Holding cocoa has actually been a much better investment than owning shares in Nvidia this year.

What is really astounding is that the price of cocoa per ton has recently surpassed the price of copper.



As of yesterday, cocoa was priced at $10,758/ton and cooper was at $9,240/ton.

Do you recall seeing stories about thieves stealing copper wire to sell it to recyclers because of its commodity value?


Source: https://www.nbclosangeles.com/news/local/officials-call-for-action-against-ongoing-copper-thefts-in-la/3320200/


If you have a supply of chocolate you might want to put it under lock and key.

If you plan to forego chocolate for another source of caffeine you might want to also consider what has happened to the price of coffee in the commodities market so far this year.


Source: https://tradingeconomics.com/commodity/coffee



What has caused the price spike in coffee? It appears that has been too much rain in Brazil and too little in Vietnam. Sounds like climate change to me. Or just ordinary weather.

What has caused the price surge in cocoa?

My research into the issue points to the principal underlying reason being three consecutive years of cocoa crop shortfalls in Africa from which 3/4 of cocoa comes from.


Credit: https://twitter.com/GBriereGiroux/status/1773281600639230286


As you might expect, the usual suspects have quickly come forth blaming "climate change" as the reason for the reduced cocoa bean crop.

That is a favorite theme for the climate alarmists for anything that happens anywhere with crop production or anything else.

To show you how crazy it has gotten, here is Sunny Hostin of "The View" blaming climate change for the solar eclipse, the New York earthquake and cicadas.

This was even too much for Whoopi Goldberg who is not on the show for her conservative views.

https://twitter.com/DailyCaller/status/1777425466942456100



However, look at the steadily increasing cocoa production for 40 years in the chart above. Climate change all of a sudden just had an effect in the last three years?

Or look at the increase in cocoa bean yields and other crops at the same time that global carbon emissions were continually increasing since 1961.

By the way, carbon emissions in the United States are the same as they were in 1991---33 years ago.

https://ourworldindata.org/co2-emissions


Lower crop yields due to carbon emission caused climate change simply does not fit the climate change narrative does it?




The best explanation I have seen for the cocoa crop production shortfalls the last three years is that many of the farmers who produce cocoa in Africa are very poor. The large increase in the price of fertilizer (3x-4x increase) in 2021/2022 caused many to cutback or completely curtail the use of this nutrient for their cocoa trees. This was particularly important as many cocoa trees in Africa are older and the additional nutrient was critical for higher yields.


Source: https://ycharts.com/indicators/fertilizers_index_world_bank


Although the price of fertilizer has receded it is still double what it was in 2020 when cocoa production set records.

Does anyone remember what the big driver was in the cost increases in fertilizer? It was the increase in the price of natural gas which is a major cost input in the production of fertilizer. Yes, that evil fossil fuel.

The supply shortfall, combined with the current transportation issues in the Red Sea, political instability in Ecuador (another major source of cocoa), and a short squeeze in the commodity markets all combined for the surge in price.

I would expect the cocoa market will stabilize and come back to earth at some point as it did after the price surge in the late 1970's.

If not, the name of this candy may soon also be its price.



In any event, my advice is to stock up on your chocolate now.

You cannot lose no matter what happens.

There is comfort in chocolate and we can all use a little comfort right now due to what is going on around us..

Wednesday, April 10, 2024

Caitlin Clark and the Future of Women's Basketball

It has been interesting to witness the impact that Iowa basketball star Caitlin Clark has had on women's college basketball over the last year.

Iowa's women's team made it to the NCAA championship game in each of the last two years, largely due to Clark, only to lose twice---last year to LSU and this year to South Carolina.

The attention that Caitlin Clark brought to the women's game is amazing.

Consider the ratings of the NCAA women's semi-final game between Iowa and LSU which was a rematch of last year's championship game.

12.3 million watched the game.





The finals game between Iowa and South Carolina did better than that---18.9 million viewers. That is more than any basketball game---male or female---since 2019.


Source: https://theathletic.com/5400210/2024/04/08/south-carolina-iowa-caitlin-clark-viewership-record/?access_token=7059673&redirected=1


Let's put that in further context as provided in an article in The Athletic.


You begin to understand what a special talent Caitlin Clark was for Iowa when you consider this scatter graph that compares all 9,718 Division 1 basketball players (male and female)  based on assists and points scored for the 2023/24 season.

Caitlin Clark is the outlier of all outliers.

For context, I highlighted the names of Braden Smith and Zach Edey of Purdue and Tristen Newton of UConn who played in the men's championship game.


Credit: https://twitter.com/secretbase/status/1777352428503064601


Clark has now played her final college game and will be selected in the WNBA draft next week.

Two big questions follow.

Will Clark be as transformative a figure for the WNBA as she was for women's college basketball?

Will women's college basketball be able to sustain the popularity that Caitlin Clark brought to it?

I am skeptical on both questions.

Clark will undoubtedly give the WNBA some lift in popularity initially but women's professional basketball has a long way to go to be in the conversation with other professional sports leagues.

In its recently concluded season the WNBA averaged just 462,000 tv viewers per game. That is the highest it has been in the last 20 years (the league was founded in 1996). However, that is only about 2.5% of the number who watched the NCAA finals.

Compare the WNBA to the average tv ratings for other sports per telecast.

NFL              17 million

NASCAR.    2.2 millón  

NBA.            1.6 million

MLB.            1.4 million        

Caitlin Clark will bring more viewers to the WNBA but I doubt it will be sustainable.

People watched Clark and women's basketball because she was a true star and her talents were so unique compared to the competition. She will not be quite as unique at the next level.

People love to watch STARS when they stand out and above like Caitlin Clark did in college women's basketball.

It is similar to when Tiger Woods appeared on the scene with the PGA Tour. There were a lot of great players on the tour before he arrived. However, Tiger was in a completely different universe and brought interest and viewers to golf who would not normally have cared about the game.

The NCAA Tournament platform is also one that people are familiar with.

The WNBA not so much.

There have been plenty of great players that have played women's college basketball and then moved on to the WNBA in the last 25 years.

A few names to consider.. Rebecca Lobo, Sue Bird. Diane Tauasi. Lisa Leslie. Tamika Catchings. Sheryl Swoopes. Britney Griner. Cynthia Cooper.

However, before Caitlin Clark arrived on the scene the NCAA women's Final Four tv audiences were actually trending down. 

This was despite and lot of great players in the Final Four over the years and the sustained success that UConn's women's basketball had over much of that 20 year period. UConn won the national championship ten times in that span.


Source: https://twitter.com/iowahawkblog/status/1777326440553345291/photo/2


This is what the chart looks like with Caitlin Clark in the Final Four the last two years. The numbers in the  chart also do not include Sunday's final game!


Source: https://twitter.com/iowahawkblog/status/1777326440553345291/photo/2


Looking at the numbers, I think if the NCAA women's Final Four can draw 4 million viewers next year they should be ecstatic

As for the WNBA, if they can draw 40% of the NBA viewership with Caitlin Clark they should feel the same.

What is often missed in all of this is that it takes both Star Power + Distribution Platform = Popularity.

I wrote a blog post seven years ago on why some songs became hits and others did not. 

The biggest factors were exposure and repeated repetition.

The greatest song in the world means nothing if it is not heard a lot...and by a lot of people.

We have always heard that "content is king". Yes, you need content. In women's college basketball the content centers on the athletes--- Caitlin Clark, Kamilla Cardoso or Angel Reese.

However, content means nothing without distribution.

Derek Thompson, the author of the book "Hit Makers" said it this way.

"Content may be king, but distribution is the kingdom".

Tom Cruise might be the same actor performing in a community theatre in New Jersey as he is in Top Gun.

His fame and his fortune is due to the distribution of his films.

He might be the same guy performing at the community theater but how many would see him and how many would care?

We see the same thing with LIV golf. They have some real stars---Jon Rahm. Brooks Koepka, Bryson DeChambeau. Cameron Smith, Dustin Johnson, etc. but most people don't care. 

Consider the fact the final round of the LIV golf tournament at Doral in Florida on Sunday drew just 221,000 tv viewers. By comparison, the PGA Tour's Valero Texas Open had 2.2 million viewers---10x the audience.

LIV golf just does not excite very many people. The platform is weak. Its media reach is weaker.

Those same golfers playing at The Masters this week is a different story.

Caitlin Clark is taking her star power to a weak platform and she has probably already reached her peak exposure and brand value now that her NCAA career is over.

The advantage the NCAA has is that it has the platform that can showcase another Caitlin Clark if there is one out there.

The same is true for the PGA Tour. 

That is not as easy for the WNBA or LIV golf to do considering their plaforms. As structured right now, the WNBA is relying on the NCAA and LIV is dependent on the PGA Tour for their future stars and content.

Caitlin Clark provided a massive boost for women's basketball.

It was a privilege to watch her play. It was special to see how she elevated the entire Iowa team with what she did on the court.

However, much like the solar eclipse that traveled over my house this week. my guess is that her impact on driving dramatic change in the future success and interest in women's basketball in the United States will be fleeting---both at the NCAA and WNBA levels.

I hope I am wrong. 

However, I feel like I have heard this song or seen this movie before.


Monday, April 8, 2024

Beneath the Headline

You might have seen the headline news on Friday that the United States added over 300,000 new jobs in March beating all Wall Street forecasts.


Source: https://www.cnn.com/2024/04/05/economy/us-jobs-report-march-final/index.html


Of course, Joe Biden was quick to claim credit for the positive news.


He claimed he "inherited an economy on the brink" and the jobs report is a sign that his administration's plans are working.

Of course, the reason that the economy was on the brink was due to the Covid pandemic and the shutdown  recommendations that were pushed incessantly by a bunch of unelected public health bureaucrats such as Tony Fauci, Deborah Birx and others.

Those that had a different view, such as Dr. Scott Atlas or Dr. Martin Kuldrorff, were targeted in the media as spreading misinformation and wanting to kill people.

Biden claims he has added 15 million jobs since he took office.

However, the Bureau of Labor Statistics (BLS) data shows that there were 158.7 million jobs at the end of February, 2020 right before the Covid lockdowns. There were 161.5 million jobs in the March, 2024 BLS report released on Friday.

That is an increase of 2.8 million jobs over four years.

You can be the judge of what is the more appropriate measure of jobs created.

However, what is more telling in looking at the BLS data is taking a look at what jobs we are actually talking about.

Are we talking about full-time jobs?

You would think that would be the case.

However, the data actually shows that the number of full-time jobs dropped by 6,000 in the last month while the number of part-time jobs increased by 692,000.

Over the last 12 months the numbers paint an even bleaker situation for full-time jobs in the economy.

Full-time employment has actually decreased by 1,347,000 jobs over the last year while part-time employment has increased by 1,888,000.



How can this be portrayed at as an economic success story if workers are giving up full-time jobs and taking part-time jobs in return?

The data also indicates that the increase in part-time jobs we are seeing may be due to more and more people taking on multiple jobs.

In the last month, the number of those working multiple jobs increased by 217,000 workers according to the BLS data. Over the last year the number of those working multiple jobs has increased by 492,000.

The unemployment rate in March was 3.8%. However, it was 3.5% a year ago.

Beneath the headline numbers are some other troubling signs.

Black unemployment was 6.1% in the BLS March report. A year ago it was 5.1%.

The unemployment rate among those 16-19 years of age was 12.6% A year ago it was 9.9%.

It is not completely clear what is happening here but this could be the result of immigrants (including illegals) putting pressure on the job prospects of Blacks and younger workers.

For example, the BLS data shows that in the last year the number of foreign born workers grew by 1,266,000. On the other hand, workers who were native born declined by 651,000.



If we go back to December, 2019 (right before the pandemic), there were 131,281,000 native born employed workers in the United States and 27,223,000 foreign born workers.

In March, 2024, the number of native born workers had fallen to 130,242,000 ( a decrease of over 1 million jobs held by native born Americans) while foreign born workers had risen to 31,114,000 ( an increase of 3,891,000 jobs).

You can see that trend in this chart from Zero Hedge that measures the change from October, 2019 (rather than December, 2019 as I did in the numbers above).


Credit: https://www.zerohedge.com/markets/behind-todays-stellar-jobs-print-it-was-literally-all-part-time-jobs-and-illegals

In effect, all of the net new jobs created in the last five years have gone to foreign born workers.

Finally, let's consider Biden's claim that his policies are ushering in a revival in manufacturing jobs in the United States.

This is a headline from an AP story last August.

Source: https://apnews.com/article/biden-factory-jobs-new-mexico-manufacturing-renaissance-95700c62f45c3a69b03e550ebdcfa01bpn

President Joe Biden declared Wednesday that his economic policies are reviving U.S. manufacturing as he toured the West to drum up support for his efforts on jobs and inflation in the face of voters’ doubts.

“Hundreds of actions coordinated through his entire government are sparking a manufacturing renaissance across the United States,” White House climate adviser Ali Zaidi told reporters ahead of Biden’s New Mexico speech.


Here's what the BLS report shows for Manufacturing job changes for the first three months of 2024 compared to the job changes for Government jobs.

Manufacturing lost 4,000 jobs between January and March while Government added 194,000 jobs.



If there is any "revival" going on it appears to be in Government jobs.

Wouldn't it be nice to be creating a few taxpayers in the private sector who could pay these salaries rather than borrowing more and more money to do so?

Everything above is in the BLS report beneath the headlines that the U.S. economy is "hot", we are in the midst of a "comeback" and seeing a "revival in manufacturing".

You can be that sure there will be hundreds of similar headlines over the next six months claiming many other things to convince you that all is well with Joe Biden and the country.

My advice...

Look beneath the headline.

And continue to read BeeLine. 

Friday, April 5, 2024

Five Facts From March, 2024

BeeLine is rooted in facts and data. It is the foundation from which everything I write is based.

Five facts from BeeLine posts in March and in my research during the past month that I  thought were particularly salient, surprising, or stupefying.

In a world in which opinions seem to be based more on feelings, emotions and prevailing narratives it might make sense to put more focus on straightforward facts, data and truths. 

Consider these facts and data and consider the context they provide to the larger issues of our world today.

Stock Market Values

The U.S. stock market in 1994 (right at the beginning of the internet revolution) was valued at 66% of U.S. GDP. 

It is now valued at 193% of GDP---nearly 3 times more.





How has all of this been possible?

One reason is that all of those big technology names (Apple, Amazon, Google, Microsoft, Tesla etc,) have been created and founded in the United States.

Is it just a coincidence that with all of the talent and intelligence in the world that it just so happened that it occurred in the United States?

The other reason is the incredible amount of money that has been created by the Federal Reserve over the last 15 years.

That money had to flow somewhere.

Overvalued? You can decide.


What Is A Fair Share of Income Taxes?

The Internal Revenue Service recently released taxpayer data for the 2021 tax year.

The data indicates that the top 1% of income earners paid 46% of all income taxes in 2021.

The top 5% paid 66%.

The top 10% paid 76%.

The top 50% paid 98%.

The bottom 50% paid 2%.

Income Tax Distribution By Income Level
IRS Statistics of Income (2021 Returns)


How much is a fair share for the rich?

How much should your fair share be?

Consider all of this and then reflect on the fact that just the interest on the federal debt this year will consume an estimated 43% of all individual income taxes.


Source Data: https://twitter.com/RealEJAntoni/status/1767622355294048486


If you have to pay the interest on the federal debt first, and it is consuming almost half of your income tax revenue, that does not leave much room for anything else (Defense, Medicaid, Welfare, Federal Worker Pay and Benefits, National Parks, FBI, CIA, etc).


Foreign-born Residing in the United States

Foreign-borns residing in the United States is at the highest percent of the population in history according to recent Census Bureau data.

Bear in mind that the Census Bureau data almost certainly undercounts the number of illegal immigrants in the country.  This estimate does not take into account all of the recent flood of illegals including the large number of get-aways that were never encountered by the Border Patrol.


Source: https://cis.org/Report/ForeignBorn-Share-and-Number-Record-Highs-February-2024?&utm_source=twitter&utm_medium=social-media&utm_campaign=addtoany


What I find astounding is that the current share of foreign born in the United States exceeds what we experienced in the 1870-1910 Ellis Island period of immigrants that came from Ireland, Italy, Germany and Eastern Europe and the period just after the nation's founding when were just recently a colony of Great Britain.

Let's put this in context.

More illegals will have entered the United States during the four years of the Biden administration than in the 40 peak years of immigration (1870-1910) through Ellis Island!

It is unprecedented and unless it is stopped it will have profound, long-lasting  and compounding effects on the nation that very few can comprehend right now. 

It is sure to put enormous pressure on the job market, social services, school systems. medical services, the housing and rental market and basic infrastructure for years to come. Quite simply, there was no planning involved in assimilating anything close to this population infusion in such a short period of time.


US National Debt

U.S. national debt is now higher than it was right after World War II when it had to borrow heavily to finance the war effort.

The United States was able to work its way out of that debt load due to the fact that a good portion of the rest of the industrialized world had been destroyed in the war which created tremendous economic opportunities for the United States in the post-war period.

U.S. debt currently stands at about 124% of GDP which is down slightly from what it was at the height of the heavy deficit spending during the Covid pandemic.


Current Congressional Budget Office projections are that the United States will pass a debt to GDP threshold of 130% within the next 10 years.

Why is that significant?

An analysis done by Hirschman Capital several years ago based on International Monetary Fund data found that, out of 52 countries since the year 1800 where the debt to GDP had surpassed 130%, 51 had defaulted, either through restructuring, devaluation, high inflation, or outright default. 

The only exception was Japan.

Can we trust that it will be different for the U.S.?

Bear in mind that all of this needs to be solved at the same time there are 10 million or so undereducated illegals who have taken residence in the country in the last four years.

What could go wrong?


Trust in the Media

The number and share of foreign-born people in the United States may be at the highest levels in history, but the share that say they trust mass media is at all-time lows.

Only 32% of Americans say they have any level trust in mainstream media.



Among Republicans it is just 11%. Independents are at 29%.

Democrats are at only 58% trust despite the fact that the mass media is carrying their water every day. 

We are a long way from the days of Walter Cronkite and Edward R. Murrow.

Wednesday, April 3, 2024

More Slow Thinking Necessary

You likely have never heard his name unless you are a long-time reader of BeeLine.

I have cited his work a number of times over the years.

He did more to allow us to understand the human mind and how we make the decisions than anyone else in history.

His name was Daniel Kahneman.


Daniel Kahneman, 1934-2024
Photo: Flickr/NRKBeta (Creative Commons BY-SA 2.0)


He passed away last week at 90 years of age.

Together with Amos Tversky (who died in 1996), Kahneman created an entirely new field called "Behavioral Economics".

Kahneman won the Nobel Prize in Economics in 2002 even though he was trained as a psychologist.

Kahneman and Tversky changed forever the way that economists and others viewed the human mind and the way we make decisions. Until their groundbreaking studies, it was generally conceded that humans made rational and logical decisions with the brain acting like a sophisticated computer.

Though their work and efforts we learned just how wrong that is. Their research showed in innumerable studies how the human mind errs in systematic ways leading to poor judgments, especially in uncertain situations.

Kahneman wrote a book in 2011, "Thinking Fast and Slow" in which he detailed much of what he had learned over the years about how we think and make decisions.



He explains that most decisions are made very quickly without a lot of thought.

"A remarkable aspect of your mental life is that you are rarely stumped.  The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way. You like or dislike people long before you know much about them; you trust or distrust strangers without knowing why; you feel that an enterprise is bound to succeed without analyzing it'"

Kahneman found that the human mind makes decisions based on two systems of thinking.

He referred to them this way.

System 1---Fast Thinking

System 2---Slow Thinking

"System 1" thinking corresponds to fast, intuitive, emotional and almost automatic decisions, though it sometimes leaves us at the mercy of our human biases. 

"System 2" thinking is more slow-going and requires more intellectual and analytical effort. To nobody's surprise, humans are more likely to rely on System 1 thinking, because it saves us effort, even if it can lead to flawed thinking. 

When I observe what is going on in the world I often think about Kahneman's findings in attempting to make sense of it all.

For example, Kaheman and Tversky found that Fast Thinking often makes us much more susceptible to errors in judgment. We can be lulled into a false sense of security with this fast thinking.

Anything that makes it easier for the associative machine in your brain to work will also bias your thinking. A perfect example is familiarity.  Generally, if something is familiar you feel more confident and secure in your thinking and beliefs.  This can easily lead us astray .

Consider this statement of Kahneman in his book.

"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth". 

In fact, authoritarian institutions and marketers have known this for a long time.  In effect, if you repeat anything (including outright lies) often enough it will tend to be believed.  This is particularly true if it is repeated often enough by an authority figure.

Kahneman found that repetition induces cognitive ease and a comfortable feeling of familiarity. It begins to feel like truth when it could be anything but.

You want to know why so many people dutifully followed what they were told during Covid without asking many questions (closing businesses, schools, playgrounds, masking, vaccine mandates, etc) although any critical analysis and prior public health protocols and planning showed the policies were flawed?

Why do so many believe the climate change narrative?

Frequent repetitions. More and more familiarity with what is said. It all makes you feel more confident and secure in your beliefs. However, familiarity is not the TRUTH although you may think and feel it is.

Understanding these insights from Kahneman explains a lot, doesn't it?

I also believe that the results of an experiment that Kahneman (with Tversky, Jack Knetsch and Richard Thaler) did in 1986 on the question of how people judge fairness to be very important and enlightening.

It is particularly relevant today.

It is also very troubling when you consider how easily the government authorities can use inflation to steal from the public without most believing it to the the theft it is.

The study tracked responses on whether respondents believed that certain outcomes were "fair" in economic terms.

The base case factual pattern was as follows.

A company is making a small profit.  It is located in a community experiencing a recession with substantial unemployment but no inflation.  There are many worker anxious to work for the company.  The company decides to decrease wages and salaries 7% this year.

62% of respondents judged this to be UNFAIR. 38% said it was ACCEPTABLE.

A second version of the question had a modification to the above with the identical facts with two small changes.

Instead of no inflation the facts were changed so that there was  "12% inflation" and the  company was said to decide "to increase wages only 5% this year".

Notice that in both cases the workers have lost 7% of their purchasing power in real money terms.

However, 78% said that the second version was ACCEPTABLE or FAIR and only 22% judged it UNFAIR.

The fact that they gained something in one pocket in the second version was all it took for them to ignore the fact that even more money was coming out of their other pocket. 

I think of this study often as I see what is going on right now with inflation and where the United States may be heading in the future with $34.5 trillion in debt and a Federal Reserve that can print money at will.

Inflation is the easiest policy option for government to solve its debt problems.  It is also the easiest way to hoodwink the public. It just does not feel like you are losing if your wages are going up rather than going down.  

Fast thinking is also first order thinking. Most people are not able to consider the full second order effects beyond the immediate impact on their paycheck or bank account.

Receiving a 2% social security increase when prices are rising 10% just doesn't  feel as bad as having your social security payment cut by 5% when inflation is 2%.  You are actually better off with the 5% cut from a buying power perspective. Most people just don't think or feel that that way.





We all know that  inflation has been bad the last couple of years.

However, did you realize it was this bad?

Inflation has eviscerated almost a quarter of your wealth over the last four years.





It probably does not FEEL quite this bad because you might have gotten some salary increases, Social Security hikes or the stock market has treated you to some gains over that period.

If you need a more relevant, real life example consider this data regarding the increases in prices at various fast food restaurant chains over the last ten years. 

For example. prices at McDonald's are up 100% in the last ten years compared to an overall 31% inflation rate. Of course, 24% points of that 31% increase in price levels has occurred in just the last four years.

Source: https://financebuzz.com/fast-food-prices-vs-inflation

Those price increases at fast food chains are primarily due to higher food and labor costs.

However, even with fast food workers making more money, they are falling further behind due to inflation.

This chart from the Federal Reserve makes that abundantly clear.

The red line shows increases in Personal Consumption Expenditures (PCE). That is the inflation measure that the Fed looks at most closely.

The blue line is real personal disposable personal income.

The green line is median usual weekly real earnings for wage and salary workers.


Credit: https://twitter.com/QPollsandnews/status/1773813937865142309


Inflation is winning. Actual incomes from 2020 are up but inflation has vastly outpaced salaries and wages. Real disposable income and salaries and wages are both substantially lower now than they were just several years ago.

Those who are regular BeeLine readers know that I don't like making predictions because it is too easy to be wrong.

However, what should we expect going forward with inflation knowing how Kahneman demonstrated the way people think and view fairness?

It is hard to see where inflation will not be a big part of our future for the foreseeable future unless we end up with a significant recession or depression that increases unemployment levels.

The Federal Reserve has dual objectives in its charter---maintain full employment and control inflation.

However, considering where we are now, the Fed is unlikely to increase interest rates to the level necessary to tame inflation because of concerns about unemployment.

Keep in mind that interest also has to be paid on over $34.5 trillion in federal debt.

At current interest rates that requires almost half of all individual tax revenues that are collected.

Inflation also devalues the amount of that debt over time providing a way for the federal government to avoid being buried by it.

My prediction is that the Fed will be more concerned with employment (and the interest rates the government has to pay on its debt) than controlling inflation.

The sad truth is that inflation is the government's friend but it is the enemy of the working man or retiree living on a fixed income or fixed assets.

Few understand how government is given a license to steal with inflation

Worse yet,  those who are being stolen from do not even understand the extent of the theft as the Kahneman's work above demonstrated.

Everything above points to more inflation in the future as it is the easiest way out of the government debt problem at the lowest political cost from angry voters.

In many respects, we resemble the Roman Empire during its decline.

History may not repeat but it does rhyme. Unfortunately, we see similar missteps and errors time and again over the years due to the humans who are at the center of it all.

The Romans understood how the human mind works well before Daniel Kahneman documented it with his supporting research 2,000 years later.

As Rome's problems deepened it was necessary to divert and distract the populace on the larger concerns of the republic. The Romans did this by providing free wheat for everyone and making sure there was always entertainment available to all. They understood "Fast Thinking" and wanted to insure the most basic human needs were met. This meant that few concerns or questions were raised about the real underlying problems of Rome.

A poet of the day, Juvenal, put it this way as he observed the decline around him and wrote of his frustration with what he saw unfolding before his eyes from his fellow Roman citizens.




The fast thinking parts of our brain loves bread and circuses.

Expect a lot of distractions to divert your mind from the real underlying issues facing the United States in the future.

In Rome, the bread and circuses eventually could not be sustained and by the time the masses woke up it was too late.

There were simply not enough slow thinkers like Juvenal around to save Rome.

We need more slow thinkers.

We need a LOT of them.

And we need them NOW.

Thank you to Daniel Kahneman for all his contributions in making sense of a world around us that often makes no sense.

Monday, April 1, 2024

Crowded Out

What did you celebrate yesterday?

Easter---the holiest day of the year for Christians.

or

Transgender Day of Visibility.

Joe Biden seems to have a preference for the Transgender Visibility Day.

He put out a proclamation promoting it on the same day as Easter.

I did not see a similar proclamation celebrating Easter.



Notice the statement about LIFTING UP the lives of transgenders?

I could not help but wonder if that was a subtle mocking of all those who believe that Christ rose from the dead ?

If you are wondering if there is battle between good and evil going on, wonder no more.

Transgender people are most assuredly not evil. A form of mental illness is at play here in most cases. However, those who promote and celebrate it for political purposes surely are.

Let's look at the numbers.

Defenders of Biden state that March 31 has been recognized as International Transgender Day of Visibility since 2009.

It just so happened that it fell on Easter Sunday this year.

That may be the case.

However, was it really necessary for Joe Biden to go out of his way and make a national proclamation of it  this year?

After all, the celebration of Easter goes back 2,000 years before anyone even thought about a Transgender Visibility Day.

You also have to ask whether there really is a "visibility" issue for transgenders, LGBTQ+ and all the rest these days.

Let's take a look at the calendar.

It has gotten awful crowded with LGBT+ visibility, awareness and pride days, weeks and months.

There seems to be plenty of visibility without making a special proclamation of it on Easter Sunday.


February 19-25---Aromantic Spectrum Awareness Week

Month of March---Bisexual Health Awareness Month

March 1---Zero Discrimination Day

April 12---Day of Silence

April 13---International Day of Pink (Opposing Homophobia)

April 26---Lesbian Visibility Day

May 16---Honor Our LGBT Elders Day

May 19--International Day Against Homophobia, Biphobia and Transphobia

May 19---Agender Pride Day

May 22---Harvey Milk Day

Maty 24---Pansexual and Panromantic Awareness and Visibility Day

Month of June---Pride Month

June 28---Stonewall Riots Day

June 28---Gay Pride Day

July 6---Omnisexual Visibility Day

July 11-17---Bisexual Awareness Week

July 14---International Non-Binary Day

July 16---International Drag Day

August 14---Gay Uncles Day

September 15-21---Bisexual Awareness Week

September 23---Bisexual Visibility Day

Month of October---LBGT History Month

October 11---National Coming Out Day

October 17-24---Genderfluid Visibility Week

October 19---Spirit Day ((Support for LGBTQ+ Youth)

October 20---International Pronoun Day

October 20-26---Asexual Awareness Week

October 26---Asexual Awareness Day

Month of November---Trans Awareness Month

November 6---Trans Parent Day

November 8---Intersex Solidarity Day

November 13-19---Trans Awareness Week

November 20---Trans Day of Awareness 

December 1---International AIDS Day

December 8---Pansexual Pride Day

A Gay Uncles Day? I am an uncle. Is there no day for heterosexual uncles like me?

A Trans Parent Day? Why isn't Mother's Day or Father's Day sufficient?

Honor Our LGBT Elders Day? What happened to just honoring all elders?


Credit:@ PrimoBibleVerses


Notice that Aromantic Spectrum Awareness Week follows right after Valentine's Day in February. Aromantics are defined as those that have little or no romantic desire or attraction. I guess they need a week to build awareness as to why they did not send anyone a Valentine's Day card?

One person did a calculation on X that determined that there are 145 calendar days in the year devoted to celebrating LGBTQ+ in some way.

You have all of this going on and Joe Biden needed to make sure that more visibility is necessary....on Easter Sunday?

This is also the Joe Biden who is referred to as a "devout Catholic"?

How much more visibility is needed for LGBTQ+ issues?

These images are from The White House X account last June celebrating Pride Month.




Every day and in every way it seems to me that transgender and LGBTQ+ issues are getting a lot of visibility.

Democrat Governor Kathy Hochul of New York also wanted to show her commitment to Trans Visibility Day as well.

She ordered that a number of landmarks in New York be lit on Easter Sunday with transgender flag colors.

The landmarks included Niagara Falls, One World Trade Center and Empire State Plaza.




If you think all of this might have been just a minor miscalculation or oversight by The White House consider the instructions that went out on the traditional Easter egg coloring contest for the children of National Guard troops.

The rules this year specifically prohibit any religious-themed designs, themes or symbols.

Forget the crosses, angels and crowns of thorns. However, draw as many Easter bunnies and little chicks as you like.


Source: https://nypost.com/2024/03/29/media/religious-themed-designs-banned-from-white-house-easter-egg-art-contest/?utm_source=twitter&utm_medium=social&utm_campaign=nypost_sitebuttons

Children of the National Guard are prohibited from submitting religious Easter egg designs for the 2024 “Celebrating National Guard Families” art event at the White House. 

The art contest is part of the White House’s Easter traditions, which include the annual Easter Egg Roll.

The flyer for the contest states that an Easter egg design submission “must not include any questionable content, religious symbols, overtly religious themes, or partisan political statements.” 


Would this meet the White House guidelines?




Do you get the sense that the liberals want to rid Easter of Christ as much as they have been trying to do for years with Christmas?  Happy Holidays!!!

The calendar has gotten very crowded.

However, it is also clear that there are way too many who are attempting to crowd Christianity out of America. 

It is happening every day and in every way.

What is really sad is that a lot of those who are leading the charge are our elected leaders.

The United States is a long, long way from where it was on Good Friday, 1956 when the New York City skyline looked like this.


Source: https://www.snopes.com/fact-check/new-york-easter-cross-light-display/